BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1215|
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THIRD READING
Bill No: AB 1215
Author: Blumenfield (D), et al.
Amended: 8/18/11 in Senate
Vote: 21
SENATE TRANSPORTATION & HOUSING COMMITTEE : 9-0, 6/28/11
AYES: DeSaulnier, Gaines, Harman, Huff, Kehoe, Lowenthal,
Pavley, Rubio, Simitian
SENATE JUDICIARY COMMITTEE : 5-0, 7/5/11
AYES: Evans, Harman, Blakeslee, Corbett, Leno
SENATE APPROPRIATIONS COMMITTEE : 8-0, 8/22/11
AYES: Kehoe, Walters, Alquist, Lieu, Pavley, Price,
Runner, Steinberg
NO VOTE RECORDED: Emmerson
ASSEMBLY FLOOR : 75-3, 6/2/11 - See last page for vote
SUBJECT : Vehicles: electronic registration and dealer
fees
SOURCE : Author
DIGEST : This bill requires new car dealers to
participate in a program to electronically title and
register vehicles that they sell and to post specified
warning notices on some used cars. This bill allows
vehicle dealers to charge car buyers higher add-on fees on
the sale of new and used vehicles.
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ANALYSIS :
Vehicle License Plates and Registration
Existing law prohibits a person from driving, moving, or
parking a motor vehicle on the highway or in a public
parking facility unless it is registered with the
Department of Motor Vehicles (DMV). When someone buys a
new car, it is not yet registered, nor does it display
license plates. Sometimes used cars also do not have
license plates, and in any case, the dealer must transfer
the title and registration to the buyer.
At the time of retail sale, the vehicle dealer is
responsible for applying to DMV for the registration of a
new vehicle and the transfer of registration for a used
vehicle. Before the dealer can deliver the vehicle to the
buyer, the dealer must affix to the vehicle's windshield a
DMV-created report-of-sale showing that the vehicle is in
the process of being registered. The dealer then has 20
days for a new vehicle or 30 days for a used vehicle to
deliver to DMV the application and fees necessary to
register the vehicle in the buyer's name.
Once DMV receives and processes the application, it issues
and mails to the new owner two license plates, a vehicle
registration card, and the appropriate registration
stickers for the vehicle's rear license plate. The two
license plates must remain affixed to a vehicle, but the
vehicle may be operated for 180 days after purchase while
displaying a report-of-sale rather than license plates with
registration stickers.
In 2001, under SB 46 (Polanco), Chapter 127, Statutes of
2001, DMV established an Electronic Vehicle Registration
(EVR) program in which motor vehicle dealers may enter into
contracts to act as DMV business partners for vehicle
registration and titling purposes. A business partner
either directly, or through a service provider,
communicates electronically with DMV to register a vehicle
it has sold and then mails license plates, registration
cards, and registration stickers to the buyer. DMV
estimates that less than half of new car dealers
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participate in this voluntary EVR program.
Document Processing Fee
Existing law requires any person acting as a dealer of
motor vehicles subject to registration to be licensed by
DMV. Among other requirements and prohibitions, a motor
vehicle dealer must advertise the total price of a vehicle,
but may exclude taxes, registration and smog check fees,
finance charges, and document preparation fees. In
addition, the dealer must sell the vehicle at the
advertised price, exclusive of the mentioned taxes and
fees. Existing law caps dealer document preparation fees
at $45 for a leased vehicle and $55 for a purchased
vehicle. While existing law does not define what this fee
is, generally vehicle dealers assert that the fee is meant
to cover the cost to the dealer of processing paperwork,
including that required to register the motor vehicle with
the state.
National Motor Vehicle Title Information Service
The Federal Anti-Car Theft Act of 1992 (Act) provided for
the establishment of a national information system to
enable states and others to access vehicle titling
information. In 1996, United States Congress reauthorized
the Act and gave U.S. Department of Justice responsibility
for implementation and development of the system, which is
known as the National Motor Vehicle Title Information
Service (NMVTIS).
The federal government created NMVTIS to:
1. Prevent the introduction or reintroduction of stolen
vehicles into interstate commerce;
2. Protect states, consumers, and others from fraud;
3. Reduce the use of stolen vehicles for illicit purposes,
including fundraising for criminal enterprises; and
4. Provide consumer protection from unsafe vehicles,
including showing when a vehicle title has been branded
in a jurisdiction. (A "brand" is a descriptive label
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that states assign to a vehicle to identify the
vehicle's current or prior condition, such as "junk,"
"salvage," or "flood.")
For a consumer to access NMVTIS information about a
particular vehicle's title and history, the consumer pays a
small fee (typically $5 to $8) to one of several private
companies that provide access to NMVTIS records.
This bill:
1. Requires that a new motor vehicle dealer register motor
vehicles -- new or used -- that it sells or leases using
the EVR program. This provision does not apply to
motorcycles, off-highway vehicles, or recreational
vehicles. To this end, this bill makes any new car
dealer that has not signed up as a business partner in
DMV's EVR program by October 1, 2012 to be in violation
of statutory dealer licensing requirements.
2. Changes the name of the document preparation fee to the
"document processing charge" and expressly authorizes
dealers to charge a purchaser or lessee the charge.
This bill states that the document processing charge is
"for preparation and processing of documents,
disclosures, and titling, registration, and information
security obligations imposed by state and federal law"
but prohibits a dealer from representing it as a
governmental fee.
3. Increases the cap on the document processing charge for
both purchases and leases to $80 for those dealers that
participate in electronic registration and $65 for those
dealers - who could only be used vehicle dealers - who
do not participate.
4. Authorizes a dealer to charge an electronic filing
charge not to exceed the actual amount the dealer pays
to a DMV service provider for providing a license plate.
The dealer may not represent this as a governmental fee
either. (DMV regulations currently allow a dealer who
is a business partner under the EVR program to charge
consumers up to $29 for electronic registration.)
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5. Shortens the period from six months to 90 days during
which a vehicle may be operated while displaying a
report-of-sale and without a license plate and
registration stickers. This bill clarifies that a
registered owner must affix license plates to a vehicle
upon receiving those plates.
6. Prohibits a dealer from offering a used vehicle for sale
unless the dealer obtains an NMVTIS report on that
vehicle. If the report indicates that the vehicle is a
junk automobile or a salvage automobile, that specified
parties have reported it as such, or that its title
contains a brand, then the dealer must affix to the
vehicle a prescribed warning to that effect in 14 point
font on a 4 inch by 5.5 inch, red background. The
warning shall also advise the buyer that he or she may
get a copy of the NMVTIS report from the dealer or
obtain it independently and the web address at which to
obtain it. The dealer must make the NMVTIS report
available to the purchaser upon request prior to sale.
7. States nothing shall prohibit a NMVTIS data provider
from including in the report additional vehicle history
information obtained from resources other than NMVTIS,
and that this bill does not create any legal duty upon
the dealer related to the accuracy, errors, or omissions
contained in the report, or create a duty upon the
dealer to provide information added to the report after
the dealer obtained the report.
8. Provides the NMVTIS report requirements contained in the
bill shall cease in the event that all NMVTIS data
providers cease to make MNTVIS vehicle history reports
available to the public.
9. Specifies that the NMVTIS report requirements do not
apply to the sale of recreational vehicles, motorcycles,
or off road motor vehicles.
10.Takes effect on July 1, 2012.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
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According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13
2013-14 Fund
Dealer enrollment one-time costs for DMV to
register Special*
non-participating dealers into
partnerships
under the EVR program, fully offset by
fees.
Electronic registration
Staff Savings ($3,600)
($3,800) Special*
Fee revenue gains
($5,600) ($5,800) Special*
Loss of data sales unknown potential revenue
loss of Special*
$300-$500
* Motor Vehicle Account
SUPPORT : (Verified 8/25/11)
Auto Data Direct
AutoNation
California Association of Highway Patrolmen
California Motorcycle Dealers Association
California New Car Dealers Association
California Public Interest Research Group
CARCO
CarMax Auto Superstores
Center for Auto Safety
Coalition of Vehicle Registration Services
Consumer Action
Consumers for Auto Reliability and Safety
Metropolitan Transportation Committee
National Association of Consumer Advocates
National Salvage Vehicle Reporting Program
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North American Export Committee
Peace Officers Research Association of California
South Bay Expressway
OPPOSITION : (Verified 8/25/11)
African American Chamber of Commerce
California Urban Partnership
Carfax
Experian
Greater Sacramento Urban League
West Angeles Community Development Corp
ASSEMBLY FLOOR : 75-3, 6/2/11
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Cook, Davis, Dickinson, Eng,
Feuer, Fletcher, Fong, Fuentes, Furutani, Beth Gaines,
Galgiani, Garrick, Gatto, Gordon, Grove, Hagman, Harkey,
Hayashi, Roger Hernández, Hill, Huber, Hueso, Huffman,
Jeffries, Jones, Knight, Lara, Logue, Bonnie Lowenthal,
Ma, Mansoor, Mendoza, Miller, Mitchell, Monning, Morrell,
Nestande, Nielsen, Norby, Olsen, Pan, Perea, V. Manuel
Pérez, Portantino, Silva, Skinner, Smyth, Solorio,
Swanson, Torres, Valadao, Wagner, Wieckowski, Williams,
Yamada, John A. Pérez
NOES: Conway, Donnelly, Halderman
NO VOTE RECORDED: Gorell, Hall
JJA:kc 8/25/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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