Amended in Assembly May 6, 2014

Amended in Assembly April 23, 2014

Amended in Assembly April 21, 2014

Amended in Assembly March 18, 2014

California Legislature—2013–14 Regular Session

Assembly BillNo. 1627


Introduced by Assembly Member Gomez

February 10, 2014


An act to amend Sectionbegin delete 1685end deletebegin insert 11406end insert of the Vehicle Code, relating to vehicles.

LEGISLATIVE COUNSEL’S DIGEST

AB 1627, as amended, Gomez. Vehicles:begin delete qualified industry partners.end deletebegin insert registration services: disclosure of service fees.end insert

begin insert

Existing law defines the term “registration service” for purposes of the Vehicle Code and excludes from that definition certain activities. Existing law prohibits a person from acting as a registration service, engaging in the business of soliciting or receiving any application for the registration, renewal of registration, or transfer of registration or ownership of any vehicle of a type subject to registration under the Vehicle Code, or of soliciting or receiving an application for specified motor carrier permits, or transmitting or presenting any of those documents to the department, if any compensation is solicited or received for the service, without a license or temporary permit issued by the Department of Motor Vehicles. Under existing law, a registration service authorized by the department to engage in those activities is required to, among other things, display prominently at its place of business a sign indicating that the registration service is not a branch of the department and inform each customer of that fact. A violation of those provisions is a misdemeanor.

end insert
begin insert

This bill would additionally require a registration service licensed by the department to engage in the activities described above to provide a disclosure to each customer that certain services may be provided by the department without an additional fee, as specified. By expanding the scope of an existing crime, the bill would impose a state-mandated local program.

end insert
begin insert

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

end insert
begin insert

This bill would provide that no reimbursement is required by this act for a specified reason.

end insert
begin delete

Existing law authorizes the Department of Motor Vehicles to establish contracts for electronic programs that allow qualified private industry partners to join the department in providing services that include processing and payment programs for vehicle registration and titling transactions.

end delete
begin delete

This bill would require, if a qualified private industry partner is providing a service or a similar service for a fee that the department provides without charging a fee, a requirement to disclose to a customer that the department provides that service or similar service without charging a fee, as specified. This bill also makes a technical change.

end delete

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: begin deleteno end deletebegin insertyesend insert.

The people of the State of California do enact as follows:

P2    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 11406 of the end insertbegin insertVehicle Codeend insertbegin insert is amended to
2read:end insert

3

11406.  

(a) Every registration service shall keep accurate
4business records containing all of the following information:

5(1) The name, address, and license number of the registration
6service and the name and address of every employee who performs
7registration work.

8(2) The name and address of each client for whom registration
9work was performed.

P3    1(3) The identity of every vehicle by year, make, type, license
2number, and vehicle identification number on which registration
3work was performed.

4(4) The amount of registration fees or payments collected for
5each vehicle on which registration work was performed, including
6the method of payment to the registration service.

7(5) The amount of registration fees or payments submitted to
8the department for each vehicle on which registration work was
9performed, including the date and method of payment to the
10department.

11(6) The amount of any refunds or additional charges on
12registration fees or payments collected for each vehicle on which
13registration work was performed, including the date and method
14of payment of the refund or additional charge by or to the client,
15the registration service, or the department.

16(7) The name, signature, or initials of each employee performing
17work on each transaction and the date the work was done.

18(8) The cost to each client for the registration work performed
19on each of the client’s vehicles or to obtain a motor carrier permit.

20(9) For each motor carrier for which motor carrier permit work
21was performed, the carrier identification number, business type,
22business address, carrier type, activities, and number of vehicles.

23(10) For each motor carrier for which motor carrier permit work
24was performed, the amount of fees or payment collected and the
25method of payment.

26(11) For each motor carrier for which motor carrier permit work
27was performed, the amount of fees or payment submitted to the
28department, including the date submitted and the method of
29payment to the department.

30(b) As an alternative to maintaining the records required by
31paragraphs (1) to (11), inclusive, of subdivision (a), a registration
32service may retain a copy of the listing sheet approved by the
33department for transmitting registration or motor carrier permit
34documents to the department.

35(c) Every registration service shall provide each customer with
36a document containing all of the information required by
37subdivision (a) relative to that customer’s transaction, excluding
38paragraph (7) and excluding the addresses of employees and other
39customers’ names and addresses. This requirement does not apply
40to transactions for customers of a dealer or dismantler.

P4    1(d) Every registration service shall display prominently at its
2place of business a sign indicating that the service is not a branch
3of the department and shall inform each customer of that fact.

begin insert

4(e) Every registration service shall provide a disclosure to each
5customer that the services described in Section 11400 may be
6provided by the department without an additional fee. If a
7registration service is providing a service described in Section
811400 in person, the disclosure required pursuant to this
9subdivision shall be in writing. If a registration service is providing
10a service described in Section 11400 on an Internet Web site, the
11disclosure required pursuant to this subdivision shall be in a
12conspicuous place on the Internet Web site.

end insert
13begin insert

begin insertSEC. 2.end insert  

end insert
begin insert

No reimbursement is required by this act pursuant to
14Section 6 of Article XIII B of the California Constitution because
15the only costs that may be incurred by a local agency or school
16district will be incurred because this act creates a new crime or
17infraction, eliminates a crime or infraction, or changes the penalty
18for a crime or infraction, within the meaning of Section 17556 of
19the Government Code, or changes the definition of a crime within
20the meaning of Section 6 of Article XIII B of the California
21Constitution.

end insert
begin delete
22

SECTION 1.  

Section 1685 of the Vehicle Code is amended to
23read:

24

1685.  

(a) In order to continue improving the quality of products
25and services it provides to its customers, the department, in
26conformance with Article 4 (commencing with Section 19130) of
27Chapter 5 of Part 2 of Division 5 of Title 2 of the Government
28Code, may establish contracts for electronic programs that allow
29qualified private industry partners to join the department in
30providing services that include processing and payment programs
31for vehicle registration and titling transactions.

32(b) (1) The department may enter into contractual agreements
33with qualified private industry partners. There are the following
34three types of private industry partnerships authorized under this
35section:

36(A) First-line business partner is an industry partner that receives
37data directly from the department and uses it to complete
38registration and titling activities for that partner’s own business
39purposes.

P5    1(B) First-line service provider is an industry partner that receives
2information from the department and then transmits it to another
3authorized industry partner.

4(C) Second-line business partner is a partner that receives
5information from a first-line service provider.

6(2) The private industry partner contractual agreements shall
7include the following minimum requirements:

8(A) Filing of an application and payment of an application fee,
9as established by the department.

10(B) Submission of information, including, but not limited to,
11fingerprints and personal history statements, focusing on and
12concerning the applicant’s character, honesty, integrity, and
13reputation as the department may consider necessary.

14(C) Posting a bond in an amount consistent with Section 1815.

15(D) If the qualified private industry partner is providing a service
16or a similar service for a fee that the department provides without
17charging a fee, a requirement to disclose to a customer that the
18department provides that service or similar service without charging
19a fee. If a qualified private industry partner is providing the service
20or similar service to a customer in person, then the disclosure
21required pursuant to this subparagraph shall be in writing. If a
22qualified private industry partner is providing the service or similar
23service to a customer on an Internet Web site, then the disclosure
24required pursuant to this subparagraph shall be in a conspicuous
25place on the Internet Web site.

26(3) The department shall, through regulations, establish any
27additional requirements for the purpose of safeguarding privacy
28and protecting the information authorized for release under this
29section.

30(c) The director may establish, through the adoption of
31regulations, the maximum amount that a qualified private industry
32partner may charge its customers in providing the services
33authorized under subdivision (a).

34(d) The department shall charge a three-dollar ($3) transaction
35fee for the information and services provided under subdivision
36 (a). The private industry partner may pass the transaction fee to
37the customer, but the total charge to a customer may not exceed
38the amount established by the director under subdivision (c).

39(e) All fees collected by the department pursuant to subdivision
40(d) shall be deposited in the Motor Vehicle Account. On January
P6    11 of each year, the department shall adjust the fee in accordance
2with the California Consumer Price Index. The amount of the fee
3shall be rounded to the nearest whole dollar, with amounts equal
4to, or greater than, fifty cents ($0.50) rounded to the next highest
5whole dollar.

6(f) The department shall adopt regulations and procedures that
7ensure adequate oversight and monitoring of qualified private
8industry partners to protect vehicle owners from the improper use
9of vehicle records. These regulations and procedures shall include
10provisions for qualified private industry partners to periodically
11submit records to the department, and the department shall review
12those records as necessary. The regulations shall also include
13provisions for the dedication of department resources to program
14monitoring and oversight; the protection of confidential records
15in the department’s files and databases; and the duration and nature
16of the contracts with qualified private industry partners.

17(g) The department shall, annually, by October 1, provide a
18report to the Legislature that shall include all of the following
19information gathered during the fiscal year immediately preceding
20the report date:

21(1) Listing of all qualified private industry partners, including
22names and business addresses.

23(2) Volume of transactions, by type, completed by business
24partners.

25(3) Total amount of funds, by transaction type, collected by
26business partners.

27(4) Total amount of funds received by the department.

28(5) Description of any fraudulent activities identified by the
29department.

30(6) Evaluation of the benefits of the program.

31(7) Recommendations for any administrative or statutory
32changes that may be needed to improve the program.

33(h) This section shall not impair or limit the authority provided
34in Section 4610 or Section 12155 of the Insurance Code.

end delete


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