BILL ANALYSIS Ó
AB 1627
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Date of Hearing: May 1, 2014
ASSEMBLY COMMITTEE ON TRANSPORTATION
Bonnie Lowenthal, Chair
AB 1627 (Gomez) - As Amended: April 23, 2014
SUBJECT : Vehicles: qualified industry partners
SUMMARY : Requires an industry partner enrolled in the
Department of Motor Vehicles' (DMV) Business Partners Automation
Program (BPA) to provide a disclosure to their customers that
they may receive the same service from DMV without an additional
charge, as specified. Specifically, this bill :
1)Requires a BPA-enrolled qualified industry partner (BPA
partner) providing a service for a fee that DMV similarly
carries out to provide a disclosure to their customers that
DMV offers the same or similar service without an additional
charge.
2)Requires the BPA partner to provide the disclosure in writing
for services conducted in person.
3)Requires the BPA partner to provide the disclosure on the
provider's web site in a conspicuous location for services
conducted over the Internet.
EXISTING LAW :
1)Authorizes DMV to enter into contractual agreements with BPA
partners to provide DMV-related services.
2)Authorizes DMV to establish contracts for electronic programs
that allow DMV-approved BPA partners to provide a variety of
services including electronically processing and submitting
payment to DMV for vehicle registration and titling
transactions.
3)Establishes occupational licensing requirements for vehicle
registration service providers that allow businesses to
manually process vehicle registration without enrollment in
the BPA program. A non-BPA registration service provider
(non-BPA business) maintains inventory of DMV registration
cards and stickers, orders additional inventory as needed, and
manually processes vehicle registration transactions.
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4)Defines registration services as a person engaged in the
business of soliciting or receiving an application for the
registration, renewal of registration, or transfer of
registration or ownership of a vehicle or transmitting
registration documentation to DMV when any compensation is
solicited or received for the service. Specifies that a
registration service provider does not include a motor club,
as defined.
FISCAL EFFECT : Unknown
COMMENTS : DMV established the BPA program in 1996, through
administrative action, to allow DMV-authorized BPA partners to
provide a variety of DMV-related services, primarily through
electronic transactions. In addition to specific registration
titling services, BPA partners are permitted to issue validated
registration cards, collect and electronically transmit
prescribed fees, and provide registration stickers for license
plates. Once approved by DMV, BPA partners at all levels must
abide by various operational requirements such as staff
training, inventory tracking, and obtaining a prescribed
security bond, and are subject to financial audits and site
inspections. DMV keeps and maintains records of every
transaction that is processed by BPA partners.
SB 46 (Polanco), Chapter 127, Statutes of 2001, codified the BPA
program, authorized DMV to set up a fee structure for BPA
partners through the promulgation of regulations, and allowed
for the expansion of DMV-related services that may be carried
out by BPA partners. Current BPA partners include new car
dealers, registration service providers, smog check stations,
vehicle dismantlers, rental car companies, leasing companies,
and salvage pool companies. As BPA partners, these entities are
able to electronically transfer and receive specific vehicle
information from DMV and, many times, also immediately issue
vehicle decals to customers. For example, new car dealers
electronically transfer new vehicle title and registration
information to DMV when a vehicle is purchased and registration
service providers issue validated registration cards and full
year stickers to be affixed to the vehicle.
BPA partners are authorized to charge a service fee, with the
amount contingent on the services provided. For example,
existing regulations limit BPA vehicle dealers and dismantler
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service fees to $25 for each transaction. BPA registration
service providers and salvage pools are not restricted in the
amount they may charge for services provided. DMV also charges
a $4 transaction fee for each transaction processed and
completed. According to DMV's annual BPA report for Fiscal Year
2012-2013, BPA partners processed a variety of transactions
including, 1.7 million new vehicle registrations; 904,904
registration renewals; and 45,398 transfers of ownership. The
total amount of fees collected by BPAs and electronically
transmitted to DMV totaled $947.4 million.
This bill would require any BPA partner that provides a
DMV-related service for a fee that DMV similarly conducts
without an additional charge, to provide a disclosure to the
customer indicating DMV provides those services without an
additional charge. Specifically, the disclosure shall either be
a hard copy provided to the customer or a post on a BPA
partner's website for Internet transactions. The author asserts
that this proposal will close an existing loophole where
businesses are required to disclose that they are not an
official government entity however fail to disclose that DMV
provides the same or similar service without an additional
charge.
Committee concerns : The BPA program is designed to provide
customers with expedited services by allowing BPA partners to
process and electronically transmit customer and vehicle
information to DMV. While the requirement to provide a specific
disclosure is well intended, this bill may have a number of
unintended consequences to particular BPA partners and
customers. For example, AB 1215 (Blumenfield), Chapter 329,
Statutes of 2011, required all new car dealers to enroll in the
BPA and electronically transfer vehicle registration and
required fees to DMV, in turn establishing a more timely and
accurate process to complete all registration and titling
documentation. Under the implementation of this bill, if a
customer decided to personally submit the required vehicle
information to DMV rather than use the dealer's services for a
fee, the dealership could not release the vehicle to the
purchaser and would have to hold the purchased vehicle until the
consumer returned with the necessary vehicle registration
documentation provided by DMV. In relation to other services
provided by BPA partners such as smog check stations, a customer
may experience delays in renewing their vehicle registration if
they choose to personally submit their smog certification to DMV
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but fail to provide the documentation to DMV prior to the
vehicle's registration expiration date.
Additionally, the disclosure requirement specified in this bill
is not imposed on non-BPA businesses that offer DMV-related
services for a fee. For example, in relation to registration
service providers, BPA registration service providers have taken
additional steps to set up a contract with DMV and
electronically transmit and receive vehicle information, whereas
non-BPA registration service providers maintain an inventory of
DMV materials and manually process a customer's vehicle
information. Currently 1,829 BPA and non-BPA registration
service providers are authorized and licensed by DMV. The
provisions in this bill will require only BPA registration
service providers to provide the specified disclosure, while
failing to impose this same requirement on non-BPA businesses
providing similar services. As a result, customers that choose
a non-BPA registration service provider will not be provided
with the disclosure specified in this bill.
Suggested amendment: The committee suggests amending this bill
to replace the current language with disclosure provisions
within the Vehicle Code that regulate registration services.
The amendment would require all registration providers, both BPA
partners and non-BPA businesses, to provide a disclosure to
customers that they may receive similar services from DMV
without an additional fee.
Previous legislation : AB 1215 (Blumenfield), Chapter 329,
Statutes of 2011, required dealers of new motor vehicle to
participate in DMV's EVR program and required license plates to
be attached upon receipt by the vehicle owner.
SB 46 (Polanco), Chapter 127, Statutes of 2001, enacted a number
of reforms to the BPA program including, establishing the BPA
program in statute, authorizing DMV to set up a fee structure
for BPA partners through the promulgation of regulations, and
allowing for the expansion of DMV-related services that may be
carried out by BPA partners.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
AB 1627
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Opposition
None on file
Analysis Prepared by : Manny Leon / TRANS. / (916) 319-2093