BILL ANALYSIS Ó
AB 516
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Date of Hearing: April 27, 2015
ASSEMBLY COMMITTEE ON TRANSPORTATION
Jim Frazier, Chair
AB 516
(Mullin) - As Amended April 20, 2015
SUBJECT: Vehicles: temporary license plates
SUMMARY: Requires vehicles sold or leased without a permanent
license plate to be affixed with a temporary license plate
(TLP). Specifically, this bill:
1)Authorizes a first-line service provider to charge a two
dollar ($2) transaction fee to cover the cost of processing
TLPs for a vehicle. Specifies that a dealer is provided the
option of passing the transaction fee onto the customer.
2)Requires by January 1, 2017, the Department of Motor Vehicles
(DMV) to develop or contract with a private industry partner
to develop a TLP system that is to be used by DMV, dealers,
and first-line service providers to issue TLP's at the time a
vehicle is sold. Requires the TLP system to begin operation
on January 1, 2017.
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3)Permits a vehicle to operate with TLPs until either:
a) The permanent license plates and registration card are
received by the vehicle owner; or,
b) 90 days have lapsed from the vehicle's selling date.
1)Specifies that if TLPs are not issued for a vehicle, the
existing report-of-sale requirements are to remain in effect.
2)Increases the document processing charge a dealer under the
Business Automation Program (BPA) may charge a customer from
$80 to $95.
3)Authorizes a dealer to charge the TLP transaction fee to a
customer or lessee of the vehicle.
4)Requires BPA motor vehicle dealers to affix, at the time of
sale, a TLP to a motor vehicle sold without a permanent
license plate.
5)Specifies that it is a felony for a person to alter, forge,
counterfeit, or falsify a TLP.
6)Requires TLPs to be affixed to the front and rear of the
vehicle and requires the owner to remove TLPs upon receipt of
permanent plates.
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EXISTING LAW:
1)Establishes BPA and authorizes DMV to enter into contractual
agreements with private industry partners, if certain criteria
are met, to provide specific services that include processing
vehicle registration and titling transactions.
2)Authorizes a motor vehicle dealer to charge a purchaser or
lessee of a motor vehicle a document processing charge, as
specified.
3)States any person who alters, forges, counterfeits, or
falsifies a certificate of ownership, registration card,
license, or license plate is guilty of a felony, as specified.
4)Allows a vehicle displaying a copy of the report of sale to be
operated without license plates or a registration card until
either the license plates and registration card are received
by the purchaser or the expiration of a 90-day period
beginning with the date of sale of the vehicle, whichever
occurs first.
5)Requires a dealer or lessor-retailer to submit to DMV an
application and relevant fees for registration or transfer of
registration of a vehicle within 30 days for a used vehicle or
20 days for a new vehicle.
6)Provides a dealer or lessor-retailer a specified response time
if DMV returns a registration application, contingent on the
type of vehicle.
7)Requires a new motor vehicle dealer to participate in DMV's
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electronic vehicle registration program (EVR).
8)Requires license plates to be attached upon receipt by a
vehicle owner.
FISCAL EFFECT: Unknown
COMMENTS: 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 notice 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.
Prior to 2001, once DMV received and processed the application,
DMV issued and mailed 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 was
allowed to be operated for 180 days after purchase while
displaying a report-of-sale notice rather than license plates
with registration stickers.
In 2001, under SB 46 (Polanco), Chapter 127, DMV established the
EVR program where 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. Up
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until 2011, DMV estimated that less than half of new car dealers
participated in the voluntary EVR program.
AB 1215 (Blumenfield), Chapter 329, Statutes of 2011,
implemented significant changes to the vehicle registration
process including, requiring new car dealers to participate in
the EVR program, reducing the period a vehicle may operate a
vehicle with a report-of-sale notice to 90 days, and requiring
license plates to be attached upon receipt by the vehicle owner.
The successful implementation of AB 1215 has resulted in
industry stakeholders indicating that vehicle owners are now
receiving permanent license plates between 14 to 30 days on
average. Furthermore, in those instances where vehicle
registration delays have occurred, industry stakeholders
indicate the delays typically relate to titling/financing issues
rather than dealer errors.
AB 516 proposes to develop a statewide TLP system to ensure
purchased vehicles are identifiable to law enforcement and toll
operators during the period between the point of sale and when
permanent license plates are received by the purchaser.
Specifically, AB 516 requires either DMV or a first-line service
provider develop a TLP system, requires dealers to affix TLPs on
a vehicle at the point-of-sale, and requires a vehicle owner to
remove TLPs and affix permanent license plates on their vehicle
upon receipt. AB 516 also proposes to increase the document
preparation fees a BPA dealer may charge a purchaser by $15 to a
total of $95 and also establishes a $2 TLP transaction fee to
also be passed onto the purchaser.
Overall, proponents argue that a TLP system will assist law
enforcement and also help toll agencies mitigate deliberate toll
evaders. For example, in fiscal year 2013-14, the Bay Area Toll
Authority generated approximately $690 million in toll revenues
however experienced a $7 million loss in revenue tied to
vehicles with no license plate. The author asserts that this
legislation will "improve public safety by enabling law
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enforcement to identify vehicles involved in traffic violations,
hit-and-run accidents, and other criminal activity. AB 516
requires new and used auto dealers to install temp tags at the
point of sale so vehicles are identifiable to law enforcement
and toll operators from the point they purchase the vehicle and
leave the lot."
Committee concerns: While the bill's overall intent to develop
and implement a TLP system is promising, the TLP system as
proposed in this bill leaves several technical implementation
issues unresolved relative to how the TLP system will be linked
to other relevant systems and instances of fraud.
In regards to the TLP system, it remains unclear how the TLP
system, the DMV vehicle registration database, and law
enforcement's California Law Enforcement Telecommunications
System (CLETS) will all communicate in real time. In states
such as Florida, Wisconsin, and South Carolina, the DMV in each
respective state administers the issuance of TLPs and permanent
license plates under one system. AB 516 authorizes DMV or a
first-line service provider to develop a TLP system, however
does not speak to how the system will be operated and managed if
developed by an entity other than DMV.
Regarding fraud, states such as Colorado, Pennsylvania, and
Florida have all reported incidents of TLP fraud. In Florida,
for example, TLPs with unregistered identification numbers have
been affixed to vehicles that then use Florida's toll roads.
When these vehicles come up as "no reads," the toll authorities
send pictures of the vehicle and fraudulent TLP to state patrol
in attempt to capture these vehicles through law enforcement.
While this method may be effective in regions where pro-active
enforcement is utilized on the toll roads, it is unclear how
other regions will mitigate the use of fraudulent TLPs by
deliberate toll evaders.
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Previous legislation: AB 2197 (Mullin) of 2014, similar to this
bill, would have required vehicles sold or leased without a
permanent license plate to be affix1ed with a TLP. AB 2197 was
held in the Assembly Appropriations Committee on the suspense
file.
REGISTERED SUPPORT / OPPOSITION:
Support
Alameda County Transportation Commission
California Lien Agents Association
California New Car Dealers Association
California State Sheriffs' Association
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Car Dealers Saving Lives
Golden Gate Bridge Highway and Transportation District
Metropolitan Transportation Commission
San Francisco County Transportation Authority
Opposition
None on file
Analysis Prepared by:Manny Leon / TRANS. / (916) 319-2093