BILL ANALYSIS Ó
AB 516
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Date of Hearing: May 20, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
516 (Mullin) - As Amended April 20, 2015
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
Requires vehicles sold or leased without a permanent license
plate to be affixed with a temporary license plate (TLP).
Specifically, this bill:
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1)Requires the DMV, by January 1, 2017, to develop or contract
with a private industry partner to develop a TLP system to be
used by the DMV, dealers, and first-line service providers, as
of that date, to issue TLP's at the time a vehicle is sold.
2)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, whichever occurs first.
3)Authorizes a first-line service provider to charge a two
dollar ($2) transaction fee to cover the cost of processing
TLPs for a vehicle, and authorizes a dealer to charge the TLP
transaction fee to a customer or lessee of the vehicle.
4)Increases the document processing charge a dealer under the
Business Automation Program (BPA) may charge a customer from
$80 to $95.
5)Requires BPA motor vehicle dealers to affix, at the time of
sale, a TLP to a motor vehicle sold without a permanent
license plate.
6)Extends the existing felony penalty-punishable by up to 16
months, two years, or three years in state prison or up to one
year in county jail-for counterfeit or forgery of licenses, to
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include such actions with regard to TLPs,
7)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.
FISCAL EFFECT:
The DMV estimates first-year costs of $1.75 million and ongoing
costs of $309,000. The department indicates this is related to
design and development to create the TLP process, modification
of the vehicle registration database, programming the
identification and authentication process, and creating an
interface between the database and the department. There will
also be staff time associated with developing and coordinating
programming requests, developing business rules, developing
privacy threshold and impact assessments, and updating memos,
manuals, brochures, and other related departmental publications
referencing vehicle registration information. Ongoing costs are
associated with maintenance of the TLP database, data center
costs, and staff time.
It should be noted that these cost are several times higher than
the department's cost estimate for a similar bill last year
(about $300,000), which assumed a first-line business partner
would develop the system under contract to DMV.
COMMENTS:
1)Background. At the time of retail sale, the vehicle dealer is
responsible for applying to DMV for the registration of a new
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vehicle and the transfer of registration for a used vehicle.
SB 46 (Polanco)/Chapter 127, Statutes of 2001, established the
electronic vehicle registration (EVR) program, whereby motor
vehicle dealers may enter into contracts to act as DMV
business partners for vehicle registration and titling
purposes. A business partner dealer communicates
electronically with DMV, either directly or through a
"first-line service provider", to register a vehicle it has
sold and then mails license plates, registration cards, and
registration stickers to the buyer.
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 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.
2)Purpose. This bill 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. 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 enforcement to identify vehicles involved in
traffic violations, hit-and-run accidents, and other criminal
activity.
In support, the California New Car Dealers Association, which
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was opposed to last year's version of this bill (see below),
believes that the $2 increase provided in the document
processing charge is sufficient to compensate dealers for the
added burden on dealers to comply with the TLP requirements.
3)Opposition. Consumers for Auto Reliability and Safety (CARS)
argues the bill will penalize buyers who, through no fault of
their own, do not receive their permanent license within 90
days, which CARS asserts still happens due to dealers going
out of business or dealer or DMV errors. CARS also objects to
the increased processing charge
4)Prior Legislation. AB 2197 (Mullin) of 2014, which was similar
to this bill, was held on this committee's Suspense file.
Analysis Prepared by:Chuck Nicol / APPR. / (916)
319-2081