BILL ANALYSIS                                                                                                                                                                                                    

                              Senator Jim Beall, Chair
                                2015 - 2016  Regular 

          Bill No:          AB 516            Hearing Date:    7/7/2015
          |Author:   |Mullin                                                |
          |Version:  |6/30/2015                                             |
          |Urgency:  |No                     |Fiscal:      |Yes             |
          |Consultant|Randy Chinn                                           |
          |:         |                                                      |

          SUBJECT:  Vehicles:  temporary license plates

            DIGEST:  This bill requires the Department of Motor Vehicles  
          (DMV) to create a process to issue temporary license plates  
          (TLPs) by January 1, 2018, and requires dealers to attach TLPs  
          to all unplated vehicles when they are sold beginning January 1,  

          Existing law:
          1)Requires dealers, when selling a vehicle, to use the  
            report-of-sale forms issued by the DMV, to give written notice  
            of the sale to the DMV not later than the fifth calendar day  
            after the sale, and to display a copy of the report of sale on  
            the vehicle.

          2)Permits vehicles displaying a copy of the report-of-sale to be  
            operated until the license plates are received by the  
            purchaser or for 90 days, whichever occurs first.  The penalty  
            for failing to display the plate is a fix-it ticket.

          3)Authorizes dealers to charge document preparation fees of $80  
            for new cars and $65 for used cars.

          This bill:

          1)Requires the DMV, by January 1, 2018, to develop a system for  


          AB 516 (Mullin)                                    Page 2 of ?
            electronically reporting vehicle sales before the vehicle is  
            delivered to the purchaser and for issuing TLPs.

          2)Requires dealers, by January 1, 2018, to affix the TLP to the  
            automobile at the time of sale.

          3)Requires the DMV to recover the cost of developing the TLP  
            system by increasing existing fees for the recording of  
            notices of delinquent parking violations and delinquent toll  
            evasions beginning January 1, 2017.

          4)Authorizes dealers, beginning January 1, 2018, to raise their  
            document processing fees by $10, from $80 to $90 for new cars  
            and from $65 to $75 for used cars.

          Purpose.  The author is concerned that current law allows  
          thousands of vehicles to drive on our roads with no license  
          plate, creating a public safety hazard and reducing toll revenue  
          by $15 million per year as a result of vehicles without plates  
          using toll roads and bridges without payment.

          Electronic toll payment collection systems rely upon a photo of  
          the vehicle's license plate for enforcement.  Without a plate,  
          vehicles are able to use toll lanes and toll bridges without  
          much fear of getting caught.  Because cars are often sold  
          without plates, and it is legal to operate without plates for 90  
          days, transportation agencies are concerned about revenue  
          losses.  The Metropolitan Transportation Commission estimates  
          that it loses $9 million annually in unpaid tolls, with  
          statewide losses of $15 million.

          Other supporters emphasize that having licenses on all vehicles  
          will improve public safety, allowing law enforcement to more  
          quickly and safely identify vehicles.  They note that 35 states  
          have temporary license plate programs.

          Winners and losers.  The major beneficiaries of this bill are  
          tolling agencies, which will recoup tens of millions of dollars  
          in lost revenue.  The major losers are the toll evaders, who  
          will now have to pay like everyone else.  But this bill also  
          creates costs for all car buyers, who will pay an additional $10  
          to cover the costs incurred by car dealers to implement the TLP  
          system.  If the goal is to stop cheating on toll roads and toll  


          AB 516 (Mullin)                                    Page 3 of ?
          bridges, an alternative, simpler, more quickly implemented  
          solution would be to increase patrols of these facilities.  The  
          California Highway Patrol could be contracted to enforce the  
          laws, perhaps with an increased penalty for non-compliance,  
          without increasing costs to anyone except the law breakers.  

          Electronic reporting of sales.  The provision in the bill  
          requiring the development of an electronic reporting of sales  
          (ROS) process by January 1, 2018, was suggested by the DMV.  The  
          ROS process would also result in the creation of a TLP, adding  
          efficiencies for vehicle dealers, other retailers, and the DMV  
          by eliminating the existing paper process.  Given the state's  
          uneven record with technology procurement, the progress of this  
          project will need to be followed closely.

          Opposition.  Opponents are concerned that the bill unfairly  
          penalizes consumers by making it illegal for them to drive their  
          cars without permanent plates after 90 days, even if the failure  
          to receive those plates was not the consumers' fault.  Current  
          law already makes it illegal to operate a vehicle for more than  
          90 days without a permanent plate.  But the TLP required by this  
          bill will likely have an expiration date, making it easier to  
          enforce the 90-day limit.  Therefore, this bill increases the  
          likelihood that a driver could be pulled over and cited for a  
          failure to have permanent plates.  It seems reasonable to allow  
          for an exemption to the 90-day limit in cases where the driver  
          has not received permanent plates through no fault of her own.

          Double referred.  This bill is also referred to the Senate  
          Public Safety Committee.

          Related Legislation:
          AB 2197 (Mullin, 2014) - similar to this bill, established a TLP  
          program. This bill was held in the Assembly Appropriations  

          Assembly Votes:

            Floor:    74-1
            Appr:     12-0
            Trans:    16-0
          FISCAL EFFECT:  Appropriation:  No    Fiscal Com.:  Yes     
          Local:  Yes


          AB 516 (Mullin)                                    Page 4 of ?

            POSITIONS:  (Communicated to the committee before noon on  
                          July 1, 2015.)

          California Association of Highway Patrolmen
          California Lien Agents Association
          California Police Chiefs Association
          California State Sheriff's Association
          City/County Association of Governments of San Mateo County
          Golden Gate Bridge Highway and Transportation District
          Metropolitan Transportation Commission
          San Diego Association of Governments
          San Francisco County Transportation Authority
          Santa Clara Valley Transportation Authority
          Solano Transportation Authority
          Transportation Authority of Marin

          California Rural Legal Assistance Foundation
          Consumers for Auto Reliability and Safety
          Kemnitzer, Barron & Krieg, LLP
          Lawyers Committee for Civil Rights of the San Francisco Bay Area


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