BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          AB 516 (Mullin) - Vehicles:  temporary license plates
          
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          |Version: July 16, 2015          |Policy Vote: T. & H. 10 - 0,    |
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          |Urgency: No                     |Mandate: Yes                    |
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          |Hearing Date: August 24, 2015   |Consultant: Mark McKenzie       |
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          This bill meets the criteria for referral to the Suspense File. 







          Bill  
          Summary:  AB 516 would require the Department of Motor Vehicles  
          (DMV) to develop a system for vehicle dealers to report vehicle  
          sales electronically by January 1, 2018, and require the system  
          to produce a temporary license plate (TLP) that must be affixed  
          to the vehicle prior to delivery to the purchaser or lessee.   
          The bill would authorize DMV to adjust the fees for recording a  
          notice of delinquent parking and toll evasion violations as of  
          January 1, 2017 to cover costs to administer the system.  The  
          bill would also authorize dealers to increase existing document  
          processing charges by $10 on each vehicle transaction.


          Fiscal  







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          Impact:  
           One-time DMV costs of approximately $2.4 million in 2016-17 to  
            develop and implement an automated vehicle report-of-sale  
            (ROS) process, and ongoing costs of approximately $700,000  
            annually thereafter, offset by administrative savings of  
            $920,000 annually, beginning January 1, 2018.  As a result,  
            DMV would have net costs of $260,000 in 2017-18, and net  
            savings of $220,000 annually thereafter. (Motor Vehicle  
            Account)

           Unknown fee revenue gains to DMV beginning January 1, 2017  
            related to the authorization to adjust the fees for recording  
            notices of parking and toll evasion violations.  DMV expects  
            to adjust the fees in an amount sufficient to offset costs to  
            develop the ROS system. (Motor Vehicle Account)

           Unknown, potentially significant local toll revenue gains  
            related to reduced toll evasion as a result of the requirement  
            for dealers to affix a TLP at the time of a vehicle  
            transaction. (local funds)


          Background:  Existing law requires vehicle dealers and lessor-retailers to  
          use numbered ROS forms issued by DMV when selling a vehicle, to  
          give written notice of the sale to DMV not later than the fifth  
          calendar day after the sale, and to display a copy of the report  
          of sale on the vehicle.  Existing law authorizes the operation  
          of a vehicle without license plates or a registration card if  
          the vehicle is displaying a copy of the ROS for 90 days  
          following a purchase or until the license plates are received by  
          the purchaser, whichever occurs first.  The penalty for failure  
          to display a license plate is a fix-it ticket. 

          Existing law authorizes vehicle dealers to charge a document  
          processing charge on the purchase or lease of a vehicle for the  
          preparation and processing of documents, disclosures, and  
          titling, registration, and information security obligations  
          imposed by state and federal law.  If a dealer has a contractual  
          agreement with DMV to be a private industry partner, the  
          document processing charge cannot exceed $80, otherwise the  
          charge is a maximum of $65.

          Existing law makes the altering, forging, counterfeiting, or  
          falsification of a certificate of ownership, registration card,  








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          or license plate (among other documents) a "jail wobbler,"  
          punishable by imprisonment for 16 months, or two or three years,  
          or by imprisonment in a county jail for not more than one year.   



          Proposed Law:  
            AB 516 would require DMV to develop a system for vehicle  
          dealers to report vehicle sales electronically by January 1,  
          2018.  Specifically, this bill would:
           Authorize DMV to contract with private industry partners for  
            services related to reporting vehicle sales and producing  
            TLPs.
           Require DMV to develop and implement an electronic ROS system  
            by January 1, 2018 that conforms to specified conditions,  
            including a requirement that the system produce a TLP to be  
            used and displayed in lieu of license plates, for vehicles  
            that do not already display plates.
           Require the TLP to display a unique ROS number and an  
            expiration date.
           Require dealers to report vehicle sales using the electronic  
            ROS system, effective January 1, 2018, and then affix a TLP  
            issued by the system, if the vehicle does not display license  
            plates previously issued by DMV.
           Require the TLP to be displayed until the permanent plates are  
            received by the purchaser, or 90 days have passed since the  
            vehicle sale, whichever is sooner, and requires TLPs to be  
            replaced by the permanent plates and subsequently destroyed.
           Authorize the display of a TLP for longer than 90 days if the  
            owner has not received permanent plates and submits proof that  
            an application was submitted to DMV.
           Authorize DMV to adjust the fee assessed for the recording of  
            a notice of delinquent parking or toll evasion violations,  
            beginning January 1, 2017, to provide for its costs of  
            administering the ROS system.
           Authorize vehicle dealers to increase the document processing  
            charge by $10, beginning January 1, 2018, to a maximum of $90  
            for new vehicle purchases and to $75 for used vehicle  
            purchases.
           Authorize a specified electronic filing charge that dealers  
            charge a purchaser or lessee to include the actual amount a  
            dealer is charged by a first line provider for providing  
            services related to reporting vehicle sales and producing  
            TLPs.








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           Make the altering, forging, counterfeiting, or falsification  
            of a TLP a "jail wobbler."


          Related  
          Legislation:  AB 2197 (Mullin), which was held on the Assembly  
          Appropriations Committee Suspense File last year, would have  
          required vehicles sold or leased without a permanent license  
          plate to be affixed with a TLP.


          Staff  
          Comments:  This bill is intended to address problems associated  
          with toll evasion by vehicles that do not have license plates.   
          The bill also increases efficiencies by requiring all dealer  
          vehicle sales to be performed through an electronic ROS process,  
          rather than recording vehicle sales through paper forms.
          DMV indicates that costs to develop the electronic ROS system  
          would be about $2.4 million in 2016-17, with ongoing  
          administrative costs of approximately $700,000 annually  
          thereafter.  The department would increase the administrative  
          service fees charged to parking authorities and toll operators  
          for the collection of unpaid fines through DMV in order to  
          recover costs associated with developing and implementing the  
          electronic ROS and TLP system.  Managing transactions  
          electronically would eliminate current DMV costs for printing,  
          shipping and handling, and manual keying of record of sale  
          forms, resulting in annual ongoing savings of $920,000 upon full  
          implementation.




          Recommended  
          Amendments:  Staff notes that both this bill and AB 605 (Gatto)  
          amend Vehicle Code  4456.5.  Both bills will require amendments  
          to avoid chaptering conflicts.


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