BILL ANALYSIS                                                                                                                                                                                                    Ó

          |SENATE RULES COMMITTEE            |                        AB 516|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
          |327-4478                          |                              |

                                   THIRD READING 

          Bill No:  AB 516
          Author:   Mullin (D), et al.
          Amended:  6/23/16 in Senate
          Vote:     21  

           SENATE TRANS. & HOUSING COMMITTEE:  10-0, 7/7/15
           AYES:  Beall, Cannella, Allen, Bates, Galgiani, Leyva, McGuire,  
            Mendoza, Roth, Wieckowski
           NO VOTE RECORDED:  Gaines

           SENATE PUBLIC SAFETY COMMITTEE:  5-2, 7/14/15
           AYES:  Hancock, Glazer, Leno, Liu, Monning
           NOES:  Anderson, Stone

           AYES:  Lara, Bates, Beall, Hill, Leyva, Mendoza
           NOES:  Nielsen

           ASSEMBLY FLOOR:  74-1, 6/4/15 - See last page for vote

           SUBJECT:   Vehicles: temporary license plates

          SOURCE:    California Association of Highway Patrolmen

          DIGEST:   This bill requires the Department of Motor Vehicles  
          (DMV) to create a process to issue temporary license plates  
          (TLPs) by January 1, 2019, and requires dealers to attach TLPs  
          to all unplated vehicles when they are sold beginning January 1,  

          Senate Floor Amendments of 6/23/16 (1) delay the implementation  


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          by one year, to January 1, 2019, and reduce the increase in the  
          document process fee to $5; and (2) also establish a 14-day  
          grace period for installing the permanent license plate after  
          they are issued to the owner.


          Existing law:

          1)Requires dealers, when selling a vehicle, to use the report of  
            sale (ROS) 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 ROS on the  

          2)Permits vehicles displaying a copy of the ROS 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.

          4)Makes the altering, forging, etc., of various DMV documents a  
            jail wobbler.

          This bill:

          1)Requires the DMV, by January 1, 2019, to develop a system for  
            electronically reporting vehicle sales before the vehicle is  
            delivered to the purchaser and for issuing TLPs.

          2)Requires dealers, by January 1, 2019, to affix the TLP to the  
            automobile at the time of sale.


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          3)Establishes a 14-day grace period for installing the permanent  
            license plate after they are issued to the owner.

          4)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, 2018.

          5)Authorizes dealers, beginning January 1, 2019, to raise their  
            document processing fees by $5, from $80 to $85 for new cars  
            and from $65 to $70 for used cars.

          6)Makes the altering, forging, etcetera of a TLP a jail wobbler.


          1)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 TLP programs.


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          2)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 $5 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 bridges, an alternative, simpler, more  
            quickly implemented solution would be to increase patrols of  
            these facilities.  

          3)Electronic reporting of sales.  The provision in this bill  
            requiring the development of an electronic ROS process by  
            January 1, 2019, 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.

          4)Opposition.  Opponents oppose the increase in dealer fees.   
            Also, while this bill contains safeguards to ensure that car  
            purchasers aren't cited if they don't display their permanent  
            plates within 90 days because they haven't received them,  
            opponents are concerned that those safeguards are inadequate.

          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   Yes
          According to the Senate Appropriations Committee:

          1)One-time DMV costs of approximately $2.4 million in 2016-17 to  
            develop and implement an automated vehicle 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)


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          2)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)

          3)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)

          SUPPORT:  (Verified  6/27/16)

          California Association of Highway Patrolmen (source)
          California Lien Agents Association
          California Police Chiefs Association, Inc.
          California State Lodge, Fraternal Order of Police
          California State Sheriffs' Association
          City/County Association of Governments of San Mateo County
          Golden Gate Bridge Highway and Transportation District
          Long Beach Police Officers Association
          Los Angeles County Professional Peace Officers Association
          Los Angeles County Sheriff's Department
          Metropolitan Transportation Commission
          Sacramento County Deputy Sheriffs' Association
          San Diego Association of Governments
          San Francisco County Transportation Authority
          Santa Clara Valley Transportation Authority
          Solano Transportation Authority
          Transportation Authority of Marin
          Transportation Corridor Agencies

          OPPOSITION:   (Verified6/27/16)

          California Rural Legal Assistance Foundation


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          Californians United for a Responsible Budget
          Car Dealers Saving Lives
          Consumer Action
          Consumer Federation of California
          Consumers for Auto Reliability and Safety
          Kemnitzer, Barron & Krieg, LLP
          Lawyers' Committee for Civil Rights of the San Francisco Bay  

          ASSEMBLY FLOOR:  74-1, 6/4/15
          AYES:  Achadjian, Alejo, Baker, Bigelow, Bloom, Bonilla, Bonta,  
            Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu,  
            Chu, Cooley, Cooper, Dababneh, Daly, Dodd, Eggman, Frazier,  
            Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia,  
            Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley,  
            Roger Hernández, Holden, Irwin, Jones-Sawyer, Kim, Lackey,  
            Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty,  
            Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell,  
            Olsen, Patterson, Perea, Quirk, Rendon, Ridley-Thomas,  
            Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond,  
            Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins
          NOES:  Levine
          NO VOTE RECORDED:  Travis Allen, Brough, Dahle, Harper, Jones

          Prepared by:Randy Chinn / T. & H. / (916) 651-4121
          6/29/16 15:45:44

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