BILL ANALYSIS                                                                                                                                                                                                    



                                                                     AB 516


                                                                    Page  1


          (Without Reference to File)





          CONCURRENCE IN SENATE AMENDMENTS


          AB  
          516 (Mullin)


          As Amended  June 23, 2016


          Majority vote


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          |ASSEMBLY:  |74-1  |(June 4, 2015) |SENATE: |30-6  | (June 30, 2016) |
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          Original Committee Reference:  TRANS.


          SUMMARY:  Requires the Department of Motor Vehicles (DMV) to  
          develop and implement an electronic vehicle report of sale  
          system and permits vehicles sold or leased without a permanent  
          license plate to be affixed with a temporary license plate  
          (TLP).  


          The Senate amendments: 


          1)Increase the document preparation fee a motor vehicle dealer  
            may charge a customer by $5, as specified. 









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          2)Allow a vehicle to continue to operate with a report-of-sale  
            form or TLP after 90 days if the owner has not received  
            permanent license plates and can provide sufficient proof that  
            they have submitted the appropriate documentation to DMV, as  
            specified. 


          3)Clarify the existing electronic filing charge is not to exceed  
            the cost associated with administering the report of sale  
            system and producing TLP's, as specified.  


          4)Require DMV to develop standards for TLPs, as specified.


          5)Delay the bill's implementation date until January 1, 2019.


          AS PASSED BY THE ASSEMBLY, this bill:


          1)Required a dealer or lessor to use the electronic report of  
            sale system and attach a TLP on a vehicle sold or leased that  
            does not display license plates, as specified.


          2)Permitted a vehicle to operate with TLPs or a report of sale  
            form until either:


             a)   The permanent license plates and registration card are  
               received by the vehicle owner; or, 


             b)   Ninety days have lapsed from the vehicle's selling date.  
                


          1)Required DMV to develop a system for dealers and  
            lessor-retailers to electronically report the sale of a  
            vehicle, as specified.  








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          2)Provided that the electronic report of sale system will  
            produce TLP's for vehicle's sold or leased that do not display  
            license plates and specifies the TLP will display a report of  
            sale number, expiration date, and any other information as  
            determined by DMV. 


          3)Required a dealer to assign each transaction with a unique  
            report of sale number that will be used on all report of sale  
            forms and TLP for a vehicle.  


          4)Required the electronic report of sale system to record the  
            vehicle identification number, the vehicle year, model, and  
            make, the dealer or lessor-retailer purchaser name, and any  
            other information as determined by DMV. 


          5)Required the electronic report of sale system to be developed  
            and made available to dealers by no later than January 1,  
            2018.


          6)Specified that it is a felony for a person to alter, forge,  
            counterfeit, or falsify a TLP. 


          7)Authorized DMV to charge an administrative fee to applicable  
            public agencies for processing delinquent parking violations  
            and toll evasion violations to cover the cost of administering  
            the electronic report of sale system. 


          8)Required TLPs to be affixed to the vehicle and requires the  
            owner to remove TLPs upon receipt of permanent plates.  


          9)Made additional technical and conforming changes in order to  
            implement and enforce DMV's electronic report of sale system.


          FISCAL EFFECT:  According to the Senate Appropriations  








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          Committee:


          1)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)


          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)


          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  








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          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  
          electronic vehicle registration (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 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 days 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.  


          This bill directs DMV to develop an electronic vehicle report of  
          sale system that will allow dealers to electronically transmit  
          vehicle report of sale information and also issue TLPs as a  
          means to ensure purchased or leased 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, this bill requires DMV to develop  
          an electronic report of sale system, requires dealers to attach  
          TLPs on a purchased vehicle at the point-of-sale, and requires a  








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          vehicle owner to remove TLPs and affix permanent license plates  
          on their vehicle upon receipt.


          Analysis Prepared by:                                             
                          Justin Behrens / TRANS. / (916) 319-2093  FN:  
          0003544