Amended in Assembly March 26, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 605

Introduced by Assembly Member Gatto

February 24, 2015

An act to amend Section begin delete 1685 end delete begin insert 4456.5 end insert of the Vehicle Code, relating to vehicles.

LEGISLATIVE COUNSEL’S DIGEST

AB 605, as amended, Gatto. begin delete Department of Motor Vehicles: electronic programs: contracts. end delete begin insert Dealer charges: license plates. end insert

Existing law authorizes the Department of Motor Vehicles to establish contracts for electronic programs that allow qualified private industry partners to join the department in providing services that include processing and payment programs for vehicle registration and titling transactions. begin insert Under existing law, a dealer is authorized to charge the purchaser or lessee of a vehicle certain charges, including an electronic filing charge, not to exceed the actual amount the dealer is charged by a first-line service provider, for providing license plate processing, postage, and other specified fees and services relating to first-line service providers. end insert

This bill would begin delete make a technical, nonsubstantive change to these provisions. end delete begin insert specify that the filing charge would only be for the fees and services identified, and would not include any direct or indirect costs for unrelated first-line provider services, as specified. Because a violation of these provisions would constitute an infraction, this bill would impose a state-mandated local program. end insert

begin insert

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

end insert begin insert

This bill would provide that no reimbursement is required by this act for a specified reason.

end insert

Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program:  begin delete no end delete begin insert yes end insert .

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 4456.5 of the end insert begin insert Vehicle Code end insert begin insert is amended
to read: end insert

4456.5.  

(a) A dealer may charge the purchaser or lessee of a
vehicle the following charges:

(1) A document processing charge for the preparation and
processing of documents, disclosures, and titling, registration, and
information security obligations imposed by state and federal law.
The dealer document processing charge shall not be represented
as a governmental fee.

(A) If a dealer has a contractual agreement with the department
to be a private industry partner pursuant to Section 1685, the
document processing charge shall not exceed eighty dollars ($80).

(B) If a dealer does not have a contractual agreement with the
department to be a private industry partner pursuant to Section
1685, the document processing charge shall not exceed sixty-five
dollars ($65).

(2) An electronic filing charge, not to exceed the actual amount
the dealer is charged by a first-line service provider begin insert , only end insert for
providing license plate processing, postage, and the fees and
services authorized pursuant to subdivisions (a) and (d) of Section
1685. begin insert The electronic filing charge shall not include any direct or
indirect costs for first-line provider services unrelated to providing
license plate processing, postage, and the fees and services
authorized pursuant to subdivisions (a) and (d) of Section 1685. end insert
The director may establish, through the adoption of regulations,
the maximum amount that a first-line service provider may charge
a dealer. The electronic filing charge shall not be represented as a
governmental fee.

(b) As used in this section, the term “first-line service provider”
shall have the same meaning as defined in subdivision (b) of
Section 1685.

begin delete

(c) This section shall become operative on July 1, 2012.

end delete

begin insert

begin insert SEC. 2. end insert   

end insert begin insert

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.

end insert

begin delete

SECTION 1.  

Section 1685 of the Vehicle Code is amended to
read:

1685.  

(a) In order for the department to continue improving
the quality of products and services it provides to its customers,
the department, in conformance with Article 4 (commencing with
Section 19130) of Chapter 5 of Part 2 of Division 5 of Title 2 of
the Government Code, may establish contracts for electronic
programs that allow qualified private industry partners to join the
department in providing services that include processing and
payment programs for vehicle registration and titling transactions.

(b) (1) The department may enter into contractual agreements
with qualified private industry partners. There are the following
three types of private industry partnerships authorized under this
section:

(A) First-line business partner is an industry partner that receives
data directly from the department and uses it to complete
registration and titling activities for that partner’s own business
purposes.

(B) First-line service provider is an industry partner that receives
information from the department and then transmits it to another
authorized industry partner.

(C) Second-line business partner is a partner that receives
information from a first-line service provider.

(2) The private industry partner contractual agreements shall
include the following minimum requirements:

(A) Filing of an application and payment of an application fee,
as established by the department.

(B) Submission of information, including, but not limited to,
fingerprints and personal history statements, focusing on and
concerning the applicant’s character, honesty, integrity, and
reputation as the department may consider necessary.

(C) Posting a bond in an amount consistent with Section 1815.

(3) The department shall, through regulations, establish any
additional requirements for the purpose of safeguarding privacy
and protecting the information authorized for release under this
section.

(c) The director may establish, through the adoption of
regulations, the maximum amount that a qualified private industry
partner may charge its customers in providing the services
authorized under subdivision (a).

(d) The department shall charge a three-dollar ($3) transaction
fee for the information and services provided under subdivision
(a). The private industry partner may pass the transaction fee to
the customer, but the total charge to a customer may not exceed
the amount established by the director under subdivision (c).

(e) All fees collected by the department pursuant to subdivision
(d) shall be deposited in the Motor Vehicle Account. On January
1 of each year, the department shall adjust the fee in accordance
with the California Consumer Price Index. The amount of the fee
shall be rounded to the nearest whole dollar, with amounts equal
to, or greater than, fifty cents ($0.50) rounded to the next highest
whole dollar.

(f) The department shall adopt regulations and procedures that
ensure adequate oversight and monitoring of qualified private
industry partners to protect vehicle owners from the improper use
of vehicle records. These regulations and procedures shall include
provisions for qualified private industry partners to periodically
submit records to the department, and the department shall review
those records as necessary. The regulations shall also include
provisions for the dedication of department resources to program
monitoring and oversight; the protection of confidential records
in the department’s files and databases; and the duration and nature
of the contracts with qualified private industry partners.

(g) The department shall, annually, by October 1, provide a
report to the Legislature that shall include all of the following
information gathered during the fiscal year immediately preceding
the report date:

(1) Listing of all qualified private industry partners, including
names and business addresses.

(2) Volume of transactions, by type, completed by business
partners.

(3) Total amount of funds, by transaction type, collected by
business partners.

(4) Total amount of funds received by the department.

(5) Description of any fraudulent activities identified by the
department.

(6) Evaluation of the benefits of the program.

(7) Recommendations for any administrative or statutory
changes that may be needed to improve the program.

(h) This section does not impair or limit the authority provided
in Section 4610 or Section 12155 of the Insurance Code.

end delete