BILL ANALYSIS Ó
AB 605
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Date of Hearing: April 27, 2015
ASSEMBLY COMMITTEE ON TRANSPORTATION
Jim Frazier, Chair
AB 605
(Gatto) - As Amended March 26, 2015
SUBJECT: Dealer charges: license plates
SUMMARY: Prohibits an electronic filing charge levied by a
first-line service provider from being used for any other
purpose than processing vehicle titling and registration
information, as specified.
EXISTING LAW:
1)Creates the Business Partner Automation (BPA) Program which
allows the Department of Motor Vehicles (DMV) to enter into
contracts to establish electronic programs to be used by
private industry partners for purposes of processing vehicle
titling and registration transactions, as specified.
2)Identifies three categories of private industry partners
within BPA and specifies the roles and responsibilities of
each category of BPA partner.
3)Requires DMV to adopt regulations and procedures to monitor
and provide oversight over BPA partners and the proper use of
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vehicle records.
4)Allows a dealer to charge the purchaser or lessee of a vehicle
an electronic filing charge to cover processing fees by a BPA
partner, as specified. Authorizes the Director of the DMV
through regulations to establish the maximum amount a BPA
partner may charge a dealer.
FISCAL EFFECT: Unknown
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. 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 "first-line
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.
AB 1215 (Blumenfield), Chapter 329, Statutes of 2011,
implemented significant changes to the vehicle registration
process including, now requiring new car dealers to participate
in the EVR program, reducing the period a vehicle may operate
with a report-of-sale notice to 90 days, and requiring license
plates to be attached upon receipt by the registered owner.
Under this process, a dealer uses a software program developed
by a first-line service provider to electronically process and
transfer the vehicle's title and registration information to
DMV. Once all the necessary documentation is in order, the
first-line service provider then issues permanent license plates
to the registered owner. AB 1215 also authorized dealers to
charge an EVR fee to customers that cover the cost of
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electronically processing registration and titling documents.
The author introduced AB 605 in attempt to resolve an
unintentional consequence that has resulted from the enactment
of AB 1215. Existing law and regulations have established the
EVR fee at a fixed $29 per EVR transaction and requires dealers
to use EVR through a first-line service provider. However, it
has been reported that a number of first-line service providers
are attracting dealers away from their existing EVR agreements
by incentivizing dealers to enter into new EVR agreements by
providing other services for free or at a heavily discounted
rate. These additional services include a dealer management
systems, digital retailing services, or website management.
Industry stakeholders argue that this practice does not reflect
the original intent of the EVR requirement as enacted under AB
1215 which was to only include the costs associated with vehicle
registration and the issuance of license plates. Thus, the
author notes that this bill aims to "clarify that the charge
being paid by consumers for electronically filing title and
registration documents with the DMV does not include costs
associated with services unrelated to EVR."
REGISTERED SUPPORT / OPPOSITION:
Support
Honorable Bob Blumenfield, Councilmember, City of Los Angeles
Motor Vehicle Software Corporation
AB 605
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Opposition
None on file
Analysis Prepared by:Manny Leon / TRANS. / (916) 319-2093