BILL ANALYSIS Ó
AB 605
Page 1
ASSEMBLY THIRD READING
AB
605 (Gatto)
As Amended March 26, 2015
Majority vote
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|Committee |Votes |Ayes |Noes |
|----------------+------+------------------------+-------------------|
|Transportation |16-0 |Frazier, Achadjian, | |
| | |Baker, Bloom, Chu, | |
| | |Daly, Dodd, Eduardo | |
| | |Garcia, Gomez, Kim, | |
| | |Linder, Medina, | |
| | |Melendez, Nazarian, | |
| | |O'Donnell, Santiago | |
| | | | |
|----------------+------+------------------------+-------------------|
|Appropriations |17-0 |Gomez, Bigelow, Bloom, | |
| | |Bonta, Calderon, Chang, | |
| | |Daly, Eggman, | |
| | |Gallagher, Eduardo | |
| | |Garcia, Holden, Jones, | |
| | |Quirk, Rendon, Wagner, | |
| | |Weber, Wood | |
| | | | |
| | | | |
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SUMMARY: Prohibits an electronic filing charge levied by a
first-line service provider from being used for any other purpose
AB 605
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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
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: According to the Assembly Appropriations
Committee, "Negligible fiscal impact."
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, Statutes of 2001, DMV
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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 electronically processing registration and
titling documents.
The author introduced this bill 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 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
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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."
Analysis Prepared by:
Manny Leon / TRANS. / (916) 319-2093 FN: 0000299