BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 605|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
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THIRD READING
Bill No: AB 605
Author: Gatto (D)
Amended: 6/16/15 in Senate
Vote: 21
SENATE TRANS. & HOUSING COMMITTEE: 9-0, 6/23/15
AYES: Beall, Cannella, Gaines, Galgiani, Leyva, McGuire,
Mendoza, Roth, Wieckowski
NO VOTE RECORDED: Allen, Bates
SENATE APPROPRIATIONS COMMITTEE: 6-0, 7/6/15
AYES: Lara, Beall, Hill, Leyva, Mendoza, Nielsen
NO VOTE RECORDED: Bates
ASSEMBLY FLOOR: 80-0, 5/14/15 - See last page for vote
SUBJECT: Dealer charges: license plates
SOURCE: Author
DIGEST: This bill limits the charges that can be included in
the electronic filing fee paid by automobile purchasers.
ANALYSIS:
Existing law:
1)Allows the Department of Motor Vehicles (DMV) electronic
vehicle registration (EVR) program to outsource some of the
vehicle licensing and titling functions to willing motor
vehicle dealers. Known as "business partners," these dealers
communicate electronically with the DMV to register the
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vehicles and then mail the license plates, registration cards,
and tags to the buyer. The dealers often utilize third
parties, known as first-line service providers, for this
processing. This outsourcing was intended to save DMV costs
by shifting them to dealers.
2)Allows dealers to pass along these costs to customers as a
separate charge, herein called an electronic filing charge.
DMV regulations currently limit the charge to $29, of which $4
is for DMV fees and $25 is for the first-line service
processors. This charge was last examined in 2006.
This bill prohibits the first-line service providers from
charging an electronic filing fee that is more than their costs
plus a reasonable profit.
Comments
Purpose of bill. The author is concerned that some first-line
service providers are overcharging for their EVR services, using
the extra profits to subsidize other services provided to the
dealers. To prevent overcharging, this bill specifies that the
electronic filing fee cannot be used to pay for any additional
fees, goods, or services not directly related to the electronic
registration of a motor vehicle.
A little bit of regulation. Preventing overcharging will
require the DMV to audit and investigate the books and records
of the first-line service providers. This is not a difficult
task, but it can be costly and is often adversarial. Government
agencies do this all the time; the California Public Utilities
Commission does this routinely when setting rates for electric,
natural gas, and water service. The DMV has a substantial
auditing department which should have the expertise to perform
this function.
Opposition concerns. Opponents are concerned that this bill
will subject them to regulation, the extent of which is unclear.
They believe that it is almost impossible to regulate prices
and that the effort will be fruitless, as all costs are passed
on to customers in any event.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
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According to the Senate Appropriations Committee, this bill will
introduce minor and absorbable costs to the DMV for enforcement
activities related to improper electronic filing charges.
(Motor Vehicle Account)
SUPPORT: (Verified7/6/15)
Bob Blumenfield, Los Angeles Councilmember
Motor Vehicle Software Corporation
TechNet
OPPOSITION: (Verified7/6/15)
Computerized Vehicle Registration
Dealertrack Technologies, Inc.
ASSEMBLY FLOOR: 80-0, 5/14/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang,
Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle,
Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina
Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,
Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden,
Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, 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
Prepared by:Randy Chinn / T. & H. / (916) 651-4121
7/9/15 9:10:22
**** END ****
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