Amended in Assembly April 12, 2016

California Legislature—2015–16 Regular Session

Assembly BillNo. 1714


Introduced by Assembly Member Brough

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(Coauthors: Assembly Members Achadjian, Travis Allen, Gallagher, Mathis, Mayes, Obernolte, Olsen, Patterson, Steinorth, Wagner, and Waldron)

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(Coauthors: Senators Anderson, Bates, Morrell, and Runner)

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January 26, 2016


An act tobegin delete amend Section 1685 ofend deletebegin insert add Section 1686 toend insert the Vehicle Code, relating to the Department of Motor Vehicles.

LEGISLATIVE COUNSEL’S DIGEST

AB 1714, as amended, Brough. Department of Motor Vehicles: services: third-party contracts.

Existing law authorizes the Department of Motor Vehicles, in conformance with certain provisions in existing law relating to personal services contracts with private parties, to establish contracts for electronic programs that allow qualified private industry partners to join the department to provide title and vehicle registration transactions. Existing law authorizes the department to enter into contractual agreements with 3 specified types of private industry partners for this purpose, and to charge a transaction fee for the information and services provided.

This bill would expand the services for which the department would be authorized to establish contracts with private industry partners as described above, to includebegin insert processing and payment programs forend insert driver’s licensebegin delete renewals, eyesight and hearing tests, and fingerprinting and photography services. The bill would make other technical and conforming changes.end deletebegin insert renewals, as specified.end insert

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

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

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begin insertSECTION 1.end insert  

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begin insertSection 1686 is added to the end insertbegin insertVehicle Codeend insertbegin insert, to
2read:end insert

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3

begin insert1686.end insert  

(a) In order to continue to improve the quality of
4products and services it provides to its customers, the department,
5in conformance with Article 4 (commencing with Section 19130)
6of Chapter 5 of Part 2 of Division 5 of Title 2 of the Government
7Code, may establish contracts for electronic programs that allow
8qualified private industry partners to join the department in
9providing services that include processing and payment programs
10for driver’s license renewals pursuant to Section 12800.

11
(b) (1) The department may enter into contractual agreements
12with qualified private industry partners to provide the services
13authorized under subdivision (a). The following three types of
14private industry partnerships are authorized under this section:

15
(A) A first-line business partner is an industry partner that
16receives data directly from the department and uses it to complete
17an activity authorized in subdivision (a), for that partner’s own
18business purposes.

19
(B) A first-line service provider is an industry partner that
20receives information from the department and then transmits it to
21another authorized industry partner.

22
(C) A second-line business partner is a partner that receives
23information from a first-line service provider.

24
(2) The private industry partner contractual agreements shall
25include the following minimum requirements:

26
(A) Filing of an application and payment of an application fee,
27as established by the department.

28
(B) Submission of information, including, but not limited to,
29fingerprints and personal history statements, focusing on and
30concerning the applicant’s character, honesty, integrity, and
31reputation as the department may consider necessary.

32
(C) Posting a bond in an amount consistent with Section 1815.

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(3) A private industry partner’s contractual agreements shall
2be met for purposes of this section if the private industry partner
3satisfies the contractual agreements required in Section 1685.

4
(4) The department, by regulation, shall establish any additional
5requirements for the purpose of safeguarding privacy and
6protecting the information authorized for release under this section.

7
(c) The director, through the adoption of regulations, may
8establish the maximum amount that a qualified private industry
9partner may charge its customers in providing the services
10authorized under subdivision (a).

11
(d) The department shall charge a three-dollar ($3) transaction
12fee for each category of information and services provided under
13subdivision (a). The private industry partner may pass the
14transaction fee to the customer, but the total charge to a customer
15for any category of information and services may not exceed the
16amount established by the director under subdivision (c).

17
(e) All fees collected by the department pursuant to subdivision
18(d) shall be deposited in the Motor Vehicle Account. On January
191 of each year, the department shall adjust the fee in accordance
20with the California Consumer Price Index. The amount of the fee
21shall be rounded to the nearest whole dollar, with amounts equal
22to, or greater than, fifty cents ($0.50) rounded to the next highest
23whole dollar.

24
(f) The department shall adopt or revise regulations and
25procedures that ensure adequate oversight and monitoring of
26qualified private industry partners to protect the department’s
27customers from the improper use of information provided to the
28qualified industry partner pursuant to this section. These
29regulations and procedures shall include provisions for qualified
30private industry partners to periodically submit records to the
31department, and the department shall review those records as
32necessary. The regulations shall also include provisions for the
33dedication of department resources to program monitoring and
34oversight; the protection of confidential records in the department’s
35files and databases; and the duration and nature of the contracts
36with qualified private industry partners.

37
(g) Notwithstanding Section 10231.5 of the Government Code,
38by October 1 of each year, the department shall provide a report
39to the Legislature that shall include all of the following information
P4    1gathered during the fiscal year immediately preceding the report
2date:

3
(1) Listing of all qualified private industry partners, including
4names and business addresses.

5
(2) Volume of transactions, by type, completed by business
6partners.

7
(3) Total amount of funds, by transaction type, collected by
8business partners.

9
(4) Total amount of funds received by the department.

10
(5) Description of any fraudulent activities identified by the
11 department.

12
(6) Evaluation of the benefits of the program.

13
(7) Recommendations for any administrative or statutory
14changes that may be needed to improve the program.

15
(h) A report submitted under subdivision (g) shall be submitted
16pursuant to Section 9795 of the Government Code.

17
(i) This section does not impair or limit the authority provided
18in Section 12155 of the Insurance Code.

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SECTION 1.  

Section 1685 of the Vehicle Code is amended to
20read:

21

1685.  

(a) In order to continue improving the quality of products
22and services it provides to its customers, the department, in
23conformance with Article 4 (commencing with Section 19130) of
24Chapter 5 of Part 2 of Division 5 of Title 2 of the Government
25Code, may establish contracts for electronic programs that allow
26qualified private industry partners to join the department in
27providing services that include processing and payment programs
28for all of the following:

29(1) Vehicle registration and titling transactions.

30(2) Driver’s license renewals.

31(3) Eyesight and hearing tests.

32(4) Fingerprinting services.

33(5) Photography services.

34(b) (1) The department may enter into contractual agreements
35with qualified private industry partners to provide the services
36authorized under subdivision (a). The following three types of
37private industry partnerships are authorized under this section:

38(A) A first-line business partner is an industry partner that
39receives data directly from the department and uses it to complete
P5    1 an activity authorized in subdivision (a), for that partner’s own
2business purposes.

3(B) A first-line service provider is an industry partner that
4receives information from the department and then transmits it to
5another authorized industry partner.

6(C) A second-line business partner is a partner that receives
7information from a first-line service provider.

8(2) The private industry partner contractual agreements shall
9include the following minimum requirements:

10(A) Filing of an application and payment of an application fee,
11as established by the department.

12(B) Submission of information, including, but not limited to,
13fingerprints and personal history statements, focusing on and
14concerning the applicant’s character, honesty, integrity, and
15reputation as the department may consider necessary.

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

17(3) The department, by regulation, shall establish any additional
18requirements for the purpose of safeguarding privacy and protecting
19the information authorized for release under this section.

20(c) The director, through the adoption of regulations, may
21establish the maximum amount that a qualified private industry
22partner may charge its customers in providing the services
23authorized under subdivision (a).

24(d) The department shall charge a three-dollar ($3) transaction
25fee for each category of information and services provided under
26subdivision (a). The private industry partner may pass the
27transaction fee to the customer, but the total charge to a customer
28for any category of information and services may not exceed the
29amount established by the director under subdivision (c).

30(e) All fees collected by the department pursuant to subdivision
31(d) shall be deposited in the Motor Vehicle Account. On January
321 of each year, the department shall adjust the fee in accordance
33with the California Consumer Price Index. The amount of the fee
34shall be rounded to the nearest whole dollar, with amounts equal
35to, or greater than, fifty cents ($0.50) rounded to the next highest
36whole dollar.

37(f) The department shall adopt or revise regulations and
38procedures that ensure adequate oversight and monitoring of
39qualified private industry partners to protect vehicle owners and
40other department customers from the improper use of vehicle
P6    1records or other information provided to the qualified industry
2partner pursuant to this section. These regulations and procedures
3shall include provisions for qualified private industry partners to
4periodically submit records to the department, and the department
5shall review those records as necessary. The regulations shall also
6include provisions for the dedication of department resources to
7program monitoring and oversight; the protection of confidential
8 records in the department’s files and databases; and the duration
9and nature of the contracts with qualified private industry partners.

10(g) Notwithstanding Section 10231.5 of the Government Code,
11by October 1 of each year, the department shall provide a report
12to the Legislature that shall include all of the following information
13gathered during the fiscal year immediately preceding the report
14date:

15(1) Listing of all qualified private industry partners, including
16names and business addresses.

17(2) Volume of transactions, by type, completed by business
18partners.

19(3) Total amount of funds, by transaction type, collected by
20business partners.

21(4) Total amount of funds received by the department.

22(5) Description of any fraudulent activities identified by the
23department.

24(6) Evaluation of the benefits of the program.

25(7) Recommendations for any administrative or statutory
26changes that may be needed to improve the program.

27(h) A report submitted under subdivision (g) shall be submitted
28pursuant to Section 9795 of the Government Code.

29(i) This section does not impair or limit the authority provided
30in Section 4610 or Section 12155 of the Insurance Code.

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