BILL ANALYSIS Ó
AB 1714
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Date of Hearing: April 18, 2016
ASSEMBLY COMMITTEE ON TRANSPORTATION
Jim Frazier, Chair
AB 1714
(Brough) - As Amended April 12, 2016
SUBJECT: Department of Motor Vehicles: services: third-party
contracts
SUMMARY: Expands the types of transactions for which the
Department of Motor Vehicles (DMV) may establish contracts with
private industry partners to include processing and payment
programs for driver's license renewals.
EXISTING LAW:
1)Requires an applicant for an original or renewal of a driver's
license to provide DMV with information including the
applicant's true full name, age, sex, mailing address,
residence address, social security account number or proof of
legal presence in the United States or proof of residency in
California, and a full-face photograph of the applicant.
2)Requires DMV to report information from an applicant for a
driver's license or identification card relating to voter
registration to the Secretary of State.
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3)Requires the renewal of a driver's license every 5 years.
4)Authorizes DMV to conduct driver's license renewals by mail
for persons under the age of 70 who have not renewed their
license by mail twice consecutively.
5)Authorizes DMV to establish contracts for electronic programs
that allow qualified private industry partners to provide
services that include processing and payment programs for
vehicle registration and titling transactions.
6)Requires a new motor vehicle dealer to use electronic programs
provided by a specific type of private industry partner to
register a vehicle the dealer sells or leases if DMV permits
the transaction to be processed electronically, except for
off-highway or recreational vehicles.
FISCAL EFFECT: Unknown
COMMENTS: Existing law, [SB 46 (Polanco), Chapter 127, Statutes
of 2001], establishes DMV's Business Partner Automation (BPA)
program and authorizes the department to enter into contracts
that allow private industry partners to process specific
vehicle-related transactions, such as vehicle registration and
titling. Under this program, a business partner communicates
with DMV either directly or through a service provider to
complete the transaction. In 2011,
AB 1215 (Blumenfield), Chapter 329, Statutes of 2011, required
licensed new motor vehicle dealers to participate in the BPA
program and electronically process all vehicle sales and leases.
Since that time, the BPA program has grown to become the
primary processing method for these transactions, and more than
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$1.2 billion in annual vehicle-related state revenue is received
by the state through the BPA program.
AB 1714 would similarly allow DMV to conduct transactions
through private industry partnerships relating to driver's
license renewals.
According to the author, AB 1714 would improve DMV customers'
experiences with the department by streamlining the role DMV
plays in providing license renewal services through a
public-private partnership with industry partners. The author
intends this bill to alleviate the wait times that DMV customers
often encounter in local DMV field offices. The author cites
the 25 million customer transactions handled by DMV in 2013 and
the growth in the proportion of Californians eligible for
driver's licenses under AB 60 (Alejo), Chapter 524, Statutes of
2013, as evidence of the significant volume of work undertaken
by DMV that could be lessened through additional private
industry participation.
As the author notes, the Administration has indicated a shift
towards eliminating the need for some DMV transactions to be
conducted in field offices through an $8 million proposal in the
2016-17 state budget to fund self-service kiosks to conduct DMV
transactions in places like grocery stores.
According to the American Association of Motor Vehicle
Administrators, 18 other states outsource some motor vehicle
functions to private industry.
Committee concerns: While the BPA program has been successful
in demonstrating the potential for streamlining DMV functions
through the use of private industry participation, the
transactions authorized to be conducted under that program are
constrained to vehicle registration and titling. The complexity
of those transactions and information involved is significantly
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different from that of driver's license renewals.
In addition to basic identification information, driver's
license renewals require the applicant to provide additional
information, for example, information relating to social
security, immigration status, and voter registration. That
information must all be verified by DMV with the Social Security
Administration, the Department of Homeland Security, and the
Secretary of State. While it is often necessary for government
agencies to share this kind of information, authorizing private
vendors to collect and examine that information is
inappropriate. Furthermore, encouraging DMV customers to share
that information with private vendors would likely create a
threat to those customers' privacy and identification security.
If DMV were to be required to collect and verify that
information as part of the transactions conducted by industry
partners, it would likely eliminate whatever value was added by
outsourcing those functions.
The functions that DMV performs related to identification are
also closely related to ensuring that license holders are
appropriately certified for safely operating motor vehicles.
While DMV currently has extensive control over who is able to
receive a driver's license and how an applicant's abilities are
tested, delegating that control to private industry could result
in substandard enforcement of requirements, unsafe licensure, or
fraud. For example, the holder of a highly-regulated commercial
driver's license might be subjected to all the requirements
established by state and federal law when renewing that license
through DMV, but when renewing through a private vendor,
inconsistencies in how that vendor operates compared to the
department could lead to a renewal that would not otherwise meet
state and federal requirements. In that example, since federal
requirements on interstate trucking include rules on commercial
licenses, a worst-case scenario in improper licensure through a
private vendor could result in the state's forfeiture of some
federal transportation funds.
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While there may be some functions of DMV that might be
appropriate for delegation to private industry partners, as
shown by the success of the BPA program, the transactions
specified in this bill are not those functions.
Double referral: This bill will be referred to the Assembly
Public Employees, Retirement & Social Security Committee should
it pass out of this committee.
Related legislation: AB 2107 (Frazier), authorizes DMV to enter
into agreements with qualified private industry partners to
carry out certain electronic registration transactions related
to the International Registration Plan. AB 2107 passed out of
this committee on April 4, 2016, with a vote of 16-0, and is
currently awaiting a hearing in the Assembly Appropriations
Committee.
Previous legislation: AB 1215 (Blumenfield), Chapter 329,
Statutes of 2011, required new car dealers to participate in a
program to electronically title and register vehicles that they
sell and to post specified warning notices on some used cars.
SB 46 (Polanco), Chapter 127, Statutes of 2001, established the
BPA program, allowing qualified private industry partners to
process specific vehicle-related transactions and electronically
transmit the transaction information to the department's vehicle
registration database.
REGISTERED SUPPORT / OPPOSITION:
AB 1714
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Support
None on file
Opposition
None on file
Analysis Prepared by:Justin Behrens / TRANS. / (916) 319-2093