BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2107


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          Date of Hearing:  April 4, 2016


                        ASSEMBLY COMMITTEE ON TRANSPORTATION


                                 Jim Frazier, Chair


          AB 2107  
          (Frazier) - As Introduced February 17, 2016


          SUBJECT:  Department of Motor Vehicles:  electronic vehicle  
          registration services:  interstate carrier partnership


          SUMMARY:  Authorizes the Department of Motor Vehicles (DMV) to  
          enter into agreements with qualified private industry partners  
          to carry out certain electronic registration transactions  
          related to the International Registration Plan (IRP).   
          Specifically, this bill:  


          1)Authorizes DMV to enter into contracts with three types of  
            interstate carrier partners subject to certain requirements  
            for the purpose of providing electronic vehicle registration  
            service using an apportioned registration system.


          2)Authorizes DMV to adopt regulations to carry out the purposes  
            of this program.


          3)Authorizes DMV to establish through regulation the maximum  
            amount that an interstate carrier partner may charge its  
            customers in providing the services under this program.










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          EXISTING LAW:


          1)Authorizes DMV to enter in to the IRP and adopt rules and  
            regulations necessary to carry out the provisions of the IRP.


          2)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.


          3)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  
          $1.2 billion in annual vehicle-related state revenue is received  








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          by the state through the BPA program.
          The IRP is a federally-supported program that facilitates  
          interstate trucking operations across the United States and the  
          Canadian provinces.  Member jurisdictions of the IRP collect  
          vehicle registration fees from their home-based interstate  
          trucking companies on behalf of each member jurisdiction in  
          which the companies operate.  Fees collected under the IRP are  
          then apportioned to each member jurisdiction, based on the  
          proportion of the carrier's operations in that jurisdiction.  In  
          order to participate in this apportioned registration program,  
          motor carriers must register and obtain IRP credentials from  
          their home jurisdiction.


          In 2011, DMV initiated a pilot program resembling the BPA  
          program to allow certain registration services to perform a  
          limited set of transactions related to the IRP on an electronic  
          platform.  Under the pilot, authorized vendors can issue IRP  
          credentials and documents to motor carriers and record  
          transactions on DMV systems that are then reviewed by the  
          department for accuracy and completeness.  The alternative,  
          non-electronic method to complete these transactions requires  
          motor carriers to submit physical documents to DMV headquarters  
          for approval, which can be a lengthy, time-consuming process.   
          This pilot program has allowed the trucking industry to obtain  
          local service in a timely manner without negatively impacting  
          processing times in DMV field offices.  In the span of five  
          years, over 75,000 IRP transactions will have been processed by  
          59 program participants.


          AB 2107 would make DMV's pilot program permanent and authorize  
          DMV to adopt regulations to carry out the program.   
          Specifically, this bill establishes basic qualifications for  
          industry partners and identifies three types of entities DMV may  
          partner with:  a registration service, who handles vehicle  
          registration as part of a bookkeeping operation for  
          owner-operators and small firms; a vehicle leasing company or  
          vehicle rental company, who provide trucks and equipment; and a  








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          motor carrier association, which could assist their memberships  
          with IRP credentialing.  DMV would also be authorized to adopt  
          regulations relating to program administration structure, fees,  
          financial responsibility, compliance requirements, adequate  
          oversight and monitoring, safeguards for privacy, minimum  
          transaction requirements, performance standards to ensure  
          accuracy and efficiency, and to set the maximum amount that an  
          industry partner could charge for these services.


          According to the author, this bill will ensure that the trucking  
          industry has immediate and convenient access to IRP  
          credentialing, expediting the entry of commercial motor vehicles  
          into interstate trucking activities.  The success of the BPA  
          program demonstrates the value of public-private partnerships in  
          accomplishing regulatory compliance with California's motor  
          vehicle-related standards.  The author argues that this bill  
          would improve the movement of goods in California, home to three  
          of the nation's busiest ports and a primary arrival and  
          destination point for international trade, by quickly  
          authorizing vehicles to operate in interstate commerce through  
          an efficient and cost-effective technological solution.


          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.












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          REGISTERED SUPPORT / OPPOSITION:




          Support


          California Trucking Association




          Opposition


          None on file




          Analysis Prepared by:Justin Behrens / TRANS. / (916) 319-2093