BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          AB 2107 (Frazier) - Department of Motor Vehicles:  electronic  
          vehicle registration services:  interstate carrier partnership
          
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          |Version: February 17, 2016      |Policy Vote: T. & H. 10 - 0     |
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          |Urgency: No                     |Mandate: No                     |
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          |Hearing Date: August 1, 2016    |Consultant: Mark McKenzie       |
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          This bill meets the criteria for referral to the Suspense File.



          Bill  
          Summary:  AB 2107 would authorize the Department of Motor  
          Vehicles (DMV) to enter into an interstate carrier partnership  
          to provide electronic vehicle registration services for  
          commercial trucks under the federal International Registration  
          Plan (IRP).


          Fiscal  
          Impact:  
           One-time DMV costs of approximately $390,000 to develop and  
            adopt regulations, execute contracts with partners, develop  
            security protocols, and make necessary systems changes.   
            (Motor Vehicle Account)

           Ongoing DMV costs of approximately $250,000 to process  
            applications.  These costs would be fully offset by fees  
            established by regulations.  (Motor Vehicle Account)







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           Unknown ongoing DMV savings by reducing field office workload  
            associated with manual in-person transactions.  (Motor Vehicle  
            Account)


          Background:  Existing law establishes the Business Partner Automation (BPA)  
          program, which authorizes DMV to enter into contracts that allow  
          private industry partners to process specific vehicle-related  
          transactions, such as vehicle registration and titling, either  
          directly or through a service provider.  Existing law requires  
          licensed new motor vehicle dealers to participate in the BPA  
          program and electronically process all DMV transactions related  
          to vehicle sales and leases.  The BPA program is generally not  
          available for commercial vehicle transactions, except on a pilot  
          basis as noted below.
          The IRP is a federally-supported program that facilitates  
          interstate trucking operations across the United States and the  
          Canadian provinces.  Member jurisdictions 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 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.  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.












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          Proposed Law:  
            AB 2107 would authorize DMV to enter into an interstate  
          carrier partnership to provide electronic vehicle registration  
          services through an interstate carrier partner that does all of  
          the following:
                 Agrees to provide electronic vehicle registration  
               services with specified capabilities through a DMV  
               registration system or a system approved by DMV.
                 Maintains, protects, and issues apportioned vehicle  
               registration documents and applicable indicia on behalf of  
               DMV to its customers.
                 Demonstrates IRP knowledge proficiency, as determined by  
               DMV and established through regulations
                 Meets qualification standards established by DMV through  
               regulations.

          The bill authorizes DMV to enter into contractual agreements  
          with the following interstate carrier partners that utilize the  
          DMV apportioned registration system or a system approved by DMV:  
          (1) a registration service; (2) a vehicle leasing or rental  
          company; or (3) a motor carrier association.  The partner must  
          submit an application to DMV on the form specified in  
          regulations and include any other required information.

          AB 2107 would also require DMV to adopt regulations for purposes  
          of establishing the program that include the following: program  
          administration structure, fees, financial responsibility,  
          compliance requirements, adequate oversight and monitoring,  
          safeguards for privacy and protecting information authorized for  
          release, minimum transaction requirements, and performance  
          standards to ensure accuracy and efficiency.  DMV regulations  
          may also specify the maximum amount that an interstate carrier  
          may charge its customers in providing electronic registration  
          services.


          Related  
          Legislation:  AB 1215 (Blumenfield), Chap. 329/2011,  requires  
          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), Chap. 127/2001), established the BPA program,  
          allowing qualified private industry partners to process specific  
          vehicle-related transactions and electronically transmit the  








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          transaction information to DMV's vehicle registration database.




          Staff  
          Comments:  This bill builds on the initial success of the pilot  
          program and establishes a permanent program providing for the  
          electronic registration of commercial vehicles through  
          partnerships with participants in the federal IRP.  DMV will  
          incur initial costs to formally establish the program, but  
          ongoing costs will be fully offset by fees, and the program is  
          likely to result in ongoing DMV savings by moving transactions  
          out of field offices.   


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