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 ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: February 17, 2016 |Policy Vote: T. & H. 10 - 0 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: No | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: August 1, 2016 |Consultant: Mark McKenzie | | | | ----------------------------------------------------------------- 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) AB 2107 (Frazier) Page 1 of ? 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. AB 2107 (Frazier) Page 2 of ? 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 AB 2107 (Frazier) Page 3 of ? 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. -- END --