BILL ANALYSIS
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: AB 647
SENATOR ALAN LOWENTHAL, CHAIRMAN AUTHOR: yamada
VERSION: 6/22/09
Analysis by: Carrie Cornwell FISCAL: yes
Hearing date: July 7, 2009
SUBJECT:
Vehicle titling information
DESCRIPTION:
This bill requires the California Department of Motor Vehicles
(DMV) to comply fully with the federal law creating and
governing the National Motor Vehicle Title Information Service.
ANALYSIS:
The federal Anti-Car Theft Act of 1992 provided for the
establishment of a national information system to enable states
and others to access vehicle titling information. In 1996,
Congress reauthorized the act and gave U.S. Department of
Justice (US DOJ) responsibility for implementation and
development of the system, which is known as the National Motor
Vehicle Title Information Service (NMVTIS).
The federal government created NMVTIS to:
Prevent the introduction or reintroduction of stolen
vehicles into interstate commerce;
Protect states, consumers, and others from fraud;
Reduce the use of stolen vehicles for illicit purposes,
including fundraising for criminal enterprises; and
Provide consumer protection from unsafe vehicles.
The federal act allows a third party to operate the titling
system for the federal government. Since 1992, the American
Association of Motor Vehicle Administrators (AAMVA) has acted in
this role, operating NMVTIS under the oversight of US DOJ. AAMVA
is the association of U.S. and Canadian officials responsible
for the administration and enforcement of motor vehicle laws.
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Currently, 28 states participate in NMVTIS, either by supplying
titling information to NMVTIS or by supplying information and
making it available to consumers who are potential purchasers of
vehicles. Fourteen states only supply title information to
NMVTIS, and 14 both supply and allow consumer access to their
information.
For a consumer to access NMVTIS information about a particular
vehicle's title and history, the consumer pays a small fee
($2.50 in most instances) to one of several private companies
that provide access to NMVTIS records.
The California DMV participates in NMVTIS only by supplying
information on its vehicle titling transactions through a
contract with a private entity that does not allow for consumer
access to the information.
This bill :
1.Requires that DMV be in full compliance with the federal
Anti-Car Theft Act of 1992 and the US DOJ rules governing
NMVTIS.
2.Requires that DMV eliminate any restrictions to consumer
access to titling, branding, and theft information provided by
DMV to NMVTIS by January 1, 2010 to ensure that prospective
vehicle purchasers have instant and reliable access to
California's data.
COMMENTS:
1.Purpose . Each state participating in NMVTIS loads information
into the system about each vehicle it titles, including the
vehicle identification number (VIN) and any title brand
information. (A "brand" is a descriptive label that states
assign to a vehicle to identify the vehicle's current or prior
condition, such as "junk," "salvage," or "flood.") Many
participating states also use NMVTIS to verify information on
a paper title being presented on a vehicle coming in from
out-of-state.
The author notes that before NMVTIS, a thief could steal a
car, take it over any state line, and get a valid title by
presenting fraudulent ownership documentation or a VIN stolen
from another car. This was possible because states did not
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have an instant, reliable way of validating the ownership
information before issuing the new title. NMVTIS provides this
by tracking the VIN, titles, and branding of vehicles across
states lines. This is still possible in states not
participating in NMVTIS.
The author asserts that California's DMV is in violation of
the federal Anti-Car Theft Act in that it bars direct consumer
access to NMVTIS. DMV supplies titling information in weekly
batches through an outside contractor, R.L. Polk & Company.
DMV's contract with this firm precludes it from sharing the
information provided to NMVTIS, so California's titling
information is not available through NMVTIS to consumers.
DMV's contract with R.L. Polk is for two years and ends in
April 2010. Because of DMV's contract, Californians must pay a
private company up to $30 per inquiry to receive vehicle
history information, even though taxpayers have been financing
the development of NMVTIS since 1992. By lifting the consumer
access restriction, this bill will bring DMV into compliance
and allow potential car buyers to retrieve used car history at
a lower price.
2.Background on California's participation . In August 2007, in
response to requests from consumer groups, legislative staff,
AAMVA, and others DMV agreed to participate in NMVTIS. DMV's
data management capabilities prevented it at that time from
executing this task with its own staff, so DMV entered into
the contract with R.L. Polk & Co., which owns CARFAX, a
business through which consumers can purchase for about $30
per VIN the title, accident, branding, and other information
about a vehicle. Typically, a consumer uses CARFAX's service
when buying a used car. CARFAX collects its information from
various sources, such as buying it from state motor vehicle
departments, including California DMV.
3.DMV's compliance with the federal act . US DOJ published its
final rules defining state requirements for compliance on
January 30, 2009. They require states to maintain at least the
level of participation they had established as of January 1,
2009, which DMV has done. California titling information is
currently provided to NMVTIS on a weekly basis. The US DOJ
rules require this to be upgraded to a daily update by January
2010, and DMV reports that it is working to accomplish this
change within existing resources. DMV's current contract
restricts access to California records in NMVTIS, but DMV
entered into this agreement before US DOJ published the
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proposed rules to implement NMVTIS in September of 2008. DMV
representatives state that DMV continues to do everything it
can to ensure full compliance with NMVTIS rules, including
allowing direct consumer access to California records housed
in the database, as quickly as possible.
4.DMV current contract to submit title information . DMV reports
that it is trying to end its contract with R.L. Polk in order
that it may provide consumers with access to the data it
submits to NMVTIS. While the contract expires in April of next
year, DMV believes that it will be able to terminate the
contract before the end of this year. At that time, DMV will
begin submitting titling information to NMVTIS using its own
employees. This bill requires that DMV complete this task by
January 1, 2010. Nonetheless, this bill will not void or allow
DMV to break the contract with R.L. Polk in the event that
DMV's efforts to terminate the contract are unsuccessful.
5.Full compliance . While DMV is on track to make its titling
information supplied to NMVTIS accessible to consumers by
January 1, 2010, DMV reports that it will be several years
before it provides and checks titling information in real time
with NMVTIS. DMV states that this is due to the limitations of
NMVTIS to accept the large amount of vehicle title data
California will supply to and demand from the national system.
Therefore, California's DMV will not be in "full compliance"
with the federal act until several years from now. The author
or committee may wish to amend this bill to clarify that DMV
shall be in full compliance with the Anti-Car Theft Act of
1992, other than providing consumer access, as soon as is
practicable, rather than by the effective date of the bill,
January 1, 2010.
Assembly Votes:
Floor: 73 - 0
Appr: 16 - 0
Trans: 14 - 0
POSITIONS: (Communicated to the Committee before noon on
Wednesday,
July 1, 2009)
SUPPORT: Consumers for Auto Reliability and Safety
(sponsor)
Consumer Action
Consumer Attorneys of California
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Consumer Watchdog
LKQ Corporation
North American Export Committee
Public Citizen
OPPOSED: None received.