BILL ANALYSIS
AB 1515
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Date of Hearing: April 27, 2009
ASSEMBLY COMMITTEE ON TRANSPORTATION
Mike Eng, Chair
AB 1515 (Eng) - As Amended: April 29, 2009
SUBJECT : Vehicle title documents
SUMMARY : Authorizes the establishment of a mandatory Electronic
Lien and Title (ELT) Program. Specifically, this bill :
1)Requires the Department of Motor Vehicles (DMV), on or before
January 1, 2012, and in consultation with lienholders, to
develop, an ELT Program requiring all lienholders' title
information be held in an electronic format, if DMV determines
that the program is cost effective compared to the current
paper title and registration system.
2)Allows DMV to establish an auto loan business volume threshold
below which a lienholder is not required to participate in
ELT.
EXISTING LAW :
1)Requires DMV, upon registering a vehicle, to issue a
certificate of ownership to the legal owner and a registration
card to the owner, or both to the owner if there is no legal
owner of the vehicle.
2)Requires the certificate of ownership to contain the date
issued; the name and residence or business address or mailing
address of the owner and of the legal owner, if any; the
registration number assigned to the vehicle; a description of
the vehicle as complete as that required in the application
for registration of the vehicle; and provision for: notice to
DMV of a transfer of the title or interest of the owner or
legal owner, application for transfer of registration by the
transferee, and an odometer disclosure statement.
FISCAL EFFECT : Unknown
COMMENTS : According to the author, California has for the last
two decades had a voluntary ELT system whereby DMV sends an
electronic message to participating lienholders instead of using
a paper title. The program is believed to provide significant
AB 1515
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cost savings benefits to lienholders as well as DMV. However,
is being utilized by only about 20% of lienholders.
This bill therefore seeks to expand the use of ELT by requiring
all lien and title information to be held in an electronic
format, provided DMV determines it is cost effective to do so.
ELT is purported to reduce DMV's costs by virtue of its
replacing paper titles with electronic data, eliminating the
data entry and processing of inbound title work to remove the
first lien and issue a clean title, reducing the data entry and
processing of duplicate title applications resulting from lost
paper titles, reducing the issuance of replacement paper titles
to lienholders, and reducing the chance for fraud by eliminating
paper documents that can be compromised.
Conversely, ELT can reduce lienholders' costs associated with
activities such as the manual receipt of inbound paper titles,
matching titles to loan or lease data, storage of titles,
retrieval of titles from file vaults, and execution of lien
release and mailing of titles upon lien satisfaction. According
to supporters, who provide electronic lien handling services on
a commercial basis for lienholders, "The benefits to lienholders
are reduction in work effort, lower cost, no storage
requirements, no postage and better customer service by avoiding
lost titles since ELT cannot by lost. Much like e-mail has
replaced written letters, ELT is eliminating paper titles. The
average cost for tracking, handling and storing a title can
range from $8 to $12. Using ELT can bring this figure down to
about $2 per title."
While this bill could be construed as creating a market for the
sponsor, it should be noted that there are at least three firms
currently offering this service, enactment of the bill would
surely spur the establishment of additional firms, and
lienholders could choose to perform these tasks with their own
personnel.
REGISTERED SUPPORT / OPPOSITION :
Support
VINtek (sponsor)
Opposition
AB 1515
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None received
Analysis Prepared by : Howard Posner / TRANS. / (916) 319-2093