BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 1515|
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THIRD READING
Bill No: AB 1515
Author: Eng (D)
Amended: 6/25/09 in Senate
Vote: 21
SENATE TRANS. & HOUSING COMMITTEE : 11-0, 6/23/09
AYES: Lowenthal, Huff, Ashburn, DeSaulnier, Harman,
Hollingsworth, Kehoe, Oropeza, Pavley, Simitian, Wolk
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 76-0, 5/28/09 (Consent) - See last page
for vote
SUBJECT : Vehicles: Electronic Lien and Title Program
SOURCE : VINtek
DIGEST : This bill requires that by January 1, 2012, the
Department of Motor Vehicles develop a mandatory Electronic
Lien and Title program.
ANALYSIS : Existing law prohibits driving, moving, or
leaving standing upon a public road or pubic parking
facility a vehicle unless the vehicle is registered with
the Department of Motor Vehicles (DMV). Upon registration,
the DMV issues a certificate of ownership to the legal
owner (e.g., the bank that made the auto loan and therefore
is the lienholder on the auto) and a registration card to
the owner. If there is no legal owner (i.e., a person pays
CONTINUED
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cash for a car), then the DMV issues both the certificate
of title and the registration card to the owner.
A certificate of ownership includes the following
information:
1. The date issued.
2. The name and residence or business address or mailing
address of the owner and of the legal owner, if any.
3. The registration number the DMV assigned to the vehicle.
4. A description of the vehicle.
5. Provisions to notify the DMV of a transfer of the title,
to apply to the DMV for transfer of registration, and to
disclose the vehicle's odometer reading at time of
transfer.
The DMV operates a voluntary Electronic Lien and Title
(ELT) program for lienholders that provides an electronic
ownership record in lieu of a paper certificate of title.
Under its ELT program, the DMV suppresses the printing of
paper titles for lienholders that choose to participate,
but a paper registration card is still issued to the
registered owner. The DMV reports that approximately ten
percent of vehicles titled in the state are in its program.
Lienholders participating in the ELT program may initiate
various transactions to ELT vehicle records that are then
transmitted electronically to the DMV's headquarters for
processing. For example, an ELT participant may under the
program notify the DMV electronically that the registered
owner has satisfied a lien against the vehicle by paying
off the auto loan. After receiving this information, the
DMV would then create and mail out a paper certificate of
title to the vehicle owner.
This bill requires by January 1, 2012 the director of the
DMV to develop a mandatory ELT program, if the director
determines that such a program is cost effective and, in
consultation with lienholders, licensed dealers and other
stakeholders, to hold in electronic format all lienholders'
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vehicle title information. The bill also allows the DMV to
establish an auto loan business volume threshold level
below which a lienholder will not have to participate in
the ELT.
Comments
The author's office introduced this bill to reduce the
costs associated with processing paper vehicle titles with
liens by making the existing voluntary the DMV ELT program
mandatory if the DMV finds it cost effective to do so.
The DMV reports that it launched the existing ELT program
in 1989 to replace paper vehicle and vessel titles in order
to reduce its own costs and in response to requests from
auto lenders. ELT reduces DMV's costs by replacing paper
titles with electronic data thus eliminating the data entry
and processing of removing a lien and issuing 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.
ELT reduces lienholders' costs associated with paper
titles, including matching titles to loan data, storage of
titles, retrieving titles from file vaults, and executing
lien releases and mailing of titles upon lien satisfaction.
According to the sponsor, VINteck, which provides
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 be 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 two dollars per title."
Other states . The DMV reports that 14 other states
currently have ELT programs, including one state,
Pennsylvania, with a mandatory program, which has been in
place for about one year.
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FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 7/7/09)
VINtek (source)
California New Car Dealers Association
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Beall, Bill
Berryhill, Tom Berryhill, Blakeslee, Block, Blumenfield,
Brownley, Buchanan, Caballero, Charles Calderon, Carter,
Chesbro, Conway, Cook, Coto, Davis, De La Torre, De Leon,
DeVore, Emmerson, Eng, Feuer, Fletcher, Fong, Fuentes,
Fuller, Furutani, Gaines, Galgiani, Garrick, Gilmore,
Hagman, Hall, Harkey, Hayashi, Hernandez, Hill, Huber,
Huffman, Jeffries, Jones, Knight, Krekorian, Lieu, Logue,
Bonnie Lowenthal, Ma, Miller, Monning, Nava, Niello,
Nielsen, John A. Perez, V. Manuel Perez, Portantino,
Price, Ruskin, Salas, Saldana, Silva, Skinner, Smyth,
Solorio, Audra Strickland, Swanson, Torlakson, Torres,
Torrico, Tran, Villines, Yamada, Bass
NO VOTE RECORDED: Duvall, Evans, Mendoza, Nestande
JJA:do 7/7/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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