BILL ANALYSIS
AB 1515
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CONCURRENCE IN SENATE AMENDMENTS
AB 1515 (Eng)
As Amended June 25, 2009
Majority vote
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|ASSEMBLY: |76-0 |(May 28, 2009) |SENATE: |36-0 |(July 16, |
| | | | | |2009) |
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Original Committee Reference: TRANS .
SUMMARY : Authorizes the establishment of a mandatory Electronic
Lien and Title (ELT) Program.
The Senate amendments require the Department of Motor Vehicles
(DMV) to consult with licensed dealers, and other stakeholders
in establishing the ELT program.
EXISTING LAW requires:
1)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)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.
AS PASSED BY THE ASSEMBLY , this bill:
1)Required 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.
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2)Allowed DMV to establish an auto loan business volume
threshold below which a lienholder is not required to
participate in ELT.
FISCAL EFFECT : According to the Assembly Appropriations
Committee analysis, the costs of the ELT program appear to be
absorbable and there may be longer term administrative savings
to DMV related to its expanded use.
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
cost savings benefits to lienholders as well as DMV; however, it
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
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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.
Analysis Prepared by : Howard Posner / TRANS. / (916) 319-2093
FN: 0001773