BILL ANALYSIS �
AB 869
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Date of Hearing: January 9, 2012
ASSEMBLY COMMITTEE ON TRANSPORTATION
Bonnie Lowenthal, Chair
AB 869 (Davis) - As Amended: January 4, 2012
SUBJECT : Vehicle registration periods
SUMMARY : Allows the Department of Motor Vehicles (DMV) to
establish multiyear registration periods for motor vehicles.
Specifically, this bill :
1)Allows DMV to establish multiyear periods, as it determines to
be appropriate, for the registration of motor vehicles.
2)Allows registration renewals to be issued for multiyear
periods.
3)Specifies that this authorization also applies to the
registration of fleet vehicles.
EXISTING LAW :
1)Authorizes DMV to assign or reassign dates for the expiration
of registration for a vehicle registered pursuant to the
Vehicle Code.
2)Allows DMV to establish a registration year for any vehicle
consisting of any period from seven months to 18 months,
inclusive, with subsequent renewals being required at yearly
intervals thereafter.
FISCAL EFFECT : Unknown
COMMENTS : According to the author, while the Vehicle Code
provides for vehicle registration periods of anywhere from 7
months to 18 months, no period beyond that is allowed. He
contends, in the instance of fleet owners, "Some companies, for
administrative convenience or greater flexibility in managing
assets and liabilities, may benefit from the ability to pay for
and secure longer vehicle registration periods." Supporters
agree, writing that the bill "would streamline the process of
licensing for vehicles often owned in fleets by California
businesses, lowering the cost of doing business in the state."
AB 869
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While seemingly simple, this bill raises a number of operational
challenges. Under existing one-year registration terms, if a
vehicle is transferred, damaged beyond repair, or moved out of
the state, the registration is terminated and the vehicle owner
essentially "eats" the cost of a remaining term that is
necessarily something less than 12 months. A multiyear
registration period would naturally subject the owner to the
risk of losing a substantial investment in registration fees
should the registration terminate prematurely. Absent a new
requirement for DMV to make prorated refunds for unused
registration periods (a significant problem in its own right),
this feature could make multiyear registration quite
unattractive.
Although this bill appears to be intended to benefit fleet
owners, it could potentially - at DMV's discretion - apply to
all classes of vehicle ownership. If DMV in fact felt compelled
to offer this option universally, it would be put in a position
of administering multiple programs for registration fee
collection. Besides the ongoing costs and complications of such
an exercise under DMV's improving, but still comparatively
archaic, information technology system, there could be
significant upfront programming costs in order to benefit of
what is likely to be a comparatively small population of owners.
Additionally, a multi-year registration program would need to
include a mechanism to account for any fee increases that might
be enacted within the registration term. Otherwise owners who
prepay for multiyear registrations would essentially be granted
a "free ride," which would leave the full burden of fee
increases on those who chose single year registration. To avoid
this outcome, DMV would have to administer - again, at some
expense to the Department - a process to apply and collect
retroactive fee increases on multiyear registrants.
Alternatively, as the author suggests, DMV might add a charge to
a vehicle's future registration to make up for the lost fee
increase from the already-paid current registration (assuming
the vehicle is in fact re-registered).
Finally, there would be complications for the biennial Smog
Check program, which is administered in conjunction with vehicle
registration process. Unless registration periods are
synchronized with Smog Check intervals, the state would lose its
leverage in requiring adherence to emission control requirements
AB 869
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as a prerequisite for renewing vehicle registrations.
Suggested Committee amendments : In order to mitigate some of
the administrative burdens the bill may present for DMV, the
author may wish to exclude individually-owned vehicles and limit
the bill's application to those fleet vehicles that are in
substantial-sized fleets (perhaps those with 25 or more
vehicles).
Also, DMV believes there are at least 14 Health and Safety Code
Sections, nine Revenue and Taxation Code Sections, and 35
Vehicle Code sections that would require amendment in order to
allow multi-year registration. Penalty fee structures would
also need adjustment.
REGISTERED SUPPORT / OPPOSITION :
Support
California Manufacturers and Technology Association
Opposition
None on file
Analysis Prepared by : Howard Posner / TRANS. / (916) 319-2093