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 12, 2012
SUBJECT : Vehicle registration periods
SUMMARY : Allows the Department of Motor Vehicles (DMV) to
establish multiyear registration periods for fleet vehicles.
Specifically, this bill :
1)Redefines "fleets," for the purposes of determining which
vehicles qualify for participation in DMV's fleet registration
program, to be those with 25 vehicles or more.
2)Allows DMV to establish the registration period of any fleet
vehicle to be for one year or for a multiyear period.
3)Requires the vehicle owner to pay a registration fee that
reflects that duration of the registration period assigned to
that vehicle.
EXISTING LAW :
1)Establishes a fleet registration program for fleet consisting
of 50 or more vehicles.
2)Authorizes DMV to assign or reassign dates for the expiration
of registration for a vehicle registered pursuant to the
Vehicle Code.
3)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
AB 869
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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."
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.
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).
The bill, however, is permissive. If any of these challenges
are too difficult to overcome, DMV could choose not to implement
it.
REGISTERED SUPPORT / OPPOSITION :
Support
AT&T
California Manufacturers and Technology Association
Opposition
AB 869
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None on file
Analysis Prepared by : Howard Posner / TRANS. / (916) 319-2093