BILL ANALYSIS �
AB 2197
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Date of Hearing: April 21, 2014
ASSEMBLY COMMITTEE ON TRANSPORTATION
Bonnie Lowenthal, Chair
AB 2197 (Mullin) - As Amended: April 10, 2014
SUBJECT : Vehicles: temporary license plates
SUMMARY : Requires vehicles sold or leased without a permanent
license plate to be affixed with a temporary license plate
(TLP). Specifically, this bill :
1)Requires the Department of Motor Vehicles (DMV) to issue a
request for proposal on or before April 1, 2015, for the
development of a TLP system. Requires the TLP system to be
operational on or before July 1, 2015.
2)Requires the TLP system to allow vehicle dealers and
lessor-retailers and entities authorized by DMV, as specified,
to print TLPs at the point of sale.
3)Requires TLPs to be printed on weatherproof paper or other
media as determined by DMV, as specified.
4)Requires a user of the TLP system to electronically record and
transmit to the system the vehicle and owner's identification
information, as specified.
5)Authorizes DMV to impose a fee on vehicle dealers and
lessor-retailers for processing TLPs that does not exceed the
reasonable cost to DMV for the procurement and administration
of the TLP system.
6)Limits the use of the TLP system to authorized users of DMV's
vehicle registration database and requires the TLP system to
be accessible by law enforcement officers using the California
Law Enforcement Telecommunications System (CLETS).
7)Specifies that only first-line service providers, as defined,
that are authorized by DMV are to provide access to the TLP
system.
8)Requires the TLP system to transfer TLP information and
ownership information to DMV's vehicle registration database
within two working days.
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9)Requires a dealer or lessor-retailer to issue TLPs at the
point of sale of any vehicle that is sold without permanent
license plates mounted on the vehicle.
10)Clarifies any request or criminal penalty related to the use
of the TLP system and TLPs is contingent upon the TLP system
becoming operative, as specified.
11)Requires a dealer or lessor-retailer to affix TLPs to any
vehicle sold without a permanent license plate attached to the
vehicle at the time of sale. TLPs are required to be affixed
to the front and rear of the vehicle.
12)Permits a vehicle to be operated with TLPs until either:
a) The permanent license plate and registration card are
received by the purchaser. or;
b) A 90-day period, commencing with the date of sale of the
vehicle, has expired.
1)Establishes a TLP processing charge and requires DMV to set
the maximum amount that may be charged through the adoption of
regulations. Allows DMV to set different maximum amounts for
industry partners enrolled in the DMV's Business Partner
Automation (BPA) Program and non-enrolled dealers, as
specified.
2)Requires a dealer to electronically record the TLP number,
vehicle identification number (VIN), vehicle make, model,
year, and owner's name and address into TLP system provided by
a first-line service provider, as defined. Requires an
independent dealer to utilize a first-line service provider to
access the TLP system if not enrolled in the BPA program.
3)Authorizes TLPs to be valid for up to 45 days. Allows for
TLPs to be reissued by a dealer or DMV for an additional 45
days.
4)Requires the TLP to contain, at a minimum, a unique
identification number, an expiration date of the TLP, and the
vehicle's make and model.
5)Requires DMV to designate specifications for TLP paper or
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other media designated by DMV to prevent tampering and
counterfeiting. Specifies TLP shall be designed to withstand
all weather conditions for up to 45 days and requires the TLP
unique identification number to be printed with black ink on a
white background.
6) Permits the TLP to include the name of a dealership, as
specified.
7) Makes the counterfeit or forgery of TLPs a felony, as
specified.
8)Establishes an infraction, punishable by a fine, for failure
to display TLPs on a vehicle, as specified.
9)Requires TLPs to be securely fastened to the vehicle at all
times, as specified. Requires a person to replace TLPs with
permanent license plates upon receipt and require a person to
destroy TLPs.
10)Requires a dealer or lessor-retailer to electronically submit
to DMV the day of sale, vehicle registration information for
any new or used vehicle that is sold or leased, as specified.
11)Specifies that the failure to properly display a TLP does not
qualify as a "notice to correct" citation (fix it ticket) by
an issuing officer.
EXISTING LAW :
1)Authorizes DMV to enter into contractual agreements with
private industry partners, if certain criteria is met, to
provide specific services that include processing vehicle
registration and titling transactions.
2)States any person who alters, forges, counterfeits, or
falsifies a certificate of ownership, registration card,
license, or license plate is guilty of a felony, as specified.
3)Allows a vehicle displaying a copy of the report of sale to be
operated without license plates or a registration card until
either the license plates and registration card are received
by the purchaser or the expiration of a 90-day period
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beginning with the date of sale of the vehicle, whichever
occurs first.
4)Requires a dealer or lessor-retailer to submit to DMV an
application and relevant fees for registration or transfer of
registration of a vehicle within 30 days for a used vehicle or
20 days for a new vehicle.
5)Provides a dealer or lessor-retailer a specified response time
if DMV returns a registration application, contingent on the
type of vehicle.
6)Requires a new motor vehicle dealer to participate in DMV's
electronic vehicle registration program (EVR).
7)Requires license plates to be attached upon receipt by a
vehicle owner.
FISCAL EFFECT : Unknown
COMMENTS : At the time of retail sale, the vehicle dealer is
responsible for applying to DMV for the registration of a new
vehicle and the transfer of registration for a used vehicle.
Before the dealer can deliver the vehicle to the buyer, the
dealer must affix to the vehicle's windshield a DMV-created
report-of-sale notice showing that the vehicle is in the process
of being registered. The dealer then has 20 days for a new
vehicle or 30 days for a used vehicle to deliver to DMV the
application and fees necessary to register the vehicle in the
buyer's name.
Prior to 2001, once DMV received and processed the application,
DMV issued and mailed to the new owner two license plates, a
vehicle registration card, and the appropriate registration
stickers for the vehicle's rear license plate. The two license
plates must remain affixed to a vehicle, but the vehicle was
allowed to be operated for 180 days after purchase while
displaying a report-of-sale notice rather than license plates
with registration stickers.
In 2001, under SB 46 (Polanco), Chapter 127, DMV established the
EVR program where motor vehicle dealers may enter into contracts
to act as DMV business partners for vehicle registration and
titling purposes. A business partner either directly, or
through a service provider, communicates electronically with DMV
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to register a vehicle it has sold and then mails license plates,
registration cards, and registration stickers to the buyer. Up
until 2011, DMV estimated that less than half of new car dealers
participated in the voluntary EVR program.
AB 1215 (Blumenfield), Chapter 329, Statutes of 2011,
implemented significant changes to the vehicle registration
process including, requiring new car dealers to participate in
the EVR program, reducing the period a vehicle may operate a
vehicle with a report-of-sale notice to 90 days, and requiring
license plates to be attached upon receipt by the vehicle owner.
The successful implementation of AB 1215 has resulted in
industry stakeholders indicating that vehicle owners are now
receiving permanent license plates between 14 to 30 days on
average. Furthermore, in those instances where vehicle
registration delays have occurred, industry stakeholders
indicate the delays typically relate to titling/financing issues
rather than dealer errors.
This bill proposes to develop a statewide TLP system to ensure
new and used purchased vehicles are identifiable to law
enforcement and toll operators during the period between the
point of sale and when permanent license plates are received by
the purchaser.
The author asserts that this legislation will save toll
authorities millions of dollars in uncollectable toll
violations, while also improving public safety by helping law
enforcement identify vehicles involved in traffic violations,
hit-and-run accidents, and other criminal activity.
Writing in support of this bill, the Metropolitan Transportation
Commission (MTC) notes "California's electronic toll payment
collection system - Fastrak - relies upon a photo of a vehicle's
license plate for enforcement. In the San Francisco Bay Area,
drivers without plates are enjoying a free ride on the region's
eight toll bridges to the tune of almost $8 million in FY
2012-13." Additionally, the Transportation Corridor Agencies
(TCA), in support of this bill, writes that in Fiscal Year 2013,
TCA "lost approximately $3.1 million in uncollected tolls from
drivers who evaded tolls by driving vehicles without license
plates."
In opposition to this bill, the California New Car Dealers
Association (CNCDA) writes, "AB 2197 creates a new onerous point
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of sale temporary license plate system that burdens consumers,
vehicle dealers, and DMV with additional costs and effort. AB
2197 gives DMV just six months to create this new system -
request for proposals for a new temporary license plate
database, a design for the new temporary license plate, and
regulations on the new consumer charge. Dealers must then
quickly adhere to this new system and install temporary plates
or potentially face the loss of their license."
Committee concerns: While the bill's overall intent to develop
and implement a TLP system is promising, the TLP system as
proposed in this bill leaves open several unresolved technical
implementation issues pertaining to the TLP system database,
instances of fraud, and the required implementation date.
In regards to the TLP system database, it remains unclear how
the TLP system database, the DMV vehicle registration database,
and law enforcement's CLETS system will all communicate in real
time. In states such as Florida, Wisconsin, and South Carolina,
the DMV in each respective state administers the issuance of
TLPs and permanent license plates under one system. This bill
proposes to have a separate TLP database transfer vehicle
information to DMV's vehicle registration database.
Regarding fraud, states such as Colorado, Pennsylvania, and
Florida have all reported incidents of TLP fraud. In Florida,
for example, TLPs with unregistered identification numbers have
been affixed to vehicles that then use Florida's toll roads.
When these vehicles come up as "no reads," the toll authorities
send pictures of the vehicle and fraudulent TLP to state patrol
in attempt to capture these vehicles through law enforcement.
While this method may be effective in regions where pro-active
enforcement is utilized on the toll roads, it is unclear how
other regions will mitigate the use of fraudulent TLPs.
Lastly, this bill requires the promulgation of regulations for
the development and implementation of the TLP system. It should
be noted that this process generally takes about one year to
develop and finalize regulations. If enacted, this bill would
take effect January 1, 2015, however this bill sets an
implementation date of no later than July 1, 2015; in turn
providing DMV and industry stakeholders only six months to
develop and implement the TPL system.
If this bill is approved, the Committee may wish to request for
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the author's commitment to continue working on resolving
technical implementation issues.
Author's amendment: The author has indicated this bill will be
amended to set the implementation date of the TLP system to
January 1, 2016, to ensure sufficient time is provided for the
promulgation of regulations prior to implementing the TLP
system.
Related legislation:
AB 1864 (Daly) allows a vehicle to be operated without license
plates or registration card until either the license plates and
registration card are received by the purchaser, or the
expiration of a 75-day period beginning with the date of sale of
the vehicle, whichever occurs first. This bill will be heard by
this committee on April 21, 2014.
REGISTERED SUPPORT / OPPOSITION :
Support
Metropolitan Transportation Commission (co-sponsor)
Golden Gate Bridge, Highway, and Transportation District
(co-sponsor)
California Police Chiefs Association
California State Sheriffs' Association
Orange County Transportation Authority
Peace Officers Research Association of California
Riverside County Transportation Commission
Transportation Corridor Agencies
Walnut Creek Police Department
Opposition
California New Car Dealers Association
Analysis Prepared by : Manny Leon / TRANS. / (916) 319-2093