BILL ANALYSIS �
AB 2197
Page 1
Date of Hearing: May 7, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 2197 (Mullin) - As Amended: April 23, 2014
Policy Committee:
TransportationVote:10-1
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill 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 DMV, by April 1, 2015, to issue a request for
proposal (RFP) with a private industry partner to contract for
development of a TLP system, as specified, to become
operational by January 1, 2016.
2)Authorizes DMV to impose a fee on dealers and lessors to
process TLPs that does not exceed DMV's costs to procure and
maintain the system.
3)Authorizes the dealer to charge the vehicle purchaser a TLP
processing charge, not to exceed an amount established by DMV
through regulations.
4)Requires a dealer to electronically record and transmit to the
TLP system vehicle and owner identification information as
specified.
5)Allows a vehicle to be operated with a TLP until either the
purchaser receives a permanent license plate or a 90-day
period following the date of sale of the vehicle has expired.
6)Specifies the contents of a TLP and stipulates that a TLP is
valid for up to 45 days, and may be reissued by the dealer for
an additional 45 days.
7)Makes counterfeit or forgery of TLPs a felony, punishable to
AB 2197
Page 2
up to 16 months, two years, or three years in state prison or
up to one year in county jail.
8)Stipulates that failure to display TLPs as specified is an
infraction, punishable by a base fine of $25 for a first
offense to $40 for each subsequent offense.
FISCAL EFFECT
1)DMV preliminarily estimates one-time costs of around $300,000
for programming, development of the RFP and regulations, and
contract costs for the system. Based on department forecasts
of vehicle sales and assuming 20% of used car sales require
temporary plates, revenues to cover these start-up costs and
DMV's ongoing costs would be about $2.4 million in 2016-17 and
about $5 million annually thereafter, assuming a two-dollar
fee on vehicle purchasers. These estimated costs could be
significantly reduced to the extent the vendor absorbs the
up-front costs of the system and recoups those costs through
the transaction fee. DMV indicates that the four months
allowed in the bill to issue the RFP and the one year allowed
to implement the program are unrealistic timelines.
2)DMV indicates that based on similar systems in place
elsewhere, the dealers processing charge to vehicle buyers
would be in the range of $5 to $8.
3)Increase in toll revenues to the extent vehicles currently
without permanent license plates are avoiding toll
collections. (See Comment #2)
COMMENTS
1)Background . At the time of retail sale, the vehicle dealer is
responsible for applying to DMV to register a new vehicle and
transfer registration for a used vehicle. Before the dealer
can deliver the vehicle to the buyer, the dealer must affix to
the windshield a report-of-sale notice showing that the
vehicle is in the process of being registered, after which the
dealer 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.
SB 46 (Polanco)/Statues of 2001 established the electronic
vehicle registration (EVR) program, where motor vehicle
AB 2197
Page 3
dealers may enter into contracts as DMV business partners for
vehicle registration and titling purposes. A business partner
either directly, or through a service provider, communicates
electronically with DMV to register a vehicle it has sold and
then mails license plates, registration cards, and
registration stickers to the buyer.
AB 1215 (Blumenfield)/Statutes of 2011, in part required new
car dealers to participate in the EVR program, reduced the
period a vehicle may operate a vehicle with a report-of-sale
notice to 90 days, and required license plates to be attached
upon receipt by the vehicle owner. With implementation of AB
1215, industry stakeholders indicate that vehicle owners are
now receiving permanent license plates between 14 to 30 days
on average following a sale.
2)Purpose . This bill requires development of 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.
In support, 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 2012-13."
3)Opposition . The California New Car Dealers Association (CNCDA)
writes, "AB 2197 creates a new onerous point of sale temporary
license plate system that burdens consumers, vehicle dealers,
and DMV with additional costs and effort."
4)Related Legislation . AB 1864 (Daly), pending in the Assembly,
reduces, from 90 days to 75 days, the maximum period a
purchased vehicle may be operated without license plates or a
registration card.
AB 2197
Page 4
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081