Assigned to TRANS                                                                                             FOR CAUCUS & FLOOR ACTION

ARIZONA STATE SENATE

Forty-seventh Legislature, Second Regular Session

CORRECTED AMENDED

FACT SHEET FOR H.B. 2622

off-highway vehicles; regulation

(NOW: MVD third party fees; retention)

Purpose

            Clarifies and adds to the circumstances in which the Arizona Department of Transportation (ADOT) reimburses third party providers for various services.  Increases the bond amount required from a person who is applying to operate as an authorized third party service provider.

Background

            Laws 1993, Chapter 178 enabled ADOT to authorize third parties to perform vehicle title and registration functions. According to the Motor Vehicle Division (MVD), the third party program is designed to help improve delivery of MVD services and products through improved service quality and enhanced customer service and satisfaction.

            Third parties are private individuals or businesses authorized to perform the following services: title and registration, vehicle inspections, motor vehicle records access, driver license testing, driver license processing, driver training schools, accident prevention programs and traffic survival schools.  Individuals who request third party certification must undergo a criminal history check and complete the appropriate courses of instruction at the MVD Training Academy. Performance measures are compiled regularly to track the amount and type of work performed by third parties. Compliance auditors monitor the work for adherence to MVD policies, the Arizona Administrative Code and statutes.

Revenues due to the state for these services are remitted by third parties to MVD. A service charge may be collected by third parties in addition to the appropriate MVD fee. In 1998, legislation required ADOT to partially reimburse an authorized third party for two percent of each vehicle license tax payment the third party collects and submits to ADOT (Laws 1998, Chapter 200). In 2001, the Legislature required ADOT to reimburse third party providers in varying amounts for processing driver licenses, registration and permit applications (Laws 2001, Chapter 326).

 Individuals applying for authorization to operate as a third party service provider are required to submit a $25,000 bond to the ADOT Director with the application. A surety company executes the bond and the state is the bond obligee. The bond protects any person who suffers loss because of nonpayment of any fee or taxes the individual paid to a third party, insolvency or
discontinuance of the third party’s business or a failure of the third party to comply with its duties. However, the total liability of the surety company for any breach of the bond conditions is limited to the amount of the bond and the state is in the first position to be reimbursed for any losses.

According to the MVD, there is no fiscal impact associated with this legislation.

Provisions

1. Specifies that a third party provider is eligible for reimbursement for transactions involving the replacement, renewal and duplication of vehicle registrations, titles, driver’s licenses, special or personalized plates and vehicle dealer’s licenses.

2. Authorizes third party reimbursement for special motor vehicle records requests.

3. Allows third parties to be reimbursed for the greater of either one-fourth of one percent of each fuel tax report filed, or $5, which is currently authorized, and caps the reimbursement at $1,500,000 for the first year and $360,000 each year thereafter.

4. Allows authorized third parties to add the cost associated with expedited processing of renewal, replacement or duplicate applications if requested by an applicant.

5. Prohibits their parties from receiving a fee for processing crushed vehicle applications.

6. Authorizes a $1 third party reimbursement for each processed traffic survival school application and certificate of completion.

7. Allows authorized third party providers to retain $2 for electronic document processing when the statutory fee is $2 or more.

8. Allows the ADOT Director to authorize the electronic third party provider to process electronic fund transfers to the MVD for payment of motor vehicle taxes and fees and authorizes the third party provider to add a $2 processing fee for each transfer. 

9. Increases the bond amount, from $25,000 to $100,000, required from a person who is applying to operate as an authorized MVD third party service provider.

10. Exempts an owner or registrant of a fleet of 100 or more vehicles from the bond requirement instead of the owner of two or more vehicles currently in law.

11. Removes an ADOT bonded title service company from the list of entities exempted from the bond requirements.

12. Makes technical and conforming changes.

13. Becomes effective on the general effective date.

Amendments Adopted by Committee

1. Increases the maximum annual amount a third party may receive as a processing fee for fuel tax reports from $1,000,500 to $1,500,000.

2. Increases the bond amount, from $25,000 to $100,000, required from a person who is applying to operate as an authorized MVD third party service provider.

3. Exempts an owner or registrant of a fleet of 100 or more vehicles from the bond requirement instead of the owner of two or more vehicles currently in law.

4. Removes an ADOT bonded title service company from the list of entities exempted from the bond requirements.

Corrections

· Revises the purpose statement to include the provision regarding the increased bond amount.

House Action Senate Action

TRANS           2/09/06     DPA/SE     6-0-0-3-0         TRANS           3/14/06     DPA     4-0-0-0

3^rd Read           2/21/06                        53-0-7-0

Prepared by Senate Research

March 22, 2006

DG/jas