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Joyce Endee

Bill to allow dealers to register cars opposed by local officials

SB156 passes House by 10 votes, despite town clerks' opposition

May 12, 2011
On April 27, a bill to allow automobile dealers to register cars passed in the New Hampshire House by a 10-vote margin (176 - 166). Senate Bill 156, cosponsored by Senators Jeb Bradley and Andy Sanborn, is seen by local authorities as a threat to local control and local revenues.

At a March 9 meeting, the Wolfeboro Board of Selectmen, who invited Bradley and state representatives to discuss the proposal, Bradley touted the bill as a convenience to car buyers. He said dealers would not be making more money as a result of the change and said that the addition of the third party, out of state, electronic vehicle registration (EVR) vendor would not cost the state any money.

Furthermore, he said, the practice is carried out in 30 other states, a claim the NH Automobile Dealers Association underlines in its "SB 156 fact sheet".

The New Hampshire City and Town Clerks Association (NHTCA), whose membership voted 179 to 3 in opposition to the legislation, begs to differ. It has stated on record that "no other state allows private entities to collect local monies for vehicle registrations and then send the money directly to the municipalities…Zero states authorize auto dealers to be agents of municipalities." The difference is that in the states that do allow some level of participation in EVR, it is the Department of Motor Vehicles (DMV) that receives the revenue, not the towns, as is the practice in New Hampshire.

Wolfeboro Town Manager Dave Owen wrote in opposition of the bill to Senator Bradley and Representatives Chris Ahlgren, Dave Knox, Betsy Patten and Steve Schmidt on behalf of the selectmen:

"New Hampshire is unique in the way its cities and towns rely on motor vehicle fee revenue to offset the local property taxes paid by their residents. The passage of this legislation would be unfavorable to the Town of Wolfeboro and other municipalities in the State. Local officials would be taken out of the process and would no longer have control over the collection of their own municipal revenues."

For the dealer, registering a newly acquired car on site allows faster payment for their sale; leasing companies pay upon registration. SB156 does not limit the amount of the surcharge that dealers pass on for the cost of the third party system to customers who choose to register at the dealership.

Supporters of the bill consider it an advantage to the consumer to be able to roll the cost of registration and any additional surcharge into financing. Those in opposition point out that the dealer makes money on the interest charges and the overall cost to the buyer is higher. The law does not require disclosure of the compounded cost. There is a price for the convenience.

Wolfeboro Town Clerk Pat Waterman notes that though buyers may choose to register their newly-acquired vehicle at the site of a participating dealer, they will leave with a temporary plate. The customer then relies on the dealer to transmit the information to the DMV and then has to wait for the state to send the decals and final plates. Why not just visit your local town hall and transact all the business at once? Waterman wonders.

The three- to 20-day float of the money between the dealer and the third party vendor before it is sent to the proper town makes Town Treasurer John Burt wary. Not only is the town without the use of the money during that time, but Burt has expressed concern about giving a third party access to town accounts. For that reason, he has a separate account to receive money from third parties..

Waterman says she isn't looking forward to training third party vendors to handle registrations, something that she and other clerks feel that they can do efficiently already. In her opinion, car dealers are not as invested in checking residency as are the hometown clerks. She worries about how the system will work in the Lakes Region with its "second home syndrome," referring to homeowners from out of state, who have a second home in New Hampshire and want to register their cars here to avoid taxes in their home state.

She isn't alone. It has been reported in the Laconia Daily Sun (April 13), that the Laconia City Council voted unanimously against the bill and sent a letter to Rep. John Hunt, Chairman of the House Commerce and Consumer Affairs Committee, expressing concern about the potential "to create substantial problems with residency verification."

Mistakes are likely to show up a year later at renewal time, when the process is in the exclusive province of the town clerks.

Representatives Dave Knox, Betsey Patten and Steve Schmidt responded to local concerns of and voted against SB156. Chris Ahlgren voted yes. It now moves to the Senate for review by the Committee of Congress. If those members approve it, it will then go to the governor for final approval.

If approved, a year-long pilot, including a limited roster of car dealers, chosen by the NH Automobile Dealers Association, the Department of Motor Vehicles and the clerks is expected to be put in place.

In a six-page memorandum to legislators, the NHTCA calls attention to the bill's fiscal note that identifies "three part-time positions, one of which from the Department of Information Technology would be needed at a cost of $76,809 in FY2013, $80,211 in FY2014 and $83,736 in FY 2015", a total of $240,756. It also notes that the Department estimates the staff time involved will increase state expenditures in those four years by $290,896.

In the association's opinion, "SB156 represents the first step toward the privatization of a municipal function and which clearly places the interests of the private sector above that of local municipalities and the citizens they serve."

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