Allows the commissioner of motor vehicles to require an electronic transfer of vehicles and to establish separate fees for paper and electronic transfers

Summary of provisions

Section 1 would amend Vehicle and Traffic Law §415(6) to allow the Commissioner of Motor Vehicles to promulgate regulations requiring that transfer of the MV-50 form which is used by motor vehicle dealers, and is known as the Retail Certificate of Sale and the Wholesale Certificate of Sale, be in an electronic format.

Section 3 would amend Vehicle and Traffic Law §429(b)(1) to permit the Commissioner of Vehicles to waive, by regulation, the delivery of documents related to junk and salvage vehicles or, in the alternative, to allow such requirements to be satisfied by filing of the necessary information by or on behalf of the person to whom such requirements apply.

The bill would take effect immediately upon receiving Executive approval.

Existing law

Currently, the Vehicle and Traffic Law does not provide for the electronic filing of information contained on motor vehicle transfer document known as the MV-50. In addition, currently there is no waiver for the use of documents or the electronic filing of such documents related to junk and salvage vehicles.

Legislative history

This is a new bill.

Statement in support

As part of the Department of Motor Vehicle's efforts to remain a nationwide leader in efficiency and quality of service, the Department seeks the ability to create an electronic infrastructure for transferring MV-50 forms otherwise known as the Retail Certificate of Sale and the Wholesale Certificate of Sale.

Because the reverse side of the New York State Certificate of Title has space for only one sales transfer, New York dealerships are required by 15 NYCRR §78.10 to utilize an MV-50 (Retail Certificate of Sale) or an MV-50W (Wholesale Certificate of Sale) document for dealer sales. When a dealer makes a retail sale of a vehicle, the MV-50 must

accompany the title, whereupon the purchaser (or dealer on his/her behalf) applies for a new title. The MV-50 is also used to transfer motor vehicles from one dealer to another. Pursuant to federal odometer disclosure requirements, the MV-50 also records the vehicle's odometer reading, as attested to by the dealer and purchaser.

MV-50's are secure multi-copy documents. Each MV-50 has a unique serial number and is purchased by dealers, for five dollars, from the Department in books of 50. Approximately 60,000 such books are printed and distributed annually. Used books must be returned to DMV and are warehoused for five years. After five years, they must be destroyed using a secure process. By requiring an electronic MV-50, the Department will streamline its processes and advance an important greening initiative.

DMV receives requests from Tax and Finance, for tax audit purposes, for over 2000 books annually, which must be physically shipped and returned. DMV staff audits dealers' use and maintenance of MV-50s. This is a labor-intensive, expensive process that requires visiting the dealer's facility. An electronic filing system would make this process more secure and efficient, because DMV's investigators would be able to conduct audits from a remote location.

When a dealer makes an error on an MV-50 or, for other reasons, the MV-50 cannot be used, it must be voided. Some dealers estimate voiding as many as 10% of their MV-50s, which is a costly and unnecessary expense. There is also no way to link blank individual MV-50s to specific vehicles after the documents are issued, leading to misuse of paper MV-50s, odometer fraud, and tax fraud. Since MV-50s are ownership documents, they have significant "street value" on the "black market", e.g., between $300 to $500 in New York City.

The electronic transfer of MV-50s, known as the Retail Certificate of Sale and the Wholesale Certificate of Sale would avoid or ameliorate many of these problems, while providing DMV with comprehensive information on vehicle transfers in New York in real- time.

In 1992, Congress enacted The Anti-Car Theft Act as a means of preventing automobile theft and the registration of stolen vehicles. The U.S. Department of Transportation was directed to establish a national information system that would enable states to verify a vehicle's information prior to the issuance of a title in their state. The information system created is referred to as the National Motor Vehicle Title Information System (NMVTIS). The final rule governing NMVTIS (28 CFR Part 25) was issued in January of 2009. According to the Rule, the "purpose of NMVTIS is to assist in efforts to prevent the introduction or reintroduction of stolen motor vehicles into interstate commerce, protect states and individual and commercial consumers from fraud, reduce the use of stolen vehicles for illicit purposes including fundraising for criminal enterprises, and provide consumer protection from unsafe vehicles".

According to Vehicle and Traffic Law and DMV Commissioner's regulations, junk and salvage yards operating in New York State must submit a statement to the Commissioner regarding the acquisition of a

vehicle which has been disposed of as junk or for salvage. The yards are also required to submit the certificate of title or any other ownership documentation related to those motor vehicles. According to federal regulation, the yards are required to report vehicle acquisition data to NMVTIS which is almost identical to the data the yards also report to DMV.

In an effort to streamline reporting and encourage yard reporting to NMVTIS, DMV proposes eliminating the junk and salvage vehicle acquisition reporting requirements in the Vehicle and Traffic Law as stated above. DMV will be seeking to acquire information electronically from other sources including AAMVA, the NMVTIS administrator. The information will be available to DMV in a more timely manner since there are limited resources available to process the paper currently received from the yards. In addition, the proposed change will eliminate a duplicative junk and salvage yard reporting requirement while still ensuring information about junk and salvage vehicles is available to DMV and NMVTIS.

Budget implications

This act should significantly reduce state expenditure in overseeing vehicle transfers. The cost of printing MV-50s is approximately $220,000 per year. The Tax Department also estimates that the electronic MV-50 system would enable them to recover an additional $10,000,000 annually in sales tax. The Tax Department currently sends auditors into the field to conduct audits. With the electronic transmission of the MV-50, the tax auditors can conduct remote audits, which consume much less time. Consequently, more auditors would be available to conduct more audits on all annual basis. The staff costs to create the system would be approximately $500,000 spread out over the entire implementation (2 to 3 years).