A bill introduced by Anchorage Republican Sen. Cathy Giessel would give private businesses which expedite Department of Motor Vehicle services a pay raise of 15 percent from state revenues. If it passes, SB 127 would cost the state at least $1.2 million a year.
The companies say they need the extra money to process credit cards and to expand their businesses. Critics say that the state would be giving additional money to businesses for doing work that’s already profitable. The state DMV is neutral on the bill. Currently, there are eleven businesses that contract with the state for this service in Alaska, not all of whom appear to have valid Alaska business licenses.
Since 2000, the state has allowed private companies to provide titles, transfer of titles, and commercial services historically done through DMV. They set up offices away from DMVs and the lines are much shorter. The companies provide the paper work, but DMV still does the processing.
Such services provide convenience for consumers. In exchange, the companies have been allowed to charge whatever the market will bear for the convenience, above and beyond the standard DMV fees. They’re also allowed to charge for things, like handicap license plates, that the state doesn’t charge for.
In fiscal year 2013, they collected more than $11.4 million in fees from 193,697 transactions.
Fees charged to the consumers can vary dramatically depending on the business and the service. One of the largest of such businesses, Alaska Tags & Titles, processed 341,000 transactions from 2004 until 2013. According to legislative testimony, the company charges consumers $20 for a registration renewal, $2 for a transfer of title, and $30 for commercial fees.
This is a service fee above and beyond what the state charges.
If the bill is passed, in addition to those service fees, companies will get an additional $2 for a duplicate registration, $5 for a duplicate tag or plate, and $115 for a registration for transfer of title from the state, according to Melissa Cucullu, the general manager of Alaska Title and Transfer.
That money will come from the general fund.
Giessel said that it would encourage more private sector involvement and would save the state money, though she has not offered any documentation for the latter claim.
The bill passed out of State Affairs Committee and was referred to Finance.
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