e-Texas Recommendations

Each year the Texas Department of Transportation (TxDOT) sends out millions of vehicle registration renewal notices that are returned to the county assessor-collector with the appropriate fees in person or by mail. TxDOT began an Internet Pilot Project for individual vehicle registration in fiscal 2001. The project, however, could be enhanced to reduce the workload on county assessor-collectors and allow more types of transactions to be processed over the Internet.

Background

All state residents’ vehicles operated on Texas public roads must be registered each year through county assessor-collectors.[1] After initially registering the vehicle at time of purchase, the owner usually receives annual renewal notices by mail. The owner can renew registration at the county assessor-collector’s office, through the mail, or at an authorized substation, generally a county office or a contracted location such as a grocery store. If the owner does not have the renewal notice, he or she must register the vehicle in person at a location that is online with the Registration and Titling System (RTS). The owner must show proof of insurance and pay the appropriate fees, which include the registration fee, an optional local road and bridge fee of up to $10, an optional child safety fee of up to $1.50, a $1 fee in counties with more than 50,000 vehicles, and a $1 fee if the transaction is completed by mail.[2]

Growing Use of the Internet

In the last several years, the use of the Internet has exploded, and at least 16 states offer electronic vehicle registration. Although the process varies, the online registration systems all include several common elements: the owner does not need to have a renewal notice; the owner pays the fees by credit card, with the state paying any credit card fee; and, the state’s vehicle records are automatically updated with the information provided by the owner.[3]

While most of the state online procedures apply only to personal vehicles, a few states allow fleets operating in their state, or trucks operating in multiple states to register online. Arizona, for example, accepts fleet registration through the Internet.[4] North Carolina’s Motor Vehicle Division is conducting a pilot test with seven fleet companies, which operate in multiple states, using Internet registration.[5]

In Texas, Lubbock County has implemented its own Internet registration program, and Dallas County is expecting to do so in the near future.[6]

Texas’ Internet Pilot Project

Since late 1999, TxDOT has been working on a pilot project to introduce Internet registration in Texas. The pilot project includes six counties: Brazoria, Galveston, Harris, Liberty, Lubbock and Montgomery. The project will provide an alternative way for owners to renew their vehicles’ registration.[7] In the pilot project, the owner will access the Web site, enter the information printed on the renewal notice, and enter his or her credit card number and payment amount. The system will verify the credit card, deposit the money in the counties’ bank accounts, and store the registration information. The county will access the database and will be able to view and process 10 transactions at a time. The county will verify insurance coverage by contacting the insurance carrier, retype the information into RTS, and mail the new registration sticker to the owner. As with mail or in-person transactions, RTS will update the information.

Under TxDOT’s pilot project, a vendor provides software for about $264,000. To pay for the software development, vehicle owners registering online will be charged a $3 fee, which includes $1 for mailing, $1 for electronic registration, and $1 for credit card processing. (Individuals with a registration fee greater than $100 will not be permitted to use Internet registration because the credit card fee is too high.) After the vendor receives the entire $264,000 development cost, TxDOT will own the software.[8] There are no plans to reduce the fee once the vendor has been compensated for the software, because the revenue collected from the fees is not sufficient to cover the cost of registering through the Internet. TxDOT plans to open the Internet registration to all counties within 30 days following successful implementation.[9]

Benefits of a Comprehensive System

TxDOT’s current approach benefits owners registering passenger vehicles, light trucks, and trailers, but does not affect other types of vehicles and does not enhance the operations in county assessor-collector or TxDOT offices.[10] Although vehicles that are part of a fleet may be registered over the Internet, the vehicles must be registered individually, with the fleet administrator typing in the information on the renewal form. Trucks that are engaged in interstate commerce are registered under rules of the International Registration Plan. Under the current pilot, these trucks cannot be registered using the Internet. Adding these two features to the Internet registration system could reduce the effort and cost to businesses to register their fleets.

The current Internet process requires the county assessor-collectors offices to retype the information into RTS. This is more time-consuming than processing mail-in renewals, which are bar coded and may be scanned to bring up the record in RTS. In addition, having both the owner and the county employee typing in the information increases the chances of errors.[11] Allowing direct RTS updates would reduce the amount of potential errors and reduce the workload on the counties. The Lubbock County Assessor-Collector stated that there could be a 50 to 60 percent reduction in workload for each transaction that is processed through the Internet if the system communicated with the RTS.[12]

Recommendation

Texas Department of Transportation (TxDOT) should expand its Internet registration system to allow for an interface with the Registration and Title System (RTS), for fleet registration, and registration under the International Registration Plan (IRP).

Providing these enhancements would allow information entered on the Internet by the customer to be added to RTS at the time of entry with current information. This would eliminate the manual reentry of data into RTS by the county assessor-collector. These enhancements would also allow owners of fleets and vehicles registered under the IRP to register vehicles using the Internet.

Fiscal Impact

TxDOT would incur costs to expand Internet registration to include an interface with RTS, as well as vehicle fleets and vehicles registered under IRP. The cost of these changes cannot be estimated (cbe). TxDOT has not estimated the cost of these changes, nor was the review able to find comparable cost figures from other states. Last session, HB3014 was enacted, which created a dedicated revenue stream that could be used to fund these changes.

Expanding the Internet registration to include additional counties and registrations would increase the number of vehicles registered over the Internet and the associated revenue gains. The estimated savings represent the amounts of the State Highway Fund that could be redirected to other TxDOT programs or budget items.

Fiscal Year	Savings/(Cost) to RTS Restricted Amounts in the State Highway Fund	Net Savings to the State Highway Fund Available to Redirect
2002	$0	$359,000
2003	cbe	$364,000
2004	$0	$368,000
2005	$0	$373,000
2006	$0	$378,000

[2] Interview with Bob Tanner, director, Technical Operations, Vehicle Titles and Registration Division, Texas Department of Transportation, Austin, Texas, August 11, 2000.

[3] Memorandum from Jerry Dike, director, Vehicle Titles and Registration Division, Texas Department of Transportation, to Richard Mudge, BBP Consultant Study, February 29, 2000; spreadsheet provided by Texas Department of Transportation; and interview with Kim McKoy, Consultant to Vehicle Titles and Registration Management Support Branch, Austin, Texas, May 10, 2000; and memorandum from Janet Hasty, Internet registration manager, Vehicle Titles and Registration, Texas Department of Transportation, to Frank Smith, Hagler Bailly Services, Inc., September 14, 2000.

[4] Telephone interview with Jamie Robertson, Internet specialist, Arizona Motor Vehicle Carrier Division, Arizona Department of Transportation, Phoenix, Arizona, August 31, 2000.

[5] Telephone interview with Mac Davenport, Internet registration manager, North Carolina Motor Vehicle Division, North Carolina Department of Transportation, Raleigh, North Carolina, September 21, 2000.

[6] Telephone interview with Kim McKoy, consultant to Vehicle Titles and Registration Division, Texas Department of Transportation, Austin, Texas, July 10, 2000.

[7] Telephone interview with Janet Hasty, Internet registration manager, Vehicle Titles and Registration Division, Texas Department of Transportation, Austin, Texas, September 14, 2000, and Bob Tanner, director, Technical Operations, Vehicle Titles and Registration Division, Texas Department of Transportation, Austin, Texas, July 10, 2000.

[8] Telephone interview with Kim McKoy, consultant to Vehicle Titles and Registration Division, Texas Department of Transportation, Austin, Texas, July 10, 2000, telephone interview with Bob Tanner, director, Technical Operations, Vehicle Titles and Registration Division, Texas Department of Transportation, Austin, Texas, July 6, 2000, telephone interview with Janet Hasty, Internet registration manager, Vehicle Titles and Registration Division, Texas Department of Transportation, Austin, Texas, September 14, 2000.

[9] Telephone interview with Janet Hasty, Internet registration manager, Vehicle Titles and Registration Division, Texas Department of Transportation, Austin, Texas, September 14, 2000.

[10] Telephone interview with Bob Tanner, director, Technical Operations, Vehicle Titles and Registration Division, Texas Department of Transportation, Austin, Texas, July 10, 2000.

[11] Telephone interview with Bob Tanner, director, Technical Operations, Vehicle Titles and Registration Division, Texas Department of Transportation, Austin, Texas, July 6, 2000.

[12] Telephone interview with Steve Watt, county tax assessor-collector, Lubbock, Texas, July 14, 2000, and Bob Tanner, director, Technical Operations, Vehicle Titles and Registration Division, Texas Department of Transportation, Austin, Texas, July 14, 2000.