Over the objection of some local officials, the Texas Department of Motor Vehicles Board passed proposals Monday that will impact how much Texans pay for vehicle registrations as well as potentially drive some private firms out of business.
The board approved a $4.75 processing and handling fee for vehicle registration renewals done in person or through the mail, making the total cost for both methods $55.50. The board also agreed to reduce the cost of online transactions by 25 cents, dropping it to $54.50.
The decision to make online renewals cheaper had rankled some local county officials, who complained that they will lose registration fee revenue, as they receive a larger cut from renewals performed in-person or via mail. The new prices are set to go into effect on Jan. 1.
"I don't think they really weighed all the information the way they should have, and I really think they already had their minds made up before the meeting," said Albert Uresti, the Bexar County tax assessor-collector. "But whatever is decided, we're going to make it work."
The original proposal from the department would have added a $5 fee to non-online transactions. Feedback from various officials including Gov. Greg Abbott's office prompted the department to reduce the new fee to $4.75.
"Our primary interest is in keeping this fee structure as low for customers as possible, and rewarding customers who utilize the most cost efficient vehicle registration method offered – online renewals," wrote Drew DeBerry, Abbott's director of budget and policy, in a letter to the department.
The DMV board also voted to adopt a limit for the fees private title service companies can charge for their work, a proposal many of those companies predicted would ultimately force them out of business.
Only four Texas counties — Bexar, El Paso, Hidalgo and Travis — allow title service companies to perform some of the same duties as the county, including the issuance of vehicle registrations, license plates and transferring car titles. In 2013, the Legislature ordered the DMV board to set a maximum fee for how much these private entities could charge for their services.
The DMV's initial proposal would have set the price caps at $5 for registrations and $15 for title services. Among hundreds of public comments to the pricing system, some private title service companies warned the limits were too low for them to stay in business.
After reviewing the feedback and financial information from the firms, the DMV submitted revised recommendations that would increase the caps to $10 for registrations and $20 for titling. Jeremiah Kuntz, director of the department's vehicle titles and registration division, predicted the new numbers would "maintain profitability." A representative of some of the private title service companies disagreed.
As the board moved to adopt the revised spending cap, board member Robert Barnwell emphasized the Legislature's order for the board to develop such a cap.
"It's not my intention to hurt the people of Texas or to hurt these private businesses, and what a balancing act we've been handed," Barnwell said.
Bill Aleshire, an Austin-based attorney who represents 11 title service operations, said the revised proposal would still put many of the companies out of business.
"This state appointed board has injected itself in a way that undermines the work of local elected tax collectors," he wrote in an email following the meeting. "Hopefully, the Legislature and the Courts will stop them."
In the counties where private title service companies operate, tax assessor-collectors said those firms handle a significant percentage of registration and titling services. In Bexar county, Uresti said it would cost the county $7 million in the first year to make up the business. Travis County Tax Assessor-Collector Bruce Elfant estimated his county's cost at $1 million.
While El Paso County Tax Assessor-Collector Ruben Gonzalez said it would cost the county $3.3 million if their title service companies went out of business, the pricing caps approved by the board should be workable in his county.
"I think it was kind of favorable for us, for El Paso," Gonzalez said. "The fees they proposed, of 10 and 20, that's kind of more than [title service companies] are getting now ... I'm very happy that they established that."
Elfant said he was concerned the fee caps would prevent title service companies from operating long term, even if they were not immediately put out of business.
"If you set these fees, and even if some of them can barely make a profit, what's that going to look like the next year, or the year after?" Elfant said. "I think that we need to trust the free market system. If these companies do go out of business ... it's going to be because government regulation put them out of business."
DMV Board Chairwoman Laura Ryan said the board would "absolutely" be open to reconsidering the cap at future meetings.