Full Report (PDF) - Office of the Legislative Auditor

18MOTOR VEmCLE DEPUTY REGISTRARSStates vary considerably in the way they regulate private agents. Many statesregulate the number and location of private agents according to geographic or economicfactors similar to those used in Minnesota, such as sparsity, population ofthe county, and projected financial impact on or distance to the nearest agent.UnlikeMinnesota,some statesappoint privateagents under aformal contract.Unlike Minnesota, the agent is often appointed under a fonnal contract. In Ohio,private agents bid on a two-year contract. 16 Selection of Ohio agents involvescomparing their bids against a point system based on economic and demographicfactors and applicant qualifications. About 20 percent of agents tum over eachyear, and they have an ongoing training program using a network of field representatives.Ohio also loans each agent a computer, incorporating an automatedsystem for calculation, fonns completion, and reporting.Almost 300 private agents in Oklahoma work under a continuing contract, butthey may be removed for any reason. Agents in the metropolitan areas must bethree miles apart, and elsewhere the state limits the number of agents per town.Oklahoma has a $30,000 cap on net agent fees based on IRS reimbursable expensesand agents are subject to multiple state audits.Some states identify agents by their occupation or business. In a few states, onlycar dealers, car rental agencies, leasing companies, and fleets process their own titlesand registration. In Illinois, over 2,000 financial institutions process tab renewals.Officials in Wisconsin told us that they are considering authorizingcurrency exchanges to issue tabs. 17 Some states delegate part or all of the appointmentfunction to counties, which regulate their own sub-agents.We identified six states (California, Pennsylvania, Maryland, Illinois, Hawaii andWest ViIginia) who register and bond registration services that act as an agent forthe customer. These agents may pick up the paperwork, help complete fonns, deliverapplications to a central or branch office, complete payment, and return thetab or plate to the customer, charging a fee for each level of service. In Pennsylvania,only the central state office issues tabs and titles, and 187 private agents assistcitizens with registration or title applications.We asked officials from other states whether the right to be an agent could be soldto another private party. We found that:• Minnesota is the only state where the right to provide motor vehicleand driver's license services in a protected, restricted environment canbe sold to a private agent.Officials from other states told us that the right to provide motor vehicle anddriver's license services could not be sold. In states where the agents are self-selectedand operate in an open environment, the agents may incorporate and selltheir business, but there is no exclusive right to provide these services. Officialsfrom most states told us that they wanted a person designated as the agent, even16 Three years in 1994.17 Currency exchanges perfonn various functions, such as check cashing, and are most often foundin urban areas.