HB 1779 Vehicle Property Tax Collection A Priority Goal of the NCACC W.A. (Pete) Rodda, CAE, RES David Baker, MPA, PPS

To improve the citizen’s experience: Reduce the number of government interactions. Eliminate the need for delinquent collections. Reduce/share costs: Duplicate mailings (postage, materials, handling, and so on) Increase Efficiency of an Existing Tax Improved collections and revenues. Improved compliance. Project Goals HB 1779 Vehicle Property Tax Collection2

Major Issues: Average of 66% of RMV bills are paid on time Average Collection Rates at Fiscal Year End by County Population: RMVAnnual Statewide Average87.22% 97.91% 100, % 98.37% 50,000 – 99, % 96.96% 25,000 – 49, % 96.61% 24,999 and Below84.08% 95.23% *Source: LGC Memorandum # , 4/17/ Current System: “Billing In Arrears” HB 1779 Vehicle Property Tax Collection

4 HB1779 PROGRAM OFFICE HB 1779 Project Sponsor Steering Committee DMV, DOR, DOT IT, NCACC Steering Committee DMV, DOR, DOT IT, NCACC NC DOT Architecture / Security NC ITS Architecture / Security Core Teams STARS Development DOR IT DMV Financial Accounting (Billing & Payment) HB 1779 Program Manager Owns the technical solution NC DOT PMO NC ITS EPMO Manages program Owns the HB1779 Business Solution Limited number of decision makers DOR HB 1779 Business Architect HB 1779 Solution Architect Stakeholders Citizens, counties, auto dealers, tax assessors, LPAs Governance – Cross Functional Development

Vehicle Renewal/Reissuance Process 5HB 1779 Vehicle Property Tax Collection

In the new system, property taxes will be included with the “invitation to renew”: Assessor determines value, SITUS, and taxable status of the vehicle in advance – not in arrears. File is “delivered” to DMV to prepare the invitations to renew the registration. Taxes must be paid in order to obtain the registration – no partial payments will be allowed. 6HB 1779 Vehicle Property Tax Collection New System: “Simultaneous Billing”

In the new system property taxes will be included with the “invitation to renew.” The RMV owner has legitimate options NOT to renew the registration. Taxes are collected by DMV/License Plate Agencies (LPAs) (no partial payments). 7HB 1779 Vehicle Property Tax Collection New System: “Simultaneous Billing”

With the new system: No more billing in arrears – billing is done when the invitation to renew is sent. Vehicle cannot be registered unless the taxes are paid. The local collector is not charged with collection. A tax levy (in the traditional sense) is not created. 8HB 1779 Vehicle Property Tax Collection Major Differences Between “Current” Verses “New” System

9HB 1779 Vehicle Property Tax Collection With the new system: All assessments (valuation, SITUS, taxability) will be performed in statewide Vehicle Tax System (VTS) administered by the Department of Revenue. Refunds will still be handled by the local governments using the VTS. DOT Fiscal will distribute local tax revenue to the counties, who will in turn distribute to other taxing units. Major Differences Between “Current” Verses “New” System

10HB 1779 Vehicle Property Tax Collection STARS is a mainframe system, scheduled for replacement. RFI has been issued. Decision was made to take a modular approach. Vehicle Tax System will be a separate system housed at the NC DOR data center. DMV maintains responsibility for titles and registrations. DOR responsible for property tax administration. Configuration

Counties work their first files in the new system in March/April, 2013 July, 2013 renewals Combined notices to be in mailboxes no later than June, 1, 2013 Old system and new system will overlap for four months Change in due date Counties will now work two files for 5 months rather than 6! Implementation HB 1779 Vehicle Property Tax Collection11

Registered Motor Vehicle Process Chart – July 2013 Implementation File Delivery/ RegistrationProcessing NoticeTaxesPastEnforcement RenewedOld SystemNew SystemPreparedDue BeginsBlock NoticeBlock Nov-12Jan-13 Feb-13Mar-13Apr-13May-13Jun-13Jul-13 Dec-12Feb-13 Mar-13Apr-13May-13Jun-13Jul-13Aug-13 Jan-13Mar-13 Apr-13May-13Jun-13Jul-13Aug-13Sep-13 Feb-13Apr-13 May-13Jun-13Jul-13Aug-13Sep-13Oct-13 Mar-13May-13 Jun-13Jul-13Aug-13Sep-13Oct-13Nov-13 Apr-13Jun-13 Jul-13Aug-13Sep-13Oct-13Nov-13Dec-13 May-13Jul-13 Aug-13Sep-13Oct-13Nov-13Dec-13Jan-14 Jun-13Aug-13 Sep-13Oct-13Nov-13Dec-13Jan-14Feb-14 Jul-13 Apr-13May-138/15/20138/16/2013N/A Aug-13 May-13Jun-139/15/20139/16/2013N/A Sep-13 Jun-13Jul-1310/15/201310/16/2013N/A Oct-13 Jul-13Aug-1311/15/201311/16/2013N/A Nov-13 Aug-13Sep-1312/15/201312/16/2013N/A Dec-13 Sep-13Oct-131/15/20141/16/2014N/A Jan-14 Oct-13Nov-132/15/20142/16/2014N/A Feb-14 Nov-13Dec-133/15/20143/16/2014N/A Mar-14 Dec-13Jan-144/15/20144/16/2014N/A Apr-14 Jan-14Feb-145/15/20145/16/2014N/A May-14 Feb-14Mar-146/15/20146/16/2014N/A Jun-14 Mar-14Apr-147/15/20147/16/2014N/A 12

16 billing cycles in FY 2014: Four under current system, twelve under new system. Additional billing cycles due to moving away from billing in arrears to concurrent billing/registration renewal. Vehicle tax years remain the same; only the due dates are changing. The additional billing cycles are a one-time occurrence. THIS IS NOT A WINDFALL! HB 1779 Vehicle Property Tax Collection13 Local Impact

 RMV Process Chart_1.xlsx RMV Process Chart_1.xlsx MV Process Chart HB 1779 Vehicle Property Tax Collection14

Tax Association Meetings “Road Show” Demos planned for October 15 – 19, 2012 NCAAO Fall Conference, Thursday November 15, 2012 Statewide Training Sessions February 8 through March 8, 2013 Potential sites include Wilmington, Greenville, Fayetteville, Raleigh, Winston-Salem, Charlotte and Asheville. Webcasts Statewide Training Opportunities HB 1779 Vehicle Property Tax Collection15

WHO DATEINTRODUCTORYTESTING HB 1779 Vehicle Property Tax Collection16 Conversion and Testing SESSION SESSION 3 Pilot Counties 9/17/ /17-18/ /22-26/ Counties 10/31/ /26/ /26-30/ Counties 12/21/2012 1/3-4/2013 1/7-25/2013

Vehicles not Handled by VTS HB 1779 Vehicle Property Tax Collection17 (1) M otor vehicles exempt from registration pursuant to G.S. 20 ‑ 51. (2) Manufactured homes, mobile classrooms, and mobile offices. (3) Semitrailers or trailers registered on a multiyear basis. (4) Motor vehicles owned or leased by a public service company and appraised under G.S. 105 ‑ 335. (5) Repealed by Session Laws 2000, c. 140, s. 75(a), effective July 1, 2000.

Vehicles not Handled by VTS HB 1779 Vehicle Property Tax Collection18 (6) Motor vehicles registered under the International Registration Plan. (7) Motor vehicles issued permanent registration plates under G.S. 20 ‑ 84. (8) Self ‑ propelled property ‑ carrying vehicles issued three ‑ month registration plates at the farmer rate under G.S

 County codes the vehicle as such within the VTS and the notice only has the registration fee on it.  Application for exemption must be filed within 30 days of the due date.  DMV or LPA can not exempt a vehicle. Exemptions and Exclusions HB 1779 Vehicle Property Tax Collection19

 Will be handle the same way as today.  Assessor will situs, appraise, assess the vehicles in the VTS.  The VTS will send the amount of taxes due to STARS.  DMV will mail and collect.  Due date is the 15 th of the month.  Appeal – Value appeal must be made with 30 days of due date. Renewals HB 1779 Vehicle Property Tax Collection20

 Real time  Sales price used as the value if it is a dealer sale.  This will help with trailers, RV and special vehicles. New Registration HB 1779 Vehicle Property Tax Collection21

Issues – Limit Registration Plate LRP  Buyer can choose to get a limited registration.  Plate will be marked with a “T” rather than a year. Good for the month plus 2 more months.  March purchase - good till May 31.  Buyer will be sent a combined notice 15 days after registration and title work is submitted.  When tax is paid, buyer will get the full year registration. (A year sticker to place over “T”)

 SB 826  Minimal tax bills (f)  Appeals/Exemption and (b)  Interest – – ¾% interest starts the second month after the due date.  Collection remedies still in place for any taxes bill under the current/old system. Leg. Changes HB 1779 Vehicle Property Tax Collection24

 Stops double taxation.  Allows vehicles to be billed for missing months.  Bill as unregistered in county system.  Spreadheet: E:\Unregistered vehicle bills.xlsxE:\Unregistered vehicle bills.xlsx Unregisterd vehicles (a1) HB 1779 Vehicle Property Tax Collection25

 No value  No Situs  RV  Plus Code  Condition Code  Exemption  Exception  Antique MV  Trailer  Notes Work Queues HB 1779 Vehicle Property Tax Collection26

Fields for alias record Field nameExampleField nameExampleField nameExample Record typeA Alias street type ST Alias state NC County Address Id 5874 Alias street number Alias zip code Alias street name LIBERTY Alias street range from Alias zip plus Alias street prefix Alias street range to Alias type O Alias street suffix Alias city RAMSEUR Alias type: A for Abbreviation C for Name Change O for Other Name P for Preferred Name

VTS Situs Validation Process

HB 1779 Vehicle Property Tax Collection29 Questions?