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Chapter 5.7

Streamline the Process for Issuing Special License Plates


Summary

Texans can choose from a wide range of special plates if they do not want the standard license plates on their cars and trucks. The special plates process has several requirements that create extra steps for Texans who purchase special plates and additional processing costs for the Texas Department of Transportation. Reducing the number of single-year plates, allowing special plates to be renewed in a single transaction and removing unnecessary renewal regulations will improve customer service and reduce the cost of providing special plates.


Background

Texans can choose from a wide range of special plates if they don’t want the standard license plates on their cars and trucks. TxDOT offers more than 100 different special plates; some of the better known are for state officials, military service, supporters of state universities, and older, classic cars. Each of the special plates has its own statutory requirements for who may purchase the plates and what fees are charged. In addition, unlike standard plates, several of the special plates must be reissued each year.[1] By the end of December 1999, TxDOT issued about 220,000 special plates.[2]

To manage the diverse special plate offerings, TxDOT has divided the plates into three broad categories: exempt, military, and prestige. The Special Plates Branch of the Vehicle Titles and Registration Division (VTR) accepts all applications for the various types of special plates and determines whether the person or organization meets the qualifications.


Plate Types

Exempt plates are plates issued to governmental entities, including the federal government, state government, counties, cities and school districts. Exempt plates are permanent plates that remain with the vehicle as long as it is owned and used by a governmental entity.[3] In fiscal 1999, excluding law enforcement, about 29,000 other types of exempt plates were issued, both new and renewals.[4]

Military plates include about 20 different plates, such as disabled veteran, Purple Heart recipient, and a special plate for each branch of the armed services.[5] Except for the Legion of Valor and Congressional Medal of Honor plates, all the military plates are multi-year plates that require an annual windshield sticker. At the end of fiscal 1999, about 54,500 military plates had been issued or renewed.[6] Of these, two plates, disabled veterans and Purple Heart recipients, make up the majority; during fiscal 1999 about 24,000 disabled veteran plates and 19,000 Purple Heart recipient plates were issued or renewed.[7]

Prestige plates range from elected official plates, to supporters of such things as state universities, the arts, animals, and one of the newest, the Girl Scouts.[8] Excluding elected official plates, more than 100,000 prestige plates were issued or renewed during fiscal 1999. Prestige licenses are multi-year plates that require an annual windshield sticker.[9]

The plates issued to elected officials, such as county judges, state judges, state officials, members of the US Congress, and US judges, are single-year plates with the year the plate expires stamped into the metal.[10] The elected officials must replace their plates every year. About 4,800 elected official special plates were issued during the 2000-2001 registration period.[11]


Application and Renewal Processes

To apply for a special plate, an individual or organization fills out an application form and submits the appropriate fee to TxDOT. The forms can be obtained from county assessor-collectors’ offices, a VTR regional office, or TxDOT’s 1-800 number and, in some cases, TxDOT’s Internet site.

TxDOT mails a confirmation that the application has been received back to the owner. If the required qualifications are met, the administrative portion of the fee is deposited into the State Highway Fund and the remainder of the fee is deposited in the sponsoring organization’s account. Next, TxDOT sends a letter to the customer stating that the application has been accepted and enters the appropriate information into its computer system, called the Special Plates System. The Special Plates System generates a plate production schedule that notifies the Texas Department of Criminal Justice (TDCJ) to produce the plate. TDCJ mails the plate to the appropriate county assessor-collector and TxDOT notifies the owner via mail that the plate is ready and can be picked up at the county assessor-collector’s office. [12]

The renewal of multi-year prestige plates is a two-step process. First, TxDOT mails the owner a renewal notice and bill for the additional prestige plate fee. The owner mails a check back to TxDOT, then TxDOT mails the owner a standard renewal notice. The owner follows the normal registration process by paying the county assessor-collector the appropriate fees and receiving a windshield sticker.[13]

Thirty employees are assigned to the Special Plates Branch. The branch estimates that each new special plate application takes about 18 minutes on average to process, while renewals take about five minutes.[14]


Improving Special Plates Process

State law creates extra steps for Texans who purchase special plates, and additional processing costs for TxDOT. By changing the procedures, these extra steps and costs could be avoided while improving customer service.

Single-Year Plates. The elected official plates are single-year plates and require a multi-step process for renewal. TxDOT contacts the elected official asking if he or she still wants to retain the plate. If the answer is yes, TxDOT notifies TDCJ to produce the plate and mail it to the county assessor-collector, and notifies the elected official the plates are available. The elected official must present the notice to the county assessor-collector with the appropriate registration fee when he or she picks up the new plates.[15]

In contrast, the elected official could be issued a multi-year plate with the expiration coinciding with the end of the term of office, and issued a standard windshield sticker each year. Since stickers can be issued through the mail, and in the future may be issued over the Internet, the effort for the elected official to renew his or her plates could be reduced. The Department’s production cost could also be reduced, since the plates would be for terms of office ranging from two to six years, rather than issuing a new plate every year. The savings from issuing multi-year plates to elected officials is estimated to range from $13,720 in non-election years to a low of almost $670 in years when most officials are elected.

Two-step renewal process. State law specifies how the Department must deposit the special plate fees, but does not specify the renewal process. TxDOT collects the special plate fees then sends a renewal notice to the owner, who pays the normal registration fee to the county assessor-collector, creating a two-step renewal process.[16] For example, for an individual “Animal Friendly” plate, state law sets the fee at $25 and requires the Department to deposit $20 in the animal friendly account in the General Revenue Fund and $5 in the State Highway Fund.[17] To renew an “Animal Friendly” plate, the owner must first pay TxDOT $25 and then wait for a standard renewal notice. After receiving the notice, the individual then renews the registration through the county assessor collector.[18]

In contrast, if the county assessor-collector collected the special plate renewal fees, the vehicle owner could renew his or her registration in one transaction. In addition, TxDOT could eliminate a mailing and processing these special plate renewals, saving the Department as much as $456,000 annually.

Unneeded Regulations. In some cases, an owner must annually confirm eligibility even though the eligibility does not change. For example, to renew a disabled veteran plate, the owner must certify that he or she continues to be disabled and pays a $3 fee. While some disabilities are temporary and TxDOT is required by law only to issue special plates to those who met the qualifications, requiring permanently disabled individuals to certify their status is not necessary.[19] TxDOT annually spends about $70,000 to mail the forms and about $35,000 to review them, for a total cost of about $105,000 a year.[20]

Improvements in the special plates process would require changes to TxDOT’s automated Registration and Titling System (RTS), primarily to account for the special plate renewal fees that the county assessor-collectors would send to TxDOT. The modification would also require these fees to be accounted for separately from the regular registration fees since they would not be included in the complex formula that allocates fees between the counties and the state. The cost to modify RTS to incorporate these changes is estimated to total about $400,000. TxDOT indicated that the integration of the special plates processing into RTS would not only improve customer service but would also reduce errors and data inconsistencies while allowing better inventory management of special plates and stickers. [21]


Recommendations

A. State law should be changed to require TxDOT to issue elected officials multi-year license plates for their vehicles, with the plate expiration coinciding with the end of their term of office.

The new process would replace the current annual plates with multi-year plates. Elected officials would receive standard renewal notices and would be issued standard windshield stickers. State officials would no longer be required to replace vehicle license plates during their term of office. Plate issuance and renewal could be completed in person, through the mail, or if other recommendations in this report are adopted, over the Internet.

TxDOT would be required to modify its mailing list and Registration and Titling System (RTS) to identify the elected officials’ terms of office. TxDOT would send elected officials a standard renewal notice, rather than the letters now sent to officials’ residences and business addresses. TxDOT would also reduce the number of license plates manufactured each year, instead issuing additional windshield stickers.

B. State law should be changed to specify that special plate renewals will be processed with a single transaction through the county assessor-collectors’ offices.

To implement this recommendation, TxDOT would need to modify its processes to generate consolidated renewal notices and update RTS to allow county assessor-collectors’ offices to process these transactions and appropriately account for the special plate fees. Allowing vehicle owners to renew their special plates in a single transaction would improve customer service.

TxDOT would reduce the number of renewal mailings from two to one, reducing its printing and mailing costs. Integrating the separate special plates information into RTS would reduce errors and data inconsistencies.

C. TxDOT should change its special plate renewal requirements to reduce unnecessary regulations and associated fees.

TxDOT should eliminate its requirements that require individuals to recertify their eligibility each year when their qualifications for special plates do not change. Specifically, TxDOT should eliminate any requirements for disabled veterans, Purple Heart recipients, Pearl Harbor survivors, former Prisoners of War, and individuals eligible for Legion of Valor plates to recertify their status annually and the associated plate fees. Instead, their status would be recertified when new plates are issued. In addition, TxDOT should review all of its forms, processes, procedures and rules to ensure that any other similarly unnecessary requirements are eliminated. TxDOT would need to change its renewal forms and automated systems to reflect these changes.


Fiscal Impact

Implementing these recommendations would require TxDOT to incur a one-time cost of about $400,000 to modify the automated Registration and Titling System (RTS). Although RTS is in the process of upgrading the system, these changes should be made prior to January 2003. Elected officials, whose terms begin in January 2003, would be issued plates under the new system. Last session, the Legislature enacted House Bill 3014, creating a dedicated revenue stream to be used to pay for these changes.

Matching the expiration of license plates with the elected officials terms of office would reduce the plate production and mailing costs as well as the cost to notify elected officials that their plates are ready. This savings varies from year to year depending upon how many elected officials terms of offices begin during that fiscal year. The saving range from almost $670 to nearly $14,000 since the Texas Department of Criminal Justice produces these plates, it would realize revenue losses of up to $2,600.

Moving to a single transaction to renew special plates through the county assessor-collectors’ offices would save about $608,000 in the fiscal 2003 and $700,000 annually in subsequent years. This savings includes eliminating one of the mailings and the reduction of five employees in fiscal 2003 and an additional three employees in fiscal 2004, who would no longer be needed to process these renewals at TxDOT.

However, moving to a single transaction would delay depositing the special plate fees into the State Highway Fund as well as other state funds. The cost of the delay is a one-time and is estimated to total $11,700 to the State Highway Fund $46,000 to the General Revenue Fund, and $22,200 to other state funds and accounts.

Removing the three dollar fee from the disabled veteran, Purple Heart recipient, Pearl Harbor survivors, former Prisoner of War, and Legion of Valor plates would result in a cost to the State Highway Fund of about $123,000 annually and a cost to counties of $24,500 annually.

Fiscal Year
Cost to
RTS-Restricted Amounts in the State Highway Fund
Net Savings
to the State Highway Fund Available to Redirect
Gain/(Loss)
to the General Revenue Fund
Cost to Other State Funds and GR Dedicated Accounts
Reduction in FTEs
2002
0
0
0
0
0
2003
($400,000)
$475,000
($46,000)
($22,000)
-5
2004
0
$591,000
($3,000)
0
-8
2005
0
$585,000
($2,000)
0
-8
2006
0
$591,000
($3,000)
0
-8

Endnotes

[1] V.T.C.A., Transportation Code, Chapter 502, subchapter E and subchapter F, and Texas Department of Transportation, “Vehicle Titles and Registration Division Overview,” March 28, 2000.

[2] Texas Department of Transportation, “Vehicle Titles and Registration Division Overview,” March 28, 2000, p. 5.

[3] Texas Department of Transportation, Vehicle Titles and Registration Division, Texas License Plates (Austin, Texas, September 1998), p. 4.

[4] Telephone interview with Dave Escamilla, branch manager, Special Plates, Vehicle Titles and Registration Division, Texas Department of Transportation, Austin, Texas, July 11, 2000.

[5] Texas Department of Transportation, “Special License Plates,” October 30, 2000 (http://www.dot.state.tx.us/insdtdot/orgchart/vtr/reginfo/spplates/specplat.htm). (Internet document.); Texas Department of Transportation, “Vehicle Titles and Registration Division Overview,” March 28, 2000; and Texas Department of Transportation, Vehicle Title and Registration Division, Texas License Plates (Austin, Texas, September 1998) telephone interview with Dave Escamilla, branch manager, Special Plates, Vehicle Titles and Registration Division, Texas Department of Transportation, Austin, Texas, July 11, 2000.

[6] Telephone interview with Dave Escamilla, branch manager, Special Plates, Vehicle Titles and Registration Division, Texas Department of Transportation, Austin, Texas, July 11, 2000; Texas Department of Transportation, Vehicle Title and Registration Division, Texas License Plates (Austin, Texas, September 1998), Texas Department of Transportation, Special Plates Monthly Report Calendar 1999, Austin, Texas. (Computer printout.)

[7] Telephone interview with Dave Escamilla, branch manager, Special Plates, Vehicle Titles and Registration Division, Texas Department of Transportation, Austin, Texas, July 11, 2000; Texas Department of Transportation, Special Plates Monthly Report Calendar 1999, Austin, Texas. (Computer printout.)

[8] Texas Department of Transportation, “Special License Plates,” October 30, 2000 (http://www.dot.state.tx.us/insdtdot/orgchart/vtr/reginfo/spplates/specplat.htm). (Internet document.)

[9] Telephone interview with Dave Escamilla, branch manager, Special Plates, Vehicle Titles and Registration Division, Texas Department of Transportation, Austin, Texas, July 11, 2000; Texas Department of Transportation, Special Plates Monthly Report Calendar 1999, Austin, Texas. (Computer printout.)

[10] Texas Department of Transportation, Vehicle Titles and Registration Division, Texas License Plates (Austin, Texas, September 1998), pp. 3, 9 and 11.

[11] Interview with Dave Escamilla, branch manager, Special Plates, Vehicle Titles and Registration Division, Texas Department of Transportation, Austin, Texas, July 22, 2000.

[12] Telephone interview with Dave Escamilla, branch manager, Special Plates, Vehicle Titles and Registration Division, Texas Department of Transportation, Austin, Texas, June 27, 2000.

[13] Telephone interview with Dave Escamilla, branch manager, Special Plates, Vehicle Titles and Registration Division, Texas Department of Transportation, Austin, Texas, July 11, 2000.

[14] Letter from Kirby W. Pickett, P.E., deputy executive director, Texas Department of Transportation, to Clint Winters, Research and Policy Development Division, Texas Comptroller of Public Accounts, Austin, Texas, August 21, 2000, and telephone interview with Duane Pufpaff, chief, Headquarters Operations, Vehicle Titles and Registration Division, Texas Department of Transportation, Austin, Texas, December 18, 2000; and telephone interview with Duane Pufpaff, chief, Headquarters Operations, Vehicle Titles and Registration Division, Texas Department of Transportation, Austin, Texas, January 8, 2001.

[15] Telephone interview with Dave Escamilla, branch manager, Special Plates, Vehicle Titles and Registration Division, Texas Department of Transportation, Austin, Texas, July 11, 2000.

[16] Telephone interview with Dave Escamilla, branch manager, Special Plates, Vehicle Titles and Registration Division, Texas Department of Transportation, Austin, Texas, July 11, 2000; and V.T.C.A., Transportation Code, Chapter 502, Subchapter E.

[17] V.T.C.A., Transportation Code §502.291.

[18] Telephone interview with Dave Escamilla, branch manager, Special Plates, Vehicle Titles and Registration Division, Texas Department of Transportation, Austin, Texas, July 11, 2000.

[19] Telephone interview with Dave Escamilla, branch manager, Special Plates, Vehicle Titles and Registration Division, Texas Department of Transportation, Austin, Texas, August 7, 2000; and Texas Department of Transportation, “Disabled Veterans License Plates,” July, 2000.

[20] E-mail from Duane Pufpaff, chief, Headquarters Operations, Vehicle Titles and Registration Division, Texas Department of Transportation, Austin, Texas, July 24, 2000 Letter from Kirby W. Pickett, P.E., deputy executive director, Texas Department of Transportation, to Clint Winters, Research and Policy Development Division, Texas Comptroller of Public Accounts, Austin, Texas, August 21, 2000.

[21] Texas Department of Transportation, “Special License Plates,” July 14, 2000.