The rule establishes eligibility criteria to apply to deliver an ADM course.

The rule sets forth the minimum requirements essential for all ADM courses and the details of the application process. An application must be accompanied by a $7,500 fee. A sponsor must post a $100,000 bond or letter of credit.

DMV must be given access to all course materials and must be able to audit all ADM courses. Sponsoring agencies shall allow and cooperate with DMV or its designee's monitoring of ADM courses. If the Department is unable to engage a third party monitor, the sponsoring agencies shall be required to procure an independent third party monitor.

The rule requires course sponsors to evaluate the effectiveness of their AMD course.

The rule extensively sets forth the course requirements, including the length of the course, its content, customer support requirements, identity validation techniques, content questions that insure student participation, and proctored exam requirements, where appropriate.

The rule establishes information security guidelines for course sponsors and requirements for course administration.

The rule sets forth the basis for DMV to suspend or revoke approval of a sponsoring or delivery agency.

The rule establishes guidelines for acceptable advertising produced by the sponsors.

1. Statutory authority: Section 2336 of the Insurance Law provides that the Department of Motor Vehicles will approve and monitor motor vehicle accident prevention courses for liability insurance premium reduction. Section 399-l of the Vehicle and Traffic Law, as added by Chapter 751 of the Laws of 2005, provides that the Commissioner may impose a fee of up to $7,500 for each applicant for the program. Section 399-n of such law provides that the Commissioner of Motor Vehicles is authorized to promulgate regulations in relation to the Accident Prevention Internet, and Other Technology Pilot Program. Such section provides that the regulations should insure that internet and other technologies can validate: student identity; student participation; course time requirements; and successful course completion. Such section also provides that the Commissioner may charge the sponsoring agency a fee of up to $8 for each student who completes the Pilot Program course.

2. Legislative objectives: In enacting Article 12-B of the Vehicle and Traffic Law, the Legislature stated that its purpose was to further highway safety by preserving the quality and efficacy of the accident prevention course program by the establishment of strict criteria for initial and continual course sponsorship approval. Article 12-C of the Vehicle and Traffic Law expands upon the classroom course, authorized by Article 12-B, and authorizes the Commissioner of Motor Vehicles to “establish and implement a comprehensive pilot program to review and study internet, and other technologies as approved by the Commissioner, as a training method for the administration and completion of an approved accident prevention course for the purposes of granting point and insurance premium reduction benefits.” (Vehicle and Traffic Law section 399-k) The Legislature specifically directed that the regulations address issues regarding validation of student identity, student participation throughout the course and student completion of the course. The proposed rule is in accord with the public policy objectives that the Legislature sought to advance in creating Article 12-C, since it creates comprehensive and detailed rules for establishing an internet/alternative technologies accident prevention course.

3. Needs and benefits: The proposed revisions are necessary to effectuate the provisions of Article 12-C of the Vehicle and Traffic Law, the Accident Prevention Course Internet and Other Technologies Pilot Program. Chapter 751 of the Laws of 2005 directed the Commissioner to promulgate any rules and regulations necessary to implement Article 12-C of the Vehicle and Traffic Law.

This proposed regulation is necessary to put sponsoring agencies on notice about the specific rules and guidelines governing an internet/alternative technologies accident prevention course. This proposal sets forth requirements relative to: course application procedures; third party monitoring; DMV audits; information security; course requirements; student validation techniques; suspension and revocation of sponsor's authority to give course; and advertising restrictions.

The regulation puts applicants on notice that the Commissioner shall only approve an application for an internet/alternative technologies course if such applicant has received approval to give the classroom accident prevention course, as set forth in Article 12-B of the Vehicle and Traffic Law.

The proposed regulation is also important because it informs the general public about the specifics of the internet/alternatives technologies program and gives assurances that the program is designed to prevent fraud and abuse.

4. Costs: a. To regulated parties: This is a voluntary program. No business is obligated to participate.

All businesses applying to sponsor an internet/alternative technologies course must pay a $7,500.00 application fee to be deposited in the Accident Prevention Course Internet Technology Pilot Program Fund, as established in State Finance Law section 89-g. Vehicle and Traffic Law section 399-n(2) authorizes the Commissioner to impose a fee upon each approved sponsoring agency, which shall not exceed $8.00 for each student who completes the accident prevention course. A business approved to sponsor an internet/alternative technologies course must post a $100,000 bond or letter of credit. Interested sponsoring agencies estimate that a monitoring program would cost about $5 to $8 per student.

Prospective sponsors estimate that the implementation cost for the program will range from $40,000 to $72,000. The difference in cost is most likely attributed to the fact that some sponsors already have Internet/alternative programs in place while others are in the initial stages of development.

It is estimated that it will cost between $10,000 and $40,000 to hire a third party monitor, if DMV does not contract with such a monitor.

It is estimated that it will cost sponsors about $30,000 to $35,000 to evaluate their courses.

It is estimated that it will cost between $3,000 and $5,000 to maintain a course on an annual basis.

It is estimated that the use of biometric technology will be approximately ten dollars per student.

Cost to the public: The course fee charged to customers will be set by the marketplace. There is no minimum or maximum fee that must be assessed. Prospective sponsors estimate the cost to the public at $15 to $49.

b. Cost to agency: Cost to DMV would involve approximately 100 hours of staff time to review each application and curriculum. We would also need to provide security audits to monitor the program at an agency level. We estimate these costs at approximately $45,000 the first year when the majority of applications would arrive, dropping to $22,500 on an ongoing basis in subsequent years for administrative needs.

c. Source: DMV's Divisions of Program Regulation, Information Technology, and Field Investigation. Two potential sponsoring agencies submitted cost estimates. Their names are not disclosed so as not to diminish their competitive position.

5. Local government mandates: This proposal does not impose any mandates upon local governments.

6. Paperwork: The primary paperwork requirement is the initial application that all providers must complete to become an approved provider. In addition, the course providers are required to evaluate their course during the five year period. This will require the retention of data and submission of results to DMV within 60 days of the pilot program termination. Providers must also provide participating students with an online receipt, available for printing. A provider that wishes to substantively change the course must provide DMV with a proposed notice of change. The providers must also maintain records subject to DMV audit, submit copies of policies and procedures to DMV, maintain student completion records for five years, issue course completion certificates to the students, report successful completions to DMV, notify students of the requirements necessary to complete the course, and abide by DMV's advertising policies as established in Part 141.13 of this proposal.

7. Duplication: This proposal does not duplicate, overlap or conflict with any relevant rule or legal requirement of the State or federal governments.

8. Alternatives: Chapter 751 of the Laws of 2005 authorized the Department of Motor Vehicles to establish the Accident Prevention Course Internet and Other Technologies Pilot Program. In order to make this pilot program successful, the Department consulted widely with the current PIRP providers. The Department distributed a draft of this regulation for comment and incorporated some of the recommended changes into this final proposal. Two particular elements of this proposed rulemaking received extensive comments: one, the third party monitoring requirement and, two, the requirement to post a bond or letter of credit.

These two requirements stem from the Department's compelling need to design a pilot program that is free of abuse and fraud. When the Governor vetoed similar legislation in 1999 and 2004, he wrote, “I remain concerned about the potential for fraud and abuse inherent in home study programs. In addition to identification of the individual taking the course, it is necessary to ensure that such individual actually is viewing the course material.” Keeping these concerns in mind, the Department designed a pilot program with flexibility to accommodate different sponsor courses, while establishing structures to insure the integrity of the courses.

The third party monitoring requirement represents one such structure. Chapter 751 provided that the Department would collect an application fee of up to $7,500 and an $8 to be paid by the sponsoring agency for each student taking the internet program. These fees were to be deposited in the Accident Prevention Course Internet, and other Technology Pilot Program fund, as established in section 89-g of the State Finance Law. The Department intended to take the money from this fund and use it to pay for a third party monitor that would be selected via the RFP-Contract process. This neutral monitor would oversee all of the internet programs. Unfortunately, the Legislature failed to appropriate such funds in the 2006 Budget. DMV is attempting again this year to obtain such appropriation. However, if such appropriation is not forthcoming, pursuant to this proposed rule, the sponsors will be required to obtain their own monitor, subject to DMV approval. Although this would be the less desirable alternative, the Department maintains that it is preferable to having no monitor at all.

This proposed rule also requires that course sponsors post a $100,000 bond or letter of credit. Although some course sponsors noted objections to this requirement, the Department maintains that such bond or letter of credit provides crucial protection for consumers in the event the sponsor goes out of business or there is a data loss by such sponsor. Consumers could be reimbursed for course fees, for example, if the company goes out of business.

A no action alternative was not considered.

9. Federal standards: The proposal does not exceed any minimum standards of the federal government for the same or similar subject areas.

10. Compliance schedule: Compliance shall commence upon adoption of this regulation.

1. Effect of rule: There are no local governments affected by this rule.

The Department estimates that each of the 13 currently approved classroom course sponsoring agencies will apply to participate in the voluntary technology pilot program. The proposed regulation does not require sponsors to continue delivering their classroom courses but, based on communications with sponsors, the Department estimates that at least 80% (10 of 13) will continue providing classroom courses through their established delivery agencies. There are approximately 3225 delivery agencies and 5900 instructors delivering classroom courses statewide. The Department considers approximately 85% of delivery agencies to be small businesses, the remainder being larger employers. The Department estimates that 6 of 13 sponsors are small businesses.

2. Compliance requirements: Participation in the pilot program is voluntary and is not limited to course sponsoring agencies that currently have a classroom course approved in New York State. Those choosing to apply will be required to use their existing classroom course to develop an Alternate Delivery Method, such as an Internet based course, CD-Rom/Video or other technology. Sponsors will be required to implement strategies to validate participant identity, time of registration, and participation throughout the 320 minute course, as well as securing all personal information.

The primary paperwork requirement is the initial application that all providers must complete to become an approved provider. In addition, the course providers are required to evaluate their course during the five year period. This will require the retention of data and submission of results to DMV within 60 days of the pilot program termination. Providers must also provider participating students with an online receipt, available for printing. A provider that wishes to substantively change the course must provide DMV with a proposed notice of change. The providers must also maintain records subject to DMV audit, submit copies of policies and procedures to DMV, maintain student completion records for five years, issue course completion certificates to the students, report successful completions to DMV, notify students of the requirements necessary to complete the course, and abide by DMV's advertising policies as established in Part 141.13 of this proposal.

3. Professional services: Sponsors may choose to contract with firms that provide Internet services and various technological solutions for verifying student identity participation as part of the overall development of their ADM course, especially in the development and initial implementation of the course. The sponsors may have to contract with an independent third party monitor if DMV does not enter into a contract with such a monitor.

4. Compliance costs: This is a voluntary program. No business is obligated to participate.

All businesses applying to sponsor an internet/alternative technologies course must pay a $7,500.00 application fee to be deposited in the Accident Prevention Course Internet Technology Pilot Program Fund, as established in State Finance Law section 89-g. Vehicle and Traffic Law section 399-n(2) authorizes the Commissioner to impose a fee upon each approved sponsoring agency, which shall not exceed $8.00 for each student who completes the accident prevention course. A business approved to sponsor an internet/alternative technologies course must post a $100,000 bond or letter of credit.

Interested sponsoring agencies estimate that a monitoring program would cost about $5 to $8 per student. Prospective sponsors estimate that the implementation cost for the program will range from $40,000 to $72,000. The difference in cost is most likely attributed to the fact that some sponsors already have Internet/alternative programs in place while others are in the initial stages of development.

It is estimated that it will cost between 10,000 and 40,000 dollars to hire a third party monitor, if DMV does not contract with such a monitor.

It is estimated that it will cost sponsors about 30,000 to 35,000 dollars to evaluate their courses.

It is estimated that it will cost between 3,000 and 5,000 dollars to maintain a course on an annual basis.

It is estimated that the use of biometric technology will be approximately ten dollars per student.

5. Economic and technological feasibility: The Department believes that approximately 8 of the 13 current classroom providers are presently delivering Internet based, or other technology based courses in other states, or are developing courses for use in other states. The use of Internet and associated technologies in the delivery of myriad services, including driver safety courses, has become commonplace in the modern world. Fifteen states have authorized the delivery of driver improvement course via these technologies with great success in terms of increased participation with minimal negative impact on classroom course attendance. Two such courses in California use a third party monitor. Sponsors that elect to participate in this voluntary pilot program will see an initial investment in technologies to validate student identity upon registration and validate identity and participation throughout the 320 minute course, as well as securing personal information obtained as part of the validation process.

6. Minimizing adverse impact: This is a voluntary 5-year pilot program and sponsoring agencies are not required to participate. The proposed regulation and associated specifications require commonly accepted, readily available technologies, and use standard policies for course accessibility, consumers with disabilities, privacy policies validation of a consumer's identity, and security of personal information. The proposed regulations allow flexibility for the sponsor in choosing their course delivery method, as well as their validation and security techniques, rather than requiring a specific model.

The Department evaluated concerns that not requiring sponsoring agencies to continue delivering the classroom course could negatively affect small business delivery agencies. Initial research has shown that many states have authorized the delivery of courses via these technologies with great success in terms of increased participation, with minimal negative impact on classroom course attendance. Sponsors have built their business through their delivery agencies and are seeking ways to involve their agencies in the pilot program in ways such as using them for in-person identity verification, point of sale for alternative delivery methods (such as CD-Rom), proctored testing locations, web-café type establishments where the technology course can be taken at a physical location, as well as remunerating delivery agencies that make website referrals to the sponsor's course.

As noted below, the Department consulted extensively with the affected businesses in order to draft regulations and specifications that met both industry needs and DMV's need to prevent fraud and abuse. We did receive feedback from several businesses, mentioned below, and made some revisions to both policy decisions and our initial draft regulation. For example, we created more flexibility in the validation scheme used to insure that a given individual is actually taking the course. We increased the time that a student has to complete the course, from three weeks to 30 days. The formula for calculating number of words per minute for the average reader was reduced from 150 words per minute to 100 words per minute. DMV agreed that it should develop the uniform post class survey. At the request of several sponsors, we agreed that a sponsor could post a letter of credit in lieu of the $100,000 bond.

7. Small business and local government participation: The Department has consulted with the motor vehicle accident prevention course/driver safety course industry. Initially, we released a Request for Information to currently approved sponsoring agencies, potential applicants from other states, administrators from other state governments with technology courses, vendors of technology services, and potential course monitors. Feedback was incorporated into draft regulations and specifications, which were then re-circulated to the currently approved sponsoring agencies for comment. We received comments about the proposed regulations from 12 sponsors, whose names will not be disclosed so as not to impair their competitive position. Finally, four additional sponsors, representing two larger sponsors and two smaller sponsors were consulted by telephone for cost input and regulatory impact information.

A Rural Area Flexibility Analysis is not submitted with this proposal because it will not have an adverse or disproportionate impact on rural areas of the State.

A Job Impact Statement is not submitted with this proposal because it will not have an adverse impact on job development or job creation in the State.