(c) Such a dealer may charge a person who purchases a vehicle from such dealer a fee for assisting in securing a registration and/or certificate of title for such vehicle provided the dealer actually performs the service of filing the application for title and/or registration with the Commissioner of Motor Vehicles or his issuing agent. The fee charged by the dealer may not exceed [$45] $75. Such fee does not include the fee required to be paid to the Department of Motor Vehicles for issuance of the registration or for issuance of a certificate of title, nor shall such fee include the fee charged for the motor vehicle inspection of the vehicle.

Paragraph (2) of subdivision (c) and subdivision (d) of section 78.19 are amended to read as follows:

(2) Such a dealer may charge a person who purchases a vehicle from such dealer a fee for assisting in securing a registration and/or certificate of title for such vehicle, provided the dealer actually performs the service of filing the application for title and/or registration with the Commissioner of Motor Vehicles or his issuing agent. The fee charged by the dealer may not exceed [$45] $75. Such fee does not include the fee required to be paid to the Department of Motor Vehicles for issuance of the registration or for issuance of a certificate of title, nor shall such fee include the fee charged for the motor vehicle inspection of the vehicle.

(d) If a fee is charged by the dealer for assisting in securing a registration and/or title or securing special or distinctive plates, the dealer shall print the following statement and asterisked statement on all copies of the invoice or bill of sale in a type size not smaller than the type size used for other charges on such document:

"Dealer's optional fee for processing application for registration and/or certificate of title, and for securing special or distinctive plates (if applicable). THIS IS NOT A DMV FEE. *$________"

The asterisk and the following language shall be printed below the above statement:

*The optional dealer registration or title application processing fee ([$45.00] $75.00 maximum) and special plate processing fee ($5.00 maximum) are not New York State or Department of Motor Vehicles fees. Unless a lien is being recorded or the dealer issued number plates, you may submit your own application for registration and/or certificate of title or for a special or distinctive plate to any motor vehicle issuing office.

1. Statutory authority: Section 215(a) of the Vehicle and Traffic Law authorizes the Commissioner to promulgate regulations which regulate and control the exercise of the powers of the Department of Motor Vehicles. VTL Section 415(9)(d) provides that the Department may take action against a dealer who fails to comply with the rules and regulations of the Commissioner for the enforcement of Article 16 or with any provision of the VTL applicable thereto. Thus, under such section, the Department may promulgate rules regulating dealer activities and procedures.

2. Legislative objectives: The Legislature enacted Article 16 of the Vehicle and Traffic Law, Registration of Dealers and Transporters, to both protect consumers from fraudulent business practices and to assist the dealers in the sale of motor vehicles. Implicit in VTL Section 415(9)(d) is the authority of the Commissioner to promulgate regulations governing the sale of motor vehicles.

This proposal accords with the legislative objective of assisting dealers in the sale of motor vehicles by permitting an increase in the fee dealers may charge customers for processing registration and title documents. Since the fee was increased to $45 dollars in 2004, not only have dealer costs increased substantially, but dealers are operating at a competitive disadvantage with neighboring states. This proposal also accords with the legislative objective of protecting consumers by placing a cap on the fee that dealers may charge.

3. Needs and benefits: This proposed regulation is necessary primarily to assist the dealer industry in meeting the increasing cost of processing DMV registrations and titles and to compete with dealers in neighboring states. Since 1972, the Department has allowed the industry to impose a discretionary fee to cover the cost of processing registration and title work. This is known as the “dealer document fee.” If a vehicle is bought with a lien attached, the dealer must process the registration and title paperwork. If there is no lien, the consumer may choose to process the paperwork himself or herself at a DMV Office.

A dealer is not required to charge the document fee. However, most dealers have chosen to charge the fee due to the cost of doing business. In 1972, the fee was set at a maximum of $10. This was increased to a maximum of $20 in 1991. In 2004, the fee was increased to a maximum of $45. At the current rate, the fee is substantially less than that charged in other states. In our neighboring states, the fees are much higher: up to $200 in Massachusetts, up to $125 in Vermont and between $199 and $299 in New Jersey. By increasing the fee to $75, New York would come within 50% of the national average of dealer document fees, without imposing an onerous burden on consumers.

In addition to competitive concerns, dealer-related statutes and regulations have become more abundant and complex. As the law and procedures evolve, titling and registration processing has become more involved, with some transactions requiring particularized, detailed attention. It is estimated that there are about 15 documents associated with each motor vehicle sale, and that at least six employees are involved in a motor vehicle sale, including the salesperson, the finance and insurance manager, the billing clerk, the sales manager, the accounts payable clerk and the accounts receivable clerk.

Many states do not regulate the dealer documentation fee. New York, however, believes that without a cap, consumers could be subject to exorbitant fees; thus, a cap remains in place in order to protect consumers. The regulation represents a balance between the business needs of dealers and consumer protection imperatives.

4. Costs: There would be no cost to regulated parties. There are 1,937 new car dealers, 9 qualified dealers and 9,621 used car dealers in New York State. Dealers sold about 1.5 million vehicles in the past year. Assuming that all purchasers were assessed a maximum document fee, such dealers would have collected an additional $45 million dollars in 2008.

Purchasers of motor vehicles will assume the costs noted above by paying the increased dealer documentation fee.

5. Local government mandates: There are no local government mandates associated with this proposal.

6. Paperwork: There are no new reporting or paperwork requirements associated with this proposal. Dealers shall be required to revise their forms that list the dealer document fee. Until such revisions are made, they may continue to use their current stock and simply write or type in the new document fee.

7. Duplication: This rule does not duplicate any State or Federal regulation.

8. Alternative: Several dealer groups requested that the Department increase the dealer document fee, including the Greater New York Dealers Association, the New York State Automobile Dealers Association, the Eastern New York Coalition of Automotive Retailers, the Niagara Frontier Automobile Dealers Association, the Rochester Automobile Dealers Association and the Syracuse Automobile Dealers Association. In light of the concerns expressed by the groups and balancing those concerns with the interests of consumers, the Department considered various document fee increase proposals. This proposal represents a reasonable increase to meet industry needs without imposing an undue burden on consumers. A no action alternative was considered, but it was rejected in light of the economic and fiscal needs of the industry.

9. Federal standards: This rule does not exceed any minimum standards of the Federal government.

10. Compliance schedule: Immediate.

A Regulatory Flexibility Analysis for Small Businesses and Local Governments is not submitted with this proposed rule because it will have no adverse impact on small business or local governments. This proposal permits dealers to increase the dealer document fee charged to customers for the processing of registration and title transactions. Dealers will collect the increased document fee to cover their increased business costs. Thus, the proposal benefits dealers and will have no adverse impact.

A Rural Area Flexibility Analysis is not submitted with this proposed rule because it has no adverse or disproportionate impact on rural areas of New York State.

A Job Impact Statement is not submitted with this proposal because it will have no adverse impact on job creation and development in New York State. This proposal concerns an increase in the dealer document fee collected by dealers upon the sale of a motor vehicle.