The document discusses North Carolina's implementation of a new combined motor vehicle registration renewal and property tax collection system. It provides an overview of the goals and mechanics of the new system, implementation updates, costs, revenue estimates, and reports available from the system. Key points include that the new system has improved collections, revenues are estimated to increase by over $100 million annually, and costs per transaction are lower than the old system.

1. David Baker, MPA, PPS
Director
Local Government Division
NCDOR
State of North Carolina
System
1NCLGBA July 17, 2014

2. Major Issues:
Average of 66% of RMV bills are paid on time
Average Collection Rates at Fiscal Year End by County Population:
RMV Annual
Statewide Average 87.22% 97.91%
100,000+ 88.09% 98.37%
50,000 – 99,999 85.37% 96.96%
25,000 – 49,999 84.01% 96.61%
24,999 and Below 84.08% 95.23%
*Source: LGC Memorandum #2012-14, 4/17/2012
NCLGBA July 17, 2014 2
Old System: “Billing In Arrears”

3.  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.
Goals of the New System
NCLGBA July 17, 2014 3
Goals

4.  In the new system, property taxes are
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.
NCLGBA July 17, 2014 4
New System Billing
New System Billing

5. General Rules
 DOT fiscal will distribute money by the 10th day of the month
following collection.
 Counties will distribute revenues to the municipalities and other taxing
jurisdictions within the county.
 DOT Fiscal will provide gross collections, billing, credit card and
debit card costs, and net revenue.
 Costs will be extracted.
 Costs for the initial mailings were paid from the Special Account
as we start the project.
NCLGBA July 17, 2014 5

6. Overall the implementation has gone very
good.
A few minor defects which are being fixed.
A major change but has been accepted by the
citizens and other stakeholders.
Implementation
NCLGBA July 17, 2014 6

7. The implementation phase closed the end of
September.
Project was closed out the end of November.
Final MOU has been approved and signed by
all stakeholders.
Update on Project:
NCLGBA July 17, 2014 7

8. Steering Committee has transferred the
project over to the Change Control Board.
Make up of the Change Control Board
 Chairman – David Baker
 Six voting members
 Group of SME’s
 Purpose
Update on Project:
NCLGBA July 17, 2014 8

9. VTS Users Group
 Made up of all different size counties from across
the State.
 Contract with VTS vendor will be transferred
from NCDOT to NCDOR
 NCDOR will work with all stakeholders to
improve the system as we move forward.
Update on Project:
NCLGBA July 17, 2014 9

10. NCLGBA July 17, 2014 10
Project costs were paid through the
Special Fund administered by the State
Treasurer:
• 3% additional interest.
How We Paid For It

11. Interest Money
From January 2006 to June 30, 2013
• $41,713,270.11 collected
• Project Budget: $26,000,000
• Project cost: $25,062,346.16
• Money Returned $16,650,923.95
11NCLGBA July 17, 2014

12. Operational Costs will be passed to the
local governments:
• Costs will be prorated, based on a given
jurisdiction’s contribution to the total of
all local taxes/fees.
Operational Costs
12NCLGBA July 17, 2014

13. SB 305
 The issuance of a limited registration "T" sticker and
the collection of property tax are each considered a
separate transaction for which compensation at the rate
of one dollar and twenty-seven cents ($1.27) and
seventy-one cents ($0.71), respectively, shall be paid by
counties and municipalities as a cost of the combined
motor vehicle registration renewal and property tax
collection system.
 $1.06 For the LPA’s for the first months –September –
February.
13NCLGBA July 17, 2014

14. HB 1050
Omnibus Tax Law Changes
 The LPA fee for the 2014-2105 fiscal year will be $1.06.
 The DMV collection fee will not be changed and will
remain at $0.71 for the upcoming year.
 The Limited Registration Plate is issued by an LPA
fee of a $1.27 will not change for the upcoming year.
14NCLGBA July 17, 2014

15. Operational Costs
 The LPA fee for the 2014-2105 fiscal year will be $1.06.
 The $1.06 fee amount is retroactive for the months March
2014 to June 2014 and for any months from March 2014 to the
date the DMV is able to implement the additional fee.
 For any month that $0.71 was charged will be adjusted to
$1.06 and the difference subtracted from future revenues
equally over a three month period. The difference has to be
calculated by September 1, 2014.
 The DMV collection fee will not be changed and will remain
at $0.71 for the upcoming year.
15NCLGBA July 17, 2014

16. 2014-15 Operational Costs
An overhead fee is charged on each combined notice and includes but
not limited to printing, postage, TEC valuation service, software
licenses and maintenance, personnel costs, etc.
 Overhead Fee $1.21
Collection Fees
 LPA Collection Fee $1.06
 DMV Collection Fee $0.71
 LRP Issuance Fee $1.27
 Credit Card Fee Variable
 Debt Card Fee Variable
Other Variable
 LRP Cost- $0.50 for each LRP notice mailed for taxes due.
 CPS- Common Payment Service 0.23 per transaction for payment
processing
16NCLGBA July 17, 2014

17. 17NCLGBA July 17, 2014

18. 18NCLGBA July 17, 2014

19. Actual Gross Revenues
Collections
Month Gross Revenues
September $22,867,318.79
October $45,801,194.74
November $42,921,999.66
December $51,147,385.28
January $53,763,540.81
February $56,441,017.63
March $64,191,509.89
April $66,084,464.45
May $67,411,659.22
Total $470,630,090.47
19NCLGBA July 17, 2014

20. Actual Net Revenues
Collections
Month Net Revenues
September $22,867,318.79
October $44,206,970.11
November $42,139,411.92
December $48,523,666.04
January $51,960,006.06
February $55,484,526.58
March $61,296,290.33
April $64,152,390.42
May $66,352,183.21
Total $456,982,763.46
20NCLGBA July 17, 2014

21. Old System Collections Gross Revenues
Data from Treasurer's Website Statewide Totals
2012-13 Total Revenue $570,960,352.28
2012-13 average collection per month $47,580,029.36
Tag and Tax collection Estimate
Gross Revenues
Statewide Totals
2013-14 average net collection per month $55,970,346.46
Total Estimated Revenue for 2013-14 $671,644,157.52
Difference (increase) $100,683,805.25
21NCLGBA July 17, 2014

22. Actual Collections from September 2013 to May 2014
Gross Revenues $447,762,771.68
NetRevenues $434,115,444.67
Expenses $13,647,327.01
Percentage 3%
22NCLGBA July 17, 2014

23. Estimated 2013-14 Revenues Both Systems
6 monthson old system $285,480,176.14
10 months on new system $559,703,464.60
Total Revenue Both Systems $845,183,640.74
23NCLGBA July 17, 2014

24. Old system Expenses based on Survey in 2012
County Share $2.65
Municipalities' Share $1.00
Total Cost per Transaction on a $100 tax bill $3.65
24NCLGBA July 17, 2014

25. Tag and Tax Cost per transaction
County Share $1.84
Other units share $0.79
Total Cost per Transaction on a $100 tax bill $2.62
25NCLGBA July 17, 2014

26. Tax Collection Percentages
Tag and Tax System
80% Renewals @100% collection rate 80.00%
20% Issuances @ 85% collection rate 17.00%
Statewide Collection Rate 97.00%
Old System
Statewide Collection Rate 86.20%
26NCLGBA July 17, 2014

27.  Appeal Loss Report: Displays the effect of the
property tax appeals on appraised and assessed value
 Assessed Value Report by Renewal Month
Displays assessed values for each tax district where the
assessed value is the total appraised value minus the
total exempt value in each tax district by renewal
Period
This report is used to estimate number of vehicles and
value in each tax district
27NCLGBA July 17, 2014

28.  Assessed Value Report by Transaction
Displays assessed values by payment transaction date
 County Net Collection Report By Renewal Month
Summarizes the following:
 tax income,
 tax bill data by fiscal year
 tax district
 levy type
28NCLGBA July 17, 2014

29.  County Net Collection Report By Transaction Date
Track Net collections for vehicles bills based payment date
 County Reconciliation Report
Lists all vehicle taxes, fees, and interest collected for each
jurisdiction along with total payments, holds, reversed taxes,
reversed fees, and reversed interest. Breaks down how much of
the total payment was collected by credit card and debit card.
 Default Situs Report
Identify abstracts billed with default address based on renewal
dates
 Default Situs Report By Transaction Date
Identify abstracts billed with default address based on
transaction dates
29NCLGBA July 17, 2014

30.  Exclusion Report
Lists all vehicles that are excluded from taxation based
on plate issue dates
 Exempt Report
Lists all vehicles that are exempt from taxation based
on renewal dates
NCLGBA July 17, 2014 30

31.  Finance Report
Displays a summary of levy amounts and amounts
collected by year and tax district
 Gap Billing
List all vehicles that have had a new plate issued or has
had a new sticker that changes the renewal cycle where
one or more months of taxes has been omitted.
31NCLGBA July 17, 2014

32.  NET Distribution Report
List all collections and refunds for a specific date (Date
sent to Finance) including over/under amounts
NCLGBA July 17, 2014 32

33.  Not Renewed Vehicle Report
List the Abstract number, owner, vehicle description,
plate valid through, vehicle value, and amount due for
vehicles where the registration has not been renewed,
but renewal miss is more than one year. Parameters
are: Renewal Period, Tax Year, and Tax Jurisdiction
 Pending Refund Report
Displays refunds (both pending and authorized) of
vehicle tax and fees.
33NCLGBA July 17, 2014

34. Tax Billing Detail Report
Lists VIN, Vehicle info, Bill number, due date, Taxpayer
name and address, tax District, levy type and levy
amount and then total value and total taxes and fees
for all vehicles in the county matching the parameters.
If a subset of tax districts are selected it will list each
vehicle in that tax district and then all line items
including all other tax districts that apply to that
vehicle
NCLGBA July 17, 2014 34

35.  Tax Billing Summary Report
This report may be used to project the following:
 number of vehicles
 assessed values
 taxes and vehicle fees
35NCLGBA July 17, 2014

36.  Vehicle Tax Collection Data
Displays the following:
 Vehicle bill information
 Amounts paid
 Summary of total taxes and amounts paid by tax
district.
 Vehicle Tax Collection Date By Transaction Date
Tract paid and unpaid tax bills
36NCLGBA July 17, 2014

37. State Auditor’s Report
 IS Auditor in process – results should be out soon.
 SOC1 Report
37NCLGBA July 17, 2014

38. Questions?
38NCLGBA July 17, 2014