BILL NUMBER:S4074                REVISED 3/13/15

TITLE OF BILL:  An act to authorize the commissioner of motor vehicles
to study registration compliance and to amend the financial services
law, in relation to the establishment of penalties for automobile insur-
ance rate evasion

PURPOSE: The bill would direct the New York Department of Motor Vehicles
to study the problem of New York state residents failing to properly
register their vehicles in New York and provide recommendations for
solutions to this problem.

SUMMARY OF PROVISIONS:

Section 1. Direct the Department of Motor Vehicles to study the problem
of New York residents improperly registering their vehicles out of the
state.

Section 2. Direct the Department of Motor Vehicles to issue a report of
findings and provide recommendations to encourage compliance with the
law.

Section 3. Financial Services Law section 408 (a) (1) (A) is amended to
stipulate that the Superintendent of the Department of Financial
Services may impose a fine of no more than $5,000 for any intentional
fraud or intentional misrepresentation of a material fact on an insur-
              

ance policy application.

Section 4. Effective date is immediately upon enactment.

JUSTIFICATION:  The New York State Commission of Investigation (SCI) in
2006 published a preliminary report of their investigation into insur-
ance rate evasion through the use of out of New York State license
plates. SCI found that in 2005 295,963 parking summonses were issued in
New York City to 127,243 Pennsylvania registered vehicles. As of Febru-
ary 2006, 152,957 of these summonses were still outstanding and these
represent unpaid fines due to New York City of $14.3 million. New York
City is also missing out on unpaid red light traffic infraction fines
due to out of state registrations. In 2005 7,378 notices were sent to
owners of vehicles registered in Pennsylvania with 3,143 remaining
unpaid as of March 2006. The unpaid fines for these notices add up to
$270,350.

Additional evidence of the large number of New Yorkers improperly regis-
tering their vehicles out of state is found from the SCI report's reci-
tation of 2004 data with 4,495 accidents involving Pennsylvania-regis-
tered vehicles reported to DMV with 1,098 of these accidents (about a
quarter) occurring in Brooklyn. Since Brooklyn is not contiguous with
Pennsylvania, this strongly suggests that most of the owners of these
vehicles were likely New York residents and not Pennsylvania residents.

Extrapolating the 1,098 Brooklyn out of state registered vehicles to New
York City as a whole and calculating the average sales tax amount for
these vehicles leads to a conservative estimate that the State is losing
out on at least $2.7 million in sales tax revenue it should rightfully
receive with New York City losing out on the equivalent sum.

Furthermore, given the costs of a New York registration is $80 for an
average 2 year registration fee, $25 license plate fee, $50 original
title certificate fee and a $30 2-year vehicle use tax for New York City
residents only, these 1,098 accidents meant a loss to State and City
coffers of at least $203,130, consisting of a $35,940 loss to the City
and a loss of revenue to the State of $167,190. While that number may
seem minor, extrapolating it over all five New York City boroughs adds
up to a State and City revenue loss of over $1 million.

LEGISLATIVE HISTORY: New bill.

FISCAL IMPLICATIONS: New York City could recovery upwards of $17.2
million. The State could recoup at least $3.8 million.

EFFECTIVE DATE: This act shall take effect immediately after it shall
have become a law.