Vehicle Lifecycle Administration VLA Patrice Aasmo AAMVA Staff

Vehicle Lifecycle Administration (VLA) Patrice Aasmo, AAMVA Staff Vivienne Cameron, AAMVA Staff Deb Hillmer, Chair, E-Titling Working Group AAMVA-Official Use Only 1

Session Outline: q Update on NMVTIS Strategic Initiatives – Reducing costs: • Reengineering – Increasing Revenue: • State Fees – FY’ 13 and FY’ 14 • Consumer access q Update on NMVTIS Operational Status – – – Overall program view State program New Working Groups AAMVA-Official Use Only 2

Session Outline: q NMVTIS Junk, Salvage and Insurance (JSI) total loss vehicle reporting program review – – q States reporting data on behalf of reporting entities Costs, etc E-titling Update AAMVA-Official Use Only 3

NMVTIS Strategic Initiatives Reduce System Operating Costs: q System re-engineering – – – AAMVA’s investment $4 million No negative impact on states or other stakeholders Rewrite the mainframe COBOL code to MS. NET Migrate from DB 2 to MS SQL Server New Service Oriented Architecture web services Development underway, completion projected December 2012 AAMVA-Official Use Only 4

NMVTIS Strategic Initiatives (cont’d) Revenue Generation: q State user fees: - AAMVA Board and DOJ Approved August 2011 - State fees will cover a maximum 50% of total NMVTIS operational costs - For FY ‘ 13 NMVTIS cost estimated at $5 M - Fee memo issued in September 2011 - Invoicing will begin October 1, 2012 - Work underway to calculate FY’ 14 fees using same model - Once approved, fee memo will be issued prior to October 1, 2012 AAMVA-Official Use Only 5

NMVTIS Strategic Initiatives (cont’d) Generating Revenue: q. State Fee and Consumer Access Revenues: – 50% credit of each consumer access transaction that results in title or brand data returned for a VIN pointing to that state as current state of title (CSOT) will be applied until the fees are offset at 100% and any credits beyond the state fees will be applied to aforementioned state as well AAMVA-Official Use Only 6

NMVTIS Strategic Initiatives (cont’d) Generating Revenue: q Consumer Access: – Eight authorized providers in production – Experian and Carfax are also in development for implementation by July 1, 2012 – California legislation AB 1215 – requires all used car details to provide a NMVTIS Vehicle History Report on all vehicles offered for retail sale, effective July 1, 2012 – Other states considering similar actions – Continue to pursue potential of consumer access to theft data AAMVA-Official Use Only 7

NMVTIS Operational Update AAMVA-Official Use Only 8

States and NMVTIS State Participation Growth 2005 - Present 35 30 Number of States 25 20 Participating Data Only 15 Development Not Participating 10 5 0 2005 2007 2009 2010 AAMVA-Official Use Only 2011 Current 10

Operational Status q. Stakeholder Management: – To ensure the ongoing operation of the system is in line with stakeholder needs/requirements – Four working groups are being established: 1. State Business Rules • Representation: regional, NMVTIS status, AAMVA, DOJ • Vehicle Standing Committee 2. Law Enforcement • Representation: regional, NMVTIS status, AAMVA, DOJ • LE Standing Committee 3. Consumer Access 4. Third Party Reporting AAMVA-Official Use Only 11

NMVTIS Third Party Reporting Program Review AAMVA-Official Use Only 12

Third Party Program Review Concern: – Recycler and shredder industry concerned about double reporting as well as the cost to report to NMVTIS Their strategy: – Focus effort to have state agencies collect the required NMVTIS data and report into NMVTIS on their behalf, at no cost – Successful in GA last year, other recent draft legislation in MS, SC, TN AAMVA-Official Use Only 13

Third Party Program Review (cont’d) Myth vs. Reality Myth: – “States are already reporting data to NMVTIS – this is a simple just add a few more data points. ” – “This shouldn’t cost much more? ” Reality: • States must operate similar to current data consolidation services. – Different technical solution from current state data provision – Must establish administrative procedures/protocol to register reporting entities, issue IDs, etc. – Must establish customer service support to handle errors etc. – TN fiscal impact - $9, 800 one time fee, $96, 000 ongoing annual cost AAMVA-Official Use Only 14

Third Party Program Review (cont’d) Questions for consideration: 1. Is that the best approach? 2. How can states use JSI information? Example: NYS DMV – obtains JSI information from NMVTIS on weekly basis that helps support their Destroyed Vehicle Program AAMVA-Official Use Only 15

Electronic Vehicle Titling Proof of Concept AAMVA-Official Use Only 16

Background • E-Titling Working Group requested AAMVA Board consider a member-driven ‘proof of concept’ for electronic vehicle titling August 2011 • Board approved staff pursuit of requirements definition, scope and budget for a pilot • Final deliverables • E-Titling Proof of Concept Definition • AAMVA E-Titling Scope and Costs • Board approved going forward with a proof of concept pilot AAMVA-Official Use Only 17

Why E-Titling? E-Titling will minimize the following: • Paper handling • Investigative/Administrative efforts • Opportunities for document fraud E-Titling contains opportunities to: • Streamline processing and reduce stakeholder burdens (save money) • Provide new revenue streams (earn money) AAMVA-Official Use Only 18

Why AAMVA? • Request from the members • Efficiency through use of existing infrastructure (i. e. , network connectivity, NMVTIS and ELT) • Neutral/standardized interstate transacting • 2012 -2014 Strategic Plan “sweet spot” AAMVA-Official Use Only 19

Proof of Concept Pilot: Scope Implement paperless process for all stakeholder groups involved in the first-time titling of new motor vehicles*. Stakeholder groups are as follows: • Vehicle Manufacturers • Vehicle Dealers • State Titling Agencies • Vehicle Lien Holders • Consumers * New motor vehicles defined as: • New passenger vehicles • SUVs and property carrying vehicles with a GVWR of less than 10, 000 lbs. • Motorcycles, trucks (GVWR over 10, 000 pounds), and trailers are not considered in scope for the pilot. • Must be produced by NHTSA approved manufacturers of vehicles available for sale in the U. S. that conform to the federal motor vehicle standard 17 -Digit vehicle identification number. AAMVA-Official Use Only 20

Proof of Concept Pilot: Goal/Approach Goal: Demonstrate cost savings, process efficiencies and reduction in fraud by implementing technology and procedures to use electronic records to track a new vehicle from its manufacturer to its first title issuance. Approach: • Remain a state-initiated and state-controlled program • To the extent possible, use or adapt existing tools or systems including those: ü Under direct state control ü Provided by industry ü Controlled by the Federal Government • Comply with both State and Federal Regulations • Collaborate with industry stakeholders to gain their support AAMVA-Official Use Only 21

Data Exchange 1. CREATE MCO 2. SEND MCO TO DEALER 3. REASSIGNMENT 4. VERIFY CONSUMER IDENTITY * 5. TITLE APPLICATION 6. VERIFY DEALER STANDING * 7. VERIFY TITLE INFORMATION 8. CHECK NMVTIS 9. ACKNOWLEDGE LIEN 10. CREATE TITLE 11. NOTIFY CONSUMER * * Optional step AAMVA-Official Use Only 22

Data Exchange AAMVA-Official Use Only 23

Proof of Concept Pilot: Deliverables The E-Titling Proof of Concept will use the definition document and evaluation criteria to execute the Proof of Concept with a limited set of stakeholders. The execution of the Proof of Concept will result in the development of the following deliverables: • Project Plan • Roadmap for E-Titling • Standardized Data Definition of E-Titling Record • MCO System Modifications to enable E-Titling • AAMVA ELT Service Requirements • Return on Investment Analysis • Proof of Concept Evaluation Report • Best Practices All deliverables will be reviewed and approved by participants in the state E-Titling Proof of Concept Task Force. Industry stakeholder groups will be engaged in the Proof of Concept pilot and be given the opportunity to develop and review deliverables. AAMVA-Official Use Only 24

Proof of Concept Pilot: Duration Projections for time frames on a potential pilot include the following: • July 2012 through January 2013: • Prepare infrastructure and data integration standards • January 2013 through September 2013: • Pilot participants implementation • September 2013 through May 2014: • Pilot operation and evaluation AAMVA-Official Use Only 25

Participation Commitment in the form of LOIs have been received from the following as it relates to participation in a proof of concept pilot: • States: Seven working group states for pilot, others have shown interest • NICB • Manufacturers • Dealers • Lenders AAMVA-Official Use Only 26

APPENDIX AAMVA-Official Use Only 27

AAMVA E-Titling Working Group Ø Debra Hillmer, South Dakota, Chair Ø Monica Blackwell, Texas Ø Karen Grim, Virginia Ø Paul Zelenski, Wisconsin Ø Stacey Stanton, Arizona Ø Kitty Kramer, California Ø Boyd Walden, Florida Ø Andrew Lewis, Iowa Ø Debbie Rogers, Maryland Ø Tom Mc. Cormick, Vermont Ø Lotte Devlin/Sharon Madison, South Carolina Ø Scott Clapper, Delaware Ø Janet Dolan, Pennsylvania* * NOTE: Representative of Vehicle Committee (Chair) and in this role, serves exofficio on the E-Titling Working Group AAMVA-Official Use Only 28