SB 175, An Act to provide for the removal of certain noncommercial motor vehicle
license plates from a motor vehicle if the ownership of the vehicle is transferred and to
make an appropriation to provide for the administration thereof.
Senate Bill 175 would change motor vehicle registration laws so that whenever a vehicle is sold, it would become an unlicensed vehicle in South Dakota's motor vehicle registration system. The new owner would have 30 days to register the vehicle and replace its license plates. Whatever plates had been on the vehicle would go with the owner, or have to be removed, destroyed, and replaced by the new owner. Unlike the current system, salvaged vehicles would not retain their license plates indefinitely, and every time a vehicle's ownership changes the license plates would change as well.
It is estimated that Senate Bill 175 would have the following impact on the state's
finances during the first fiscal year of implementation:
|Excise Tax Revenue||$0||$0||$2,750,000||$2,750,000|
|Registration Fee Revenue||$0||$0||$1,250,000||$1,250,000|
There is reason to believe that increased revenue would offset the cost of implementing
SB 175. As experienced in North Dakota (one of the 40 states that have the "Plate-
With-Owner" law) some vehicles change ownership two or three times a year, which
would mean an increase in the revenue stream from this activity. North Dakota has
experienced an increase in fee revenue (though not all of it attributable to increased
activity) since enacting similar legislation in 1997.
Approximately 170,000 vehicles were assessed the excise tax in 2004 when they were
titled. This averages to about $324 in excise tax per vehicle. If there was an estimated
5% increase in the number of vehicles titled, or 8,500 more vehicles titled and assessed
excise tax, there could be a revenue increase of as much as $2.75 million in excise
taxes. Similarly, the amount of revenue realized from registration transfers could also
increase. If registrations increased by an estimated 5%, there could be an increase in
revenue of as much as $1.25 million in registration fees during the first full year.
The department collected $51.5 million and $55 million in motor vehicle excise taxes for
Fiscal Years 2003 and 2004, respectively. In 2003 registration fees revenue was
$25.2million, and in 2004 it was $26 million. That revenue is deposited in the Highway
APPROVED BY:______________________________________ DATE:____________