Lobbyist presses fiscal case for DMV contract

By David McGrath Schwartz

Thursday, May 7, 2009 | 2 a.m.

Former Assembly speaker and current lobbyist Richard Perkins said the state could make more than $100 million a year in higher fees and added insurance premiums if the Legislature requires it to hire a company to automatically verify vehicle insurance coverage.

Perkins acknowledged before the committee that only Michigan-based InsureNet, which has hired Perkins as its lobbyist, qualifies for the contract under Assembly Bill 504. It is the only company that meets the strict requirements of a law enforcement organization, he said.

But, Perkins said, the Assembly committee could prevent the state from “giving away the store” in a contract with InsureNet by putting conditions or limits on how much the company could make under the contract.

AB504 would require the Department of Motor Vehicles to contract with a third party to automatically verify which vehicles are insured.

Perkins told lawmakers InsureNet would set up cameras around the state to photograph the license plates of passing vehicles. The plates would be checked against insurance company databases and when an uninsured vehicle is spotted, a citation would be issued to its registered owner.

Law enforcement would also be able to check in real time which drivers are uninsured, even out-of-state drivers.

“You’ve all heard deals that are too good to be true as I did when I sat on this committee for 14 years,” Perkins told the Assembly Ways and Means Committee. “So how can that be so?”

He said the company would pay for “millions of dollars in upfront costs” to establish the program and in exchange would get a percentage of citations issued through use of the technology.

“Clearly, you could put parameters on what the percentages could be, so you’re not quote-unquote giving away the store,” he said.

DMV Director Edgar Roberts expressed concern that the bill would circumvent laws requiring bids to be open to many potential contractors.

Dennis Colling, the DMV’s chief of administrative services, said “a single company that qualifies is certainly negotiating from a position of power.”

Only Assemblyman Joe Hogan, D-Las Vegas, expressed concern about potential problems the state could encounter negotiating with a company it’s required by law to hire.

“I want to make sure we’re not overpaying or, heaven forbid, underpaying for the contract,” he said. “I’m intrigued, this is an exciting process. But it’s going so fast, I’d like a little more time.”

The bill was not voted on Wednesday.