SB1020 repeals and reenacts section 136.055, resetting the rules for entities that act as Department of Revenue fee offices processing motor-vehicle titles, registrations, and collecting certain taxes. It preserves a fixed fee schedule for registrations and licenses but recasts who wins contracts and who keeps the money collected.
The bill requires competitive bidding with procurement priorities for specific tax-exempt organizations and political subdivisions, adds conflict-of-interest limits for employees and affiliates, authorizes a limited single contract extension, and makes auditability an affirmative condition of contract awards. For compliance officers and procurement teams, this changes the bidder landscape, contract terms, and oversight mechanics for Missouri's motor-vehicle transactions network.
At a Glance
What It Does
The bill requires the director of revenue to award fee-office contracts through competitive bidding with priority given to certain tax-exempt organizations and political subdivisions, and it codifies a statutory fee schedule for registration, title, and license transactions. Contracted offices may retain the authorized fees as their compensation; department-run offices’ fees remain state revenue. The director may extend eligible contracts once for up to five years and must ensure audit access to fee-office records.
Who It Affects
Organizations that bid to operate Missouri motor-vehicle fee offices (including nonprofits, service organizations, municipalities, counties, and private contractors), the Department of Revenue's procurement and compliance staff, motor-vehicle dealers who are currently authorized agents, and the state auditor. Consumers are indirectly affected because where and how they pay the statutory fees may shift to non-state operators.
Why It Matters
The bill shifts more of the operational and financial control of motor-vehicle transactions to contracted entities, changes procurement preferences to favor certain nonprofits and local governments, and embeds auditability and conflict-of-interest rules into the contract framework—altering revenue flows, competition, and transparency in a routine but high-volume state function.
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What This Bill Actually Does
SB1020 replaces the existing statutory language governing Department of Revenue fee offices with a single updated section that keeps a numbered schedule of fixed fees for registrations, titles, licenses, lien notices and related services. The statute continues to authorize fee offices to charge only the amounts listed in statute, but it distinguishes who counts that money as revenue: contract operators may retain the fees to fund their operations, while any office run directly by the department treats those receipts as state revenue.
The director of revenue must award contracts via a competitive process and is instructed to give priority to organizations that are tax-exempt under 501(c)(3), 501(c)(6), or 501(c)(4), with an explicit carve‑out for ‘‘action organizations’’ not to receive priority. The statute also signals special consideration for bidders that pledge to reinvest a large share of net proceeds back into Missouri charities or political subdivisions.
If competitive bids are not received, the director may still contract with political subdivisions, service organizations, or other reputable businesses.To limit conflicts, the bill bars awarding contracts to entities affiliated with current department employees or with former employees within one year of their separation; it defines affiliation to include ownership or serving as an officer or board member. It also prohibits cross‑affiliation between a contract fee office and entities that operate as motor-vehicle title service agents.
The director may adopt rules necessary to implement the contracting scheme but the statute couples that authority to the state’s rule-review provisions.SB1020 gives the director authority to extend a competitively awarded contract once for up to five years (for contracts awarded after a 2009 cutoff), but only after evaluating contractor performance; the director is not required to offer this extension. Finally, the statute makes audit access a mandatory condition of contracting: the state auditor may examine fee-office records, and the department must require that right as part of any award while protecting personally identifiable information.
The bill also clarifies that motor-vehicle dealers acting under other statutory agency authorities do not collect these fees under this section.
The Five Things You Need to Know
The statute prescribes a fixed fee schedule (for example: $9 for annual vehicle registration, $18 for biennial registration, $9 for a title application; the schedule covers registrations, titles, licenses, lien notices and a $2 notary/transaction charge).
Competitive bidding gives priority to organizations exempt under 501(c)(3), 501(c)(6), or 501(c)(4), but excludes ‘‘action organizations’’ under the tax code from that preference.
The director must give special consideration to bidders that reinvest at least 75% of net proceeds to Missouri charitable organizations and political subdivisions.
The director may extend a competitively awarded fee-office contract once for up to five years (only for contracts awarded after Sept. 1, 2009), but an extension requires a performance evaluation and can be granted only one time.
The state auditor is explicitly authorized to audit fee-office records; the department must make auditability a condition of contract awards while safeguarding personally identifiable information.
Section-by-Section Breakdown
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Statutory fee schedule for fee offices
This subsection lists the exact fees that a fee office may collect for registrations, titles, licenses, lien notices and transaction transmissions. Practically, it caps what contractors can charge customers: offices cannot assess fees higher than those specified. The provision is the statutory pricing baseline that determines contractor revenue per transaction and therefore underpins any business model for running a fee office.
Competitive bidding priorities and conflict rules
The director must run a competitive bidding process and prioritize bidders that are tax‑exempt under 501(c)(3), (c)(6) or (c)(4), excluding organizations classified as ‘‘action organizations.’’ The subsection adds a preference for bidders that commit to reinvesting a defined portion of net proceeds to Missouri charities and political subdivisions. It also imposes affiliation-based prohibitions that block awards to entities owned or governed by current department employees or by former employees within one year, and it forbids overlap between a contract holder and motor-vehicle title service agents. The director may adopt implementing rules subject to the state's rule‑review process.
Contract extension and performance evaluation
This provision allows the director to offer a one-time extension of up to five years for contracts awarded through the competitive process (limited to contracts awarded after Sept. 1, 2009). The director must evaluate contractor performance before granting an extension but is not obligated to offer one. The single-extension cap is the principal mechanism to balance continuity against entrenchment of contractors.
Who keeps fees and collection limits
The statute makes clear that fees collected by contract offices may be retained and used by the operator, whereas fees collected by department-run offices remain state revenue. It also reiterates that no fee may exceed the amounts in the statute and requires that all offices—contracted or department-run—collect the same statutory fees. This bifurcation determines whether fees flow into private or municipal budgets versus the state treasury.
Operational responsibilities and exclusions
Operators acting as agents for the department must maintain an insurable interest in license plates, tabs, forms and other departmental documents they hold, protecting the state's assets while in private custody. The statute also excludes motor-vehicle dealers acting under separate statutory agency provisions from collecting the specified fees, preserving existing dealer authorities and preventing double coverage of agency roles.
Auditability and confidentiality
The state auditor may examine fee-office records in the same manner as other state agencies, and the department must make auditability a condition of contracting. The provision requires the auditor to avoid divulging personally identifiable information, so while it expands oversight, it also inserts an express confidentiality safeguard into the audit process.
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Explore Government in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- 501(c)(3)/(c)(6)/(c)(4) nonprofits and qualifying service organizations — procurement priority and special consideration for charitable reinvestment improves their chances of operating fee offices and capturing transaction-based revenue.
- Municipalities, counties and other political subdivisions — explicitly listed as preferred bidders and potential fallback contractors if competitive bids fail, giving local governments new revenue and service-control options.
- Contract operators (nonprofit or private entities that win awards) — may retain statutory fees as compensation, creating a sustainable revenue model tied to transaction volume.
- Consumers in communities with contracted offices — may get more local, non-departmental points of service depending on which entities win contracts, potentially increasing convenience in some areas.
Who Bears the Cost
- For-profit bidders and small private businesses that lack tax-exempt status — the procurement preference for certain nonprofits and political subdivisions reduces their competitive position for contracts.
- Former Department of Revenue employees and entities affiliated with them — the one-year post-employment affiliation ban restricts immediate entrepreneurial participation by recent exiters and their associated entities.
- The Department of Revenue — gains contracting flexibility but takes on administrative costs for running competitive processes, evaluating performance for extensions, ensuring audit access, and overseeing confidentiality protections.
- State treasury/taxpayers — when contracts are awarded to external operators who retain fees, fewer receipts flow directly into state revenue; that shifts budgetary implications to other appropriations or funding sources.
Key Issues
The Core Tension
The central tension is between channeling transaction revenue and local control to favored nonprofits and political subdivisions (to keep proceeds near communities and support charities) and preserving broad, competitive procurement that maximizes state revenue, transparency, and market access; the mechanisms that favor community actors also create enforcement challenges, potential incumbency, and reduced bidder diversity.
The bill blends public procurement, community-focused priorities and private revenue retention in a single statutory scheme, but those design choices create hard implementation questions. The priority for specific tax-exempt categories and the special preference for bidders that reinvest a large share of net proceeds will require concrete, auditable definitions (what counts as ‘‘net proceeds’’ and which transfers meet the 75% test).
Without clear metrics and reporting requirements, the stated preference could be subjective and difficult to enforce.
The affiliation and post-employment restrictions are broad—covering ownership and board membership—and will likely reduce conflict risk but also limit the pool of viable bidders, especially in smaller communities where civic leaders wear multiple hats. The one-time five-year extension for contracts can encourage investment by contractors but also risks entrenching incumbents; the statutory requirement to evaluate performance before extending is an implementation hinge point.
Finally, the rulemaking clause is tied to Missouri's chapter 536 review and includes a nonseverability statement: if judicial review upends the rule-review powers, delegated rulemaking could collapse and leave practical gaps in implementing details the statute leaves to regulation.
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