Location:
MOTOR VEHICLES, CT DEPT OF;

OLR Research Report


AAA CONTRACTS WITH CONNECTICUT, MASSACHUSETTS, AND RHODE ISLAND

By: Paul Frisman, Principal Analyst

ISSUE

In light of AAA Northeast's October 3, 2016 decision (since reconsidered) to provide Department of Motor Vehicles (DMV) services only to its members, you asked several questions about similar AAA services in Massachusetts and Rhode Island. We answer the questions separately below. Some of the questions require a legal opinion. The Office of Legislative Research is not authorized to issue legal opinions, and this document should not be considered one.

BACKGROUND

State law allows DMV to authorize automobile clubs or associations, such as AAA, to provide the following DMV services: (1) renewing driver's licenses and identity (ID) cards, (2) issuing duplicate licenses and ID cards, and (3) conducting registration transactions. AAA may charge customers up to $5 per transaction (CGS 14-41(b)), as amended by PA 16-55).

Two AAA affiliates provide these services in Connecticut. AAA Northeast contracts with DMV to provide DMV services in Fairfield, Litchfield, and New Haven counties. AAA Allied Group provides DMV services in Connecticut's five other counties.

On October 3, 2016, AAA Northeast announced it would no longer provide these services to non-AAA members, but later agreed to continue offering them to non-members through December 31, 2016, when its contract with DMV expires. (AAA Northeast's decision does not affect DMV services provided by AAA Allied Group, which provides DMV services to members and non-members in its service area.)

QUESTIONS

Q. Does AAA Northeast's contract with Connecticut's DMV require it to provide DMV services to both members and non-members?

A. Yes. An October 5, 2011 contract (attached) between AAA Northeast's predecessor, AAA Southern New England (AAA SNE), and DMV required AAA SNE to provide DMV services to both AAA members and non-members (“the general public”). Specifically, Section 1 of the contract requires AAA SNE to “renew and issue duplicate copies of motor vehicle operator license and identification cards and to conduct other DMV transactions for the general public, as authorized by statute and established by the parties in writing.”

In 2014, AAA SNE (which had merged with the AAA Connecticut Motor Club in 2008) acquired AAA New York and the AAA New Jersey Auto Club to become known as AAA Northeast. It has offices in Connecticut, Massachusetts, New Jersey, New York, and Rhode Island.

Q. Does AAA Northeast limit motor vehicle services it offers in Massachusetts and Rhode Island to its members?

A. Yes. AAA Northeast Senior Vice President Lloyd P. Albert says the programs in both states are exclusive to AAA members and that AAA Northeast does not enter into agreements with state DMVs to provide services to the general public. “Our programs are developed to provide DMV services exclusively to members as a value-added offering,” he said, noting that AAA Northeast “inherited a member/non-member program in Connecticut” when it merged with the Connecticut Motor Club.

Albert said AAA Northeast has “written agreements…governing the terms of service” with the Massachusetts and Rhode Island motor vehicle departments. Because these are confidential documents, he declined to share them. He did say “the agreements in both Rhode Island and Massachusetts include specific language stipulating that DMV services will be made available exclusively to AAA members. We would look to add similar language to any agreement with the Connecticut DMV governing service delivery beyond December 31, 2016.”

Q. Briefly summarize AAA's relationships with the Rhode Island and Massachusetts motor vehicle departments.

A. Albert said that AAA Northeast's Rhode Island program “has been regulated by the DMV, which reports up through the Department of Revenue to the Governor's office.  It began in the mid-1980s with registration renewals in three offices, and was vastly expanded in 2003 and 2006 to include driver's license renewals in all nine offices.  Currently, we process nearly half of all licenses renewed in the state each year.  Additionally, we'll likely do close to 80,000 registration renewals in 2016.”

In Massachusetts, Albert said, “the legislature passed enabling legislation in 2009 (Mass. G.L. Title XIV, Chapter 90, 30A1/2) authorizing the Registrar to enter into agreements with entities that provide automobile-related services.  What started as a pilot in two Massachusetts AAA offices expanded in 2011 to six offices.  We are currently expanding the program to 20 offices by February 2017, with the expectation that all 30 of our offices will be fully deployed by December 2017.  Like Rhode Island, we do both license and registration renewals in Massachusetts, with an expectation that transaction volume will grow exponentially as we achieve full deployment by the end of next year.”

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