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JEFFERSON CITY | A new fee structure for Missouri motor vehicle and driver records has insurance companies enraged and a lawmaker promising action in the waning days of the legislative session.
The state Department of Revenue on May 1 raised the fee to $7 per record and has said it would not provide a bulk discount to companies that use the data for things such as calculating insurance rates. That means companies now must pay about $28 million for the entire database.
“A week ago to provide the file cost less than a quarter of a penny per record and now it costs 300,000 percent more than that,” said Tim Sowton, regional director for government relations for R. L. Polk & Co., parent company of Carfax. “We cannot survive absorbing that kind of cost increase.”
Before the first of the month, the companies paid a little more than $2,000 for the state’s entire database of about 4 million records. Some of the companies purchased the updated database on a weekly or monthly basis.
The change could put some companies out of business in Missouri and lead to higher insurance rates for everyone, officials said Tuesday at a legislative committee hearing.
Insurance companies use the data to set rates for people based on their driving records. Without the personal records, the higher costs of insuring troubled drivers would be shouldered by everyone, industry officials said. The data is also used to enhance vehicle histories provided to people and businesses by companies like Carfax, and as a factor in the calculation of credit scores.
Media groups also oppose the new fees, arguing the records should be available through the state’s Sunshine Law. The records are not available to the public, although people can get their records.
Department of Revenue Director Omar Davis defended the decision to increase the fee against withering questioning from lawmakers.
The increase was necessary to account for the true cost of maintaining the database and to pay for a new and more integrated system, he said. The current system uses more than 20 disparate databases, some of which are decades old. The new database will cost tens of millions of dollars over several years and must be paid through fees for access to the data, he said.
Other states charge similar or higher per-record fees, Davis said. Opponents of the new pricing system, however, countered that most other states allow for reduced bulk prices and charge an average of 2 cents per record when the entire database is purchased.
Lawmakers generally were not receptive to Davis’ position.
Rep. Shannon Cooper, a Clinton Republican, asked Davis what his plans were for scaling back the fee for bulk buyers, and threatened to introduce a legislative fix if the department didn’t lower the cost.
“Don’t make me go upstairs and get Tucker,” Cooper said, referring to a staffer who would help draft legislation.
After the hearing, Cooper said he hoped the department would find a way to lower the fee long enough to open conversation with affected business groups. If not, he said he would spend the next eight days — the final eight of the legislative session — trying to cut the cost through statute.
“Obviously this will hurt a lot of people if we don’t slow down,” he said.
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