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Department of Revenue requests $2.6M for electronic motor‑vehicle‑lien system; flags tire tax allocation shortfall
Summary
Revenue Commissioner David Gerigano requested $2.6 million to implement an electronic lien system required by Public Chapter 745, funded by a $2 per‑lien pass‑through fee; he also noted difficulties allocating expected tire‑sale tax proceeds because retailers often omit an informational line on returns.
David Gerigano, commissioner of the Tennessee Department of Revenue, told the House Finance, Ways and Means Committee the department has a $2.6 million cost increase request to implement an electronic motor vehicle lien notation system required by "Public Chapter 745" (transcript reference phrasing). The system will allow lienholders to record and release liens electronically, reducing paper titles and storage costs; the department plans to collect a $2 per‑lien fee from service providers that will be passed through to pay the vendor.
Gerigano also outlined three budget reductions totaling roughly $740,000: eliminating a general‑fund appropriation for electronic insurance verification that is now fully fee‑supported (approx. $62,000), closing the department’s remaining out‑of‑state office real estate costs (about $577,000), and contract efficiencies in scanning operations (about $100,000).
On an unrelated revenue‑allocation item, committee members asked about an $80 million estimated allocation from tire sales. Gerigano said the revenue is being collected but the department lacks reliable breakdowns from retailers because an informational line on the sales tax return is optional and often left blank. As a result, the department is allocating about $2 million a month to the highway fund versus the higher estimate and plans outreach to retailers to improve reporting compliance.
Gerigano described other operational processes — including the multi‑letter, escalating enforcement approach the department uses to verify motor vehicle insurance for registered VINs — and agreed to provide additional detailed statistics to legislators after the hearing.
