A major state tax entity is working with two technology companies to update a system targeting unpaid vehicle registrations.

The California Franchise Tax Board, which is perhaps best known as the entity that collects state income tax, is contracting with BM Associates and HHS Technology Group (HTG) to modernize its Delinquent Vehicle Registration (DVR) system, which collects vehicle registration debts on behalf of the California Department of Motor Vehicles. Among the takeaways:

  • DVR’s main objective is to collect vehicle registration debt “using administrative remedies available to FTB,” the Board told Techwire via email, indicating no data is available to show how many vehicles it handles annually. The Board also uses the DVR to take part in the Interagency Intercept Collection on behalf of DMV. This program, which FTB administers on behalf of the State Controller’s Office, “intercepts personal income tax refunds, lottery winnings and unclaimed property disbursements,” FTB said, and uses the money to pay delinquent accounts at more than 600 state entities.
  • FTB’s needs for the DVR center on the fact that it was “built on 40-year-old technology and lacks many basic, modern functions,” the Board said, noting these are “adversely affecting the efficiency of collections and options available to customers for voluntary compliance.” The DVR system was implemented in 1993, FTB said, and the technology underpinning it was developed in 1981. Workflows include the daily exchange of account information between DMV and FTB via the latter’s “Secure Web Internet File Transfer (SWIFT) service.” That information includes new debts, updated account balances, payment files, account closures and various reports. The DVR “issues an initial demand for payment notice to every account received,” FTB said, adding that subsequent notices are issued on accounts that remain unpaid — potentially including an “Order to Withhold sent to financial institutions or a Wage Garnishment sent to employers.”
  • FTB used the Department of General Services Master Service Agreement for IT Consulting Services for the procurement, it said, indicating BM Associates “was identified” from that list. FBT also used a competitive Request for Offer process. The resulting pact with BM Associates and HTG is valued at nearly $2.3 million and is slightly more than three years; it runs Jan. 15-Feb. 1, 2024, the state said. Work began Feb. 16. Contract staff are assisting FTB with “specialized skills” needed to execute, the state said, adding that FTB will lead “detailed design, development, and testing” of the new application using agile methods to do the “analysis, design, coding, data conversion, testing, optimization and support services” needed for the implementation. The plan is for the new DVR to be operational in 2024.
  • Brett Furst, HTG president, told Techwire via email that this is HTG’s first contract with FTB. However, both companies have a significant history of working with the state. BM Associates has worked with multiple state agencies over more than two decades, including the departments of Corrections and Rehabilitation, Developmental Services, and Water Resources, according to a news release. HTG, a Red Hat Alliance partner, recently began a multi-year contract with state Child Welfare Digital Services to work on its (California Automated Response and Engagement System) CARES-Live child welfare case management system, and delivered “core software development services” to CWDS.