A.R.S. tit. 28 ch. 13 — Arizona Revised Statutes Title 28 Chapter 13 — Authorized Third Parties

28-5100. Definitions In this article, unless the context otherwise requires: 1. "Authorized third party" means an entity that has executed a written agreement and is authorized by the department to perform limited or specific functions but is not authorized by the department to function as an authorized third party electronic service provider. 2. "Authorized third party electronic service partner" means an entity that has been awarded a written agreement with the department pursuant to a competitive bid process to provide electronic transmission services and that may be authorized by the director to develop and implement information technology and other automated systems and to provide any necessary ongoing support for these systems. 3. "Authorized third party electronic service provider" means an entity that has executed a written agreement with the department and is authorized by the department to provide electronic transmission services between the department, private citizens, other government agencies and public and private entities in this state or in any other state, territory or country. 28-5101. Third party authorization A. The director may authorize third parties to perform certain of the following functions: 1. Title and registration. 2. Motor carrier licensing and tax reporting. 3. Dealer licensing. 4. Driver licensing as prescribed in sections 28-5101.01, 28-5101.02 and 28-5101.03. B. The director may authorize a person to be a third party electronic service provider or to be a third party electronic service partner. An authorized third party electronic service provider shall meet all of the requirements established by the department. The written agreement between the department and the authorized third party electronic service provider may be for a limited number of services and may limit the persons that may receive the services. An authorized third party electronic service partner shall meet the requirements established by the department and shall be selected through a competitive bid process. C. A person shall not engage in any business pursuant to this article unless the director authorizes the person to engage in the business. D. The director may furnish necessary documents or license plates subject to this article. E. Except as provided in subsection F of this section, an authorized third party or an authorized third party electronic service provider shall submit to the department all statutorily prescribed fees and taxes it collects. In addition to the statutorily prescribed fees and taxes, an authorized third party or an authorized third party electronic service provider may collect and retain a reasonable and commensurate fee for its services. F. In addition to payment pursuant to section 28-374, the department shall reimburse the authorized third party or third party electronic service provider as follows: 1. One dollar of each initial, renewal, replacement or duplicate registration fee for a vehicle or an aircraft. 2. One dollar of each initial, duplicate or transfer certificate of title fee for a vehicle or an aircraft. 3. An amount equal to two percent of each vehicle license tax payment or aircraft license tax payment the authorized third party collects and submits to the department or four dollars for each registration year or part of a registration year, whichever is more. The reimbursement amount shall not exceed the amount of vehicle license tax or aircraft license tax collected. 4. Four dollars for each initial, renewal, replacement or duplicate application that the third party processes and that relates to driver licenses, nonoperating identification licenses or permits. An authorized third party may add the cost for expedited processing of renewal, replacement or duplicate applications if requested by the applicant. 5. An amount equal to two percent of each overweight or excess size vehicle registration or permit fee the third party collects and submits to the department or one dollar for each overweight or excess size vehicle registration or permit processed, whichever is more. 6. One dollar for each motor vehicle or special motor vehicle record, excluding motor vehicle records released to commercial recipients, including insurers and their authorized agents. 7. Five dollars or one-fourth of one percent of the fuel taxes reported, whichever is greater, for each fuel tax report filed electronically. The maximum annual amount retained each year shall not exceed four hundred eighty thousand dollars. 8. One dollar for each fuel tax permit. 9. One dollar for each nonsufficient funds or dishonored check payment. 10. One dollar for each abandoned vehicle report processed, except for applications for crushed vehicles. 11. One dollar for each abandoned vehicle payment. 12. Two dollars for each initial special or personalized license plate application. 13. One dollar for each initial, renewal or replacement vehicle dealer license plate. 14. Five dollars for each application for an initial vehicle dealer license or continuation of a vehicle dealer license. 15. One dollar of each twelve dollar fee paid pursuant to section 28-2356. 16. One dollar for each traffic survival school application and one dollar for each certificate of completion processed. 17. One dollar for each replacement license plate or tab. G. For authorized third party electronic service partners, the amount of compensation and the amount of reimbursements for transactions shall be negotiated by the department and the authorized third party electronic service partner and shall be set forth in the written agreement authorizing the third party electronic service partner. If reimbursement is made for individual transactions, the reimbursements shall not exceed the amounts specified in subsections F, H and I of this section. Other forms of compensation or reimbursements for services may be specified in the written agreement. Compensation and reimbursements provided for by the written agreement may include the development and implementation of information technology and other automated systems and any necessary support for these systems. H. The department's authorized third party electronic service provider may retain two dollars for processing documents electronically when the statutory fee pursuant to this title is two dollars or more. I. The director may authorize the third party electronic service provider to process electronic fund transfers to the department for payment of motor vehicle taxes and fees. The third party electronic service provider may add a two dollar processing fee for each electronic funds transfer. J. Each authorized third party that holds itself out as providing services to the general public shall post a sign in a conspicuous location in each facility of the authorized third party that contains all of the following: 1. The amount charged for each transaction performed by the authorized third party. 2. The amount charged by the department for the same transaction. 3. How to file a complaint or concern with the department about the authorized third party. 28-5101.01. Authorized third party driver license providers; requirements A. Except as provided in section 28-5101.03, an authorized third party driver license provider must perform both of the following: 1. Driver license skills and written testing. 2. Driver license processing. B. A person who is a third party driver license provider authorized pursuant to this section may also be authorized pursuant to this article to perform certain title and registration functions. C. A person who applies for authorization pursuant to this section shall submit with the application all of the following: 1. A bond in a form to be approved by the director and in an amount of at least $300,000 for an initial application for authorization pursuant to this section and an additional $100,000 for each additional location providing driver license functions prescribed in subsection A of this section, except that if the authorized third party is also authorized pursuant to this article to perform certain title and registration functions at the same location only a single $100,000 bond is required for that location. The total bond amount required by this paragraph shall not exceed $1,000,000. The bond requirements of this paragraph do not apply to entities prescribed in section 28-5104, subsection E, paragraphs 1, 2, 3, 5, 11 and 12. 2. Documentation that the applicant satisfies all of the following: (a) Has been an authorized third party pursuant to this chapter for at least the immediately preceding three years. (b) Has conducted an average of at least one thousand retention transactions per month for the previous calendar year. (c) Is in good standing with the department. (d) Has a facility plan for each location that shows adequate space and equipment necessary to perform the functions prescribed in subsection A of this section. 3. Documentation that the applicant has during business hours at least one certified processor qualified to perform at a minimum all of the following at each location: (a) Fraudulent document recognition. (b) Ignition interlock requirements. (c) Driver license reinstatements. D. A third party driver license provider authorized pursuant to this section must comply with all quality control requirements prescribed by the department. E. A third party driver license provider authorized pursuant to subsection A of this section may perform administrative functions or testing functions or both administrative functions and testing functions for the issuance and renewal of commercial driver licenses as authorized by the director and pursuant to federal law. 28-5101.02. Authorized third party driver license training providers; requirements; applicability A. Beginning July 1, 2014, a person must be an authorized third party driver license training provider to perform driver license training. B. A person who applies for authorization pursuant to this section is not required to submit a bond with the application. C. A third party driver license training provider authorized pursuant to this section must comply with all quality control requirements prescribed by the department. D. This section does not apply to any professional driver training school licensed pursuant to title 32, chapter 23. 28-5101.03. Authorized third party commercial driver license examiners; requirements A. Beginning July 1, 2014, a person must be a separately authorized third party commercial driver license examiner to perform commercial driver license skills testing. B. A third party commercial driver license examiner authorized pursuant to this section must comply with all quality control requirements prescribed by the department. 28-5102. Powers and duties of director A. The director shall: 1. Supervise and regulate all persons required by this article to obtain authorization. 2. Establish minimum quality standards of service and a quality assurance program for authorized third parties to ensure that an authorized third party is complying with the minimum standards. 3. Adopt rules to administer and enforce this chapter. B. The director may: 1. Conduct investigations the director deems necessary. 2. Conduct audits. 3. Make on-site inspections during regular business hours and at locations as the director deems appropriate to determine compliance by an authorized third party with this article. If an inspection is conducted at a place located outside this state, the director may charge a fee to the authorized third party. 4. Require that an authorized third party or employees or agents of an authorized third party be certified to perform the functions prescribed in this article. 5. Require authorized third parties and authorized third party electronic service providers to reimburse the department for mutually agreed on costs. 28-5103. Application procedure A. A person may apply for authorization or certification, or both, pursuant to this article to the director in writing on a form prescribed and furnished by the director. The person shall include with the application all documents and fees prescribed by the director. B. The application shall be verified and shall contain: 1. The name and residence address of the applicant, the name and residence address of each partner if the applicant is a partnership or the name and residence address of each principal officer if the applicant is a corporation. 2. The principal place of business of the applicant. 3. The established place of business at or from which the business is to be conducted. 4. Other information the director requires. 28-5104. Bond requirement A. Except as provided in subsection F of this section and sections 28-5101.01 and 28-5101.02, a person who applies for authorization pursuant to this article shall submit with the application a bond in a form to be approved by the director and in an amount of at least $100,000 for each location. B. A surety company authorized to transact business in this state shall execute the bond with the applicant as principal obligor on the bond and the state as obligee. The bond shall be conditioned that the applicant will faithfully comply with all of the provisions of law and that the bond is noncancellable without at least sixty days' prior notice to the director. Any future liability of the surety company terminates on the director's termination of a third party's authorization. C. The bond inures to the benefit of any person who suffers loss because of any of the following: 1. Nonpayment by the authorized person of any fee or tax paid to the third party by that person. 2. Insolvency or discontinuance of business. 3. Failure of the authorized third party to comply with the authorized third party's duties pursuant to this article. D. The aggregate liability of a surety company for any breach of the conditions of a bond required pursuant to this section shall not exceed the amount of the bond. E. The bond requirement of this section does not apply to: 1. A department, an agency or a political subdivision of this state. 2. A court of this state. 3. A law enforcement agency or department of this state. 4. A financial institution or enterprise under the jurisdiction of the department of insurance and financial institutions or a federal monetary authority. 5. The federal government or any of its agencies. 6. A motor vehicle dealer that is licensed and bonded by the department of transportation or a state organization of licensed and bonded motor vehicle dealers. 7. A manufacturer, an importer, a factory branch or a distributor licensed by the department of transportation. 8. An insurer under the jurisdiction of the department of insurance and financial institutions. 9. An owner or a registrant of a fleet of one hundred or more vehicles. 10. A public utility. 11. A tribal government. 12. An employer or association that has at least five hundred employees or members. F. A towing company employee who conducts a level one motor vehicle inspection described in section 28-2011 and who applies for authorization pursuant to this article shall submit with the application a bond in a form to be approved by the director and in an amount of not more than $25,000. The bond issued pursuant to this subsection covers every location in which the towing company is located. 28-5105. Criminal records check; denial of application; immunity from costs A. Except as provided by subsection B of this section, each applicant who owns twenty percent or more of an entity, each partner or stockholder who owns twenty percent or more of an entity and each person who is an employee of an authorized third party who has access to personal information as defined in section 28-440 obtained from the department or a customer of the department or monies collected on behalf of this state, and who seeks authorization or certification, or both, pursuant to this article shall provide: 1. A full set of fingerprints to the department of transportation for the purpose of obtaining a state and federal criminal records check pursuant to section 41-1750 and Public Law 92-544. The department of public safety may exchange this fingerprint data with the federal bureau of investigation. 2. A nonrefundable fee to be paid to the department of public safety for the criminal records check. B. Each employee of an authorized third party who conducts vehicle inspections on behalf of this state shall provide: 1. A full set of fingerprints to the department of transportation for the purpose of obtaining a state and federal criminal records check pursuant to section 41-1750 and Public Law 92-544. The department of public safety may exchange this fingerprint data with the federal bureau of investigation. 2. A nonrefundable fee to be paid to the department of public safety for the criminal records check. C. The director may deny an application for authorization or certification, or both, if any individual included in the application has either: 1. Made a misrepresentation or misstatement in the application to conceal a matter that would cause the application to be denied. 2. Been convicted of fraud or an auto-related felony in any state, territory or possession of the United States or any foreign country within the ten years immediately preceding the date the criminal records check is complete. 3. Been convicted of a felony, other than a felony described in paragraph 2 of this subsection, in a state, territory or possession of the United States or a foreign country within the five years immediately preceding the date the criminal records check is complete. 4. Violated a rule or policy of the department. 5. Been involved in any activity that the director determines to be inappropriate in relation to the authority granted. D. The director may approve an application for provisional authorization or certification, or both, pending completion of the criminal records check if the applicant meets all other requirements of this article. The director may revoke a provisional authorization or certification, or both, for a violation of this title. A provisional authorization or certification, or both, is valid unless revoked by the director or until the applicant receives approval or denial of the application for authorization or certification, or both. E. Within twenty days of completion of the criminal records check, the director shall approve or deny the application. If the application is denied, the director shall advise the applicant in writing of the denial and the grounds for denial. The department or its employees are not liable for any costs incurred by an applicant seeking authorization or certification, or both, under this article. F. Within thirty days after receipt of the notice of denial, the applicant may petition the director in writing for a hearing on the application pursuant to section 28-5107. G. If the authorized third party adds a partner or stockholder who owns twenty percent or more of the entity and who was not included in the criminal records check on a prior application, the authorized third party shall notify the department within thirty days of the change. H. At the time of notification pursuant to subsection G of this section, the third party shall submit to the department of transportation an application and, if applicable, a full set of fingerprints and the fee to be paid to the department of public safety for a criminal records check. On completion of the investigation if the individual added or changed by the authorized third party is found to be ineligible pursuant to subsection C of this section, the director of the department of transportation shall advise the authorized third party and the individual in writing of the grounds for the action and that the authorization will be revoked unless the individual is removed from the position. I. The requirement for a criminal records check does not apply to an applicant who is seeking third-party authorization and who is: 1. A department, agency or political subdivision of this state. 2. A court of this state. 3. A law enforcement agency or department of this state. 4. A financial institution or enterprise under the jurisdiction of the department of insurance and financial institutions or a federal monetary authority. 5. The federal government or any of its agencies. 6. A motor vehicle dealer that is licensed and bonded by the department of transportation or a state organization of licensed and bonded motor vehicle dealers. 7. A manufacturer, importer, factory branch or distributor licensed by the department of transportation. 8. An insurer under the jurisdiction of the department of insurance and financial institutions. 9. An owner or registrant of a fleet of one hundred or more vehicles. 10. A public utility. 11. A tribal government. 12. An employer or association that has at least five hundred employees or members. J. For the purposes of this section, personal information does not include information received pursuant to section 28-872. 28-5106. Records A third party who is authorized pursuant to this article shall: 1. Maintain records in a form and manner prescribed by the director. 2. Allow access to the records during regular business hours to authorized representatives of the director or any law enforcement agency to ensure compliance with all applicable statutes and rules. 28-5107. Application denial; hearing; appeal A. The director may deny an application for third party authorization or certification, or both, under this article and shall advise the applicant in writing within twenty days of the denial and the grounds for the denial if the director determines that any of the following applies: 1. The applicant is not eligible for third party authorization or certification, or both, under this article. 2. The application is not made in good faith. 3. The application contains a material misrepresentation or misstatement. 4. The applicant has not met the requirements of law. B. An applicant who is aggrieved by the denial of an application may make a written request to the department for a hearing on the application within thirty days after service of the notice of denial. If the applicant does not request a hearing within thirty days, the denial is final. C. If the applicant requests a hearing, the director shall give written notice to the applicant to appear at a hearing to show cause why the denial of the applicant's application should not be upheld. After consideration of the evidence presented at the hearing, the director shall serve notice in writing to the applicant of the director's findings and order. A timely request for a hearing stays the denial of the application. D. If the application is denied, the applicant may appeal the decision pursuant to title 12, chapter 7, article 6. 28-5108. Cancellation or suspension of authorization or certification; hearing; appeal A. The director may suspend or cancel an authorization or certification, or both, granted pursuant to this article if the director determines that the third party or certificate holder has done any of the following: 1. Made a material misrepresentation or misstatement in the application for authorization or certification. 2. Violated a law of this state. 3. Violated a rule or policy adopted by the department. 4. Failed to keep and maintain records required by this article. 5. Allowed an unauthorized person to engage in any business pursuant to this article. 6. Been involved in any activity that the director determines to be inappropriate in relation to the authority granted. B. The director may suspend or cancel an authorization or certification, or both, granted pursuant to this chapter if the director determines that an individual included in the application for authorization or certification: 1. Made a misrepresentation, omission or misstatement in the application to conceal a matter that may cause the application to be denied. 2. Has been convicted of fraud or an auto related felony in a state, territory or possession of the United States or a foreign country within the ten years immediately preceding the date a criminal records check is complete. 3. Has been convicted of a felony, other than a felony described in paragraph 2 of this subsection, in a state, territory or possession of the United States or a foreign country within the five years immediately preceding the date a criminal records check is complete. C. The director shall suspend or cancel an authorization of a third party granted pursuant to this article if the director determines that the third party failed to maintain the bond required pursuant to section 28-5104. D. If the director has reasonable grounds to believe that a certificate holder or other person employed by an authorized third party has committed a serious violation, the director may order a summary suspension of the third party's authorization granted pursuant to this chapter pending formal suspension or cancellation proceedings. For the purposes of this subsection, "serious violation" means: 1. Title or registration fraud. 2. Driver license or identification license fraud. 3. Improper disclosure of personal information as defined in section 28-440. 4. Bribery. 5. Theft. E. On determining that grounds for suspension or cancellation of an authorization or certification, or both, exist, the director shall give written notice to the third party or certificate holder to appear at a hearing before the director to show cause why the authorization or certification should not be suspended or canceled. F. After consideration of the evidence presented at the hearing, the director shall serve notice of the director's finding and order to the third party or certificate holder. G. If a third party authorization or a certification is suspended or canceled, the third party or certificate holder may appeal the decision pursuant to title 12, chapter 7, article 6. 28-5109. Cease and desist order A. If the director has reasonable cause to believe that a person who is authorized as a third party pursuant to this article or who holds a certificate granted pursuant to this article is violating any provision of this title, the director shall immediately issue and serve on the person, by personal delivery or first class mail at the person's last known address, a cease and desist order. B. On receipt of the cease and desist order, the person shall immediately cease and desist, or cease and desist as provided in the contract between the department and the authorized third party, from further engaging in any activity that is authorized pursuant to this article and that is specified in the cease and desist order. C. On failure of the person to comply with the cease and desist order, the director may conduct a hearing pursuant to this article. 28-5110. Action to restrain violation If the director has reasonable cause to believe that a person authorized under this article is violating any law of this state, the enforcement or administration of which is vested in the director, or has or is violating any rule or order adopted by the director pursuant to law, in addition to any remedies existing under this article, the director may bring an action in the superior court in Maricopa county in the name of and on behalf of the state and against the person to restrain or enjoin the person from continuing the violation. 28-5111. Electronic transmission and recording of title, registration and driver license; program; authorized third party A. The director may establish a program to measure and determine the effectiveness of the following in improving customer service, operations, capital cost reductions and security of information transmitted to the department: 1. The electronic transmission and recording of vehicle certificate of title and registration information between the department and an authorized third party or an authorized third party electronic service provider for the purpose of titling and registering vehicles entering this state from another jurisdiction in a cost-effective manner in lieu of the submission and maintenance of paper documents. 2. The electronic transmission and recording of driver license applications between the department and another state through an authorized third party or authorized third party electronic service provider for the purpose of issuing driver licenses in a cost-effective manner in lieu of the submission and maintenance of paper documents as provided in this chapter. 3. The electronic transmission and recording of vehicle accident data between the department, other states and law enforcement agencies within this state or within another state through an authorized third party or authorized third party electronic service provider. B. In the process of establishing the system, the director shall: 1. Research methods the department and authorized third parties or authorized third party electronic service providers may use to exchange and maintain information relating to driver licenses and vehicle certificates of title and registration without submitting or receiving a paper document. 2. Develop methods an authorized third party or an authorized third party electronic service provider may use to electronically submit updated information relating to the certificate of title and registration record or the driver license record. C. The director may limit the number of other states and authorized third party electronic service providers participating in the system. If the director determines the system is successful, the director may expand the system. D. Chapter 2, article 5 of this title applies to certificates of title and driver license information under the system established pursuant to this section.