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Snowmobilers balk at proposed title fee

http://www.mlive.com/outdoors/grpress/index.ssf?/base/sports-0/1135343707214830.xml&coll=6

Friday, December 23, 2005 By Howard Meyerson Press Outdoors Editor

Whether Michigan's 406,399 registered snowmobiles will need to have a title when sold in the future could become a controversial legislative topic next year.

A bill introduced last summer at the urging of banks and credit unions calls for a change in the long-standing title-free status of snowmobiles. It would require any new and used sled sold to be titled like a boat, car or motorcycle.

"Banking interests have come to me and said that they would have more security when making loans if snowmobiles had titles," said Rep. Kevin Green, R-Wyoming, who introduced the bill.

"But I'm not planning to push this hard unless I can get some consensus from the consumers (snowmobile owners)."

Consensus may be hard to come by. Organized snowmobilers say they are opposed to the bill, which would require a snowmobile owner to post a surety bond of twice the value of the machine if there was any question about rightful ownership.

The bill also would establish a one-time title fee of $15 to cover the Secretary of State's cost for processing the title. Snowmobilers currently pay a $22 registration fee good for three years and an annual $25 trail fee. Another $15 for nothing, they say, isn't really much incentive.

"This has come up every legislative session for the last 10 years and we don't see that it really helps us do anything," said Bill Manson, the legislative director for the Michigan Snowmobile Association.

"Bankers say they want it because they are losing money, but if that's the case they should quit loaning money for that kind of stuff."

Andy Doerr, the legislative affairs director for the Michigan Credit Union League, says having a title "makes it a little more difficult for an individual to walk away from the money they owe.

"I can't quantify just how much would have been saved if snowmobiles were titled in Michigan," he said. "The state police say 1,400 sleds were stolen last year. Some were free and clear, some were financed."

"One of our members reported a six-percent default rate for a total of $30,000. They believe things would have been better with a title. A $10,000 to $20,000 loss can be a big deal to some of our smaller members in northern Michigan."

Green said he is looking into the assertions of the financial community and examining whether the pot might be sweetened for snowmobiler.

"I'd like to find a way to bring value to the snowmobiler," said Green. "Whether that means better interest rates or money for trails, we'd like it to be a win-win situation."

Manson believes the banks already are covered. Trails, he said, are certainly covered.

Of the $25 riders pay for trail permits each year, $23.50 goes to signing and maintaining snowmobile trails. The other $1.50 goes for administration.

The $22 registration fees pays $3 to the Secretary of State; $5 for snowmobile law enforcement on state trails; $9 for local grants to county sheriffs for snowmobile enforcement; and $5 to the state snowmobile trail-improvement fund.

The two fees provide more than $2.5 million annually for the state's 6,100 miles of designated snowmobile trails.

"It's just another tax that we don't think we need," said Manson.

Area retailers say adding a title will do nothing more than add more paperwork and cost for them -- the added cost of processing and the requisite trips to the Secretary of State office. Both would be passed on to customers, who are likely not to notice.

"I'd bet that 95 percent wouldn't even know what they were paying for. They only want to know the out-the-door price or the monthly payment," said Randy Vandenburg, general manager for Nelson's Speed Shop in Greenville.

"But I think titles are more valuable to banks than to us. They are already registered and the banks file what's called a UCC form that lets the state know that Joe Public has a loan on a 2006 Arctic Cat."

Snowmobile manufacturers say they are neutral on the subject. There are other states that require titles.

But Michigan snowmobile program managers say they can see no benefit in the proposed plan.

"Although it has little impact on our program and policies, the DNR opposes the bill," said Steve DeBrabander, the supervisor for the agency's state trails construction unit. "We agree with the Michigan Snowmobile Association. It creates greater costs and bureaucracy without large benefits."

Manson said his membership's response has been overwhelmingly negative.

"We offered them a full page in our magazine and they wrote about the merits of the bill, how titles mean less theft and cheaper rates at banks and credit unions and we received comments from 1,800 people," Manson said. "Only four were in favor. The rest were against."

Green's bill, HB 5062, sits in the House Banking and Financial Services Committee, chaired by David Robertson (R-Grand Blanc), who is reported to be eager to move the bill along.

"Dave Robertson is very enthusiastic, but I am a consensus builder," Green said. "I told him to give me more time to get more consensus and compromise. I've asked him to postpone (a hearing) until January so I could talk more with snowmobilers."
 
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