MINNEAPOLIS -- Minnesota lawmakers are promoting a financial bailout for the local license bureaus that have borne the brunt of the troubled rollout of the state's new licensing and registration system, known as MNLARS.

Internet connectivity problems and processing glitches created well-documented headaches for drivers, car dealers and banks beginning in late July when MNLARS went online. Once simple tasks such as transferring titles, registering new vehicles and renewing license tabs were plagued by false starts and delays.

The state's 174 license bureaus, also known as deputy registrars, have been caught in the middle, flooded with complaints from frustrated customers while incurring significant costs due to overtime. In some cases, the registrars have sustained training costs for new employees who replaced workers who were so stressed out they simply quit.

"It's been frustrating for those workers as well as Minnesotans who've how to deal with delays," Rep. Rick Hansen of South St. Paul told KARE.

His bill, which has attracted bipartisan support, would set aside $10 million dollars for relief checks for bureaus. Rep. Hansen said it would work similar to the state's disaster relief fund, which requires recipients to document their expenses.

"This bill is to make sure they're reimbursed for those documented costs that they weren't anticipating, in order to make them whole, so they can continue to operate and provide a valuable service to Minnesotans."

Struggling small businesses

Some of those deputy registrar offices are part of city and county government, but many are small, family-owned businesses such as Kathy's License Service in South St. Paul.

"We make our money off the filing fees, so for a tab renewal we receive $6 and a car title transfer is $10," Jim Joa of Kathy's License Service told KARE. "That's the only way DMVs make their money. We can't charge more than that."

Joa said the owners of Kathy's have spent $75,000 out-of-pocket to subsidize the operation since the changeover to MNLARS.

"That's money they're paying to make sure we pay the payroll, the bills."

He said Kathy's has been especially hard hit because many of the bureau's customers are car dealers that are in a bind, waiting three to four months and longer for titles to be processed.

"We had at one time 68 dealerships working with us," Joa explained. "It's basically cut in half since this new system began. We actually had to return some of the paperwork to dealers, so they could try other license bureaus."

Joa said the system has gradually become more user-friendly, and that new interfaces are clicking into place allowing for smoother connections between local bureaus and the State system. The Division of Vehicle Services, or DVS, has also kept deputy registrars updated daily on changes.

But as of December 26, the Dept. of Public Safety was still reporting a backlog of 322,000 vehicle titles, with an average turnaround time of 97 days.

On the bright side, virtually all other registration functions were current as of Tuesday.

DPS reported the new MNLARS system has handled 2.2 million registration renewals, and 790,000 title transactions since going on line July 24.