In this chapter 13 case, the pro se debtor filed a motion for relief from stay alleging that the Arkansas Department of Finance & Administration [ADFA] had violated the stay by refusing to register and provide tags for her vehicle unless she first paid pre-petition sales tax and post-petition registration, title, and license fees and penalties. In response, ADFA argued that it had sovereign immunity as a state agency, its actions were excepted from the stay under § 362(b)(4) and (b)(9)(D), and ADFA had not violated the stay because it had taken no affirmative action in regard to the debtor’s property nor exerted control over it. The Court found that sovereign immunity did not apply pursuant to § 106 and Supreme Court precedent, ADFA had violated the stay under § 362(a)(6) by refusing to register the vehicle unless the debtor paid the pre-petition sales tax, ADFA’s request for payment of the sales tax was an affirmative act and its refusal to register the vehicle without payment of the sales tax was coercive. However, the Court found that ADFA had not violated the stay in regard to the registration, title, and licensing fees and penalties because the collection of such fees and penalties are excepted from the automatic stay under § 362(b)(4) as an exercise of ADFA’s regulatory power. The Court ordered ADFA to register the vehicle and provide physical tags to the debtor upon her payment of any outstanding fees, including registration, title, license fees, and any penalties related thereto.
