The city has agreed to change how it handles and gets rid of motor vehicles deemed abandoned or unclaimed to settle a dispute with the federal government over such vehicles owned by active-duty service members.

The Servicemember Civil Relief Act prohibits anyone who has a lien on property owned by a service member from selling the property without a court order while the service member is on active duty. The prohibition extends three months after the service member is no longer on active duty.

Under the terms of a settlement agreement announced Thursday, the city has 90 days to develop policies and procedures for the auction or sale of vehicles owned by active-duty service members. They include:

>> Changing motor vehicle registration to require military service members to provide their Social Security numbers, birth dates, local and permanent mailing addresses, personal and military telephone numbers and email addresses, and emergency contact information.

>> Amending the Abandoned Motor Vehicle in Custody notification letter to let service members or their designated representatives know they have 60 days to reclaim their vehicles or submit a waiver of their SCRA rights.

>> Creating an informational brochure for service members about the city’s abandoned-vehicle laws, long-term storage options and SCRA waiver.

>> Providing SCRA compliance training to employees involved with abandoned-­vehicle policies and enforcement, including the director and deputy directors of its Customer Services and Budget and Fiscal Services departments, chief and deputy chiefs of police, and chief of its Motor Vehicle Control Branch.

The federal government will have 45 days to respond to the city’s proposed changes to its policies and procedures. The changes will take effect 21 days after federal government approval.

The changes are designed to settle a lawsuit the federal government filed Thursday against the city and All Island Automotive Towing, the city’s contracted towing company. According to the lawsuit, the city and All Island have auctioned, sold or otherwise disposed of motor vehicles belonging to 1,440 individuals who have identified themselves as active-­duty service members without court orders since January 2011.