Legislature(1993 - 1994)
03/30/1993 01:00 PM House CRA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SSHB 34: SNOWMOBILE REGISTRATION TAX Number 411 REPRESENTATIVE CURT MENARD, PRIME SPONSOR OF SSHB 34, read his sponsor statement into the record. (A copy of the sponsor statement may be found in the House Community and Regional Affairs Committee Room, Capitol Room 110, and after the adjournment of the second session of the 18th Alaska State Legislature, in the Legislative Reference Library.) He added, "I did introduce this bill at the request of the Mat-Su Motor Mushers. I believe we also have the Anchorage Motor Mushers on board." REPRESENTATIVE MENARD continued, "There is an estimation of roughly probably 50-60,000 snow machines out there, and I believe probably the total amount registered in the municipality is maybe a thousand or thereabouts. The reason in reality they do not register is because they come under a local property tax. In the Mat-Su, a $5,000 machine would represent about $150 to $160 in local personal property tax. So in an effort to reach some sort of a compromise in this, to give the owners and the dealers the ability to have their machines titled, they feel it would track the ownership side of it and we would have a revenue stream that would start where we could tap into developing trails and establishing areas that would help many areas in the state expand their tourist and recreational monies." Number 452 CHAIRMAN OLBERG said, "Converting the MSO (Manufacturer's Statement of Origin) to a title at the time of sale when a machine is new would certainly cause some revenue to be generated." REPRESENTATIVE BUNDE asked about the Department of Public Safety's fiscal note. Number 482 JUANITA HENSLEY, CHIEF, DRIVER SERVICES, DIVISION OF MOTOR VEHICLES, DEPARTMENT OF PUBLIC SAFETY, said, "This fiscal note is written on what the industry has advised us. I was surprised to hear Representative Menard say there was 50- 60,000 machines... It's only 25,000." REPRESENTATIVE MENARD said, "It was someone's guess." MS. HENSLEY continued, "It's based on how many vehicles would be titled or registered. I must say something else, the department is opposed to title assumption. We presently have a format, and it is required by law that everyone who owns a snow machine register that vehicle with the Division of Motor Vehicles. They are not doing that. We have 7,000, I believe 7,100 registered snow machines now in this state. Titling them, we feel, is not going to accomplish anything further than what it already is. There are a lot of places out there that do not register their vehicles, lots of villages out there..." Number 509 CHAIRMAN OLBERG said, "A titling requirement should mandate that the dealer at the time of sale would acquire a title by turning in the MSO. Maybe we can do it through the registration process in some fashion, but what we are really trying to do here is establish a paperwork trail with the sale of each new snow machine. Whether it be a title or registration, I do not have any hang-ups, but it needs to be mandated at the dealer level when the machine is new, if it is going to have any effect at all." REPRESENTATIVE BUNDE said, "The level of possible registrants is optimistic, and as such the chances of the program being revenue neutral and paying for itself is diminished." Number 510 CHAIRMAN OLBERG asked if present laws require snowmobile registration to be physically on the machine. MS. HENSLEY indicated no, but there are decals applied to snowmobiles. REPRESENTATIVE MENARD said, "I didn't care whether it was titling or registration... I knew DMV (Division of Motor Vehicles) did not support titling. Currently, the group that I am working with seemed to be intent that titling is the important factor and we have not worked through it. I think they can do the same thing with registration. Their main concern was theft of machine...and having the ability to do it at the time of sale. The organized groups that talked to us say they do not like operating outside the law but they are not willing to step up to the plate because of the cost of new machines and the borough personal property (tax)... REPRESENTATIVE MENARD continued, "So we are trying to devise some sort of a mechanism to one, make them register or have an incentive to register, given the track record on the thieving and give them the opportunity to work on some kind of a revenue stream to develop trails. I did float it out to the groups, 'would you be willing to...have an assessment over and above what the registration tax is that would be earmarked for trails development?' ...And they are floating that around. I do not have the total exact crystal clear picture how this should work...and I would like to work within the committee and with the department to see if there is a way that we can structure it. ...I am not opposed to structuring something that is somewhat revenue neutral. I just don't know what the numbers are." Number 589 CHAIRMAN OLBERG suggested, "If we propose mandatory registration at time of original sale...would that cause a fiscal note in DMV?" MS. HENSLEY said, "If you are increasing the fees or requiring a mandated fee. Then, of course, the fiscal note we have would still be the same fiscal note. However, the revenue that would be generated would certainly offset the costs." Number 605 GARY LEWIS, CITY MANAGER, CORDOVA, testified giving an example of a municipality assessing personal property tax on a snow machine. CHAIRMAN OLBERG said, "If we structured it so that the dealer selling the new machine is mandated to register the snow machine at a fee that is revenue neutral, ten bucks call it...then the relationship becomes a relationship between the owner of the snow machine and the municipality that he or she lives in as to the personal property tax ramifications." MS. HENSLEY said, "I am not saying that titling is not a positive thing. I am saying it is something I do not think is necessary because we do have the registration... These are registered every two years as opposed to yearly. Presently, it is $5.00 to register a snow machine. With this registration of these vehicles the city can come back to (the Department of) Motor Vehicles and say, 'I want a list of the people who registered snow machines in that municipality' and we will supply that to them. In fact, we do that to several municipalities..." CHAIRMAN OLBERG confirmed the present biannual snow machine registration. MS. HENSLEY reminded the committee there are only 7,000 snow machines presently registered and added, "The law does say if it is operated on public lands that it must be registered." She further said, "I have a list of areas who are exempt from motor vehicle registration and the same would exist (for snow machines) in those areas." Number 660 REPRESENTATIVE ED WILLIS asked if other snow machine groups had commented on SSHB 34. REPRESENTATIVE MENARD indicated the Anchorage, Wasilla and state associations had been contacted. Number 675 REPRESENTATIVE BUNDE pointed out, "I think we have two issues: One, a registration procedure so that we can track stolen vehicles, and that ought to be a fee that just pays for itself, I would think. Then the municipalities, if they have a property tax on this vehicle, that is a whole other question. Do I understand correctly that the thrust of what the organizers want is to have a system where the vehicle can be traced?" CHAIRMAN OLBERG reiterated, "By mandating the registration of snow machines at the time it is sold new we would accomplish a couple of things. First, we would hear from every dealer in the state so we would know who they are, but then the state would have an every two year registration fee and municipalities could do what they want to do and everybody else can do what they want to do. Is that what you are suggesting?" REPRESENTATIVE JOHN DAVIES said, "Except that the last line in the bill (SSHB 34) exempts snow machines from personal property taxation." TAPE 93-19, SIDE B Number 000 REPRESENTATIVE BUNDE said, "Eventually over a ten year period, the majority of snow machines in the state will be registered vehicles." Number 020 CHAIRMAN OLBERG clarified, "The plan is that everybody that registers their vehicle exempts themselves from the municipal tax." REPRESENTATIVE MENARD added, "And is substituted with a registration fee. That was the carrot that was out there. Obviously, there are a lot of machines out there that are not registered and the main reason is the personal property tax that is assessed. ...So the group thought that if they had the registration...and were not subject to personal property tax they would go with a registration fee." Number 074 REPRESENTATIVE BUNDE said, "The compromise I would like to support is a registration title of all dealers that sell machines with the idea that eventually most of the machines would become registered, but I do not think we should bind the hands of the municipality by saying they cannot charge them a property tax..." REPRESENTATIVE TOOHEY asked which committee members represented areas with personal property tax. Number 120 REPRESENTATIVE BUNDE said, "If we had to create a tax big enough in the Mat-Su to pick this up, the registration fee would be $60-$70. I do not think the organization is going to be real happy about that." Number 147 REPRESENTATIVE DAVIES asked Representative Menard what the current discussion was with the snow machine groups regarding compromises. Number 153 REPRESENTATIVE MENARD said, "A lot of people are not registering. They would like to have the registration. Unless they are exempt from the personal property tax and we come up with some kind of a registration tax then they lose support of the bill (SSHB 34). If it comes down that we are going to mandate registration from this point forward on new sales and resalable machines, and there's not a fee structure in the bill on what they would be charged; and, if they fall totally under the municipal personal property tax, then they would drop their support of the bill." He then indicated that the groups would approve of a fee in the $20- 25 range. Number 186 MR. LEWIS said, "In some municipalities, the local assessor looks at a snow machine as part of the household goods which is exempt. In other municipalities, the assessor looks at it as personal property that is taxable. A definition of a snow machine being part of the property of the head of a household might eliminate the whole tax question on snow machines that are used for personal use. It would only be snow machines that are held in inventories or used for commercial purposes that would be taxable." He continued, "In the first part of (AS) 29.45 it says the personal effects of the head of a household are exempt from property taxation. If you define snow machines as being part of the personal effects of the head of the household they could be exempt." Number 214 REPRESENTATIVE MENARD pointed out the similarities in registering snow machines and motorcycles. REPRESENTATIVE BUNDE said, "Am I to assume we do it something like motor vehicles, cars, that the state would then rebate the municipality something that would then hold them harmless from their original tax? Like motor vehicles, we pay our state registration, but we do not pay a personal property tax on motor vehicles." MS. HENSLEY said, "Presently you pay your $35 or $40 for your normal registration fee. In addition, you pay, if you live in the Anchorage, Mat-Su or Kenai area, well, nine areas of the state, you pay a motor vehicle registration tax that the Division of Motor Vehicles collects for the municipality and rebates less than 5% which is kept for administrative costs." Number 247 REPRESENTATIVE DAVIES said, "I would be a lot more comfortable about putting this exemption in here if the permissive language allowed the municipalities to put a dedicated fee on top of that..." REPRESENTATIVE TOOHEY said, "I've a problem with this, primarily (because) for twenty years I commuted by snow machine to my car because there was no maintenance on the road I live on... Snow machiners are very reticent to do anything to help communities because nobody helps the snow machiners. There is no plan out there that says, 'yes, this is an activity that we think is good and it is healthy and here is a trail you can use, here is a mountain you can use...' There are no trails in the Anchorage area. There is one mountain down in the pass." REPRESENTATIVE BUNDE said, "I am sorry, I cannot support this part where they will leave out the municipal property tax, certainly without talking to Anchorage...I think it is going to be a hardship on the municipalities." Number 302 REPRESENTATIVE DAVIES said, "There are trails in the Fairbanks area...where snow machines are welcome. That is what I am concerned about this other possibility: The municipality could raise some dedicated funds to help maintain those kinds of trails. That would encourage that kind of designated use." REPRESENTATIVE MENARD gave a description of trails available for snow machines. He added, "We need to come up with some kind of a mechanism to generate those through and then we move forward." REPRESENTATIVE TOOHEY pointed out, "What happens to the person who is trapping and he buys his neighbor's snow machine for $1,200 or $300 and it is used for transportation." REPRESENTATIVE BUNDE said, "If there is a snow machine registration tax and it differs from Anchorage to Wasilla to Fairbanks, where they don't have any, people are going to be buying their snow machines where the tax is the smallest..." CHAIRMAN OLBERG said, "The tax is assessed by the municipality in which you live, not where you buy...so everybody is going to end up living in Delta, I suppose." He then suggested a subcommittee be formed to work further on SSHB 34. REPRESENTATIVE DAVIES volunteered to work on the subcommittee with Representative Menard. CHAIRMAN OLBERG said, "Realistically, I do not think we can address everything that this addresses in one bill. Maybe we need a state registration bill mandating dealers to register at the point of initial sale and let it go at that. Then that list is available to the municipalities and they can do whatever they want with it, and they can fight it out in the municipalities." Number 380
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