Legislature(1993 - 1994)
02/15/1994 08:00 AM House STA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CSHB 363 - AN ACT RELATING TO MOTOR VEHICLE REGISTRATION FEES Number 602 CHAIR VEZEY recognized the Committee Substitute draft to HB 363 and asked if the committee would like to move to adopt it. Number 606 REPRESENTATIVE SANDERS moved to adopt the Committee Substitute (CS) draft to HB 363. CHAIR VEZEY recognized REPRESENTATIVE SANDERS' motion, hearing no objections, the CS draft to HB 363 was adopted and for discussion. Number 614 REPRESENTATIVE KOTT noted the two changes to the original HB 363. Section 1, the amount is reduced by $5 if a person applies through the mail. Section 2-4, $5 is added to all the vehicle registrations throughout the state of Alaska. Number 623 CHAIR VEZEY asked REPRESENTATIVE KOTT if a fiscal note was available. REPRESENTATIVE KOTT did not have a fiscal note, because the Department of Motor Vehicles (DMV) and Public Safety need to have the CS adopted by the committee before the fiscal note could be provided, per Juanita Hensley. Ms. Hensley conveyed to REPRESENTATIVE KOTT that revenue would be generated for the DMV at a minimum of $55,000. He felt this was underestimated, and that it should be closer to $400,000, based on the DMV's numbers and "no speculation". Number 638 JUANITA HENSLEY, DIVISION OF MOTOR VEHICLES, DEPARTMENT OF PUBLIC SAFETY (DPS), testified her department remained neutral on the CS draft of HB 363. She noted the Governor's Office would supply a fiscal note for the members' packets now that the CS has been adopted. She stated, DMV estimates $55,000 net revenue for the state. "To give you a little background as to why we estimate that, is that this raises all annual registration fees by $5 and it provides a $5 reduction if the registration renewal is conducted by mail. The current $10 fee for registration renewals not conducted by mail is eliminated. In 1993, the Division processed 114,000 new registrations and 417,000 renewal registrations. Prior to FY 94, 30 percent of all vehicle owners used the mail to renew their registrations. And the remainder renewed in-person at the DMV offices. With implementation of the $10 fee for in-person renewals, the use of the mail increased to the point that by the end of the first year, July 1994, the Division estimates 60 percent of the renewals will be conducted by mail. Those 166,000 owners who did not use the mail generate $1.6 million in revenue, which will be eliminated with this bill. This revenue will be replaced by raising all registration fees by $5. The total annual number of registrations (531,000) would generate $2.655 million in additional revenue. This amount would be reduced by $5 for each renewal conducted by mail. It is assumed that those 30 percent of the owners who use the mail, before the fee, will continue to do so. The original $10 fee was picked because the Division felt that it was enough of an incentive without being overly burdensome. The $5 reduction will not be as much of an incentive as the $10 fee, and some owners who used the mail will revert to the in-person office visits. The Division estimates that with the $5 fee, only 45 percent of the vehicle owners will use the mail. The 45 percent, or 188,000 vehicle owners who use the mail, will result in the reduction of $940,000. The summary of all these actions is as follows: Revenue loss at the $10 fee, 166,00 registrations x 10 is $1.6 million; revenue gained from the $5 increase, 531,000 x $5 is $2.655 million; revenue loss from the $5 reduction, 188,00 x $5 is $940,000; leaving a net revenue gain of $55,000. While this bill does not show a net revenue gain, while it does show a revenue gain, it also has the effect of adding 15 percent of vehicle owners, or almost 80,000 customers, to the already long lines at DMV offices. This erases the efficiency initiative originally intended by having the $10 fee. The Department basically with this $5 would be neutral; however, we do expect more people in the lines." Number 681 REPRESENTATIVE KOTT thought the DPS was making assumptions in their fiscal analysis. He believed $5 decrease in fees would be enough incentive to use the mail system and people would fear, even more, the possibility of long lines. REPRESENTATIVE KOTT cited a letter from the DMV January 13, 1994, which states it doesn't cost anymore to process applications behind the scene as in front of the counter. He commented in essence, there should be a greater positive revenue from the counter activity, because it's not costing anymore. . MS. HENSLEY responded processing an application is the same amount of work wherever it is done, however, when a person is in front of the counter there is "chit chat", and checks take time to write. DMV estimates it takes two more minutes to process an application at the counter than it does by mail. TAPE 94-14, SIDE B Number 000 REPRESENTATIVE KOTT reiterated the information he received January 13, 1994, from Jay Dulany, DMV, which stated the "time saved by not exchanging pleasantries in a face to face setting is offset by the additional time in handling the mail." (On file.) Number 010 REPRESENTATIVE G. DAVIS indicated almost all fiscal notes have assumptions in them. Number 019 CHAIR VEZEY commented anyone is welcome to submit written or oral testimony refuting the DMV fiscal note. He speculated the mail use rate after the $5 decrease, MS. HENSLEY assumed, was too generous, feeling the public would instinctively respond to higher fees. Number 056 MS. HENSLEY responded the DMV has no way of estimating how many people will continue to use the mail system. Human nature is to procrastinate. Number 066 CHAIR VEZEY repeated he thought the DMV's assumption was generous, while REPRESENTATIVE KOTT's was a little harsh. Number 071 REPRESENTATIVE KOTT felt the DMV has a great deal of latitude and discretion in determining whether or not they should apply the $10 fee to those individuals that perhaps come to the state for the first time. He felt the department could probably make some allowances for the face to face fee in those situations. There are a number of military members and other individuals in the Anchorage "bowl area" that are involved in that circumstance. He felt these individuals should be a consideration in the fiscal note. REPRESENTATIVE KOTT noted an instance where he was standing in the DMV line and the front counter clerk took five to ten minutes to talk with the supervisor to decide if the $10 fee should be waived or not. Number 100 CHAIR VEZEY understood the fiscal note would be transmitted from MS. HENSLEY soon after the meeting. CSHB 363 could not be transferred to the Clerk's Office without a fiscal note. However, if the committee wanted to take action on it, CHAIR VEZEY would allow it. He also mentioned to the committee that CSHB 363 could be held over. Number 115 MS. HENSLEY interjected the fiscal note would be to the committee within an hour. Number 117 REPRESENTATIVE G. DAVIS clarified the fiscal note would read $55,000. REPRESENTATIVE KOTT moved to pass CSHB 363 with fiscal note attached, per MS. HENSLEY'S testimony, under the next committee referral. Number 126 CHAIR VEZEY asked the committee secretary to call role. Having done so, CSHB 363 passed from the House State Affairs Committee with individual recommendations.
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