Legislature(2011 - 2012)CAPITOL 106
02/10/2011 08:00 AM House STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB64 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 64 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 64-PERMANENT MOTOR VEHICLE REGISTRATION
8:34:25 AM
CHAIR LYNN announced that the only order of business was HOUSE
BILL NO. 64, "An Act relating to permanent motor vehicle
registration; and providing for an effective date."
8:35:00 AM
DARRELL BREESE, Staff, Representative Bill Stoltze, Alaska State
Legislature, presented HB 64 on behalf of Representative
Stoltze, joint prime sponsor. In response to Representative
Gruenberg, he said it was not the intent of the joint prime
sponsors to include motorcycles in the bill, but because they
are mentioned in the fiscal note, clarification is being sought
on that matter. In response to a follow-up question, he said
that although the intent was not to include motorcycles, the
joint prime sponsors would not seek to exclude them if it turns
out that they are included.
8:37:05 AM
MR. BREESE said the purpose of HB 64 is two-fold: to make the
registration process more streamlined for the consumer and to
help the Division of Motor Vehicles (DMV) run more efficiently.
He noted that currently Montana is the only state to offer
permanent registration; it does so for vehicles that are 11
years old and older, and it charges three and one half times the
regular registration fee. He stated that HB 64 proposes to
charge the lesser of five times the regular registration fee
established in statute or $100. He said those figures were
arrived at in response to information obtained from the DMV back
in November (2010) when the bill was being drafted, and that
number differs from the fiscal note currently available, because
of a mistake made by the DMV. He said should the bill make it
to the House Finance Committee there will be a discussion as to
how to adjust the fiscal note to match the correct statistics.
MR. BREESE said if HB 64 were enacted today, it would affect
441,000 vehicles, which is 63 percent of all the vehicles
currently registered in Alaska. He reiterated that this would
lighten the workload for DMV and make interaction with the DMV
more user-friendly.
8:41:08 AM
MR. BREESE said that under HB 64, after 11 years the number of
vehicles that would be eligible would drop by 8 percent, after
15 years it would drop to 44 percent, and after 18 years that
number would drop further to 30 percent. However, he said a
decrease would not really be seen because the 441,000 eligible
today will increase each year. He noted as a point of interest
that currently there is a vehicle that has been registered since
1900, which would be the oldest vehicle to qualify under HB 64.
Mr. Breese noted that under HB 64, people would have the choice
of whether to get a permanent registration or continue paying
for registration every two years.
8:42:50 AM
MR. BREESE, in response to Representative Petersen, said a
permanent registration would not transfer to a new owner. In
response to another question, he indicated that a person with a
permanent registration would still be responsible for staying
current with inspection and maintenance (I/M) certification in
areas of the state that require it, and he suggested that
perhaps a sticker could be displayed in the window of the
person's vehicle to show that IM testing is current.
8:44:40 AM
REPRESENTATIVE GRUENBERG said another factor that must be
considered is a driver's age. He explained that at age 65, a
person gets a free registration on his/her vehicle.
Furthermore, he surmised that some people may have specialized
plates. He said he thinks those factors were not considered,
and he would like a more accurate analysis done. He opined that
if the twin goals of the joint prime sponsors are to make things
easier on the consumer and more efficient for the [division],
then perhaps there may be a way to factor in whether a car is
not used, for example, by listing the odometer reading on
penalty of perjury.
8:48:08 AM
MR. BREESE responded that current statute allows for collected
car plates, and that would not be changed under HB 64.
Furthermore, the ability of those 65 and older to receive free
registration is currently in statute and will not change. In
response to Representative Gruenberg, he offered his
understanding that issue of seniors getting free registration
was not factored into the fiscal note.
REPRESENTATIVE GRUENBERG named two aspects [related to fees]:
the cost of the plate and the tax charged. He queried, "We're
not dealing here with the plate, but those guys still have to
pay the tax don't they?"
MR. BREESE answered, "Correct."
REPRESENTATIVE GRUENBERG offered his understanding that whether
or not someone gets a Pearl Harbor plate or a personalized plate
is irrelevant to the discussion.
MR. BREESE said the information regarding taxes is included in
the bill [in Section 2, subsection (b)], but only covers a
period of ten years; therefore, it would be necessary to revisit
the issue. He offered his understanding of how the process is
handled in Montana. He indicated if the municipalities are
given the responsibility to collect the taxes, then that would
save money for the state.
8:52:24 AM
REPRESENTATIVE SEATON asked if the joint prime sponsors would
like to take out the $100 fee mentioned [in Section 2,
subsection (b)].
MR. BREESE said Representative Stoltze chose to leave the $100
fee in the bill to encourage discussion and debate to arrive at
the best number. He said the joint prime sponsors think that
five times the rate established in statute is fair. He noted
that Montana's rate is 3.7. He pointed out that the five times
amount was chosen based on information from the DMV, which later
proved to be incorrect. He said the DMV was off by about
300,000 vehicles that would eligible.
MR. BREESE, in response to Representative Seaton, he said he
does not know the exact number of those who do their
registration by mail, but offered his understanding that it is
approximately 60 percent.
REPRESENTATIVE SEATON said he would like to know how many of the
in-person visits to the DMV were made solely to pay a
registration fee. He asked if it is anticipated that an effect
of bill may be that parents would leave the registration of a
vehicle driven by their offspring in their name, and he
questioned whether that would result in confusion at the time of
an accident.
MR. BREESE said the joint prime sponsor has not considered that
scenario.
8:57:02 AM
REPRESENTATIVE SEATON remarked that the DMV has been a large
revenue source for the state, and he questioned whether the bill
may reduce the revenue stream.
MR. BREESE responded that the intent of the bill is not to
reduce the revenue stream and shift that burden somewhere else.
He said the current fiscal note was received recently and has
generated concern.
REPRESENTATIVE SEATON explained he was seeking assurance that
the intention is not to further concentrate the state's
dependence on oil taxes.
8:59:32 AM
REPRESENTATIVE JOHANSEN stated, "I don't think we should be in
the business of creating income streams when we don't have to."
He expressed concern that the intent to lighten the load for the
DMV may actually result in the division taking on more
responsibility, and he said he does not want that to happen. He
asked Mr. Breese if the joint prime sponsors have considered
including commercial vehicles.
MR. BREESE answered that vehicle weight is a factor with
commercial vehicles, and it would be more complicated to include
them. Currently the state offers permanent registration to
commercial trailers, he said.
9:01:59 AM
REPRESENTATIVE JOHANSEN said he will maintain interest in that
issue. Regarding the aforementioned I/M program, he asked why
the state is "asking for another position and more money" in
conjunction with a municipal program.
9:03:12 AM
MR. BREESE said he, too, noted the additional staff person
written into the fiscal note. He further commented that he does
not see any additional responsibility that would have to be
covered by the Department of Environmental Conservation that is
not already addressed in the memorandum of understanding. He
said he finds the addition of the staff person perplexing.
REPRESENTATIVE JOHANSEN stated that he likes the concept of the
bill, but does not believe that the DMV should be a money making
entity.
9:04:35 AM
REPRESENTATIVE KELLER, as joint prime sponsor, asked Mr. Breese
if historical vehicles and specialized plates were considered
for inclusion in HB 64.
MR. BREESE answered that the DMV charges a separate charge for
specialized plates, and an assumption was made that those
wanting specialized plates would continue to be willing to pay
the extra fee involved; therefore, specialized plates were not
included in the bill.
REPRESENTATIVE KELLER asked Mr. Breese to look closer at the
collector car issue. He explained that collectors want to keep
cars for a long time, and it would be convenient for them to be
included, or at least have some sort of extended registration.
Notwithstanding that, he emphasized that he does not want to
slow the bill process down.
9:06:51 AM
MR. BREESE suggested that a person with a collective car could
choose to get a permanent registration, but then would not have
the special plate.
9:08:18 AM
REPRESENTATIVE P. WILSON said she does not think the bill is
near to being ready to move out of committee. She questioned
the need for another person when the work in the department will
be less. She questioned the proposed fee of five times the rate
established in statute or $100.00, because she said everyone
would choose the $100 because it would be less.
9:10:34 AM
MR. BREESE said he agrees that there is work that needs to be
done, primarily based on the fiscal note, but said the hearing
today is helpful in finding out what needs to be done, and how
much the fee should be.
9:12:06 AM
REPRESENTATIVE JOHANSEN said he wants motorcycles included in
the language of the bill. He said he supports letting the House
Finance Committee take care of the fiscal note. He stated
support of moving the bill out of committee.
9:13:19 AM
REPRESENTATIVE GRUENBERG said his concerns are not limited to
the fiscal note. He said he is not sure that the bill will
reach its goal of offering convenience to those getting
registrations and streamlining the DMV's operations. He
suggested that one way to actually make money from this
legislation is by getting money from people up front, which
gives the state the use of people's money while giving those
people a break up front.
MR. BREESE said if people pay a two-year registration five
times, then the state has payment for ten years, but the vehicle
owner may end up selling the vehicle after five years.
REPRESENTATIVE GRUENBERG suggested that the state may not want
to make it a lifetime registration, but may choose instead to
specify a certain period of time and get more money up front.
MR. BREESE reiterated the statistics related to attrition. He
said vehicles get older and people buy new vehicles.
9:18:50 AM
REPRESENTATIVE GRUENBERG interjected another factor, which is
that vehicles are more expensive and more sophisticated these
days, and because of the economy, people keep their cars longer.
9:19:11 AM
MR. BREESE agreed.
9:19:21 AM
REPRESENTATIVE SEATON directed attention to page 1, line 14,
which read, "A permanent registration may not be renewed." He
asked if the intention of the bill is that there will be only
one permanent registration entered on a vehicle, and that if a
vehicle is sold it would fall back into the two-year
registration cycle, or that if a person buys a vehicle that is
over ten years old, then he/she will automatically qualify for a
permanent registration.
MR. BREESE responded that the intent is that the vehicle
registration would not be transferable. He offered further
details, and said he thinks the language of the bill could be
improved to clarify this issue.
9:21:20 AM
MR. BREESE, in response to a question from Representative
Seaton, explained that the state collects the taxes on vehicle
registrations that are imposed by certain municipalities. He
said it is convenient for the municipality, and the state makes
8 percent for that service. He said the issue of whether a
person would get back taxes paid on a permanent registration if
that person sold the car soon afterward would have to be taken
up with the municipalities.
9:23:18 AM
REPRESENTATIVE SEATON asked Mr. Reece to find out what the
positions of the municipalities are regarding that issue. He
then asked why a permanent registration would not work for all
vehicles.
9:26:03 AM
MR. BREESE said permanent vehicle registration for all vehicles
would be easier, and he surmised that shifting the tax
collection back to the municipalities would result in a big
savings for the state; however, he said that since the majority
of vehicle sales occur after the first five years of vehicle
ownership, permanent registration instated for all vehicles
would result in a loss in revenue.
9:27:42 AM
REPRESENTATIVE PETERSEN asked if the bill would inadvertently
encourage older vehicles to be on the road longer than they
otherwise might.
MR. BREESE said that factor was considered, but he suggested
that may be a subject for another bill. He surmised that most
people want to drive safe vehicles, and the bill would not
increase the number of those who are already driving unsafe
vehicles.
9:29:49 AM
WHITNEY BREWSTER, Director, Division of Motor Vehicles (DMV),
Department of Administration, estimated that approximately 75
percent of vehicle registration transactions are done outside
the DMV offices, either through the Internet, through the mail,
or through one of the division's business partners, such as at
an I/M station. She relayed that the DMV moved to biennial
registration in 1997, with the hope that that would decrease
wait time at the DMV, and that was successful. She stated that
conceptually the DMV does not oppose the permanent registration
of vehicles, but the division's concern is related to the
administration of such a change. Regarding the motor vehicle
registration tax and having municipalities collect it, she said
presently there are 16 municipalities for which the DMV collects
that tax in accordance with AS 28.10.431. She said that statute
mandates that motor vehicle registration tax is to be collected
in the same manner in which registration fees are collected;
therefore, she questioned whether the municipalities would have
the statutory authority under current statute to collect that
tax. She said not all municipalities have adopted the fee
schedule in statute, but they have the ability, by ordinance, to
adopt a separate fee schedule that is more than what is set out
in the schedule; therefore, there may be a fiscal impact to
those municipalities. She said currently there are seven
municipalities that have adopted a separate fee schedule.
9:33:44 AM
MS. BREWSTER, regarding the fiscal note, said regardless of
whether the number of vehicles [to get permanent registration]
is 90,000 or 443,000, there will be a revenue loss. She said
the division factored in many assumptions to get an accurate
figure. She directed attention to the fiscal note, which shows
that in 2012, there will be an estimated 221,600 vehicles
eligible for permanent registration. She explained that that is
about half of the 443,000 vehicles that would be eligible for
permanent registration under HB 64, with the other half coming
up for renewal in 2013. She said in 2014 and beyond, there will
be a loss of revenue, which would have been made through
biennial registration. She said a second factor is that there
would be a slight increase for motorcycle registration, because
motorcycle registration currently is less than the $100
mentioned in the bill. She stated that the division made the
assumption that motorcycles would be included under HB 64,
because the bill references registration procedures in AS
28.10.108, which includes motorcycles. She explained that is
why motorcycles are included in the fiscal note. She reiterated
that the division is not opposed to the bill, but is concerned
about how it would administer it.
9:36:18 AM
MS. BREWSTER, in response to Representative Gruenberg, said the
division did not factor in that many of the people with old cars
are already getting free registration because they are 65 or
older, but she said she does not think that would significantly
change the numbers. She explained that although gathering that
statistic seems simple, it is not, because in the DMV's
mainframe system, vehicles are not connected to a person's
driver's license, because a person does not have to own a
driver's license to own a vehicle in Alaska.
REPRESENTATIVE GRUENBERG said he would like to see that
statistic. He talked about the United States Postal Service's
"forever stamps." He stated his assumption that from time to
time motor vehicle registration fees go up, and he asked if
having "forever plates" would entice people.
MR. BREWSTER said that is an interesting concept. She said the
legislature sets the DMV's fees; therefore, it would be the
purview of the legislature to consider that. She said the DMV
would not be opposed to any changes in those fees, because those
fees go directly to the general fund.
9:39:52 AM
REPRESENTATIVE GRUENBERG mentioned the concept of selling a
house and having reserves from having prepaid taxes. He
suggested that the plates could be associated with the car,
rather than the owner, which he said would increase the value of
the car because of the prepaid taxes.
MS. BREWSTER responded that that is a new concept that the DMV
has not considered.
CHAIR LYNN said he thinks that concept is outside of the scope
of the bill.
9:40:49 AM
MS. BREWSTER, in response to a question from Representative
Seaton, offered her understanding that under HB 64, anyone who
elects permanent registration would pay the lesser of five times
the motor vehicle registration tax or $100. Those
municipalities that have set a fee schedule that is greater than
what is set in statute would see a decrease in the taxes that
are collected.
9:42:59 AM
REPRESENTATIVE SEATON said the House State Affairs Standing
Committee has the jurisdiction between the state and local
municipalities, and this is a case where the state may be
overriding statutory authority for municipalities to set their
fee rates.
MS. BREWSTER, in response to the chair, said she does not have
any specific suggestions on that issue, and cannot speak for the
local governments. She said she just wanted to bring it up,
because the issue would impact municipalities and there is no
one currently present to speak on their behalf. In response to
the chair, she said she knows that the Alaska Municipal League
(AML) is interested in this issue.
REPRESENTATIVE SEATON said since this issue will impact seven of
the most populous communities, it is important to figure out
what the impacts will be and hear testimony from those
communities.
9:45:27 AM
REPRESENTATIVE KELLER echoed Mr. Breese's statement that the
proposed legislation would benefit both Alaskans and the DMV.
In regard to the possible impact to municipalities, he suggested
that the Alaska Municipal League could share its concerns with
the House Finance Committee.
9:46:14 AM
REPRESENTATIVE JOHANSEN said the bill has been noticed for five
days and no one from the municipalities has stepped forward. He
stated his assumption that the issue must not be that important
to them if they have not shown up.
REPRESENTATIVE GRUENBERG said another possibility is that
representatives of the municipalities may not yet be aware of
this legislation.
CHAIR LYNN remarked that it is not the fault of the committee if
municipalities don't read a notice.
9:48:03 AM
REPRESENTATIVE P. WILSON referred to the title of the bill, and
observed that it does not say anything about a municipality
having to take over responsibility. She added that she does not
intend to hold up the bill.
REPRESENTATIVE JOHANSEN noted that Ms. Brewster had said that
the municipalities indicated to her that they were interested in
HB 64. He further relayed that he used to be a professional
lobbyist and, during that time, looked at every bill that was
announced. He opined that there is no excuse for municipalities
not attending to a bill of interest to them.
9:49:35 AM
REPRESENTATIVE PETERSEN asked Ms. Brewster what she meant when
she said the municipalities have an interest in the bill.
9:49:58 AM
MS. BREWSTER indicated that an AML lobbyist had inquired as to
the possible impact of the proposed bill on local government,
but said since there was no impact reflected in the fiscal note,
the DMV was unable to answer that question.
9:51:03 AM
MR. BREESE, in response to Representative P. Wilson's concern,
indicated that HB 64 does not address what happens to motor
vehicle tax beyond a certain period, which is why that is not
reflected in the bill title. Regarding the suggestion to
include commercial vehicles, he said it would be necessary to
consider the depreciation of commercial vehicles and how long
the vehicles are maintained. In response to Chair Lynn, he said
he does not think there are any issues in the bill that could
not be addressed in the next committee of referral.
9:53:13 AM
CHAIR LYNN closed public testimony.
9:53:24 AM
REPRESENTATIVE PETERSEN opined that because so many questions
have been raised regarding HB 64, it is not ready to move out of
committee.
9:53:58 AM
REPRESENTATIVE SEATON reiterated that the House State Affairs
Standing Committee is the committee of jurisdiction regarding
the interaction between state and municipal laws. He said HB 64
would change the authorities that municipalities have under
current statute to set schedules regarding motor vehicle taxes,
which would significantly reduce municipalities' revenues. He
said the committee has not heard from any municipality. He said
a number of issues have been raised, but are unanswered. He
noted that the committee has not heard from the DMV as to
whether the bill would streamline its work. He opined that the
bill is not ready to move out of committee.
9:56:01 AM
REPRESENTATIVE GRUENBERG echoed the comments of Representatives
Petersen and Seaton that this bill has had no work done on it,
and he recommended taking time on it. He said, "You can't just
wink at these issues." He opined that the House State Affairs
Standing Committee is a good committee that should do its job
and "not just pass it out for political expediency."
CHAIR LYNN responded that no one would pass out this or any bill
for political expediency.
9:57:33 AM
REPRESENTATIVE JOHANSEN said no one can state another person's
intent for voting to move a bill out of committee. He said he
learned from Ms. Brewster that including motorcycles would raise
costs, which he relayed is not his wish.
9:58:41 AM
MR. BREESE, in response to Representative P. Wilson, said the
joint prime sponsors would like the bill moved to the House
Finance Committee where the financial impacts can be addressed.
9:59:43 AM
REPRESENTATIVE KELLER expressed his confidence that the issue of
financial impact can be address in the House Finance Committee.
10:00:36 AM
REPRESENTATIVE KELLER moved to report HB 64 out of committee
with individual recommendations and the accompanying fiscal
notes.
REPRESENTATIVE SEATON objected.
A roll call vote was taken. Representatives Keller, Johansen,
and Lynn voted in favor of moving HB 64 out of committee with
individual recommendations and the attached fiscal notes.
Representatives Seaton, Gruenberg, and Petersen voted against
it.
REPRESENTATIVE P. WILSON said, "I think it should have
amendments - pass with amendments."
CHAIR LYNN asked Representative P. Wilson for clarification of
her vote.
REPRESENTATIVE JOHANSEN requested an at-ease.
The committee took a brief at-ease.
10:03:08 AM
CHAIR LYNN announced that the original roll call vote would be
voided.
10:03:09 AM
REPRESENTATIVE KELLER moved to report HB 64 out of committee
with individual recommendations and the accompanying fiscal
notes.
CHAIR LYNN reminded committee members that individual
recommendations could be the following: do pass, do not pass,
no recommendation, or amend.
10:03:28 AM
REPRESENTATIVE SEATON objected.
10:03:31 AM
A roll call vote was taken. Representatives Johansen, P.
Wilson, Keller, and Lynn voted in favor of moving HB 64 out of
committee with individual recommendations and the attached
fiscal note. Representatives Seaton, Gruenberg, and Petersen
voted against it. Therefore, HB 64 was reported out of the
House State Affairs Standing Committee by a vote of 4-3.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 01 HB0064A.pdf |
HSTA 2/10/2011 8:00:00 AM |
HB 64 |
| 02 HB 64 Sponsor Statement.pdf |
HSTA 2/10/2011 8:00:00 AM SSTA 4/11/2012 9:00:00 AM |
HB 64 |
| 03 HB 64 support Montana Law.pdf |
HSTA 2/10/2011 8:00:00 AM SSTA 4/11/2012 9:00:00 AM |
HB 64 |
| 04 HB 64 Background and research v2.pdf |
HSTA 2/10/2011 8:00:00 AM SSTA 4/11/2012 9:00:00 AM |
HB 64 |
| 05 HB064-STA-DOA-DMV-02-04-11.pdf |
HSTA 2/10/2011 8:00:00 AM SSTA 4/11/2012 9:00:00 AM |
HB 64 |
| 06 HB064-DEC-AQ-02-04-11 (2).pdf |
HSTA 2/10/2011 8:00:00 AM |
HB 64 |