Legislature(2011 - 2012)CAPITOL 17
02/24/2011 01:00 PM House TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| HB64 | |
| HB10 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HJR 4 | TELECONFERENCED | |
| += | HB 30 | TELECONFERENCED | |
| + | HB 64 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 10 | TELECONFERENCED | |
HB 64-PERMANENT MOTOR VEHICLE REGISTRATION
1:13:04 PM
CHAIR P. WILSON announced that the first order of business would
be HOUSE BILL NO. 64, "An Act relating to permanent motor
vehicle registration; and providing for an effective date."
1:13:28 PM
DARRELL BREESE, Staff, Representative Bill Stoltze, Alaska State
Legislature, on behalf of one of the prime sponsors,
Representative Bill Stoltze, related that HB 64 would offer a
permanent motor vehicle registration to vehicles that are eight
years old or older. The reason for the bill is to make process
more user friendly since older vehicles tend to be used less
frequently. He recalled that some people use their older
pickups for snowplowing or other activities such as dump runs.
He offered his belief that to reregister the older vehicle each
two years is burdensome. The goal is to create an option for
owners to permanently register their eight years or older
vehicles. He related that if a vehicle is sold the new owner is
required to register the vehicle again. The biennial
registration would still be an option for the owner. Some
issues arose in hearings held by the prior committee with
respect to how the motor vehicle tax change would affect
municipalities. He said he hopes to remedy any issues with HB
64 in a future committee substitute for the bill. In response
to Chair P. Wilson, he explained the proposed committee
substitute is not yet ready.
1:16:22 PM
REPRESENTATIVE PRUITT asked whether the potential exists for the
state to increase revenues for motor vehicle registration fees.
He said after a few years an owner could pay for the permanent
registration and later sell the vehicle. The new owner would
register the vehicle which could generate more revenue.
MR. BREESE answered no, not as HB 64 is currently written since
the proposed motor vehicle registration fee in the bill is set
at five times the normal motor vehicle registration fee or $100,
whichever is less. Under current law, the motor vehicle
biennial registration fee is set at $100. He said the sponsor
anticipated some debate to determine if the $100 fee was a fair
rate. He was uncertain as to the best rate to charge for
trailers. He welcomed more people being involved at the
committee level. He agreed if the rate increases it is possible
state to revenues collected to also increase, at least
initially. He related a scenario in which the motor vehicle
registration fees were be increased by five times the current
fee. He assumed half of vehicles would be registered in year
one and the other half in year two. In year three, the
permanently registered vehicle owners would not pay any
additional fees. In that scenario, some revenue would be lost
in year three and subsequent years, he said.
REPRESENTATIVE PRUITT related his understanding that the amount
of revenue lost would be almost a wash since the owner would
prepay the entire fee. The amount would potentially be the same
over the course of time, he stated.
MR. BREESE agreed. He used his previous scenario, and stated
that if fees are set at five times the registration fee, the
owner would essentially pay for ten years of biennial
registration fees for his/her vehicle. He suggested that using
the state's budget process, the state would not consider revenue
in year one and two to be projected in years three and four.
Therefore, it would appear as a reduction in years three through
five.
1:20:02 PM
CHAIR P. WILSON referred to page 2, lines 8-10 of HB 64. She
stated that an owner of a permanently registered motor vehicle
is not required to pay other fees or taxes under this chapter.
She pointed out that many municipalities charge fees for vehicle
registration and expressed her concern since she was uncertain
of the fees.
MR. BREESE responded that 16 communities, including Anchorage,
Bethel, Bristol Bay, Cordova, Dillingham, Juneau, Kenai,
Ketchikan, Kodiak, Matanuska-Susitna, Nenana, Nome, Petersburg,
Sitka, Unalaska, and Whittier have enacted ordinances to collect
additional fees.
CHAIR P. WILSON referred to the handout in members' packets and
read the anticipated lost revenue by communities, including
losses for the Matanuska-Susitna at $4 million, Anchorage at
$5.3, Kenai at $1.5 million, and for the overall total lost
revenue anticipated at $12.3 million.
1:21:44 PM
REPRESENTATIVE PRUITT asked whether the figures were correct.
MR. BREESE answered yes.
1:22:06 PM
WHITNEY BREWSTER, Director, Division of Motor Vehicles (DMV),
Department of Administration (DOA), introduced herself and
stated she was available to answered questions.
CHAIR P. WILSON recalled an attorney general's opinion on the
about municipality taxes on permanent vehicle registration fees.
MS. BREWSTER explained that the Department of Law advises that
to review HB 64 to determine whether municipalities could rather
than the DMV. She stated that municipalities would not have
that ability under the current statute and structure.
1:23:24 PM
REPRESENTATIVE JOHNSON pointed out the $12 million
municipalities would lose is $12 million that would go into
Alaskans' pockets. He stated it is not like it is vanishing or
disappearing.
1:23:52 PM
TONYA MILLER, City of Unalaska, explained that the City of
Unalaska just implemented a $100 biennial fee for junked vehicle
disposal. She explained that the City of Unalaska has just
implemented the law so the city has limited data on how much
revenue would be lost. She offered that the city received
$3,330 in one month. She anticipated the total loss of $30 to
$50 thousand per year. She advised members that the City of
Unalaska has had an issue with junked vehicles, that it decided
to provide a local remedy and thereby instituted the additional
$100 biennial fee. She concluded that removing the motor
vehicle fees as proposed in HB 64 would be detrimental to the
City of Unalaska.
1:25:11 PM
RICK GIFFORD, Manager, Kodiak Island Borough (KIB), related his
understanding that the KIB receives an additional $283,000 in
fees for the vehicle registration fees it collects. The KIB
uses is fees to help fund schools but also remits $100,000
towards recycling junked and abandoned vehicles, mostly older
vehicles that are left behind after the fishing season by
fishermen and cannery workers. He said a 63 percent reduction
would be approximately $178,000 per year. The figure considers
the fees collected in the first two years, but he thought it was
possible the KIB would lose the entire $283,000. He said he was
uncertain. However, either way the loss of revenue would
represent a significant amount for the KIB. He reported that it
costs the city from $400 to $1,000 per vehicle to ship the
vehicles off the island in order to recycle them.
1:27:14 PM
MR. GIFFORD explained that if an owner was responsible and
recycled the vehicle rather than junking, that would be great.
Unfortunately, many do not do so. He further explained that the
owner currently only pays $100 in vehicle registration fees.
Since owners are not willing to ship their vehicles off the
island the vehicles remain behind and the KIB is forced to
remove them. He recalled the DMV may have previously had a fund
designated for use for the purpose of disposing of junked or
abandoned vehicles, but he was uncertain. He commented that he
has discussed this issue with many other communities. He also
commented that this issue is also a state issue as well since
some of the vehicles are left on state roads or right-of-way.
He expressed concern that HB 64 would reduce the City of
Unalaska and other municipalities' ability to address junked or
abandoned vehicle.
1:28:27 PM
REPRESENTATIVE PETERSEN asked whether a lifetime registration on
vehicles eight years old or older would encourage people to keep
vehicles longer or would add to junked vehicles.
MR. GIFFORD said he was uncertain. He said a cost is involved,
whether the cost is incurred by the municipality or the
individual.
1:29:25 PM
REPRESENTATIVE JOHNSON asked whether it is illegal to abandon a
vehicle.
MR. GIFFORD answered yes. He indicated that owners often do not
keep up the registration, but may give to a friend and the title
is not transferred and then they leave the island. It is
difficult to find them or enforce the law.
1:30:40 PM
JAMIE SUNDERLAND, Public Safety Director, stated that his
department has the responsibility for junked or abandoned
vehicles. He related he has an employee, the DMV employee in
Unalaska, who works for him at the satellite office. This
office is funded through commission fees from DMV. He also
stated that lifetime registration may impact the commission fees
since the city would have fewer customers. He highlighted his
primary concern is to address junked vehicles in a remote
community. He stated that the shipping fee for vehicles is
quite high. The cheapest way to ship a vehicle out of Unalaska
to the mainland is via the Alaska Marine Highway System (AMHS).
The cost to ship a vehicle costs about $1,000 to/from Unalaska.
Vehicles are typically older vehicles and many owners are
transient workers from out of state or out of country so
collecting the fee is impossible. The City of Unalaska has
instituted its $200 biennial tax to collect a fund for disposing
of junked or abandoned vehicles. The city must drain the fluids
and remove the tires prior to shipping. He said it seems like
the junked car would have a value but it has not had a resale
value in his experience so it can be quite expensive to dispose
of the vehicle. He expressed concern that if HB 64 was amended
to allow the municipality to collect the tax outside of the
permanent registration, it may also prove difficult. In those
instances the municipality would need to create a separate
registration system locally for a vehicle, perhaps by using a
window tag. The community would also need to develop a means to
collect and enforce the tax. He concluded, "We see that as
potentially difficult."
1:34:02 PM
MR. BREESE asked whether he was referring to the Motor Vehicle
Registration Tax (MVRT) or another tax.
MR. SUNDERLAND answered that this tax is collected through the
MVRT. The City of Unalaska set the revenue aside in a special
fund to be used for disposal of junked vehicles. He reiterated
that the tax is collected by the DMV as a MVRT. In response to
Chair Wilson, Mr. Sunderland explained the MVRT is the state
Motor Vehicle Registration Tax. He offered that in the event an
owner paid $100 to register the vehicle, the owner would pay an
additional tax at the time to the municipality. The DMV would
return this fee to the community approximately six weeks later.
1:35:24 PM
REPRESENTATIVE MUNOZ asked for the percentage that is returned
to communities.
MR. SUNDERLAND responded that the DMV retains eight percent as a
collection fee. In response to Chair Wilson, he repeated that
the DMV retains eight percent of the registration tax.
1:36:00 PM
REPRESENTATIVE MUNOZ asked whether 92 percent of the one-time
fee, once instituted, would be returned to municipalities.
MR. BREESE answered that the 92 percent of the one-time fee for
the MVRT would be reimbursed to municipalities, but the
registration fee is retained by the DMV. In further response to
Representative Munoz, he explained that the way HB 64 is
currently written, the owner would be charged $100 for vehicle
registration fee, plus an additional $100 for the municipal tax.
He reiterated the fees for the permanent registration proposed
in HB 64 is based on five times the current biennial
registration tax.
1:36:51 PM
REPRESENTATIVE PETERSEN asked whether the bill is also
designating how much tax local municipalities can charge owners
for vehicles.
MR. BREESE answered yes. HE said HB 64 would limit the MVRT
municipalities can collect. He suggested a simple solution
exists, which he would be happy to share.
REPRESENTATIVE JOHNSON asked whether the suggested changes will
be incorporated into the forthcoming committee substitute.
MR. BREESE stated that the sponsor is currently working on
changes that would be incorporated into a committee substitute
to present to the committee at a future date. In further
response to Representative Johnson, Mr. Breeze anticipated a
committee substitute would be prepared for the next committee
meeting.
REPRESENTATIVE JOHNSON suggested that if substantive changes
will be made to HB 64, the committee could adopt the proposed
committee substitute (CS) and address the changes at that time.
CHAIR P. WILSON indicated that a CS is not yet prepared.
REPRESENTATIVE PETERSEN said he agreed with Representative
Johnson.
1:38:37 PM
REPRESENTATIVE MUNOZ agreed also. She asked whether a future CS
will contemplate returning a portion of the registration fees to
communities, as well.
MR. BREESE answered that the current statute does not return
registration fees to municipalities for any vehicle fees
collected. The only portion returned to municipalities by the
DMV is the MVRT. He referred to two methods to return the fees,
one is by using a set chart, and the other method allows
municipalities to set their own tax, which many municipalities
have already done. He clarified that this is not referenced in
HB 64 in its current form.
1:39:32 PM
REPRESENTATIVE MUNOZ hoped any proposed CS would consider ways
to lessen the impact to municipalities. She said she supports
the intent to help Alaskan consumers, but she expressed concern
about the impact. She pointed out that Juneau would face a $500
thousand impact, which is a big impact for a community.
1:40:08 PM
CHAIR P. WILSON related that she requested some additional work
on the bill.
MR. BREESE offered to share recommendations made by the DMV.
CHAIR P. WILSON stated she would leave public testimony open.
[HB 64 was held over and assigned to a subcommittee chaired by
Representative Petersen. Committee members assigned to the
subcommittee are Representatives Pruitt, Munoz, and Gruenberg].
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB_64_Sponsor_Statement.pdf |
HTRA 2/24/2011 1:00:00 PM SSTA 4/11/2012 9:00:00 AM |
HB 64 |
| HB064-DEC-AQ-02-04-11_(2)1.pdf |
HTRA 2/24/2011 1:00:00 PM |
HB 64 |
| HB064-DOA-DMV-02-18-11 (2).pdf |
HTRA 2/24/2011 1:00:00 PM |
HB 64 |
| HB064-DOA-DMV-02-18-11.pdf |
HTRA 2/24/2011 1:00:00 PM SSTA 4/11/2012 9:00:00 AM |
HB 64 |
| HB064-STA-DOA-DMV-02-04-111.pdf |
HTRA 2/24/2011 1:00:00 PM |
HB 64 |
| HB64 Bill.pdf |
HTRA 2/24/2011 1:00:00 PM |
HB 64 |
| HB 64 MVRT Revenue.pdf |
HTRA 2/24/2011 1:00:00 PM SSTA 4/11/2012 9:00:00 AM |
HB 64 |
| HB_64_support_Montana_Law.pdf |
HTRA 2/24/2011 1:00:00 PM SSTA 4/11/2012 9:00:00 AM |
HB 64 |
| HB064_Class Codes (2).pdf |
HTRA 2/24/2011 1:00:00 PM SSTA 4/11/2012 9:00:00 AM |
HB 64 |
| HB064_Vehicle Counts-Statewide.pdf |
HTRA 2/24/2011 1:00:00 PM SSTA 4/11/2012 9:00:00 AM |
HB 64 |
| HB 64 Opposition ltr AML.pdf |
HTRA 2/24/2011 1:00:00 PM SSTA 4/11/2012 9:00:00 AM |
HB 64 |
| Estimates of revenue effects from HB64 and HB10.pdf |
HTRA 2/24/2011 1:00:00 PM |
HB 10 HB 64 |