Legislature(1993 - 1994)

05/03/1994 09:10 AM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                               
  CS FOR HOUSE BILL NO. 328(FIN)                                               
                                                                               
       An  Act   allowing  motor   vehicle  registration   and                 
       licensing fees to be paid by credit card.                               
                                                                               
  Co-chair Pearce  directed that CSHB 328 (Fin)  be brought on                 
  for discussion and advised  that it would allow for  payment                 
  of motor vehicle fees via credit  card.  Senator Kelly asked                 
  why the bill would incur a  cost.  Co-chair Pearce responded                 
  "because the credit card company would get 1-1/2%."                          
                                                                               
  JEANNE LARSON,  aide to Representative  Martin, came  before                 
  committee.  She  explained that the bill  allows individuals                 
  to pay driver license and motor vehicle registration fees by                 
  credit  card  and  authorize  use  of  the  credit  card via                 
  telephone.   She  deferred  further  comment  to  department                 
  staff.                                                                       
                                                                               
  Co-chair Pearce  asked if  consideration had  been given  to                 
  allowing the department  to charge  the extra percentage  so                 
                                                                               
                                                                               
  that the bill would be revenue neutral.  Ms. Larson observed                 
  that  it  was mentioned  in passing  but  not dealt  with in                 
  substantial detail.                                                          
                                                                               
  Senator Rieger pointed to  new language within the bill  and                 
  asked that the department comment.   JUANITA HENSELY, Chief,                 
  Driver  Services,  Dept.  of Public  Safety,  said  that the                 
  department is comfortable with the  mandate to establish the                 
  procedures and fees  prescribed for  credit card payment  by                 
  telephone.                                                                   
                                                                               
  Speaking to questions relating to  raising the fee to  cover                 
  the credit card  cost, Ms. Hensley referenced  discussion of                 
  the issue  in  the House.    The House  was  adamant in  its                 
  decision not to increase motor  vehicle fees to cover credit                 
  card charges.                                                                
                                                                               
  Co-chair  Pearce  asked  if  it  was  necessary  to  provide                 
  statutory authority to allow  for use of credit cards.   Ms.                 
  Hensley said that  aside from the Marine  Highway System, no                 
  other agency  accepts  credit cards.    The reason  for  the                 
  proposed legislation  is to receive the $225.0 appropriation                 
  for credit card costs.  It represents  a means of fixing the                 
  funding in the budget.                                                       
                                                                               
  In  response to a question from  Senator Rieger, Ms. Hensley                 
  explained  that  the  department  has  been in  contact  and                 
  negotiations with banks.   The Alaska Bankcard Center is the                 
  clearing house for all credit cards.  It  is the entity that                 
  has offered the  1-1/2%.  It  is the department's intent  to                 
  allow for use of more than one credit card if the 1-1/2% can                 
  be negotiated.  Senator  Rieger voiced a preference for  use                 
  of "may" rather than "shall" in  new language.  He expressed                 
  concern that controversy would arise over which credit cards                 
  are allowed and which are not.                                               
                                                                               
  Senator Kelly inquired regarding the net result of levying a                 
  $1.00 credit card  transaction fee.  Ms.  Hensely advised of                 
  estimates  that 40 to  50% of those  renewing licenses would                 
  use  credit  cards in  lieu of  cash.   The  state registers                 
  approximately 605,000  vehicles annually and  issues 200,000                 
  identification cards  and driver  licenses each  year.   The                 
  $1.00 fee would  more than  cover the cost.   Senator  Kelly                 
  asked if it would  be possible to register an  automobile by                 
  telephone.  Ms. Hensley responded affirmatively and spoke to                 
  the  workings of  a dial-in  system in  Wisconsin.   Senator                 
  Kelly voiced support for that approach.                                      
                                                                               
  Pointing to language in the bill, Senator Rieger noted  that                 
  it appears  individuals will  pay an  additional $10  unless                 
  registration is conducted by mail.  Ms. Hensley advised that                 
  the $10 fee was intended to cut down on the number of people                 
  actually coming to registration offices.   Payment by credit                 
  card  via telephone would accomplish the same end.  Co-chair                 
                                                                               
                                                                               
  Pearce advised that bill  language stating "that  additional                 
  fees shall be added for  registration not conducted by mail"                 
  does not  exempt telephone  transactions from  the $10  fee.                 
  Senator Sharp pointed to  language at lines 8 through  9 and                 
  noted  that the  department  may waive  the  $10.00 fee,  by                 
  regulation, and suggested  that an  exception could be  made                 
  for payment  by telephone.   Ms.  Hensely voiced  department                 
  intent  to  waive  the  $10.00   for  credit  card  renewals                 
  conducted  via  telephone.   Senator  Kelly proposed  that a                 
  $1.00 fee be  levied for credit card transactions.  Co-chair                 
  Frank voiced his understanding that an individual who renews                 
  a registration  or  license at  a motor  vehicle office  and                 
  utilizes  a  credit card  for  payment  would pay  a  fee of                 
  $11.00.  He then suggested that payment by credit card could                 
  save processing costs.                                                       
                                                                               
  Discussion of the existing $10.00 fee and proposed  fees for                 
  credit  card  use   followed.    A  number   of  alternative                 
  approaches were  proposed.   Co-chair Pearce  raised concern                 
  that changes in the  $10.00 fee could not be  made under the                 
  existing bill title.   Senator Kelly  MOVED to levy a  $5.00                 
  fee  on transactions  by  credit  card  via telephone.    He                 
  advised that the  fee would cover  the $225.0 cost shown  on                 
  the fiscal note.   In  response to a  question from  Senator                 
  Sharp asking if  the $10.00 fee  would apply in addition  to                 
  the $5.00 charge, Senator Kelly commented that the $5.00 fee                 
  would encourage  individuals to  use the  phone for  renewal                 
  rather than  stand in  line at  a registration  office.   He                 
  reiterated earlier  comments that the department would waive                 
  the $10.00 charge  for telephone transactions.   Ms. Hensley                 
  concurred.  Co-chair  Pearce called for  a show of hands  on                 
  the  motion.  The amendment was ADOPTED on a vote of 4 to 2.                 
                                                                               
                                                                               
  The department  was requested to  provide a new  fiscal note                 
  for  the  bill, including  an  estimate  of  revenues to  be                 
  generated by the $5.00 fee.                                                  
                                                                               
  Senator  Kelly MOVED that  SCS CSHB 328  (Finance) pass from                 
  committee  with  individual recommendations.    No objection                 
  having been  raised, SCS CSHB 328 (Finance) was REPORTED OUT                 
  of committee with  a fiscal  note from the  Dept. of  Public                 
  Safety showing a  cost of $225.0 and revenue of $322.5.  All                 
  members  signed  the  committee  report  with  a  "do  pass"                 
  recommendation with  the exception  of Senator  Kerttula who                 
  signed "no rec."                                                             
                                                                               

Document Name Date/Time Subjects