Legislature(2003 - 2004)
04/04/2003 09:01 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE BILL NO. 103
"An Act increasing certain motor vehicle registration fees;
and providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken noted this bill would increase motor vehicle fees
$10 to $15 per year for most classes of vehicles.
DUANE BANNOCK, Director, Division of Motor Vehicles (DMV),
Department of Administration, testified via teleconference from an
offnet site reading a statement into the record as follows.
In front of you today is a senate bill that was proposed by
the Administration. Senate Bill 103 is a overall comprehensive
bill review of our current registration rates as they apply
mostly to noncommercial vehicles, a small extent to commercial
vehicles and to other administrative functions that apply the
re-registration and new registration of automobiles in title
fee and lien fee. Those are the majority of the changes that
are proposed.
We'll start with title and lien. Title fee is a fee that is
collected by the DMV every time there is a title transfer;
whether it be when the vehicle is purchased new or when the
vehicle is sold to subsequent owners. Currently that rate is
five dollars. My records don't show that it was ever anything
but five dollars. It's been proposed that that fee be raised
to $15. A lien fee, likewise, since its inception has been at
five dollars. A lien fee is something that is paid, it's a
one-time pay by the customer if they borrow money against
their vehicle. Oftentimes the lender will process the
paperwork for them and show the lender as a lien holder.
Again, currently five dollars, and being proposed to be raised
to $15.
As we move into the noncommercial fees for many many years,
there has been two sets of fees for vehicles defined as
passenger vehicles or vehicles defined as pick-up trucks and
vans. The difference for the past approximate 20 years has
been a five to ten dollar difference in the rates between
those two vehicles. This bill proposes two major factors.
Number one: eliminating the difference in the fee structure
between a passenger vehicle or a pick-up truck, and raises
them both to the same level. Currently, we collect bi-annually
or for a two-year period and the bi-annual fee on a passenger
vehicle today is $58; on a pickup truck, it is $78 dollars. We
have proposed that that become $100 across the board for all
noncommercial vehicles that weigh less than 10,000, thus
eliminating the difference between a passenger vehicle or a
pick-up truck.
As it applies to commercial fees, we have suggested and we
have recommended an increase of ten dollars on all of our
commercial fees rates. There are currently four different sets
of rates and a commercial vehicle is registered based on its
weight category. We have asked for a ten-dollar per weight
class increase.
Senator Taylor recalled the Legislature addressed commercial
vehicle and trailer registration in 1999. He charged that this
legislation would triple the licensing fees of all trailers from
$10 to $30 citing language on page 2, line 6.
Mr. Bannock corrected the language referenced does not apply to
commercial trailers. He reminded that in 1999, the licensing method
was changed to a permanent registration with a fee established. He
noted that this bill proposed to increase that fee.
Senator Taylor asked the amount of the proposed increase for
commercial trailers registration.
Co-Chair Wilken directed attention to page 3, line 5, which
stipulates that the fee for commercial trailers would be increased
from $10 to $20.
Senator Bunde asked if Section 2 is the "biannual representation"
of Section 3.
Mr. Bannock affirmed.
FRANK DILLON, Executive Vice President, Alaska Trucking
Association, testified via teleconference from Anchorage in support
of this legislation. He described the 45-year old trade association
that represents transportation interests throughout Alaska. He
stated the increased fees would generate revenues without causing
undue hardship.
JAMES DOYLE, Partial Owner, Weaver Brothers, testified via
teleconference from Kenai in support of the bill. He referenced an
amended proposal, which represents a 73 percent increase in fees
over the amounts specified in the bill. He objected to this and
asked if it would be considered.
Co-Chair Wilken informed that this bill would be held in Committee
and that a committee substitute would be drafted to contain a fee
restructuring to correct an inequity that was created with
legislation passed in 1998 and 1999. He assured the witness would
have an opportunity to comment on the updated version.
Co-Chair Wilken asked for an explanation of the one-time licensing
of a trailer that enters Alaska. He noted it has been suggested
that the fee for this licensing be increased.
CHUCK HOSACK, Deputy Director, Division of Motor Vehicles,
Department of Administration, testified via teleconference from an
offnet location and stated that a commercial trailer not registered
in Alaska could obtain a registration upon entering the State. This
registration, he pointed out is the same for in-State trailers and
costs ten dollars. He qualified that the "power unit" must be
legally registered in Alaska, either through a dual registration
that allows the owner to retain registration in their home state,
or through a commercial trip permit for a $350 fee. He noted the
fee for a dual registration is the same as the regular commercial
vehicle registration fees, based on the weight of the vehicle.
Co-Chair Wilken clarified the trailer could be legally registered
through a one-time fee but the vehicle towing it requires an Alaska
registration.
Mr. Hosack replied that either an Alaska registration or a trip
permit could be obtained for the power vehicle. He stated that
State law requires commercial vehicles to be registered as soon as
they begin commercial use in Alaska, which in the case of out-of-
state originators, is at the time the vehicle crosses the border
from Canada.
Co-Chair Wilken asked the registration fee for an eight-wheeled
tractor.
Mr. Hosack replied the annual fee is $321 for a commercial vehicle
weighing more than 18,000 pounds "unladen" and $248 for a vehicle
that weighs between 12,000 and 18,000 pounds.
Co-Chair Wilken asked for an explanation of the International
Registration Plan (IRP).
Mr. Hosack detailed that the IRP represents an agreement between
the Lower 48 states to allow commercial vehicles to travel between
states without obtaining separate registration or trip permits. He
stated the Plan was mandated by a federal transportation equity act
during the 1990s, although Alaska and Hawaii are exempt. He shared
that the Alaska Trucking Association and the National Governor's
Association researched whether Alaska would benefit from joining
the IRP and it was determined that Outside commercial vehicle
operators would benefit more than Alaskan operators and that the
cost would be high for the State to join and maintain the program.
As a result, he said, Alaska has chosen to not participate in the
IRP.
Co-Chair Wilken asked if a trade association within Alaska made
this determination.
Mr. Hosack affirmed. He noted that no federal or State statute
requires that Alaska join the IRP.
Co-Chair Wilken asked what entity would make the determination
whether to join the IRP if it were in the best interest of the
"people of Alaska".
Mr. Hosack replied that the State Administration could recommend
participation, although a statutory change would be required to
provide the pro-ration of registration fees.
Co-Chair Wilken commented that such statutory changes could be made
in this legislation if it were deemed to be in the best interest of
the State.
Mr. Hosack affirmed.
Senator Olson asked why the fee amounts were not even numbers,
rather than $168, $38, $494, $662, etc.
[Note: Mr. Hosack and Mr. Bannock were testifying from the same
offnet location and did not identify themselves as they spoke.]
Mr. Hosack or Mr. Bannock replied that the $35 fee for passenger
vehicles and $40 fee for pick-up trucks were initially collected
annually. He continued that the process was changed to a biannual
registration in 1997 and the fee payments were subsequently doubled
with a $1-per year reduction. He noted the Division is "looking to
unwind this and go with a simple round number".
Senator Olson did not see this reflected in other fees.
Mr. Hosack or Mr. Bannock replied those fees reflect a $10
increase.
Senator Taylor asked the cost to register commercial vehicles
weighing up to 12,000 pounds and commercial vehicles weighing up to
18,000 pounds.
Mr. Hosack or Mr. Bannock referenced Sections 2 and 3 of the bill,
which he explained differentiate between biannual and annual
commercial vehicle license fees. He stated that owners of
commercial vehicles have the option of registering vehicles either
annually or biannually.
Senator Taylor and Mr. Hosack or Mr. Bannock established the annual
and biannual registration fees for commercial vehicles of different
weights as proposed in this legislation.
Senator Taylor asked if commercial vehicles traveling into the
State had three options for registration: a trip permit, a dual
registration and an Alaska registration.
Mr. Hosack or Mr. Bannock corrected that two options are available,
clarifying that a dual registration would apply to a vehicle
currently registered in another state.
Senator Taylor asked the fee for a trailer registration.
Mr. Hosack or Mr. Bannock answered the bill proposed increasing the
one-time permanent registration fee for commercial trailers from
$10 to $20.
PAUL FUHES, representing Horizon Shipping Line, formally, CSX
Shipping Line, testified in Juneau in favor of the legislation. He
told of the difficulties of the previous annual trailer
registration process of tracking all trailers, plus the higher
costs to the Division of Motor Vehicles. He noted the registration
fees for commercial vehicles are "at least twice as high as any
other category" and that additional increases could not be
supported. He then spoke of the cumulative impact of the proposed
fee and tax increases under consideration this legislative session,
listing this bill, the proposal to amend the legislation relating
to studded tires to impose a tax on all tire purchases, and the
legislation proposing to increase the tax on fuel. He stressed that
the total of these increases would have a "tremendous impact" on
industry and warned this would increase the cost of imported goods
as well as the shipment costs of fish and other commodities.
Senator Taylor clarified the witness supports SB 103.
Mr. Fuhs affirmed and noted the company also supports the proposed
$2.50 tax on tire purchases.
Senator Olson questioned the witness' assertion that commercial
vehicle registration fees are twice as high.
Mr. Fuhs referenced the proposed fees for vehicles weighing more
than 12,000 pounds of $516 and $662 and stated that large
commercial tour buses have the next highest registration fee at
$300.
Co-Chair Wilken reminded that prior to 1998 trailers were licensed
annually with fees of $51 to $221 imposed based on weight. He
shared that this process was cumbersome, as registration renewal
stickers had to be attached to each trailer every year. In 1999, he
continued, the regulation process was changed and replaced with a
lifetime registration with a $10 fee for all commercial trailers.
He stressed this resulted in $1.6 million reduced revenues from
trailer registration fees, and subsequently the registration fees
for all commercial vehicles, regardless of whether the vehicle was
used to haul trailers, was increased 44 to 59 percent to neutralize
the change. He noted the commercial vehicle registration also
applies to leased cars, small pick-up trucks, etc.
Co-Chair Wilken gave an example of one trucking company that owned
1,711 trailers: in 1997 this company paid $288,691 in fees and in
1998, paid $17,000 in fees for the same number of trailers. He
characterized this as "the gift that kept on giving" with the
difference passed along to all other commercial vehicle owners. He
informed that a committee substitute would be drafted to "right
that wrong because it was clearly bad legislation, for the right
purposes with the wrong affect."
Mr. Fuhs noted that increased in fees on larger trucks was "worked
out with the teamsters," as " we do not drive our own trucks, we
have contracts with other companies." He stated that although the
trailer registration fees were reduced, the shipping company paid
the increased vehicle registration fees to the "truckers" through
renegotiated contracts.
Mr. Dillon added that the majority of the 30,000 commercial
vehicles in the State are rental cars and that the increased
registration fees computed to approximately $6 per vehicle. He was
aware of no complaints related to this increase.
Co-Chair Wilken requested the information regarding rental cars,
recalling this was a "selling tool" when the legislation was
considered in 1998. He asserted he remained disgruntled about the
changes made in that legislation.
Co-Chair Wilken ordered the bill HELD in Committee.
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