Legislature(1995 - 1996)

03/08/1996 09:15 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
       SENATE BILL NO. 226                                                     
       "An  Act relating  to  biennial  registration of  motor                 
  vehicles;      imposing biennial registration fees  on motor                 
  vehicles and   authorizing  a  scheduled  biennial municipal                 
  tax on motor   vehicles; relating to  fees for motor vehicle                 
  emissions control   programs; and providing for an effective                 
  Tom Williams, aide  to Senator Steve Frank gave testimony in                 
  support  of SB  226.   Senator  Frank  noted that  amendment                 
  number 1 had the effect of  bringing the IM program and  the                 
  biennial program into existence at the same time by delaying                 
  the  IM  program by  six months.   It  was requested  by the                 
  Department  but  has  taken  extra  time  to  implement  the                 
  biennial IM from last year's SB 28.  Mr. Williams said  that                 
  this amendment arose out of a request from the Department of                 
  Environmental Conservation  and with  the  agreement of  the                 
  Department of Public Safety, Division of Motor Vehicles.  As                 
  explained  in  the attached  letters  to the  amendment they                 
  believe that public confusion will be reduced and it will be                 
  less expensive if there is  a simultaneous implementation of                 
  biennial registration  with the biennial  emissions testing.                 
  The   amendment   tightens   the  title   and   delays   the                 
  implementation until 1 January 1997, making them concurrent.                 
  It also amends SB 28, last year's IM testing bill, to insure                 
  that they have  the authority to stagger  the implementation                 
  according to  the current  language in  SB 226 allowing  the                 
  biennial  registration  to  be  staggered   as  far  as  the                 
  implementation.  Co-chairman Halford asked about the  effect                 
  of the delay of the fiscal note.  Mr. Williams said that the                 
  Department had been requested to update their fiscal note to                 
  reflect  the  increase  in  revenues  as  a  result  of  the                 
  accelerated collections.   The accelerated collections  will                 
  be moved up by six   months.  There  will be roughly a  $9.8                 
  million  one time  windfall in  present  value terms  to the                 
  State of  Alaska.  Mr.  Williams said that there  would be a                 
  revised fiscal note  showing the time difference  should the                 
  amendment be approved.  Co-chairman  Halford asked about the                 
  statement in  the amendment packet on $150,000  for delay of                 
  SB 28.   Mr. Williams said that the $150,000  dealt with the                 
  software  changes  that  were  required  by the  various  IM                 
  stations and that was funded by DEC.  There is no additional                 
  cost  from DEC as a  result of this  amendment.  Those costs                 
  are  being  incurred right  now  under  SB 28  and  they had                 
  indicated there would be some additional costs if it was not                 
  made consistent.  However, no  new fiscal note was submitted                 
  on the original bill hearing.                                                
  Juanita Hensley,  Chief Driver  Services, Division  of Motor                 
  Vehicles was  invited to  join the  committee.   She advised                 
  that  the  Department  supported this  bill  along  with the                 
  amendments.  An updated fiscal note will be provided as soon                 
  as the committee  substitute is adopted.   She said a  draft                 
  fiscal  note  was prepared  and  is  in the  packet  for the                 
  original bill but when  the committee adopted a CS  they had                 
  no idea what  the impacts would be  on the Department and  a                 
  new  fiscal note could not be  prepared.  She said she would                 
  get a fiscal note to the committee as soon as possible  when                 
  she knew  what the final  version was.   Co-chairman Halford                 
  said the committee would  act on the amendment first  and if                 
  after they acted  and she could get the fiscal  note back to                 
  them they could  still move the  bill today.  Senator  Frank                 
  MOVED amendment number  1.   Senator Donley objected  saying                 
  that  some  limits   should  be  set  consistent   with  the                 
  philosophy of the bill on the  costs that were being charged                 
  for  IM.    Currently the  municipalities  of  Anchorage and                 
  Fairbanks were  charging  $10 for  the annual  certificates.                 
  They will want to  go to $20 for the  biennial certificates.                 
  Under  this  bill $2  is discounted  for those  who register                 
  their motor vehicles biennially.   He said he would  be much                 
  more inclined to support this bill if a cap of $18  could be                 
  set for the municipalities  to charge so they do  not double                 
  their  fees.  Without  that it  is kind  of difficult  to go                 
  along  with delaying the  IM provisions again.   People were                 
  disappointed  it  took as  long as  it  did.   Senator Frank                 
  indicated he  and Senator  Donley had  been discussing  this                 
  matter  and  that he  shared  this  concern.   However,  his                 
  reluctance in putting  in the statute  a specific amount  is                 
  because these  issues should be  hashed out  locally by  the                 
  administration and  assemblies who  will have to  administer                 
  the programs.   The administration of the  municipality will                 
  have  to have  public hearings  and defend  it's request  to                 
  increase the fees.   It will be a dynamic  public process to                 
  decide how much to be spent and how  much will be justified.                 
  Perhaps some legislative intent could be sent along.                         
  Co-chairman Halford asked  about a general statement  of the                 
  bill and that  it could state that the fee  could not exceed                 
  the cost of implementing the program.   This is not intended                 
  to be  a  revenue  generator.   Senators  Frank  and  Donley                 
  concurred.     Senator  Frank  said  perhaps   a  conceptual                 
  amendment could be  prepared.   Senator Rieger commented  on                 
  the choice recommended by DEC to delay  the old SB 28 to the                 
  time of implementation of SB 226.  Is there a reason to hold                 
  this off until January 1?  They should  both come into being                 
  at the same  time October 1 or  September 1.  How  much time                 
  would it  take for adoption  and getting all  this together?                 
  Juanita Hensley explained that  DEC implementations will not                 
  be  ready  by July.     The  Division has  already  made the                 
  changes available and would have been able to do a voluntary                 
  biennial  registration.    Coordinating   the  two  is  very                 
  important because it will benefit  the public.  Registration                 
  renewal mail-outs would have  to be ready to go in August to                 
  be ready for 1 October.                                                      
  Senator Rieger said he understood  DEC would be implementing                 
  SB 28 on  1 July and now  they would actually be  getting an                 
  extra three months.   How would it be harder for  them to be                 
  getting something  ready for three  months later?    Juanita                 
  Hensley  said  that  she  could  not  speak for  DEC.    She                 
  testified as to  the fiscal note  numbers that she would  be                 
  submitting.  The  first year would,  if it had an  effective                 
  date  of 1  January, show  a revenue  of approximately  $2.5                 
  million and FY 98 would be $5.85  million.  FY 99 through FY                 
  02  shows  a loss  of revenue  of  $580,000. for  each year.                 
  There would be  no operational costs  for FY 97 because  the                 
  existing  funds that  were appropriated  in SB  28  would be                 
  used.    FY 98  through  the  following years  would  show a                 
  reduction of operating costs to the Division  of $64,000 and                 
  that would be in the mailing of the registrations.                           
  Co-chairman Halford  said the question before  the committee                 
  was the adoption of the amendment.   The remaining questions                 
  are the delay  of one versus  acceleration of the other  and                 
  Senator  Donley's  question on  recovery  of cost.   Senator                 
  Frank said that it was better to take the January 1 deadline                 
  and not argue  about how long implementation  would take and                 
  then have the bill not get passed.                                           
  Senator Halford said that  without objection Senator Frank's                 
  amendment #1 would be ADOPTED.                                               
  Senator Donley  offered the following  conceptual amendment:                 
  "That the State  and local governments could not charge more                 
  for the  inspection fee  than the  programs actually  cost".                 
  Co-chairman  Halford   noted  "...than  the   cost  of   the                 
  administration  of the  program".  The  debate would  be the                 
  direct costs  or the  direct and  indirect  costs.   Juanita                 
  Hensley re-iterated that  this was a  cost that DEC had  and                 
  DMV did not get involved.   Co-chairman Halford did not feel                 
  that it was unreasonable to have  it be a revenue generator.                 
  Co-chairman Halford said  that there  being no objection  to                 
  Senator Donley's conceptual amendment it would be drafted as                 
  part of the Finance CS and  essentially is intended to treat                 
  municipal and State governments the same way.                                
  Senator Phillips MOVED amendment  number 2.  He said  that a                 
  few  years   ago  a  revision   to  Title   28  was   passed                 
  inadvertently  charging  individuals  more money  than  they                 
  should have been charged and there  were a lot of complaints                 
  and this  should correct  the matter.   Co-chairman  Halford                 
  said that the amendment was not changing the numbers, rather                 
  it was changing the words.  Juanita Hensley said DMV was not                 
  in opposition  to the  amendment.   She did  say that  there                 
  would be  a portion of  public complaints.   Some discussion                 
  between  members  regarding   public  complaints  to   their                 
  respective  offices   but  in   general  they  agreed   that                 
  complaints have died  off to some extent.   Senator Phillips                 
  WITHDREW amendment number 2.                                                 
  Senator Rieger still felt that  amendment number 2 should be                 
  adopted.    Co-chairman  Halford  said  that  there  was  no                 
  substantive effect of  what was being  done.  Senator  Frank                 
  felt that  the amendment would only cause more confusion and                 
  strongly objects to  amendment number 2.   He said the  fees                 
  were being  changed from  $35 for  one year  to $68 for  two                 
  years.   Co-chairman Halford asked  for a vote  on amendment                 
  number 2 as drawn by Senator Phillips and offered by Senator                 
  Rieger and it was voted to be WITHDRAWN.                                     
  Co-chairman Halford said that  a fiscal note of the  bill as                 
  amended had  been explained  to  the committee  and that  it                 
  would  show in  operating zero  for 1997; $64,000  for 1998;                 
  $64,000  for  1999;  $2.5  million;  $5.8 million  and  then                 
  $580,000 going forward on the gain/loss side.  As long as it                 
  is understood  exactly what  it was  going to be  it can  be                 
  assumed  the committee is adopting that fiscal note with the                 
  bill.    Juanita Hensley  advised  that the  information was                 
  correct and  that the  fiscal note  would be  made available                 
  today.  Co-chairman Halford  said it could go with  the bill                 
  to be read across on the floor today.                                        
  Senator Frank MOVED CSSB 226 (FIN) and without objections it                 
  was   REPORTED    OUT   of    committee   with    individual                 
  recommendations and the explained fiscal note.                               

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