Legislature(1995 - 1996)
03/08/1996 09:15 AM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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 date." 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.