Legislature(1995 - 1996)

04/20/1995 02:10 PM Senate L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
        SB  28 MOTOR VEHICLE REG FEE/EMISS'N INSPECTIONS                      
                                                                              
 CHAIRMAN KELLY called the Senate Labor and Commerce Committee                 
 meeting to order at 2:10 and announced SB 28 to be up for                     
 consideration.                                                                
                                                                               
 SENATOR DAVE DONLEY, sponsor, said SB 28 is designed to change the            
 I.M. testing program in Alaska from every year to every other year.           
 Almost all other states, including California, do it every other              
 year.                                                                         
                                                                               
 He said, at the request of Senator Rieger, there was a                        
 restructuring of DMV fees.  Currently, there is an additional $10             
 fee if you come to a DMV office in person when you could do it by             
 mail.  Senator Rieger thought the fees should be $10 with a rebate            
 if you use the mail. Personally, he said, he is very ambivalent               
 about this change and really wanted to just do away with the fee.             
 However, financially it is hard to do that since DMV has become               
 dependent on that extra revenue.                                              
                                                                               
 SENATOR DONLEY said the point of the legislation is to get bi-                
 annual testing which would be a real positive thing to do for the             
 people of Alaska.                                                             
                                                                               
 SENATOR KELLY asked if you still have to register every year, but             
 get the emission test every second year.  SENATOR DONLEY responded            
 that was correct.  He elaborated that there has been interest in              
 bi-annual registration, but the argument against it in past years             
 has been because we have to get I.M. tests every year and there is            
 the shock of having to pay twice as much every other year rather              
 than scheduling the payments out, so to speak.  He thought bi-                
 annual registration would save the state a lot of money in                    
 administrative costs, but this particular bill doesn't do that.               
                                                                               
 Number 93                                                                     
                                                                               
 JUANITA HENSLEY, Division of Motor Vehicles, explained the reason             
 they have not gone to bi-annual registration is because of programs           
 that have been added over the years, such as the yearly emissions             
 program and the collection of 13 communities' motor vehicle                   
 registration taxes which are collected on an annual basis.                    
 SENATOR SALO asked why you couldn't collect taxes on a bi-annual              
 basis.  MS. HENSLEY explained the statute says it has to be                   
 collected annually.                                                           
 SENATOR TORGERSON asked if insurance was required before you                  
 register your vehicle now.  MS. HENSLEY answered that is a                    
 requirement.                                                                  
                                                                               
 SENATOR TORGERSON asked what would bi-annual do to that.  MS.                 
 HENSLEY said they don't look at insurance verification.  They just            
 have the person sign a certified statement on the registration                
 saying they have insurance as required by law and they are expected           
 to keep it.                                                                   
                                                                               
 WALLY HOPKINS, Quick Lube Chief Executive Officer, said they are              
 the largest provider of emission testing in the state, employing 25           
 people in the Anchorage and Fairbanks emissions program.  The                 
 annual payroll for these people is $1.1 million.  In recent years             
 the violation of federal standard has fallen a maximum of three or            
 four times a year when Anchorage or Fairbanks has an extreme                  
 temperature inversion.                                                        
                                                                               
 Current programs operating in Anchorage and Fairbanks are recently            
 new, he explained.  They have invested over $1 million in                     
 facilities, equipment, and personnel to be able to provide these              
 services.  After a successful 90-day pilot program in Anchorage,              
 including a reregistration service, they hoped to open another                
 facility in Fairbanks within the next 30 days. He thought this was            
 a prime example of private enterprise and government working                  
 together.  With the reregistration process the state does not have            
 any cost and they are not charging their customers any fee for this           
 service.                                                                      
                                                                               
 At their facility in Anchorage they can test eight cars at a time             
 and they are gearing up to do 12 cars at a time.  The average wait            
 to get a vehicle tested there is less than 10 minutes.  They are              
 currently testing 22 1/2% of vehicles in Anchorage, according to              
 the number of registrations that are being mailed out to the public           
 in Anchorage.                                                                 
                                                                               
 He concluded saying that if this bill passes, it will eliminate 50%           
 or more of the jobs within the emission testing industry.  It will            
 put a hardship on the residents of Alaska who are subject to                  
 emissions testing by doubling the cost of repairs for failed                  
 vehicles.  It would put an extreme hardship on good businesses that           
 in good faith planned, developed, and provided emission testing               
 based on established programs.                                                
                                                                               
 SENATOR KELLY asked Ms. Hensley if there was a cap for an emission            
 inspection in statute.  She replied that she didn't have that                 
 answer, but knew that DMV collects $1 for the processing of those             
 certificates.  In this bill it would go up to $2.                             
                                                                               
 SENATOR KELLY asked if there was a set fee for emission inspections           
 at his shops.  MR. HOPKINS said they are charging $29.95 for the              
 inspection and they add the $10 registration fee at this time.  He            
 said he thought Anchorage had $45 as a cap.  Fairbanks has                    
 something like $65.                                                           
                                                                               
 Number 260                                                                    
                                                                               
 RON KING, Department of Environmental Conservation, said that state           
 statute and regulations do not limit what an inspection cost could            
 be.  Local statutes and ordinances in Anchorage and Fairbanks limit           
 what the facility can charge.  In Anchorage it is $40 and Fairbanks           
 has a $40 or $45 upper limit.                                                 
                                                                               
 SENATOR KELLY asked him how many vehicles are tested in Anchorage             
 every year.  MR. KING replied approximately 150,000 vehicles that             
 qualify for this program are in Anchorage and approximately 50,000            
 in Fairbanks.                                                                 
                                                                               
 SENATOR TORGERSON asked if he had a position on going to two years.           
 MR. KING replied that the department has been concerned with going            
 to an every other year inspection until the communities have                  
 attained the standard.  Based on the failure rates, however, and              
 working with DMV and Senator Donley, they believe they put together           
 a package that will enable them to convince EPA to approve an every           
 other year inspection.                                                        
                                                                               
 SENATOR KELLY commented that Mr. Hopkins has already recovered his            
 investment.  MR. HOPKINS disagreed and explained that it would take           
 about three years to amortize their investment.                               
                                                                               
 Number 291                                                                    
                                                                               
 SENATOR TORGERSON asked Mr. Hopkins what the average cost of fixing           
 an emission problem would be.  MR. HOPKINS replied the average cost           
 would be about $100 - $125 per repair.  He explained with an every            
 other year scenario, instead of 17% of vehicles failing (the figure           
 for now) there would about 35% or more.                                       
                                                                               
 SENATOR DONLEY said the last committee changed the effective date             
 to 1996 which would give businesses time to adjust to the new plan.           
 The Division would have some discretion to deal with problem                  
 automobiles.  They also have some authority, through regulation, to           
 address the cost issue.  He noted that after some review of                   
 correspondence, he was struck with the discrepancy between fees               
 charged for I.M. testing in Alaska versus other states.  Our fees             
 up here are twice as much.                                                    
                                                                               
 SENATOR KELLY said he liked the idea of bi-annual registration, but           
 he didn't think there would be time with 30 days left to go.  He              
 hoped legislation like that would be introduced at a later time.              
                                                                               
 SENATOR SALO said she was concerned because she had many                      
 constituents call her about the $10 fee and thought the bill just             
 flip flopped the issue around.  If the argument is revenue, and               
 having become dependent on that revenue, she thought that was                 
 negated by the fact that every one of those fees is going up $10.             
 She would like to see the elimination of that section unless there            
 is compelling information from the DMV that it's a good idea.                 
                                                                               
 SENATOR DONLEY commented that section is not related to the bi-               
 annual testing proposal.                                                      
                                                                               
 MS. HENSLEY said the original bill did do away with the $10 fee               
 proposal if you walked in as opposed to mailing in the                        
 registration.  Since they have gone to the $10 fee, mail has been             
 increased to total 60%.  Senator Rieger's amendment would increase            
 everyone's registration by $10 unless you mail it in and get a                
 rebate, with the exception on page 2, lines 9 - 12, which deletes             
 language that allowed them to waive the $10 fee if you are required           
 to be in the office to handle a transaction.                                  
                                                                               
 People who choose to register their cars at the I.M. stations are             
 not charged the $10 walk-in fee, although some of the stations                
 charge a $10 processing fee.  This bill makes it equitable for                
 everyone and will generate approximately $2.5 in general fund                 
 revenue which their department doesn't receive unless it is                   
 appropriated to them, MS. HENSLEY explained.                                  
                                                                               
 SENATOR KELLY asked if SB 28 encouraged smaller lines in the DMV              
 offices.  MS. HENSLEY agreed that it did.                                     
                                                                               
 SENATOR DONLEY said he didn't think the fees section of the bill              
 had an effect one way or the other on that.  He said SB 28 didn't             
 change the incentive to register by mail.  He said the committee              
 could delete the fee section and the status quo would remain that             
 the division would be assessing the $10.                                      
                                                                               
 SENATOR SALO said her intention would be to take out the section so           
 they would lose the ability to collect the $10.  She didn't think             
 people would automatically start going back to DMV instead of using           
 the mail.                                                                     
                                                                               
 MS. HENSLEY said offering a program with incentive to keep people             
 from standing in a line so you can give better service to someone             
 who has to be there is what they are seeking.  She said it was                
 working.                                                                      
                                                                               
 Number 435                                                                    
                                                                               
 SENATOR KELLY commented that even if this bill passes people could            
 still register their vessels at the various I.M. stations.  MS.               
 HENSLEY agreed that was correct.                                              
                                                                               
 SENATOR KELLY asked if DMV supported this bill.  MS. HENSLEY said             
 they support it as drafted.                                                   
                                                                               
 SENATOR DONLEY said one amendment was recommended by DEC to make a            
 different effective date to allow them to begin enforcement                   
 earlier.                                                                      
                                                                               
 SENATOR TORGERSON moved amendment #1.  There were no objections and           
 it was so ordered.                                                            
                                                                               
 SENATOR TORGERSON moved to pass CSSB 28 (L&C) from committee with             
 individual recommendations.  There were no objections and it was so           
 ordered.                                                                      

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