Legislature(2011 - 2012)BUTROVICH 205

01/27/2011 09:00 AM Senate STATE AFFAIRS


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 18 DURATION OF REGULAR LEGISLATIVE SESSIONS TELECONFERENCED
Heard & Held
*+ SB 26 FEE/TAX EXEMPTION FOR CERTAIN VEHICLES TELECONFERENCED
Heard & Held
Bills Previously Heard/Scheduled
= SB 31 COUNTING OF WRITE-IN VOTES
Moved CSSB 31(STA) Out of Committee
= SB 33 DISPOSITION OF SERVICE MEMBERS' REMAINS
Moved CSSB 33(STA) Out of Committee
          SB 26-FEE/TAX EXEMPTION FOR CERTAIN VEHICLES                                                                      
                                                                                                                              
9:40:04 AM                                                                                                                    
CHAIR WIELECHOWSKI announced consideration of SB 26.                                                                            
                                                                                                                                
GENEVEIVE  WOJTUSIK, aide  to  Senator  Lesil McGuire,  explained                                                               
that SB 26 would exempt  from motor vehicle registration fees and                                                               
taxes  those vehicles  fueled solely  by  alternative fuels.  She                                                               
stated this  is a progressive  approach to  presenting incentives                                                               
to the  public for  using vehicles  that utilize  new technology.                                                               
Other benefits are  improving air quality, and  the potential for                                                               
new jobs.  She stated that  the availability of  plug-in vehicles                                                               
will  be  expanding   rapidly,  and  Alaska  should   be  in  the                                                               
forefront.                                                                                                                      
                                                                                                                                
9:42:03 AM                                                                                                                    
SENATOR PASKVAN  moved to adopt  work draft  committee substitute                                                               
(CS) for SB 26, labeled 27-LS0291\B, as the working document.                                                                   
                                                                                                                                
9:43:23 AM                                                                                                                    
CHAIR WIELECHOWSKI objected for purposes of discussion.                                                                         
                                                                                                                                
MS. WOJTUSIK  explained the  changes in the  CS, which  include a                                                               
change in the title and a definition of alternative fuels.                                                                      
                                                                                                                                
CHAIR WIELECHOWSKI asked about the fiscal note.                                                                                 
                                                                                                                                
9:44:13 AM                                                                                                                    
WHITNEY   BREWSTER,  Director,   Division   of  Motor   Vehicles,                                                               
Department of Administration, Anchorage,  AK, spoke to the fiscal                                                               
note, which  requests $20,000 for  programming to modify  the DMV                                                               
database to  capture information regarding fuel  type. She stated                                                               
they are not able to determine  what the loss of revenue would be                                                               
to the  state, because the  information on  type of fuel  used is                                                               
not currently  captured. She  believes that  the loss  of revenue                                                               
will be small  at first, but will increase  as alternative fueled                                                               
cars  gain popularity.  She  noted that  DMV  does collect  motor                                                               
vehicle registration  tax, which  is currently $100  per vehicle.                                                               
Beyond  that, the  DMV also  collects motor  vehicle registration                                                               
tax  on  behalf  of  local  municipalities.  They  are  currently                                                               
collecting  for  16 municipalities.  The  DMV  does retain  eight                                                               
percent  of  the  motor vehicle  registration  tax  collected  on                                                               
behalf of  municipalities, but the rest  of those fees go  to the                                                               
municipalities.                                                                                                                 
                                                                                                                                
CHAIR  WIELECHOWSKI  asked  if  municipal  tax  is  collected  in                                                               
addition to state tax.                                                                                                          
                                                                                                                                
MS.  BREWSTER responded  that municipalities  set  their own  tax                                                               
through  ordinance,  and  that the  $100  registration  fee  goes                                                               
directly to the general fund.                                                                                                   
                                                                                                                                
SENATOR PASKVAN asked  if the DMV does collect sales  tax on auto                                                               
sales.                                                                                                                          
                                                                                                                                
MS BREWSTER  responded that  the DMV  does not  currently collect                                                               
sales tax. Municipalities set fees  based on the year of vehicle.                                                               
The basic $100  registration fee goes to the  state general fund,                                                               
and the  tax collected based on  year of the vehicle  goes to the                                                               
municipality.                                                                                                                   
                                                                                                                                
9:50:06 AM                                                                                                                    
CHAIR WIELECHOWSKI asked  if the department has a  position on SB
18.                                                                                                                             
                                                                                                                                
MS. BREWSTER responded that the department is neutral.                                                                          
                                                                                                                                
SENATOR  WIELECHOWSKI removed  his objection  and announced  that                                                               
version B was before the committee.                                                                                             
                                                                                                                                
SENATOR MEYER asked if hybrid cars could be added.                                                                              
                                                                                                                                
MS. BREWSTER replied that they could.                                                                                           
                                                                                                                                
CHAIR  WIELECHOWSKI  expressed  a   desire  to  identify  the  16                                                               
communities that would  be affected to see what  the impact would                                                               
be.                                                                                                                             
                                                                                                                                
SENATOR MEYER  asked how  many hybrid  vehicles are  currently in                                                               
use in Alaska.                                                                                                                  
                                                                                                                                
MS.  BREWSTER  responded  that there  are  presently  1,560  Ford                                                               
Fusions registered  with the  DMV. Since there  are two  types of                                                               
Ford Fusions and only one type  is a hybrid, it is impossible for                                                               
the DMV to know how many hybrid vehicles are in use.                                                                            
                                                                                                                                
SENATOR PASKVAN asked if passing  this just for vehicles that are                                                               
on the road today, would result in a $200,000 loss to the state.                                                                
                                                                                                                                
MS. WOJTUSIK responded that SB  26 applies only to cars purchased                                                               
after October 1, 2010.                                                                                                          
                                                                                                                                
CHAIR WIELECHOWSKI  noted that  very few  cars would  be eligible                                                               
right now,  and stated that he  would like to see  a cost-benefit                                                               
analysis.                                                                                                                       
                                                                                                                                
9:55:08 AM                                                                                                                    
CHAIR WIELECHOWSKI opened public testimony.                                                                                     
                                                                                                                                
DANIEL  R.  FRAKES,  Manager,  General  Motors,  stated  that  GM                                                               
supports SB 26.  He noted that hybrid and  plug-in tax incentives                                                               
have  played a  key role  in  the development  and acceptance  of                                                               
alternative technology vehicles. As  with any new technology, the                                                               
first generation  tends to be  expensive, and consumers  are wary                                                               
of  anything unfamiliar,  so incentives  help them  overcome this                                                               
anxiety. Once subsequent generations  are developed, economies of                                                               
scale  take effect,  and incentives  can be  phased out.  Current                                                               
incentives  include   incentives  towards  the   purchase  price,                                                               
waivers  for  state  income tax,  license  and  registration  fee                                                               
exemptions,  and infrastructure  incentives for  the installation                                                               
of new technology.                                                                                                              
                                                                                                                                
9:58:11 AM                                                                                                                    
CHAIR WIELECHOWSKI  asked if Alaska  is one of only  three states                                                               
that don't have incentives.                                                                                                     
                                                                                                                                
MR. FRAKES said that is true.  This takes into account hybrids as                                                               
well as electric  vehicles. He noted that the  Chevrolet Volt was                                                               
launched in Dec 2010 to  selected markets, and GM announced today                                                               
that it  will be available nationally  by the end of  2011, ahead                                                               
of  the  original  schedule.  He  said  that  incentives  on  the                                                               
federal, state, and  local level are a win-win  across the board,                                                               
and that  they help customers  adapt to new technology,  help our                                                               
country,  states and  cities get  plug-in ready,  and help  lower                                                               
costs to industry.                                                                                                              
                                                                                                                                
SENATOR  PASKVAN asked  what phase-out  criteria  might apply  to                                                               
incentives.                                                                                                                     
                                                                                                                                
MR. FRAKES  responded that  they have  seen programs  starting to                                                               
phase out in 2014 - 2015.                                                                                                       
                                                                                                                                
SENATOR   MEYER  asked   if   incentives   are  offered   because                                                               
alternative fuel cars  cost more. For instance, what  is the cost                                                               
of a Volt?                                                                                                                      
                                                                                                                                
MR.  FRAKES stated  that cars  with hybrid  systems, such  as the                                                               
Volt,  are  about  three  to four  thousand  above  a  comparably                                                               
equipped vehicle. The base price of  a volt is about $41,000, and                                                               
with the  federal incentives  that are  available the  price goes                                                               
down to about $33,000.                                                                                                          
                                                                                                                                
10:05:08 AM                                                                                                                   
SENATOR MEYER asked how electric cars hold up in cold weather.                                                                  
                                                                                                                                
MR. FRAKES responded that both  hot and cold temperature extremes                                                               
affect batteries, and that both  range and driving conditions are                                                               
affected. GM does offer an 8-year warranty on the battery pack.                                                                 
                                                                                                                                
CHAIR WIELECHOWSKI asked if the range diminishes over time.                                                                     
                                                                                                                                
MR.  FRAKES  answered  that  as  a  battery  is  used,  its  life                                                               
diminishes, which is why the 8-year warranty period exists.                                                                     
                                                                                                                                
CHAIR WIELECHOWSKI asked why an  insurance discount is offered in                                                               
forty-seven states,  with Alaska being  one of three where  it is                                                               
not offered.                                                                                                                    
                                                                                                                                
MR. FRAKES said he didn't know  why, but would try to provide the                                                               
information.                                                                                                                    
                                                                                                                                
CHAIR WIELECHOWSKI closed public testimony and held SB 26 in                                                                    
committee.                                                                                                                      

Document Name Date/Time Subjects
SB 18 Sectional.pdf SSTA 1/27/2011 9:00:00 AM
Duration of Regular Legislative Sessions
SB 18
SB 18 Legislative Research Report 90 Day Session.pdf SSTA 1/27/2011 9:00:00 AM
Duration of Regular Legislative Sessions
SB 18
SB 18 Legislation Passed 1979-2010.pdf SSTA 1/27/2011 9:00:00 AM
Duration of Regular Legislative Sessions
SB 18
SB 18 Interim Meetings.pdf SSTA 1/27/2011 9:00:00 AM
Duration of Regular Legislative Sessions
SB 18
SB 18 Sponsor Statement.pdf SSTA 1/27/2011 9:00:00 AM
Duration of Regular Legislative Sessions
SB 18
SB 18 Fiscal Note.pdf SSTA 1/27/2011 9:00:00 AM
Duration of Regular Legislative Sessions
SB 18
SB 18 Candidates 2000-2010.pdf SSTA 1/27/2011 9:00:00 AM
Duration of Regular Legislative Sessions
SB 18
SB 18 Session Days by State.pdf SSTA 1/27/2011 9:00:00 AM
SB 18 History Length of Sessions.pdf SSTA 1/27/2011 9:00:00 AM
Duration of Regular Legislative Sessions
SB 18
SB 18 History Length of Sessions CHART.pdf SSTA 1/27/2011 9:00:00 AM
Duration of Regular Legislative Sessions
SB 18
SB 18 House 90-Day Evaluation Survey.PDF SSTA 1/27/2011 9:00:00 AM
Duration of Regular Legislative Sessions
SB 18
SB 26 Committee Substitute.PDF SSTA 1/27/2011 9:00:00 AM
Fee/Tax Exemption for Certain Vehicles
SB 26
SB 26 Fiscal Note.pdf SSTA 1/27/2011 9:00:00 AM
Fee/Tax Exemption for Certain Vehicles
SB 26
SB 26 Sponsor Statement.PDF SSTA 1/27/2011 9:00:00 AM
Fee/Tax Exemption for Certain Vehicles
SB 26
SB 26 Ford Motor Company Presentation.PDF SSTA 1/27/2011 9:00:00 AM
Fee/Tax Exemption for Certain Vehicles
SB 26
SB 18 Opposing Document - fax Lynn Willis.pdf SSTA 1/27/2011 9:00:00 AM
Duration of Regular Legislative Sessions
SB 18
SB18 Voter_Turnout 1976-2010.pdf SSTA 1/27/2011 9:00:00 AM
Duration of Regular Legislative Sessions
SB 18