03/27/2014 09:00 AM Senate STATE AFFAIRS

          HB  19-PERM. MOT. VEH. REGISTRATION/TRAILERS                                                                      
                                                                                                                                
9:05:00 AM                                                                                                                    
CHAIR   DYSON   reconvened   the  meeting   and   announced   the                                                               
consideration  of  HB  19.  CSHB  19(RLS)(efd  am),  labeled  28-                                                               
LS0130\N.A, was before the committee.                                                                                           
                                                                                                                                
9:05:49 AM                                                                                                                    
DARRELL BREESE,  Staff, Representative  Bill Stoltze,  sponsor of                                                               
HB  19, stated  that  this legislation  provides  the option  for                                                               
Alaskans  to  obtain  permanent  registration  for  noncommercial                                                               
motor  vehicles   that  are   at  least   eight  years   old  and                                                               
noncommercial  trailers.  The  bill   is  modeled  after  similar                                                               
legislation that passed in Montana.  The sponsor chose the eight-                                                               
year benchmark because  motor vehicle tax rates  remain flat once                                                               
a vehicle is eight years old.                                                                                                   
                                                                                                                                
MR. BREESE highlighted that the  House Rules committee amended HB
 and added  the requirement for municipalities  and boroughs to                                                               
opt-in  to the  program by  passing  an ordinance.  He said  it's                                                               
important  to note  that  the Division  of  Motor Vehicles  (DMV)                                                               
takes  in about  $38 million  more in  registration fees  than it                                                               
needs to operate.                                                                                                               
                                                                                                                                
9:08:33 AM                                                                                                                    
REPRESENTATIVE  BILL STOLTZE,  Alaska State  Legislature, Juneau,                                                               
Alaska, speaking  as sponsor of  HB 19,  described the bill  as a                                                               
matter  of philosophy  as well  as  finance. He  said he  doesn't                                                               
dispute the  fiscal notes because  DMV has to be  conservative in                                                               
its estimates, but  he believes that a lot of  people are willing                                                               
to  spend more  money to  keep  from dealing  with government  so                                                               
often, particularly  on the issue  of noncommercial  trailers. He                                                               
noted that the  bill had been modulated  by municipality concerns                                                               
but he  thought that at  least the  Mat-Su Borough would  look at                                                               
the legislation seriously.                                                                                                      
                                                                                                                                
9:12:02 AM                                                                                                                    
SENATOR EGAN joined the committee.                                                                                              
                                                                                                                                
CHAIR DYSON asked if there  was discussion about someone who buys                                                               
a  permanently registered  motor  vehicle and  doesn't bother  to                                                               
change the registration.                                                                                                        
                                                                                                                                
REPRESENTATIVE  STOLTZE  replied  that  problem  exists  with  or                                                               
without the  bill and it's something  that DMV should be  able to                                                               
fix.                                                                                                                            
                                                                                                                                
MR. BREESE  pointed out that  Sections 2  and 4 address  the fact                                                               
that  the permanent  registration  is  nontransferable. When  the                                                               
vehicle sells  and the  seller sends in  the slip,  the permanent                                                               
registration expires.                                                                                                           
                                                                                                                                
CHAIR  DYSON asked  if an  organized municipality  would have  to                                                               
pass an ordinance before this would be effective.                                                                               
                                                                                                                                
REPRESENTATIVE STOLTZE confirmed that  the bill is permissive and                                                               
that a  municipality would need  to pass  an ordinance for  it to                                                               
take effect.                                                                                                                    
                                                                                                                                
CHAIR DYSON questioned the term "shall" on page 1, line 8.                                                                      
                                                                                                                                
REPRESENTATIVE STOLTZE  offered his  understanding that  it means                                                               
in conformance  with DMV  registration requirements.  He deferred                                                               
further explanation to DMV.                                                                                                     
                                                                                                                                
9:16:29 AM                                                                                                                    
SENATOR WIELECHOWSKI asked for an estimate of the fiscal impact.                                                                
                                                                                                                                
MR.  BREESE  replied the  current  fiscal  note is  indeterminate                                                               
because it's difficult to tell  which municipalities and boroughs                                                               
would pass an ordinance allowing the permanent registration.                                                                    
                                                                                                                                
SENATOR  WIELECHOWSKI  reviewed  the fiscal  note  dated  3/20/13                                                               
attached to CSHB 19(TRA), and asked if that had changed.                                                                        
                                                                                                                                
9:17:34 AM                                                                                                                    
MR. BREESE  replied that  fiscal note was  changed when  the bill                                                               
was  amended  with  the  opt-in   provision.  Not  knowing  which                                                               
municipalities will  opt in  makes is  difficult to  estimate how                                                               
many  vehicles will  be eligible  for permanent  registration. He                                                               
surmised that  the 3/20/13  fiscal note  would probably  apply if                                                               
all municipalities and boroughs opt in.                                                                                         
                                                                                                                                
SENATOR WIELECHOWSKI asked if the  bill would cause a fiscal loss                                                               
to municipalities or boroughs.                                                                                                  
                                                                                                                                
REPRESENTATIVE STOLTZE replied it's a local option.                                                                             
                                                                                                                                
SENATOR WIELECHOWSKI asked  if the state receives  100 percent of                                                               
vehicle   registration  fees   or   if  some   of   it  goes   to                                                               
municipalities.                                                                                                                 
                                                                                                                                
MR. BREESE explained  that 16 municipalities currently  add on to                                                               
the  state motor  vehicle registration  tax; the  rate varies  by                                                               
area  and  the age  of  the  vehicle.  Thus, it's  possible  that                                                               
municipalities  would see  a loss  if the  bill passes.  He noted                                                               
that  Section  7  allows  municipalities  to  set  motor  vehicle                                                               
registration  tax rates  for a  vehicle that  will be  registered                                                               
permanently.                                                                                                                    
                                                                                                                                
9:19:50 AM                                                                                                                    
SENATOR COGHILL joined the committee.                                                                                           
                                                                                                                                
SENATOR WIELECHOWSKI  asked what  the tax is  in Anchorage  so he                                                               
could get an idea of how much this would cost his community.                                                                    
                                                                                                                                
REPRESENTATIVE  STOLTZE  replied  it would  only  cost  Anchorage                                                               
money if the municipality makes the  decision to opt in. He noted                                                               
that Mayor Sullivan doesn't support the bill.                                                                                   
                                                                                                                                
MR. BREESE  added that the  Municipality of Anchorage adds  a $70                                                               
tax to  the motor  vehicle registration fee  for a  motor vehicle                                                               
that  is  eight years  or  older.  He  suggested that  DMV  could                                                               
probably provide an estimate using that figure.                                                                                 
                                                                                                                                
9:21:22 AM                                                                                                                    
SENATOR WIELECHOWSKI  calculated that  based on the  DMV estimate                                                               
that 478,000 vehicles  would qualify statewide and  the fact that                                                               
Anchorage  has 42  percent of  the  population, the  municipality                                                               
could lose $7 million per year if it opts in to the program.                                                                    
                                                                                                                                
MR. BREESE  agreed with the  estimate based on those  figures and                                                               
then reiterated that the exact math is only a best guess.                                                                       
                                                                                                                                
SENATOR GIESSEL pointed out that  if municipalities structure and                                                               
collect  the  tax  they  will  be 8  percent  ahead  because  DMV                                                               
currently  keeps  8  percent  of the  municipality's  tax  as  an                                                               
administrative fee.                                                                                                             
                                                                                                                                
MR. BREESE agreed.                                                                                                              
                                                                                                                                
CHAIR DYSON commented that the title was confusing.                                                                             
                                                                                                                                
REPRESENTATIVE  STOLTZE  clarified  that  this  applies  to  both                                                               
noncommercial motor vehicles and noncommercial trailers.                                                                        
                                                                                                                                
9:23:52 AM                                                                                                                    
SENATOR  WIELECHOWSKI  remarked  that   in  an  earlier  bill  he                                                               
introduced a  floor amendment to cut  DMV fees by 15  percent and                                                               
it was rejected. He asked if  the sponsor would support a similar                                                               
amendment to HB 19.                                                                                                             
                                                                                                                                
REPRESENTATIVE STOLTZE replied he doesn't  have a position on the                                                               
proposed amendment but it's not the focus of HB 19.                                                                             
                                                                                                                                
9:25:07 AM                                                                                                                    
AMY ERICKSON,  Director, Division  of Motor  Vehicles, Department                                                               
of Administration, offered to answer questions.                                                                                 
                                                                                                                                
CHAIR DYSON asked her expectation of the impact of HB 19 on DMV.                                                                
                                                                                                                                
MS. ERICKSON  replied DMV  doesn't expect an  impact per  se. DMV                                                               
already  offers a  permanent "P  tab" registration  to people  65                                                               
years  of age  and older  and thus  could issue  a P  tab to  any                                                               
municipality that opts in.                                                                                                      
                                                                                                                                
CHAIR DYSON  asked for an estimate  of reduced staff time  if DMV                                                               
had 5,000 fewer vehicles to register each year.                                                                                 
                                                                                                                                
MS.  ERICKSON  conceded  that the  division  hadn't  contemplated                                                               
that.                                                                                                                           
                                                                                                                                
9:26:23 AM                                                                                                                    
SENATOR  WIELECHOWSKI referenced  the  3/20/13  fiscal note  that                                                               
projects a  $22 million  loss in  2019. He  asked if  she agrees,                                                               
assuming that municipalities opt in.                                                                                            
                                                                                                                                
MS. ERICKSON confirmed that the  figures were that large when the                                                               
bill was mandatory for all municipalities.                                                                                      
                                                                                                                                
CHAIR DYSON asked her sense of the  language on page 1, line 8 of                                                               
version N.A.                                                                                                                    
                                                                                                                                
MS. ERICKSON replied it's no different than current statute.                                                                    
                                                                                                                                
9:27:25 AM                                                                                                                    
At ease.                                                                                                                        
                                                                                                                                
9:27:59 AM                                                                                                                    
CHAIR DYSON reconvened the meeting and solicited a motion.                                                                      
                                                                                                                                
9:28:02 AM                                                                                                                    
SENATOR GIESSEL  moved to report CSHB  19, labeled 28-LS0130\N.A,                                                               
from  committee  with  individual  recommendations  and  attached                                                               
fiscal note(s).                                                                                                                 
                                                                                                                                
9:28:18 AM                                                                                                                    
SENATOR  WIELECHOWSKI declared  a potential  conflict because  he                                                               
owns two vehicles that meet the bill requirement.                                                                               
                                                                                                                                
CHAIR  DYSON announced  that without  objection CSHB  19(RLS)(efd                                                               
am)  was   reported  from  the  Senate   State  Affairs  Standing                                                               
Committee.