Legislature(1993 - 1994)

02/08/1994 08:00 AM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
             HOUSE STATE AFFAIRS STANDING COMMITTEE                            
                        February 8, 1994                                       
                            8:00 a.m.                                          
  MEMBERS PRESENT                                                              
  Representative Al Vezey, Chairman                                            
  Representative Pete Kott, Vice Chairman                                      
  Representative Bettye Davis                                                  
  Representative Gary Davis                                                    
  Representative Harley Olberg                                                 
  Representative Jerry Sanders                                                 
  Representative Fran Ulmer                                                    
  MEMBERS ABSENT                                                               
  COMMITTEE CALENDAR                                                           
  HB 328:   "An Act relating to motor vehicle registration                     
             and  registration fees; to fees for drivers                       
             licenses and permits; and providing for an                        
             effective date."                                                  
             HEARD AND HELD TO TIME UNCERTAIN                                  
  HB 363:   "An Act repealing an additional fee for motor                      
             vehicle registration not conducted by mail."                      
             HEARD AND HELD TO TIME UNCERTAIN                                  
  HCR 25:    Relating to a state materials exchange.                           
             PASSED OUT OF COMMITTEE                                           
  HB 240:   "An Act allowing gaming devices on ferries."                       
             HEARD AND HELD TO TIME UNCERTAIN                                  
  HB 345:   "An Act relating to the preservation of public                     
             facilities and to appropriations for annual                       
             maintenance and repair, periodic renewal and                      
             replacement, and construction of public                           
             NOT HEARD                                                         
  WITNESS REGISTER                                                             
  REP. TERRY MARTIN                                                            
  Alaska State Legislature                                                     
  Alaska State Capital, Room 411                                               
  Juneau, AK  99811                                                            
  Phone:  465-3783                                                             
  Position Statement:  Sponsor of HB 328.                                      
  JANE BUTLER, Staff                                                           
  REPRESENTATIVE PETE KOTT                                                     
  Alaska State Capitol, Room 409                                               
  Juneau, AK  99811                                                            
  Phone:  465-3777                                                             
  Position Statement:  Testified in favor of HB 328.                           
  JUANITA HENSLEY                                                              
  Division of Motor Vehicles                                                   
  Department of Public Safety                                                  
  P.O. Box 20020                                                               
  Juneau, AK  99802                                                            
  Phone:  465-2650                                                             
  Position Statement:  Testified in favor of HB 328 and HB
  REPRESENTATIVE CARL MOSES                                                    
  Alaska State Legislature                                                     
  Alaska State Capitol, Room 204                                               
  Juneau, AK  99811                                                            
  Phone:  465-4451                                                             
  Position Statement:  Sponsor of HB 240.                                      
  DONALD STOLWORTHY, Director                                                  
  Division of Charitable Gaming                                                
  Department of Revenue                                                        
  P.O. Box 110440                                                              
  Juneau, AK  99811                                                            
  Phone:  465-2229                                                             
  Position Statement:  Answered questions on HB 240.                           
  PREVIOUS ACTION                                                              
  BILL:  HB 328                                                                
  SHORT TITLE: BIENNIAL VEHICLE REGISTRATION                                   
  SPONSOR(S): REPRESENTATIVE(S) MARTIN,BARNES,Phillips,B.Davis                 
  JRN-DATE     JRN-PG               ACTION                                     
  01/03/94      2013    (H)   PREFILE RELEASED                                 
  01/10/94      2013    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  01/10/94      2013    (H)   STATE AFFAIRS, FINANCE                           
  01/13/94      2054    (H)   COSPONSOR(S):  B. DAVIS                          
  01/22/94              (H)   STA AT 08:00 AM CAPITOL 102                      
  01/22/94              (H)   MINUTE(STA)                                      
  01/29/94              (H)   MINUTE(STA)                                      
  02/08/94              (H)   STA AT 08:00 AM CAPITOL 102                      
  BILL:  HB 363                                                                
  SPONSOR(S): REPRESENTATIVE(S) KOTT,B.Davis                                   
  JRN-DATE     JRN-PG               ACTION                                     
  01/11/94      2033    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  01/11/94      2033    (H)   STATE AFFAIRS, FINANCE                           
  01/13/94      2056    (H)   COSPONSOR(S):  B. DAVIS                          
  01/29/94              (H)   STA AT 08:00 AM CAPITOL 102                      
  01/29/94              (H)   MINUTE(STA)                                      
  01/29/94              (H)   MINUTE(STA)                                      
  01/29/94              (H)   MINUTE(STA)                                      
  02/08/94              (H)   STA AT 08:00 AM CAPITOL 102                      
  BILL:  HCR 25                                                                
  SPONSOR(S): REPRESENTATIVE(S)                                                
  JRN-DATE     JRN-PG               ACTION                                     
  01/10/94      2005    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  01/10/94      2005    (H)   LABOR & COMMERCE, STATE AFFAIRS                  
  01/14/94      2082    (H)   COSPONSOR(S):  GREEN                             
  01/21/94      2126    (H)   COSPONSOR(S):  MENARD                            
  01/24/94      2139    (H)   COSPONSOR(S):  NORDLUND                          
  01/26/94      2159    (H)   COSPONSOR(S):  B. DAVIS                          
  01/27/94              (H)   L&C AT 03:00 PM CAPITOL 17                       
  01/27/94              (H)   MINUTE(L&C)                                      
  01/31/94      2201    (H)   L&C RPT  CS(L&C) 6DP                             
  01/31/94      2201    (H)   DP:  HUDSON, PORTER, SITTON,                     
  01/31/94      2201    (H)   DP:  WILLIAMS, GREEN                             
  01/31/94      2201    (H)   -ZERO FISCAL NOTE (DEC) 1/31/94                  
  02/08/94              (H)   STA AT 08:00 AM CAPITOL 102                      
  BILL:  HB 240                                                                
  SHORT TITLE: GAMBLING DEVICES ON STATE FERRIES                               
  SPONSOR(S): REPRESENTATIVE(S) MOSES,Bunde                                    
  JRN-DATE     JRN-PG               ACTION                                     
  03/19/93       708    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  03/19/93       708    (H)   TRANSPORTATION, STATE AFFAIRS,                   
  04/01/93              (H)   TRA AT 05:00 PM CAPITOL 17                       
  04/01/93              (H)   MINUTE(TRA)                                      
  04/05/93       977    (H)   TRA RPT  1DP  3NR                                
  04/05/93       978    (H)   DP: G.DAVIS                                      
  04/05/93       978    (H)   NR: MACKIE, MULDER, MENARD                       
  04/05/93       978    (H)   -FISCAL NOTE  (DOT)  4/5/93                      
  04/05/93       978    (H)   REFERRED TO STATE AFFAIRS                        
  02/08/94              (H)   STA AT 08:00 AM CAPITOL 102                      
  BILL:  HB 345                                                                
  SPONSOR(S): REPRESENTATIVE(S) JAMES                                          
  JRN-DATE     JRN-PG               ACTION                                     
  01/07/94      2018    (H)   PREFILE RELEASED                                 
  01/10/94      2018    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  01/10/94      2018    (H)   STATE AFFAIRS, FINANCE                           
  01/25/94              (H)   STA AT 08:00 AM CAPITOL 102                      
  01/25/94              (H)   MINUTE(STA)                                      
  02/08/94              (H)   STA AT 08:00 AM CAPITOL 102                      
  ACTION NARRATIVE                                                             
  TAPE 94-8, SIDE A                                                            
  Number 000                                                                   
  CHAIR AL VEZEY called the meeting to order at 8:00 a.m.,                     
  announcing that a quorum was present.  Members present were                  
  REPRESENTATIVES KOTT, SANDERS, G. DAVIS,  B. DAVIS, and                      
  ULMER.  REPRESENTATIVE OLBERG entered at 8:01 a.m.                           
  HB 345 was postponed by request of the sponsor,                              
  REPRESENTATIVE JEANNETTE JAMES.  CHAIR VEZEY opened the                      
  floor with HB 328 and a work draft of the committee                          
  substitute to HB 328 was handed out.                                         
  HB 328 - BIENNIAL VEHICLE REGISTRATION                                       
  Number 046                                                                   
  REPRESENTATIVE TERRY MARTIN, sponsor of HB 328, began with                   
  an overview of the committee substitute to HB 328.  He                       
  thanked the Department of Finance and the Department of                      
  Environmental Conservation (DEC) for their contributions to                  
  the revised version of HB 328.  There is now a savings of                    
  $300,000 dollars to the general fund which will be made up                   
  by fees.  Changes include the date, the addition of picking                  
  up stalled or trashed vehicles, and the DEC will be the                      
  major enforcer of emissions control.  Cities do not like the                 
  idea of collecting their own taxes, however, it will add to                  
  the efficiency of the registration process.  REPRESENTATIVE                  
  MARTIN noted Anchorage as an example.                                        
  JANE BUTLER, representing REPRESENTATIVE KOTT, explained the                 
  changes to HB 328.  Sections 1-5 have no changes.  Section 6                 
  adds a motor vehicle pollution fee, while deleting the                       
  annual Motor Vehicle Registration Tax (MVRT).  The MVRT will                 
  be transferred to municipalities.  Sections 7-11 have no                     
  changes.  Section 12 is corrected on page 6(15) to have no                   
  increase in fee.  Section 13 allows the Division of Motor                    
  Vehicles (DMV) to collect the emission control program fee,                  
  which will be transferred to the DEC.  Section 14 allows                     
  fees to be paid with a credit card.  Section 15 is a                         
  conforming amendment to Section 16 having the municipalities                 
  impose the tax instead of the DMV.  Section 16 changes the                   
  title from the DMV to the municipalities.  The fee schedule                  
  is the same, but the reference to the DMV to collect the tax                 
  is deleted, page 8(c).  Section 18 refers to the DEC                         
  administering the emission control program.  DEC is to                       
  determine enforcement, regulation, and price of the program.                 
  Section 18(f) establishes a motor vehicle emissions control                  
  account in the general fund which the Environmental                          
  Protection Agency is in favor of.  Section 19 deletes AS                     
  28.10.108(b) by request of the DMV because it is no longer                   
  applicable to the current registration process.  AS                          
  28.10.431 will be repealed and a new statute will be enacted                 
  with the municipalities to cover the tax collection change.                  
  Section 20 allows the registration fee to be collected at                    
  the time of registration or renewal.  Section 20(b) begins a                 
  start up fee on July 1, 1994, through December 1, 1994,                      
  which will cost $2 for six months before the biennial                        
  process begins.  This fee will provide DEC with a start up                   
  fund to implement the emissions program.  DEC's fee for                      
  biennial registration, which is yet to be determined, will                   
  begin on January 1, 1995.                                                    
  Number 208                                                                   
  REP. FRAN ULMER inquired if the transfer of the tax to the                   
  municipalities would really be more efficient.  The increase                 
  of paperwork was as concern.                                                 
  Number 225                                                                   
  MS. BUTLER could not answer the question and deferred it to                  
  REPRESENTATIVE MARTIN to answer in later testimony.                          
  Number 237                                                                   
  CHAIR VEZEY noted the direction of HB 328 was to remove the                  
  DMV from the collection of municipal property taxes.  He                     
  asked if the possibility of collecting taxes on a biennial                   
  basis was explored.                                                          
  MS. BUTLER believed not.  The main accomplishment of HB 328                  
  was to separate the DMV from the MVRT.                                       
  Number 250                                                                   
  CHAIR VEZEY asked if the vehicle registration fees remained                  
  unchanged and if they still are one and one-half times the                   
  current rate.   He noted the change to allow the DMV to                      
  collect a $2 emissions fee for the rest of the calendar                      
  MS. BUTLER replied the fee begins July 1, 1994.                              
  Number 257                                                                   
  CHAIR VEZEY emphasized the July 1, 1994, start up date and                   
  the effective date in Section 22 would be nullified without                  
  a two-thirds vote by both houses.                                            
  Number 261                                                                   
  MS. BUTLER stated the DEC expects the administration costs                   
  for the emission control program will be covered by a fee of                 
  approximately $8 every two years.                                            
  Number 263                                                                   
  CHAIR VEZEY questioned why the tax rate for vehicles is                      
  included in HB 328, if the DMV is getting out of collecting                  
  MS. BUTLER replied the original information was located in                   
  AS 28 which is under DMV.  The information is being repealed                 
  from AS 28 to be in AS 29 under a municipalities statute.                    
  Number 299                                                                   
  CHAIR VEZEY asked who would be collecting the taxes under                    
  Section 16.                                                                  
  MS. BUTLER responded the municipalities would be.                            
  Number 304                                                                   
  CHAIR VEZEY stated he understood why a state would need a                    
  statute if it needed to collect taxes, however, he did not                   
  understand why the legislature would need to be involved in                  
  the Anchorage municipality.                                                  
  Number 310                                                                   
  REPRESENTATIVE GARY DAVIS asked MS. BUTLER which of the fees                 
  or taxes are new to the municipality of Anchorage.                           
  Number 313                                                                   
  MS. BUTLER noted the MVRT under Section 16 is exactly the                    
  same as what is currently being charged.                                     
  REPRESENTATIVE G. DAVIS believed Section 16 would be new.                    
  MS. BUTLER pointed out to REPRESENTATIVE G. DAVIS that the                   
  MVRT has always been collected.                                              
  REPRESENTATIVE PETE KOTT stated there may be reason to                       
  remove Section 16 from HB 328 since there is not a fee                       
  REPRESENTATIVE BETTYE DAVIS requested the testimony of                       
  REPRESENTATIVE MARTIN on HB 328.                                             
  Number 341                                                                   
  REPRESENTATIVE ULMER highlighted the principle purposes of                   
  HB 328 to REPRESENTATIVE MARTIN.  She then questioned what                   
  the true efficiency would be of giving the MVRT back to the                  
  municipalities and wondered if it would be a duplication of                  
  the current state process.                                                   
  Number 359                                                                   
  REPRESENTATIVE MARTIN replied in the past individuals                        
  received and filled out a property tax statement.  The DMV                   
  then began collecting taxes for the city.  He believed this                  
  was done to make the people believe they were paying less in                 
  property taxes by having the state take care of it.  The                     
  fees are included because the Alaska Constitution states                     
  only the Legislature has the power to tax and it shall never                 
  be surrendered; meaning the state has the power on all                       
  levels to impose taxes.  The degree of taxation is included                  
  in Title 29 for municipalities.  REPRESENTATIVE MARTIN noted                 
  the MVRT has become a burden to the state and just last year                 
  the DMV wanted to increase the fees to 35 percent.  The                      
  cities, however, did not want to give them more money for                    
  collecting the fee.  He felt the one form the city will                      
  provide would be more efficient than the transporting                        
  process from the state to the city.  REPRESENTATIVE MARTIN                   
  emphasized Section 16 was included to show the changes                       
  occurring and his major concern with HB 328 was to decrease                  
  the lines at the DMV.                                                        
  REPRESENTATIVE B. DAVIS inquired if this process would                       
  provide the $300,000 savings.                                                
  Number 423                                                                   
  REPRESENTATIVE MARTIN replied yes, and noted the DEC will be                 
  able to decrease the general fund allocation to about                        
  $260,000 and also collect fees on those who default on                       
  getting their registration.  Decals are going to be provided                 
  to ease in the enforcement of inspection and registration                    
  Number 439                                                                   
  CHAIR VEZEY asked REPRESENTATIVE MARTIN if he believed                       
  Section 16 was needed to grant Anchorage the authority to                    
  takeover the MVRT.                                                           
  Number 442                                                                   
  REPRESENTATIVE MARTIN responded Anchorage already has the                    
  authority and it is for technical purposes to return it to                   
  Title 29.                                                                    
  CHAIR VEZEY asked if the legislature structures property                     
  taxes for municipalities.                                                    
  REPRESENTATIVE MARTIN clarified the legislature allows the                   
  cities certain authority.                                                    
  Number 452                                                                   
  CHAIR VEZEY noted the legislature does not structure sales                   
  Number 453                                                                   
  REPRESENTATIVE MARTIN replied the authority (to structure                    
  taxes) is in Title 29.                                                       
  Number 454                                                                   
  CHAIR VEZEY wondered why the cities needed more authority                    
  than that given in Title 29 to do property taxes.                            
  Number 455                                                                   
  REPRESENTATIVE MARTIN answered past legislatures decided the                 
  MVRT would be the tax for various vehicles and experts                       
  believe it should now be in Title 29.                                        
  Number 461                                                                   
  CHAIR VEZEY introduced JUANITA HENSLEY as the next witness.                  
  Number 474                                                                   
  JUANITA HENSLEY, representing the DMV, testified in favor of                 
  HB 328.  MS. HENSLEY stated the DMV has been collecting 5-6                  
  million dollars for 10 municipalities, eight percent of                      
  which is being kept to cover administrative costs.  HB 328                   
  will account for a 4.9 million dollar loss to the general                    
  fund which will be further increased without the eight                       
  percent collection.  Section 16 of HB 328 will provide a set                 
  fee for the municipalities to collect the MVRT.  Currently,                  
  the municipalities are set into a tax base when they agree                   
  to have the DMV collect their taxes.  Therefore, without DMV                 
  available for collection, Section 16 will provide the                        
  municipalities with tax base guidelines.  MS. HENSLEY                        
  proposed Section 16 be deleted and the authority be placed                   
  back with the municipalities under Title 29, but do not                      
  establish a set tax base structure.  The municipalities                      
  could set it where they like.  DMV is in favor of biennial                   
  vehicle registration to cut down on their lines and improve                  
  Number 510                                                                   
  CHAIR VEZEY asked if it would be feasible to change the tax                  
  collection to a biennial period.                                             
  Number 518                                                                   
  MS. HENSLEY did not know if there was a constitutional                       
  problem with collecting on a two year tax base, in which                     
  case, moving out of the state and eligibility for rebates                    
  would have to be a consideration.                                            
  Number 522                                                                   
  CHAIR VEZEY noted people do not receive a rebate after                       
  buying an annual license and moving out of state after six                   
  Number 524                                                                   
  MS. HENSLEY replied there is a difference between an annual                  
  registration and an actual tax the state is collecting for                   
  the cities.                                                                  
  Number 525                                                                   
  CHAIR VEZEY clarified the state is collecting the tax now                    
  and people who are living in Alaska only part of the year                    
  are not being rebated.                                                       
  Number 527                                                                   
  MS. HENSLEY agreed with CHAIR VEZEY.                                         
  Number 528                                                                   
  CHAIR VEZEY was not aware of any constitutional problems                     
  with biennial tax collection.                                                
  Number 530                                                                   
  REPRESENTATIVE ULMER questioned how the DMV felt towards the                 
  collection of the municipalities taxes and if this process                   
  was a stable situation as long as the fees to cover the                      
  administrative cost are being collected.                                     
  Number 532                                                                   
  MS. HENSLEY replied the DMV has a neutral opinion.  DMV is                   
  one of the revenue generators for the state, as it collects                  
  over 29 million dollars for the general fund.                                
  REPRESENTATIVE ULMER requested an overview of the fiscal                     
  Number 540                                                                   
  MS. HENSLEY noted the loss incurred with the change from two                 
  times the current rate to one and one-half times.  The fee                   
  will be reduced from $70 to $53 every two years which will                   
  amount to a loss of $4.6 million.  The MVRT will also lose                   
  the collection of fees for one year due to the expanded two                  
  year base.  This factor will amount to about $4.9 million in                 
  lost funds to the state.  An additional $2.75 million will                   
  be lost to the municipalities in the original version of HB
  328.  The revised version of HB 328 which takes the MVRT                     
  from the DMV and places it back on the municipalities will                   
  total the states losses at $4.9 million.                                     
  Number 559                                                                   
  REPRESENTATIVE ULMER could not understand why state revenues                 
  were being released when the state has a great deficit.                      
  Efficiency is great, however, a revenue neutral bill should                  
  be considered.                                                               
  MS. HENSLEY added the credit card cost would be another cost                 
  with an operational fee of approximately $225,000 a year.                    
  CHAIR VEZEY asked to point out the credit card cost in the                   
  Number 569                                                                   
  MS. HENSLEY noted page 3, line 22, Section 9(3).  The cost                   
  is paid to the credit card companies.                                        
  Number 576                                                                   
  CHAIR VEZEY inquired of the DMV's position on the use of                     
  credit cards.                                                                
  Number 578                                                                   
  MS. HENSLEY welcomed credit card use to cut down on NSF                      
  checks and the extra work they create.                                       
  Number 582                                                                   
  REPRESENTATIVE KOTT reaffirmed MS. HENSLEY'S opinion.  The                   
  extra payment on top of the reduction in fees may "dig a                     
  deeper hole" REPRESENTATIVE KOTT stated.                                     
  Number 586                                                                   
  MS. HENSLEY urged the use of credit cards to ease those                      
  people who dislike using checks or money orders.  A credit                   
  card system will provide an easier move to higher technology                 
  using touch-tone phones to renew registrations and ATM                       
  machines to acquire driving records.  Drivers license                        
  reinstatements can also be quite expensive and the use of a                  
  credit card would ease payments for the customer.  The                       
  reduction of fees, MS. HENSLEY believes, does not have to                    
  happen and the current rate times two could remain in place,                 
  thereby, the state would only incur the credit card cost.                    
  Number 614                                                                   
  CHAIR VEZEY asked if the credit card cost would be less than                 
  the current cost of pursuing bad debt receipts.                              
  Number 619                                                                   
  MS. HENSLEY replied no.  The action taken on bad checks                      
  received is to place holds on registrations, titles, and                     
  drivers licenses.  The credit card fee would have to be                      
  appropriated because the DMV budget could not absorb it.                     
  Number 623                                                                   
  CHAIR VEZEY related to the reason of increased efficiencies                  
  as a justification for the credit card cost.                                 
  Number 627                                                                   
  MS. HENSLEY agreed.                                                          
  REPRESENTATIVE HARLEY OLBERG stated the credit card fees                     
  would be deducted from the revenues generated by the fees                    
  from the bank in which it is deposited.  Therefore, no                       
  appropriation should be necessary.                                           
  CHAIR VEZEY believed the state would probably not see the                    
  money unless it was accounted for.                                           
  Number 635                                                                   
  REPRESENTATIVE G. DAVIS questioned if an extra charge could                  
  already be on the credit card and if the credit card company                 
  would collect it.                                                            
  Number 641                                                                   
  REPRESENTATIVE OLBERG answered an extra charge cannot be                     
  charged for a service or product because the payment is made                 
  by credit card.  As the transaction takes place the bank                     
  will skim its discount off the transaction and there will be                 
  no exchange of money between the State of Alaska and the                     
  CHAIR VEZEY asked REPRESENTATIVE OLBERG if he was referring                  
  to federal law and whether it was still legal to offer cash                  
  discounts as opposed to credit card charges.                                 
  REPRESENTATIVE OLBERG replied yes.                                           
  Number 649                                                                   
  Seeing no more testimony, CHAIR VEZEY asked REPRESENTATIVE                   
  KOTT if he would like to continue working on HB 328.                         
  Number 651                                                                   
  REPRESENTATIVE KOTT replied it would be a good idea to look                  
  HB 328 over again as the committee substitute was just                       
  received.  The reduction in fees is a concern and the need                   
  for Section 16 will be examined.                                             
  Number 663                                                                   
  CHAIR VEZEY announced HB 328 would be held over for review                   
  and would be rescheduled in the future.                                      
  HB 363 - NO FEE FOR CAR REGISTRATION IN PERSON                               
  CHAIR VEZEY opened the floor for discussion on HB 363.                       
  Number 672                                                                   
  REPRESENTATIVE KOTT reviewed HB 363.  The $10 surcharge is                   
  repealed for those who want to apply for their vehicle                       
  registration in person.  A fiscal impact of a $1.6 million                   
  would occur.  He felt the registration fees for those who                    
  apply in person could increase by $5 which would generate $2                 
  million and offset the $1.6 million loss.  If the situation                  
  were to remain neutral the state could gain about $400,000.                  
  A $5 reduction would still be offered for those who opt to                   
  use the mail system.                                                         
  CHAIR VEZEY asked if a sponsor or committee substitute would                 
  be proposed for HB 363.                                                      
  Number 696                                                                   
  REPRESENTATIVE KOTT replied yes.                                             
  TAPE 94-8, SIDE B                                                            
  Number 000                                                                   
  REPRESENTATIVE OLBERG asked if REPRESENTATIVE KOTT intended                  
  to propose the substitute in State Affairs or in Finance.                    
  REPRESENTATIVE KOTT said it did not really make a                            
  difference; however, Finance may be the appropriate place                    
  for it.  The fees for all registered vehicles will increase                  
  by $5 in person with a $5 break for using the mail system.                   
  Number 026                                                                   
  REPRESENTATIVE OLBERG stated he had received a numerous                      
  amount of support for repealing the $10 fee and he supports                  
  REPRESENTATIVE KOTT'S $5 increase and decrease suggestion.                   
  REPRESENTATIVE OLBERG did state he cannot support HB 328 if                  
  it includes any sort of reduction in registration fees.                      
  REPRESENTATIVE OLBERG is in favor of moving HB 328 to                        
  REPRESENTATIVE ULMER liked REPRESENTATIVE KOTT's adjustment                  
  to HB 328 and asked how successful the $10 fee was in                        
  discouraging people from coming in and applying in person.                   
  Number 055                                                                   
  JUANITA HENSLEY answered questions on HB 363.  Prior to the                  
  $10 fee 30 percent mailed registration renewals in.  After                   
  imposing the fee, the percentage of mailed registration                      
  renewals has increased to 60 percent.  Lines have decreased                  
  in size.  There is a three-five percent increase in new                      
  titles every year.  MS. HENSLEY believed a $5 increase will                  
  not be a suitable deterrent for coming to DMV in person.                     
  Number 087                                                                   
  REPRESENTATIVE KOTT responded an increase in the size of                     
  lines may turn out to be more incentive to want to use the                   
  mail system.  There is no greater efficiency by using the                    
  mail rather than applying in person because handling the                     
  mail takes just as long as person to person contact.  He                     
  reinforced the lines would not substantially increased and                   
  the $5 increase would be alright.                                            
  MS. HENSLEY hoped to see a decrease of lines because the                     
  front counter clerks tend to take a lot of abuse from the                    
  Number 141                                                                   
  REPRESENTATIVE ULMER suggested the application for the                       
  permanent fund dividend include a one page attachment for                    
  motor vehicle registration.  The public may take note of the                 
  form if attached to a widely read document.  She also                        
  suggested to REPRESENTATIVE KOTT that a State Affairs                        
  committee substitute to HB 328 be proposed before it is                      
  given to the Finance Committee because they may not pay                      
  attention to a revenue reducing bill.  A bill which will                     
  raise revenues may have more of a chance.                                    
  REPRESENTATIVE G. DAVIS agreed with REPRESENTATIVE ULMER and                 
  would like a substitute to HB 328.                                           
  REPRESENTATIVE KOTT had no problem with proposing a                          
  substitute, however, he has contacted Finance with the                       
  changes to be made to HB 328 and they had no problem with                    
  Number 195                                                                   
  CHAIR VEZEY asked for further comment on HB 363.                             
  REPRESENTATIVE KOTT asked CHAIR VEZEY for his decision on HB
  CHAIR VEZEY announced HB 363 would be held in committee for                  
  Number 216                                                                   
  REPRESENTATIVE KOTT asked the committee members if an                        
  amendment might be offered so HB 328 might move out of                       
  committee amended.                                                           
  Number 221                                                                   
  CHAIR VEZEY did not want to move HB 328 out of committee on                  
  a verbal amendment, however, the committee substitute may be                 
  REPRESENTATIVE OLBERG reminded REPRESENTATIVE KOTT a                         
  committee substitute for HB 328 would be made be State                       
  Affairs members.                                                             
  Number 230                                                                   
  REPRESENTATIVE ULMER proposed a committee substitute should                  
  be prepared with a new fiscal note so HB 328 may pass out of                 
  the committee with "do pass" written on it.                                  
  CHAIR VEZEY allowed REPRESENTATIVE KOTT to put forth an                      
  amendment if he wished to do so.                                             
  Number 246                                                                   
  REPRESENTATIVE KOTT opted to bring back a committee                          
  HCR 25 - STATE INDUSTRIAL MATERIALS EXCHANGE                                 
  Number 248                                                                   
  CHAIR VEZEY opened the floor for discussion of CSHCR 25                      
  announcing a zero fiscal note and that if passed it will                     
  proceed to House Rules.                                                      
  Number 259                                                                   
  REPRESENTATIVE KOTT, sponsor of CSHCR 25, began an overview                  
  of the contents.  CSHCR 25 would acknowledge April as the                    
  State Materials Exchange Month.  REPRESENTATIVE KOTT read                    
  his sponsor statement. (See attached.)  CSHCR 25 is a joint                  
  effort of the public and private sector to reduce the flow                   
  of industrial waste into Alaska landfills.  The Support                      
  Industry Alliance, British Petroleum, ARCO, and the DEC                      
  Pollution Prevention office are participants.  Various                       
  materials will be for sale or just available at no cost.  A                  
  computerized network or booklet will be available to locate                  
  available materials.  Across Canada and the lower 48 states                  
  there are about two dozen material exchanges already in                      
  operation.  These exchanges are saving the industry                          
  approximately $27 million annually and the equivalent of                     
  100,000 barrels of oil.  REPRESENTATIVE KOTT believed CSHCR
  25 would foster responsible management of available                          
  resources in Alaska with minimal or no cost.  There is great                 
  support for CSHCR 25.                                                        
  Number 319                                                                   
  CHAIR VEZEY wanted to clarify if REPRESENTATIVE KOTT meant                   
  mainly hazardous and toxic materials, not general                            
  construction materials.                                                      
  REPRESENTATIVE KOTT answered the materials could consist of                  
  anything.  There is no limit. (i.e. large machinery)                         
  Number 324                                                                   
  CHAIR VEZEY stated hazardous and toxic waste has a very                      
  important role in our society and he clarified CSHCR 25 does                 
  relate to all industrial materials.                                          
  Number 332                                                                   
  REPRESENTATIVE KOTT agreed.                                                  
  Number 333                                                                   
  CHAIR VEZEY inquired of the states role in the materials                     
  exchange process.                                                            
  Number 335                                                                   
  REPRESENTATIVE KOTT replied the state would facilitate the                   
  private and public sector to work together.                                  
  Number 339                                                                   
  REPRESENTATIVE G. DAVIS indicated CSHCR 25 sounded like                      
  other recycling efforts and wanted to make sure CSHCR 25                     
  would not be duplicating other business.                                     
  Number 347                                                                   
  CHAIR VEZEY rejected CSHCR 25 as recycling, rather a                         
  redistribution of useful materials.  A potentially hazardous                 
  material needs to be handled properly as long as it is                       
  useful, however, it becomes an expensive commodity when                      
  termed a hazardous waste and no longer needed.  CSHCR 25                     
  allows potential users to locate surplus supplies.                           
  Number 366                                                                   
  REPRESENTATIVE JERRY SANDERS agreed with the intent of CSHCR
  25, however, he questioned the zero fiscal note and the                      
  desire government employees to facilitate the program for                    
  Number 372                                                                   
  REPRESENTATIVE KOTT responded he would not challenge the                     
  fiscal note and stated he was informed the employees would                   
  cooperate.  The cost estimated at $30  would have to be                      
  absorbed and there would be little work to do.  He noted the                 
  effort has been on-going and CSHCR 25 is merely recognizing                  
  April as the "kick-off month".  This coincides with DEC's                    
  major promotional effort to prevent pollution.                               
  Number 387                                                                   
  CHAIR VEZEY stated if the amount of material being dumped in                 
  disposal sites would be reduced there would be substantial                   
  savings in future recycling efforts.  CSHCR 25 is a                          
  statement of support for the program without mandating any                   
  programs or authorizing any funds.                                           
  Number 398                                                                   
  REPRESENTATIVE SANDERS offered CSHCR 25 may have a negative                  
  fiscal note with more research.                                              
  Number 402                                                                   
  CHAIR VEZEY agreed if the program was identified.  CHAIR                     
  VEZEY also felt private industry would not support the                       
  resolution if it did not see CSHCR 25 as a place to save                     
  Number 404                                                                   
  REPRESENTATIVE G. DAVIS supported CSHCR 25 and proposed this                 
  effort may have been instigated by large companies due to                    
  DEC eliminating clean-up day after a reduction in its'                       
  Number 421                                                                   
  REPRESENTATIVE KOTT did not know who began the program.  DEC                 
  is merely beginning a campaign to include both the public                    
  and private sector in the clean up process.                                  
  Number 430                                                                   
  REPRESENTATIVE ULMER moved CSHCR 25 to the committee and                     
  asked for individual recommendations.                                        
  Number 435                                                                   
  CHAIR VEZEY asked if there were any objections, hearing                      
  none, the secretary noted the vote had unanimous consent,                    
  and the bill was passed around the committee for signatures                  
  and recommendations.  CHAIR VEZEY called for a short recess                  
  at 9:10 a.m. and will reopen business with HB 240.                           
  (REPRESENTATIVE ULMER left the committee meeting at 9:10                     
  HB 240 - GAMBLING DEVICES ON STATE FERRIES                                   
  CHAIR VEZEY reconvened the meeting at 9:20 a.m. and opened                   
  discussion on HB 240.                                                        
  Number 448                                                                   
  REPRESENTATIVE MOSES, sponsor of HB 240, presented a brief                   
  overview of HB 240 supplied by his sponsor statement. (See                   
  attached.)  HB 240 is intentionally crafted to allow the                     
  state ferry system to set up and operate or contract out the                 
  Number 465                                                                   
  CHAIR VEZEY commented HB 240 has been created in a                           
  convoluted manner and asked if Commerce and Economic                         
  Development has been changed to Revenue.                                     
  Number 478                                                                   
  REPRESENTATIVE MOSES replied if HB 240 passes "(we) can do                   
  whatever we want to it."                                                     
  Number 481                                                                   
  CHAIR VEZEY understood the Commissioner of Revenue would                     
  have control over the gambling.  CHAIR VEZEY questioned the                  
  wording which states "...a gambling device does not include                  
  a gambling device as authorized by statutes." "...a gambling                 
  enterprise is not a vessel of the Alaska Marine Highway                      
  System."  He felt the approach of HB 240 seemed backwards                    
  and asked if it was necessary because Alaska's gambling was                  
  so complicated.                                                              
  Number 492                                                                   
  REPRESENTATIVE MOSES was not very familiar with the                          
  technical details of HB 240, but felt the problems could be                  
  worked out.                                                                  
  Number 495                                                                   
  CHAIR VEZEY began to examine where the gambling machines                     
  would be located.                                                            
  Number 503                                                                   
  REPRESENTATIVE MOSES answered the ferries would find room.                   
  CHAIR VEZEY noted the different sizes of the ferries and the                 
  limited space on the smaller ones.  He questioned if HB 240                  
  was practical.                                                               
  Number 514                                                                   
  REPRESENTATIVE MOSES assumed the ferry system would have                     
  discretion to put the gambling devices only on ferries where                 
  it would be practical.                                                       
  CHAIR VEZEY warned of constituents who are against legalized                 
  gambling and wondered how it could be explained to those                     
  Number 527                                                                   
  REPRESENTATIVE MOSES explained a revenue stream would be                     
  developed and the winter traffic on ferries would probably                   
  increase by 20 percent.                                                      
  CHAIR VEZEY asked if the increase in traffic would be                        
  primarily residents of Alaska.                                               
  REPRESENTATIVE MOSES believed the gambling would be an                       
  attraction for the tourist industry.  The increased flow of                  
  traffic would be very beneficial.                                            
  Number 539                                                                   
  REPRESENTATIVE KOTT commented some cruise lines have closed                  
  down their gaming operations because they were not very                      
  profitable.  He warned the public may not feel the incentive                 
  to take the ferry solely to gamble.  He also inquired about                  
  the associated costs involved in managing the gaming                         
  Number 554                                                                   
  REPRESENTATIVE MOSES had not seen a projected revenue report                 
  and responded to REPRESENTATIVE KOTT gambling would be added                 
  attraction to the ferries, not the sole incentive.                           
  Number 561                                                                   
  REPRESENTATIVE OLBERG commented the gaming machines must be                  
  located in the bar area to limit those under 21 years of age                 
  from playing.                                                                
  REPRESENTATIVE KOTT agreed a regulated area must be                          
  Number 572                                                                   
  CHAIR VEZEY added minors are allowed in places which serve                   
  alcoholic beverages as long as they are accompanied by a                     
  parent or legal guardian.  He did not, however, know if the                  
  law also applied to gambling facilities.                                     
  Number 575                                                                   
  REPRESENTATIVE MOSES reaffirmed CHAIR VEZEY and stated                       
  minors are allowed inside, however, gambling is not                          
  REPRESENTATIVE KOTT agreed with CHAIR VEZEY and noted HB 240                 
  has a provision which prohibits minors from entering a                       
  gambling area.  A ferry's bar area would no longer work as a                 
  location for the gambling machines.  The alcohol                             
  establishment statute would either have to be changed or HB
  240 would override it.                                                       
  Number 598                                                                   
  REPRESENTATIVE MOSES thought the liquor laws would have to                   
  be incorporated whereby HB 240 would be changed to specify                   
  "unless accompanied by a parent or legal guardian."                          
  Number 607                                                                   
  REPRESENTATIVE KOTT agreed and mentioned policies of other                   
  Number 610                                                                   
  CHAIR VEZEY thought other states did not allow minors in                     
  alcohol facilities at all.                                                   
  REPRESENTATIVE OLBERG suggested a space be dedicated to the                  
  gambling devices and have the access controlled.  An                         
  overhead would have to be incurred.                                          
  Number 617                                                                   
  REPRESENTATIVE KOTT commented alcohol and gambling are                       
  closely related in other facilities.                                         
  Number 621                                                                   
  REPRESENTATIVE OLBERG noted the object is to raise revenue.                  
  Number 622                                                                   
  REPRESENTATIVE KOTT suggested alcohol and gambling not be                    
  Number 625                                                                   
  REPRESENTATIVE SANDERS wanted HB 240 to be worded like the                   
  liquor laws where minors may be present if accompanied by a                  
  parent or guardian.                                                          
  REPRESENTATIVE OLBERG stated if the gambling devices are not                 
  in the bar the overhead becomes self-defeating.  An extra                    
  employee would be required.                                                  
  Number 634                                                                   
  REPRESENTATIVE SANDERS added the social atmosphere would not                 
  be the same in a separate area from the bar.  The purpose of                 
  HB 240 would be defeated.                                                    
  Number 637                                                                   
  REPRESENTATIVE KOTT did not want minors in the gambling                      
  area.  He believed  it did not facilitate the proper social                  
  CHAIR VEZEY clarified slot machines were not the topic of                    
  conversation.  The machines used would not distribute coins                  
  or cash.                                                                     
  Number 660                                                                   
  REPRESENTATIVE OLBERG suggested the use of machines which                    
  dispense pull tabs.                                                          
  Number 661                                                                   
  CHAIR VEZEY agreed.                                                          
  Number 663                                                                   
  REPRESENTATIVE B. DAVIS expressed concern for the amount of                  
  machines required and the anticipated revenue stream.  She                   
  then asked if there was not any money coming to the state,                   
  would HB 240 be for entertainment purposes only.                             
  REPRESENTATIVE MOSES replied entertainment on coin operated                  
  machines is common now with two people playing a machine,                    
  not exposing their money, but still making debts.                            
  TAPE 94-9, SIDE A                                                            
  Number 007                                                                   
  REPRESENTATIVE B. DAVIS asked if these games are already                     
  being played on the boats.                                                   
  Number 011                                                                   
  REPRESENTATIVE MOSES said no, but the machines are available                 
  and found in bars.                                                           
  Number 022                                                                   
  REPRESENTATIVE KOTT illustrated the fiscal note does state                   
  six machines will be put on mainline vessels.                                
  CHAIR VEZEY recalled reading the provision of six machines                   
  written in the fiscal note.                                                  
  REPRESENTATIVE MOSES stated the amount of machines may                       
  increase due to demand for their use.                                        
  CHAIR VEZEY introduced DONALD STOLWORTHY as the next                         
  Number 052                                                                   
  DEPARTMENT OF REVENUE, answered questions on HB 240.  On                     
  July 1, 1993, Charitable Gaming transferred from the                         
  Department of Commerce to the Department of Revenue by                       
  Executive Order 82.  HB 240 states this change is for "house                 
  cleaning purposes."                                                          
  Number 072                                                                   
  CHAIR VEZEY recognized this reason.                                          
  REPRESENTATIVE KOTT asked what kind of machines might be                     
  installed on the ferries.                                                    
  MR. STOLWORTHY explained the three classes of gaming:  Class                 
  1 - video games, pinball machines; Class 2 - pull tabs,                      
  bingo (nonelectronic & nonmechanical sanctioned games);                      
  Class 3 - slot machines, electronic pull tab games (District                 
  Court 4, District of Columbia, Washington, recently ruled                    
  electronic pull tab games as Class 3.), video poker.  Class                  
  3 games return either money or tokens from the machine to                    
  the player.  MR. STOLWORTHY predicted HB 240 would allow                     
  electronic pull tab games, video poker, and slot machines                    
  which return tokens.                                                         
  CHAIR VEZEY asked for a clarification of the three classes                   
  of gaming devices.                                                           
  Number 150                                                                   
  MR. STOLWORTHY offered the three criteria as proposed by the                 
  courts which constitute gambling.  These three include                       
  chance, consideration (i.e. paying money), and prize (i.e.                   
  receiving cash).  Once past Class 1 the games are considered                 
  gambling devices.                                                            
  CHAIR VEZEY questioned if Class 1 games are not gambling                     
  devices, why are they classified as a Class 1 gambling                       
  Number 174                                                                   
  MR. STOLWORTHY replied the Class 1 games are for                             
  entertainment purposes only and he could not answer why they                 
  are labeled as gambling devices.                                             
  Number 180                                                                   
  REPRESENTATIVE KOTT noted the difference between Class 1 and                 
  Class 2 and 3 combined is no external pay out.  He then                      
  asked if HB 240 could require the provided slot machines to                  
  only emit tokens which could be redeemed on the ferry.                       
  Number 201                                                                   
  MR. STOLWORTHY felt REPRESENTATIVE KOTT's request could be                   
  included in HB 240, however, he believed the ferries would                   
  be more likely to use video poker and video pull tab                         
  machines which dispense tokens.                                              
  Number 213                                                                   
  REPRESENTATIVE SANDERS asked about the use of "set back                      
  buttons" on machines he has seen used in bars.                               
  Number 222                                                                   
  MR. STOLWORTHY answered "set back buttons" are currently                     
  illegal to use in the state of Alaska because the amount of                  
  payout by the facility is harder to keep track of.                           
  Fraternal clubs, veterans organizations, and bars tend to                    
  have machines with these devices installed in them.                          
  CHAIR VEZEY inquired if "set back buttons" were used to                      
  reduce the chances of winning.                                               
  MR. STOLWORTHY responded "set back buttons" are merely used                  
  to circumvent the law.  The game tallies the total amount of                 
  games played and can be reset at any time.  Computers are                    
  available to be hooked up to machines without "set back"                     
  devices which give tallies of the amount of free games left                  
  on the machines that have been paid back in cash.                            
  REPRESENTATIVE SANDERS thought some states had their                         
  gambling machines directly wired into the State Department                   
  of Revenue and inquired if it would be possible on ferries.                  
  Number 282                                                                   
  MR. STOLWORTHY clarified REPRESENTATIVE SANDERS was                          
  referring to "on-line technology".  States, such as Nevada,                  
  have computers which calculate the odds on many machines and                 
  print out any discrepancies found.  These computers are                      
  extremely accountable.  He noted paper pull tabs have a wide                 
  margin for pay out discrepancies with forged cards and                       
  insider trading.  Reports are filed quarterly that are                       
  matched up with the computer printouts.  This process                        
  creates a solid accounting system.                                           
  Number 338                                                                   
  CHAIR VEZEY did not understand the incentive behind only                     
  allowing gaming devices that do not dispense coins or cash.                  
  MR. STOLWORTHY did not know the reason.                                      
  CHAIR VEZEY clarified Department of Revenue did not have a                   
  preference because the accountability of both types of                       
  machines would be close to the same.                                         
  Number 346                                                                   
  MR. STOLWORTHY replied the money and token dispensing                        
  machines are identical devices which merely vary where the                   
  money is picked up.                                                          
  Number 348                                                                   
  CHAIR VEZEY asked for a committee member to volunteer to                     
  work with REPRESENTATIVE MOSES, sponsor, on HB 240.                          
  REPRESENTATIVE B. DAVIS volunteered.  Hearing no more                        
  testimony, HB 240 was held in committee to be rescheduled.                   
  CHAIR VEZEY announced a meeting for the Alaska Railroad                      
  Review Committee would be scheduled, possibly Saturday,                      
  February 12, and asked for members to relay convenient                       
  Seeing no more business before the committee, CHAIR VEZEY                    
  adjourned the meeting at 10:00 a.m.                                          
  BILLS NOT HEARD                                                              
  HB 345 - "An Act relating to the preservation of public                      
  facilities and to appropriations for annual maintenance and                  
  repair, periodic renewal and replacement, and construction                   
  of public facilities" was scheduled but not heard.                           

Document Name Date/Time Subjects