Legislature(2017 - 2018)SENATE FINANCE 532

05/02/2018 01:30 PM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 409 VEHICLES;ID CARD,REGISTRAT.,LICENSE FEES; TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 135 SCHOOL CONSTRUCTION GRANT PROGRAM TELECONFERENCED
Moved SCS CSHB 135(FIN) Out of Committee
Bill Rescheduled from 9:30 a.m.
+= HB 346 DENTIST: TEMPORARY PERMIT TELECONFERENCED
Moved SCS CSHB 346(FIN) Out of Committee
Bill Rescheduled from 9:30 a.m.
                 SENATE FINANCE COMMITTEE                                                                                       
                        May 2, 2018                                                                                             
                         2:04 p.m.                                                                                              
                                                                                                                                
2:04:04 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Vice-Chair  Bishop  called   the  Senate  Finance  Committee                                                                    
meeting to order at 2:04 p.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Lyman Hoffman, Co-Chair                                                                                                 
Senator Click Bishop, Vice-Chair                                                                                                
Senator Peter Micciche                                                                                                          
Senator Donny Olson                                                                                                             
Senator Gary Stevens                                                                                                            
Senator Natasha von Imhof                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Anna MacKinnon, Co-Chair                                                                                                
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Juli  Lucky, Staff,  Senator Anna  MacKinnon; Representative                                                                    
John  Lincoln,  Sponsor;  Tim  Mearig,  Facilities  Manager,                                                                    
Department    of    Education   and    Early    Development;                                                                    
Representative  Sam Kito,  Sponsor; Representative  Jonathan                                                                    
Kreiss-Tomkins,  Sponsor;   Cathy  Schlingheyde,   Staff  to                                                                    
Representative  Kreiss-Tomkins;   Bob  Bartholomew,  Finance                                                                    
Manager, City and Borough of Juneau.                                                                                            
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Bryant  Hammond,  City  Clerk,  City of  Nome,  Nome;  Kathy                                                                    
Wasserman, Alaska Municipal  League, Anchorage; Lisa Parker,                                                                    
Soldotna  City Council,  City of  Soldotna, Anchorage;  Karl                                                                    
Kassel, Mayor, Fairbanks North  Star Borough, Anchorage; Stu                                                                    
Graham,  Deputy  Mayor,  City  of  Wasilla,  Anchorage;  Pat                                                                    
Branson,  Mayor,  City  of Kodiak,  Anchorage;  Lyn  Carden,                                                                    
Deputy  Administrator, City  of  Wasilla, Wasilla;  Caroline                                                                    
Venuti, Self and Homer City Council, Homer.                                                                                     
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
CSHB 135(EDC)am                                                                                                                 
          SCHOOL CONSTRUCTION GRANT PROGRAM                                                                                     
                                                                                                                                
          SCS CSHB  135(FIN) was  REPORTED out  of committee                                                                    
          with a  "do pass" recommendation and  with one new                                                                    
          fiscal note  from the Department of  Education and                                                                    
          Early Development.                                                                                                    
                                                                                                                                
CSHB 346(L&C)                                                                                                                   
          DENTIST: TEMPORARY PERMIT                                                                                             
                                                                                                                                
          SCS CSHB  346(FIN) was  REPORTED out  of committee                                                                    
          with  a  "do  pass" recommendation  and  with  one                                                                    
          previously  published   fiscal  impact   note:  FN                                                                    
          1(CED).                                                                                                               
                                                                                                                                
CSHB 409(FIN)am                                                                                                                 
         VEHICLES;ID CARD,REGISTRAT.,LICENSE FEES;                                                                              
                                                                                                                                
          CSHB 409(FIN)am  was HEARD  and HELD  in committee                                                                    
          for further consideration.                                                                                            
                                                                                                                                
CS FOR HOUSE BILL NO. 135(EDC) am                                                                                             
                                                                                                                                
     "An Act relating to school district participation in                                                                       
     the school construction grant program."                                                                                    
                                                                                                                                
2:05:11 PM                                                                                                                    
                                                                                                                                
Vice-Chair Bishop  reviewed the meeting agenda.  He detailed                                                                    
that  HB  135 had  been  heard  on  April  26, 2018  when  a                                                                    
committee   substitute  (CS)   had   been  adopted,   public                                                                    
testimony (all in  support of the bill) had  been heard, and                                                                    
the fiscal  note had been  reviewed. He noted  the committee                                                                    
had received additional information.                                                                                            
                                                                                                                                
Senator  Micciche MOVED  to ADOPT  the committee  substitute                                                                    
for  CSHB   135(EDC)am,  Work  Draft   30-LS0549\R  (Laffen,                                                                    
5/2/18).                                                                                                                        
                                                                                                                                
Vice-Chair Bishop OBJECTED for discussion.                                                                                      
                                                                                                                                
2:05:33 PM                                                                                                                    
                                                                                                                                
JULI  LUCKY, STAFF,  SENATOR ANNA  MACKINNON, explained  the                                                                    
changes in the  CS. She noted that there  had been committee                                                                    
concerns   about    an   undefined   time    of   extension.                                                                    
Additionally, there had been concern  that no definition for                                                                    
the term  "good cause"  had been included  in the  bill. She                                                                    
addressed the Explanation of Changes (copy on file):                                                                            
                                                                                                                                
     The Senate Finance CS makes two changes:                                                                                   
                                                                                                                                
      Limits the extension to seven years on page 1, line                                                                    
        12.                                                                                                                     
                                                                                                                                
      Describes what constitutes "good cause" on page 2,                                                                     
        lines 2-10.  New  SCS  version  R  makes  clarifying                                                                    
        changes  to  this  language  as   requested  by  the                                                                    
        Department  of  Education  and   Early  Development.                                                                    
        Specifically:                                                                                                           
                                                                                                                                
          Page 2, line 5 added "as described in a grant                                                                         
          agreement under AS 14.11.017"                                                                                         
                                                                                                                                
          Page 2, line 6 replaced "the state's share" with                                                                      
          "state funding"                                                                                                       
                                                                                                                                
Ms. Lucky  announced that there  was no  sectional analysis.                                                                    
The bill had two technical  changes and the only substantive                                                                    
section was  Section 2, which she  had previously explained.                                                                    
She noted that the department  had communicated there was no                                                                    
change to the fiscal note with the adoption of the CS.                                                                          
                                                                                                                                
Senator  Stevens was  happy to  see a  definition for  "good                                                                    
cause" and an end date included in the bill.                                                                                    
                                                                                                                                
Vice-Chair  Bishop WITHDREW  his OBJECTION.  There being  NO                                                                    
further OBJECTION, Work Draft 30-LS0549\R was ADOPTED.                                                                          
                                                                                                                                
2:07:59 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:08:54 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
REPRESENTATIVE  JOHN   LINCOLN,  SPONSOR,   appreciated  the                                                                    
changes made  in the CS. He  spoke to the importance  of the                                                                    
legislation for  his district.  He detailed  the legislation                                                                    
would extend  the funding  opportunity for  a school  in the                                                                    
district  that  had run  into  some  complications with  the                                                                    
construction of  a road  and other  funding sources.  He was                                                                    
confident the passage of the  bill would allow the community                                                                    
of  Kivalina  to construct  a  new  school. He  thanked  the                                                                    
committee for its time and attention to the legislation.                                                                        
                                                                                                                                
Senator Olson  asked if Representative Lincoln  was in favor                                                                    
of the changes made in the CS.                                                                                                  
                                                                                                                                
Representative Lincoln replied in the affirmative.                                                                              
                                                                                                                                
Senator Olson asked how the  Northwest Arctic Borough School                                                                    
District viewed the changes.                                                                                                    
                                                                                                                                
Representative  Lincoln answered  that  the school  district                                                                    
strongly supported  the legislation, which was  critical for                                                                    
the  construction of  the school.  He added  the legislation                                                                    
was a major priority for the entire district.                                                                                   
                                                                                                                                
Senator  Stevens   referenced  the  third  cause:   (3)  the                                                                    
extension will  not result in  an increase of  state funding                                                                    
of  the  project  cost  [page  2,  lines  6  and  7  of  the                                                                    
legislation]. He asked how a  cost increase would impact the                                                                    
borough.                                                                                                                        
                                                                                                                                
Representative  Lincoln  was  uncertain  what  the  approach                                                                    
would  be  to  meet  increased costs.  The  entire  regional                                                                    
leadership  for the  Northwest Arctic  Borough and  the NANA                                                                    
region were  behind the project.  The borough was  bonding a                                                                    
local  match  exceeding  $12  million.  He  elaborated  that                                                                    
everyone was  committed in their  support for  Kivalina, the                                                                    
school,  and  its  families. He  communicated  that  he  and                                                                    
others would find a way to address any cost increase.                                                                           
                                                                                                                                
2:11:33 PM                                                                                                                    
                                                                                                                                
Senator  Stevens  remarked  that   the  longer  it  took  to                                                                    
complete  a  project the  higher  the  cost. He  appreciated                                                                    
Representative Lincoln's comments.                                                                                              
                                                                                                                                
Senator  Olson  remarked that  he  had  spoken with  borough                                                                    
representatives  and they  were  very  comfortable with  the                                                                    
money that had been sought  and appropriated. There had been                                                                    
no problem with that part of the extension.                                                                                     
                                                                                                                                
Vice-Chair  Bishop noted  that the  Department of  Education                                                                    
and Early  Development (DEED)  was available  for questions.                                                                    
He added  that the state was  coming out of a  recession. He                                                                    
observed that construction projects  were down, based on bid                                                                    
costs over  the past three  years. He elaborated  that there                                                                    
was substantial competition [for projects] at present.                                                                          
                                                                                                                                
Senator  Stevens noted  that previously  there  had been  no                                                                    
parameters on  what the commissioner  could determine  to be                                                                    
good cause. He expounded that  the bill would implement four                                                                    
criteria for the  commissioner to find good  cause. He asked                                                                    
if DEED was comfortable with the parameters.                                                                                    
                                                                                                                                
TIM MEARIG, FACILITIES MANAGER,  DEPARTMENT OF EDUCATION AND                                                                    
EARLY DEVELOPMENT, replied in the affirmative.                                                                                  
                                                                                                                                
Vice-Chair  Bishop  relayed  that   he  had  worked  in  the                                                                    
[Northwest Arctic  Borough] region  in the distant  past. He                                                                    
stated  that Kivalina  sorely  needed a  new  school and  he                                                                    
believed   the  school   would   go  a   long  way   towards                                                                    
complementing the other schools in the Kobuk region.                                                                            
                                                                                                                                
Senator Micciche  MOVED to REPORT  SCS CSHB 135(FIN)  out of                                                                    
committee with  individual recommendations  and accompanying                                                                    
fiscal note. There being NO OBJECTION, it was so ordered.                                                                       
                                                                                                                                
SCS CSHB 135(FIN)  was REPORTED out of committee  with a "do                                                                    
pass" recommendation and  with one new fiscal  note from the                                                                    
Department of Education and Early Development.                                                                                  
                                                                                                                                
2:14:28 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:16:13 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
CS FOR HOUSE BILL NO. 346(L&C)                                                                                                
                                                                                                                                
     "An Act relating to the licensure of dentists."                                                                            
                                                                                                                                
2:16:39 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Bishop  detailed  that the  committee  had  last                                                                    
heard  the bill  on April  24, 2018  when it  had considered                                                                    
public testimony and reviewed the fiscal note.                                                                                  
                                                                                                                                
Senator  Micciche MOVED  to ADOPT  the committee  substitute                                                                    
for   CSHB  346(L&C),   Work  Draft   30-LS1409\J  (Radford,                                                                    
2/25/18).                                                                                                                       
                                                                                                                                
Vice-Chair Bishop OBJECTED for discussion.                                                                                      
                                                                                                                                
JULI LUCKY,  STAFF, SENATOR ANNA  MACKINNON relayed  that in                                                                    
the  previous  bill  hearing the  department  had  noted  it                                                                    
needed  authorization  to  approve  regulations,  a  delayed                                                                    
effective  date, and  an immediate  effective  date for  the                                                                    
regulations change.  The CS incorporated the  changes, which                                                                    
necessitated  the   additions  of   Sections  3   through  5                                                                    
beginning on  page 2, line 28  through the end of  the bill.                                                                    
There  had  been no  additional  changes  to the  bill.  She                                                                    
detailed  that the  changes would  require  a title  change,                                                                    
which  had  been  approved by  the  bill  sponsor.  Co-Chair                                                                    
MacKinnon's office had been working  on the changes with the                                                                    
sponsor. She confirmed with the  department that there would                                                                    
be no change to the fiscal note.                                                                                                
                                                                                                                                
Vice-Chair  Bishop WITHDREW  his OBJECTION.  There being  NO                                                                    
further OBJECTION, it was so ordered.                                                                                           
                                                                                                                                
2:18:07 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SAM  KITO, SPONSOR, appreciated the  work the                                                                    
committee  had  done  on  the bill.  The  objective  of  the                                                                    
legislation  was to  provide opportunities  for dentists  to                                                                    
address situations where they had  an emergency and were not                                                                    
able to provide services to  their patients. The bill opened                                                                    
a  temporary license  that would  allow dentists  to solicit                                                                    
support from dentists who may  not be licensed in Alaska for                                                                    
temporary periods  not to exceed  240 days. He spoke  to the                                                                    
importance of the legislation and  detailed it was supported                                                                    
by the  Dental Society and  the Alaska Dental Board.  He was                                                                    
supportive of the changes in the CS.                                                                                            
                                                                                                                                
Senator Micciche  MOVED to REPORT  SCS CSHB 346(FIN)  out of                                                                    
committee  with  individual   recommendations  and  attached                                                                    
fiscal note. There being NO OBJECTION, it was so ordered.                                                                       
                                                                                                                                
SCS CSHB 346(FIN)  was REPORTED out of committee  with a "do                                                                    
pass"  recommendation  and  with  one  previously  published                                                                    
fiscal impact note: FN 1(CED).                                                                                                  
                                                                                                                                
2:19:09 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:21:31 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
CS FOR HOUSE BILL NO. 409(FIN) am                                                                                             
                                                                                                                                
     "An Act  relating to identification cards;  relating to                                                                    
     permanent  motor  vehicle   registration;  relating  to                                                                    
     vehicle registration fee rates;  relating to changes of                                                                    
     address;  relating   to  driver's  license   fees;  and                                                                    
     relating   to   financial  responsibility   for   motor                                                                    
     vehicles."                                                                                                                 
                                                                                                                                
2:22:31 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JONATHAN   KREISS-TOMKINS,  SPONSOR,  shared                                                                    
that HB  409 was a  House State Affairs Committee  bill that                                                                    
had   originated  from   the  indirect   expenditure  report                                                                    
produced by  the Legislative Finance Division  (LFD) as well                                                                    
as  from  some  statute   change  recommendations  from  the                                                                    
Department    of    Administration    legislative    finance                                                                    
subcommittee  process  in the  House.  He  detailed that  an                                                                    
amendment  had been  made in  the  House Finance  Committee,                                                                    
which resulted  in the bill  before the committee.  The bill                                                                    
included  a variety  of indirect  expenditure reductions  or                                                                    
eliminations  as   well  as  several   streamlining  statute                                                                    
changes to  enable the Division  of Motor Vehicles  (DMV) to                                                                    
deliver services  more efficiently.  He noted that  in light                                                                    
of budget  cuts the bill  would enable  DMV to do  more with                                                                    
the  same funding  or do  more with  less. He  asked if  the                                                                    
committee wanted to hear the sectional analysis.                                                                                
                                                                                                                                
2:24:07 PM                                                                                                                    
                                                                                                                                
Senator Micciche  asked for the sponsor's  philosophy on the                                                                    
bill.                                                                                                                           
                                                                                                                                
Representative  Kreiss-Tompkins   answered  that   the  bill                                                                    
included two  categories of changes. The  first was indirect                                                                    
expenditure reduction  or elimination. The  second, included                                                                    
statute or policy  changes that allow DMV  to streamline its                                                                    
operations  or  get rid  of  statutes  that were  no  longer                                                                    
relevant or  were hindering the agency's  ability to deliver                                                                    
services.                                                                                                                       
                                                                                                                                
CATHY SCHLINGHEYDE, STAFF  TO REPRESENTATIVE KREISS-TOMKINS,                                                                    
discussed the sectional analysis (copy on file):                                                                                
                                                                                                                                
     Section  1:  This  section  standardizes  the  age  for                                                                    
     senior citizen  fee waivers by  changing the age  for a                                                                    
     senior citizen identification card from 60 to 65.                                                                          
                                                                                                                                
Ms.  Schlingheyde  elaborated  that currently  there  was  a                                                                    
senior  citizen waiver  on vehicle  registration, which  was                                                                    
not in  any way affected by  the bill. The waiver  went into                                                                    
effect  when  someone  turned 65.  She  continued  with  the                                                                    
analysis:                                                                                                                       
                                                                                                                                
     Section 2:  This section allows  a person  to authorize                                                                    
     the Division  of Motor Vehicles  (DMV) to  update their                                                                    
     address  based  on  the United  States  Postal  Service                                                                    
     (USPS) database.                                                                                                           
                                                                                                                                
Ms. Schlingheyde expounded that  currently DMV had access to                                                                    
the  USPS  database,  but  it  was  not  allowed  to  update                                                                    
incorrect  addresses. The  bill was  an opt-in  section that                                                                    
would  allow a  person  to  agree to  let  DMV update  their                                                                    
address. She moved to the next section:                                                                                         
                                                                                                                                
     Section 3: This  section is a conforming  change to the                                                                    
     repeal of  the permanent registration in  Section 18 of                                                                    
     this bill.                                                                                                                 
                                                                                                                                
     Section   4:   This   section   removes   the   vehicle                                                                    
     registration   fee   exemption    for   amateur   radio                                                                    
     operators.                                                                                                                 
                                                                                                                                
Ms.  Schlingheyde explained  that  the change  in Section  4                                                                    
came  out of  LFD's  analysis of  indirect expenditures  and                                                                    
conversations   in  the   [House]  Finance   Committee.  She                                                                    
continued with the analysis:                                                                                                    
                                                                                                                                
     Section   5:   This    section   raises   the   vehicle                                                                    
     registration  fee for  municipalities  to the  standard                                                                    
     $100.                                                                                                                      
                                                                                                                                
Ms.   Schlingheyde  detailed   that   the  current   vehicle                                                                    
registration  fee for  municipalities was  $10. The  fee had                                                                    
been  set in  1978  and  had not  been  reviewed since;  the                                                                    
change  came from  LFD's  indirect  expenditure report.  She                                                                    
advanced to the next section:                                                                                                   
                                                                                                                                
     Section 6: This  section is a conforming  change to the                                                                    
     repeal of  the permanent registration in  Section 18 of                                                                    
     this bill.                                                                                                                 
                                                                                                                                
     Section 7:  This section prohibits a  municipality from                                                                    
     establishing  a tax  on  vehicles  that remain  covered                                                                    
     under  the  permanent  registration provision  that  is                                                                    
     repealed in Section 18 of this bill.                                                                                       
                                                                                                                                
Ms.  Schlingheyde  added that  Section  7  was a  conforming                                                                    
change. She continued with the next section:                                                                                    
                                                                                                                                
     Section 8: This section sets  the fee for DMV Knowledge                                                                    
     Tests at $5 and raises the  fee for DMV Road Tests from                                                                    
     $15 to $25.                                                                                                                
                                                                                                                                
Ms. Schlingheyde elaborated that  the section would generate                                                                    
revenue and DMV  hoped it would reduce the  no-show rate and                                                                    
failure rates  as people  used the  test as  practice rather                                                                    
than studying in advance.                                                                                                       
                                                                                                                                
     Section  9:  This  section  raises  the  threshold  for                                                                    
     requiring  deposit  of security  to  DMV  from $501  to                                                                    
     $2,000 to  align with the  standard for  the Department                                                                    
     of Transportation (DOT).                                                                                                   
                                                                                                                                
Ms. Schlingheyde  explained that numerous  sections included                                                                    
the change from $501 to $2,000.  Currently in the case of an                                                                    
accident if the cost was less  than $500 there were no forms                                                                    
filled  out  for  DMV.  Accidents  costing  $501  to  $2,000                                                                    
required  the completion  of a  DMV form.  Accidents costing                                                                    
over   $2,000  required   the  completion   of  a   separate                                                                    
Department  of Transportation  and  Public Facilities  (DOT)                                                                    
form and the  DMV form was no longer  required. She detailed                                                                    
the process had created  significant confusion - people were                                                                    
filling out  forms inaccurately and  did not know  when they                                                                    
needed which form.  She relayed that DMV  had requested that                                                                    
only  the  DOT   form  be  used.  The  DMV   form  would  be                                                                    
eliminated, and  it would not  in any way effect  a person's                                                                    
liability for an  accident or the filing  of police reports.                                                                    
The  change would  eliminate the  requirement for  police to                                                                    
send a  duplicative report to  DMV - the police  would still                                                                    
send a  report to  their own superiors.  She added  that the                                                                    
section  would   not  change  insurance   requirements.  She                                                                    
continued with  the sectional [she  did not  review Sections                                                                    
10 and 11 below]:                                                                                                               
                                                                                                                                
     Section  10:  This  section raises  the  threshold  for                                                                    
     requiring   a   peace   officer  to   provide   written                                                                    
     notification  about  the   requirements  in  the  Motor                                                                    
     Vehicle Safety Responsibility Act from $501 to $2,000.                                                                     
                                                                                                                                
     Section  11:  This  section raises  the  threshold  for                                                                    
     accepting release  from liability executed by  a parent                                                                    
     or legal  guardian on  behalf of a  minor from  $501 to                                                                    
     $2,000.                                                                                                                    
                                                                                                                                
     Section  12:  This  section raises  the  threshold  for                                                                    
     requiring  proof of  financial  responsibility after  a                                                                    
     traffic offense from $501 to $2,000.                                                                                       
                                                                                                                                
     Section  13:  This  section raises  the  threshold  for                                                                    
     requiring  proof of  financial responsibility  after an                                                                    
     accident from $501 to $2,000.                                                                                              
                                                                                                                                
     Section 14:  This section  requires proof  of financial                                                                    
     responsibility  after   a  license  is   suspended  for                                                                    
     failure  to pay  a  judgement be  maintained for  three                                                                    
    years, rather than the existing lifetime provision.                                                                         
                                                                                                                                
          The section  also changes the requirement  to hold                                                                    
          proof of financial  responsibility after judgement                                                                    
          satisfaction only  if the failure  to pay  was due                                                                    
          to driving while uninsured.                                                                                           
                                                                                                                                
Ms. Schlingheyde addressed SR-22  insurance, a type of high-                                                                    
risk  insurance. Current  statute  required SR-22  insurance                                                                    
for three years  for individuals in an  accident that caused                                                                    
significant property  damage, death, or serious  injury. The                                                                    
insurance  was also  required for  three years  if a  person                                                                    
drove uninsured.  The insurance was required  for five years                                                                    
in the  case of a  DUI and for  a lifetime after  four DUIs.                                                                    
The section  required SR-22  insurance for  a lifetime  if a                                                                    
person failed to  pay a judgement within 30  days, which was                                                                    
disproportionate  to  the  rest  of the  statute.  The  bill                                                                    
changed the SR-22  requirement for failure to  pay within 30                                                                    
days to three years.                                                                                                            
                                                                                                                                
     Section 15:  This section allows  for a  second payment                                                                    
     plan   in  installments   for  people   facing  license                                                                    
     suspension based on outstanding financial judgements.                                                                      
                                                                                                                                
Ms. Schlingheyde  noted that a  court would  approve payment                                                                    
plans  of   installments  for  people  who   could  not  pay                                                                    
judgements immediately.                                                                                                         
                                                                                                                                
     Section  16:  This  section raises  the  threshold  for                                                                    
     showing  proof  of  motor vehicle  liability  insurance                                                                    
     from $501 to $2,000.                                                                                                       
                                                                                                                                
     Section  17: This  section removes  the requirement  to                                                                    
     update  DMV  with address  changes  if  the person  has                                                                    
     given permission  for DMV to update  addresses from the                                                                    
     USPS database.                                                                                                             
                                                                                                                                
Ms.  Schlingheyde  explained  that Section  17  removed  the                                                                    
requirement for  a person to  update their address  with DMV                                                                    
if they  had opted in to  allow DMV to update  their address                                                                    
based off the USPS database.                                                                                                    
                                                                                                                                
     Section  18:  This  section repeals  permanent  vehicle                                                                    
     registration  for  vehicles  that are  at  least  eight                                                                    
     years old.                                                                                                                 
                                                                                                                                
     Section  19: This  section grandfathers  in people  who                                                                    
     have  already  registered   their  vehicles  under  the                                                                    
     permanent vehicle registration.                                                                                            
                                                                                                                                
Ms.  Schlingheyde  elaborated  that Section  19  applied  to                                                                    
individuals,  not cars.  She  explained that  if  a car  was                                                                    
sold, the new  owner would not be able to  apply and pay for                                                                    
a permanent vehicle registration.                                                                                               
                                                                                                                                
2:30:30 PM                                                                                                                    
                                                                                                                                
Senator  Olson  noted   that  Representative  Kreiss-Tomkins                                                                    
represented a  number of small  communities. He  asked where                                                                    
he  had  come up  with  Section  5  of  the bill,  which  he                                                                    
believed  had  caused  most of  the  consternation  for  the                                                                    
communities he  had heard from.  He noted the  section would                                                                    
increase  a fee  from $10  to $100.  He explained  that some                                                                    
small communities  could barely afford a  vehicle, let alone                                                                    
registering  it. He  wondered what  the thinking  behind the                                                                    
substantial increase had been.                                                                                                  
                                                                                                                                
Representative  Kreiss-Tomkins replied  that there  were two                                                                    
ways to  look at Section 5.  One way to look  at the section                                                                    
was  it  would increase  the  vehicle  registration fee  for                                                                    
municipalities from  $10 to $100.  The other way to  look at                                                                    
it  was  that  it  would  eliminate  a  $90  deduction  that                                                                    
municipalities had enjoyed,  and it would bring  the rate to                                                                    
the same  rate everyone else  paid. He was not  claiming one                                                                    
way was  right and one  was wrong,  but that there  were two                                                                    
ways to look  at the issue. He explained that  he had looked                                                                    
at  all indirect  expenditures associated  with DMV  and the                                                                    
one  in  Section 5  was  substantial.  He had  been  working                                                                    
closely  with the  operating budget  co-chair  in the  House                                                                    
[Representative  Paul  Seaton]  to find  ways  to  eliminate                                                                    
indirect  expenditures. He  recognized  it  was a  sensitive                                                                    
component of the bill and  was probably the one section that                                                                    
had attracted  a fair  amount of  attention. He  deferred to                                                                    
the  will  of  the  committee. He  believed  having  uniform                                                                    
vehicle  registration fees  had a  certain amount  of logic,                                                                    
but  he  recognized  the   fiscal  constraints  facing  many                                                                    
communities.  He noted  that  the state  was  arguably in  a                                                                    
similar situation.                                                                                                              
                                                                                                                                
Senator Olson  remarked that  in the  small town  of Golovin                                                                    
one vehicle  acted as  the ambulance  for the  health clinic                                                                    
and was  not owned  by the municipality.  He asked  where it                                                                    
fell within the registration fee structure.                                                                                     
                                                                                                                                
Representative Kreiss-Tomkins answered  that without knowing                                                                    
the  type of  entity  that  owned the  vehicle  [he did  not                                                                    
know].   He  stated   if  the   vehicle  was   a  charitable                                                                    
organization,  a  501(c)(3),  would pay  $10;  however,  any                                                                    
other  entity  would  pay the  $100  registration  fee  that                                                                    
private citizens would pay.                                                                                                     
                                                                                                                                
2:33:59 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Bishop announced  that Marla  Thompson with  DMV                                                                    
was available for questions.                                                                                                    
                                                                                                                                
Senator  Stevens pointed  to Section  8  of the  legislation                                                                    
that would  set the fee  for DMV  knowledge tests at  $5 and                                                                    
raise the fee  for DMV road tests from $15  to $25. He noted                                                                    
that the  sponsor had mentioned  people were not  showing up                                                                    
to appointments for the tests. He asked for further detail.                                                                     
                                                                                                                                
Representative  Kreiss-Tomkins  answered  that  the  no-show                                                                    
rate for  the driver skills  test was currently  20 percent.                                                                    
The test  currently had a $15  fee. He detailed that  it was                                                                    
the agency's perspective that with  insufficient skin in the                                                                    
game for people registering for  the driver's tests led to a                                                                    
high  no-show  rate and  added  to  congestion in  the  DMV;                                                                    
people there  to take  the test had  to wait  longer because                                                                    
every fifth test  was a no-show. The  agency had recommended                                                                    
increasing  the  fee  to  add   incentive  to  show  up  for                                                                    
appointments, which  would increase the efficiency  of DMV's                                                                    
operations. He explained that the  bill would implement a $5                                                                    
fee for driver knowledge test;  the component had been added                                                                    
to the  bill in  consultation with  the agency.  He detailed                                                                    
that because  there was no  fee, people  went to DMV  to use                                                                    
the   test  to   practice.  There   was  not   currently  an                                                                    
overwhelming   passage   rate;   therefore,   DMV   believed                                                                    
implementing  a  fee  would incentivize  studying  prior  to                                                                    
taking the test. He deferred to DMV for further detail.                                                                         
                                                                                                                                
2:36:45 PM                                                                                                                    
                                                                                                                                
Senator Stevens  asked for  verification that  the knowledge                                                                    
test did not require an appointment.                                                                                            
                                                                                                                                
Representative   Kreiss-Tomkins   replied   that   was   his                                                                    
understanding. He deferred to the agency.                                                                                       
                                                                                                                                
Vice-Chair Bishop  noted that  Section 4  of the  bill would                                                                    
remove the exemption for amateur  radio operators. He stated                                                                    
that those radio operators had  been the state's link to the                                                                    
outside world  in the 1964  earthquake when  everything else                                                                    
had  been   shut  down.  He  felt   partiality  towards  the                                                                    
operators.                                                                                                                      
                                                                                                                                
Vice-Chair Bishop OPENED public testimony.                                                                                      
                                                                                                                                
BRYANT  HAMMOND,  CITY  CLERK,   CITY  OF  NOME,  NOME  (via                                                                    
teleconference),  shared  that  the  City  of  Nome  opposed                                                                    
Section  5 of  the bill.  The city  believed it  passed cost                                                                    
from the state to the  municipalities at a time when revenue                                                                    
sharing  and other  sources  of  revenue for  municipalities                                                                    
were  declining  and being  cut  off.  The section  did  not                                                                    
result in  a major cost increase  for the City of  Nome, but                                                                    
it  did  represent  a  major   cost  increase  to  different                                                                    
municipalities  across  the  state.  He believed  it  was  a                                                                    
chance to  pass off costs  to municipalities when  the state                                                                    
should be thinking  of a broader fiscal plan  to address the                                                                    
current crisis. He asked for the removal of Section 5.                                                                          
                                                                                                                                
2:39:33 PM                                                                                                                    
                                                                                                                                
Senator Stevens  asked how  many vehicles  the City  of Nome                                                                    
had. Mr. Hammond replied that there were approximately 30.                                                                      
                                                                                                                                
2:39:56 PM                                                                                                                    
                                                                                                                                
KATHY  WASSERMAN, ALASKA  MUNICIPAL  LEAGUE, ANCHORAGE  (via                                                                    
teleconference),  spoke against  Section 5  of the  bill and                                                                    
felt that increasing  costs ten-fold was "out  of line." She                                                                    
recalled DMV legislation introduced  in the past where there                                                                    
had been much discussion that  DMV had a surplus. She stated                                                                    
that  the  issue  had  bothered  numerous  Senate  committee                                                                    
members.  She observed  the money  brought in  by Section  5                                                                    
would go  to the General  Fund. She believed it  seemed like                                                                    
nothing more than  a money grab. She  reminded the committee                                                                    
that  many  of  the  vehicles   that  would  pay  $100  were                                                                    
providing maintenance  on state roads. She  believed raising                                                                    
the costs, when communities were  already picking up some of                                                                    
the state  maintenance, was wrong.  She did not  believe the                                                                    
increase appeared to be streamlining.                                                                                           
                                                                                                                                
2:41:30 PM                                                                                                                    
                                                                                                                                
LISA  PARKER,  SOLDOTNA  CITY  COUNCIL,  CITY  OF  SOLDOTNA,                                                                    
ANCHORAGE (via teleconference), spoke  against the bill. She                                                                    
stated that the  bill would increase the  city's annual fees                                                                    
from  $700 to  $7,000. She  noted  that the  state had  been                                                                    
increasing fees on  the city and over the past  two years it                                                                    
had  raised the  seasonal  oversize permit  fees twice.  She                                                                    
explained  the  fees had  previously  been  $300 for  summer                                                                    
permits  and  $300 for  winter  permits,  which covered  the                                                                    
city's  entire fleet  of oversized  equipment. She  stressed                                                                    
that two  years back the  state had  raised the fee  to $300                                                                    
per oversized piece of equipment  and again to $330 in 2017.                                                                    
The city had  gone from a cost of $600  for the entire fleet                                                                    
to  almost $5,300.  She  reported that  the  person who  had                                                                    
given her the information the  previous day had been outside                                                                    
clearing sand  from the  state's sidewalks  as he  looked at                                                                    
the cost increase from the  state. She reiterated the city's                                                                    
opposition to the bill.                                                                                                         
                                                                                                                                
2:43:23 PM                                                                                                                    
                                                                                                                                
KARL KASSEL, MAYOR, FAIRBANKS  NORTH STAR BOROUGH, ANCHORAGE                                                                    
(via teleconference),  spoke against  Section 5 of  the bill                                                                    
and a ten-fold  increase for the borough.  He understood the                                                                    
increase could help  with the state's fiscal  issues, but he                                                                    
underscored  the  importance  of  a broad  fiscal  plan.  He                                                                    
stressed  that  shifting  costs to  municipalities  did  not                                                                    
constitute  a fiscal  plan. The  borough  was struggling  in                                                                    
several  ways  and  was  picking up  slack  due  to  reduced                                                                    
funding  in  a  variety  of   areas.  The  burden  would  be                                                                    
significant for  the borough -  about 250 vehicles  would be                                                                    
impacted (the  number did not  include the  school district,                                                                    
which he  estimated would  be similar).  The increase  was a                                                                    
smaller  lift  for  smaller  communities;  however,  smaller                                                                    
communities  had smaller  financial resources.  He requested                                                                    
the elimination  of cost shifting to  municipalities and the                                                                    
creation of a broader fiscal plan.                                                                                              
                                                                                                                                
2:45:05 PM                                                                                                                    
                                                                                                                                
STU GRAHAM,  DEPUTY MAYOR, CITY  OF WASILLA,  ANCHORAGE (via                                                                    
teleconference),  spoke against  Section 5.  He stated  that                                                                    
the  legislation was  not trying  to  cut costs  for DMV  or                                                                    
cover  costs for  DMV. He  remarked that  DMV operated  at a                                                                    
surplus  and  the  bill  would  raise  additional  funds  by                                                                    
increasing fees  for municipalities. He did  not believe the                                                                    
bill  shifted costs  but raised  money from  municipalities.                                                                    
Raising money from  municipalities meant that municipalities                                                                    
had to raise  money from their citizens. He  believed it was                                                                    
a poor  precedent to set.  He believed an amendment  made to                                                                    
the legislation  that would eliminate  an increase  for fees                                                                    
to  charitable  organizations.  He  thought  originally  the                                                                    
increase  would go  from $10  to $50,  but an  amendment had                                                                    
been made  to bring the  fee down. He assumed  the amendment                                                                    
had  been   made  because  of   the  good   that  charitable                                                                    
organizations  do  for  municipalities  and  the  state.  He                                                                    
considered  that municipalities  also  did substantial  good                                                                    
for  citizens.  He   believed  municipalities  and  boroughs                                                                    
should  be exempt  from any  raise, particularly  a ten-fold                                                                    
raise to generate revenue.                                                                                                      
                                                                                                                                
2:47:51 PM                                                                                                                    
                                                                                                                                
Vice-Chair Bishop  called on  Mr. Navarre  from the  City of                                                                    
Kenai. Ms. Wasserman replied that  Mr. Navarre was no longer                                                                    
available. She stated that Mr.  Navarre opposed Section 5 of                                                                    
the bill.                                                                                                                       
                                                                                                                                
2:48:19 PM                                                                                                                    
                                                                                                                                
PAT  BRANSON,   MAYOR,  CITY   OF  KODIAK,   ANCHORAGE  (via                                                                    
teleconference), spoke  against Section 5 due  to the city's                                                                    
large number of vehicles it  used to provide public service.                                                                    
She had  difficulty understanding the philosophy  behind the                                                                    
bill.  Until  the  bill was  flushed  out,  she  recommended                                                                    
tabling it for further study and review.                                                                                        
                                                                                                                                
2:48:47 PM                                                                                                                    
                                                                                                                                
LYN CARDEN,  DEPUTY ADMINISTRATOR, CITY OF  WASILLA, WASILLA                                                                    
(via teleconference),  spoke against Section 5  of the bill.                                                                    
She shared  that the  city had  87 registered  vehicles. The                                                                    
fee  would increase  from $1,030  to $9,270,  a 900  percent                                                                    
increase.  She stated  that arbitrarily  raising prices  for                                                                    
Alaska's municipalities on chosen  services when the service                                                                    
had not  been operating at a  loss, should not be  used as a                                                                    
solution to help balance the state's budget.                                                                                    
                                                                                                                                
2:49:49 PM                                                                                                                    
                                                                                                                                
BOB  BARTHOLOMEW,  FINANCE  MANAGER,  CITY  AND  BOROUGH  OF                                                                    
JUNEAU, spoke  against Section  5 of  the bill.  He reported                                                                    
the section would cause a  significant cost increase for the                                                                    
city's 450  registered pieces of equipment.  He reasoned the                                                                    
lower  fee for  local  governments was  due  to the  working                                                                    
relationship that  the state and local  governments provide.                                                                    
He  believed   the  discount  was  to   recognize  financial                                                                    
compensation for the partnership.  For example, the city had                                                                    
seven boat  launch ramps and  it charged local  citizens and                                                                    
other  users $90  per year  to use  the ramps.  He explained                                                                    
that the  city did not  charge the Alaska State  Troopers or                                                                    
the  Department of  Fish and  Game because  they had  a good                                                                    
working relationship.  He believed it  was a benefit  to all                                                                    
the  city's  citizens.  He  stressed  the  provision  headed                                                                    
towards  damaging a  working relationship  that had  been in                                                                    
place for  many decades in Alaska.  Additionally, he pointed                                                                    
out that subdivisions  of the state did not have  to pay the                                                                    
fee (e.g. the Alaska  Gasline Development Corporation or the                                                                    
Alaska  Housing  Finance  Corporation).  The  city  believed                                                                    
local  governments  were  a subdivision  of  government  and                                                                    
should be granted the same exemption.                                                                                           
                                                                                                                                
2:51:49 PM                                                                                                                    
                                                                                                                                
CAROLINE  VENUTI, SELF  and HOMER  CITY COUNCIL,  HOMER (via                                                                    
teleconference),   spoke   against    Section   5   of   the                                                                    
legislation. The city  council viewed Section 5 as  a way to                                                                    
raise money  from citizens. The  city had an  agreement with                                                                    
state troopers  and ambulance vehicles where  it allowed use                                                                    
of the boat  harbor for free. She believed  the provision in                                                                    
the bill  would probably put  a burden on  the relationship.                                                                    
She  reasoned the  bill section  seemed to  put the  state's                                                                    
revenue  problem on  the backs  of citizens.  She considered                                                                    
people working  on the North  Slope as taxpayers.  She asked                                                                    
the  legislature to  put forth  the idea  of a  state income                                                                    
tax, which would include North  Slope workers. She stated it                                                                    
was  a   way  to  raise   some  funds  without   looking  to                                                                    
municipalities. She  explained the City of  Homer was trying                                                                    
to raise  money for a police  station - it would  have to go                                                                    
to  voters for  approval. She  believed the  city would  not                                                                    
receive a  positive reaction  if it also  had to  raise fees                                                                    
because the  state had  raised its  fees. She  stressed that                                                                    
the  bill  pertained to  police  stations,  fire halls,  and                                                                    
ambulances.  She thanked  the committee  for serving  as the                                                                    
voice of the state's communities.                                                                                               
                                                                                                                                
2:53:56 PM                                                                                                                    
                                                                                                                                
Vice-Chair Bishop CLOSED public testimony.                                                                                      
                                                                                                                                
Vice-Chair Bishop  announced that  the DMV  operating budget                                                                    
was $16,700,000 in 2017 and  revenue generated by the agency                                                                    
was $56,800,000.                                                                                                                
                                                                                                                                
Senator  Micciche   discussed  the  fiscal  note   from  the                                                                    
Department  of Administration,  DMV. The  cost was  zero and                                                                    
revenue  was  $762,200  annually.  He noted  the  bill  made                                                                    
several statutory  changes that  would have a  fiscal impact                                                                    
to  the division.  He read  changes the  bill would  have on                                                                    
page 2 of the fiscal note:                                                                                                      
                                                                                                                                
    changes the age a  person may  receive  a free  state                                                                    
     identification card from 60 to 65 years of age or                                                                          
     older;                                                                                                                     
    requires amateur   radio   operators  to   pay   full                                                                    
     registration fees for their vehicle;                                                                                       
    increases registration fees  from   $10  to  $50  for                                                                    
     vehicles owned by a charitable organization;                                                                               
    increases registration fees  from  $10  to  $100  for                                                                    
     vehicles owned by a municipality;                                                                                          
    adds a $5  fee  for the  driver  knowledge  test  and                                                                    
    increases the fee for the driver skill test to $25                                                                          
                                                                                                                                
   In FY2017 DMV administered 81,000  driver knowledge tests                                                                    
   and 5,500  driver skill  tests.  DMV anticipates  similar                                                                    
   numbers for future fiscal years:                                                                                             
                                                                                                                                
     Knowledge tests: 81,000 x $5 = $405,000                                                                                    
     Driver skill test: 5,500 x $10 = $55,000                                                                                   
                                                                                                                                
   DMV data shows that 5,738 people  in age range 56-59 have                                                                    
   a state  identification  (ID) card.  DMV  has  no way  to                                                                    
   determine if additional people within this age group with                                                                    
   decide to obtain an ID card; current ID card holders will                                                                    
   continue to pay  fees for  one additional  renewal period                                                                    
   before they  are eligible  for free  ID cards.  This will                                                                    
   generate $86,070  in  revenue,  with  an  average  yearly                                                                    
   earned revenue over the next four  years of $21,518. This                                                                    
   group will reach 65 after the 1st renewal period and will                                                                    
   receive the next ID for free.                                                                                                
                                                                                                                                
   There are  6,188  vehicles  registered to  municipalities                                                                    
   that pay $10 to register their vehicles. The new $100 fee                                                                    
   will generate an additional $556,920. ($618,800 - $61,880                                                                    
   /current  revenue   =  $556,920).   Due  to   the  2-year                                                                    
   registration cycle  the  additional  yearly  revenue  for                                                                    
   FY2019 and FY2020 will be $278,460.                                                                                          
                                                                                                                                
   DMV currently  has  44  amateur  radio operators  in  our                                                                    
   registration files.  Under AS  28.10.421(d)(8) they  will                                                                    
   now be required  to pay full  registration fees  on their                                                                    
   vehicles.  $100  x  44  =  $4,400.   Due  to  the  2-year                                                                    
   registration period this will result in yearly revenue in                                                                    
   the amount of $2,200.                                                                                                        
                                                                                                                                
2:57:27 PM                                                                                                                    
                                                                                                                                
Vice-Chair Bishop announced that concerns and amendments                                                                        
were due the following day.                                                                                                     
                                                                                                                                
CSHB 409(FIN)am was HEARD and HELD in committee for further                                                                     
consideration.                                                                                                                  
                                                                                                                                
ADJOURNMENT                                                                                                                   
2:57:47 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 2:57 p.m.                                                                                          
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects
HB 409 Letter of Opposition.pdf SFIN 5/2/2018 1:30:00 PM
HB 409
HB 409 Sen Finance from Dave Donley.pdf SFIN 5/2/2018 1:30:00 PM
HB 409
HB 409 Sectional Analysis.pdf SFIN 5/2/2018 1:30:00 PM
HB 409
HB 409 Sponsor Statement.pdf SFIN 5/2/2018 1:30:00 PM
HB 409
HB 409 Summary of Changes.pdf SFIN 5/2/2018 1:30:00 PM
HB 409
HB 409 Testimony AML.pdf SFIN 5/2/2018 1:30:00 PM
HB 409
HB 409 Testimony Matanuska-Susitna Borough.pdf SFIN 5/2/2018 1:30:00 PM
HB 409
HB346 SCS FIN v. J Explanation.pdf SFIN 5/2/2018 1:30:00 PM
HB 346
HB 135 SCS Work Draft Version R.pdf SFIN 5/2/2018 1:30:00 PM
HB 135
HB135 SCS FIN v. R Explanation.pdf SFIN 5/2/2018 1:30:00 PM
HB 135
HB346 SCS FIN work draft version. J.pdf SFIN 5/2/2018 1:30:00 PM
HB 346
HB 409 Public Testimony Doner.pdf SFIN 5/2/2018 1:30:00 PM
HB 409
HB 409 Public Testimony Jones.pdf SFIN 5/2/2018 1:30:00 PM
HB 409
HB 409 Public Testimony Marcum.pdf SFIN 5/2/2018 1:30:00 PM
HB 409
HB 409 Public Testimony Oliver.pdf SFIN 5/2/2018 1:30:00 PM
HB 409
HB 409 Public Testimony Opposition North Slope Borough.pdf SFIN 5/2/2018 1:30:00 PM
HB 409
HB 409 Public Testimony Faerber.pdf SFIN 5/2/2018 1:30:00 PM
HB 409
HB 409 Public Testimomy City of Cordova.pdf SFIN 5/2/2018 1:30:00 PM
HB 409