HB 19-PERM. MOT. VEH. REGISTRATION/TRAILERS  1:07:17 PM REPRESENTATIVE FEIGE announced that the first order of business would be HB 19, HOUSE BILL NO. 19, "An Act relating to permanent motor vehicle registration; relating to the registration fee for noncommercial trailers and to the motor vehicle tax for trailers; and providing for an effective date." 1:07:50 PM REPRESENTATIVE BILL STOLTZE, Alaska State Legislature, related that a bill similar to HB 19 was heard last year. Last year, he said he asked to have the bill sent back to committee for more deliberations to address issues. He said he believes in the committee process. He stated HB 19 would provide owners the convenience of being able to register their trailer once and receive a permanent registration. He stated that his constituents prefer not to deal with government on a regular basis. Further, HB 19 would also address an equity issue since commercial trailers have a favorable tax treatment compared to non-commercial trailers. This bill would also allow for permanent registration of personal-use motor vehicles older than eight years. 1:10:31 PM REPRESENTATIVE STOLTZE acknowledged that the eight-year figure was arbitrary, but after vehicles reach a certain age it seems reasonable the person should have the option for permanent registration. Further, this option became available with the dismantling the Inspection and Maintenance (IM) program. He explained that the Municipality of Anchorage's emissions testing affected Matanuska-Susitna commuters, but the removal of the IM program now allows for the possibility of permanent registration. He related some fiscal issues still exist with HB 19. He characterized the IM program and two-year registration as revenue generators for the Department of Administration. Not all fiscal issues have been resolved, such that even today a revised fiscal note was issued to remove some assumptions the department used. He suggested that committee members can make a determination on the fiscal implications as the committee considers policy issues; however, he cautioned members to be skeptical of assumptions made by departments, which rely upon revenues. He surmised members could decide whether these revenues belong in the state's pocket, or their constituents' pockets, which he characterized as being a common sense issue. Under HB 19, the permanent registration program would be optional for individuals. Additionally, the community can decide whether to collect revenues so a local option is included. He understood "Talk Radio" in Southcentral Alaska has been pretty charged up about this issue. Even though he has not promoted this publicity, the issue grew from spontaneous comments by constituents and as a representative he was responsive to their needs. 1:14:08 PM REPRESENTATIVE GATTIS disclosed she owns two vehicles that would fall under the category of vehicles being older than eight years old. She has also received numerous calls and e-mails from constituents who support the concept in HB 19. She said she also owns commercial trailers that she only registers once. She related she also has snowmachine trailers, and while she does pay the fees, she admitted she doesn't always get the tags adhered to the trailer on a timely basis. She reiterated many constituents have the same issue. REPRESENTATIVE STOLTZE disclosed that he has also owns an old boat trailer and an old truck. REPRESENTATIVE LYNN says his personal vehicles are all over eight years old and he also owns a vacation trailer over two years old. REPRESENTATIVE FEIGE remarked that people are busy and to have to register vehicles every two years is time consuming and generates little revenue. He asked, "Why not just register it once and be done with it? It certainly is a legitimate point." 1:17:05 PM REPRESENTATIVE LYNN suggested he likely pays less for registration since he is a senior citizen. He asked whether vehicle registration for seniors is available for vehicles eight years or older under the bill. REPRESENTATIVE STOLTZE deferred to the Division of Motor Vehicles (DMV) to answer. He recalled that seniors are entitled to one vehicle exemption. 1:17:49 PM REPRESENTATIVE KREISS-TOMKINS said he read a letter from the Alaska Municipal League (AML). He recalled she commented on revisions to a bill last year that led to the AML to withdraw its opposition and be neutral on the bill. He asked whether the sponsor could speak to the revised provisions. REPRESENTATIVE STOLTZE answered the revised bill included a well-defined local option. He suggested the AML may still have some concerns, although he was unsure. 1:18:46 PM DARRELL BREESE, Staff, Representative Bill Stoltze, Alaska State Legislature, on behalf of the bill sponsor, referred to one concern that AML had last year, which was that municipalities would not be able to collect motor vehicle registration taxes (MVRT) at the time of registration. However, changes to last year's bill, which is also reflected in HB 19, would allow municipalities to set a MVRT for vehicles registered permanent registration. He briefly described the process municipalities would use, including that local government would pass an ordinance to allow it to collect MVRT for vehicles registered permanently or for non-commercial trailers. 1:20:09 PM MR. BREESE stated Section 2 of HB 19 would allow vehicle owners an option to obtain a permanent vehicle registration for vehicles that are eight years or older or to continue to register their vehicle biennially. Owners would pay the DMV fees based on the vehicle age and other factors, plus a one-time $25 fee for permanent registration. He suggested the DMV would likely add a box on registration forms for permanent registration, as well as supply a tab, sticker, or plate for permanent registration. MR. BREESE reported that currently seniors are allowed a single motor vehicle registration exemption. He turned to proposed Section 3 of the bill and explained that a senior citizen would need to decide whether to pay the $25 for permanent exemption or apply for the senior exemption from the DMV. He reiterated that this section does not set out a specific exemption for seniors; however, if he was a senior, he would likely choose the senior citizen exemption but to do so would mean registering the vehicle biennially. 1:23:14 PM MR. BREESE pointed out that Section 4 refers to non-commercial trailers, such as recreational trailers, boats, snowmachines horse trailers. This proposed section would allow the non- commercial trailer owner to pay the $30 fee, plus a $25 fee for permanent registration which is an option. He pointed out the two-year registration is still allowed. MR. BREESE said while the language is not necessary for the bill, Section 5 was left in the statutes allow municipalities the option to implement any IM program if the program is reinstated. 1:24:59 PM MR. BREESE explained that Section 6 would set out the base rate for the MVRT. He referred to the change on page 4, line 9, to an option for any permanent vehicle registration tax imposed by municipalities. Currently municipalities have the authority to set a MVRT, but not all municipalities do so. He recalled 16 communities currently have a MVRT with varying rates and a listing of these communities is in members' packets titled, "MVRT Collections by Community." In fact, the MVRT is a municipal tax and not a state tax, he said. Currently the DMV collects the MVRT for municipalities and retains an eight percent fee to collect the tax. 1:26:26 PM REPRESENTATIVE GATTIS understood the person has an option to apply for permanent registration. She asked whether the permanent registration is transferable. MR. BREESE answered no. He explained that sales are treated like any other vehicle sale. 1:27:20 PM MR. BREESE referred to Section 7, and to page 4, lines 22-23 of HB 19. He explained that only one registration tax may be collected. Under proposed Sections 8-9, the state cannot collect more than $100 in MVRT for vehicles with permanent registration. Thus, if Matanuska-Susitna Borough (MSB) set the MVRT at $300, the maximum amount the DMV would collect is $100 and the MSB would need to collect the $300 MVRT. MR. BREESE turned to Section 8, which highlights that municipalities can set a MVRT as they see fit. The sponsor discovered while working with AML last year that collecting the MVRT could be a burden to some municipalities and since he did not wish to adversely impact municipalities, the bill allows local government to establish its own MVRT rate. In doing so, local governments would establish the proposed MVRT tax by ordinance, which would also allow communities to obtain input from residents. MR. BREESE stated, as mentioned earlier, Section 9 would establish that the DMV would not collect more than $100; however, this provision is not a cap, but would simply transfer the responsibility to collect any MVRT greater than $100 to municipalities or cities that impose the tax. 1:30:29 PM REPRESENTATIVE KREISS-TOMKINS asked for the clarification on the intent of Section 9. MR. BREESE responded that the sponsor's intent is to keep taxes low. Further, some confusion exists on whether the MVRT is a state or municipal tax and this section would address this by identifying the MVRT as a local tax imposed by a municipality or a city and not the state. 1:31:27 PM REPRESENTATIVE KREISS-TOMKINS asked how many municipalities have taxes greater than $100, if any. MR. BREESE referred to a list in members' packets, titled "MVRT Collections by Community." He explained that once a non- commercial vehicle reaches eight year in age, the DMV fees flatten out. He pointed out the only community that charges more than $100 is Unalaska and Dutch Harbor, which sets the MVRT at $116, while the remaining communities MVRT rate is $100 or less. REPRESENTATIVE FEIGE clarified this bill refers to the MVRT and not to a property tax. 1:33:12 PM REPRESENTATIVE KREISS-TOMKINS referred to the sponsor statement which read, "Permanent registration will result in a cost savings for Alaskans." He suggested this would translate to tax relief and not necessarily to cost savings. MR. BREESE deferred to DMV to attest to any cost savings for the state; however, he thought most vehicles are registered on-line. Any cost savings for Alaskans would accrue after two years since the permanent registration is a one-time fee of $25 fee rather than the current biennial tax. Thus these vehicle owners would no longer have to pay fees for the remaining time they own the vehicle, he said. 1:34:31 PM KATHIE WASSERMAN, Executive Director, Alaska Municipal League (AML), reported the AML is currently neutral on HB 19. She said the AML is awaiting reports from the 16 municipalities on the financial impacts for each community. She offered her belief most municipalities currently use the MVRT fees for road maintenance or junk car removal. 1:35:45 PM REPRESENTATIVE JOHNSON asked whether the DMV would issue a special tag so owners would avoid tickets. 1:36:43 PM AMY ERICKSON, Director, Division of Motor Vehicles (DMV), Department of Administration (DOA), stated that if a permanent registration fee is implemented the DMV would issue an orange tag, which would be distinguished from other tags. In further response to Representative Johnson, she answered it would be a tag and not a special plate. In response to another question, she answered that the DMV's revenues total approximately $70 million. She clarified that the DMV's revenues are approximately $70 million and their expenses total approximately $17 million. 1:38:06 PM REPRESENTATIVE JOHNSON asked how many people renew online as opposed to in person registration. MS. ERICKSON answered that approximately 11 percent of registrations are done in house and the rest are renewed online. REPRESENTATIVE JOHNSON asked if certain staff were dedicated to online versus in house. MS. ERICKSON answered that the DMV does not dedicate staff specifically to conduct online or in house transactions. In further response to a question she agreed that the DMV staff rotates and is not dedicated to performing one function. 1:39:28 PM REPRESENTATIVE JOHNSON asked whether anything would prevent the Municipality of Anchorage (MOA) from setting up a substantially higher MVRT. MS. ERICKSON answered that nothing in the bill would prohibit the MOA from setting a higher MVRT. REPRESENTATIVE JOHNSON questioned whether the bill should have a cap. REPRESENTATIVE FEIGE indicated public testimony would be kept open on HB 19. [HB 19 was held over.]