HB 64-PERM. MOT. VEH. REGISTRATION/TRAILERS  9:16:24 AM CHAIR WIELECHOWSKI announced that the next bill before the committee would be HB 64, which would allow DMV to issue permanent registration to certain vehicles and trailers. RYAN MCKEE, staff to Representative Bill Stoltze, introduced HB 64 on behalf of the sponsor. He related that HB 64 is the permanent registration for non-commercial motor vehicles and trailers, and applies to motor vehicles older than eight years. It establishes a fee for permanent registration. For trailers, the regular bi-annual fee is $30, plus $25 which would go to the permanent registration fee. For vehicles, the regular bi-annual fee is $100, plus the $25 permanent registration fee. He explained that the bill allows municipalities, cities, and boroughs to establish a motor vehicle registration tax for vehicles and trailers that are registered permanently. This is done by an ordinance approved by the local legislative body. The state DMV must be notified a year before it goes into effect. He addressed the limits for the amount of motor vehicle registration tax the state will collect for municipalities, cities, and boroughs for permanently registered vehicles and trailers. If the tax is above $100, the state will not collect the tax; the municipalities will have to collect it. The effective date for this legislation will be January 1, 2013. Permanent registration will also be available beginning January 1, 2013. This means that municipalities, cities, and boroughs, cannot set a permanent rate for the tax until then. CHAIR WIELECHOWSKI asked how the bill would affect municipal revenues related to vehicle registration. MR. MCKEE explained that in the first two years, 2013 and 2014, there would be an increase in municipal revenue by $11 million. In 2015, there would be a decrease of $20 million in municipal revenue. He said it would be a savings to the people, though. CHAIR WIELECHOWSKI asked for an analysis after 2015. MR. MCKEE said he did not have that information. CHAIR WIELECHOWSKI asked about opposition to the bill from municipalities. MR. MCKEE reported no concerns from municipalities or the DMV. CHAIR WIELECHOWSKI asked if permanent registration would pose any problems identifying abandoned vehicles. MR. MCKEE clarified that the permanent registration is an option for individuals. If a vehicle switches to a different owner, the new owner would have to pay the fee again. 9:20:31 AM SENATOR PASKVAN noted opposition from the Alaska Municipal League. He opined that the bill has a negative impact on municipalities. MR. MCKEE thought it was because of the reduction in revenue to municipalities. He noted the sponsor sees the legislation as giving back to Alaskans. SENATOR PASKVAN pointed out that the bill was not revenue neutral; therefore it is an unfunded mandate to the municipalities. MR. MCKEE noted two years of a surplus of revenue for the municipalities. 9:22:32 AM WHITNEY BREWSTER, Director, Division of Motor Vehicles (DMV), Department of Administration, answered questions related to HB 64. She stated that the bill would allow DMV to charge a permanent registration fee for vehicles eight years old and older, as well as for non-commercial trailers. She clarified that DMV would see a bump in revenue in FY 13 and FY 14; however, there would be a drop in revenue which would remain a loss for the life-span of those vehicles. The loss of revenue would be $1 to $2 million and difficult to project. She stated that the loss of revenue would not be as great as shown in the fiscal note for FY 15 - FY 18. She explained that DMV does collect motor vehicle registration taxes on behalf of 16 municipalities and retains 8 percent, which goes into general fund. Historically, the collection cost is about $1 million. She clarified that the effective date of January 1, 2013, means municipalities cannot pass an ordinance to allow for a permanent registration fee until January 1, 2013, and cannot begin to collect that fee until January 1, 2015. SENATOR PASKVAN asked what percentage of non-commercial vehicles in Alaska are 8 years old or older. MS. BREWSTER replied that currently there are 369,500 vehicles that are eligible for permanent registration in 2013 out of a total of a million vehicles. SENATOR PASKVAN asked if the vehicles newer than 8 years old would have to pick up the revenue slack. He gave an example of the owner of a car that was five years old having to pay more eventually. 9:26:57 AM MS. BREWSTER said the legislature sets the fees and would have to make that decision. CHAIR WIELECHOWSKI noted the arrival of Senator Meyer. CHAIR WIELECHOWSKI asked if DMV revenues are from license fees or from the general fund. MS. BREWSTER said DMV revenues come from general fund program receipts and DMV would be able to cover the costs associated with operations contained in the bill. DMV is neutral regarding HB 64. CHAIR WIELECHOWSKI asked if a loss of $1.5 million would have an impact on DMV program receipts. MS. BREWSTER said no. CHAIR WIELECHOWSKI inquired if general funds would make up the loss. MS. BREWSTER said yes. CHAIR WIELECHOWSKI closed public testimony and set HB 64 aside.