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