02/10/2011 01:00 PM House TRANSPORTATION

          HB 10-NONCOMMERCIAL TRAILER REGISTRATION FEE                                                                      
                                                                                                                                
1:08:07 PM                                                                                                                    
                                                                                                                                
CHAIR P. WILSON  announced that the first only  order of business                                                               
would be HOUSE BILL NO. 10,  "An Act relating to the registration                                                               
fee for noncommercial  trailers and to the motor  vehicle tax for                                                               
trailers."                                                                                                                      
                                                                                                                                
1:08:24 PM                                                                                                                    
                                                                                                                                
DARRELL BREESE, Staff, Representative  Bill Stoltze, Alaska State                                                               
Legislature,  on   behalf  of  the   prime  sponsor  of   HB  10,                                                               
Representative  Bill Stoltze,  explained  that HB  10 relates  to                                                               
registration fees  for noncommercial  trailers.  During  the 20th                                                               
Legislature  the legislature  passed  a  bill granting  permanent                                                               
trailer registration  for commercial  trailer owners.   This bill                                                               
would  offer the  same permanent  registration  to consumers  and                                                               
owner of noncommercial trailers.                                                                                                
                                                                                                                                
MR.   BREESE  offered   one  secondary   effect  should   provide                                                               
additional efficiency  and help streamline the  Division of Motor                                                               
Vehicles (DMV) processing of trailer  registrations.  He remarked                                                               
that  another measure  before the  legislature  would also  offer                                                               
similar  changes to  motor vehicles.   He  pointed out  that this                                                               
bill would  still allow  noncommercial trailer  owners to  opt to                                                               
use the biennial registration method  to pay fees rather than the                                                               
permanent registration.                                                                                                         
                                                                                                                                
CHAIR  P.  WILSON,  in   response  to  Representative  Gruenberg,                                                               
clarified  that  the  bill  heard  by  the  House  State  Affairs                                                               
Standing  Committee technically  was not  a companion  bill since                                                               
that bill refers to motor vehicles.                                                                                             
                                                                                                                                
1:11:15 PM                                                                                                                    
                                                                                                                                
MR. BREESE, in response to Chair  P. Wilson, agreed that the fees                                                               
would  increase  to  $100  for   the  permanent  registration  of                                                               
noncommercial trailers.   He explained  the process  to determine                                                               
the  registration fee  amount.   The sponsor's  goal attempts  to                                                               
cover costs by  projecting an estimated cost for  someone who has                                                               
owned a  trailer for 10 years.   Thus, the fees  included in this                                                               
bill would probably be close to  $100.  He further explained that                                                               
the DMV  did not project the  number of trailers that  these fees                                                               
may apply to since people often  register a trailer, park it, and                                                               
only  re-register the  trailer when  the owner  needs to  use the                                                               
trailer again.   This is unlike  a car since people  tend to keep                                                               
their  vehicles currently  registered.   While  using  a 10  year                                                               
ownership seemed  reasonable the fees in  HB 10 are not  based on                                                               
any statistical data.   In response to Chair  Wilson, he reported                                                               
that commercial  vehicle registration  fees currently are  a one-                                                               
time $20  fee.  He related  his understanding that the  intent of                                                               
the enabling  legislation for commercial trailers  are also based                                                               
on  the owner  paying increased  taxes  and higher  fees for  the                                                               
truck operation.   However, noncommercial  trailer fees  were not                                                               
adjusted since no additional taxes  are associated with the fees.                                                               
In further  response to Chair  Wilson, he answered that  the fees                                                               
for commercial trailers  are a flat $20 fee and  are not based on                                                               
the number of axles.                                                                                                            
                                                                                                                                
1:14:17 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FEIGE  asked  for  DMV's costs  to  register  one                                                               
trailer.                                                                                                                        
                                                                                                                                
MR. BREESE said he was unsure.                                                                                                  
                                                                                                                                
CHAIR  P.  WILSON  noted  that  someone from  the  DMV  would  be                                                               
testifying later who could answer that question.                                                                                
                                                                                                                                
1:14:41 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG  referred to page  3, line 18 of  HB 10.                                                               
He asked which statutes are being repealed in this subsection.                                                                  
                                                                                                                                
MR. BREESE referred to page 3, lines  2-4 of HB 10.  He said that                                                               
this  language  is  being  reinserted  in  another  part  of  the                                                               
statute.                                                                                                                        
                                                                                                                                
REPRESENTATIVE  GRUENBERG asked  for clarification  on the  fees.                                                               
He asked whether  the fees for noncommercial vehicles  on page 3,                                                               
line 1  of HB  10 would apply  if the person  decided to  pay the                                                               
biennial  fees.   If the  person decided  to apply  for permanent                                                               
registration fees,  the fees listed on  page 3, line 14  of HB 10                                                               
would apply.   He offered his belief that  the permanent one-time                                                               
fee would be $51 as opposed to $17 for an annual fee.                                                                           
                                                                                                                                
MR. BREESE, referred to page 2,  beginning on line 13 of the bill                                                               
to the  chart, "Tax  According to  Age of  Vehicle."   He advised                                                               
that the chart calculates the  taxes for the vehicle depending on                                                               
the vehicle's age.   The fee for a vehicle,  such as a motorcycle                                                               
[line 19] would be $17 in the first  year but would drop to $4 in                                                               
the eighth  year.  He  agreed that the biennial  registration for                                                               
every year  past the eighth  year would  be $4 for  a motorcycle.                                                               
He also agreed that  on page 3, line 14 of HB 10,  the fee of $51                                                               
refers to the permanent one-time fee.                                                                                           
                                                                                                                                
1:17:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MUNOZ  asked why the fee  structure for commercial                                                               
fees is different than those for noncommercial vehicles.                                                                        
                                                                                                                                
MR.  BREESE   explained  that   owners  of   commercial  vehicles                                                               
currently pay  a higher  tax registration and  tax rate  based on                                                               
the weight  of the vehicle  and the number  of axles.   He stated                                                               
that the flat fee for  noncommercial vehicles is a structure that                                                               
was used  in the enabling  legislation.  This bill  is consistent                                                               
with the  enabling legislation,  which is to  charge the  bulk of                                                               
the fees  for a commercial  vehicle rather  than to charge  a fee                                                               
for  the  vehicle  being  towed.   An  owner  is  already  paying                                                               
registration fees for his/her truck  so an extra charge would not                                                               
be passed on for the vehicle registration in this bill.                                                                         
                                                                                                                                
1:18:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MUNOZ asked whether the  analogy would also be the                                                               
same for noncommercial vehicles.                                                                                                
                                                                                                                                
MR. BREESE  agreed that some  consistency would be  achieved, but                                                               
to  be perfectly  consistent would  require  rewriting the  whole                                                               
section  for non-commercial  vehicles  and "that's  a bigger  pie                                                               
than we were trying to cut at this time," he said.                                                                              
                                                                                                                                
1:18:59 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG referred to the  title, which is "An Act                                                               
relating to  the registration fee for  noncommercial trailers and                                                               
to the motor  vehicle tax for trailers."  He  referred to page 1,                                                               
lines 12-14, to  proposed Section 2 of HB 10,  which applies only                                                               
to  noncommercial trailers.   He  reiterated that  subsection (j)                                                               
refers only to noncommercial vehicles.                                                                                          
                                                                                                                                
MR. BREESE  answered that  subsection (j)  reads, "When  a person                                                               
registers   a   trailer   not  used   or   maintained   for   the                                                               
transportation  of  person or  property  for  hire or  for  other                                                               
commercial use..."  He explained  that this subsection means that                                                               
if  the purpose  is not  for commercial  use that  this provision                                                               
would apply.                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG agreed, noting  the language is a double                                                               
negative, so he initially missed the intent.                                                                                    
                                                                                                                                
1:20:24 PM                                                                                                                    
                                                                                                                                
WHITNEY  BREWSTER, Director,  Division of  Motor Vehicles  (DMV),                                                               
Department   of  Administration   (DOA),  addressed   an  earlier                                                               
question by  Representative Feige.   She  responded that  she did                                                               
not have a  definitive answer to how much it  costs the agency to                                                               
process a trailer renewal but she  estimated the staff time for a                                                               
renewal transaction  would be about  three minutes.   She thought                                                               
an initial registration transaction  may take about seven minutes                                                               
to  complete.    She  pointed out  the  clerks  processing  these                                                               
transactions  fall in  the  payroll ranges  of  range 10-12.  She                                                               
estimated  the  time  needed to  process  noncommercial  trailers                                                               
would  be included  as part  of the  scope of  their regular  job                                                               
duties.   She explained that  online transactions cost  the state                                                               
about  $1 per  transaction  and including  the  credit card  fees                                                               
charged would  amount to  two percent  of the  total transaction.                                                               
Thus,  transaction  fees would  cost  about  $2 on  noncommercial                                                               
trailer  registration fees  of  $30.   In  response  to Chair  P.                                                               
Wilson, she  answered that the  motor vehicle fees  collected are                                                               
deposited to the  general fund.  In further response  to Chair P.                                                               
Wilson, she agreed  that the revenue collected  would increase in                                                               
the  first  two   years  and  then  would   decrease  every  year                                                               
thereafter.                                                                                                                     
                                                                                                                                
1:23:39 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FEIGE asked  how many  trailer applications  were                                                               
anticipated per year.                                                                                                           
                                                                                                                                
MS.  BREWSTER answered  that the  DMV processes  about 5,000  new                                                               
trailer  applications   per  year.     In  further   response  to                                                               
Representative  Feige,  she  responded  that  due  to  the  small                                                               
numbers of registrations, the DMV  does not anticipate a decrease                                                               
or reduction in staff levels.                                                                                                   
                                                                                                                                
1:24:37 PM                                                                                                                    
                                                                                                                                
CHAIR P.  WILSON recalled that  the DMV's costs of  operation are                                                               
taken directly from the revenue it collects.                                                                                    
                                                                                                                                
MS.  BREWSTER  responded  that the  DMV  is  a  receipt-supported                                                               
services  organization, which  means  that the  DMV's funding  is                                                               
based on  the amount  of revenue  it generates.   In  response to                                                               
Chair  P. Wilson,  she  explained  that the  DMV  operates on  an                                                               
annual  amount of  $16.5 million.   The  proposed bill  would not                                                               
sufficiently impact the  DMV to affect its operating  funds.  She                                                               
added  that  the  DMV's   receives  approximately  $68.5  million                                                               
annually in total revenue.                                                                                                      
                                                                                                                                
1:26:37 PM                                                                                                                    
                                                                                                                                
MS. BREWSTER advised  that this program would be  a fairly simple                                                               
program to administer at the  DMV.  In response to Representative                                                               
Johnson, she answered that the DMV is neutral on HB 10.                                                                         
                                                                                                                                
MARC LUIKEN, Commissioner, Department  of Transportation & Public                                                               
Facilities (DOT&PF),  stated the  Department of  Transportation &                                                               
Public Facilities (DOT&PF)  does not have a position on  HB 10 at                                                               
this time.                                                                                                                      
                                                                                                                                
1:28:00 PM                                                                                                                    
                                                                                                                                
CHAIR P.  WILSON after  first determining no  one else  wished to                                                               
testify closed  public testimony  on HB 10.   She  explained that                                                               
the bill would be discussed at a subsequent hearing.                                                                            
                                                                                                                                
1:28:41 PM