Legislature(1993 - 1994)
05/03/1994 09:10 AM Senate FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
CS FOR HOUSE BILL NO. 328(FIN)
An Act allowing motor vehicle registration and
licensing fees to be paid by credit card.
Co-chair Pearce directed that CSHB 328 (Fin) be brought on
for discussion and advised that it would allow for payment
of motor vehicle fees via credit card. Senator Kelly asked
why the bill would incur a cost. Co-chair Pearce responded
"because the credit card company would get 1-1/2%."
JEANNE LARSON, aide to Representative Martin, came before
committee. She explained that the bill allows individuals
to pay driver license and motor vehicle registration fees by
credit card and authorize use of the credit card via
telephone. She deferred further comment to department
staff.
Co-chair Pearce asked if consideration had been given to
allowing the department to charge the extra percentage so
that the bill would be revenue neutral. Ms. Larson observed
that it was mentioned in passing but not dealt with in
substantial detail.
Senator Rieger pointed to new language within the bill and
asked that the department comment. JUANITA HENSELY, Chief,
Driver Services, Dept. of Public Safety, said that the
department is comfortable with the mandate to establish the
procedures and fees prescribed for credit card payment by
telephone.
Speaking to questions relating to raising the fee to cover
the credit card cost, Ms. Hensley referenced discussion of
the issue in the House. The House was adamant in its
decision not to increase motor vehicle fees to cover credit
card charges.
Co-chair Pearce asked if it was necessary to provide
statutory authority to allow for use of credit cards. Ms.
Hensley said that aside from the Marine Highway System, no
other agency accepts credit cards. The reason for the
proposed legislation is to receive the $225.0 appropriation
for credit card costs. It represents a means of fixing the
funding in the budget.
In response to a question from Senator Rieger, Ms. Hensley
explained that the department has been in contact and
negotiations with banks. The Alaska Bankcard Center is the
clearing house for all credit cards. It is the entity that
has offered the 1-1/2%. It is the department's intent to
allow for use of more than one credit card if the 1-1/2% can
be negotiated. Senator Rieger voiced a preference for use
of "may" rather than "shall" in new language. He expressed
concern that controversy would arise over which credit cards
are allowed and which are not.
Senator Kelly inquired regarding the net result of levying a
$1.00 credit card transaction fee. Ms. Hensely advised of
estimates that 40 to 50% of those renewing licenses would
use credit cards in lieu of cash. The state registers
approximately 605,000 vehicles annually and issues 200,000
identification cards and driver licenses each year. The
$1.00 fee would more than cover the cost. Senator Kelly
asked if it would be possible to register an automobile by
telephone. Ms. Hensley responded affirmatively and spoke to
the workings of a dial-in system in Wisconsin. Senator
Kelly voiced support for that approach.
Pointing to language in the bill, Senator Rieger noted that
it appears individuals will pay an additional $10 unless
registration is conducted by mail. Ms. Hensley advised that
the $10 fee was intended to cut down on the number of people
actually coming to registration offices. Payment by credit
card via telephone would accomplish the same end. Co-chair
Pearce advised that bill language stating "that additional
fees shall be added for registration not conducted by mail"
does not exempt telephone transactions from the $10 fee.
Senator Sharp pointed to language at lines 8 through 9 and
noted that the department may waive the $10.00 fee, by
regulation, and suggested that an exception could be made
for payment by telephone. Ms. Hensely voiced department
intent to waive the $10.00 for credit card renewals
conducted via telephone. Senator Kelly proposed that a
$1.00 fee be levied for credit card transactions. Co-chair
Frank voiced his understanding that an individual who renews
a registration or license at a motor vehicle office and
utilizes a credit card for payment would pay a fee of
$11.00. He then suggested that payment by credit card could
save processing costs.
Discussion of the existing $10.00 fee and proposed fees for
credit card use followed. A number of alternative
approaches were proposed. Co-chair Pearce raised concern
that changes in the $10.00 fee could not be made under the
existing bill title. Senator Kelly MOVED to levy a $5.00
fee on transactions by credit card via telephone. He
advised that the fee would cover the $225.0 cost shown on
the fiscal note. In response to a question from Senator
Sharp asking if the $10.00 fee would apply in addition to
the $5.00 charge, Senator Kelly commented that the $5.00 fee
would encourage individuals to use the phone for renewal
rather than stand in line at a registration office. He
reiterated earlier comments that the department would waive
the $10.00 charge for telephone transactions. Ms. Hensley
concurred. Co-chair Pearce called for a show of hands on
the motion. The amendment was ADOPTED on a vote of 4 to 2.
The department was requested to provide a new fiscal note
for the bill, including an estimate of revenues to be
generated by the $5.00 fee.
Senator Kelly MOVED that SCS CSHB 328 (Finance) pass from
committee with individual recommendations. No objection
having been raised, SCS CSHB 328 (Finance) was REPORTED OUT
of committee with a fiscal note from the Dept. of Public
Safety showing a cost of $225.0 and revenue of $322.5. All
members signed the committee report with a "do pass"
recommendation with the exception of Senator Kerttula who
signed "no rec."
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