Legislature(2017 - 2018)ADAMS ROOM 519
04/17/2018 09:00 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB185 | |
| SB105 | |
| SB92 | |
| HB119 | |
| HB409 | |
| SB105 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 224 | TELECONFERENCED | |
| + | SB 185 | TELECONFERENCED | |
| + | HB 119 | TELECONFERENCED | |
| + | HB 409 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 105 | TELECONFERENCED | |
| += | SB 92 | TELECONFERENCED | |
HOUSE BILL NO. 409
"An Act relating to identification cards; relating to
vehicle registration fee rates; relating to changes of
address; relating to driver's license fees; and
relating to financial responsibility for motor
vehicles."
1:36:57 PM
CATHY SCHLINGHEYDE, STAFF, REPRESENTATIVE KREISS-TOMKINS,
explained that the bill was a House State Affairs Committee
bill derived from a combination of recommendations from the
Department of Administration finance subcommittee,
Legislative Finance Division's indirect expenditure
reports, and some statutory clean up ideas submitted by the
Division of Motor Vehicles (DMV). She reviewed the
sectional analysis (copy on file):
Section 1: This section standardizes the age for
senior citizen fee waivers by changing the age for a
senior citizen identification card from 60 to 65.
Ms. Schlingheyde detailed that currently the vehicle
registration waiver went into effect when someone turned
65. However, the qualifying age for the senior citizen
identification card fee waiver was 60. The bill would
standardize the qualifying age to 65 for both.
Section 2: This section allows a person to authorize
the Division of Motor Vehicles (DMV) to update their
address based on the United States Postal Service
(USPS) database.
Ms. Schlingheyde elaborated that currently if a person
updated their address at the post office without notifying
DMV, the agency had to send mail to the wrong address, wait
for the mail to bounce back, and then seek out the correct
address. She explained the process cost money and was
inefficient.
Section 3: This section removes the vehicle
registration fee exemption for amateur radio
operators.
Section 4: This section raises the vehicle
registration fee for municipalities to the standard
$100, and raises the vehicle registration fee for
charitable organizations to $50.
Section 5: This section sets the fee for DMV Knowledge
Tests at $5 and raises the fee for DMV Road Tests from
$15 to $25.
Ms. Schlingheyde elaborated that Section 5 would generate
revenue and reduce the no-show rate.
Section 6: This section raises the threshold for
requiring deposit of security to DMV from $501 to
$2,000 to align with the standard for the Department
of Transportation (DOT).
Section 7: This section raises the threshold for
requiring a peace officer to provide written
notification about the requirements in the Motor
Vehicle Safety Responsibility Act from $501 to $2,000.
Section 8: This section raises the threshold for
accepting release from liability executed by a parent
or legal guardian on behalf of a minor from $501 to
$2,000.
Section 9: This section raises the threshold for
requiring proof of financial responsibility after a
traffic offense from $501 to $2,000.
Section 10: This section raises the threshold for
requiring proof of financial responsibility after an
accident from $501 to $2,000.
Ms. Schlingheyde expounded that Sections 6 through 10
increased the reporting thresholds for various accidents
and crashes. Currently the thresholds were $501 at the DMV
and $2,000 at the Department of Transportation and Public
Facilities (DOT). The bill would standardize the threshold
at the DOT rate of $2,000; the DMV number had not been
updated for inflation for 33 years.
Section 11: This section requires proof of financial
responsibility after a license is suspended for
failure to pay a judgement be maintained for three
years, rather than the existing lifetime provision.
The section also changes the requirement to hold proof
of financial responsibility after judgement
satisfaction only if the failure to pay was due to
driving while uninsured.
Ms. Schlingheyde addressed SR-22 insurance, a type
insurance required after certain vehicle accidents.
Insurance companies were required to submit SR-22 forms to
notify DMV if a person's insurance lapsed. The section
required SR-22 insurance for a lifetime if a person failed
to pay a judgement within 30 days. The bill changed the SR-
22 requirement for failure to pay within 30 days to 3 years
and it would only kick in if the person was driving while
uninsured.
Section 12: This section allows for a second payment
plan in installments for people facing license
suspension based on outstanding financial judgements.
Section 13: This section raises the threshold for
showing proof of motor vehicle liability insurance
from $501 to $2,000.
Section 14: This section removes the requirement to
update DMV with address changes if the person has
given permission for DMV to update addresses from the
USPS database.
Ms. Schlingheyde elaborated that Section 14 was statutory
cleanup for the post office update. She explained that if a
person allowed DMV to update their address based off the
post office, they did not have to notify DMV.
1:40:27 PM
Representative Kawasaki referred to Sections 6 through 10
and 13 dealing with the inflationary adjustment. He asked
what happened in cases where a vehicle was worth less than
$2,000.
Ms. Schlingheyde responded that the judgement would still
have to be paid. The threshold had to be reported to DMV
and DOT for certain accidents, but it would not negate the
requirement for an insurance company or an individual to
compensate for damages.
Representative Kawasaki referred to Section 3, which
removed an exemption for amateur radio operators. He shared
that he had an amateur radio operator in his district. He
wondered why the bill would remove the exemption. He asked
if the reasoning was because the exemption was infrequently
used.
Ms. Schlingheyde indicated there were only 44 people in the
state who currently had the exemption.
Representative Kawasaki asked Ms. Schlingheyde to review
Sections 11 and 12. He believed he liked the sections and
wondered how they had been brought into the bill that dealt
mostly with adjustments and indirect expenditures.
Ms. Schlingheyde responded that both sections had been
recommended by DMV. She elaborated that DMV had worked with
many individuals who had issues with the SR-22. She added
that DMV was available for questions. Currently the
insurance was required for five years in the case of a DUI
and for a lifetime after four DUIs. The section required
SR-22 insurance for a lifetime if a person failed to pay a
judgement within 30 days, which was disproportionate to the
rest of the statute. The bill would bring it in line with
the penalty for driving while uninsured or on a suspended
license.
1:42:31 PM
Representative Kawasaki referenced Section 4 dealing with
vehicle registration fees for municipalities and charitable
organizations. He asked for verification that like the
state, currently municipalities were exempt from
registration fees.
Ms. Schlingheyde responded that municipalities currently
paid a $10 registration fee, which was a 90 percent
discount.
Representative Kawasaki asked what charitable organizations
currently paid. Ms. Schlingheyde responded that the
registration fee for charitable organizations was also $10.
Representative Tilton asked whether the post office
database provision in Section 1 was optional for
individuals.
Ms. Schlingheyde confirmed is was optional for individuals
and was only based on permanent address changes. A
temporary forwarding of mail would not affect a person's
registration at DMV.
Representative Pruitt asked for verification Section 1
would apply to any mail correspondence with DMV including
license and registration renewal. He shared that at one
point DMV had sent his registration renewal to his old
address.
Ms. Schlingheyde responded in the affirmative.
1:44:22 PM
Representative Pruitt referred to Sections 6 through 10 and
13 that would increase the threshold [for requiring deposit
of security to DMV] from $501 to $2,000. He noted that it
was difficult to determine the distinction between $500 and
$2,000 damage on a vehicle. He recalled a situation where a
police officer had specified that damage to a car did not
appear to be over $500; however, the damage had been over
$5,000. He had been fortunate that insurance companies had
managed the situation. He asked how to determine whether to
contact a police officer to have them participate. He
continued that having a police officer document that an
accident took place and what occurred could be a huge asset
to an individual dealing with damage to a vehicle. He asked
how individuals should deal with accidents when trying to
figure out how to manage going forward.
Ms. Schlingheyde responded that the sections in the bill
did not address the issue of calling the police, but
whether they had to file certain forms with DMV after the
accident. Individuals would have time to assess what the
damage level was. She deferred to DMV for any additional
information.
1:46:18 PM
Co-Chair Foster indicated the committee had been joined by
the bill sponsor.
REPRESENTATIVE JONATHAN KREISS-THOMKINS, SPONSOR, thanked
the committee for hearing the bill.
Representative Pruitt referenced Section 7 that would
increase the threshold for requiring a peace officer to
provide written notification about the requirements in the
Motor Vehicle Safety Responsibility Act from $501 to
$2,000. He stated while it was related to the suspension of
an operator's license or driving privileges, it involved a
police officer assessing what the damage was. He stated
that currently officers could look at the side of caution
because $500 was a small amount, but $2,000 was four times
that amount. He was concerned about putting an individual
in a position where they did not have an officer present to
provide credible assistance and determine the damage value
that may be needed in a judicial proceeding later.
Co-Chair Foster indicated that DMV was available online.
Ms. Schlingheyde noted that they did assess $2,000 worth of
damage currently for reports to DOT. Currently two
thresholds were reported on - $500 to DMV and $2,000 to
DOT. The bill would change the reporting requirement to one
threshold amount.
1:49:28 PM
Representative Pruitt spoke to the requirement of a police
officer to assist a person who had been in an accident.
With the higher threshold he believed police officers would
be less likely to assist and more likely to give a card out
because it was difficult to tell how much damage had been
done. He believed officers could err on the side of caution
when it did not appear significant damage had been done. He
stated that with the higher threshold more damage could be
done, and it would be easier for an officer to merely hand
a card out as opposed to writing a report. He stated a
report by a police officer could assist an individual and
operate as a credible witness later on. He asked how the
threshold would be administered, how a police officer would
deal with the reporting, and how the change would impact
people involved in an accident.
MARLA THOMPSON, DIRECTOR, DIVISION OF MOTOR VEHICLES,
DEPARTMENT OF ADMINISTRATION (via teleconference), spoke
about the goal of updating the discrepancy between
reporting a person's insurance to DMV for everything at and
above $501 and reporting an accident and insurance on the
DOT form. The goal was to only have one threshold.
Representative Pruitt wondered if the small tweaks did not
necessitate an individual to have something put on their
record if the damage was less than $2,000.
Ms. Thompson agreed. Previously, if a person was in an
accident and damage was over $500 they were supposed to
report the accident to DMV and provide proof of insurance.
The bill would clean up the thresholds; if a person was in
an accident they would fill out the DOT report, which
included their insurance information - the bill would
eliminate confusion by cutting out extra requirements that
people did not know they were supposed to do.
1:52:54 PM
Co-Chair Foster stated his understanding that currently if
an accident involved damages exceeding $500, an individual
was required to submit a form to DMV online. He asked for
detail about the DOT report requirement.
Ms. Thompson responded that the DOT report was a crash
report that individuals were required to fill out (the
report was often filled out by police officers at the crash
site). The report also included the individual's insurance
information.
Co-Chair Foster summarized that under the legislation if a
person had a crash they did not have to submit a report to
DMV if they believed damages were under $2,000. However, if
the person believed the damages exceeded $2,000 they
contacted a police officer. He asked for clarification.
Ms. Thompson responded that $2,000 was a substantial number
and most of the time the police would fill out the report;
if the officer did not fill out the report, they tell the
individual what to fill out. The report included a person's
insurance information, meaning they only had to fill out
one report, which was shared with DOT.
Vice-Chair Gara stated that in 2017 there had been a bill
on Real ID; in the later stages of the bill the license fee
had been increased substantially in his view. He recalled
the fee was significantly higher than the cost of
administering the license. He asked Ms. Thompson if she
remembered the proposed license fee and the fee that had
ultimately been adopted. He wondered what fee level (in the
current legislation) would be cost neutral.
Ms. Thompson reported that the fee was $20, which had been
changed in the end. She believed DMV's original request had
been $10 and then $5. The cost neutral amount was
approximately $5.
1:55:48 PM
Vice-Chair Gara asked for verification that the $20 was in
addition to the regular driver's license. Ms. Thompson
replied in the affirmative.
Vice-Chair Gara asked for the total Real ID license cost.
Ms. Thompson answered that a regular driver's license was
$20, and a Real ID was $15.
Vice-Chair Gara asked for verification that the Real ID
license cost $40. Ms. Thompson responded that the cost was
$40, but the extension had increased from 5 years to 8
years.
Representative Wilson stated that several years back a bill
contained a provision allowing people to pay an additional
$25 for vehicles older than eight years, meaning the owner
did not have to buy another registration until the car was
sold. She asked if the sponsor would be amenable to the
deletion of AS 28.10.155, which would remove the exemption.
Representative Kreiss-Tompkins responded that he had
reviewed the indirect expenditure report. He stated that it
was a substantial indirect expenditure and he had been let
down to find that the anticipated cost of the expenditure
had not yet been calculated by the Legislative Finance
Division. He recalled when the exemption had been passed
and he would be amenable to the change, which he believed
created further reduction of indirect expenditures.
1:57:53 PM
Representative Wilson explained that the exemption had been
automatic for individuals in an unorganized area, whereas
organized areas had to vote on the exemption. Anchorage did
not take the exemption because it utilized a different tax
on vehicles. She noted that Fairbanks took the exemption;
she did not have detail on other locations. Part of the
reason the exemption had been passed was because the state
had money and DMV was making more money than it needed. She
did not believe the state was in the same position any
longer. She thought it was time to remove the exemption.
She reasoned her 10-year-old car probably wore on the road
as much as 3-year-old vehicles.
Representative Kawasaki asked Ms. Thompson for the
approximate vehicle registration costs.
Ms. Thompson answered that she would follow up with the
information. She detailed that the rates had not been
increased recently. There were things like $15 for a road
test that DMV was trying to increase to $25 to cover costs.
Representative Kawasaki noted Section 4 of the bill would
raise registration rates from $10 to $50 for a vehicle
owned by a charitable organization and from $10 to $100 for
vehicles owned by municipalities. He wondered if the state
would suddenly be making money rather than breaking even.
He understood it was difficult to suss out the total cost
because of the various work done by the agency. He was
trying to come up with a reasonable amount.
Ms. Thompson replied that in the fiscal note showed the
registration changes with the difference in municipalities
and charities separately.
2:00:38 PM
Representative Guttenberg asked if the division had a way
to parse out how long it took when individuals got a
vehicle registration or a license, had difficulty getting
registration, or did not have sufficient information. He
was interested in how long each of the items took
separately and where the cost drivers resided. He provided
various examples of different things individuals came to
DMV for.
Ms. Thompson answered that she tracked the wait and
transaction times across the state. The average transaction
time was about seven minutes.
Representative Guttenberg stated that when he went to DMV
he observed that some people were having significant
difficulty. He stated that he typically had basic and
simple business to conduct; however, he did not think seven
minutes was the average time it took when he went in to
renew something. He wondered about the time it took for
someone with an out-of-state license to get an Alaska
license in comparison to other items.
Ms. Thompson replied that she could probably come up with
some averages on registration and driver's licenses. She
did not know whether she could parse down to the level
Representative Guttenberg was looking for, but she offered
to come up with some figures.
Representative Guttenberg clarified that he did not need
the figures, but was trying to determine how easy it was
for DMV to come up with the data.
2:04:04 PM
Representative Kreiss-Tompkins followed up on an earlier
question by Representative Wilson. He explained when the
initial authorizing legislation that created the permanent
vehicle registration passed it had not contained a
provision from an earlier version that gave blanket
statewide applicability in the fiscal note where the cost
had been estimated at $20 million per year. The exemption
had been tightened up since that time. He noted it could be
a little complicated to eliminate the exemption because
permanent vehicle registration was at a higher rate than
normal vehicle registration. He thought there may need to
be an accommodation or transition incorporated if the
permanent vehicle registration was eliminated.
Representative Wilson explained that the permanent vehicle
registration cost the typical two-year fee plus an
additional $25. She explained that individuals with the
exemption would have to be grandfathered in. She explained
[the removal of the exemption] would stop the bleeding and
bring in a portion of the $20 million. She reported she
would work with the sponsor on an amendment but would not
hold the bill up in committee.
Co-Chair Foster OPENED and CLOSED public testimony.
2:06:52 PM
Representative Kawasaki MOVED to ADOPT conceptual Amendment
1 on page 2, line 22. The amendment would maintain the
current $10 vehicle registration fee for charitable
organizations instead of the proposed $50 fee.
Representative Wilson OBJECTED. She asked about the impact
and queried the number of charitable organization licenses.
Co-Chair Seaton pointed to the third paragraph on page 2 of
the fiscal note that specified there were 2,657 vehicles
registered to charitable organizations. The new $50 fee
would generate an additional $106,280. Due to the two-year
registration cycle the additional yearly revenue for FY 19
and FY 20 would be $53,140.
Representative Wilson did not believe $25 per year [$50 for
two years] was drastic. She remarked that the bill did not
increase the fee as high as it could have (to $100).
2:08:52 PM
Representative Kawasaki noted there had been discussion the
previous day about the public, private, and nonprofit
sectors. He stated the nonprofit sector worked closely with
Alaska's public sector. He elaborated that the nonprofit
sector thrived and fell based on the state's economy. He
reasoned nonprofits provided more services. At a time where
the public sector was trying to find money, the nonprofit
sector was also trying to scrape by. He reported the senior
center in his district that ran the Meals on Wheels program
probably took advantage of the $10 registration. He did not
believe $40 would break the bank for the nonprofits, but it
did not seem right to add to their burdens. He supported
deferring their burdens longer.
Representative Grenn provided some context as the
Department of Administration finance subcommittee chair.
The Legislative Finance Division indirect expenditure
report noted that the discount had started in 1978. When
the discount was first offered only a few hundred vehicles
were eligible, compared to the current number of close to
6,000.
Representative Wilson MAINTAINED her OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Guttenberg, Kawasaki, Foster
OPPOSED: Thompson, Tilton, Wilson, Gara, Grenn, Ortiz,
Pruitt, Seaton
The MOTION to adopt conceptual Amendment 1 FAILED (3/8).
2:11:28 PM
AT EASE
2:13:10 PM
RECONVENED
Representative Wilson MOVED to ADOPT conceptual Amendment
2:
Delete 8-year-old car exemption in Sec. 28.10.155.
Permanent motor vehicle registration.
Except for anyone who already has a permanent
registration and the permanent registration expires
when the owner transfers or assigns the owner's title
or interest in the vehicle.
Co-Chair Seaton OBJECTED for discussion.
Representative Wilson explained that the amendment would
remove the 8-year-old car permanent registration exemption
under AS 28.10.155. She explained that currently someone
could pay a fee plus $25, which exempted their vehicle
[from another registration fee] until they sold the
vehicle. She elaborated that when the vehicle was sold the
new owner had to reregister and pay the fee.
Co-Chair Seaton asked for verification that when a new
owner purchased a car that had previously been under the
exemption, they would pay the regular registration fee.
Representative Wilson replied in the affirmative. There
would no longer be an exemption; therefore, individuals
would pay a two-year registration fee like everyone else.
Co-Chair Seaton WITHDREW his OBJECTION.
Representative Thompson OBJECTED. He stated that a person
over the age of 65 could get a permanent vehicle
registration. He asked for verification the exemption
addressed by the amendment was separate.
Representative Wilson answered that Representative Thompson
was referencing a different statute. She clarified that
individuals over the age of 65 were allowed a permanent
vehicle registration for one vehicle.
Representative Thompson WITHDREW his OBJECTION.
There being NO further OBJECTION, Conceptual Amendment 2
was ADOPTED.
2:15:49 PM
Representative Kawasaki stated that he had planned to offer
a separate conceptual amendment dealing with
municipalities. He detailed that the fee for municipalities
would increase from $10 to $100. He remarked that the
legislature had done numerous things in the past couple of
years to harm municipal governments, including school bond
debt reimbursement, reduced revenue sharing, reduced
capital budget, and reduced education. He thought the
increased fee would add an additional burden to
municipalities at a time when they were having trouble
making ends meet. He appreciated the bill and would not be
offering the amendment.
2:16:21 PM
Vice-Chair Gara reviewed the previously published fiscal
impact note from the Department of Administration, DMV.
There was no cost. The change in revenue was $815,300 per
year starting in FY 19. He believed an updated fiscal note
would follow.
Co-Chair Seaton MOVED to report CSHB 409(FIN) out of
Committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CSHB 409(FIN) was REPORTED out of committee with a "do
pass" recommendation and with one previously published
fiscal impact note: FN1 (ADM).
2:17:37 PM
AT EASE
2:20:25 PM
RECONVENED