Legislature(2015 - 2016)BELTZ 105 (TSBldg)
03/17/2015 03:30 PM Senate COMMUNITY & REGIONAL AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| Confirmation Hearing: Commissioner, Alaska Department of Commerce, Community & Economic Development | |
| SB22 | |
| HB70 | |
| SB56 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | SB 22 | TELECONFERENCED | |
| + | HB 70 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 56 | TELECONFERENCED | |
SB 22-MOTOR VEHICLE REG. TAX: COLLECTION COSTS
3:44:02 PM
CHAIR BISHOP announced the consideration of SB 22. He asked that
Mr. Wolfe address questions posed at the previous committee
meeting that included costs to the communities and to the
Division of Motor Vehicles (DMV).
3:44:24 PM
FORREST WOLFE, Staff, Senator Giessel, Alaska State Legislature,
Juneau, Alaska, read the following statement:
Since the inception of the motor vehicle registration
and tax system in 1983, the cost to the state in
collecting municipality taxes has been reduced
considerably while the rate taken off the top by the
state has not. The Motor Vehicle Registration Fees &
Taxes (MVRT) Program was created not as a revenue
sharing program, but was intended to piggyback in a
sense on the activities the state was already
conducting in order to produce revenue for the
municipalities; with this understanding in mind, the
state should only be collecting the added cost it
incurs from the operating the program and not sharing
in the revenues the municipalities receive from their
citizens.
SB 22 proposes to reduce the amount that the state
collects from 8 percent to 5.5 percent in order to
more accurately reflect the amount of work and
resources the state provides to the municipality for
performing this service. This does not impose any new
costs or fees on the state or citizens, it simply
reallocates the collected funds to the cities
themselves. By allowing local governments to keep more
of their own taxes, this revenue is kept closer to the
citizens it was enacted to serve and therefore serves
the people better. With revenue sharing posed to be
reduced in these difficult fiscal times, allowing the
municipalities to retain more of their revenue makes
sense.
3:45:56 PM
CHAIR BISHOP welcomed Senator Cathy Giessel, bill sponsor, to
the committee meeting.
3:47:58 PM
DANIEL MOORE, City Treasurer, Municipality of Anchorage,
Anchorage, Alaska, stated that Anchorage has been losing
$500,000 per year in tax revenue. He said when Anchorage
increased its auto tax rates in 2012, DMV's statutory 8 percent
fixed rate for administering the MVRT Program provided DMV with
an additional $500,000. He detailed that Anchorage accounts for
45 percent of all the vehicles in the state, but since the
change in 2012, Anchorage is paying 59 percent of all of the
costs. He declared that changing DMV's fixed rate to 5.1 percent
would put DMV's administrative charge back to parity. He noted
that Senator Giessel's proposal in SB 22 provides for a 5.5
percent fixed rate, a rate that takes into account wage
increases that DMV may have encountered. He remarked that DMV
has noted in their fiscal note that a 5.5 percent rate will have
no impact on their operational costs. He added that not just
Anchorage, but 16 other communities that have MVRT will benefit
by an additional 3 percent in revenue.
3:52:09 PM
SENATOR MACKINNON asked to confirm that Anchorage accounts for
45 percent of the state's transactions.
MR. MOORE answered correct. He noted that the rate is a
percentage that DMV recently quoted.
SENATOR MACKINNON called upon Amy Erickson and asked if she
agreed with Mr. Moore's assertion that Anchorage accounts for 45
percent of DMV's transactions. She also inquired if the proposed
rate reduction to 5.5 percent would fairly allocate costs across
the state.
3:53:20 PM
AMY ERICKSON, Director, Division of Motor Vehicles (DMV),
Department of Administration, Anchorage, Alaska, replied that
based on DMV's statistics, 45 percent of all of the vehicles in
the state are registered in the Municipality of Anchorage. She
commented that she cannot speak to effects on the other
communities.
SENATOR EGAN noted previous discussions regarding the contract
collectors for DMV licensing. He asked if the contract
collectors are being figured into the licensing fee equation.
MS. ERICKSON replied that strictly DMV and commissioned agents
were taken into account.
SENATOR EGAN asked if the Alaska Trucking Association (ATA) is a
commissioned agent.
MS. ERICKSON answered no. She explained that ATA is considered a
contracting processor.
SENATOR EGAN noted previous legislation for ATA and other
organizations that were trying to collect some kind of revenue
and the bill did not pass. He asked if Ms. Erickson is
interesting in talking with ATA and other organizations. He
conceded that the previous bill was different, but remarked that
the bill was trying to get to the same end result.
3:55:07 PM
MS. ERICKSON replied that the legislation Senator Egan referred
to was slightly different. She detailed that ATA was trying
achieve a commission for DMV processing fees. She specified that
SB 22 relates to the MVRT which DMV collects on behalf of 17
municipalities and then redistributes the fees after retaining 8
percent.
SENATOR EGAN asked to verify that DMV retains 8 percent.
MS. ERICKSON replied that DMV retains 8 percent.
SENATOR EGAN asked how much ATA would retain.
MS. ERICKSON answered that ATA charges a service fee and does
not receive 8 percent of the Motor Vehicle Registration Tax.
SENATOR EGAN asked if ATA's service charge is market driven.
3:56:14 PM
CHAIR BISHOP announced that public testimony is closed.
3:56:26 PM
SENATOR STEDMAN moved to report SB 22, [29-LS0315\A], from
committee with individual recommendations and attached fiscal
note(s).
3:56:34 PM
CHAIR BISHOP announced that without objection, SB 22 moved out
of the Senate Community and Regional Affairs Standing Committee.