Legislature(1995 - 1996)
04/20/1995 02:10 PM Senate L&C
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
SB 28 MOTOR VEHICLE REG FEE/EMISS'N INSPECTIONS
CHAIRMAN KELLY called the Senate Labor and Commerce Committee
meeting to order at 2:10 and announced SB 28 to be up for
consideration.
SENATOR DAVE DONLEY, sponsor, said SB 28 is designed to change the
I.M. testing program in Alaska from every year to every other year.
Almost all other states, including California, do it every other
year.
He said, at the request of Senator Rieger, there was a
restructuring of DMV fees. Currently, there is an additional $10
fee if you come to a DMV office in person when you could do it by
mail. Senator Rieger thought the fees should be $10 with a rebate
if you use the mail. Personally, he said, he is very ambivalent
about this change and really wanted to just do away with the fee.
However, financially it is hard to do that since DMV has become
dependent on that extra revenue.
SENATOR DONLEY said the point of the legislation is to get bi-
annual testing which would be a real positive thing to do for the
people of Alaska.
SENATOR KELLY asked if you still have to register every year, but
get the emission test every second year. SENATOR DONLEY responded
that was correct. He elaborated that there has been interest in
bi-annual registration, but the argument against it in past years
has been because we have to get I.M. tests every year and there is
the shock of having to pay twice as much every other year rather
than scheduling the payments out, so to speak. He thought bi-
annual registration would save the state a lot of money in
administrative costs, but this particular bill doesn't do that.
Number 93
JUANITA HENSLEY, Division of Motor Vehicles, explained the reason
they have not gone to bi-annual registration is because of programs
that have been added over the years, such as the yearly emissions
program and the collection of 13 communities' motor vehicle
registration taxes which are collected on an annual basis.
SENATOR SALO asked why you couldn't collect taxes on a bi-annual
basis. MS. HENSLEY explained the statute says it has to be
collected annually.
SENATOR TORGERSON asked if insurance was required before you
register your vehicle now. MS. HENSLEY answered that is a
requirement.
SENATOR TORGERSON asked what would bi-annual do to that. MS.
HENSLEY said they don't look at insurance verification. They just
have the person sign a certified statement on the registration
saying they have insurance as required by law and they are expected
to keep it.
WALLY HOPKINS, Quick Lube Chief Executive Officer, said they are
the largest provider of emission testing in the state, employing 25
people in the Anchorage and Fairbanks emissions program. The
annual payroll for these people is $1.1 million. In recent years
the violation of federal standard has fallen a maximum of three or
four times a year when Anchorage or Fairbanks has an extreme
temperature inversion.
Current programs operating in Anchorage and Fairbanks are recently
new, he explained. They have invested over $1 million in
facilities, equipment, and personnel to be able to provide these
services. After a successful 90-day pilot program in Anchorage,
including a reregistration service, they hoped to open another
facility in Fairbanks within the next 30 days. He thought this was
a prime example of private enterprise and government working
together. With the reregistration process the state does not have
any cost and they are not charging their customers any fee for this
service.
At their facility in Anchorage they can test eight cars at a time
and they are gearing up to do 12 cars at a time. The average wait
to get a vehicle tested there is less than 10 minutes. They are
currently testing 22 1/2% of vehicles in Anchorage, according to
the number of registrations that are being mailed out to the public
in Anchorage.
He concluded saying that if this bill passes, it will eliminate 50%
or more of the jobs within the emission testing industry. It will
put a hardship on the residents of Alaska who are subject to
emissions testing by doubling the cost of repairs for failed
vehicles. It would put an extreme hardship on good businesses that
in good faith planned, developed, and provided emission testing
based on established programs.
SENATOR KELLY asked Ms. Hensley if there was a cap for an emission
inspection in statute. She replied that she didn't have that
answer, but knew that DMV collects $1 for the processing of those
certificates. In this bill it would go up to $2.
SENATOR KELLY asked if there was a set fee for emission inspections
at his shops. MR. HOPKINS said they are charging $29.95 for the
inspection and they add the $10 registration fee at this time. He
said he thought Anchorage had $45 as a cap. Fairbanks has
something like $65.
Number 260
RON KING, Department of Environmental Conservation, said that state
statute and regulations do not limit what an inspection cost could
be. Local statutes and ordinances in Anchorage and Fairbanks limit
what the facility can charge. In Anchorage it is $40 and Fairbanks
has a $40 or $45 upper limit.
SENATOR KELLY asked him how many vehicles are tested in Anchorage
every year. MR. KING replied approximately 150,000 vehicles that
qualify for this program are in Anchorage and approximately 50,000
in Fairbanks.
SENATOR TORGERSON asked if he had a position on going to two years.
MR. KING replied that the department has been concerned with going
to an every other year inspection until the communities have
attained the standard. Based on the failure rates, however, and
working with DMV and Senator Donley, they believe they put together
a package that will enable them to convince EPA to approve an every
other year inspection.
SENATOR KELLY commented that Mr. Hopkins has already recovered his
investment. MR. HOPKINS disagreed and explained that it would take
about three years to amortize their investment.
Number 291
SENATOR TORGERSON asked Mr. Hopkins what the average cost of fixing
an emission problem would be. MR. HOPKINS replied the average cost
would be about $100 - $125 per repair. He explained with an every
other year scenario, instead of 17% of vehicles failing (the figure
for now) there would about 35% or more.
SENATOR DONLEY said the last committee changed the effective date
to 1996 which would give businesses time to adjust to the new plan.
The Division would have some discretion to deal with problem
automobiles. They also have some authority, through regulation, to
address the cost issue. He noted that after some review of
correspondence, he was struck with the discrepancy between fees
charged for I.M. testing in Alaska versus other states. Our fees
up here are twice as much.
SENATOR KELLY said he liked the idea of bi-annual registration, but
he didn't think there would be time with 30 days left to go. He
hoped legislation like that would be introduced at a later time.
SENATOR SALO said she was concerned because she had many
constituents call her about the $10 fee and thought the bill just
flip flopped the issue around. If the argument is revenue, and
having become dependent on that revenue, she thought that was
negated by the fact that every one of those fees is going up $10.
She would like to see the elimination of that section unless there
is compelling information from the DMV that it's a good idea.
SENATOR DONLEY commented that section is not related to the bi-
annual testing proposal.
MS. HENSLEY said the original bill did do away with the $10 fee
proposal if you walked in as opposed to mailing in the
registration. Since they have gone to the $10 fee, mail has been
increased to total 60%. Senator Rieger's amendment would increase
everyone's registration by $10 unless you mail it in and get a
rebate, with the exception on page 2, lines 9 - 12, which deletes
language that allowed them to waive the $10 fee if you are required
to be in the office to handle a transaction.
People who choose to register their cars at the I.M. stations are
not charged the $10 walk-in fee, although some of the stations
charge a $10 processing fee. This bill makes it equitable for
everyone and will generate approximately $2.5 in general fund
revenue which their department doesn't receive unless it is
appropriated to them, MS. HENSLEY explained.
SENATOR KELLY asked if SB 28 encouraged smaller lines in the DMV
offices. MS. HENSLEY agreed that it did.
SENATOR DONLEY said he didn't think the fees section of the bill
had an effect one way or the other on that. He said SB 28 didn't
change the incentive to register by mail. He said the committee
could delete the fee section and the status quo would remain that
the division would be assessing the $10.
SENATOR SALO said her intention would be to take out the section so
they would lose the ability to collect the $10. She didn't think
people would automatically start going back to DMV instead of using
the mail.
MS. HENSLEY said offering a program with incentive to keep people
from standing in a line so you can give better service to someone
who has to be there is what they are seeking. She said it was
working.
Number 435
SENATOR KELLY commented that even if this bill passes people could
still register their vessels at the various I.M. stations. MS.
HENSLEY agreed that was correct.
SENATOR KELLY asked if DMV supported this bill. MS. HENSLEY said
they support it as drafted.
SENATOR DONLEY said one amendment was recommended by DEC to make a
different effective date to allow them to begin enforcement
earlier.
SENATOR TORGERSON moved amendment #1. There were no objections and
it was so ordered.
SENATOR TORGERSON moved to pass CSSB 28 (L&C) from committee with
individual recommendations. There were no objections and it was so
ordered.
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