03/12/1996 09:10 AM Senate FIN

                                                                               
  SENATE BILL NO. 86                                                           
                                                                               
       An  Act relating  to issuance  of special  request                      
       commemorative  gold  rush  motor  vehicle  license                      
       plates.                                                                 
                                                                               
  Co-chairman Halford  directed that SB  86 be brought  on for                 
  discussion.  Senator Sharp explained  that the bill proposes                 
  to redesign  the state license  plate for motor  vehicles to                 
  reflect the ten-year (1994-2004) gold rush centennial theme,                 
  and  he referenced  letters of  support.   The  Senator then                 
  MOVED for adoption of work  draft 9-LS0689\G (Ford, 3/8/96).                 
  No objection having been raised, CSSB 86 (Fin) was ADOPTED.                  
                                                                               
  JUANITA HENSLEY, Chief, Driver  Services, Division of  Motor                 
  Vehicles, Dept. of  Public Safety, came before  committee to                 
  respond to questions.  Co-chairman Halford asked if the work                 
  draft would  be accompanied  by a  zero fiscal  note.   Mrs.                 
  Hensley responded  negatively.   The original  note, showing                 
                                                                               
                                                                               
  costs of $7.7  and revenues  of $7.8, reflects  design of  a                 
  specialty license  plate depicting the  gold rush era.   The                 
  work draft allows the gold rush design to become the general                 
  issue license plate.   That would involve  contractual costs                 
  for both the designer and supplier.  Operating costs for the                 
  first  year  would be  $10.0  for  design.   An  increase in                 
  subsequent years  to $34.4  reflects rebid  of the  existing                 
  contract  which expires in January, 1997.   The contract has                 
  historically shown a  10 percent increase.  That  cost would                 
  be in addition to costs associated with the new design.                      
                                                                               
  In response to a further question from the Co-chairman, Mrs.                 
  Hensley acknowledged that  sale of the plates  would produce                 
  revenue, but she  said she  had no way  of quantifying  that                 
  revenue at this  time.  Discussion followed  regarding sales                 
  of vanity license plates.                                                    
                                                                               
  Responding  to  a  question  from  Co-chairman  Frank,  Mrs.                 
  Hensley reiterated that  the gold rush plate would be phased                 
  in as the new  general issue plate.  Senator  Donley advised                 
  that he would support availability of gold rush plates as an                 
  option.  He  stressed that the  proposal that the new  plate                 
  become general  issue represents a major change in the bill.                 
                                                                               
                                                                               
  Senator Randy  Phillips asked  what would  happen after  the                 
  ten-year  centennial  period.   He  attested to  past public                 
  aversion  to  changing  Alaska's  license plates.    Senator                 
  Donley voiced support  for the original bill  which provided                 
  for an optional  centennial plate.  Senator  Sharp explained                 
  that the impetus behind general issue  was to make the plate                 
  available  as   economically  as  possible   at  the   $5.00                 
  replacement rate  rather than  at the  custom plate  rate of                 
  $30-$35.    The intent  was to  provide  a low  priced entry                 
  threshold through gradual phase in.   Experience with vanity                 
  plates indicates that  sales of gold rush plates  would more                 
  than  cover annual costs.   The cost escalation projected on                 
  the fiscal note would have occurred for existing plates when                 
  the contract was  rebid.  The  only difference is the  $10.0                 
  design  cost  and  nominal  costs  from  redesign  that  may                 
  increase the average cost of plates.  Sale of plates  at the                 
  replacement rate  of $5.00 provides  a $2.00 profit  for the                 
  state.  When profit  is calculated per projected  sales, the                 
  state should more than break even.  Co-chairman Frank voiced                 
  support for the adopted work draft.                                          
                                                                               
  Senator Rieger MOVED that CSSB  86 (Fin) pass from committee                 
  with accompanying fiscal  notes.   No objection having  been                 
  raised, CSSB 86 (FIN)  was REPORTED OUT of committee  with a                 
  $10.0 fiscal  note from  the Dept.  of Public  Safety.   All                 
  members  signed  the  committee  report  with  a  "do  pass"                 
  recommendation  with the  exception of  Senators Donley  and                 
  Phillips who signed "no recommendation."