Legislature(1995 - 1996)
03/08/1996 09:15 AM Senate FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE BILL NO. 226
"An Act relating to biennial registration of motor
vehicles; imposing biennial registration fees on motor
vehicles and authorizing a scheduled biennial municipal
tax on motor vehicles; relating to fees for motor vehicle
emissions control programs; and providing for an effective
date."
Tom Williams, aide to Senator Steve Frank gave testimony in
support of SB 226. Senator Frank noted that amendment
number 1 had the effect of bringing the IM program and the
biennial program into existence at the same time by delaying
the IM program by six months. It was requested by the
Department but has taken extra time to implement the
biennial IM from last year's SB 28. Mr. Williams said that
this amendment arose out of a request from the Department of
Environmental Conservation and with the agreement of the
Department of Public Safety, Division of Motor Vehicles. As
explained in the attached letters to the amendment they
believe that public confusion will be reduced and it will be
less expensive if there is a simultaneous implementation of
biennial registration with the biennial emissions testing.
The amendment tightens the title and delays the
implementation until 1 January 1997, making them concurrent.
It also amends SB 28, last year's IM testing bill, to insure
that they have the authority to stagger the implementation
according to the current language in SB 226 allowing the
biennial registration to be staggered as far as the
implementation. Co-chairman Halford asked about the effect
of the delay of the fiscal note. Mr. Williams said that the
Department had been requested to update their fiscal note to
reflect the increase in revenues as a result of the
accelerated collections. The accelerated collections will
be moved up by six months. There will be roughly a $9.8
million one time windfall in present value terms to the
State of Alaska. Mr. Williams said that there would be a
revised fiscal note showing the time difference should the
amendment be approved. Co-chairman Halford asked about the
statement in the amendment packet on $150,000 for delay of
SB 28. Mr. Williams said that the $150,000 dealt with the
software changes that were required by the various IM
stations and that was funded by DEC. There is no additional
cost from DEC as a result of this amendment. Those costs
are being incurred right now under SB 28 and they had
indicated there would be some additional costs if it was not
made consistent. However, no new fiscal note was submitted
on the original bill hearing.
Juanita Hensley, Chief Driver Services, Division of Motor
Vehicles was invited to join the committee. She advised
that the Department supported this bill along with the
amendments. An updated fiscal note will be provided as soon
as the committee substitute is adopted. She said a draft
fiscal note was prepared and is in the packet for the
original bill but when the committee adopted a CS they had
no idea what the impacts would be on the Department and a
new fiscal note could not be prepared. She said she would
get a fiscal note to the committee as soon as possible when
she knew what the final version was. Co-chairman Halford
said the committee would act on the amendment first and if
after they acted and she could get the fiscal note back to
them they could still move the bill today. Senator Frank
MOVED amendment number 1. Senator Donley objected saying
that some limits should be set consistent with the
philosophy of the bill on the costs that were being charged
for IM. Currently the municipalities of Anchorage and
Fairbanks were charging $10 for the annual certificates.
They will want to go to $20 for the biennial certificates.
Under this bill $2 is discounted for those who register
their motor vehicles biennially. He said he would be much
more inclined to support this bill if a cap of $18 could be
set for the municipalities to charge so they do not double
their fees. Without that it is kind of difficult to go
along with delaying the IM provisions again. People were
disappointed it took as long as it did. Senator Frank
indicated he and Senator Donley had been discussing this
matter and that he shared this concern. However, his
reluctance in putting in the statute a specific amount is
because these issues should be hashed out locally by the
administration and assemblies who will have to administer
the programs. The administration of the municipality will
have to have public hearings and defend it's request to
increase the fees. It will be a dynamic public process to
decide how much to be spent and how much will be justified.
Perhaps some legislative intent could be sent along.
Co-chairman Halford asked about a general statement of the
bill and that it could state that the fee could not exceed
the cost of implementing the program. This is not intended
to be a revenue generator. Senators Frank and Donley
concurred. Senator Frank said perhaps a conceptual
amendment could be prepared. Senator Rieger commented on
the choice recommended by DEC to delay the old SB 28 to the
time of implementation of SB 226. Is there a reason to hold
this off until January 1? They should both come into being
at the same time October 1 or September 1. How much time
would it take for adoption and getting all this together?
Juanita Hensley explained that DEC implementations will not
be ready by July. The Division has already made the
changes available and would have been able to do a voluntary
biennial registration. Coordinating the two is very
important because it will benefit the public. Registration
renewal mail-outs would have to be ready to go in August to
be ready for 1 October.
Senator Rieger said he understood DEC would be implementing
SB 28 on 1 July and now they would actually be getting an
extra three months. How would it be harder for them to be
getting something ready for three months later? Juanita
Hensley said that she could not speak for DEC. She
testified as to the fiscal note numbers that she would be
submitting. The first year would, if it had an effective
date of 1 January, show a revenue of approximately $2.5
million and FY 98 would be $5.85 million. FY 99 through FY
02 shows a loss of revenue of $580,000. for each year.
There would be no operational costs for FY 97 because the
existing funds that were appropriated in SB 28 would be
used. FY 98 through the following years would show a
reduction of operating costs to the Division of $64,000 and
that would be in the mailing of the registrations.
Co-chairman Halford said the question before the committee
was the adoption of the amendment. The remaining questions
are the delay of one versus acceleration of the other and
Senator Donley's question on recovery of cost. Senator
Frank said that it was better to take the January 1 deadline
and not argue about how long implementation would take and
then have the bill not get passed.
Senator Halford said that without objection Senator Frank's
amendment #1 would be ADOPTED.
Senator Donley offered the following conceptual amendment:
"That the State and local governments could not charge more
for the inspection fee than the programs actually cost".
Co-chairman Halford noted "...than the cost of the
administration of the program". The debate would be the
direct costs or the direct and indirect costs. Juanita
Hensley re-iterated that this was a cost that DEC had and
DMV did not get involved. Co-chairman Halford did not feel
that it was unreasonable to have it be a revenue generator.
Co-chairman Halford said that there being no objection to
Senator Donley's conceptual amendment it would be drafted as
part of the Finance CS and essentially is intended to treat
municipal and State governments the same way.
Senator Phillips MOVED amendment number 2. He said that a
few years ago a revision to Title 28 was passed
inadvertently charging individuals more money than they
should have been charged and there were a lot of complaints
and this should correct the matter. Co-chairman Halford
said that the amendment was not changing the numbers, rather
it was changing the words. Juanita Hensley said DMV was not
in opposition to the amendment. She did say that there
would be a portion of public complaints. Some discussion
between members regarding public complaints to their
respective offices but in general they agreed that
complaints have died off to some extent. Senator Phillips
WITHDREW amendment number 2.
Senator Rieger still felt that amendment number 2 should be
adopted. Co-chairman Halford said that there was no
substantive effect of what was being done. Senator Frank
felt that the amendment would only cause more confusion and
strongly objects to amendment number 2. He said the fees
were being changed from $35 for one year to $68 for two
years. Co-chairman Halford asked for a vote on amendment
number 2 as drawn by Senator Phillips and offered by Senator
Rieger and it was voted to be WITHDRAWN.
Co-chairman Halford said that a fiscal note of the bill as
amended had been explained to the committee and that it
would show in operating zero for 1997; $64,000 for 1998;
$64,000 for 1999; $2.5 million; $5.8 million and then
$580,000 going forward on the gain/loss side. As long as it
is understood exactly what it was going to be it can be
assumed the committee is adopting that fiscal note with the
bill. Juanita Hensley advised that the information was
correct and that the fiscal note would be made available
today. Co-chairman Halford said it could go with the bill
to be read across on the floor today.
Senator Frank MOVED CSSB 226 (FIN) and without objections it
was REPORTED OUT of committee with individual
recommendations and the explained fiscal note.
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