02/13/1996 01:33 PM Senate TRA

 STRA - 2/13/96                                                                
                                                                               
         SB 226 MOTOR VEHICLE REGISTRATION/EMISSIONS                         
                                                                               
                                                                               
 Number 002                                                                    
                                                                               
 CHAIRMAN RIEGER called the Senate Transportation meeting to order             
 at 1:33 p.m. and introduced  SB 226  as the first order of business           
 before the committee.                                                         
                                                                               
 TOM WILLIAMS, Staff to Senator Frank, read the following sponsor              
 statement:                                                                    
                                                                               
 SB 226 requires motor vehicle registrations to be renewed once                
 every two years instead of annually.  This will result in shorter             
 customer service lines at the Division of Motor Vehicles (DMV) by             
 reducing the necessity for as frequent public contact.                        
                                                                               
 To help offset the burden of having to pay two years of fees at               
 once, this legislation gives the public a small registration fee              
 break.  However, despite the small fee break to the public, the               
 state and those municipalities which have a motor vehicle                     
 registration tax will receive additional one time revenue in the              
 year of implementation due to accelerated collections.                        
                                                                               
 This legislation dovetails with DMV's current plans to convert to             
 biennial vehicle registration in Anchorage and Fairbanks and allows           
 DMV sufficient time to convert to a statewide biennial system!                
                                                                               
 I believe this is a good piece of legislation and encourage your              
 support.                                                                      
 Mr. Williams noted that the committee packets contained a sectional           
 analysis, an overview outline, and a summary of highlights.  He               
 explained that the first schedule illustrated the projected vehicle           
 registration by utilizing the actual numbers in 1994 and 1995 while           
 the numbers for the years 1996 to 2002 are based on an annual                 
 increase of three percent.  The second schedule projects the cash             
 flow under the current fees.  The third schedule shows the                    
 projected cash flow with the new fees, assuming that the effective            
 date is July 1, 1997.  There is a cash flow difference of $12.3               
 million between the total revenues with the new fees and the total            
 revenues with the old fees.  There is a one time net cash flow                
 increase of $9.8 million.                                                     
                                                                               
 Number 092                                                                    
                                                                               
 JUANITA HENSLEY, Chief of Driver's Services for DMV, said that the            
 department does support this concept.  A biennial registration                
 program has been supported in previous years, but the annual                  
 emissions testing in Anchorage and Fairbanks have been an obstacle            
 for the implementation of such a program.  She said that a                    
 voluntary biennual program is planned to begin in July.  This would           
 benefit the people of Alaska.                                                 
                                                                               
 CHAIRMAN RIEGER understood that biennial registration would become            
 mandatory after the transition period.  JUANITA HENSLEY clarified             
 that SB 226 would mandate biennial registration whereas now it is             
 an initiative of DMV to voluntarily do biennial registration.                 
                                                                               
 CHAIRMAN RIEGER asked if there would be a refund of any portion of            
 the registration fee, if a vehicle leaves the state or is involved            
 in a car accident.  JUANITA HENSLEY replied no.                               
                                                                               
 CHAIRMAN RIEGER pointed out that this analysis may fail to capture            
 the unused registration fee.  Under the old system, a car that was            
 totalled in an accident or owned by a person who moved to another             
 state would leave the remaining months of registration fee.  Under            
 the new system those free months of registration fee would be                 
 increased.  That must happen frequently.  Chairman Rieger stated              
 that all of the fiscal impacts must then be understated.  Biennial            
 registration may be more revenue generating than the information              
 suggests.  Was that factored into the analysis?                               
                                                                               
 JUANITA HENSLEY said that she did not know, but the division does             
 support the projections that were presented by Mr. Williams.                  
                                                                               
 TOM WILLIAMS informed the committee that the projections utilized             
 the actual vehicle registration from 1995 with a three percent                
 increase projected.  Nothing that Chairman Rieger suggested was               
 taken into account.                                                           
                                                                               
 JAY DULANY, Director of the Division of Motor Vehicles, offered to            
 be available for questions.                                                   
 SENATOR ADAMS moved that SB 226 be moved out of committee with                
 individual recommendations.  Hearing no objections, it was so                 
 ordered.