Legislature(1993 - 1994)

04/16/1994 01:05 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
  HOUSE BILL NO. 328                                                           
                                                                               
       "An  Act relating  to  motor  vehicle registration  and                 
       registration fees;  to fees for  drivers' licenses  and                 
       permits; and providing for an effective date."                          
                                                                               
  Representative  Martin  provided  members  with  a  proposed                 
  committee substitute,  work draft 8-LS1316\D,  4/15/94 (copy                 
  on  file).  He noted  that the proposed committee substitute                 
  incorporates the following changes:                                          
                                                                               
       *    Sets biennial vehicle  registration fees at  twice                 
            the current annual rate; and                                       
                                                                               
       *    Allows the  Department of Public Safety to suspend                 
            or revoke the  registration if the owner  fails to                 
            obtain an emission inspection certificate.                         
                                                                               
  Co-Chair Larson noted that the  ability to collect municipal                 
  personal property tax  on automobiles upon  registration has                 
  aided municipalities.                                                        
                                                                               
  Representative Martin  noted  that the  provision for  state                 
  collection will be optional.  He stressed that the municipal                 
                                                                               
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  tax could be collected in conjunction with the property tax.                 
                                                                               
                                                                               
  Co-Chair  Larson  noted  that  the  owner of  an  automobile                 
  purchased  on January  2 would  not pay their  municipal tax                 
  until the following year.                                                    
                                                                               
  JUANITA  HENSLEY,  DIRECTOR,  DIVISION  OF  MOTOR  VEHICLES,                 
  DEPARTMENT OF PUBLIC SAFETY explained that section 17 of the                 
  proposed  committee  substitute contains  the  municipal tax                 
  schedule.  Section 17 also provides for an agreement between                 
  the  Commissioner  of the  Department  of Public  Safety and                 
  municipalities   to   collect   the   municipal   tax   upon                 
  registration.     She  clarified  that   municipalities  are                 
  currently  given  the  option  of  state  collection.    The                 
  proposed committee substitute  would add  an option for  the                 
  state to collect the tax.  She noted that the state collects                 
  municipal tax for ten municipalities.                                        
                                                                               
  Ms. Hensley  noted that  the  proposed committee  substitute                 
  removes authorizing language from title 28.10.431.  Language                 
  allowing the tax to be collected by the Department of Public                 
  Safety would be placed under title  29.  The Commissioner of                 
  the  Department  of   Public  Safety  would  be   given  the                 
  discretion to collect or not collect the municipal tax.                      
                                                                               
  Representative   Hanley   expressed    concern   that    the                 
  Commissioner could chose not to collect the tax on behalf of                 
  municipalities.   He emphasized  that the  state receives  8                 
  percent of the money collected for administrative costs.                     
                                                                               
  Representative  Martin   noted  that  the   state  has   the                 
  administrative burden and expense of  collection.  The state                 
  receives 8 percent  of the  money collected as  compensation                 
  for the administrative costs.                                                
                                                                               
  Ms.  Hensley  noted  that  the  Division of  Motor  Vehicles                 
  collected $29.0 million  dollars in FY  94.  She added  that                 
  $5.9 million was  returned to municipalities.   She observed                 
  that  8  percent of  the collected  tax  is returned  to the                 
  General Fund.   Eight  percent  equals approximately  $440.0                 
  thousand  dollars.    She  emphasized  that  the  8  percent                 
  marginally  covers  all  of the  costs  associated  with the                 
  collection.                                                                  
                                                                               
  Representative Hanley discussed funding for the Division  of                 
  Motor  Vehicles.    He  reiterated   his  concern  with  the                 
  provision to  allow the  Commissioner of  the Department  of                 
  Public  Safety   to  not  collect  the  tax   on  behalf  of                 
  municipalities.                                                              
                                                                               
  Members discussed amending the proposed committee substitute                 
                                                                               
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  to delete the  provision allowing  discretion.  Ms.  Hensley                 
  suggested that section 17 be deleted.                                        
                                                                               
  Representative Martin  clarified that the  tax collection is                 
  based on annual  registration.   Ms. Hensley explained  that                 
  the tax is still based on the annual registration fee.                       
                                                                               
  Representative  Hanley  express concern  that municipalities                 
  would receive the same amount of revenue for each year.  Ms.                 
  Hensley clarified that  the fee would be collected every two                 
  years  with a  reflection of  one year  collected tax  base.                 
  Municipal revenues would be  cut in half if the tax  base is                 
  not  doubled  for a  biannual  collection.   Title 28.15.431                 
  would have to be amended to double the tax base structure.                   
                                                                               
  Ms. Hensley noted  that the legislation also  allows payment                 
  by credit card.                                                              
                                                                               
  JEANNIE LARSON, STAFF,  REPRESENTATIVE MARTIN observed  that                 
  the tax structure  could be  taken out of  statute to  allow                 
  municipalities to  set  fees.   Ms. Hensley  noted that  the                 
  Department of Public  Safety would oppose the  suggestion to                 
  allow municipalities to set  fees.  She emphasized that  the                 
  Department wishes a standard fee structure.                                  
                                                                               
  RON  KING, PROJECT  MANAGER,  MOBIL  SOURCES, DEPARTMENT  OF                 
  ENVIRONMENTAL  CONSERVATION  referred  to  the  department's                 
  fiscal  note.   He noted  that the  department  has provided                 
  three  fiscal  notes  based  on   different  options.    The                 
  department supports option  one.   Option one would  provide                 
  that if an individual fails to renew the emmissions  permit,                 
  the Department  of Environmental  Conservation would  inform                 
  the Department of Public Safety.                                             
                                                                               
  Mr. King explained that  failure to renew could result  in a                 
  violation of $100  hundred dollars  issued by the  municipal                 
  police department or a civil action through the small claims                 
  court.                                                                       
                                                                               
  Mr.   King   discussed  the   Department   of  Environmental                 
  Conservation's  fiscal  notes.   He noted  that  a $2  to $3                 
  dollar per vehicle  fee would be  collected.  He noted  that                 
  section  21  amends  AS   28.10.431  which  addresses   only                 
  Anchorage and Fairbanks.  Ms. Hensley noted that  section 14                 
  of the  proposed committee substitute addresses  the program                 
  fees  collected by the Division  of Motor Vehicles.  Program                 
  authority would be under section 19.                                         
                                                                               
  Representative Martin noted  that sections  10 and 15  allow                 
  registration to be paid by credit card.  He noted that there                 
  are   difficulties   with    implementation   of    biannual                 
  registration.                                                                
                                                                               
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  Ms. Larson recommended that sections 2, 7, 10, 14, 15 and 19                 
  be  retained  to  allow   the  Department  of  Environmental                 
  Conservation greater enforcement authority.                                  
                                                                               
  CRYSTAL SMITH, ALASKA  MUNICIPAL LEAGUE stressed  that state                 
  collection of the  municipal motor vehicle registration  tax                 
  is  the  most efficient.    She  felt fee  values  should be                 
  increased.   She spoke in support of a  change to a two year                 
  collection  of the tax.   She discussed the municipal fiscal                 
  note.  She  noted that enforcement  would be a local  police                 
  function.  She stressed that monitoring of the program would                 
  cost  the municipality of Anchorage $181.6 thousand dollars.                 
                                                                               
                                                                               
  Co-Chair Larson noted that the word "biannual" would need to                 
  be  deleted if the Committee does  not change the collection                 
  period  from an annual  fee.  Mr. King  stressed that if the                 
  registration is kept  on an annual  basis the Department  of                 
  Environmental  Conservation would  not have to  exercise any                 
  fee  requirements  under  section  19.   He  added  that the                 
  Department would  have improved  enforcement abilities.   He                 
  suggested  that  section 19  would  allow the  Department of                 
  Environmental Conservation to  establish a  fee to fund  the                 
  Mobil Source Program by program receipts.   He estimated the                 
  proposed change  would result in  a general fund  savings of                 
  $287.0 thousand dollars.  He noted that municipalities could                 
  increase revenues through the issuance of citations.                         
                                                                               
  Representative Martin  spoke  against increased  fees.    He                 
  spoke in  favor of deleting all sections  except sections 10                 
  and  15.     Representative  Therriault   agreed  that  only                 
  retention of sections 10 and 15 should be retained.                          
                                                                               
  Representative   Brown  suggested   that   fees  should   be                 
  considered  in light of the state's declining revenues.  She                 
  suggested that the enforcement authority  be retained if the                 
  fee sections are deleted.  Mr. King reiterated that sections                 
  2, 7, 10, 14, 15 and 19  would result in a zero fiscal  note                 
  and that  no fees  would be  executed by  the Department  of                 
  Environmental Conservation unless regulations are exercised.                 
                                                                               
  (Tape Change, HFC 94-127, Side 2)                                            
                                                                               
  Representative Martin  MOVED to  delete all  material except                 
  sections  10  and 15;  and amend  the  title to  reflect the                 
  change.                                                                      
                                                                               
                                                                               
  Representative Brown MOVED  to AMEND  the motion to  include                 
  the retention of  sections 2 and 19.   Representative Martin                 
  OBJECTED.  Representative Brown argued that the amendment to                 
                                                                               
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  the    amendment    would   strengthen    the   enforcement.                 
  Representative Martin spoke  in opposition to the  motion to                 
  amend.   A roll call vote was taken  on the amendment to the                 
  amendment.                                                                   
                                                                               
  IN FAVOR: Brown, Larson                                                      
  OPPOSED:  Hanley, Foster, Martin, Parnell, Therriault                        
                                                                               
  Representatives Grussendorf, Hoffman,  Navarre, and  MacLean                 
  were not present for the vote.                                               
                                                                               
  The MOTION FAILED (2-5).                                                     
                                                                               
  Ms.  Hensley  noted  that  the  Division  needs  legislative                 
  authority  to  pay the  credit  card  collection fee.    She                 
  estimated that  the Division  would need  a $225.0  thousand                 
  dollar fiscal  note to  reflect the  credit card  collection                 
  cost.                                                                        
                                                                               
  Representative  Martin reiterated  the motion to  delete all                 
  material except sections 10  and 15; and amend the  title to                 
  reflect the change.                                                          
                                                                               
  In  response  to  a question  by  Representative  Brown, Ms.                 
  Hensley clarified that the department needs authorization to                 
  seek appropriation to pay credit card costs.   She estimated                 
  that credit  card  fees  would  equal  approximately  $225.0                 
  thousand  dollars  a  year.    Ms. Hensley  discussed  costs                 
  associated with credit card collection and defaulted checks.                 
                                                                               
                                                                               
  Co-Chair Larson  suggested that credit  card collection will                 
  result in increased efficiency.                                              
                                                                               
  There being NO  OBJECTION, all  material except sections  10                 
  and 15 was  deleted; and  the title amended  to reflect  the                 
  change.                                                                      
                                                                               
  Representative  Brown expressed  concern  with the  cost  of                 
  credit card collection.                                                      
                                                                               
  Co-Chair  Larson  MOVED to  report  CSHB  328 (FIN)  out  of                 
  Committee  with  individual  recommendations  and  with  the                 
  accompanying amended  fiscal  note from  the  Department  of                 
  Public Safety for  $225.0 thousand dollars.  There  being NO                 
  OBJECTION, it was so ordered.                                                
                                                                               
  CSHB  328  (FIN)  was  reported out  of  Committee  with "no                 
  recommendation"  and  with  a  fiscal  impact  note  by  the                 
  Department of Public Safety.                                                 

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