Legislature(1993 - 1994)
04/16/1994 01:05 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
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 2 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 3 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. 4 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 5 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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