Legislature(2013 - 2014)BARNES 124

02/18/2014 05:00 PM House RULES


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 19 PERM. MOT. VEH. REGISTRATION/TRAILERS TELECONFERENCED
Moved CSHB 19(RLS) Out of Committee
+ SB 148 KACHEMAK BAY CRITICAL HABITAT AREA TELECONFERENCED
Moved Out of Committee
          HB  19-PERM. MOT. VEH. REGISTRATION/TRAILERS                                                                      
                                                                                                                                
5:18:37 PM                                                                                                                    
                                                                                                                                
CHAIR JOHNSON announced that the  next order of business would be                                                               
HOUSE BILL  NO. 19, "An  Act relating to permanent  motor vehicle                                                               
registration; relating to the  registration fee for noncommercial                                                               
trailers  and  to  the  motor   vehicle  tax  for  trailers;  and                                                               
providing  for an  effective date."   [Before  the committee  was                                                               
CSHB 19(TRA).]                                                                                                                  
                                                                                                                                
5:18:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE OLSON moved that  the committee adopt Amendment 1,                                                               
labeled 28-LS0130\U.4, Strasbaugh, 2/7/14, which read:                                                                          
                                                                                                                                
     Page 1, line 1, following "registration":                                                                                
          Insert "in the unorganized borough and in a                                                                         
        municipality that has elected to allow permanent                                                                      
     registration"                                                                                                            
                                                                                                                                
     Page 1, line 13, following "old":                                                                                          
          Insert "and the owner resides in the unorganized                                                                      
      borough or in a municipality that elects, by passage                                                                      
      of an appropriate ordinance, to allow the permanent                                                                       
     registration of motor vehicles"                                                                                            
                                                                                                                                
     Page 2, line 27, following "or":                                                                                           
          Insert ", if the person resides within the                                                                            
     unorganized borough or in a municipality that elects,                                                                      
      by passage of an appropriate ordinance, to allow the                                                                      
     permanent registration of motor vehicles,"                                                                                 
                                                                                                                                
CHAIR JOHNSON objected for discussion purposes.                                                                                 
                                                                                                                                
5:19:07 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BILL  STOLTZE, Alaska  State Legislature,  a joint                                                               
prime sponsor  of HB 19, related  that although he is  not overly                                                               
excited  about Amendment  1 as  there is  already a  local option                                                               
that allows  municipalities to opt-out,  he said he  respects the                                                               
process.                                                                                                                        
                                                                                                                                
5:20:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG  acknowledged  situations  in  which  a                                                               
resident  of   Anchorage  registered   his/her  car   outside  of                                                               
Anchorage.   Therefore,  he expressed  concern  that Amendment  1                                                               
looks to the  residence of the owner rather than  the location of                                                               
the trailer.   The municipality  will gain or lose  revenue based                                                               
upon where the trailer is located  rather than where the owner is                                                               
located.   Representative Gruenberg  then questioned  whether the                                                               
principle location of the car should be targeted.                                                                               
                                                                                                                                
REPRESENTATIVE  STOLTZE   offered  that  would  be   a  different                                                               
amendment on a different subject.                                                                                               
                                                                                                                                
5:22:13 PM                                                                                                                    
                                                                                                                                
CHAIR  JOHNSON  said  he believes  that  every  municipality  and                                                               
borough  that has  taxing authority  has the  ability to  enforce                                                               
that taxing  authority, and therefore  that is not an  issue that                                                               
the committee needs to address.                                                                                                 
                                                                                                                                
5:24:01 PM                                                                                                                    
                                                                                                                                
JOSHUA WALTON, Staff, Representative  Craig Johnson, Alaska State                                                               
Legislature, explained that cumulatively  the changes embodied in                                                               
Amendment 1 provide that municipalities  have the ability to opt-                                                               
in to  offering permanent vehicle  registrations to  those owners                                                               
of noncommercial motor vehicles that  are older than eight years.                                                               
Under existing  statute, AS  28.10.431, municipalities  may elect                                                               
to levy a biennial motor vehicle  registration tax.  The level of                                                               
the tax is determined by  each individual municipality, collected                                                               
by the Division of Motor  Vehicles (DMV) when drivers renew their                                                               
registrations,  and   then  is   dispersed  to   the  appropriate                                                               
municipalities.   By offering the  option for drivers  and owners                                                               
to permanently  register their motor vehicles,  the mechanism for                                                               
collecting  that  revenue  stream  is  taken  from  the  DMV  and                                                               
provided  to  the  municipalities   because  when  an  individual                                                               
permanently registers a  motor vehicle, the DMV  doesn't see them                                                               
again.   The current language  of the legislation allows  for the                                                               
motor vehicle  registration tax to  continue to be levied  by the                                                               
municipalities, it  just doesn't provide  an option by  which the                                                               
municipalities   can    collect   those   taxes.       Therefore,                                                               
municipalities  would  have to  establish  their  own system  for                                                               
collecting and enforcing the tax.   The tax couldn't be collected                                                               
at the  DMV, save the one-time  tax at the time  of the permanent                                                               
motor vehicle  registration.  Mr.  Walton pointed out  that every                                                               
vehicle  that is  permanently registered  represents a  permanent                                                               
loss of revenue  to the municipality that has opted  to adopt the                                                               
motor  vehicle  registration  tax.   He  then  pointed  out  that                                                               
Amendment 1 addresses  a timing issue present  in the legislation                                                               
as currently  written.  The  legislation provides at the  time of                                                               
the  effective  date  of  the   legislation,  for  the  immediate                                                               
availability of  permanent registrations.  However,  Section 7 of                                                               
the legislation requires  that a municipality provide  to the DMV                                                               
notice of greater than a  year.  Specifically, written notice has                                                               
to be  filed by  January 1st  in the year  preceding the  year in                                                               
which the  tax is to take  effect in order for  a municipality to                                                               
levy a tax on permanent  motor vehicle registrations.  Therefore,                                                               
there is at least one year  in which eligible residents can apply                                                               
for  and receive  permanent motor  vehicle registrations  but the                                                               
municipality  can't collect  the one-time  tax during  that year.                                                               
Amendment 1,  he explained, would allow  municipalities to opt-in                                                               
by  passing an  ordinance, which  can include  an effective  date                                                               
that's more than a year out  from passage.  During that time, the                                                               
required notice to DMV can  be made before the municipality opts-                                                               
in  to the  permanent  motor vehicle  registration  system.   The                                                               
aforementioned closes the gap, he highlighted.                                                                                  
                                                                                                                                
5:29:14 PM                                                                                                                    
                                                                                                                                
MR.  WALTON,   upon  request  by  Chair   Johnson,  directed  the                                                               
committee's attention to the language  on page 4, lines 25-29, "A                                                               
municipality that chooses to change  the tax imposed under (b) or                                                               
(l)  of  this  section  or  establishes  a  tax  for  permanently                                                           
registered  motor  vehicles  or  trailers shall  file  a  written                                                             
notice of  the change  with the  department by  January 1  of the                                                               
year preceding  the year in  which the change  in tax is  to take                                                               
effect."    For  example,  starting from  today  the  earliest  a                                                               
municipality  could give  notice that  it wanted  to establish  a                                                               
permanent  motor vehicle  registration  tax would  be January  1,                                                               
2015.   Although the  current language  of HB  19 results  in the                                                               
earliest date  the tax could  take effect being January  1, 2016,                                                               
the effective date clause specifies  that it takes effect January                                                               
1,  2014.   Therefore,  there is  a period  of  time between  the                                                               
effective date  of the legislation and  the first day in  which a                                                               
municipality could  levy the tax,  such that the  permanent motor                                                               
vehicle registrations  are available in the  municipality but the                                                               
taxing capability is not.                                                                                                       
                                                                                                                                
5:30:43 PM                                                                                                                    
                                                                                                                                
CHAIR JOHNSON  related his understanding then  that an individual                                                               
would be able  to register his/her motor  vehicle permanently and                                                               
never  return  to  DMV.    [The  date  specifications  create]  a                                                               
loophole of a year, year-and-a-half  during which no tax would be                                                               
able to be  collected under the existing  legislation.  Amendment                                                               
1 would address the aforementioned by providing the option.                                                                     
                                                                                                                                
MR. WALTON  said that is  correct because Amendment 1  allows for                                                               
the  opt-in  provision  through the  passage  of  an  appropriate                                                               
ordinance; a  cleverly worded ordinance  could close the  gap and                                                               
enable   municipalities   to   offer  permanent   motor   vehicle                                                               
registrations at the same time they are able to tax them.                                                                       
                                                                                                                                
5:31:34 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HERRON asked why those dates were chosen.                                                                        
                                                                                                                                
REPRESENTATIVE STOLTZE explained that  it's routine to update the                                                               
effective  dates,  [particularly when]  the  hope  was that  this                                                               
legislation would've passed last year.                                                                                          
                                                                                                                                
5:32:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG  surmised then that Amendment  1 changes                                                               
the legislation from being applied  everywhere to applying if the                                                               
municipality passes an ordinance to  adopt it, which is an opt-in                                                               
provision.                                                                                                                      
                                                                                                                                
MR.  WALTON confirmed  that is  correct.   Given  that there  are                                                               
municipalities that  currently have a motor  vehicle registration                                                               
tax and  rely on  that revenue, [Amendment  1] would  provide the                                                               
decision to  offer permanent motor  vehicle registrations  to the                                                               
local level.                                                                                                                    
                                                                                                                                
5:33:52 PM                                                                                                                    
                                                                                                                                
CHAIR JOHNSON  opened public testimony  and encouraged  people to                                                               
speak only to Amendment 1, not the legislation itself.                                                                          
                                                                                                                                
5:35:15 PM                                                                                                                    
                                                                                                                                
KATHIE  WASSERMAN, Executive  Director,  Alaska Municipal  League                                                               
(AML),   opined   that  Amendment   1   makes   the  option   for                                                               
municipalities cleaner, quicker,  and provides the municipalities                                                               
with a choice to review their finances and make a choice.                                                                       
                                                                                                                                
5:35:49 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KELLER inquired as to  whether there have been any                                                               
calculations as  to the difference  in revenue Amendment  1 would                                                               
make in terms of local revenue.                                                                                                 
                                                                                                                                
MS. WASSERMAN related that DMV  has figures regarding the revenue                                                               
if everyone opted-in.                                                                                                           
                                                                                                                                
5:36:32 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KELLER, noting  that he is one of  the joint prime                                                               
sponsors, declared a conflict of  interest in this matter because                                                               
he owns  multiple trailers.   He then opined that  it's difficult                                                               
to  believe that  the  tax revenue  generated  from his  multiple                                                               
trailers  would be  a significant  amount  for the  municipality.                                                               
Therefore,  he inquired  as to  how  much revenue  has made  this                                                               
effort worth it.                                                                                                                
                                                                                                                                
5:38:30 PM                                                                                                                    
                                                                                                                                
DAN O'HARA, Mayor, Bristol Bay  Borough, began by saying he liked                                                               
Amendment  1.   Referring  to  a list  specifying  the amount  of                                                               
revenue  being   lost  from  the  municipalities,   Mayor  O'Hara                                                               
informed  the  committee  that Bristol  Bay  Borough  would  lose                                                               
$530,000 [under  CSHB 19(TRA)], which  could cover the cost  of a                                                               
lot of  snow removal.   Mayor O'Hara informed the  committee that                                                               
he  hasn't received  any calls  on this  legislation.   He opined                                                               
that this [legislation]  is coming from the top  down rather than                                                               
from the ground level, which is  important to him.  Therefore, he                                                               
characterized Amendment 1 as great.                                                                                             
                                                                                                                                
5:40:28 PM                                                                                                                    
                                                                                                                                
JOE KLAYKA, Mayor, City of  Bethel, related support for Amendment                                                               
1.  He informed the committee  that the City of Bethel is looking                                                               
at a  $1 million shortfall  this year because the  Alaska Village                                                               
Electric  Cooperative,  Inc.  (AVEC)  is taking  over  the  local                                                               
utility company and because AVEC is  a nonprofit the city will no                                                               
longer  be  able to  tax  the  fuel.    He further  informed  the                                                               
committee that it costs the City  of Bethel an enormous amount of                                                               
money to  put down calcium chloride  on the roads in  the summer.                                                               
Therefore, whatever  money the city  can collect is  important to                                                               
it, and thus he supported the optional nature of Amendment 1.                                                                   
                                                                                                                                
5:41:24 PM                                                                                                                    
                                                                                                                                
LUCINDA  MAHONEY, Chief  Finance Officer  (CFO), Municipality  of                                                               
Anchorage, related  support for  Amendment 1 because  without it,                                                               
the Municipality of Anchorage would  face a significant reduction                                                               
in   revenue,  an   estimated  $6-$7   million  annually.     The                                                               
aforementioned  reduction would  be a  significant impact  on the                                                               
municipality's  budget  and ability  to  retain  employees.   She                                                               
estimated that  63 percent  of the  vehicles in  the municipality                                                               
would fall into  this category, which is  a significant component                                                               
of the municipality's budget.                                                                                                   
                                                                                                                                
5:42:46 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KELLER inquired as to  other options that would be                                                               
available to the  Municipality of Anchorage if  Amendment 1 isn't                                                               
adopted.                                                                                                                        
                                                                                                                                
MS.  MAHONEY explained  that if  the bill  as originally  written                                                               
were  to  pass,  the  municipality  would  have  the  ability  to                                                               
increase  property taxes  for the  area.   In  response to  Chair                                                               
Johnson,  Ms. Mahoney  estimated  that  the original  legislation                                                               
would  necessitate  a 1.2  percent  increase  for every  property                                                               
taxpayer.    She  opined  that  the  aforementioned  increase  is                                                               
significant.                                                                                                                    
                                                                                                                                
CHAIR JOHNSON  estimated that such  an increase would  amount, on                                                               
average, to about $54 for an average house.                                                                                     
                                                                                                                                
5:43:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KELLER opined  that $54 would be  worth the hassle                                                               
of not having to keep track of it.                                                                                              
                                                                                                                                
CHAIR JOHNSON said that's the option being offered.                                                                             
                                                                                                                                
5:44:23 PM                                                                                                                    
                                                                                                                                
MIKE  NAVARRE,  Mayor,  Kenai Peninsula  Borough,  announced  his                                                               
support for Amendment  1.  He commented that every  time there is                                                               
a  tax change,  it's  a tax  shift  and the  borough  is left  to                                                               
struggle.                                                                                                                       
                                                                                                                                
5:45:58 PM                                                                                                                    
                                                                                                                                
CHAIR  JOHNSON, after  ascertaining that  no one  else wished  to                                                               
testify, closed public testimony.                                                                                               
                                                                                                                                
5:46:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG  directed attention to Section  8 of the                                                               
legislation, which would repeal the  $30 annual fee for trailers.                                                               
He  inquired as  to why  that statute  is being  repealed because                                                               
many may not opt-in.                                                                                                            
                                                                                                                                
CHAIR  JOHNSON  clarified  that  the   option  to  opt-in  is  in                                                               
reference to the municipality.                                                                                                  
                                                                                                                                
5:48:02 PM                                                                                                                    
                                                                                                                                
CHAIR JOHNSON removed his objection  to Amendment 1.  There being                                                               
no further objection, Amendment 1 was adopted.                                                                                  
                                                                                                                                
5:48:56 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG inquired as  to why [AS 28.10.421(b)(6)]                                                               
is being  repealed because  it seems to  him that  unless someone                                                               
opts  for a  permanent  registration, the  [statute] would  still                                                               
apply for a trailer.                                                                                                            
                                                                                                                                
5:49:45 PM                                                                                                                    
                                                                                                                                
DARRELL BREESE, Staff, Representative  Bill Stoltze, Alaska State                                                               
Legislature,  replied  that  the  provision  for  the  option  of                                                               
trailer  registration  is being  repealed  because  the price  is                                                               
going  to be  the  same as  permanent  registration.   Currently,                                                               
commercial trailers are allowed to  be registered for the life of                                                               
the  trailer for  a  $25  fee.   Therefore,  it  seemed fair,  he                                                               
opined,  for noncommercial  trailers to  have the  option of  the                                                               
same permanent registration as the commercial trailers.                                                                         
                                                                                                                                
5:50:34 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG then  inquired as to what  the fee would                                                               
be under the  legislation for a person to  permanently register a                                                               
trailer rather do so under [AS 28.10.421(b)(6)].                                                                                
                                                                                                                                
MR. BREESE  said that Section  4 specifies that the  biennial fee                                                               
for  registration is  $30 and  the permanent  registration is  an                                                               
additional  $25   fee,  which   totals  $55  for   the  permanent                                                               
registration.   In further response to  Representative Gruenberg,                                                               
Mr.  Breese confirmed  that the  biennial  registration is  being                                                               
repealed for  ease because most  people aren't going  to continue                                                               
the  biennial  registration  if   permanent  registration  is  an                                                               
option.  Furthermore,  it puts the fee on par  with the permanent                                                               
registration fee for commercial trailers.                                                                                       
                                                                                                                                
REPRESENTATIVE  STOLTZE added  that  it would  probably create  a                                                               
greater  level of  compliance because  it's common  to not  use a                                                               
trailer for several years.                                                                                                      
                                                                                                                                
5:53:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE OLSON  moved to report  CSHB 19(TRA),  as amended,                                                               
out  of   committee  with  individual  recommendations   and  the                                                               
forthcoming  fiscal  notes.    There  being  no  objection,  CSHB
19(RLS) was reported from the  House Rules Standing Committee and                                                               
is available for calendaring.                                                                                                   

Document Name Date/Time Subjects
SB 148 vs A.pdf HRLS 2/18/2014 5:00:00 PM
SRES 2/5/2014 3:30:00 PM
SB 148
SB 148 Fiscal Note.pdf HRLS 2/18/2014 5:00:00 PM
SRES 2/5/2014 3:30:00 PM
SB 148
SB 148 Sponsor Statement.PDF HRLS 2/18/2014 5:00:00 PM
SB 148
SB 148 Supp Resolution City of Homer 14-005 20140113.pdf HRLS 2/18/2014 5:00:00 PM
SRES 2/5/2014 3:30:00 PM
SB 148
SB 148 Map Proposed Exclusion to the Kachemak Bay Critical Habitat Area DNR.pdf HRLS 2/18/2014 5:00:00 PM
SRES 2/5/2014 3:30:00 PM
SB 148
HB 19 DMV MVRT Imformation.pdf HRLS 2/18/2014 5:00:00 PM
HB 19
HB 19 DMV Eligible Registration Classes.pdf HRLS 2/18/2014 5:00:00 PM
HB 19
HB 19 Sponsor Statement.pdf HRLS 2/18/2014 5:00:00 PM
HB 19
HB 19 Support Letters.pdf HRLS 2/18/2014 5:00:00 PM
HB 19
HB 19 Opposition Letters.pdf HRLS 2/18/2014 5:00:00 PM
HB 19
CSHB 19(TRA) Fiscal Note DOA-DMV 2-15-13.pdf HRLS 2/18/2014 5:00:00 PM
HB 19
CSHB 19(TRA) Fiscal Note DOA-DMV 3-20-13.pdf HRLS 2/18/2014 5:00:00 PM
HB 19
CSHB 19(TRA) FY 2015 Fiscal Note.pdf HRLS 2/18/2014 5:00:00 PM
HB 19
CS HB 19(TRA) Amendment 1 U.4.pdf HRLS 2/18/2014 5:00:00 PM
HB 19
HB19 Version A.pdf HRLS 2/18/2014 5:00:00 PM
HB 19
CS HB 19(TRA).pdf HRLS 2/18/2014 5:00:00 PM
HB 19