Legislature(1993 - 1994)
03/05/1994 08:00 AM House STA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 328 - BIENNIAL VEHICLE REGISTRATION CHAIRMAN VEZEY opened HB 328 for discussion. Number 228 REPRESENTATIVE KOTT, HB 328 subcommittee chair, moved that version R of committee substitute for HB 328 be adopted. Number 236 CHAIRMAN VEZEY recognized the motion and hearing no objection, version R of CS for HB 328, was adopted by the committee for discussion. Number 237 REPRESENTATIVE KOTT noted there were two major changes made to HB 328 which deal with policy. First, who'll be collecting the emission taxes. Secondly, the fee structure. Number 250 JANE BUTLER, REPRESENTATIVE PETE KOTT'S STAFF, outlined the changes made by CSHB 328. She indicated on page 8, line 26, "except for as provided under (d) of this section," and then "(d)". This does not require the municipality to collect the tax. If the municipality and a commissioner of Public Safety agree, upon their agreement, that is how they decide who collects the tax. She stated this would be the major change in CSHB 328. Number 265 CHAIRMAN VEZEY thought subsection (c) and (d) read differently; however, he understood MR. BUTLER'S intent. MS. BUTLER replied the change is basically that who collects the tax will be decided between the two parties. Number 277 REPRESENTATIVE KOTT confirmed CHAIRMAN VEZEY's interpretation. Number 280 REPRESENTATIVE ULMER asked how the eight percent tax rate was chosen. REPRESENTATIVE KOTT responded eight percent is currently in statute. REPRESENTATIVE ULMER inquired if the eight percent reflected what the program actually costs. CHAIRMAN VEZEY believed MS. HENSLEY had previously testified the Department of Public Safety was satisfied with the eight percent. Number 286 REPRESENTATIVE ULMER thought the percentage ought to be revenue neutral. The program should not cost the state. REPRESENTATIVE KOTT responded the state is currently collecting the tax and it has had a positive effect. Number 298 MS. BUTLER stated CSHB 328 needs to be changed on page 6, line 22, and on page 10, line 24, to read "biennial", instead of "annual." She also mentioned the fee structure on page 7, section 16, had been questioned as to whether or not CSHB 328 needed to dictate it. If the municipalities were allowed to collect their own taxes, she noted, then a fee structure would not have to be present in CSHB 328. DMV and the sponsor would rather have this issue taken up in the Finance Committee. Number 332 REPRESENTATIVE G. DAVIS asked what REPRESENTATIVE TERRY MARTIN's rationale is in reducing the fee lower than $35. JEANIE LARSON, REPRESENTATIVE TERRY MARTIN'S STAFF, responded that REPRESENTATIVE MARTIN, CSHB 328 SPONSOR, wanted to encourage people to adopt the biennial registration by lowering fees. He also felt making the fees less would make people more likely to register their cars. She noted there is an approximate 10 percent reduction in cost to the DMV. There will also be less need to hire new staff. Number 354 REPRESENTATIVE ULMER thought the intent of biennial registration was to save the state money and time. She noted CSHB 328 may save the state some staff time; however, at the price of $4.5 million, CSHB 328 did not sound like a good deal. She asked what the purpose of CSHB 328 would be. MS. LARSON responded REPRESENTATIVE MARTIN felt savings should be passed on to the consumer, and CSHB 328 would be a trade off with the decrease in staff time and new hires. Number 369 REPRESENTATIVE OLBERG asked why there was a difference in fees for pick-ups and mobile homes. MS. LARSON stated those fees were in current statute. JUANITA HENSLEY, CHIEF OF DRIVER SERVICES, DIVISION OF MOTOR VEHICLES, DEPARTMENT OF PUBLIC SAFETY, answered questions on CSHB 328. Number 393 REPRESENTATIVE ULMER inquired what the fees would have to be to keep CSHB 328 revenue neutral. Number 395 CHAIRMAN VEZEY responded HB 328 had been discussed thoroughly at previous meetings she did not attend, and answered the existing fees would have to be doubled to make the bill revenue neutral. He thought the proposed fees in CSHB 328 are 1.5 times the existing fee, rounded off to the highest dollar. To be revenue neutral, the fee would have to be two times the existing fee. Number 402 REPRESENTATIVE ULMER asked why the committee chose not to make CSHB 328 revenue neutral. CHAIRMAN VEZEY replied the committee had referred HB 328 to a subcommittee and had asked them to report back. Number 408 REPRESENTATIVE KOTT, HB 328 subcommittee chair, answered the subcommittee worked with the sponsor and he felt there should be savings passed on to the consumer. He emphasized CSHB 328 did have a Finance referral and he was sure they would take care of the problem if there was a negative fiscal effect. He noted the committee had passed an earlier motor vehicle registration bill which increased registration fees. He felt the Finance Committee would take both bills into consideration. Number 427 REPRESENTATIVE G. DAVIS asked if the subcommittee had discussed with the sponsor that it would still be a benefit to the public to have the opportunity for biennial registration, even at the same rate. Number 434 REPRESENTATIVE KOTT replied it had been discussed, but the sponsor disagreed and the subcommittee succumbed to the sponsor. Number 438 REPRESENTATIVE OLBERG suggested CSHB 328 penalized people for requiring them to produce $70, instead of $35. Number 444 MS. HENSLEY stated CSHB 328 would allow individuals to also use credit cards if the DMV were to obtain the funding to pay the credit card fees. The $70 could be paid off over a period of time. REPRESENTATIVE OLBERG responded it did not cost anything to use a credit card, but it would be an additional revenue loss. He thought the state of Alaska would probably get a discount rate of one-two percent. Number 453 CHAIRMAN VEZEY thought this would account for certainly less than the time value of the money involved. MS. HENSLEY directed comments toward REPRESENTATIVE ULMER'S previous question regarding the eight percent administrative fees the state collects. She responded the fees would be deposited into the general fund. The DMV collects approximately $5.9 million from the municipalities, which would be would percent. She noted deleting the administration tax from DMV would also incur a several hundred thousand dollar loss to the state. Number 462 CHAIRMAN VEZEY believed approximately $400,000 would be lost as he remembered from previous testimony. Number 464 REPRESENTATIVE ULMER asked why the state would want to delete the administration tax from the DMV. Number 465 MS. HENSLEY replied some tax structure would have to be changed to allow municipalities to go to a biennial tax collection, as well as the DMV. The current tax structure corresponds with an annual registration and collection of fees. Number 473 REPRESENTATIVE OLBERG asked if CSHB 328 would be phased in. He was concerned about the following year, having no one to register, after the first year biennial registration begins. Number 477 MS. HENSLEY replied CSHB 328 does allow half the registrations to be done one year, and half the registrations to be done the next. Number 483 CHAIRMAN VEZEY moved to the Anchorage teleconference site. Number 485 RON KING, DEPARTMENT OF ENVIRONMENTAL CONSERVATION (DEC), answered questions on CSHB 328. Number 490 REPRESENTATIVE ULMER asked if MR. KING had reviewed the new CSHB 328 and if he had any problems with it. MR. KING responded DEC was preparing a fiscal note with an explanation of the impact of CSHB 328. Anchorage and Fairbanks staff for the vehicle inspection program are very concerned about the loss of effectiveness by changing to biennial registration. Annual inspections and annual registration provide the strongest enforcement mechanism available. Fairbanks feels the biennial program will be difficult to enforce and the additional work force will have a limited enforcement mechanism. MR. KING stated there were two areas which DEC felt were crucial for their ability to implement the program. First, a fee structure would have to include 4.5 positions, 3.5 within the DEC and 1 within the DMV. This addition would cost approximately $450,000. Secondly, a bailable offense would have to be added, which would take violators to either civil or criminal court. With a bailable offense, DEC would be able to hold additional employees at 4.5. Without a bailable offense, in Anchorage an additional five positions would have to be added costing approximately $100,000 more. Number 528 CHAIRMAN VEZEY asked MR. KING to explain his large fiscal note position. Number 532 MR. KING answered there would be two investigators in the Fairbanks regional office, combining equipment, utilities, supplies, and commodities, it would cost approximately $85,000 per position. The half time district attorney would cost approximately $68,000. The remainder of the fees pay for stationary mail outs, postage at approximately $50,000. In Anchorage there would be four principal investigators, each costing approximately $85,000, with a full-time district attorney, costing approximately $110,000. The commodities and supplies would be contractual. He noted the additional court costs. MR. KING noted, with a bailable offense, additional funds and positions would not be needed within the municipality of Anchorage. The Anchorage Parking Authority would take over representations, in agreement with the municipalities, of the violators. Number 566 CHAIRMAN VEZEY asked the pleasure of the committee. Number 569 REPRESENTATIVE ULMER believed CSHB 328 should return to the subcommittee. Number 571 REPRESENTATIVE OLBERG did not like CSHB 328, but wanted to pass it on. Number 572 REPRESENTATIVE G. DAVIS asked if the committee would have to wait for the additional fiscal notes. CHAIRMAN VEZEY replied CSHB 328 could be passed with the current fiscal notes; however, there are new fiscal notes coming to the committee. Number 579 REPRESENTATIVE KOTT moved to amend CSHB 328 on page 6, line 22, and page 10, line 24, to change "annual" to read "biennial." CHAIRMAN VEZEY recognized the motion and hearing no objection, REPRESENTATIVE KOTT'S amendment was adopted. Number 591 REPRESENTATIVE OLBERG felt the fees should be amended, but they would probably be taken care of in the Finance Committee. Number 597 REPRESENTATIVE KOTT moved CSHB 328 be passed from committee with individual recommendations. He felt Finance should deal with the technical aspects such as funding. He noted the money for the extra positions, as mentioned by the DEC, would not come from the general fund. The positions would be covered by the program receipts. Number 605 REPRESENTATIVE ULMER objected to REPRESENTATIVE KOTT's motion. She felt passing CSHB 328 would not be responsible action by the committee as it costs almost $5 million and does not achieve very much. The small amount of less work is not worth the money that will have to be spent on CSHB 328. REPRESENTATIVE G. DAVIS also objected to the motion. He asked if there was the possibility of an optional biennial program, for those who may have the fees to pay biennially and others may pay annually. He would not vote to pass CSHB 328 from committee. REPRESENTATIVE OLBERG objected to the fee structure, and he would not want CSHB 328 to pass if it were to allow DEC to have that many positions. Number 625 MS. HENSLEY responded DMV has considered a biennial registration, and regardless of the passage of CSHB 328, they would consider it in locations where they did not have to collect the emissions testing certificate and the municipal taxes. DMV collects taxes for approximately 10 municipalities and they do already have biennial registration as an option. CHAIRMAN VEZEY asked the committee secretary to call the roll, and with 3 YEAS and 2 NAYS, CSHB 328 failed to pass from the House State Affairs Committee.
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