Legislature(2005 - 2006)CAPITOL 106
02/21/2006 08:00 AM House STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| Public Defender | |
| HB375 | |
| SB224 | |
| SB12 | |
| HB344 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | HB 375 | TELECONFERENCED | |
| + | SB 224 | TELECONFERENCED | |
| *+ | HCR 27 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 12 | TELECONFERENCED | |
| += | HB 344 | TELECONFERENCED | |
HB 344-VEHICLE TRANSACTION AGENTS [Contains brief mention of HB 383.] 9:57:20 AM CHAIR SEATON announced that the next order of business was HOUSE BILL NO. 344, "An Act relating to the commissioner of administration's appointing agents to perform for compensation certain transactions related to vehicles; and providing for an effective date." 9:57:35 AM CHAIR SEATON closed public testimony. 9:58:05 AM REPRESENTATIVE RAMRAS mentioned a conversation with former testifier, Jim Arpino, of Affordable Used Cars, related to the issue of document "doc" fees. He mentioned HB 383, sponsored by Representative Gara, which would clarify the issue of the doc fee. He stated, "I would like to draw a bright line between what HB 344 does and what document fees do." He explained that he wants the discussion to stay focused on "incentivizing dealers to participate in the advance business partner [(ABP)] programs ...." 10:02:38 AM REPRESENTATIVE RAMRAS, in response to a comment by Chair Seaton, clarified that his comment that the Division of Motor Vehicles is hated - made at a previous hearing - was intended to mean that the wait time at the division is what is disliked. 10:03:23 AM REPRESENTATIVE GARDNER directed attention to a handout in the committee packet, entitled, "History of the DMV Business Partnership Program," and the following page, entitled, "Proposal to allow Advanced Business Partners to retain a portion of revenue generated," the third paragraph of which read: While this concept is a terrific bargain to the state, if the surcharge exceeds a customer comfort zone, the business will be returned to the DMV, defeating the original purpose. REPRESENTATIVE GARDNER stated that title and registration cannot be returned to the DMV; under current legislation, dealers are required to process title and insurance. Representative Gardner turned to a letter in the committee packet from [Duane Bannock, Division of Motor Vehicles], Department of Administration, dated February 17, which read in part: While their customers always have the right to take their business to the DMV, these Advanced Business Partners sell a service that they market as quicker and more convenient and proof has shown that Alaskans are willing to pay. REPRESENTATIVE GARDNER said, again, that may refer to some services offered, but not to title and registration. She said she just wanted to clarify that matter, because it seems to be a source of confusion. She concluded, "So, it's true that dealers are required to do that, and they have been doing it without any state compensation." She said she personally does not have a problem with compensation for services. She stated, "What I do have a problem with is if they're getting it from both sides." 10:05:43 AM CHAIR SEATON said there are three issues to discuss: a proposal to retain 7.5 percent of the fees collected; documentation preparation fees, which are a totally private and separate charge made by the dealer; and a surcharge. He said he would like the director of the Division of Motor Vehicles to explain the surcharge. 10:06:51 AM DUANE BANNOCK, Director, Division of Motor Vehicles, Department of Administration, said he is the author of not only the letter dated 2/17, but also the "History of the DMV Business Partnership Program" handout - both aforementioned by Representative Gardner. Mr. Bannock explained that "customer," as he uses the word, can mean a citizen or a dealership. He specified that the statutory requirement that dealerships complete the vehicle registration is not to say that dealerships are statutorily required to be business partners. He indicated that business partnerships created to allow ["select auto dealerships to process the registration and titles of vehicles sold"] have allowed four of the eight DMV staff previously occupied with that work to instead provide customer service. There are approximately six of these ABPs in Alaska. 10:09:26 AM MR. BANNOCK noted that one of the ABPs does the DMV work for eight small dealerships in Alaska, and for that work, the ABP charges a surcharge, because without it she collects nothing from the State of Alaska for doing the work that in the past only state employees were able to do. 10:10:56 AM REPRESENTATIVE GARDNER asked Mr. Bannock if it would be fair to say what is really being done is the privatization of state services. 10:11:15 AM MR. BANNOCK indicated that there is a debate over the definition of "privatization," which he would not [address at this time]. He reiterated the benefit of lightening the workload of the DMV through the use of ABPs, and he emphasized his commitment to reducing the wait time at DMV. 10:12:34 AM CHAIR SEATON asked Mr. Bannock if the surcharge of which he spoke is the same as the $10 charged by the DMV for in-office work, versus by-mail work. 10:12:46 AM MR. BANNOCK answered no. He said, "I just used that in my letter as a simple comparison." 10:12:54 AM CHAIR SEATON asked if there is a limitation on the surcharge exacted by the ABP. 10:13:12 AM MR. BANNOCK said there is no governmental limit on that fee; however, as Representative Gardner noted by reading from his own proposal information, "if the surcharge exceeds a customer comfort zone, the business will be returned to the DMV, defeating the original purpose." In response to a follow-up question from Chair Seaton, he said he has seen that happen. He offered an example. 10:17:04 AM REPRESENTATIVE GATTO questioned why a 7.5 percent fee should be allowed when there is already a surcharge. 10:17:35 AM CHAIR SEATON, in response to Mr. Bannock and Representative Gatto, said the surcharge is permissive. The bill, he clarified, would allow 7.5 percent of what is generated in revenue to be returned to the preparer, in compensation for the work done, whether he/she charges a surcharge or not. He said he thinks the question is whether having both the surcharge and the 7.5 percent would allow compensation for the same action. He suggested another question to ask is whether [the 7.5 percent that would be paid by the state] is needed, or whether the service provided by the ABPs generates enough customer service to be continued without that 7.5 percent. He asked Representative Ramras if his comments offered a clearer view of the discussion on the table. 10:19:42 AM REPRESENTATIVE RAMRAS answered yes. He said: We've got two really separate issues, and one is on the table, and one may be taken up by this committee or the Twenty-Fifth Legislature to address. We've uncovered a pretty interesting ... issue, but I think that you have it. 10:20:02 AM REPRESENTATIVE GRUENBERG noted that in Mr. Bannock's "Proposal to allow Advanced Business Partners to retain a portion of revenue generated," he notes that ABPs are at liberty to set their own surcharge. He asked, "If they can do that, why in the world are we allowing them an additional 7.5 percent?" He said he does not see any justification for that kind of governmental handout. He observed that the fiscal note shows a cost of $486.6 thousand the first year, increasing over the next five years. He asked what justification there is for giving the auto industry of Alaska a half million dollars of taxpayers' money. In response to Mr. Bannock, he specified that he wants to know if there is anything that prevents car dealerships from "using the surcharge." He clarified as follows: I guess the question becomes, "At some point in time, are we going to have to increase registration fees, so that we have the ability to pay private individuals ... or companies to prepare the documents, and is there anything at all that prevents the car dealerships from utilizing and putting on the ... $10- or $20-dollar surcharge?" 10:23:45 AM MR. BANNOCK said he doesn't think there is anything in law today that prevents "anyone from charging any fee." 10:23:59 AM REPRESENTATIVE GRUENBERG said the only people who have testified in support of the bill are car dealers, and those opposed to the bill are customers. He stated his concern that the industry is clearly anticipating that HB 344 will "provide additional funds to it." 10:25:07 AM MR. BANNOCK said he has seen one letter of objection, which was written by one of his employees whose opinion he values, although he does not concur with her assessment. He emphasized his belief that "we've done a good job of proving that this program works." He said there is data to support the proposed legislation, and he encouraged the committee to support the bill. He recommended that if committee members feel there is a problem with allowing general fund monies to go to private organizations, they should review the same policy used by the Alaska Department of Fish & Game (ADF&G), on which he based "this theory." 10:26:18 AM CHAIR SEATON said there are requirements for ADF&G's fishing license program which prevent those vendors from attaching any surcharge. 10:26:47 AM REPRESENTATIVE GRUENBERG said the economics of people who sell fishing tackle is much different than those who sell vehicles. The latter makes thousands on a sale. 10:27:25 AM CHAIR SEATON clarified that this issue addresses ABPs, which does not necessarily mean auto dealers. 10:27:47 AM CHAIR SEATON announced that HB 344 was heard and held.
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