Legislature(2005 - 2006)CAPITOL 106

02/16/2006 08:00 AM STATE AFFAIRS

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* first hearing in first committee of referral
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= bill was previously heard/scheduled
Heard & Held
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
Moved CSHB 347(STA) Out of Committee
Moved CSHB 238(STA) Out of Committee
Moved HCS CSSB 186(STA) Out of Committee
HB 344-VEHICLE TRANSACTION AGENTS                                                                                             
8:48:05 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."                                                                                                                
8:48:15 AM                                                                                                                    
REPRESENTATIVE VIC  KOHRING, Alaska State Legislature,  as one of                                                               
the prime  sponsors of HB  344, said  the bill would  improve the                                                               
service  the Division  of Motor  Vehicles (DMV)  provides to  the                                                               
public by  allowing the  [advanced business  partnerships (ABPs)]                                                               
already doing  contract work  for DMV  to keep  a portion  of the                                                               
revenue generated from the transactions  they conduct.  The point                                                               
of  using  ABPs  is  to  lessen  the  workload  of  DMV,  thereby                                                               
improving  customer   service.    He  related   that  the  Alaska                                                               
Department  of  Fish  &  Game  (ADF&G)  contracted  with  private                                                               
entities to  issue its fishing  licenses.  He said  currently the                                                               
bill  provides that  the ABPs  be  paid 15  percent; however,  he                                                               
suggested  that   amount  could   be  lowered  to   7.5  percent.                                                               
Representative Kohring  described the  bill concept as  a win-win                                                               
situation,  because  it would  benefit  DMV,  the ABPs,  and  the                                                               
8:51:42 AM                                                                                                                    
REPRESENTATIVE  KOHRING directed  attention to  the fiscal  note,                                                               
which shows  a $491,000 [change  in revenues], and he  noted that                                                               
no general fund  monies would be involved.   He brought attention                                                               
to letters of  support from Capital Chevrolet - an  ABP - and the                                                               
Alaska Auto  Dealers Association (AADA).   He said AADA  noted it                                                               
would support the change from 15 to 7.5 percent.                                                                                
8:53:03 AM                                                                                                                    
REPRESENTATIVE  GATTO  moved  to  adopt  the  proposed  committee                                                               
substitute, Version  24-LS1082\Y, Bannister,  1/30/06, as  a work                                                               
draft.   There  being  no  objection, Version  Y  was before  the                                                               
8:53:36 AM                                                                                                                    
REPRESENTATIVE  GATTO  noted  that  there  is  a  letter  in  the                                                               
committee  packet from  an individual  concerned that  "the money                                                               
will simply  be reflected in  additional markup."  He  asked, "Is                                                               
there anything  in the legislation  that ... keeps  this separate                                                               
from the markup?"                                                                                                               
8:53:56 AM                                                                                                                    
REPRESENTATIVE  KOHRING answered  no.   He said  the amount  of a                                                               
surcharge would  be left  to the ABP's  discretion.   He surmised                                                               
that  if the  customer decides  that  the amount  charged is  too                                                               
high, then he/she would simply  go elsewhere, for example, to the                                                               
DMV office or to another ABP.                                                                                                   
8:54:30 AM                                                                                                                    
CHAIR SEATON  asked Representative Kohring to  confirm that there                                                               
is no  requirement that a  person must  use an ABP;  he/she could                                                               
choose to go the DMV.                                                                                                           
8:55:00 AM                                                                                                                    
REPRESENTATIVE KOHRING answered that's right.                                                                                   
8:55:08 AM                                                                                                                    
REPRESENTATIVE GATTO  asked, "[Excluding] taxes and  fees, what's                                                               
left in a DMV registration?"                                                                                                    
8:55:15 AM                                                                                                                    
REPRESENTATIVE  KOHRING said  that would  be a  question for  the                                                               
director of DMV, Duane Bannock.                                                                                                 
8:55:32 AM                                                                                                                    
REPRESENTATIVE GARDNER said she has  bought only one new car, and                                                               
she said it  was convenient to have the dealer  do the paperwork.                                                               
She said  she cannot remember  whether or not  she paid a  fee at                                                               
the time.   She stated her understanding that  there is paperwork                                                               
related  to the  title,  perhaps, that  runs approximately  $199.                                                               
She asked Representative Kohring, "Do  you know ... what that fee                                                               
would  ... [cover]  besides title  processing?   Are there  other                                                               
documents that are covered by a fee like that?"                                                                                 
REPRESENTATIVE KOHRING  responded, "Not that  I'm aware of."   In                                                               
response to  a request  for clarification  from Chair  Seaton, he                                                               
confirmed that  he is not  aware of any restriction  that charges                                                               
made  for  paperwork   processing  can  be  made   only  for  DMV                                                               
8:56:57 AM                                                                                                                    
REPRESENTATIVE  RAMRAS said  he bought  a used  car recently  and                                                               
paid a document fee of $199,  which he was told was "an arbitrary                                                               
charge  that dealerships  just tend  to include."   He  indicated                                                               
that that  is a separate issue  that the legislature may  want to                                                               
address in the  future.  He revealed that he  paid a registration                                                               
fee of $15, and he figured that  7.5 percent of that fee would be                                                               
about "one  dollar and some cents,"  which would go to  [the ABP]                                                               
instead of  to the  DMV.   He stated,  "Although it's  a negative                                                               
fiscal note, I think we will  learn from the director of DMV that                                                               
the [Division] of  Motor Vehicles generates about  $63 million to                                                               
the State  of Alaska  in fees, and  this will  certainly maintain                                                               
some of the efficiency at the DMV."                                                                                             
8:58:42 AM                                                                                                                    
REPRESENTATIVE  KOHRING, in  response  to a  series of  questions                                                               
from Representative  Ramras, said he thinks  people despise going                                                               
to the  DMV because of the  long lines involved, they  don't like                                                               
going more  than necessary,  and they  probably don't  like going                                                               
during  their  lunch  or  dinner   hour.    He  shared  that  his                                                               
experience at an  ABP was a pleasant one.   He emphasized that he                                                               
is  not  criticizing  the  fine DMV  staff,  only  the  laborious                                                               
9:00:25 AM                                                                                                                    
CHAIR  SEATON asked  if the  advanced business  partners will  be                                                               
able to  do everything that  the DMV  does, other than  issuing a                                                               
driver's test and a driver's license.                                                                                           
9:01:59 AM                                                                                                                    
REPRESENTATIVE KOHRING said he thinks  the answer to that is yes,                                                               
but he would like the director of DMV to verify that is true.                                                                   
9:02:22 AM                                                                                                                    
CHAIR SEATON directed attention to  [the second paragraph of] the                                                               
third  page of  [a three-page  document attached  to the  sponsor                                                               
statement,  entitled "History  of  the  DMV Business  Partnership                                                               
Program"],   which   read   as  follows   [original   punctuation                                                               
     We propose  that after completion  of one year  of good                                                                    
     standing  in  the  departments  [sic]  discretion,  the                                                                    
     ABP's [sic]  be allowed  to retain  seven and  one half                                                                    
     percent   (7.5%)  of   all  state   revenue  collected,                                                                    
     excluding MVRT  and, of course, any  surcharge of their                                                                    
CHAIR  SEATON asked  if that  means someone  would have  to be  a                                                               
business partner for a year before he/she could become an ABP.                                                                  
9:02:52 AM                                                                                                                    
REPRESENTATIVE  KOHRING  said  that  is old  information  in  the                                                               
committee   packet  and   is  not   part   of  current   proposed                                                               
9:03:24 AM                                                                                                                    
REPRESENTATIVE GARDNER,  regarding the  aforementioned comparison                                                               
between this proposed legislation  and ADF&G's contracting out of                                                               
fishing  license  services,  pointed out  that  contractors  that                                                               
issue fishing  licenses are not  allowed to charge any  fee above                                                               
and beyond the  percentage made on the sale, while  the ABP could                                                               
practice "double dipping."  She asked if that is correct.                                                                       
9:04:30 AM                                                                                                                    
REPRESENTATIVE KOHRING answered yes.   In response to a follow-up                                                               
question from Representative Gardner,  he explained that the idea                                                               
for HB 344 was brought to his attention by the director of DMV.                                                                 
9:05:09 AM                                                                                                                    
CHAIR SEATON said  it seems like an ABP is  similar to a contract                                                               
agent.   He asked if that  is true, and  if ABPs will be  able to                                                               
offer road permits, as well.                                                                                                    
9:05:50 AM                                                                                                                    
REPRESENTATIVE KOHRING  said he doesn't  think the answer  is yes                                                               
to  that  question, because  the  service  that ABPs  provide  is                                                               
9:06:46 AM                                                                                                                    
REPRESENTATIVE   KOHRING,  in   response  to   a  question   from                                                               
Representative Gatto, said he is  not aware of any restriction in                                                               
state statute  regarding the  amount of  surcharge that  a dealer                                                               
can exact.                                                                                                                      
9:06:56 AM                                                                                                                    
REPRESENTATIVE GATTO  opined, "They don't  need to be  asking for                                                               
any other money  if they can simply adjust the  surcharge to make                                                               
it comfortable for themselves."                                                                                                 
9:07:35 AM                                                                                                                    
REPRESENTATIVE  KOHRING said,  "I  think  this legislation  would                                                               
enable  the consumer  to  continue to  pay  essentially the  same                                                               
rates, without those rates having to go up."                                                                                    
9:08:26 AM                                                                                                                    
REPRESENTATIVE  GRUENBERG asked  Representative  Kohring if  when                                                               
Mr.  Bannock   suggested  the  need  for   this  legislation,  he                                                               
indicated that the car dealers in  Alaska are in trouble and need                                                               
the extra help from the state.                                                                                                  
9:08:38 AM                                                                                                                    
REPRESENTATIVE KOHRING answered no.                                                                                             
9:08:42 AM                                                                                                                    
DUANE  BANNOCK, Director,  Director's Office,  Division of  Motor                                                               
Vehicles, Department  of Administration,  relayed that  his boss,                                                               
Commissioner Nordstrand, has described  him as entrepreneur.  Mr.                                                               
Bannock said  his single goal in  coming to the division  was and                                                               
is to shorten the wait line at DMV.   He stated that HB 344 would                                                               
create  "a  better free-market  ability  as  it pertains  to  the                                                               
services of the DMV."                                                                                                           
9:11:12 AM                                                                                                                    
MR.  BANNOCK said  the bill  is design  with two  main functions:                                                               
one, to reinforce  the ABP program as a strategy  to shorten wait                                                               
times at  the DMV;  and two, to  provide fundamental  fairness to                                                               
those agents who are performing  the statutory obligations of the                                                               
DMV.  He stated, "It's important  to remember that today there is                                                               
no alternative for the recovery of  any of these fees, other than                                                               
that process."   Mr. Bannock said another bill, HB  383, has been                                                               
filed, which  addresses the subject  of document "doc"  fees, and                                                               
he asked that  the committee keep the issue of  doc fees separate                                                               
from the issue addressed through HB 344.                                                                                        
MR. BANNOCK, regarding  Representative Gardner's previous mention                                                               
of buying a  new car, explained that it is  important to remember                                                               
that  the  rules  for  someone  who buys  a  car  are  different,                                                               
depending  on whether  the car  is bought  from a  neighbor or  a                                                               
dealer.   He  noted  that  AS 28.10.291  requires  the dealer  to                                                               
process paperwork,  a law that  Mr. Bannock  said is a  good one.                                                               
If it  did not exist, then  customers could say they  will do the                                                               
work and then forget to do it.                                                                                                  
9:14:36 AM                                                                                                                    
MR.  BANNOCK said  one  of  his goals  has  been  to "expand  the                                                               
ability of  what the business  partners can  do."  In  2003, ABPs                                                               
could  only carry  out a  transaction for  a title  on a  new car                                                               
sale.   He  said  the  division has  since  trained  the ABPs  to                                                               
execute used  car titles  and out-of-state titles.   He  said the                                                               
number of  ABPs has expanded.   He directed attention to  a chart                                                               
in   the    committee   packet    showing   the    expansion   in                                                               
responsibilities  and participation,  and he  said it  correlates                                                               
with a decreasing wait time for the public at the DMV offices.                                                                  
MR.  BANNOCK, regarding  the issue  of  the surcharge,  confirmed                                                               
that  there is  nothing  in  HB 344  that  prevents, attempts  to                                                               
limit, or even  addresses a surcharge.   Notwithstanding that, he                                                               
stated  that, based  on his  opinion of  the free  market, if  an                                                               
[ABP] continues  to raise its surcharge  to the point that  it is                                                               
no  longer generating  any revenue,  [the program]  "will implode                                                               
9:17:10 AM                                                                                                                    
MR. BANNOCK stated  that a large portion of the  DMV's revenue is                                                               
called, "Motor  Vehicle Registration  Tax (MVRT)."   He described                                                               
MVRT as  "local government's best  friend."   Some municipalities                                                               
in  Alaska have  adopted an  MVRT, while  others have  not.   Mr.                                                               
Bannock  said HB  344  "does not  pay the  7.5  percent on  local                                                               
government fees."   He said  the typical customer in  Alaska pays                                                               
$100 every two years for vehicle registration.  He continued:                                                                   
     Sounds  to  me  like the  vehicle  that  Representative                                                                    
     Ramras purchased  still had  valid registration  on it,                                                                    
     thus, the  only fee  that the dealership  collected was                                                                    
     $15.   It's important to  note, however, that  the work                                                                    
     that  the  dealership  does   in  processing  that  $15                                                                    
     transaction is the same amount  of work that they would                                                                    
     [do] if he was paying full fees of $115.                                                                                   
9:19:23 AM                                                                                                                    
CHAIR SEATON noted  for the record that  Representative Ramras is                                                               
the other prime sponsor of the bill.                                                                                            
9:20:14 AM                                                                                                                    
REPRESENTATIVE RAMRAS  told Representative  Gardner that  for her                                                               
benefit  he   asked  his   staff  to  include   a  copy   of  the                                                               
aforementioned HB 383, sponsored by  Representative Les Gara.  He                                                               
said HB 383  addresses the issues of doc fees,  and he reiterated                                                               
that that  issue, although  valid, is  totally separate  from the                                                               
issue of HB 344.                                                                                                                
9:21:08 AM                                                                                                                    
REPRESENTATIVE GARDNER said after  hearing Mr. Bannock speak, she                                                               
looked up AS  28.10.291 and now understands the  issue of vehicle                                                               
dealers  being   required  to  process  title   and  registration                                                               
documents.   She asked if there  is any reason to  think that the                                                               
amount those  dealers are currently charging  doesn't cover their                                                               
9:21:58 AM                                                                                                                    
MR. BANNOCK  responded that  he is not  qualified to  answer that                                                               
question.  Notwithstanding that,  he offered a philosophical view                                                               
that there surely is a limit  to what they charge, and that limit                                                               
is a  direct correlation  to how  much a  customer is  willing to                                                               
pay.    He  said  the aforementioned  statute  "is  probably  the                                                               
genesis of  the business partnership  program."  He  said dealers                                                               
are  not only  under statutory  obligation to  get the  paperwork                                                               
done, they are also  under a statutory timeline to do so.                                                                       
9:23:53 AM                                                                                                                    
REPRESENTATIVE GARDNER  asked if  it would  be reasonable  to say                                                               
that the DMV is much more  efficient and those who are submitting                                                               
the paperwork  are no longer  in any  danger of being  in default                                                               
because of slowness.                                                                                                            
9:24:04 AM                                                                                                                    
MR. BANNOCK  replied that there  are still issues on  the horizon                                                               
that  will create  work for  the DMV  and, thus,  could slow  its                                                               
process  down.   For that  reason, he  said, the  division cannot                                                               
afford a  preemptive strike  of the ABPs,  which would  result in                                                               
the work now being done by them to  be sent back to the DMV.  Mr.                                                               
Bannock emphasized the value he places on the ABPs.                                                                             
9:25:19 AM                                                                                                                    
MR.  BANNOCK,  in  response to  a  question  from  Representative                                                               
Gardner,  said almost  100 percent  of the  vehicle registrations                                                               
and titles are  conducted through a computer,  with the exception                                                               
that the DMV provides support  and the necessary documents to the                                                               
9:26:29 AM                                                                                                                    
MR. BANNOCK, in response to  a question from Representative Lynn,                                                               
reiterated that  the surcharge limit  is a market-based  one, not                                                               
one set in statute.                                                                                                             
9:27:05 AM                                                                                                                    
REPRESENTATIVE  LYNN mentioned  fees added  on  at the  end of  a                                                               
vehicle transaction.                                                                                                            
9:27:52 AM                                                                                                                    
CHAIR  SEATON asked  that the  discussion focus  on the  fees for                                                               
title and  registration, not the  doc fees that are  addressed in                                                               
HB 383.                                                                                                                         
9:28:47 AM                                                                                                                    
MR. BANNOCK  confirmed [the issue  of doc fees] is  not addressed                                                               
in HB 344, and he said it should not be.                                                                                        
9:29:18 AM                                                                                                                    
REPRESENTATIVE  GATTO questioned  why there  would be  any reason                                                               
for  HB 344,  if  the  dealer should  have  already included  all                                                               
documentation costs in the doc fee.                                                                                             
9:30:21 AM                                                                                                                    
MR.  BANNOCK said  the  committee  will hear  from  at least  one                                                               
dealer that  does not charge a  doc fee.  He  told Representative                                                               
Gatto  that  7.5 percent  of  the  average $100  registration  is                                                               
$7.50, which is  "a long ways away from whatever  the dealers may                                                               
decide that  they need to  charge for  a documentation fee."   He                                                               
opined  that  attempting   to  compare  [the  money   made  on  a                                                               
registration fee] with [the documentation  fee] is like comparing                                                               
apples and oranges.                                                                                                             
9:31:16 AM                                                                                                                    
CHAIR  SEATON asked  for clarification  of  the following  terms:                                                               
[commission]  agents, business  partners,  and advanced  business                                                               
9:31:49 AM                                                                                                                    
MR. BANNOCK  said commission  agents have  the same  authority as                                                               
state-operated DMVs,  but where they  differ is in  funding; they                                                               
are based  on contracts.   Generally, he  noted, the  majority of                                                               
Alaska's 17 commission  agents are with local  governments.  They                                                               
receive  compensation  at   a  minimum  of  30   percent  of  the                                                               
transaction   up  to   100   percent.     In   addition  to   the                                                               
aforementioned  supplies  provided  to  the ABPs,  the  DMV  also                                                               
provides commission agents with the hardware.                                                                                   
MR.  BANNOCK said  the next  step down  is the  advanced business                                                               
partners.   They  are  designed to  perform  every motor  vehicle                                                               
transaction that  the DMV  can do,  and are  doing more  now than                                                               
they  were three  years  ago.   A business  partner  that is  not                                                               
advanced   is   not   involved  in   ownership   changes,   title                                                               
transactions, or anything that is  a "liability greater than only                                                               
the vehicle registration."  Of  the millions of transactions that                                                               
the DMV performs each year, the vehicle renewal is the simplest.                                                                
9:35:19 AM                                                                                                                    
CHAIR SEATON  returned to  his previous  question related  to the                                                               
history provided  in the  committee packet,  regarding completing                                                               
one year in good standing, and he  asked Mr. Bannock if that is a                                                               
policy for ABPs.                                                                                                                
9:35:38 AM                                                                                                                    
MR.  BANNOCK pointed  to  a sentence  in Version  I,  on page  1,                                                               
[beginning on line 10], which read as follows:                                                                                  
     The regulations  must require, at  a minimum,  that the                                                                    
     agent be bonded, have an  Alaska business license under                                                                    
     AS 43.70, and  have been in existence for  a minimum of                                                                    
     one year  before entering into  the agreement  with the                                                                    
MR.  BANNOCK   said  that  one-year  requirement   would  not  be                                                               
retroactive.   In  response to  a follow-up  question from  Chair                                                               
Seaton, he  stated his  intent is  that the  agent be  a business                                                               
partner for one  year, not just be in any  business for one year.                                                               
He said he thinks that should be clarified in regulations.                                                                      
9:37:26 AM                                                                                                                    
CHAIR SEATON asked Mr. Bannock if,  over time, the same number of                                                               
commission agents would be used, or if ABPs would take over.                                                                    
9:37:59 AM                                                                                                                    
MR. BANNOCK  said he  thinks the same  commission agents  will be                                                               
exactly the same five years from now  as they are today.  He said                                                               
he bases that  prediction on the fact that  the commission agents                                                               
today are  in far-flung  areas not  conducive to  private, stand-                                                               
alone business partnership operations or large car dealerships.                                                                 
9:38:42 AM                                                                                                                    
CARROL   LYBERGER,   Lyberger's   Car    &   Truck   Sales,   LLC                                                               
("Lyberger's"), testified  that she is "a  partnership" with DMV.                                                               
She listed the qualities and  benefits of the program as follows:                                                               
one, it is voluntary; two,  the partners are well trained; three,                                                               
the  transactions  are processed  faster;  and  four, service  to                                                               
customers  is  expedited  and,  thus,  improved.    Ms.  Lyberger                                                               
reviewed  how the  process used  to be  done before  the business                                                               
partner  program began,  emphasizing the  extended time  that was                                                               
taken for  documentation.  She  related that  there is a  cost to                                                               
the dealer  who is in partnership  with DMV, and she  stated that                                                               
any  compensation  for  that  cost would  be  appreciated.    She                                                               
articulated that  any fees  charged as doc  fees are  not payment                                                               
for any work  done in the business partnership  program; the fees                                                               
collected  on behalf  of the  DMV  are paid  to the  state.   Ms.                                                               
Lyberger revealed that  Lyberger's does not charge  doc fees, but                                                               
if it  did it  would show  up on  a separate  line [on  the sales                                                               
contract], and would  be clearly labeled as a doc  fee, while the                                                               
DMV  fees would  be  clearly  marked on  a  separate  line.   She                                                               
offered further details and mentioned disclosure laws.                                                                          
9:42:34 AM                                                                                                                    
CHAIR  SEATON said  the committee  is  trying to  figure out  how                                                               
significant  the  7.5  percent  would  be,  and  whether  or  not                                                               
Lyberger's  would  discontinue  the  service  it  provides  as  a                                                               
business  partner  with DMV  if  the  7.5  percent fee  were  not                                                               
9:43:13 AM                                                                                                                    
MS. LYBERGER replied by illustrating  the commitment she has made                                                               
to the program,  both in staff paid and  special equipment bought                                                               
and maintained, such  as a printer that  takes special, expensive                                                               
ink.  In response to the  second half of Chair Seaton's question,                                                               
she said  she would not  drop the partnership if  the legislature                                                               
does  not pass  the bill  providing  the 7.5  percent payback  on                                                               
state fees collected, because the  service Lyberger's offers as a                                                               
partner is  a value  to its customers.   She  indicated, however,                                                               
that  she would  appreciate whatever  percentage the  legislature                                                               
decides upon in order to offset her costs.                                                                                      
9:44:12 AM                                                                                                                    
JIM ARPINO, Affordable Used Cars,  Fairbanks and Anchorage; Board                                                               
member, Alaska Automotive  Dealers Association, characterized Ms.                                                               
Lyberger's  testimony as  "very accurate."   He  stated that  the                                                               
fees  that a  customer  would be  charged  [for registration  and                                                               
title] at DMV are the same  fees that are charged by [dealers who                                                               
are ABPs].  He said the  proposed 7.5 percent would help to cover                                                               
the costs  of data entry.   In response to a  question from Chair                                                               
Seaton, he  said he  currently is  an ABP, but  he may  no longer                                                               
offer that  service if  the bill  does not pass.   He  said being                                                               
involved  in the  program is  time-consuming.   In response  to a                                                               
follow-up  question from  Chair Seaton,  he said  Affordable Used                                                               
Cars does charge a documentation fee.                                                                                           
9:47:21 AM                                                                                                                    
CHAIR SEATON asked  Mr. Arpino for an estimate of  the total that                                                               
Affordable  Used Cars  would make  after a  year of  charging 7.5                                                               
percent on the state fee for titles and registrations.                                                                          
9:47:37 AM                                                                                                                    
MR. ARPINO  responded, "The transactions  are all over  the map,"                                                               
thus, the exact  amount would be hard to pinpoint.   He estimated                                                               
that the  7.5 percent would  cover about  50 percent of  his time                                                               
involved in the  program.  The amount originally  proposed was 15                                                               
percent,  which Mr.  Arpino  said would  more  closely cover  his                                                               
9:48:24 AM                                                                                                                    
CHAIR SEATON  asked if  being a  dealership that  is also  an ABP                                                               
gives that dealership  a competitive edge over  a dealership that                                                               
is not an ABP.                                                                                                                  
9:49:02 AM                                                                                                                    
MR.  ARPINO  replied   that  he  would  not  describe   it  as  a                                                               
competitive edge,  but he said he  can see a slight  advantage to                                                               
having a business  partnership, "more after the  sale than before                                                               
the sale."                                                                                                                      
9:49:26 AM                                                                                                                    
DEANNA  SLACK, General  Manager, Cal  Worthington Ford,  said she                                                               
agrees with all  comments made thus far.  She  indicated that Cal                                                               
Worthington Ford  has been a  business partner  for approximately                                                               
four years,  having taken on  the cost of providing  this service                                                               
to its customers  "automatically."  She said  customers are happy                                                               
to get  their license plates  and registration earlier  than they                                                               
often received them  through DMV.  She stated, "We  feel that our                                                               
cost  [in  providing this  service],  ...  based on  the  selling                                                               
volume, is  in excess of  approximately $50-55,000 a year."   She                                                               
said Cal Worthington  Ford hires two full-time  and one part-time                                                               
employees to  handle the  partnership duties,  and it  covers the                                                               
costs  of a  computer, special  printer, software,  and telephone                                                               
line.   She  said the  proposed 7.5  percent would  not begin  to                                                               
cover  that cost.   In  response to  Chair Seaton,  she said  Cal                                                               
Worthington Ford charges a documentation  fee, but she emphasized                                                               
that  the doc  fee is  for  other services,  not for  DMV-related                                                               
9:52:07 AM                                                                                                                    
REPRESENTATIVE GARDNER asked what doc fees cover.                                                                               
9:52:16 AM                                                                                                                    
MS.  SLACK  answered  that  the doc  fee  covers  "several  other                                                               
services" relating  to a  car deal  and is  disclosed on  its own                                                               
9:52:42 AM                                                                                                                    
REPRESENTATIVE   GARDNER  asked   Ms.   Slack   what  a   typical                                                               
explanation to a customer would be regarding the doc fee.                                                                       
9:52:56 AM                                                                                                                    
MS. SLACK indicated that the customer  would be told that the doc                                                               
fee  covers  other  services provided,  including  paperwork  and                                                               
delivering the documentation to the lien holder.                                                                                
9:53:15 AM                                                                                                                    
REPRESENTATIVE GARDNER  said when she  bought her car,  there was                                                               
no lien, and she paid cash.  She  said she would like to know the                                                               
purpose of the $199 fee she paid.                                                                                               
9:53:27 AM                                                                                                                    
MS. SLACK said  there is paperwork and documentation  to be done.                                                               
In response to a follow-up  question from Representative Gardner,                                                               
she said doc  fees cover "a numerous amount of  things," each one                                                               
is different.   It  is one charge  that shows on  one line  of an                                                               
application, "separate [from] everything else."   She said if she                                                               
were to  look at Representative Gardner's  transaction, she could                                                               
explain her doc  fee to her.   In response to a  request by Chair                                                               
Seaton, she  agreed to send  examples of a transaction  showing a                                                               
doc fee to the committee.                                                                                                       
9:55:24 AM                                                                                                                    
MS. SLACK, in  response to a question  from Representative Gatto,                                                               
reiterated that Cal  Worthington Ford does not  exact a surcharge                                                               
and, thus, does not make money  "as far as collecting for the DMV                                                               
9:56:14 AM                                                                                                                    
CHAIR  SEATON asked  Representative Kohring  to get  back to  the                                                               
committee regarding the use of  the word "surcharge," and whether                                                               
or not it means the same thing as doc fee.                                                                                      
9:56:19 AM                                                                                                                    
REPRESENTATIVE KOHRING said he would  wait to answer the question                                                               
regarding surcharge.   He  stated his  desire that  the committee                                                               
"stay on course with the  main thrust of this legislation," which                                                               
is to provide compensation for  services currently being provided                                                               
at  no  charge by  authorized  auto  dealers.   He  said  statute                                                               
requires that  auto dealers  that sell new  or used  cars provide                                                               
title and  registration service.   He opined, "If we're  going to                                                               
require that  statute, in my mind  it seems fair that  we provide                                                               
them with a limited compensation to cover those costs."                                                                         
9:57:15 AM                                                                                                                    
REPRESENTATIVE  ELKINS said  he thinks  the committee  is way  of                                                               
[course] and could  have moved the bill 30 minutes  ago if it had                                                               
stayed on track.                                                                                                                
9:57:41 AM                                                                                                                    
JOHN  IMMEL,  Past  Co-Owner,  Gene's  Chrysler,  testified  that                                                               
Gene's  Chrysler was  one of  two dealerships  to become  ABPs in                                                               
Alaska.   He stated that  8-10 years ago,  there used to  be long                                                               
wait times for titles and  registrations, and he pointed out that                                                               
temporary  licenses are  only good  for two  months.   Banks were                                                               
upset with the slowness of the  system before the ABP program was                                                               
started.   He stated that if  the legislature does not  grant the                                                               
7.5 percent,  the new owners  of Gene's Chrysler would  never end                                                               
the  program, because  it is  one of  the best  customer services                                                               
available from the  car dealership.  He concluded,  "It's a great                                                               
benefit, and I just want to see it continue."                                                                                   
9:59:53 AM                                                                                                                    
REPRESENTATIVE  RAMRAS  reiterated  that  two  issues  have  been                                                               
discussed:   the doc fee and  [the ABP program].   The latter, he                                                               
said is a  good example of entrepreneurial spirit,  and helps cut                                                               
down the  wait times at  the DMV,  which in turn  helps alleviate                                                               
the dislike consumers have towards government.                                                                                  
10:00:32 AM                                                                                                                   
MR.  EMIL reemphasized  how  bad  the wait  time  was before  the                                                               
program began.   He  said he was  responsible for  convincing Mr.                                                               
Arpino to get involved in the  program.  He acknowledged that Mr.                                                               
Arpino  is  unhappy  regarding  the high  costs  of  running  the                                                               
program,  but  he  reiterated  the benefits  of  the  program  to                                                               
10:01:18 AM                                                                                                                   
CHAIR SEATON announced that HB 344 was heard and held.                                                                          

Document Name Date/Time Subjects