Legislature(1999 - 2000)

02/24/2000 03:37 PM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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            SENATE STATE AFFAIRS COMMITTEE                                                                                      
                  February 24, 2000                                                                                             
                      3:37 p.m.                                                                                                 
                                                                                                                                
MEMBERS PRESENT                                                                                                                 
                                                                                                                                
Senator Jerry Ward, Chairman                                                                                                    
Senator Lyda Green                                                                                                              
Senator Randy Phillips                                                                                                          
Senator Kim Elton                                                                                                               
                                                                                                                                
MEMBERS ABSENT                                                                                                                  
                                                                                                                                
Senator Gary Wilken                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                              
                                                                                                                                
CS FOR HOUSE BILL NO. 133(FIN)(efd fld)                                                                                         
"An Act relating to municipal service areas and providing for voter                                                             
approval of the formation, alteration, or abolishment of certain                                                                
service areas."                                                                                                                 
                                                                                                                                
     -MOVED SCS FOR CS FOR CSHB 133 (STA) OUT OF COMMITTEE                                                                      
                                                                                                                                
Legislative confirmation hearing for Andrea Jacobson of Ketchikan                                                               
to Alaska Public Offices Commission (APOC)                                                                                      
                                                                                                                                
     -SCHEDULED BUT NOT HEARD                                                                                                   
                                                                                                                                
SENATE BILL NO. 262                                                                                                             
"An Act relating to motor vehicle license plates for disabled                                                                   
persons."                                                                                                                       
                                                                                                                                
     -HEARD AND HELD                                                                                                            
                                                                                                                                
PREVIOUS SENATE COMMITTEE ACTION                                                                                                
                                                                                                                                
CSHB 133 (FIN)(efd fld) - No previous Senate action                                                                             
                                                                                                                                
SB 262 - No previous Senate action                                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                                
                                                                                                                                
Representative Con Bunde                                                                                                        
Alaska State Capitol                                                                                                            
Juneau, AK 99801-1182                                                                                                           
POSITION STATEMENT: Sponsor of CSHB 133 (FIN)(efd fld).                                                                         
                                                                                                                                
Mr. Chuck Hosack                                                                                                                
Deputy Director                                                                                                                 
Division of Motor Vehicles                                                                                                      
Department of Administration                                                                                                    
3300 B Fairbanks                                                                                                                
Anchorage, AK 99503                                                                                                             
POSITION STATEMENT: Opposes SB 262.                                                                                             
                                                                                                                                
Mr. Scott Sell                                                                                                                  
P.O. Box 111949                                                                                                                 
Anchorage, AK 99511                                                                                                             
POSITION STATEMENT: Supports CSHB 133 (FIN)(efd fld).                                                                           
                                                                                                                                
Mr. Brook Chandler                                                                                                              
P.O. Box 263                                                                                                                    
Girdwood, AK 99587                                                                                                              
POSITION STATEMENT: Supports CSHB 133 (FIN)(efd fld).                                                                           
                                                                                                                                
Mr. Randy Clendaniel                                                                                                            
North Pole Road Commissioner                                                                                                    
3045 Taxi Lane B                                                                                                                
North Pole, AK 99705                                                                                                            
POSITION STATEMENT: Supports CSHB 133 (FIN)(efd fld).                                                                           
                                                                                                                                
Mr. Mike Prax                                                                                                                   
Fairbanks North Star Borough Assembly                                                                                           
1015 Meadow Rue                                                                                                                 
North Pole, AK 99705                                                                                                            
POSITION STATEMENT: Supports CSHB 133 (FIN)(efd fld).                                                                           
                                                                                                                                
Mr. Mike Craft                                                                                                                  
1391 Pickering Drive                                                                                                            
Fairbanks, AK 99709                                                                                                             
POSITION STATEMENT:                                                                                                             
                                                                                                                                
Mr. Ladd McBride                                                                                                                
Chairman Cripple Creek Road service area                                                                                        
P.O. Box 83567                                                                                                                  
Fairbanks, AK 99708                                                                                                             
POSITION STATEMENT: Supports CSHB 133 (FIN)(efd fld).                                                                           
                                                                                                                                
Mr. Larry Soden                                                                                                                 
P.O. Box 61328                                                                                                                  
Fairbanks, AK 99706                                                                                                             
POSITION STATEMENT: Supports CSHB 133 (FIN)(efd fld).                                                                           
                                                                                                                                
Mr. Tim Biggane                                                                                                                 
P.O. Box 53274                                                                                                                  
North Pole, AK 99705                                                                                                            
POSITION STATEMENT: Opposes SCS CSHB 133 (FIN)(efd fld).                                                                        
                                                                                                                                
Ms. Nadine Hargesheimer                                                                                                         
Fairbanks North Star Borough Mayors Office                                                                                      
P.O. Box 71267                                                                                                                  
Fairbanks, AK 99707                                                                                                             
POSITION STATEMENT: Supports CSHB 133 (FIN)(efd fld).                                                                           
                                                                                                                                
Ms. Nancy Webb                                                                                                                  
Fairbanks North Star Borough Assembly                                                                                           
469 Panorama Drive                                                                                                              
Fairbanks, AK 99712                                                                                                             
POSITION STATEMENT: Supports CSHB 133 (FIN)(efd fld).                                                                           
                                                                                                                                
Mr. Jack Brown                                                                                                                  
Kenai Borough Assembly                                                                                                          
P.O. Box 7073                                                                                                                   
Nikiski, AK 99635                                                                                                               
POSITION STATEMENT: Supports CSHB 133 (FIN)(efd fld).                                                                           
                                                                                                                                
Mr. Daniel Gregory                                                                                                              
P.O. Box 8508                                                                                                                   
Nikiski, AK 99635                                                                                                               
POSITION STATEMENT: Supports CSHB 133 (FIN)(efd fld).                                                                           
                                                                                                                                
Mr. Preston Williams                                                                                                            
General Delivery                                                                                                                
Kenai, AK 99611                                                                                                                 
POSITION STATEMENT: Supports CSHB 133 (FIN)(efd fld).                                                                           
                                                                                                                                
Mayor John Williams                                                                                                             
City of Kenai                                                                                                                   
210 Fidalgo Street, Suite 200                                                                                                   
Kenai, AK 99611                                                                                                                 
POSITION STATEMENT: Supports CSHB 133 (FIN)(efd fld).                                                                           
                                                                                                                                
Mr. William Green                                                                                                               
Deputy Municipal Attorney                                                                                                       
Municipality of Anchorage                                                                                                       
Anchorage, AK 99501                                                                                                             
POSITION STATEMENT: Opposes CSHB 133 (FIN)(efd fld).                                                                            
                                                                                                                                
Ms. Loretta Brown                                                                                                               
Chief of Staff, Senator Ward                                                                                                    
Alaska State Capitol                                                                                                            
Juneau, AK 99801                                                                                                                
POSITION STATEMENT: Presented SB 262.                                                                                           
                                                                                                                                
ACTION NARRATIVE                                                                                                                
                                                                                                                                
TAPE 00-03, SIDE A                                                                                                              
Number 001                                                                                                                      
                                                                                                                                
CHAIRMAN WARD called the Senate State Affairs Committee to order at                                                             
3:37 p.m.  Present were Senators Green, Phillips, Elton, and Ward.                                                              
The first order of business to come before the committee was CSHB
133 (FIN)(efd fld).                                                                                                             
                                                                                                                                
                                                                                                                                
 CSHB 133 (FIN)(efd fld)-VOTER APPROVAL OF SERVICE AREA CHANGES                                                                 
                                                                                                                                
REPRESENTATIVE BUNDE, sponsor of CSHB 133 (FIN)(efd fld), explained                                                             
there are people in Alaska who want smaller government, more                                                                    
efficient government,  less expensive government, more local                                                                    
control, and value privatization.                                                                                               
                                                                                                                                
CSHB 133 (FIN)(efd fld) states that service areas that will be                                                                  
absorbed or combined with another service area require a majority                                                               
vote from both entities.  Some larger entities might try to                                                                     
takeover a smaller entity, and the service area being absorbed                                                                  
doesn't have a vote in the process.  This will have a serious                                                                   
impact on road service areas that are paid for by the public who                                                                
want an increase in service.  The public willingly taxes itself so                                                              
it can have increased service.  They hire private contractors, they                                                             
get better service and quicker response because they go through a                                                               
private contractor.                                                                                                             
                                                                                                                                
Another portion of CSHB 133 (FIN)(efd fld) addresses more                                                                       
efficiency in government.  Fairbanks would like to consolidate its                                                              
service areas to achieve administrative savings.  CSHB 133                                                                      
(FIN)(efd fld) will allow Fairbanks to consolidate service areas                                                                
and allow its residents to tax themselves at differential rates.                                                                
He gave some different examples of service areas around the                                                                     
Fairbanks area.                                                                                                                 
                                                                                                                                
Number 372                                                                                                                      
                                                                                                                                
MR. RANDY CLENDANIEL, North Pole Road Commissioner, stated since                                                                
1982 the total raised has been close to 1.25 mills.  There is a new                                                             
subdivision going in on the south side, different materials have                                                                
been used in that subdivision.  Both service areas should be using                                                              
the same type of materials.  The new service area should have                                                                   
additional mill rate to offset the cost for a period of time.                                                                   
                                                                                                                                
REPRESENTATIVE BUNDE asked if he was in support of CSHB 133                                                                     
(FIN)(efd fld).                                                                                                                 
                                                                                                                                
MR. CLENDANIEL replied yes.                                                                                                     
                                                                                                                                
SENATOR PHILLIPS asked if 1.25 mills was for operating and                                                                      
maintenance costs, or for capital and maintenance.                                                                              
                                                                                                                                
MR. CLENDANIEL stated the 1.25 mills was used for capital and                                                                   
maintenance.                                                                                                                    
                                                                                                                                
MR. MIKE PRAX, Fairbanks North Star Borough Assembly, stated it                                                                 
supports CSHB 133 (FIN)(efd fld).  CSHB 133 (FIN)(efd fld) gives                                                                
citizens the right to their own destiny.  If a service area is                                                                  
compelled to accept another service area without the ability to                                                                 
vote, its recourse is to object to the Assembly.  People are                                                                    
willing to pay for a service if they can see they will receive the                                                              
service they pay for.  Some State areas are so large that                                                                       
maintenance takes twice as long than in service areas.                                                                          
                                                                                                                                
CSHB 133 (FIN)(efd fld) protects existing service areas, gives the                                                              
service areas the ability to set differential rates within a                                                                    
service area and maintains fairness.                                                                                            
                                                                                                                                
Number 726                                                                                                                      
                                                                                                                                
MR. MIKE CRAFT, developer in Fairbanks, asked why property owners                                                               
who are levied a tax rate don't have the ability to vote on service                                                             
areas.  The Borough has a problem with road power issues that no                                                                
one wants to confront.  The Borough could assist service areas in                                                               
the acquisition of rights of way.  There are places in Fairbanks                                                                
where the road rights of way were not wide enough, or grades were                                                               
not good.  Service areas and developers can't do anything about                                                                 
those situations because of the right of way issues.                                                                            
                                                                                                                                
Smaller service areas are paying a much higher rate to the Borough                                                              
for administrative fees relative to the budget.  When combining                                                                 
service areas, tax rates are uneven, so all service areas don't                                                                 
share the same financial burden.                                                                                                
                                                                                                                                
SENATOR PHILLIPS stated most of those issues need to be settled at                                                              
local government levels.  Senator Phillips gave statistics on                                                                   
Chugiak and Eagle River community councils.  Senator Phillips told                                                              
Mr. Craft he could use the Chugiak/Eagle River Road Board as a                                                                  
model.                                                                                                                          
                                                                                                                                
MR. LADD MCBRIDE, Chairman of Cripple Creek Road service area,                                                                  
stated he does support CSHB 133 (FIN)(efd fld).  Larger service                                                                 
areas don't always mean cheaper costs.  It may mean keeping a                                                                   
separate set of accounting books.  People need to know if the                                                                   
contractors hired will be able to handle the amount of work given                                                               
to them.                                                                                                                        
                                                                                                                                
MS. NANCY WEBB, Fairbanks North Star Borough Assembly, stated CSHB
133 (FIN)(efd fld) is a good idea.  Consolidation would help                                                                    
Fairbanks work out difficulties.  Passing CSHB 133 (FIN)(efd fld)                                                               
and a revenue sharing component for a gas tax increase (CSHB 59)                                                                
would provide tools for the assemblies to encourage constituents to                                                             
work together and have larger service areas.  Service areas are the                                                             
closest Fairbanks has to community councils.                                                                                    
                                                                                                                                
SENATOR PHILLIPS stated people in his area are willing to tax                                                                   
themselves because they see the service.  Senator Phillips offered                                                              
to talk with Ms. Webb at a later time about those issues.                                                                       
                                                                                                                                
Number 1226                                                                                                                     
                                                                                                                                
MR. WILLIAM GREEN, Deputy Municipal Attorney for the Municipality                                                               
of Anchorage, stated CSHB 133 (FIN)(efd fld) adversely affects the                                                              
Municipality of Anchorage as a home rule municipality.                                                                          
                                                                                                                                
In 1998 this same type of bill was before the legislature SB 208                                                                
and CSHB 365.  The Anchorage municipal assembly passed a resolution                                                             
strongly opposing both bills.  CSHB 133 (FIN)(efd fld) is a                                                                     
mandatory imposition of restrictions on local home rule powers.                                                                 
                                                                                                                                
Fairbanks is a second class borough and has restrictions that the                                                               
Municipality of Anchorage does not.  CSHB 133 (FIN)(efd fld)                                                                    
reduces the constitutional purpose of maximizing local self                                                                     
government.  If the voters in the Municipality of Anchorage wish to                                                             
change the system, they have the power to do that.                                                                              
                                                                                                                                
SENATOR PHILLIPS asked if the Municipality of Anchorage voted on SB
208 and CSHB 365 in 1998.                                                                                                       
                                                                                                                                
MR. GREEN replied yes.                                                                                                          
                                                                                                                                
SENATOR PHILLIPS stated the Chugiak/Eagle River assembly members                                                                
voted "no" on the resolution.  The greater part of Anchorage is                                                                 
mandating what Chugiak and Eagle River can do.  Chugiak and Eagle                                                               
River assemblies are requesting self determination.                                                                             
                                                                                                                                
REPRESENTATIVE BUNDE said this is going to be an area where                                                                     
reasonable people disagree.  CSHB 133 (FIN)(efd fld) does limit the                                                             
power of assemblies and gives the power to the people who are being                                                             
taxed, the concept of limiting these powers is not new.  It is                                                                  
already in statute under home rule limitations.                                                                                 
                                                                                                                                
SENATOR ELTON asked what happens to police protection if CSHB 133                                                               
(FIN)(efd fld) passes.                                                                                                          
                                                                                                                                
MR. GREEN stated if CSHB 133 (FIN)(efd fld) passes nothing would                                                                
happen to police protection, it is now a single service area.                                                                   
                                                                                                                                
REPRESENTATIVE BUNDE said that was correct.                                                                                     
                                                                                                                                
SENATOR ELTON asked if there were new powers being given to service                                                             
areas.                                                                                                                          
                                                                                                                                
REPRESENTATIVE BUNDE said there are no new powers being given.                                                                  
                                                                                                                                
SENATOR PHILLIPS stated Chugiak and Eagle Rivers fear that the                                                                  
greater part of Anchorage is mandating certain services.  Chugiak                                                               
and Eagle River need self determination.                                                                                        
                                                                                                                                
SENATOR ELTON asked if this battle needs to be fought between the                                                               
voters and the borough, instead of the State stepping in.                                                                       
                                                                                                                                
SENATOR PHILLIPS said the State is just being the referee, because                                                              
Chugiak and Eagle River only represent 15 percent of the                                                                        
population.                                                                                                                     
                                                                                                                                
Number 1610                                                                                                                     
                                                                                                                                
MR. SCOTT SELL, Board Supervisor for Birchtree/Elmore Limited Road                                                              
Service Area and Vice President of Rabbit Creek Community Council,                                                              
stated they support CSHB 133 (FIN)(efd fld).  In Anchorage, some                                                                
assembly members want to get rid of limited road service areas, and                                                             
charge those people a higher tax for less service.                                                                              
                                                                                                                                
MR. PRESTON WILLIAMS stated he supports CSHB 133 (FIN)(efd fld).                                                                
But stated objection to Section 3 of CSHB 133 (FIN)(efd fld)                                                                    
pertaining to fire service protection areas.  Mr. Williams is a                                                                 
board member of a fire service area.  At one time there were five                                                               
service areas, the assembly voted to create one large service area,                                                             
with one appointed board without a vote from the public.  Fire                                                                  
departments have been neglected, there are many fire departments                                                                
within service areas that are located in boroughs.                                                                              
                                                                                                                                
CHAIRMAN WARD said he has a proposed amendment that will address                                                                
that issue.                                                                                                                     
                                                                                                                                
MR. BROOK CHANDLER, Chairman of Girdwood Board of Supervisors, said                                                             
Girdwood is a service area for road maintenance, fire protection                                                                
services, and for parks and recreation services.  Girdwood supports                                                             
CSHB 133 (FIN)(efd fld) as a community.  CSHB 133 (FIN)(efd fld)                                                                
allows a greater degree of protection from Anchorage to decide who                                                              
maintains roads.                                                                                                                
                                                                                                                                
Girdwood enjoys the degree of independence it has as a service                                                                  
area, and the discretion it has to request amounts to be included                                                               
in the Girdwood budget to give the level of services it wants to                                                                
have.                                                                                                                           
                                                                                                                                
People thought that if Girdwood was unified with Anchorage,                                                                     
Girdwood would never be required to accept services from outside                                                                
the community without Girdwood's consent by way of vote.  Mr.                                                                   
Chandler also wanted the last sentence in Section 3 of CSHB 133                                                                 
(FIN)(efd fld) deleted.                                                                                                         
                                                                                                                                
MR. LARRY SODEN, Road Commissioner for Edanella Heights service                                                                 
area, stated support for CSHB 133 (FIN)(efd fld).  His service area                                                             
was to merge with another service area.  The other service area                                                                 
didn't want to merge with the Edanella Heights service area because                                                             
the roads in Edanella were unpaved.                                                                                             
                                                                                                                                
The people are very happy with the level of service provided, they                                                              
tax themselves approximately one mill.  The tax paid is enough to                                                               
cover costs of services.  Giving road service areas the maximum                                                                 
flexibility to decide about their futures will be a step forward.                                                               
                                                                                                                                
Number 2024                                                                                                                     
                                                                                                                                
MR. DANIEL GREGORY, Nikiski Fire Department, supports CSHB 133                                                                  
(FIN)(efd fld) but opposes the last sentence in Section 3.  Fire                                                                
departments that lie within service areas need the same protection                                                              
as those that are not in service areas.                                                                                         
                                                                                                                                
MR. TIM BIGGANE, Fire Chief of Fairbanks North Star Borough, was in                                                             
support of CSHB 133 (FIN)(efd fld) until the Senate amendment was                                                               
proposed.                                                                                                                       
                                                                                                                                
MS. NADINE HARGESHEIMER, Fairbanks North Star Borough Mayor's                                                                   
Office, said the Borough supports CSHB 133 (FIN)(efd fld) along                                                                 
with the exemption of fire service areas.  Deleting the last                                                                    
sentence within Section 3 would be problematic for the Fairbanks                                                                
North Star Borough.                                                                                                             
                                                                                                                                
Number 2199                                                                                                                     
                                                                                                                                
MR. JACK BROWN, Kenai Borough Assembly Member, said within the                                                                  
district there are five service areas that all support CSHB 133                                                                 
(FIN)(efd fld).  CSHB 133 (FIN)(efd fld) allows people to have the                                                              
level of service they want.  CSHB 133 (FIN)(efd fld) allows people                                                              
to support consolidation if they choose.  Mr. Brown stated support                                                              
for the proposed amendment.                                                                                                     
                                                                                                                                
REPRESENTATIVE BUNDE, the sponsor of CSHB 133 (FIN)(efd fld),                                                                   
stated that the police protection issue has been addressed.  The                                                                
Municipality of Anchorage opposes CSHB 133 (FIN)(efd fld) because,                                                              
from its perspective, it believes local assemblies should determine                                                             
decisions by ordinance.  Most people testifying believe if the                                                                  
local governments are going to tax people for service, those people                                                             
should have a vote.                                                                                                             
                                                                                                                                
REPRESENTATIVE BUNDE said CSHB 133 (FIN)(efd fld) strengthens a                                                                 
statute that describes a voting mechanism.  If a local assembly                                                                 
wants to abolish a service area, it will require a majority vote of                                                             
those people within the service area.  If a local assembly wants to                                                             
alter the boundaries it requires a vote of the people affected, and                                                             
the majority surrounding the area.  If a local assembly wants to                                                                
combine a service area it requires a majority vote from both                                                                    
entities involved.                                                                                                              
                                                                                                                                
He acknowledge that people in Fairbanks expressed concern about the                                                             
fire service issue.                                                                                                             
                                                                                                                                
TAPE 00-03, SIDE B                                                                                                              
                                                                                                                                
Number 2343                                                                                                                     
                                                                                                                                
REPRESENTATIVE BUNDE continued.  Road service has high operational                                                              
and maintenance costs but fire service is a matter of serving two                                                               
or three more homes, so it will not have the local tax impact that                                                              
will be caused by absorbing 20 miles of road.  Nikiski and                                                                      
Fairbanks have different views than his district.  Nikiski needs a                                                              
vote before fire service areas can be changed.                                                                                  
                                                                                                                                
CHAIRMAN WARD asked if the Anchorage Assembly or Anchorage Caucus                                                               
had a position on CSHB 133 (FIN)(efd fld).                                                                                      
                                                                                                                                
REPRESENTATIVE BUNDE said not to his knowledge.                                                                                 
                                                                                                                                
SENATOR PHILLIPS moved to adopt Amendment number 1, that would                                                                  
delete the last sentence in Section 3 of CSHB 133 (FIN)(efd fld).                                                               
Without objection, Amendment number 1 was adopted.                                                                              
                                                                                                                                
Number 2230                                                                                                                     
                                                                                                                                
MAYOR JOHN WILLIAMS, City of Kenai, replied the State is always                                                                 
looking for better ways for local government to handle its own                                                                  
concerns.  Mayor Williams said he is uncertain about the amendment                                                              
and how it will effect Kenai.                                                                                                   
                                                                                                                                
SENATOR PHILLIPS moved SCS for CS for HB 133 (STA) out with                                                                     
individual recommendations.  SENATOR ELTON objected.  The motion                                                                
carried with Senators Phillips, Green, and Ward voting "Yea," and                                                               
Senator Elton  voting "Nay."                                                                                                    
           SB 262-DISABLED PLATES FOR LEASED VEHICLES                                                                           
                                                                                                                                
Number 2085                                                                                                                     
                                                                                                                                
MS. LORETTA BROWN, aide to the Senate State Affairs Committee,                                                                  
presented SB 262 for the sponsor, Senator Ward.  At this time                                                                   
leased vehicles are considered owned by a commercial entity.                                                                    
Aplicants for handicap and/or disabled veterans plates are exempted                                                             
from paying both the registration fees and taxes; therefore the                                                                 
free plates may not be used in conjunction with a commercially                                                                  
owned vehicle.                                                                                                                  
                                                                                                                                
SB 262 adds the words "or leased" and "owned or leased" to Section                                                              
1 of AS 28.10.181 (d) and to Section 2 of AS 28.10.421 (d)(3).                                                                  
Adding this language will allow handicapped and/or disabled                                                                     
veterans to place  their license plates on a leased personal                                                                    
vehicle.                                                                                                                        
                                                                                                                                
In DMV's analysis, the fiscal note claims 5500 vehicles are                                                                     
registered to disabled persons throughout the State.  20 percent of                                                             
new vehicles are leased, so 20 percent of those were applied to the                                                             
disabled population.  Ms. Brown said she disagrees with that                                                                    
calculation, but explained that is how the fiscal note was written.                                                             
                                                                                                                                
CHAIRMAN WARD stated when he spoke with a disabled person who                                                                   
leased a vehicle, he was under the assumption that he had ownership                                                             
in the vehicle.  CHAIRMAN WARD said the fiscal note was of great                                                                
concern to him.                                                                                                                 
                                                                                                                                
Number 1891                                                                                                                     
                                                                                                                                
MR. CHUCK HOSACK, Deputy Director of Division of Motor Vehicles,                                                                
replied under Alaska statute, responsibility for paying                                                                         
registration fees and taxes is placed on the owner of the vehicle.                                                              
Leased vehicles are owned by a commercial company that makes a                                                                  
profit through letting others use its vehicles.  The owner pays                                                                 
commercial fees like for any other vehicle; rental cars, taxis,                                                                 
etc.  A commercial vehicle is often overlooked when people lease a                                                              
vehicle and use it for personal use.                                                                                            
                                                                                                                                
The person leasing the vehicle has no ownership rights or interest                                                              
in the vehicle.  The vehicle is registered in the name of the                                                                   
leasing company.  The State does not place any requirements on that                                                             
person to pay fees, and the State does not charge that person any                                                               
fees or taxes.                                                                                                                  
                                                                                                                                
In a lease all costs are negotiated just like a sale.  It is normal                                                             
practice in a lease agreement to let the lessee pay the                                                                         
registration fees for the leasing company.  This is a contract                                                                  
arrangement between the company and the lessee.                                                                                 
                                                                                                                                
SB 262 is directing Division of Motor Vehicles (DMV) to eliminate                                                               
a fee that is not charged to the individual.  SB 262 exempts the                                                                
leasing company from paying the registration fees, and this creates                                                             
an inequity in fees between the company and other commercial                                                                    
vehicles.  DMV opposes SB 262.                                                                                                  
                                                                                                                                
If the disabled individuals want the handicapped license plates on                                                              
the vehicle for parking privilege, there is a handicapped parking                                                               
permit available at no charge.                                                                                                  
                                                                                                                                
In the fiscal note Mr. Hosack did not list operating costs, since                                                               
the vehicles are listed through the State in another form.  If SB
262 passed there would be added complexities to the registration                                                                
system.  The vehicles would have to be identified separately from                                                               
all other commercial vehicles.                                                                                                  
                                                                                                                                
There will be a revenue loss if these companies are exempted from                                                               
paying the higher fees.  The number of leased vehicle leaving the                                                               
showroom floor is growing, however the fiscal note was calculated                                                               
with a conservative amount.                                                                                                     
                                                                                                                                
CHAIRMAN WARD stated people forget the handicapped tag that hangs                                                               
from the mirror.  Could disabled plates be put on a leased vehicle                                                              
they will own?  Is there no ownership with the lessee and a leased                                                              
vehicle?                                                                                                                        
                                                                                                                                
MR. HOSACK stated during the lease they have no ownership in the                                                                
vehicle, that comes after the lease term is up and then the option                                                              
to buy comes into play.                                                                                                         
                                                                                                                                
SENATOR GREEN said the ability to turn the vehicle back                                                                         
unilaterally is what distinguishes the vehicle from being                                                                       
purchased.                                                                                                                      
                                                                                                                                
SENATOR ELTON stated if you lease a vehicle it is not your asset,                                                               
as opposed to a purchased vehicle becoming your asset.                                                                          
                                                                                                                                
CHAIRMAN WARD asked how that works with a leased vehicle.                                                                       
                                                                                                                                
SENATOR ELTON stated it comes into play at the end of the lease                                                                 
agreement.                                                                                                                      
                                                                                                                                
SENATOR GREEN asked if there is a different level of liability for                                                              
persons leasing a vehicle from persons buying a vehicle.                                                                        
                                                                                                                                
MR. HOSACK stated the handicapped tag placed on the mirror can be                                                               
recognized in any state within the U.S.                                                                                         
                                                                                                                                
SENATOR ELTON asked if the tag could be taped to the windshield.                                                                
                                                                                                                                
MR. HOSACK said just as long as the tag is displayed in the                                                                     
windshield, taping may solve some of the problems.                                                                              
                                                                                                                                
SENATOR PHILLIPS suggested that a bulletin be sent to car dealers                                                               
throughout the State asking them to explain the leasing agreement                                                               
more clearly so people will not get confused about ownership.                                                                   
                                                                                                                                
Number 1328                                                                                                                     
                                                                                                                                
MR. HOSACK stated that DMV contributes to the dealer association                                                                
quarterly newsletter this is one way of putting the bulletin out.                                                               
                                                                                                                                
CHAIRMAN WARD announced the bill would be held in committee.  The                                                               
meeting was adjourned a 4:50 p.m.                                                                                               
                                                                                                                                
                                                                                                                                

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