HOUSE BILL NO. 19 "An Act relating to permanent motor vehicle registration; relating to the registration fee for noncommercial trailers and to the motor vehicle tax for trailers; and providing for an effective date." 1:55:36 PM Co-Chair Stoltze noted that he had the Department of Administration (DOA) online. He reminded that public testimony had been taken on the bill in a prior finance meeting. He imagined that most people appreciated the notion of permanent registration. He anticipated questions about the fiscal note. He asked staff to provide a brief overview of the legislation. DARRELL BREESE, STAFF, REPRESENTATIVE BILL STOLTZE, explained that HB 19 allowed for permanent registration, offered through the Division of Motor Vehicles (DMV) for non-commercial motor vehicles older than eight years and non-commercial trailers older than eight years. The permanent registration would cost $25 in addition to the regular biannual registration. The owner of the vehicle or trailer had a choice to pay biannual registration fees as established in statute or to select the permanent vehicle or trailer registration. He pointed out that the permanent registration for vehicles or trailers was nontransferable. If a vehicle or trailer was sold, the new owner must register with DMV. Co-Chair Stoltze pointed out the "opt-out" provision for the municipalities. Mr. Breeze added that the bill offered municipalities a provision to establish their own motor vehicle registration tax rate for vehicles that were permanently registered. Currently municipalities had the option based on the age of the vehicles, but HB 19 allowed municipalities to adopt, by ordinance passed by city council or a local assembly. Co-Chair Stoltze added that the municipalities could collect the portion of the registration fee that the state provided to local governments. He wished to provide an option for the public to avoid government fees. He stated that he himself had an older boat trailer and pickup truck and was impacted by the legislation. He wished to detail the fiscal note. AMY ERICKSON, DIVISION OF MOTOR VEHICLES, DEPARTMENT OF ADMINISTRATION, was available to answer questions. 2:00:20 PM Representative Kawasaki asked why the DMV collected on the behalf of some municipalities. Ms. Erickson did not have the history. Co-Chair Stoltze commented on the assumptions stated on the fiscal note. He noted that the department projected the fiscal impact or revenue loss based on predictions regarding choice of permanent registration. He added that the permanent registration might not benefit those people who chose to leave Alaska to relocate to another state or country. 2:02:40 PM Representative Gara asked to combine his legislation related to permanent licensing registration for hunting and fishing. Co-Chair Stoltze answered that he had concerns about the fish and game fund and the effect that a combined act of legislation would have, although he was amenable to the concept. Representative Gara stated that his bill, HB 157, was written to avoid any impact on the fish and game fund. 2:03:48 PM Vice-Chair Neuman expressed concern about two-year registration for DMV, which was implemented to help reduce division costs. Since DMV brought in more money than they needed, he suggested legislation to reintroduce single-year registration. Co-Chair Stoltze stated that the department was unwilling to provide information regarding the fiscal impact of a return to a single-year registration. Representative Wilson asked about the loss of revenue shown in the fiscal note. She asked if the division would continue to operate with a surplus if HB 19 were enacted. Ms. Erickson replied yes. Co-Chair Stoltze pointed out the short-term positive earnings in the division's near future, as documented in the fiscal note. He asked to know the exact short-term impact on the department. Ms. Erickson replied that the department anticipated a surplus greater than $6,000,000 in 2014 and approximately $7,000,500 in 2015. The calculations were based on the number of vehicles. The department estimated that 478,000 motor vehicles and 115,000 trailers were eligible for permanent registration. 2:06:05 PM Representative Gara asked if the projection became negative over time. Ms. Erickson responded that most vehicles registered biannually would no longer bring revenue. The increase of $25 for the permanent registration led to the projected surplus, but after 2015 the revenues were no longer available to the division. 2:06:50 PM Representative Gara asked for an estimate of annual loss to the division or communities. Ms. Erickson stated that the revenue loss impacted the state rather than DMV. She clarified that once vehicles were permanently registered, the revenue loss would compound. Co-Chair Stoltze clarified that the projections were merely speculations. 2:07:34 PM Vice-Chair Neuman questioned the assumption of the fiscal note. He supposed that some people might learn about the option and choose to register a vehicle that was otherwise ignored, leading to further revenue for the state. Co-Chair Stoltze agreed that speculations were merely that. Representative Munoz asked about the percentage of the permanent fee that was to be shared with communities. She asked if the formula would remain consistent. Mr. Breese responded that the permanent registration fee went directly to DMV and thus the state. The cities and municipalities that had motor vehicle registration tax were those that were passed and approved by each separate community. The permanent registration fee would be appropriated as the legislature chose. Co-Chair Stolze agreed and clarified that the legislature appropriated funds through the constitutional appropriation process. Representative Munoz asked the estimated savings to the individual for the average life of a car. Mr. Breese stated that the savings was difficult to estimate. He noted that the average age of vehicles in the state was 13 years old. Five years of permanent registration was calculated in an estimate making the savings difficult to discern. Co-Chair Stoltze opined that government gets its tax out of the vehicle at some point. 2:11:06 PM AT EASE 2:13:22 PM RECONVENED Representative Kawasaki MOVED Amendment 1 to be written properly for the floor. Page 1, line 2, following "trailers;": Insert "providing that permanent motor vehicle registration may not be considered when determining the eligibility of an individual for a permanent fund dividend;" Page 5, following line 2: Insert a new bill section to read: "* Sec. 8. AS 43.23.015(a) is amended to read: (a) The commissioner shall adopt regulations under AS 44.62 (Administrative Procedures Act) [THE ADMINISTRATIVE PROCEDURE ACT (AS 44.62)] for determining the eligibility of individuals for permanent fund dividends. The commissioner may require an individual to provide proof of eligibility, and the commissioner may use other information available from other state departments or agencies to determine the eligibility of an individual. The commissioner shall consider all relevant circumstances in determining the eligibility of an individual. However, the commissioner may not consider the issuance of a permanent motor vehicle registration under AS 28.10.155 as a factor in determining the eligibility of an individual, and the residency of an individual's spouse may not be the principal factor relied on [UPON] by the commissioner in determining the residency of the individual." Co-Chair Stoltze OBJECTED for discussion. Representative Kawasaki discussed policy regarding qualification for the Permanent Fund Dividend (PFD). He stated that establishing residency for the PFD used proof of home ownership, employment records, school records, voter registration, motor vehicle registration records and licenses for items or activities such as hunting and fishing. He wanted to ensure that the bill was not used exclusively to determine or establish residency. He wanted to ensure that the person did have a permanent vehicle registration. He planned to amend his amendment in the near future to allow the registration to be used for eligibility for the PFD. 2:14:46 PM Representative Wilson pointed out that a vehicle registration was considered proof of Alaskan residence in the PFD application process. Representative Gara explained that some people applied dishonestly for the PFD. The commissioner utilized a vehicle registration when determining residency, but with HB 19, a person might pay $25 one time and continue to use the documentation to prove that they were eligible for a PFD. Co-Chair Stoltze countered that a negative trigger often provided a red flag. Representative Kawasaki WITHDREW his amendment. Representative Costello detailed the fiscal note. She noted the change in revenues for FY 14 - FY 19, which illustrated a fiscal impact of $100,100 for FY 14 for database upgrades. The fiscal note also illustrated changes in state revenues for FY 14 as an increase of $5,346,000, in FY 15 an increase of $5,982,000, FY 16 a decrease of $17,836,000, FY 17 a decrease of $20,128,000, FY 18 a decrease of $20,128,000 and FY 19 projected a decrease of $22,420,000. Co-Chair Stoltze clarified that the fiscal note projections were purely speculative. 2:19:03 PM Vice-Chair Neuman MOVED to REPORT CSHB 19(TRA) out of committee with individual recommendations and the accompanying fiscal note. Representative Kawasaki OBJECTED Representative Kawasaki noted that the bill packet contained collections for communities with a motor vehicle registration tax. He pointed out that some communities would feel a significant impact from the revenue losses. He WITHDREW his OBJECTION. CSHB 19 (TRA) was REPORTED out of committee with "no recommendation" and with one new fiscal note from the Department of Administration. 2:20:35 PM AT EASE 2:23:03 PM RECONVENED