CS FOR HOUSE BILL NO. 328(FIN) An Act allowing motor vehicle registration and licensing fees to be paid by credit card. Co-chair Pearce directed that CSHB 328 (Fin) be brought on for discussion and advised that it would allow for payment of motor vehicle fees via credit card. Senator Kelly asked why the bill would incur a cost. Co-chair Pearce responded "because the credit card company would get 1-1/2%." JEANNE LARSON, aide to Representative Martin, came before committee. She explained that the bill allows individuals to pay driver license and motor vehicle registration fees by credit card and authorize use of the credit card via telephone. She deferred further comment to department staff. Co-chair Pearce asked if consideration had been given to allowing the department to charge the extra percentage so that the bill would be revenue neutral. Ms. Larson observed that it was mentioned in passing but not dealt with in substantial detail. Senator Rieger pointed to new language within the bill and asked that the department comment. JUANITA HENSELY, Chief, Driver Services, Dept. of Public Safety, said that the department is comfortable with the mandate to establish the procedures and fees prescribed for credit card payment by telephone. Speaking to questions relating to raising the fee to cover the credit card cost, Ms. Hensley referenced discussion of the issue in the House. The House was adamant in its decision not to increase motor vehicle fees to cover credit card charges. Co-chair Pearce asked if it was necessary to provide statutory authority to allow for use of credit cards. Ms. Hensley said that aside from the Marine Highway System, no other agency accepts credit cards. The reason for the proposed legislation is to receive the $225.0 appropriation for credit card costs. It represents a means of fixing the funding in the budget. In response to a question from Senator Rieger, Ms. Hensley explained that the department has been in contact and negotiations with banks. The Alaska Bankcard Center is the clearing house for all credit cards. It is the entity that has offered the 1-1/2%. It is the department's intent to allow for use of more than one credit card if the 1-1/2% can be negotiated. Senator Rieger voiced a preference for use of "may" rather than "shall" in new language. He expressed concern that controversy would arise over which credit cards are allowed and which are not. Senator Kelly inquired regarding the net result of levying a $1.00 credit card transaction fee. Ms. Hensely advised of estimates that 40 to 50% of those renewing licenses would use credit cards in lieu of cash. The state registers approximately 605,000 vehicles annually and issues 200,000 identification cards and driver licenses each year. The $1.00 fee would more than cover the cost. Senator Kelly asked if it would be possible to register an automobile by telephone. Ms. Hensley responded affirmatively and spoke to the workings of a dial-in system in Wisconsin. Senator Kelly voiced support for that approach. Pointing to language in the bill, Senator Rieger noted that it appears individuals will pay an additional $10 unless registration is conducted by mail. Ms. Hensley advised that the $10 fee was intended to cut down on the number of people actually coming to registration offices. Payment by credit card via telephone would accomplish the same end. Co-chair Pearce advised that bill language stating "that additional fees shall be added for registration not conducted by mail" does not exempt telephone transactions from the $10 fee. Senator Sharp pointed to language at lines 8 through 9 and noted that the department may waive the $10.00 fee, by regulation, and suggested that an exception could be made for payment by telephone. Ms. Hensely voiced department intent to waive the $10.00 for credit card renewals conducted via telephone. Senator Kelly proposed that a $1.00 fee be levied for credit card transactions. Co-chair Frank voiced his understanding that an individual who renews a registration or license at a motor vehicle office and utilizes a credit card for payment would pay a fee of $11.00. He then suggested that payment by credit card could save processing costs. Discussion of the existing $10.00 fee and proposed fees for credit card use followed. A number of alternative approaches were proposed. Co-chair Pearce raised concern that changes in the $10.00 fee could not be made under the existing bill title. Senator Kelly MOVED to levy a $5.00 fee on transactions by credit card via telephone. He advised that the fee would cover the $225.0 cost shown on the fiscal note. In response to a question from Senator Sharp asking if the $10.00 fee would apply in addition to the $5.00 charge, Senator Kelly commented that the $5.00 fee would encourage individuals to use the phone for renewal rather than stand in line at a registration office. He reiterated earlier comments that the department would waive the $10.00 charge for telephone transactions. Ms. Hensley concurred. Co-chair Pearce called for a show of hands on the motion. The amendment was ADOPTED on a vote of 4 to 2. The department was requested to provide a new fiscal note for the bill, including an estimate of revenues to be generated by the $5.00 fee. Senator Kelly MOVED that SCS CSHB 328 (Finance) pass from committee with individual recommendations. No objection having been raised, SCS CSHB 328 (Finance) was REPORTED OUT of committee with a fiscal note from the Dept. of Public Safety showing a cost of $225.0 and revenue of $322.5. All members signed the committee report with a "do pass" recommendation with the exception of Senator Kerttula who signed "no rec."