SENATE BILL NO. 28 An Act repealing an additional fee for motor vehicle registration not conducted by mail and limiting motor vehicle emissions inspection to once every two years. Co-chairman Halford directed that SB 28 next be brought on for discussion. Senator Donley explained that the purpose of the bill is two-fold. The first is change of the inspection and maintenance program for certification to a biennial rather than an annual basis. He asked that this section, only, be the one moved with the bill. Remaining sections within the bill are not interdependent and have generated increasing concern. Both the Dept. of Environmental Conservation and the division of motor vehicles have indicated support for the bill. With the additional jurisdictional capability, they believe they can sell biennial testing to the federal EPA. Alaska is the only state that does annual testing. California conducts biennial testing statewide. Movement to biennial testing would save Alaskans time and money. Co-chair Halford inquired regarding fines and fees within the bill. Senator Donley responded that the legislation increases the current $75 fine to $200. Ron King, Department of Environmental Conservation testified that the current fine is a class A misdemeanor for which a complaint must be filed in court. The fine can amount to $5.0 and one year in jail. The proposed change would make it a citation and not require court action. He stated that the Dept of Environmental Conservation has extended the vehicle inspection program to commuters to and from the Matanuska Valley and achieved 75% compliance. He said that 2,200 vehicles have been inspected. The division of motor vehicles reports that 2700 commute. Some are under investigation as class A misdemeanors. Juanita Hensley, Chief, Driver Services, Division of Motor Vehicles, Dept of Public Safety, said the bill would bring in $2.55 million in additional revenue. She explained that in 1994 the $10 fee was waived for 15% of 6,500 vehicles registered in the state. The additional revenue is derived from doing away with waiver of the $10 fee. The final source of new revenue would be new vehicles or out-of-state vehicles registered for the first time in Alaska. These vehicles would pay the increased fee because the original transaction involving a title cannot be done by mail. In 1994 there were approximately 140,000 registrations. This would generate $1.4 million in revenue. The total revenue from all these sources would be $2.5 million. Senator Rieger expressed support for giving a credit for registering by mail rather than a penalty for going into the division of motor vehicles to register. Co-chair Halford inquired concerning how to make the legislation revenue neutral. Ms. Hensley responded that the status quo would make it revenue neutral. Senator Sharp MOVED to adopt amendment no. 1. Ms. Hensley stated that in Anchorage people can register their cars at emission testing stations. One station in Anchorage is currently not charging the $10 fee. Approximately 150 registrations are processed daily through the stations. They process the work for the DMV, and if they collect the $10, they keep it. They have gone to the expense of putting in computers and hook ups to accomplish the work. The Legislative Budget and Audit Committee approved $100.0 to pay for the data processing charge-back and for required data storage. There was considerable discussion of extending the registration period to two years. Mr. King stated that the department has the ability to go to a two-year period. The department's intention has been to move to that time frame when possible. It is contingent upon Anchorage and Fairbanks attaining standards. He attested to recent changes in terms of reliability of automobiles, and noted that with the enforcement provisions in the proposed bill, the department can begin working on cases and achieving greater compliance. These items are key to EPA acceptance of the program change. The Clean Air Act will not allow the state to be less stringent. Mr. King reiterated that with increased enforcement and compliance and newer technology cars, the department can extend testing to a two-year period and make the argument that there is no decrease to the overall effectiveness of the program. Ms. Hensley noted that there are 631,000 vehicles registered in Alaska. She stated that deletion of sections 1,3,4,5, and 6 would render the bill revenue neutral and maintain the status quo. Emission program portions relating to biennial testing would remain in place. No objection being heard, amendment no. 1 was ADOPTED. Senator Donley MOVED to adopt the proposed amendment to render the bill revenue neutral by deleting sections 1,3,5, and 6, as well as a conforming amendment that sec. 3 reflect the statutory status quo. He also included need to insert the word "not" after the word "or" in amendment no. 1 to conform the earlier adopted amendment to changes proposed by amendment no. 2. Senator Rieger OBJECTED. He suggested that the bill could be made revenue neutral by not deleting language on page 2, lines 10, 11, and 12, which refers to allowing a waiver of the $10 fee for "a good cause based on criteria established in regulations by the department." It would keep the status quo but invert the fee structure eliminating the penalty and giving a credit instead. Ms. Hensley noted that Sections 10 and 11 should reflect new section numbers. The department would like to be given the capability to serve the public so that neither the public nor workers are burdened further. That was the initial reason for inclusion of the $10 fee in earlier legislation. Fiscal notes for both the Dept. of Public Safety and Dept. of Environmental Conservation are accurate. In response to a question from Co-chairman Halford, Ms. Hensley advised that the department is neutral on the amendment. Senator Rieger OBJECTED to the conforming amendment. He voiced support for maintaining the status quo but said there should be a credit for renewal by mail rather than a penalty for going to the DMV in person. He proposed an alternative way to make the bill revenue neutral by raising the $10 in the original base fee and eliminating the $10 surcharge. Ms. Hensley noted that the department has regulations for the waiver program under provisions of good cause. Co-chairman Halford called for a show of hands. Amendment No. 2 FAILED on a vote of 3 to 2 with 1 abstention. Senator Rieger MOVED to adopt status quo language relating to the waiver at page 2, lines 9, 10, 11, and 12. Co- chairman Halford called for a show of hands. The motion FAILED on a vote of 1-4. Senator Donley MOVED to rescind action in failing to adopt amendment no 2. With no debate, the committee voted 4 to 1 with 1 abstention to rescind its action on amendment no. 2. Senator Donley then MOVED for adoption of amendment no. 2. Co-chairman Halford called for a show of hands. Amendment no. 2 was ADOPTED on a vote of 4 to 2. Senator Sharp MOVED for passage of CSSB 28 (FIN) with individual recommendations and attached fiscal notes. Senator Rieger OBJECTED. On a vote of 5 to 1, CSSB 28 (FIN) was REPORTED OUT of committee with a revised $58.8 fiscal note from the Dept of Public Safety and a $250.0 note from the Dept of Environmental Conservation. Senators Donley and Sharp signed the committee report with a "do pass" recommendation. Co- chairman Halford and Senators Phillips, Rieger, and Zharoff signed "no recommendation." ADJOURNMENT The meeting was adjourned at approximately 7:20 p.m.