SB 28 MOTOR VEHICLE REG FEE/EMISS'N INSPECTIONS  CHAIRMAN KELLY called the Senate Labor and Commerce Committee meeting to order at 2:10 and announced SB 28 to be up for consideration. SENATOR DAVE DONLEY, sponsor, said SB 28 is designed to change the I.M. testing program in Alaska from every year to every other year. Almost all other states, including California, do it every other year. He said, at the request of Senator Rieger, there was a restructuring of DMV fees. Currently, there is an additional $10 fee if you come to a DMV office in person when you could do it by mail. Senator Rieger thought the fees should be $10 with a rebate if you use the mail. Personally, he said, he is very ambivalent about this change and really wanted to just do away with the fee. However, financially it is hard to do that since DMV has become dependent on that extra revenue. SENATOR DONLEY said the point of the legislation is to get bi- annual testing which would be a real positive thing to do for the people of Alaska. SENATOR KELLY asked if you still have to register every year, but get the emission test every second year. SENATOR DONLEY responded that was correct. He elaborated that there has been interest in bi-annual registration, but the argument against it in past years has been because we have to get I.M. tests every year and there is the shock of having to pay twice as much every other year rather than scheduling the payments out, so to speak. He thought bi- annual registration would save the state a lot of money in administrative costs, but this particular bill doesn't do that. Number 93 JUANITA HENSLEY, Division of Motor Vehicles, explained the reason they have not gone to bi-annual registration is because of programs that have been added over the years, such as the yearly emissions program and the collection of 13 communities' motor vehicle registration taxes which are collected on an annual basis. SENATOR SALO asked why you couldn't collect taxes on a bi-annual basis. MS. HENSLEY explained the statute says it has to be collected annually. SENATOR TORGERSON asked if insurance was required before you register your vehicle now. MS. HENSLEY answered that is a requirement. SENATOR TORGERSON asked what would bi-annual do to that. MS. HENSLEY said they don't look at insurance verification. They just have the person sign a certified statement on the registration saying they have insurance as required by law and they are expected to keep it. WALLY HOPKINS, Quick Lube Chief Executive Officer, said they are the largest provider of emission testing in the state, employing 25 people in the Anchorage and Fairbanks emissions program. The annual payroll for these people is $1.1 million. In recent years the violation of federal standard has fallen a maximum of three or four times a year when Anchorage or Fairbanks has an extreme temperature inversion. Current programs operating in Anchorage and Fairbanks are recently new, he explained. They have invested over $1 million in facilities, equipment, and personnel to be able to provide these services. After a successful 90-day pilot program in Anchorage, including a reregistration service, they hoped to open another facility in Fairbanks within the next 30 days. He thought this was a prime example of private enterprise and government working together. With the reregistration process the state does not have any cost and they are not charging their customers any fee for this service. At their facility in Anchorage they can test eight cars at a time and they are gearing up to do 12 cars at a time. The average wait to get a vehicle tested there is less than 10 minutes. They are currently testing 22 1/2% of vehicles in Anchorage, according to the number of registrations that are being mailed out to the public in Anchorage. He concluded saying that if this bill passes, it will eliminate 50% or more of the jobs within the emission testing industry. It will put a hardship on the residents of Alaska who are subject to emissions testing by doubling the cost of repairs for failed vehicles. It would put an extreme hardship on good businesses that in good faith planned, developed, and provided emission testing based on established programs. SENATOR KELLY asked Ms. Hensley if there was a cap for an emission inspection in statute. She replied that she didn't have that answer, but knew that DMV collects $1 for the processing of those certificates. In this bill it would go up to $2. SENATOR KELLY asked if there was a set fee for emission inspections at his shops. MR. HOPKINS said they are charging $29.95 for the inspection and they add the $10 registration fee at this time. He said he thought Anchorage had $45 as a cap. Fairbanks has something like $65. Number 260 RON KING, Department of Environmental Conservation, said that state statute and regulations do not limit what an inspection cost could be. Local statutes and ordinances in Anchorage and Fairbanks limit what the facility can charge. In Anchorage it is $40 and Fairbanks has a $40 or $45 upper limit. SENATOR KELLY asked him how many vehicles are tested in Anchorage every year. MR. KING replied approximately 150,000 vehicles that qualify for this program are in Anchorage and approximately 50,000 in Fairbanks. SENATOR TORGERSON asked if he had a position on going to two years. MR. KING replied that the department has been concerned with going to an every other year inspection until the communities have attained the standard. Based on the failure rates, however, and working with DMV and Senator Donley, they believe they put together a package that will enable them to convince EPA to approve an every other year inspection. SENATOR KELLY commented that Mr. Hopkins has already recovered his investment. MR. HOPKINS disagreed and explained that it would take about three years to amortize their investment. Number 291 SENATOR TORGERSON asked Mr. Hopkins what the average cost of fixing an emission problem would be. MR. HOPKINS replied the average cost would be about $100 - $125 per repair. He explained with an every other year scenario, instead of 17% of vehicles failing (the figure for now) there would about 35% or more. SENATOR DONLEY said the last committee changed the effective date to 1996 which would give businesses time to adjust to the new plan. The Division would have some discretion to deal with problem automobiles. They also have some authority, through regulation, to address the cost issue. He noted that after some review of correspondence, he was struck with the discrepancy between fees charged for I.M. testing in Alaska versus other states. Our fees up here are twice as much. SENATOR KELLY said he liked the idea of bi-annual registration, but he didn't think there would be time with 30 days left to go. He hoped legislation like that would be introduced at a later time. SENATOR SALO said she was concerned because she had many constituents call her about the $10 fee and thought the bill just flip flopped the issue around. If the argument is revenue, and having become dependent on that revenue, she thought that was negated by the fact that every one of those fees is going up $10. She would like to see the elimination of that section unless there is compelling information from the DMV that it's a good idea. SENATOR DONLEY commented that section is not related to the bi- annual testing proposal. MS. HENSLEY said the original bill did do away with the $10 fee proposal if you walked in as opposed to mailing in the registration. Since they have gone to the $10 fee, mail has been increased to total 60%. Senator Rieger's amendment would increase everyone's registration by $10 unless you mail it in and get a rebate, with the exception on page 2, lines 9 - 12, which deletes language that allowed them to waive the $10 fee if you are required to be in the office to handle a transaction. People who choose to register their cars at the I.M. stations are not charged the $10 walk-in fee, although some of the stations charge a $10 processing fee. This bill makes it equitable for everyone and will generate approximately $2.5 in general fund revenue which their department doesn't receive unless it is appropriated to them, MS. HENSLEY explained. SENATOR KELLY asked if SB 28 encouraged smaller lines in the DMV offices. MS. HENSLEY agreed that it did. SENATOR DONLEY said he didn't think the fees section of the bill had an effect one way or the other on that. He said SB 28 didn't change the incentive to register by mail. He said the committee could delete the fee section and the status quo would remain that the division would be assessing the $10. SENATOR SALO said her intention would be to take out the section so they would lose the ability to collect the $10. She didn't think people would automatically start going back to DMV instead of using the mail. MS. HENSLEY said offering a program with incentive to keep people from standing in a line so you can give better service to someone who has to be there is what they are seeking. She said it was working. Number 435 SENATOR KELLY commented that even if this bill passes people could still register their vessels at the various I.M. stations. MS. HENSLEY agreed that was correct. SENATOR KELLY asked if DMV supported this bill. MS. HENSLEY said they support it as drafted. SENATOR DONLEY said one amendment was recommended by DEC to make a different effective date to allow them to begin enforcement earlier. SENATOR TORGERSON moved amendment #1. There were no objections and it was so ordered. SENATOR TORGERSON moved to pass CSSB 28 (L&C) from committee with individual recommendations. There were no objections and it was so ordered.