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.