SB 45-FEE/TAX EXEMPTION FOR CERTAIN VEHICLES  10:07:40 AM CHAIR DYSON announced that the final order of business would be SB 45. GENEVIEVE WOJTUSIK, Staff, Senator Lesil McGuire, presented information related to SB 45. She offered to answer questions. She referred to an article by GM Communications dealing with how alternative fuel cars are affected by cold weather, in response to a previous question by Senator Giessel. CHAIR DYSON requested answers to several questions that came up during the previous hearing of the bill. MS. WOJTUSIK answered the question about the fiscal note, stating that last year's fiscal note was much lower at $20,000 compared to this year's fiscal note which is over $100,000. The committee noted there were not that many alternative fuel vehicles in Alaska. The sponsor is hoping that this bill will motivate more people to buy alternative fuel vehicles. She said the committee has drafted a new fiscal note reflecting last year's fiscal note. 10:08:56 AM CURTIS THAYER, Deputy Commissioner, Office of the Commissioner, Department of Administration, explained the fiscal note for SB 45. The Department of Administration submitted a fiscal note on February 22, 2013, stating the costs to the department would be about $110,000 in the first year and $25,000 in successive years. He stated that the department stands by that fiscal note and was unaware of the new fiscal note. CHAIR DYSON noted a site where the Vehicle Identification Number (VIN) information is found for free. He asked if this bill will require the department to check every VIN number in the state. MR. THAYER explained that the department would look at VIN numbers to see who qualifies for the special registration fee. There are programs that will run the VIN number to determine the type of vehicle. The $110,000 was to buy the program and then $25,000 was for the subscription. He noted that there are multiple vendors and he hoped the proposed fiscal note is on the high side. He said it is getting harder to track VIN numbers. CHAIR DYSON commented that the people who want this exemption will identify their specific vehicle, and all that needs to be done is to interact with the manufactures. He asked if there is an identifier in the VIN number that tells if it is an alternative fuel vehicle. MR. THAYER said there is, and a program can decipher that VIN number and process it immediately. 10:12:07 AM SENATOR WIELECHOWSKI emphasized that the fiscal note two years ago was $20,000 with no cost thereafter; the fiscal note this year is for $110,000 with a cost of $25,000 every year thereafter. He said he supports the bill, but thinks the fiscal note is extremely high and unjustified. CHAIR DYSON said he shares that opinion. He noted Mr. Thayer said it was the high limit. 10:13:04 AM At ease 10:13:28 AM SENATOR GIESSEL asked for clarification about the $20 biennial registration fee on line 6, and on line 9, the $10 annual registration fee. She suggested it was referring to one fee. MS. WOJTUSKI agreed that they were the same fee. 10:14:30 AM HOWARD LENOX, Regional Director, Government Affairs-Western Region, General Motors, testified in support of SB 45. He listed the types of qualified alternative fuel vehicles the fee applies to: CNG, LNG, electric and plug-in hybrid electric vehicles. He noted the national security issue due to dependence on foreign oil. He said that vehicle manufacturers are responding by producing alternative fuel vehicles. Due to their cost there is a need to encourage consumers to take action in the market place. He stressed the importance incentives play in promoting the use of alternative fuel vehicles. He said SB 45 provides such an incentive. An important aspect of the bill is that it does not pick winners or losers from a technology perspective. He noted that Alaska will join 30 states that have some form of incentive for alternative fuel vehicles. He thanked Senator McGuire and the committee. CHAIR DYSON pointed out that he and Senator Giessel have been working on alternative fuel issues. He asked Mr. Lenox to forward a list of incentives other jurisdictions have offered, and he requested an analysis of the hydrogen fuel vehicle. 10:18:13 AM CHAIR DYSON asked what the committee wishes to do about the fiscal notes. SENATOR GIESSEL noted she has more questions. She asked Mr. Thayer why the fiscal note does not address the lost revenues from the reduced registration fees. MR. THAYER said the fiscal note is indeterminate until the number of vehicles is known. SENATOR GIESSEL noted on page 2 of the fiscal note it says "there are currently 2,301 strictly hybrid vehicles registered." She concluded that there is some quantity that could be construed for a fiscal note. She asked what the typical registration fee is. MR. THAYER said, depending on the vehicle, the vehicle tax is $50 to $60, plus the Motor Vehicle Registration Tax (MVRT), the community tax which can vary from $18 to $100. There is a loss of revenue to DMV, as well as to the communities. SENATOR GIESSEL clarified that local communities would lose revenue. MR. THAYER commented that it depends on the registration. That is why DMV was trying to quantify the cost as far as administering the program. The department does not have a position on the bill and would probably lean toward supporting the bill. SENATOR GIESSEL noted that these are expensive cars. She asked what the average cost is. MS. WOJTUSKI did not know. CHAIR DYSON replied that the cheapest ones are in the $20,000 to $30,000 range and the most expensive are around $750,000. He guessed that most fall into the $25,000 to $55,000 range. 10:21:37 AM SENATOR GIESSEL observed that the reduction in registration fees would benefit affluent folks. She voiced concern about that. CHAIR DYSON said it is a policy call whether this minor change will affect anyone's buying habits. The bill does send a signal that the state wants to encourage alternative fuels. CHAIR DYSON asked if the fiscal note should be amended. SENATOR WIELECHOWSKI said he compared last year's fiscal note to this year's. He agreed it was a policy call and said he supports the bill, but would like to see a reduced fiscal note. SENATOR GIESSEL suggested moving the bill on to the Senate Finance Committee. SENATOR WIELECHOWSKI said he would not object to moving the bill. CHAIR DYSON suggested sending a cover letter along with the bill to include the committee's suggestions. He encouraged DMV to research VIN services that are available for no cost. 10:24:37 AM SENATOR GIESSEL moved to report SB 45, version 28-LS0411\A, from committee with individual recommendations and attached DOA fiscal notes. There being no objection, SB 45 was reported from the Senate State Affairs Standing Committee.