SENATE TRANSPORTATION April 18, 1995 1:42 p.m. MEMBERS PRESENT Senator Steve Rieger, Chairman Senator Robin Taylor, Vice Chair Senator Lyda Green Senator Georgianna Lincoln MEMBERS ABSENT Senator Al Adams COMMITTEE CALENDAR 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." PREVIOUS SENATE ACTION SB 28 - See Senate Transportation minutes dated 3/28/95. WITNESS REGISTER Senator Donley State Capitol Juneau, Alaska 99801-1182 POSITION STATEMENT: Prime sponsor of SB 28. Ron King Department of Environmental Conservation 410 Willoughby Avenue Juneau, Alaska POSITION STATEMENT: Suggested amendments regarding their concerns. Juanita Hensley, Chief Driver Services, Division of Motor Vehicles Department of Public Safety PO Box 20020 Juneau, Alaska 99811-0020 POSITION STATEMENT: Discussed the concerns of the DMV. Jay Delaney, Director Division of Motor Vehicles Department of Public Safety 5700 E Tudor Road Anchorage, Alaska 99507-1225 POSITION STATEMENT: Discussed the $10 fee. Ladd McBride, Secretary/Treasurer Alaska Watch Incorporated PO Box 83567 Fairbanks, Alaska 99708 POSITION STATEMENT: Discussed SB 28 as a step in the right direction. ACTION NARRATIVE TAPE 95-9, SIDE A SB 28 MOTOR VEHICLE REG FEE/EMISS'N INSPECTIONS  Number 002 CHAIRMAN RIEGER called the Senate Transportation meeting to order at 1:42 p.m. and introduced SB 28 as the only order of business before the committee. He noted that there is a proposed CS for SB 28. SENATOR DONLEY, prime sponsor, requested that all the departmental people join him at the table since they had been working together on this legislation. He stated that the goal of SB 28 is to go to a biannual testing of I/M. Currently, those areas of the state which are required to test do so annually. Many other states utilize biannual testing, even California who is very conscious of auto emissions. He seemed to think that biannual testing would save much money and trouble without endangering the highway funds. He noted that there is an amendment to the proposed CS which is being worked on. CHAIRMAN GREEN moved that the CS dated 4/18/95 version G be adopted in lieu of the original bill. Hearing no objection, it was so ordered. Number 067 RON KING, Department of Environmental Conservation, expressed the need to place similar language in AS 28 as that specified under subsection (j) in Section 8 and subsection (f) in Section 9. Such language would allow the State Troopers and the Department of Public Safety to issue the violation at the same time they issue any other moving citation. He suggested deleting lines 11 and 12 of Section 1 and inserting "(e) A motor vehicle owner subject to (d) shall obtain a new and valid emissions inspection and maintenance certificate for the vehicle if the existing emissions inspection and maintenance certificate is non existent or more than 12 months old." The purpose of that language is to maintain consistency in the workload of the DMV at the counter in order to minimize the impact. This program has a substantial impact on DMV. He explained that by requiring a certificate, the DMV can review the certificate and determine if it is acceptable and if not, the citizen would be sent to get an inspection. That would be the key to satisfying the Environmental Protection Agency. CHAIRMAN RIEGER asked if there was a grandfather clause in which a vehicle of a certain age would not be required to be tested, even if the automobile is in an I/M area . RON KING said yes. Section 1 addresses that by not forcing a vehicle to be inspected if the vehicle is of a certain age or powered by diesel or an alternative fuel. Mr. King noted that was set in regulation and would not change. CHAIRMAN RIEGER pointed out that Mr. King was discussing the amendment that had just been passed out to the committee. RON KING clarified that the language to which Chairman Rieger was referring was the new paragraph (3) and subsection (e). SENATOR DONLEY supported Mr. King's provision. He explained that these changes would simplify the decisions at the counter which would reduce administrative costs and time. Number 133 SENATOR TAYLOR moved Amendment 1. Amendment 1  Page 1, delete lines 11 & 12 Insert: "(3) motor vehicle would be subject to the emissions inspection and maintenance program; and (e) A motor vehicle owner subject to (d) shall obtain a new and valid emissions inspection and maintenance certificate for the vehicle if the existing emissions inspection and maintenance certificate is nonexistent or more than 12 months old." CHAIRMAN RIEGER asked if the Department of Public Safety was opposed to this amendment. JUANITA HENSLEY, Division of Motor Vehicles with the Department of Public Safety, said that she had not had a chance to review that amendment very closely. She informed the committee that she did have some concerns with Section 1. The first concern could be alleviated by deleting the following language on page 1, lines 5-7: "A motor vehicle owner shall, before transferring or assigning the owner's title or interest in the vehicle, provide the transferee with a current and valid emissions inspection and maintenance certificate for the vehicle" and insert the following language, "An inspection certificate is required at the change of ownership". This language would eliminate the onerous being placed on a vehicle owner who is selling a vehicle outside of the emissions program area. CHAIRMAN RIEGER asked if "change of ownership" was good statutory language. SENATOR TAYLOR said that language was adequate. CHAIRMAN RIEGER asked if there was any objection to the amendment to Amendment 1. Hearing no objection, the amended motion was before the committee. Hearing no objection, Amendment 1 as amended was adopted. SENATOR TAYLOR discussed a situation in Petersburg in which a contractor was assisting people with their registrations; could this bill be a vehicle to clarify that situation? Number 201 JAY DELANEY, Director of the Division of Motor Vehicles, recalled that the circumstance to which Senator Taylor was referring involved the $10 fee for failure to use the mail system. He was not sure of the Petersburg experience. This should not be related to ... SENATOR TAYLOR explained that in Petersburg, those people who utilized the contractor were penalized because they did not use the mail system. JAY DELANEY clarified that this bill would not be related to that because the $10 fee only applies to those who can use the mail system, but fail to do so. The mail cannot be used with title changes, so there is no $10 fee with a title transfer. SENATOR TAYLOR asked if that $10 fee was the same as that referenced in the language deleted on page 2, line 3 of the CS. JAY DELANEY explained that the proposal before the committee is to increase all the registration fees by $10 and then reduce the fee by $10 if the mail is utilized. The difference is that even though a person is required to be present at the DMV, the person would pay the additional $10. SENATOR TAYLOR did not understand why people who do not come in and use the DMV personnel for doing transfer are penalized. JAY DELANEY emphasized that the public had been encouraged to use the mail because this procedure could be handled more efficiently while alleviating the lines. Furthermore, this mail registration has been very successful. The use of mail registration has more than doubled. Mr. Delaney pointed out that prior to the $10 fee even the smaller communities complained that the DMV did not have enough employees to handle the customers. After the implementation of the $10 fee, those same people complained that they did not have lines and therefore this was not a problem. Mr. Delaney stated that the $10 fee has helped statewide, especially in regards to the decreasing revenue. The DMV cannot continue to handle the increased amount of business; the population has increased every year as well as the number of driver's licenses and registration. SENATOR TAYLOR commented that now this would worsen the situation regarding the contractor in Petersburg. Before this legislation, the contractor was at least receiving the business from those persons who would have to go to the DMV in person. With this legislation, several people do not have to go to the DMV in person any more. JUANITA HENSLEY explained that all fees would be increased by $10, but a $10 break would be given to those who use the mail which is basically the same way the $10 fee currently works. She explained that Section 5 regarding the fees for special request plates, those fees are one time fees charged for license plates. That would be an additional $10 revenue generating portion of this bill. She did not know if the sponsor knew that was not an annual ongoing fee. Those people with special request plates are still subject to their annual registration fees as specified on pages 2 and 3 of the bill. CHAIRMAN RIEGER believed that all the special request plates should not be increased. The special request plates would be additional revenue generators as opposed to being neutral. JUANITA HENSLEY replied that Chairman Rieger was correct, and said that it was the body's call whether or not to raise the fees for those plates. SENATOR DONLEY noted that the original bill did not include this provision, this was recommended by the committee. CHAIRMAN RIEGER said that he had requested that, but the drafter seemed to have misunderstood this point. The intention was to refer to those places where a $10 fee was already charged to invert it. JUANITA HENSLEY expressed another concern with regard to the effective date of July 1, 1995; the department cannot meet that date. She suggested changing the effective date to July 1, 1996. Ms. Hensley indicated that DEC could not implement their portions by that date either. RON KING explained that the biggest impact would be with DMV and the changes required to the system and registration; DMV would have to set up an algorithm in order to alter the vehicles to be tested biannually as well as modifying the computer software. He said that DEC would need at minimum, six months to get the regulations through. JUANITA HENSLEY pointed out that getting regulations through in six months would be very aggressive. SENATOR DONLEY was excited about biannual testing. If the year effective date is reasonable, then this would be a great step forward to decrease the inconvenience to citizens. Number 310 SENATOR TAYLOR moved the conceptual amendment to charge the additional $10 fee to those areas that already face that fee. CHAIRMAN RIEGER clarified that all the fees for special request plates which were one time fees and not subject to the $10 fee, those fees would be replaced with the original or former fee. Hearing no objection, it was so ordered. SENATOR GREEN moved that the effective date be changed to July 1, 1996. Hearing no objection, it was so ordered. SENATOR LINCOLN directed the committee to page 2, line 3 regarding the additional $10 fee for the mail in fee. She asserted that this fee does not make sense for communities like Cordova which do not have the problem of lines and such. The processing of the mail ins could be alleviated by allowing the local DMV to process the registration. The idea of this bill is to help the citizens of the state, perhaps, there is a way in which to amend that to accommodate those citizens who do not face lines at their DMV. JUANITA HENSLEY pointed out that with the new language in the CS, everyone pays the $10 fee unless they use the mail in which case the fee would be reduced by $10. SENATOR LINCOLN reiterated that if Cordova citizens can go to their DMV and not place the burden of the paperwork on others, then there would not be a problem with receiving registration at that point. Why penalize the citizen an additional $10 for coming into the DMV? JUANITA HENSLEY explained that perhaps, in the off season Cordova would not have any problems, but in the summer the volume of driver licenses and vehicles coming in increases. For the size of office and the town, the volume of work in the summer is quite heavy. Ms. Hensley emphasized that the goal of the mail in program was to allow the local DMVs more time to deal with those persons who have to come to the DMV for identification, drivers licenses and title changes. SENATOR LINCOLN predicted that soon the Cordova office would be closed since they do not have any business and the personnel would be moved to the processing areas. Cordova has expressed many complaints about the mail in registration fee. She did not think there was a problem in Cordova, but now there is. Number 375 JAY DELANEY pointed out that there may be difficulty in creating a system that does not have uniform fees; there would be inequity in setting up such a system. Cordova utilizes a shared position in which the employee does DMV work as well as Fish and Wildlife and State Trooper work; the business does not justify a full time position. He reiterated Ms. Hensley's point regarding the increase in business in the summer even in the small communities. When they get behind, there are lots of complaints. SENATOR TAYLOR clarified that the situation in Petersburg to which he had referred was regarding a private contractor who handles the issuing of licenses. This contractor does business by having the customer come into his office and he issues the customer tags. This contractor is on contract with Alaska. This contractor sends it through the mail. He emphasized that this contractor merely batches the registration for which the contractor is penalized $10. He pointed out that the deleted language in brackets on page 2, lines 5-8 in the CS was present in order to avoid this problem. Senator Taylor said that he could not get the department to establish and adopt the criteria for the regulations. This is still important even if there are only a few contractors such as the one in Petersburg. He recommended amending line 6 on page 2 after the word "mail" insert "or through a contract registrar who conducts business with the department via mail". He believed that it would be appropriate to decrease the fee by $10 for the contractor since he also uses the mail system. SENATOR GREEN asked if the contract agent was the same as the state employee in the DMV. SENATOR TAYLOR replied no and explained that the contractor is being paid by the person who requests the service not through the budget. CHAIRMAN RIEGER inquired as to who pays the contractor; would I give the contracted person $5 more to perform this service. JAY DELANEY explained that contract agents are allowed 15 percent of the registration receipts which comes out of the DMV's budget, it's a part of the state budget process. Mr. Delaney did not have a problem with Senator Taylor's scenario, however a person should be treated equally whether they come into a state office or a contract office. Making an exception for the contract agents is of no real significance to the division. In response to Chairman Rieger, JAY DELANEY explained that with the total contracts there are 13 commission agents which would be approximately $200,000. SENATOR TAYLOR pointed out that money would be saved because the amount paid out is 15 percent of $80 for a taxi cab, however, with the proposed amendment the savings would be 15 percent of the $70 for the same taxi cab. By adopting the amendment the contract agent would receive less. Senator Taylor withdrew his amendment. JAY DELANEY reiterated that the division had received a lot of complaints because the agents felt that they would receive less. Many of the commission agents serve dual roles. With the exception of the contractor in Petersburg, the commission agents are local governments. He informed the committee that with the other increases, most of the payments have been more than before the $10 fee. Petersburg has fluctuated. He said that Petersburg has enough business to justify a state employee, but there is no one to put in that position. Number 462 LADD MCBRIDE, representing Alaska Watch Incorporated, informed the committee that he was the Secretary/Treasury for this group. He said that the bill was a step in the right direction with regard to the biannual testing. Alaska Watch Incorporated has done a national survey which found Alaska to be the highest, most expensive, most stringent I/M program in the country. He felt that if other states could satisfy EPA with biannual testing so could the DEC in Alaska. SENATOR DONLEY noted that DEC had requested another amendment on page 5, subsection (j) under Section 8. DEC wanted that subsection to also apply under Title 28. CHAIRMAN RIEGER asked Ms. Hensley if the troopers could not enforce a fine under Title 46 if this language is not specified under Title 28. JUANITA HENSLEY said that the troopers enforce Title 12, 11, and 4. She did not believe the troopers could enforce Title 46 either. CHAIRMAN RIEGER clarified that the amendment would not be necessary. CHAIRMAN RIEGER asked DMV if a year was needed to prepare for the different fee structure or could the $10 inversion occur earlier and allow the I/M inspections a year of preparation time. JAY DELANEY predicted that the fee increases could be done in six months. DMV runs on a three month lead time with regard to the registration print. The July 1, 1995 effective date would only leave three months to do the systems work; that would prove difficult to achieve. He concluded that it would be possible, but that it would be tight. In response to Chairman Rieger, Mr. Delaney said that the DMV could not be prepared by October. Mr. Delaney explained that the October mail outs are generated in July. Mr. Delaney predicted that the DMV could achieve the fee increase and the $10 credit portions by January. CHAIRMAN RIEGER clarified that would affect Sections 2-6. SENATOR TAYLOR commented that the intent of the legislation indicates that the fees generated through the program would be applied to those services necessary for I/M. He said that he has attempted to find DMV additional funding because they generate a lot of revenue, but they continue to face budget cuts. He wanted to have more people go into the DMV and have those employees take care of them rather than attempt to create ways to keep people from the DMV. He indicated that it is the wrong approach to direct DMV generated funds to DEC; some of these revenues should be returned to the DMV. Number 537 CHAIRMAN RIEGER agreed. He explained that some of the Senate Finance members do not distinguish between program receipts general funds and other general funds. Program receipt development should be viewed as an add on. He noted that DMV had received a request for proposal (RFP) through Legislative Budget & Audit (LB&A) which got five more positions. JAY DELANEY informed the committee that half of those positions were lost when the division attempted to establish the positions permanently. SENATOR TAYLOR asked if there was any language that could be added to direct DMV revenues back to DMV. CHAIRMAN RIEGER pointed out that in Section 7, the change to the $2 fee made the revenue neutral. Chairman Rieger said that he had only been able to treat new program receipts separately for the Department of Public Safety. JAY DELANEY explained that with the CS there would be new revenue generated. With this system, everyone is required to pay the $10 whether they are required to go to the DMV or not unless they use the mail; the person required to be in the office would pay the increased fee. CHAIRMAN RIEGER asked Mr. Delaney if he wanted the "or for good cause" language. Chairman Rieger said that it would just go out as is. SENATOR TAYLOR recommended using the same language as that under subsection (j) on page 5 which states, "It is the intent of the legislature that money collected under this subsection be appropriated to promote". Senator Taylor clarified that the language could state, "It is the intent of the legislature that the increased revenue generated shall be"... CHAIRMAN RIEGER continued by suggesting the following language to follow that of Senator Taylor's, "in Section 2-6, be appropriated to increased field service operations in Public Safety." He asked if that was an amendment. SENATOR TAYLOR said yes and moved the amendment. Hearing no objection, that intent was adopted. SENATOR TAYLOR moved that the CS SB 28(TRA) be moved out of committee with individual recommendations. Hearing no objection, it was so ordered. There being no further business before the committee, the meeting adjourned at 2:25 p.m.