Legislature(2017 - 2018)ADAMS ROOM 519
04/17/2018 09:00 AM House FINANCE
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CS FOR SENATE BILL NO. 92(FIN) am "An Act relating to abandoned and derelict vessels; relating to the registration of vessels; relating to certificates of title for vessels; relating to the duties of the Department of Administration; relating to the duties of the Department of Natural Resources; establishing the derelict vessel prevention program; establishing the derelict vessel prevention program fund; relating to the authority of certain persons to enforce laws relating to derelict vessels; and providing for an effective date." 12:53:00 PM Co-Chair Foster asked Co-Chair Seaton's staff to review the changes in the committee substitute (CS). 12:53:30 PM ELIZABETH DIAMENT, STAFF, REPRESENTATIVE PAUL SEATON, highlighted the changes in the CS ["Explanation of Changes: CSSB 92 (FIN)Version I.A to House Finance CS for CSSB92 (FIN) Version M (copy on file)]: Section 7 (page 4, line 23) Definition of Barge In SB 92 Version I.A "barge" is defined as a "flat- bottomed boat used for carrying freight that is either nonmotorized and towed by another boat or motorized." In the CS for CSSB92 (FIN) Version M the definition has been changed to "barge" means a boat that is: (A) motorized or nonmotorized, (B) designed to be towed, and (C) used for carrying freight. Note: The main difference reflected is the removal of the flat-bottomed boat portion of the definition. There was some concern that definition from CSSB 92 Version I.A could misinterpret a flat bottom skiff as a barge. Section 24 (page 14, line 30) Instead of repealing Chapter 30. Article 03. Vessels Abandoned on Business Premises of Persons Engaged in Repair Business, the CS for CSSB92 (FIN) version M keeps the article in statute and amends it to add storage businesses, as well as extending the waiting period for auctioning abandoned vessels from 5 days to 30 days. Note: The change from 5 to 30 days was in the house companion bill which did not repeal but amended the section to be in line with the timeframe laid out in other sections of the bill. 12:55:07 PM Co-Chair Seaton MOVED to ADOPT proposed committee substitute for CSSB 92(FIN)am, Work Draft 30-LS0481\M (Bruce, 4/17/18). There being NO OBJECTION, it was so ordered. Representative Ortiz asked where he could find the language pertaining to an exemption for boats up to 24 feet long. Co-Chair Seaton directed attention to page 3, line 30. Ms. Diament confirmed the language was on page 3, line 30, subsection (f): "This section does not apply to an undocumented boat that is 24 feet or less in length, unless the owner of the boat chooses to apply..." Representative Ortiz wondered if vehicles were currently exempt from registering or titling in rural areas without access to Division of Motor Vehicles (DMV) offices. If so, he asked if the exemption was maintained for boats under the legislation. Ms. Diament deferred to the bill sponsor's staff. RACHEL HANKE, STAFF, SENATOR PETER MICCICHE, replied that she could follow up with the information after speaking with DMV. Co-Chair Seaton believed 24 foot boats were exempt in any location. He stated that vessels operating on inland waters were required to be registered. 12:58:29 PM Representative Ortiz believed that current titling and registration requirements for vehicles in outlying areas were exempt. If there was an exemption for vehicles in rural areas without access to DMV, he wondered if there was an exemption for all boat owners. Co-Chair Seaton believed if there was an exemption it was not due to lack of access to DMV, but due to a lack of access to roads with state maintenance. He believed there was a registration exemption on vehicles not operated on any public road. Representative Ortiz asked for verification that Co-Chair Seaton believed that the issue was not about lack of access to DMV offices, but was related to being on the road system. Co-Chair Seaton added that registration with DMV could be accessed via mail. He noted some areas may not have internet, but there was phone and mail access. Ms. Diament added that DMV would provide a written answer. Representative Kawasaki stated that Section 4 dealt with inadequate evidence of ownership. He stated a person was supposed to obtain documentation to present to the Department of Administration (DOA) as proof of ownership of a boat. He asked if it was the same way people licensed and registered their cars. Ms. Hanke responded that DMV considered current boat registration as proof of ownership, which was slightly different than vehicles. 1:01:17 PM Representative Kawasaki was concerned they could be getting to a point where statute designated a person had ownership of a boat, even though they may not have ownership. He referenced Section 4(c)(2), which specified if it was uncontested for three years following the issuance of the "no title issued" registration that a person could become the owner of record even though they may not have been the owner of record. He asked if the issue had come up previously. Ms. Ranke responded that someone could currently go in to DMV with a bar napkin as a bill of sale to get a registration. After starting to issue the titles with a sale and initial titling would use current registrations as proof of ownership. She supposed it could be happening currently. 1:02:37 PM Representative Kawasaki referenced the exemption for undocumented boats that were 24 feet or less. He wondered how 24 feet had been chosen. Ms. Hanke replied that she would have to get back to the committee. Representative Wilson thought a boat had to be larger than 24 feet and commercial. Ms. Diament responded that the language Representative Wilson was referencing was in the house companion bill HB 386, whereas, SB 92 only contained a length determination. She explained boats that were 24 feet or less were exempt; boats over 24 feet would require a title. Representative Wilson asked how many 25-foot personal use boats there were that would have to register. She thought the problem pertained to commercial boats, not personal boats. She wondered why the change had been made. 1:04:09 PM Co-Chair Seaton responded that the 20-foot length was used because it was considered fairly easy to dispose of. Boats over 24 feet had built in fuel tanks and other things. He stated there was generally a length and width ratio. He continued it became a larger problem. The exemption used [by the House version] had been for non-commercial so that commercial vessels under 20 feet would still require a title, but that had not been in the Senate bill. He continued that the provisions considered what was a reasonable amount. He asked his staff for number of boats excluded pertaining to difference between 20 and 24 feet. Ms. Diament relayed that there were about 9,100 boats between 20 and 25 feet that were exempt. Co-Chair Seaton explained the consideration was a balancing act around what qualified as something that could be abandoned, but would need to be taken care of by a different mechanism; it was the reason for the length of 24 feet suggested by the Senate. He stated that the House version of the bill had used 20 feet, but it had agreed with the Senate. Representative Wilson pointed out the 9,000 boats mentioned by Ms. Diament pertained to boats between 20 and 25 feet, not 20 and 24 feet. She asked if her understanding was accurate. Ms. Diament replied that the current language was 24 feet. She stated the bill related to boats that were 20 feet and under or 24 feet and under. She explained it would be under 25 feet. Representative Wilson restated her question. She explained that Ms. Diament had previously provided information about the number of boats between 20 and 25 feet. Ms. Diament corrected her previous testimony and clarified that the [9,100] boats were between 20 and 24 feet. 1:06:23 PM Vice-Chair Gara reviewed the four fiscal notes. There were two zero fiscal notes from the Department of Natural Resources and the Department of Environmental Conservation (OMB Component Numbers 3002 and 3094 respectively). There was one Department of Natural Resources fund capitalization fiscal note for funds from fees generated under the legislation - fees would generate roughly $58,600 beginning in 2020 and would decline after registrations were completed to $30,000 in 2022 and to $2,500 in 2023 and 2024. The last note was from the Department of Administration (OMB Component Number 2348) DMV reflecting fee generation of $65,000, declining to $50,000 in 2020. The note reflected additional designated general fund (DGF) revenues from fees beginning at $64,100 in 2019, increasing to $108,600 in 2020 and 2021, $80,500 in 2022, $52,500 in 2023 and 2024. Undesignated general fund (UGF) revenues were projected at $19,600 starting in 2020. 1:09:16 PM Representative Wilson referred to page 2 of the Department of Administration fiscal note (OMB Component Number 2348) related to title and barge fees. The fiscal note specified there were over 68,000 motorized boats registered in the State of Alaska, of which 8,418 are 25 feet and over. It also specified that a title fee of $20 for boats above 24 feet would generate approximately $168,360. She asked why the language used 25 feet in one sentence and 24 feet in the MARLA THOMPSON, DIRECTOR, DIVISION OF MOTOR VEHICLES, DEPARTMENT OF ADMINISTRATION, (via teleconference), replied the language was merely an error. The language should read "25 feet and above." Representative Wilson asked for verification that the reference to 24 feet should be changed to 25. Co-Chair Foster replied in the affirmative. Representative Ortiz asked about the fiscal note OMB Component Number 2348. He wondered if the fiscal note had been changed since the boat exemption had changed from 20 feet to 24 feet. He believed there would be less revenue with the inclusion of the exemption. Ms. Thomson responded that the fiscal note reflected the change. Co-Chair Seaton noted there had been a question about numbering of documented vessels. He read from a response he had received to the question: "states may require documented vessels to be registered and to display the state decal showing that they have complied with state requirements." However, there was some dispute about whether vessels could be renumbered. The bill specified the same numbers would be used in titling as used in the documentation. He noted that the Coast Guard was present for questions. Apparently other states had the same situation. 1:12:17 PM Co-Chair Seaton MOVED to report HCS CSSB 92(FIN) out of Committee with individual recommendations and the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. HCS CSSB 92(FIN) was REPORTED out of committee with a "no recommendation" recommendation and with one new fiscal impact note from the Department of Administration; one new fiscal impact note from the Department of Natural Resources for Fund Capitalization; and two previously published zero notes: FN3 (DEC) and FN4 (DNR). 1:12:57 PM AT EASE 1:13:15 PM RECONVENED