House Transportation transcript

Feb. 2, 2023

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Sen M Johnson The committee will come to order. The chair sees a quorum. If you’re here to speak for or against a particular bill, please be sure you sign in. I will announce to the committee that Senate Bill 120 by Senator Love, he has asked to hold that bill, and he’s working on it. So we’ll just hold that one over. I don’t see General Berry. Is he in the room or– Representative Collins? So, Representative Cavenaugh, we’d love to have you come forward now if you’re ready. He wants to speak on this bill? okay. Welcome, Representative Cavenaugh and Senator Blake Johnson, please, you’re here to present House Bill 1150. Please proceed.

HB 1150 Extends period to register a vehicle in Arkansas (passed)

Rep Cavenaugh Thank you, Mr. Chair. Thank you, committee. House Bill 1150 is a bill that will just extend the time that Arkansans have to license their vehicle from 30 days to 60. The current problem that we’re experiencing, and this is from just practical experience running dealerships, is that a person go buys a vehicle from us, we sometimes will have a payoff from a lending source. We don’t get that title in for 45 days. So we’re already past due the 30 days, so it causes a problem. So if we extend it to 60, this will help alleviate some of the problem that we’re experiencing where Arkansans aren’t at fault, but they’re getting charged penalties and fines for something beyond their control. The other thing is it will also help the lowest income Arkansans to have additional 30 days to be able to pay that tax. We’re not getting rid of the tax. All we’re doing is deferring it for 30 days. So you’re going to– we’re going to collect the same amount of tax. We’re just going to collect it 30 days later.


Sen M Johnson Okay. Senator Johnson, do you have anything to add? Okay. So we’re really just, we’re just going from 30 to 60 is the only change that it would make?


Rep Cavenaugh Yes, sir.


Sen M Johnson Okay. Yes, ma’am. Mr. Gehring from the DFA is signed up to speak on the bill. So if you would come join us at the table. Mr. Gehring, you’re recognize and please identify yourself for the record.


Gehring (DFA) Good morning, Mr. Chair, members of the committee. Paul Gehring, DFA. And Senator Chesterfield, to your point, we’re not here to talk anyone for or against the bill. We have merely signed up to speak as to the fiscal impact of House Bill 1150. So as Representative Cavenaugh noted that there is a a delay in time from 30 to 60 days for an individual to pay their sales tax and also register their vehicle. So what does result in the fiscal impact that DFA issued for this bill is what’s known as a one time revenue shift. So essentially what will occur is that those individuals that would ordinarily, would have registered and paid their sales tax in June of 2024, they’ll have the ability to delay that initial 30 days to July of 2024. So there is a one time shift in those revenues up to the $42.6 million, as noted in the fiscal impact. It’s not a definite figure. There still are going to be individuals that will continue to register within that 30 day time frame. But there will be a shift from one fiscal year to the next. Be happy to answer any questions about the fiscal impact statement of the committee.


Sen M Johnson Let me ask a question quick, Mr. Gehring. The bill does not have an emergency clause, so it doesn’t take effect until the new fiscal year. Would it still have that revenue shift?


Gehring (DFA) Yes, it would, Mr. Chairman. And the issue for that is that, of course, once the bill becomes effective, if it were to be enacted by the General Assembly and signed by the governor, that whether that’s in July or August or September, whenever 90 days after sine die, the process will go into effect on the effective date, so that that deadline will move. But of course, there are going to be individuals that ordinarily under existing law would have a deadline to register and pay their sales tax in June of 2024, those individuals that do come in that–


Sen M Johnson I understand. It’s leapfrogging, so to speak. It pushes it out one more month maximum.


Gehring (DFA) The registration fees and the sales taxes are all going to be collected. But so it’s a matter of timing.


Sen M Johnson Okay. All right. Thank you. You have a question, Senator Chesterfield? You’re recognized.


Sen Chesterfield Are not the money subsequently collected?


Gehring (DFA) That’s absolutely correct.


Sen Chesterfield You’re talking about just that shift.


Gehring (DFA) Yes.


Sen Chesterfield You’ll lost it for this time, but the person comes in and pays it. You make up that money anyway.


Gehring (DFA) It will be collected. That’s right.


Sen Chesterfield That’s why I think the 42 is rather misleading in that it appears to be a total loss. And it is not. It’s a shift from one month to another month.


Gehring (DFA) And that’s exactly correct, that’s exactly how we stated in the fiscal, one time revenue shift from one fiscal year to the next.


Sen Chesterfield But when you look at the $42 million, you’re going, oh, and then you realize you’re going to get the $42 million back one way or the other.


Gehring (DFA) It’s just a matter of one fiscal year.


Sen M Johnson A one time cash flow change.


Gehring (DFA) One time cash flow change. Exactly. And we don’t have a for or against position. We just want to make sure the committee was aware of the fiscal impact.


Sen M Johnson Thank you, Mr. Gehring. Senator Rice, you have a question?


Sen Rice Thank you, Mr. Chair. Not necessarily on fiscal impact, but it is, too. In the discussion about the delay taking sometimes 45 days and about buying a vehicle for the business or something, and sooner or later that title shows up. And I realize we’ve seen the Postal Service not be as quick as it used to be. Is there any exception that you see coming from the DFA that is going to go back to a more prompt delivery of a title or paper, whatever that’s being discussed. And I’m not against giving people extra 30 days anyway, but is DFA expecting to get much better?


Gehring (DFA) I can certainly speak to that issue. So as initial matter DFA, we don’t need an individual’s title to do your registration, but we do need a copy of the bill of sale, proof of assessment. And then as the title works its way through the former lien holder or the prior holder, that’s a process that can take place after the person has registered their vehicle. But certainly, Senator, during the pandemic, we certainly had a period of time where our title processing at DFA– and that’s when we actually have the title in hand. There was a period of time that we had, you know, a much longer period that people were waiting for titles. We have certainly gotten much better since where we were at from 2020 when there was this large rush to purchase vehicles because all of the manufacturers and the dealers, a lot of them were offering favorable financing or attractive pricing. We did have a a backlog of titles that we have gotten much better at the time to turn those around. And I’d be happy to get with motor vehicles to see exactly where we’re at on average as we’re–


Sen Rice I’m better at getting in the money and I’ll get the services as quick as I can. But it sounds like you all are better at getting the money and this will give people a little more time. And it still is taking a delay sometimes more for–.


Gehring (DFA) I understand. Yes, sir.


Sen Rice Thank you. I’m good with the bill.


Rep Cavenaugh And if I may just make a comment. When they’re able to license without the title, what happens is, as a dealer, we write a letter and say that they have the right to go and license, that we do in that letter promise to present that title when we get it from the lienholder. What happens then is it gets sent to DFA and goes to a department called suspense. Suspense has issues getting those titles in the paperwork lined up, and I can’t tell you how many people come to me trying to renew their tags, but they can’t because their title is in suspense. And then what has happened, we find that suspense has lost the title that we sent in and we go as far as a dealership as to actually send it so we know we got proof somebody did it, but they’ve still lost the title. So then we have to start the process of trying to go back and get a duplicate title. If it’s an Arkansas title, that’s great. If it’s an out-of-state title, it’s a nightmare.


Sen M Johnson Is the fact that we’re changing this to 60 days, does that have an effect on the insurance being bound?


Rep Cavenaugh No.


Sen M Johnson I want to make sure that we’re we’re not giving a loophole there.


Rep Cavenaugh So no, because the law technically is now, when you drive off the lot, you’re supposed to have liability insurance. So that’s not going to cause that.


Sen M Johnson The paper tag that’s issues is done with the binder for the insurance in effect.


Rep Cavenaugh Yes. And that will actually extend for 60 days to match the registration period. And I don’t know– just for clarity, also, prior to the temporary tags, we used to transfer tags when you bought a car, whatever car you were driving and traded it in, we’d transfer it. And so there was really no way to know if anybody had ever licensed their car because they were driving around with fictitious tags all the time.


Sen M Johnson All right. Thank you. Was there any other questions for Mr. Gehring?


Gehring (DFA) Thank you, Mr. Chair. Thank you, committee.


Sen M Johnson Anyone else? Anyone in the audience would like to speak for or against this bill? We don’t have anyone signed up. Okay, well, let’s let her close real quick, Senator Chesterfield. Would you like to close for your bill? Representative Cavenaugh?


Rep Cavenaugh I’m closed. I’m just trying to have a practical bill that helps Arkansans, and I’d appreciate a good vote.


Sen M Johnson Okay. Okay, Senator Chesterfield moves do pass. Second by vice chair, Senator Boyd. Any discussion? All in favor, say aye. Any opposed? Congratulations, you passed your bill. Yes, ma’am. Okay. As I mentioned, Senator Love is holding his bill. Representative Dalby, you’re welcome to come forward and present House Bill 1208. You are recognized.


HB 1208 Closes loophole on temporary driving permits for parolees

Rep. Dalby Thank you, Mr. Chair, members of the committee. House Bill 1208. You may remember, those of you who have been around, two sessions ago we passed a bill that when somebody is paroled out, they can get a temporary driver’s license for the length of their parole, which is a good thing. We want them to be able to go to work, get their job, do all those kinds of things that we require. But here is the problem. And this problem came to me when I was in the grocery store. One day, one of our state troopers stopped me and he said, You remember that bill? And I said, Yes. And he said, Well, the bill’s good. But he said, Here’s the problem with it. I just stopped somebody out on I-49– South Miller County– said, I just stopped somebody in I-49. They had a temporary driver’s permit for 10 years because that was the length of their parole. And so he said, we’re also stopping people who have never had a driver’s license, but now they have this temporary driver’s license for the length of their parole. All this bill simply does is still allow them to get that license when they get out and when they’re paroled out so that they can go to work. But it requires two things. One, that they have at least had a driver’s license at some point in the past that was suspended because obviously they’ve been in prison. And secondly, that within a year of being out, that they go back and get a driver’s license. That’s all this bill does. I’ll be happy to answer any questions.


Sen M Johnson Any questions for Representative Dalby? Senator English.


Sen English So I guess, is there a reason why somebody would have a temporary license for 10 years where that they couldn’t go and get a license after a year or something? Is there something in the law?


Rep. Dalby Well, the only thing that I could think of and I had that question asked before when I ran it in the House committee would be possibly if their underlying offense was maybe a DWI 5 that would have put them in prison, that could they couldn’t get a driver’s license or something like that. I can’t imagine, I couldn’t think of any other underlying offense that would keep them from getting a driver’s licenses unless something like that. And if they were convicted and in prison for a DWI 5 or a DWI 6, they’re not going to get a temporary license anyway when they get out. Thank you.


Sen M Johnson Any other questions? If there’s no further questions, is there anyone in the audience that would like to speak for or against the bill? If not Representative Dalby, you’re welcome to close for your bill.


Rep. Dalby Thank you. I’m closed and I would appreciate a good vote.


Sen M Johnson Thank you. Motion by Senator Boyd do pass. Second by Senator English. Any discussion? All in favor, say aye. Opposed? Great. Thank you. Bill is passed. Congratulations.


Rep. Dalby Thank you, Mr. Chair. Thank you, members of the committee.


Sen M Johnson Yes, ma’am. I don’t see any other sponsors of the bills that are on our list for today, so if is no– any comments from the committee? If not, we are adjourned. Thank you.