HomeMy WebLinkAboutResolution No. 2016-45/ Suggested by: Administration
ue<rh CITY OF KENAI
RESOLUTION NO. 2016 -45
A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, OPPOSING
KENAI PENINSULA BOROUGH ORDINANCE 2016 -38 ALLOWING FOR PERMANENT
MOTOR VEHICLE REGISTRATION TAX FOR NON - COMMERCIAL VEHICLES AND
NON - COMMERCIAL TRAILERS THAT ARE AT LEAST EIGHT YEARS OLD.
WHEREAS, Kenai Peninsula Borough Ordinance 2016 -38 provides for a permanent
(one -time) motor vehicle registration tax for non - commercial motor vehicles and
trailers that are at least eight years old; and,
WHEREAS, the Alaska Department of Motor Vehicles provided information showing
that approximately 58% of eligible participants in the Matanuska- Susitna Borough,
have participated in a similar program; and,
WHEREAS, approximately 6% of all vehicles and trailers registered in the Kenai
Peninsula Borough are registered within the Kenai City boundary; and,
WHEREAS, utilizing an estimated 50% participation rate in the Kenai Peninsula
Borough would result in a cumulative loss of estimated tax revenue of $72,400 over a
ten -year period; and,
WHEREAS, if Kenai Peninsula Borough Ordinance 2016 -38 is amended to increase
the one -�ime vehicle registration fee from $75 to $150, the effect of the ordinance
would be revenue - neutral to the City and the ordinance would not be opposed.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI,
ALASKA, that the Council opposes Kenai Peninsula Borough Ordinance 2016 -38
allowing for permanent motor vehicle registration tax for non - commercial vehicles and
non - commercial trailers that are at least eight years old, unless Ordinance 2016 -38 is
amended to be at least revenue - neutral to the City of Kenai.
PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 2nd day of
November, 2016.
Modigh, City
Brian Gabriel, . AYOR
u
"'Villaye with a Past, Ci� with a Future"
210 Fidalgo Avenue, Kenai, Alaska 99611 -7794
Telephone: 907 - 283 -75351 FAX: 907 - 283 -3014 111p
1992
MEMO:
TO: Mayor Gabriel and City Council
(� FROM: Rick Koch
f DATE: October 28, 2016
SUBJECT: Resolution 2016 -45, Opposing KPB Ordinance Allowing for
Permanent Non - Commercial Vehicle and Trailer Registration Tax
The purpose of this correspondence is to recommend Council Adoption of the above
referenced Resolution.
I will provide additional lay -down material addressing a proposed amendment to the KPB
ordinance, which the Administration would not oppose.
iThank you for your attention in this matter
KENAI PENINSULA BOROUGH
144 North Binkley Street • Soldotne, Alaska 99669 -7520
o Toll-free within the Borough: 1- 800 -076 -4441
PHONE: (907) 262A441 • PAX: (907) 262 -1892
www.kpb.us
MIKE NAVARRE
MEMORANDUM BOROUGH MAYOR
TO: Blaine Gilman, Assembly President
Members, Kenai Peninsula Borough Assembly
FROM: Dale Bagley o� )/-.a /)-' a.
DATE: October 13, 2016 .
SUBJECT: Ordinance 2016 -,�Z, Allowing for Permanent Motor Vehicle Registration
Tax for Non - Commercial Motor Vehicles and Non - Commercial Trailers that
are at Least Eight Years Old (Bagley)
The 2014 Alaska Legislature enacted HB 19 which allowed municipalities to provide a
permanent registration tax for non - commercial motor vehicles and non - commercial trailers that
are at least eight years old.
Currently there are approximately 58,000 non - commercial motor vehicles registered in the
borough of which approximately 45,000 are at least eight years old and approximately 13,700
non - commercial trailers registered in the borough of which approximately 11,000 are at least
eight years old,
The borough currently receives approximately $685,000 per year in motor vehicle tax on
vehicles that are at least eight years old and approximately $55,000 per year in motor vehicle tax
on non - commercial trailers that are at least eight years old.
Motor vehicles tax revenue is distributed to the borough, cities and service areas in accordance
with KPB 5.12.245(B) on the basis of population instead of assessed value.
Implementing a permanent registration for non - commercial motor vehicles and non - commercial
trailers would be a convenience to the residents of the borough.
If the borough implements a permanent registration tax of $75.00 for noncommercial motor
vehicles that are at least eight years old and 25 percent of eligible vehicles participate in the
program, the motor vehicle tax revenue over a ten year period is estimated to be $6.3 million,
compared to estimated revenues of $6.9 million under the current tax system. If the borough
implements a permanent registration tax of $25.00 for non - commercial trailers that are at least
eight years old and 25 percent of eligible vehicles participated in the program, the motor vehicle
October 13, 2016
Page 2 oft
tax revenue over a ten year period is estimated to be $510,000, compared to estimated revenues
of $550,000 under the current tax system.
In addition to the borough motor vehicle tax, the State of Alaska collects a biennial fee of $100
on noncommercial motor vehicles and $30 on non - commercial trailers, which would no longer
be assessed if the borough implements a permanent registration tax.
Introduced by: Bagley
Date: 10/25/16
Hearing: 11/22/16
Action:
Vote:
KENAI PENINSULA BOROUGH
ORDINANCE 2016 -38
AN ORDINANCE AMENDING KPB 5.12.245 ALLOWING FOR PERMANENT
MOTOR VEHICLE REGISTRATION TAX FOR NON - COMMERCIAL MOTOR
VEHICLES AND NON - COMMERICAL TRAILERS THAT ARE AT LEAST EIGHT
YEARS OLD
WHEREAS, the 2014 Alaska Legislature enacted HB 19 which allows municipalities to
provide a permanent registration tax for non - commercial motor vehicles and non-
commercial trailers that are at least eight years old; and
WHEREAS, the permanent registration expires when the owner transfers or assigns the
owner's title or interest in the vehicle and may not be renewed; and
WHEREAS, if the borough adopts the permanent registration option the charges would include
the state permanent registration fee for non - commercial motor vehicles and
trailers of $25 each plus the regular registration fee, and the borough permanent
registration tax; and
WHEREAS, the borough's current biennial motor vehicle tax schedule for non - commercial
motor vehicles and trailers is a follows;
Tax according to age of vehicle since model year:
Type 1st 2nd 3rd fth 5th 6th 7th 8t° or Over
(2) Passenger 140 120 100 60 50 40 30
(6) Trailers 20 18 16 14 12 10
(non - commercial) 10 10
WHEREAS, the borough currently receives approximately $685,000 per year in motor vehicle
tax on vehicles that are at least eight years old, which is distributed to the
borough, cities and service areas by population in accordance with KPB
5.12.245(B); and
WHEREAS, the borough currently receives approximately $55,000 per year in motor vehicle
tax on non - commercial trailers that are at least eight years old, which is
distributed to the borough, cities and service areas in accordance with KPB
5.12.245(B); and
Kenai Peninsula Borough, Alaska New Text Underlined; [DELETED TEXT BRACKETED] Ordinance 2016 -38
Page 1 of 4
WHEREAS, if the borough implements a permanent registration tax of $75.00 for non-
commercial motor vehicles that are at least eight years old and 25 percent of
eligible vehicles participate in the program, the non - commercial motor vehicle tax
revenue over a ten year period is estimated to be $6.3 million compared to
estimated revenues of $6.9 million under the current tax system; and
WHEREAS, if the borough implements a permanent registration tax of $25.00 for non-
commercial trailers that are at least eight years old and 25 percent of eligible
vehicles participate in the program, the non - commercial tax revenue over a ten
year period is estimated to be $510,000 compared to estimated revenues of
$550,000 under the current tax system; and
WHEREAS, implementing a permanent registration tax for non - commercial motor vehicles
and non- commercial trailers would be a convenience to borough residents;
NOW, THEREFORE, BE IT ORDAINED BY THE ASSEMBLY OF THE KENAI
PENINSULA BOROUGH:
SECTION 1. That KPB 5.12.245 is hereby amended as follows:
5.12.245. - Personal property tax — Annual motor vehicle registration tax -
Levy— Distribution.
A. There is levied a biennial motor vehicle registration tax within the
borough pursuant to the provisions of AS 28.10.431 and as such
statute may be hereafter amended, revised or replaced, based on
the age of the vehicle as determined by model year in the first year
of the biennial period, according to the following schedule. The
categories under "Type" are intended to coincide with the
categories provided in AS 28.10.431(b), as now enacted or as may
be hereinafter amended. The annual motor vehicle tax on
commercial vehicles is one -half the rate of the biennial tax.
MOTOR VEHICLE TAX SCHEDULE BIENNIAL SCHEDULE
Tax according to age of vehicle since model year:
Type 1st . 2nd 3rd 4th 5th i 6th 7th f 8`" or over
��_
(1) Motorcycle I $20 1 $18 1 $16 i $14 $12 $10 $10 $10
(2) Passenger g i 140 i 120 1 100 80 i 60 40 30
(3) Taxicab 150 130 T-
1 110 90 70 i 60T 50 —�— 40
i
(4) Conan Veh ( <_Sk lbs) 150 130 1 110 ! 90 70 60 I 50 40
Ordinance 2016 -38 New Text Underlined; [DELETED TEXT BRACKETED] Kenai Peninsula Borough, Alaska
Page 2 of 4
Comm Veh ( >5k, 512k) 200 j 180 + 160 140 ! 120 1 100 75 50
Comm Veh ( >l2k, 518k) 300 260 220 180 140 100 J 80 60
Comm Veh ( >18k) 400 350 300 i 250 200 150 1 100 70
i _ i
(5) Motor Bus 200 ,1 180 { 160 140 120 i 100 75 50
i
(6) Trailers (Non - Commercial) i 20 18 i 16 14 f 12 I ]0 10 10
(7) Non Applicable
upNan 140 1 120 100 80 60 50 40 30
(9) Dealer Plates (Initial) I 100 ; 100 1 100 100 100 100 ]00 100
Dealer (Subsequent sets) 100 ' 100 100 j 100 100 + 10000 100
B. ODtional permanent motor vehicles registration tax for non-commercial
motor vehicles and trailers that are at least eight Years old.
]. Owners of non- commercial motor vehicles and trailers that are at
least eight years old may elect to permanently register their non
commercial motor vehicles and non - commercial trailers.
2. The permanent registration expires when the owner transfers or
assigns the owner's title or interest in the motor vehicle or trailer
and may not be renewed
3. The optional Permanent motor vehicle registration tax for non-
commercial motor vehicles is $75 and for non - commercial trailers
is $25.00.
[B] C. Money received by the borough under this section and AS 28.10.431, and
as such statute may be hereafter amended, revised or replaced, shall be
allocated by the borough for city, borough, and service areas using the
same method as taxes are distributed, except that population shall be the
basis rather than assessed value. The method is as follows:
The population of each tax authority group (TAG) shall be determined.
Population shall be established by the latest figures determined by the
Kenai Peninsula Borough and accepted by the State of Alaska
Department of Community and Regional Affairs for allocation of state
revenue sharing funds, or other reliable data. Where a TAG boundary
and the boundary of the most similar area counted for population
(usually a voting precinct) do not coincide, an estimate of the
population of the dissimilar area shall be made to arrive at the most
accurate determination of population of the TAG. The sum of the
Kenai Peninsula Borough, Alaska New Text Underlined; [DELETED TEXT BRACKETED] Ordinance 2016 -38
Page 3 of
Populations of all TAGs shall equal the total population of the
borough.
2. The total receipts shall be apportioned to each TAG based upon its
percentage of the total borough population.
3. The receipts apportioned to a particular TAG shall be distributed to the
tax authority funds (TAFs) which make up that TAG. Such
distribution shall be based upon the mill rates of the TAFs compared to
the total mill rate of the TAG. The percentage shall be equal to the
TAFs mill rate divided by the total mill rate for the TAG.
[C] D. One motor vehicle per household owned by a resident 65 years of age or
older on January Ist of the assessment year is exempt from the registration
tax under AS 28.10.431. An exemption may be granted under this subsection
only upon written application on a form prescribed by the department of
public safety.
SECTION 2. That pursuant to AS 28.10.43 10) the administration shall file a written notice of
the establishment of this tax for permanently registered motor vehicles.
SECTION 3. That upon enactment this ordinance shall be effective July 1, 2017.
ENACTED BY THE ASSEMBLY OF THE KENAI PENINSULA BOROUGH THIS
DAY OF * 2016.
ATTEST:
Johni Blankenship, MMC, Borough Clerk
Yes:
No:
Absent:
Assembly President
Ordinance 2016 -38 New Text Underlined; [DELETED TEXT BRACKETED] Kenai Peninsula Borough, Alaska
Page 4 of 4
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IM
"Viltaye with a Past, C# with a Future
210 Fidalgo Avenue, Kenai, Alaska 99611 -7794
Telephone: 907 - 283 -7535 / FAX: 907 - 283 -3014 IIII�I
1992
MEMO:
TO: Mayor Gabriel and City Council
FROM: Rick Koch
DATE: November 2, 2016
SUBJECT: Resolution 2016 -45, Opposing KPB Ordinance Allowing for
Permanent Non - Commercial Vehicle and Trailer Registration Tax
The purpose of this correspondence is to discuss the above referenced Resolution.
Following introduction of KPB Ordinance 2016 -38, there has been discussion about its effect on
revenues for the City of Kenai and the Kenai Peninsula Borough. The sponsor of the ordinance,
Dale Bagley, asked the KPB finance department to estimate the effect of revenues if the one-
time vehicle registration fee was increased from $75 to $150. Assembly Member Bagley may
offer an amendment to increase the one -time fee from $75 to $150
As provided in previous information we calculated that the one -time vehicle registration fee of
$75 would result in a loss of revenue to the City of Kenai. A one -time fee of $150 would be
revenue neutral, or possibly slightly revenue positive to the City of Kenai.
Administration recommendation is to oppose the ordinance as presently written, but to not
take a position if there is an amendment which increases the fee to $150.
Thank you for your attention in this matter.
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