Legislature(2013 - 2014)SENATE FINANCE 532

04/08/2014 09:00 AM FINANCE


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09:12:25 AM Start
09:14:22 AM Confirmation Hearing: Appointee John Mcclellan of Anchorage, Alaska Mental Health Trust Authority Board of Trustees.
09:28:09 AM SB178
10:04:07 AM SB201
10:21:21 AM HB19
10:33:22 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 119 BUDGET: CAPITAL TELECONFERENCED
Scheduled But Not Heard
+ HB 278 EDUCATION: FUNDING/TAX CREDITS/PROGRAMS TELECONFERENCED
<Pending Referral>
Confirmation Hearing:
John McClellan of Anchorage, Alaska Mental Health
Trust Authority Board of Trustees
+ Bills Previously Heard/Scheduled: TELECONFERENCED
= SB 201 CRIMINAL TRESPASS ON PRIVATE PROPERTY
Moved CSSB 201(JUD) Out of Committee
= HB 19 PERM. MOT. VEH. REGISTRATION/TRAILERS
Heard & Held
= HB 263 EXTEND SENIOR BENEFITS PAYMENT PROGRAM
Scheduled But Not Heard
= SB 178 PASSENGER VEHICLE RENTAL TAX
Moved CSSB 178(FIN) Out of Committee
                 SENATE FINANCE COMMITTEE                                                                                       
                       April 8, 2014                                                                                            
                         9:12 a.m.                                                                                              
                                                                                                                                
                                                                                                                                
9:12:25 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Meyer  called the Senate Finance  Committee meeting                                                                    
to order at 9:12 a.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Pete Kelly, Co-Chair                                                                                                    
Senator Kevin Meyer, Co-Chair                                                                                                   
Senator Anna Fairclough, Vice-Chair                                                                                             
Senator Click Bishop                                                                                                            
Senator Mike Dunleavy                                                                                                           
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Angela   Rodell,   Commissioner,  Department   of   Revenue;                                                                    
Brittany Hutchison,  Staff, Senator Bishop;  Anne Carpeneti,                                                                    
Assistant Attorney  General, Legal  Services Section-Juneau,                                                                    
Criminal  Division,  Department   of  Law;  Darrell  Breese,                                                                    
Staff, Representative Bill  Stoltze; Amy Erickson, Director,                                                                    
Division of Motor Vehicles, Department of Administration;                                                                       
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
John  McClellan,  Appointee,   Alaska  Mental  Health  Trust                                                                    
Authority  Board   of  Trustees,  Anchorage;   Matt  Fonder,                                                                    
Director, Tax Division, Department of Revenue, Anchorage;                                                                       
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 119    BUDGET: CAPITAL                                                                                                       
                                                                                                                                
          SB 119 was SCHEDULED but not HEARD.                                                                                   
                                                                                                                                
SB 201    CRIMINAL TRESPASS ON PRIVATE PROPERTY                                                                                 
                                                                                                                                
          CSSB 201 (JUD) was  REPORTED out of committee with                                                                    
          a "do  pass" recommendation and with  a new fiscal                                                                    
          note from the Department  of Administration, a new                                                                    
          zero   fiscal   note   from  the   Department   of                                                                    
          Corrections,   a  new   zero   fiscal  note   from                                                                    
          Department of Law and  with 3 previously published                                                                    
          zero fiscal notes: FN1(ADM), FN4(DPS), FN5(DPS).                                                                      
                                                                                                                                
SB 178    PASSENGER VEHICLE RENTAL TAX                                                                                          
                                                                                                                                
          CSSB 178(FIN)  was REPORTED out of  committee with                                                                    
          a "do  pass" recommendation and with  2 letters of                                                                    
          intent,  individual  recommendations,  and  a  new                                                                    
          indeterminate fiscal  note from the  Department of                                                                    
          Revenue.                                                                                                              
                                                                                                                                
CSHB 19(RLS)(efd am)                                                                                                            
          PERM. MOT. VEH. REGISTRATION/TRAILERS                                                                                 
                                                                                                                                
          CSHB  19 (RLS)  (efd  am) was  HEARD  and HELD  in                                                                    
          committee for further consideration.                                                                                  
                                                                                                                                
HB 263    EXTEND SENIOR BENEFITS PAYMENT PROGRAM                                                                                
                                                                                                                                
          HB 263 was SCHEDULED but not HEARD.                                                                                   
                                                                                                                                
Confirmation   Hearing:   Appointee    John   McClellan   of                                                                    
Anchorage,  Alaska Mental  Health Trust  Authority Board  of                                                                    
Trustees                                                                                                                        
                                                                                                                                
^Confirmation   Hearing:   Appointee   John   McClellan   of                                                                    
Anchorage,  Alaska Mental  Health Trust  Authority Board  of                                                                    
Trustees.                                                                                                                       
                                                                                                                                
9:14:22 AM                                                                                                                    
                                                                                                                                
JOHN  MCCLELLAN,  APPOINTEE,   ALASKA  MENTAL  HEALTH  TRUST                                                                    
AUTHORITY    BOARD     OF    TRUSTEES,     ANCHORAGE    (via                                                                    
teleconference),   related  that   he   had  been   managing                                                                    
companies  for 35  years  and had  been  involved in  Alaska                                                                    
resource  development  as an  engineer  for  many years.  He                                                                    
expressed enthusiasm  to serve  as a  trustee to  the Mental                                                                    
Health Trust Authority Board in  order to assist in resource                                                                    
development efforts, as  well as adding to  oversight of the                                                                    
mental health trust.                                                                                                            
9:16:27 AM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer  inquired   into  Mr.  McClellan's  previous                                                                    
volunteer activities.  Mr. McClellan  responded that  he had                                                                    
been  the director  of the  American Council  of Engineering                                                                    
Companies and was  currently a board member  of the District                                                                    
Export Council. He helped to  found the Alaska Alpha Chapter                                                                    
of Tau Beta Pi, had been  on the University Of Alaska School                                                                    
Of  Business Advisory  Board for  approximately 7  years and                                                                    
had been on  the University Of Alaska  School Of Engineering                                                                    
Advisory Board for a number of years.                                                                                           
                                                                                                                                
9:17:17 AM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer  inquired  whether Mr.  McClellan  lived  in                                                                    
Anchorage.  Mr. McClellan  replied  in  the affirmative,  he                                                                    
added  that he  had  resided in  Alaska since  approximately                                                                    
1968.                                                                                                                           
                                                                                                                                
9:17:31 AM                                                                                                                    
                                                                                                                                
Senator Hoffman  inquired whether Mr. McClellan  had resided                                                                    
in any  rural Alaskan  communities. Mr.  McClellan responded                                                                    
in  the  affirmative  and  relayed  that  he  had  lived  in                                                                    
Fairbanks for several years  while finishing his engineering                                                                    
degree then,  upon graduation, he had  joined the Department                                                                    
of Transportation (before it became  public works) as one of                                                                    
the  few engineers  on the  local service  roads and  trails                                                                    
program.  He explained  that  he had  spent  an entire  year                                                                    
living and working in rural  communities. He claimed that as                                                                    
a  firefighter for  the  Bureau of  Land  Management he  had                                                                    
visited and spent time in every rural community in Alaska.                                                                      
                                                                                                                                
9:18:46 AM                                                                                                                    
                                                                                                                                
Senator  Hoffman  asked  what responsibility  Mr.  McClellan                                                                    
felt  he  should  assume,  under   his  role  in  the  trust                                                                    
authority, to  address the  significant problem  of domestic                                                                    
violence  and substance  abuse in  the state.  Mr. McClellan                                                                    
understood  that fetal  alcohol  syndrome  and suicide  were                                                                    
prevalent in  the state. He  felt that the trust  could team                                                                    
with  existing  medical  programs in  rural  communities  in                                                                    
order to provide mental health assistance.                                                                                      
                                                                                                                                
9:20:23 AM                                                                                                                    
                                                                                                                                
Vice-Chair  Fairclough MOVED  to  ADVANCE the  name of  John                                                                    
McClellan  for appointment  to the  State Assessment  Review                                                                    
Board.                                                                                                                          
                                                                                                                                
9:20:34 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:20:48 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
9:20:55 AM                                                                                                                    
                                                                                                                                
Vice-Chair Fairclough WITHDREW her previous motion.                                                                             
                                                                                                                                
9:21:01 AM                                                                                                                    
                                                                                                                                
Vice-Chair Fairclough MOVED to ADVANCE  the name of the John                                                                    
McClellan for  the appointment to  the Alaska  Mental Health                                                                    
Trust   Authority  Board   of  Trustees.   There  being   NO                                                                    
OBJECTION, the name  of John McClellan was  forwarded to the                                                                    
full membership  of the legislature  in a joint  session for                                                                    
consideration and final vote.                                                                                                   
                                                                                                                                
Co-Chair  Meyer   stated  that  signing   reports  regarding                                                                    
appointments  to boards  and  commissions  in way  reflected                                                                    
individual   members'  approval   or   disapproval  of   the                                                                    
appointees and  that the  nominations were  merely forwarded                                                                    
to the full legislature for confirmation or rejection.                                                                          
                                                                                                                                
9:22:07 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:26:57 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
SENATE BILL NO. 178                                                                                                           
                                                                                                                                
     "An Act relating to the application of the passenger                                                                       
     vehicle rental tax; and providing for an effective                                                                         
     date."                                                                                                                     
                                                                                                                                
9:28:09 AM                                                                                                                    
                                                                                                                                
ANGELA RODELL, COMMISSIONER,  DEPARTMENT OF REVENUE, related                                                                    
that the work draft  before the committee addressed previous                                                                    
concerns over  the implementation  of the tax.  She believed                                                                    
that the tax  could be easily implemented  by the Department                                                                    
of Revenue (DOR).                                                                                                               
                                                                                                                                
9:28:59 AM                                                                                                                    
                                                                                                                                
Senator  Bishop  inquired  whether Commissioner  Rodell  had                                                                    
perused  the   letter  in  intent  attached   to  the  bill.                                                                    
Commissioner Rodell replied that she had not.                                                                                   
                                                                                                                                
9:29:22 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:31:07 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
9:31:18 AM                                                                                                                    
                                                                                                                                
Co-Chair Meyer  requested Vice-Chair Fairclough to  read the                                                                    
letter intent  from the  committee, as well  as a  letter of                                                                    
intent  from DOR  signed by  Commissioner Rodell  (copies on                                                                    
file).                                                                                                                          
                                                                                                                                
9:31:34 AM                                                                                                                    
                                                                                                                                
Vice-Chair  Fairclough read  the  letter of  intent for  the                                                                    
committee(copy on file):                                                                                                        
                                                                                                                                
     It is the  intent of the Senate  Finance Committee that                                                                    
     the passenger  vehicle rental tax described  in SB 178,                                                                    
     including the original law and  the changes made by the                                                                    
     committee substitute, should not  be applied to Alaskan                                                                    
     businesses   doing   business    with   other   Alaskan                                                                    
     businesses. The Department of  Revenue (DOR) should not                                                                    
     apply   the   tax   retroactively  to   businesses   it                                                                    
     determines should  be, or should have  been, collecting                                                                    
     the  tax.  However,  if  DOR is  able  to  determine  a                                                                    
     business collected  the tax but  did not remit  the tax                                                                    
     to DOR,  then DOR  should charge back  taxes, penalties                                                                    
     and/or interest on those unpaid taxes.                                                                                     
                                                                                                                                
     In  2003,  the legislature  passed  House  Bill 271,  a                                                                    
     passenger vehicle rental tax  intended to raise revenue                                                                    
     from tourists  renting passenger vehicles so  that they                                                                    
     could help  pay for the  wear and tear they  inflict on                                                                    
     the State's publicly-maintained roads.                                                                                     
                                                                                                                                
     Since the passage of HB  271, AS 43.52 has been amended                                                                    
     three  times;  two  of which  were  to  exempt  Alaskan                                                                    
     businesses   doing   business    with   other   Alaskan                                                                    
     businesses. The third time was to exempt motorcycles.                                                                      
                                                                                                                                
     The intent of  SB 178 is to clarify,  once again, which                                                                    
     rental vehicles are to be  covered by the tax and which                                                                    
     are  not.  It  is  the  committee's  intent  that  only                                                                    
     passenger rental  cars, as  described in  AS 43.52.010,                                                                    
     should be taxed.                                                                                                           
                                                                                                                                
9:33:22 AM                                                                                                                    
                                                                                                                                
Co-Chair   Meyer  believed   that  the   letter  of   intent                                                                    
accurately  reflected  the  wishes   of  the  committee.  He                                                                    
clarified that  the intent was  that the vehicle  rental tax                                                                    
be applied to  short-term users on public  roads; he thought                                                                    
that the bill's  change to 28 days, from  90, reflected that                                                                    
intent.                                                                                                                         
                                                                                                                                
9:34:05 AM                                                                                                                    
                                                                                                                                
Senator  Olson queried  whether  the  committee was  working                                                                    
with  work  draft  version  Y.  Co-Chair  Meyer  replied  in                                                                    
affirmative.                                                                                                                    
                                                                                                                                
Senator Olson  stated that he  was unable to find  the where                                                                    
the  letter of  intent was  referenced in  Section 4  of the                                                                    
bill.                                                                                                                           
                                                                                                                                
9:34:24 AM                                                                                                                    
                                                                                                                                
Vice-Chair  Fairclough noted  that  Section 4  of version  Y                                                                    
only contained repealing language.                                                                                              
                                                                                                                                
9:34:37 AM                                                                                                                    
                                                                                                                                
Senator Olson  understood that the  intent letter  read, "as                                                                    
described in  Section 4 of  SB 178"; however, Section  4 was                                                                    
repealed on Page 2, line 13.                                                                                                    
                                                                                                                                
9:34:51 AM                                                                                                                    
                                                                                                                                
BRITTANY HUTCHISON, STAFF, SENATOR  BISHOP, related that the                                                                    
"Section 4 of  SB 178" should be taken out  of the letter of                                                                    
intent.  The reference  to Section  4 was  for the  previous                                                                    
version of the bill, in which that section redefined motor                                                                      
vehicles.                                                                                                                       
                                                                                                                                
9:35:31 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:37:03 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Meyer noted the letter of intent from the                                                                              
committee would be revisited shortly. He requested Vice-                                                                        
Chair Fairclough to read the letter of intent from                                                                              
Commissioner Rodell for the record.                                                                                             
                                                                                                                                
9:37:35 AM                                                                                                                    
                                                                                                                                
Vice-Chair Fairclough read the letter of intent from DOR:                                                                       
                                                                                                                                
     The  purpose   of  this  letter   is  to   clarify  the                                                                    
     Department's   position  and   interpretation  of   the                                                                    
     definition  of "passenger  vehicle" in  AS 43.52.099(2)                                                                    
     for   the  purposes   of   our   vehicle  rental   tax.                                                                    
     Specifically,  the Department  has  been  asked how  it                                                                    
     interprets  the phrase:  "a motor  vehicle ...  that is                                                                    
     driven or moved on a  highway or public right-of-way in                                                                    
     the state" contained in the definition.                                                                                    
                                                                                                                                
     For  vehicle  rental  tax  purposes,  the  Department's                                                                    
     interpretation of  this definition is based  on access.                                                                    
     If a member  of the general public can  freely drive on                                                                    
     the  road system  without breaking  any laws  or having                                                                    
     someone  stop them  and tell  them they  cannot go  any                                                                    
     further, they are on a  highway or public right-of-way.                                                                    
     For  example,  an  individual can  rent  a  vehicle  in                                                                    
     Anchorage, drive  to Deadhorse via the  Dalton Highway,                                                                    
     and travel  many places around Deadhorse  and the North                                                                    
     Slope  in  general. However,  there  are  areas of  the                                                                    
     North  Slope  that are  private  or  restricted that  a                                                                    
     member  of the  general  public would  not  be able  to                                                                    
     drive  to.  Vehicle  rental tax  would  apply  to  that                                                                    
     transaction  because the  individual  drove the  rented                                                                    
     vehicle  on different  highways  and public  rights-of-                                                                    
     way.                                                                                                                       
                                                                                                                                
     If an Alaska business  rents to another Alaska business                                                                    
     located in an area of  the state that is not accessible                                                                    
     by  the general  public, and  all of  the vehicles  the                                                                    
     business rents, regardless of  rental period, are never                                                                    
     driven on  a road that  can be accessed by  the general                                                                    
     public, then  under our  interpretation of  the current                                                                    
     statutes,  those  transactions  would not  be  taxable.                                                                    
     However, once  that vehicle is  driven on a  highway or                                                                    
     public right-of-way  that is open to  and accessible by                                                                    
     the general public, and the  rental period is less than                                                                    
     90  days, it  becomes a  taxable transaction  under the                                                                    
     current definition.                                                                                                        
                                                                                                                                
     I hope that this helps  clarify the questions that have                                                                    
     recently  arisen  on this  bill.  If  you have  further                                                                    
     questions do not hesitate to contact me.                                                                                   
                                                                                                                                
     Sincerely,                                                                                                                 
     Angela Rodell                                                                                                              
     Commissioner                                                                                                               
                                                                                                                                
9:40:22 AM                                                                                                                    
                                                                                                                                
Co-Chair Meyer  reiterated that the  current bill  version Y                                                                    
changed the 90-day  period to 28 days. He  believed that the                                                                    
letter  clarified issues  regarding the  tax on  private and                                                                    
public vehicles.                                                                                                                
                                                                                                                                
9:41:12 AM                                                                                                                    
                                                                                                                                
Senator  Hoffman believed  that the  concern was  that there                                                                    
were roads that were not  maintained by the state that would                                                                    
not be taxed.  He understood that roads  that were privately                                                                    
maintained  would  not  fall  under  the  tax.  Commissioner                                                                    
Rodell clarified  that under existing  law if a  vehicle was                                                                    
rented and had access to  the public roads in Deadhorse that                                                                    
were monitored by  the North Slope Borough  Police or Alaska                                                                    
State  Troopers those  transactions were  taxable regardless                                                                    
of who maintained the roads.                                                                                                    
                                                                                                                                
Senator  Hoffman  thought  that  the sponsor  had  wanted  a                                                                    
version of  the bill that  exempted vehicles outside  of the                                                                    
maintained area  in the  North Slope.  He asserted  that the                                                                    
current bill version did not  accomplish what Senator Bishop                                                                    
wanted.  Commissioner  Rodell  replied that  she  would  let                                                                    
Senator Bishop speak  to that issue, but noted  that DOR was                                                                    
struggling with the definition  because the state maintained                                                                    
roads that  it did not  give public access  to; furthermore,                                                                    
there  were many  definitions  of  what "public  maintained"                                                                    
meant,  and  DOR  was  looking at  access  as  the  defining                                                                    
factor.                                                                                                                         
                                                                                                                                
9:43:32 AM                                                                                                                    
                                                                                                                                
Senator Hoffman asserted that the  work draft version needed                                                                    
to  be modified  in order  to accomplish  the intent  of the                                                                    
sponsor.                                                                                                                        
                                                                                                                                
9:44:12 AM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer thought  that  part of  the  issue was  with                                                                    
security  check  points  that  would  not  allow  people  on                                                                    
certain  roads.  Senator  Hoffman stated  that  Commissioner                                                                    
Rodell's letter  had addressed the issue  with check points,                                                                    
but noted that those locations were farther north.                                                                              
                                                                                                                                
9:44:27 AM                                                                                                                    
                                                                                                                                
Vice-Chair  Fairclough  asked  whether   the  tax  would  be                                                                    
triggered by  the rental of  a vehicle in an  area patrolled                                                                    
by law  enforcement even if  the primary use of  the vehicle                                                                    
would be  in a restricted area.  Commissioner Rodell replied                                                                    
in  the affirmative.  She added  that the  reduction of  the                                                                    
rental  period  in  the current  work  draft  addressed  the                                                                    
concern.                                                                                                                        
                                                                                                                                
9:45:31 AM                                                                                                                    
                                                                                                                                
Vice-Chair  Fairclough noted  that  she  had seen  different                                                                    
laws  interpreted using  different  criteria. She  furthered                                                                    
that if a  vehicle had traveled in  the right-of-way, access                                                                    
was available and  the tax should be paid.  She thought that                                                                    
larger  vehicles in  Prudhoe Bay  that were  driven directly                                                                    
into  restricted areas  should  be considered.  Commissioner                                                                    
Rodell agreed that  the tax placed the burden  on the rental                                                                    
companies  to  track  where  the  vehicle  was  taken  while                                                                    
rented.  She related  that the  tax was  passed through  the                                                                    
rental company and  paid by the renter of the  vehicle.  She                                                                    
believed that an  audit requirement would be need  to be put                                                                    
into  place  that  required  rental  companies  to  document                                                                    
evidence  that the  vehicle was  kept within  the restricted                                                                    
areas. She  stated that,  to date,  the department  had been                                                                    
unable to document that evidence.                                                                                               
                                                                                                                                
9:47:30 AM                                                                                                                    
                                                                                                                                
Vice-Chair   Fairclough  offered   that   the  sponsor   was                                                                    
proposing   a   commercial   rental  to   another   licensed                                                                    
commercial business. She noted that  tourists did  not carry                                                                    
commercial  business   licenses  when  they  came   to  rent                                                                    
vehicles, but  that the state  wanted to collect a  tax from                                                                    
tourists  to  help  pay for  maintenance  on  Alaska  roads.                                                                    
She wondered  if the  committee could  consider taxing  on a                                                                    
wholesale  level.  She  furthered  that if  the  tax  was  a                                                                    
qualified business  expense for the entity  that was renting                                                                    
the vehicle for work activity  that would benefit the state.                                                                    
She inquired  whether language could  be drafted  that would                                                                    
place the  onus on the  vehicle renter, which was  where the                                                                    
actual  expense  would  be  generated.  Commissioner  Rodell                                                                    
responded that  under current  law commercial  vehicles were                                                                    
exempt  from the  tax.  She deferred  the  question to  Matt                                                                    
Fonder.                                                                                                                         
                                                                                                                                
9:49:01 AM                                                                                                                    
                                                                                                                                
MATT FONDER, DIRECTOR, TAX  DIVISION, DEPARTMENT OF REVENUE,                                                                    
ANCHORAGE (via  teleconference), stated that  the commercial                                                                    
vehicle  exemptions in  the current  statute applied  to the                                                                    
very large  busses and vehicles  that were over  26,000 lbs.                                                                    
Other  potentially exempt  vehicles were  moving trucks.  He                                                                    
believed that the commercial  wholesale transaction had been                                                                    
discussed  and  that the  Department  of  Law had  expressed                                                                    
concern over commerce clause constitutional issues.                                                                             
                                                                                                                                
9:50:39 AM                                                                                                                    
                                                                                                                                
Senator   Hoffman    understood   that    the   department's                                                                    
interpretation  had been  that  the vehicles  rented on  the                                                                    
North Slope,  on privately maintained roads,  would continue                                                                    
to  be taxed;  those beyond  the security  checkpoints would                                                                    
not. He  reiterated that the Y  version of the bill  did not                                                                    
speak to the crux of the sponsors concern.                                                                                      
                                                                                                                                
9:51:35 AM                                                                                                                    
                                                                                                                                
Senator Bishop stated that the  letter from DOR very clearly                                                                    
stated  that  the  regardless  of  the  rental  period,  the                                                                    
vehicles that  were driven on  a road not accessible  by the                                                                    
general public would not be  taxed. He referenced the map in                                                                    
members' packets and noted that it  was a half mile from the                                                                    
rental  agency to  the  restricted road  gate  on the  North                                                                    
Slope.  He  asked  whether  language  could  be  written  to                                                                    
clarify  the   intent  of   DOR  as   was  written   in  the                                                                    
department's letter  of intent. Commissioner  Rodell replied                                                                    
that she did not have an  answer on this issue. She asserted                                                                    
that  she was  striving  for fairness  in administering  the                                                                    
tax.                                                                                                                            
                                                                                                                                
Senator  Bishop  that  the  vehicles  could  be  hauled  the                                                                    
additional half  mile on  a high-deck  trailer to  the guard                                                                    
shack,  therefore  bypassing  the tax.  Commissioner  Rodell                                                                    
replied in the affirmative.                                                                                                     
                                                                                                                                
Vice-Chair Fairclough  MOVED to  AMEND the letter  of intent                                                                    
from the Senate Finance Committee:                                                                                              
                                                                                                                                
     DELETE                                                                                                                     
                                                                                                                                
     "The intent of SB 178  is to clarify, once again, which                                                                    
     rental vehicles are to be  covered by the tax and which                                                                    
     are  not.  It  is  the  committee's  intent  that  only                                                                    
     passenger  rental cars,  as described  in Section  4 of                                                                    
     CSSB 178 should be taxed under AS 43.52.010."                                                                              
                                                                                                                                
     INSERT                                                                                                                     
                                                                                                                                
     "The intent of SB 178  is to clarify, once again, which                                                                    
     rental vehicles are to be  covered by the tax and which                                                                    
     are  not.  It  is  the  committee's  intent  that  only                                                                    
     passenger  rental cars  as  described  in AS  43.52.010                                                                    
     should be taxed."                                                                                                          
                                                                                                                                
Senator Hoffman  wondered whether  the drafters of  the bill                                                                    
could provide language to specify  that only vehicles within                                                                    
the  Prudhoe  Bay unit  boundary  that  drove on  restricted                                                                    
roads would not be subject to the tax.                                                                                          
                                                                                                                                
Co-Chair  Meyer understood  that the  language pertained  to                                                                    
all  North Slope  activity, including  Kuparak. Commissioner                                                                    
Rodell replied that  the tax applied statewide  and that the                                                                    
concern  was how  to  carve out  specific  areas that  would                                                                    
create a  tax exemption  for one regional  area and  not for                                                                    
other regional areas.                                                                                                           
                                                                                                                                
Co-Chair  Meyer  noted  that   the  letter  stated  "private                                                                    
roads."                                                                                                                         
Senator Hoffman  noted that the  carving out  regional areas                                                                    
would be a  policy decision that the  legislature would made                                                                    
and not DOR.                                                                                                                    
                                                                                                                                
9:57:15 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:58:58 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
9:59:14 AM                                                                                                                    
                                                                                                                                
Co-Chair Meyer  thought that the  letter of intent  from the                                                                    
department was clear.                                                                                                           
                                                                                                                                
9:59:26 AM                                                                                                                    
                                                                                                                                
Vice-Chair Fairclough  MOVED to REPORT CSSB  178(FIN) out of                                                                    
committee   with    2   letters   of    intent,   individual                                                                    
recommendations,  and the  accompanying  fiscal note.  There                                                                    
being NO OBJECTION, it was so ordered.                                                                                          
                                                                                                                                
10:00:30 AM                                                                                                                   
                                                                                                                                
CSSB  178(FIN) was  REPORTED  out of  committee  with a  "do                                                                    
pass"  recommendation   and  with   2  letters   of  intent,                                                                    
individual recommendations,  and a new  indeterminate fiscal                                                                    
note from the Department of Revenue.                                                                                            
                                                                                                                                
10:00:41 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:02:47 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
SENATE BILL NO. 201                                                                                                           
                                                                                                                                
     "An Act relating to the crime of trespass."                                                                                
                                                                                                                                
10:04:07 AM                                                                                                                   
                                                                                                                                
Co-Chair Meyer  noted that  he had  legal concerns  with the                                                                    
bill regarding  whether the landowner  would be liable  if a                                                                    
trespasser was injured on the owner's property.                                                                                 
                                                                                                                                
10:04:36 AM                                                                                                                   
                                                                                                                                
ANNE CARPENETI,  ASSISTANT ATTORNEY GENERAL,  LEGAL SERVICES                                                                    
SECTION-JUNEAU,  CRIMINAL   DIVISION,  DEPARTMENT   OF  LAW,                                                                    
deferred  the   question  to  the  Civil   Division  of  the                                                                    
department.                                                                                                                     
                                                                                                                                
10:05:12 AM                                                                                                                   
                                                                                                                                
Vice-Chair   Fairclough  noted   that   Ms.  Carpeneti   was                                                                    
retiring.  She acknowledged  that Ms.  Carpeneti had  served                                                                    
the state  well for  many years.  Co-Chair Meyer  echoed her                                                                    
sentiments.                                                                                                                     
                                                                                                                                
10:06:10 AM                                                                                                                   
                                                                                                                                
Vice-Chair Fairclough  highlighted that the bill  before the                                                                    
committee  was  in response  to  concerns  from the  general                                                                    
public  that certain  public  law  enforcement officers  had                                                                    
violated the  public trust by  working under  the assumption                                                                    
that  trespass  laws did  not  apply  to them.  She  queried                                                                    
whether the  bill decreased the state's  ability to advocate                                                                    
for the rights  for the property owner;  conversely, could a                                                                    
person who  trespasses unknowingly  be penalized due  to the                                                                    
passage of  the legislation. Ms. Carpeneti  replied that the                                                                    
current version  of the bill  repealed sub-section C  in the                                                                    
definitions  for  criminal  trespass. It  would  remove  the                                                                    
requirement that in order to  prosecute someone for criminal                                                                    
trespass a notice  would have to be posted  at every obvious                                                                    
entry  onto the  land.  The bill  version  also removed  the                                                                    
requirements  for the  size of  the  notice. She  understood                                                                    
that  by  repealing  the sub-section  prosecution  could  be                                                                    
carried out more swiftly.                                                                                                       
                                                                                                                                
10:09:00 AM                                                                                                                   
                                                                                                                                
Vice-Chair  Fairclough thought  that the  bill spoke  to the                                                                    
issue  of  how property  owners  were  expected to  let  the                                                                    
public  know that  the property  was  private. She  believed                                                                    
that there  was no way  that a private property  owner could                                                                    
post a no  trespassing sign on every entry  to the property.                                                                    
She  offered  her  support  for   moving  the  bill  out  of                                                                    
committee.                                                                                                                      
                                                                                                                                
10:10:41 AM                                                                                                                   
                                                                                                                                
Senator  Dunleavy  thought  that  the  issue  was  regarding                                                                    
conducting  activities on  someone else's  property and  not                                                                    
with  people simply  passing  through  private property.  He                                                                    
inquired  how  the  bill  could   address  this  issue.  Ms.                                                                    
Carpeneti replied  that if only sub-section  C were repealed                                                                    
people would still be allowed  to pass through property that                                                                    
appeared  unused,  provided  the   property  owner  did  not                                                                    
verbally tell  the person  not to  enter. She  believed that                                                                    
hunting on private land would still be against the law.                                                                         
                                                                                                                                
10:13:10 AM                                                                                                                   
                                                                                                                                
Senator Dunleavy hypothesized that  if Section C was removed                                                                    
a  person approaching  a  fence while  hiking  in the  woods                                                                    
would  have   to  assume  they  were   coming  upon  private                                                                    
property. Ms. Carpeneti replied  that a fence would indicate                                                                    
that the property was private.                                                                                                  
                                                                                                                                
10:13:36 AM                                                                                                                   
                                                                                                                                
Senator Dunleavy inquired if someone  could trap on the land                                                                    
if  the land  looked  like  it had  not  been improved.  Ms.                                                                    
Carpeneti  replied  that  she   would  have  to  check  with                                                                    
Department of Public Safety.                                                                                                    
                                                                                                                                
10:14:17 AM                                                                                                                   
                                                                                                                                
Senator Dunleavy  wondered if  the current  law were  not to                                                                    
change,  people  could  access private  property  if  a  "no                                                                    
trespassing" sign  were absent.  Ms. Carpeneti  replied that                                                                    
if the land  was unimproved and apparently  unused, a person                                                                    
could pass through the property.                                                                                                
                                                                                                                                
10:14:55 AM                                                                                                                   
                                                                                                                                
Co-Chair  Meyer noted  that Co-Chair  Kelly  had joined  the                                                                    
committee.                                                                                                                      
                                                                                                                                
10:15:05 AM                                                                                                                   
                                                                                                                                
Co-Chair Meyer noted that the bill had a zero fiscal note.                                                                      
                                                                                                                                
10:15:28 AM                                                                                                                   
                                                                                                                                
Vice-Chair Fairclough MOVED to REPORT  CSSB 201(JUD)  out of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes. There  being NO OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
CSSB  201 (JUD)  was REPORTED  out of  committee with  a "do                                                                    
pass" recommendation  and with  a new  fiscal note  from the                                                                    
Department of  Administration, a  new zero fiscal  note from                                                                    
the Department of  Corrections, a new zero  fiscal note from                                                                    
Department  of  Law and  with  3  previously published  zero                                                                    
fiscal notes: FN1(ADM), FN4(DPS), FN5(DPS).                                                                                     
                                                                                                                                
10:15:45 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:20:28 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
CS FOR HOUSE BILL NO. 19(RLS)(efd am)                                                                                         
                                                                                                                                
     "An   Act   relating   to   permanent   motor   vehicle                                                                    
     registration  in  the  unorganized  borough  and  in  a                                                                    
     municipality  that  has   elected  to  allow  permanent                                                                    
     registration;  relating  to  the registration  fee  for                                                                    
     noncommercial  trailers and  to the  motor vehicle  tax                                                                    
    for trailers; and providing for an effective date."                                                                         
                                                                                                                                
10:21:21 AM                                                                                                                   
                                                                                                                                
Co-Chair Meyer requested clarification  on the definition of                                                                    
"trailers" as it pertained to the legislation.                                                                                  
                                                                                                                                
10:21:40 AM                                                                                                                   
                                                                                                                                
DARRELL BREESE, STAFF,  REPRESENTATIVE BILL STOLTZE, replied                                                                    
that the bill spoke to  any type of non-commercial, personal                                                                    
use  trailers. He  noted that  statute excluded  campers and                                                                    
residential mobile homes.                                                                                                       
                                                                                                                                
10:22:42 AM                                                                                                                   
                                                                                                                                
Co-Chair Meyer queried why the  bill spoke specifically to 8                                                                    
year-old cars. Mr. Breese responded  that the 8 year-old age                                                                    
was selected  based on the  motor vehicle  registration tax;                                                                    
after  8 years  the tax  did not  decrease or  increase from                                                                    
year to year, which would  make it easier for the Department                                                                    
of Motor Vehicles (DMV) to implement the program.                                                                               
                                                                                                                                
Senator Bishop  clarified that the  bill would  allow people                                                                    
to  register a  trailer  once and  then not  have  to do  it                                                                    
again, ever. Mr. Breese replied in the affirmative.                                                                             
10:24:47 AM                                                                                                                   
                                                                                                                                
Co-Chair  Meyer inquired  how the  bill would  impact cities                                                                    
that required  I/M testing  (emissions testing).  Mr. Breese                                                                    
responded that there  were currently no cities  in the state                                                                    
that  required I/M  testing. He  furthered  that should  the                                                                    
state  implement I/M  testing, the  issue would  need to  be                                                                    
revisited.                                                                                                                      
                                                                                                                                
10:26:01 AM                                                                                                                   
                                                                                                                                
Co-Chair Meyer  asked how the  legislation would  impact the                                                                    
state financially.                                                                                                              
                                                                                                                                
10:26:22 AM                                                                                                                   
                                                                                                                                
AMY   ERICKSON,  DIRECTOR,   DIVISION  OF   MOTOR  VEHICLES,                                                                    
DEPARTMENT OF  ADMINISTRATION, replied  that since  the bill                                                                    
had been  amended to  allow municipalities  to opt  into the                                                                    
program, it  was difficult for  DMV to determine  the future                                                                    
impact. She said  that if a municipality chose to  opt in, a                                                                    
person could pay  the $25.00 for the  registration and never                                                                    
return  to the  DMV to  renew,  which would  result on  lost                                                                    
revenues.                                                                                                                       
                                                                                                                                
10:26:49 AM                                                                                                                   
                                                                                                                                
Co-Chair  Meyer understood  that  when  a person  registered                                                                    
their car the  state and the city shared  in those revenues.                                                                    
Ms. Erickson  responded that the motor  vehicle registration                                                                    
tax  was  collected   by  the  DMV  and   then  returned  to                                                                    
communities. She  gave the example  of the  $70 registration                                                                    
for an  8 year-old car  in Anchorage  would be given  to the                                                                    
community  minus  8  percent.  The 8  percent  was  the  DMV                                                                    
processing  fee which,  in turn,  was put  into the  General                                                                    
Fund in order to benefit the entire state.                                                                                      
                                                                                                                                
10:28:12 AM                                                                                                                   
                                                                                                                                
Co-Chair   Meyer  queried   the   DMV's   position  on   the                                                                    
legislation. Ms.  Erickson replied  that the  department did                                                                    
not have an  official position on the  legislation, but that                                                                    
the   department  could   implement   the  program   without                                                                    
difficulty.                                                                                                                     
                                                                                                                                
10:28:51 AM                                                                                                                   
                                                                                                                                
Co-Chair Meyer OPENED public testimony.                                                                                         
                                                                                                                                
Co-Chair Meyer CLOSED public testimony.                                                                                         
                                                                                                                                
10:29:05 AM                                                                                                                   
                                                                                                                                
Co-Chair Meyer noted the indeterminate fiscal note. He                                                                          
asked how the sponsor determined the $25.00 fee. Mr. Breese                                                                     
replied that $25.00 had seemed a reasonable fee to charge.                                                                      
                                                                                                                                
10:29:42 AM                                                                                                                   
                                                                                                                                
Co-Chair Meyer understood that the program was optional for                                                                     
municipalities. Mr. Breese replied yes.                                                                                         
                                                                                                                                
10:30:38 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:32:33 AM                                                                                                                   
RECONVENED                                                                                                                      
10:32:39 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:32:49 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Meyer discussed housekeeping.                                                                                          
                                                                                                                                
SB 119 was SCHEDULED but not HEARD.                                                                                             
                                                                                                                                
HB 263 was SCHEDULED but not HEARD.                                                                                             
                                                                                                                                
ADJOURNMENT                                                                                                                   
10:33:22 AM                                                                                                                   
                                                                                                                                
The meeting was adjourned at 10:33 a.m.                                                                                         

Document Name Date/Time Subjects
Mental Health Trust Authority - McClellan #5.pdf SFIN 4/8/2014 9:00:00 AM
Confirmation - McClellan
SB178 DOR Letter - Rodell.pdf SFIN 4/8/2014 9:00:00 AM
SB 178
SB178 Updated Letter of Intent 2.doc SFIN 4/8/2014 9:00:00 AM
SB 178