Legislature(2007 - 2008)BUTROVICH 205
02/15/2007 01:30 PM Senate TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| SB41 | |
| SB15 | |
| SB49 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| SB 41 | |||
| = | SB 15 | ||
| = | SB 49 | ||
SB 41-REPEAL STUDDED TIRE FEE
CHAIR KOOKESH announced SB 41 to be up for consideration.
1:36:35 PM
SENATOR WIELECHOWSKI, sponsor of SB 41, explained that it would
repeal the $5 retail fee on the sale of studded tires. The fee
has had a damaging impact on small businesses selling tires, and
working families. Research shows that studded tires positively
impact the Alaskan economy, and the tax defers people from
buying them.
1:39:03 PM
SENATOR COWDERY asked for the cost associated with collecting
the fee.
SENATOR WIELECHOWSKI deferred the question to the
administration. The state does pay for one full time position,
but he didn't know that it would be eliminated.
SENATOR OLSON said that studded tires increase road maintenance
fees.
SENATOR WIELECHOWSKI said he would provide a copy of a study
that showed that costs are incurred by studded tires, and said
that technology has significantly minimized studded-tire damage,
which is mostly done when people use them in the summer. He said
repealing the tax is a way to give back to working families in
Alaska.
SENATOR OLSON asked if the state is paying the tax as well.
SENATOR WIELECHOWSKI didn't have the answer.
1:43:33 PM
SENATOR COWDERY commented that he doesn't use studded tires.
SENATOR WIELECHOWSKI reiterated that there are a number of
studies indicating that accidents drop when studded tires are
allowed. In fact studs break up the ice and make the roads safer
for non stud users.
SENATOR COWDERY stated his belief that lightweight studs are
just as damaging as heavy ones.
1:46:21 PM
JOANNA BALES, Supervisor for the Excise Auto Group, confirmed
Senator Wielechowski's testimony and said the primary complaint
about the tax is that this is the only one levied at the retail
level.
She said that one tax technician was hired to deal with the tire
tax, but that they wouldn't necessarily lose their job if the
tax was repealed, and there would be a savings of $56,000 to the
state. Also, the state is exempt from the tax, although it is
using heavyweight studs on its DOT and state vehicles.
Complaints have been made about this disparity.
SENATOR OLSON asked if federal or commercial vehicles are exempt
as well.
MS. BALES replied that federal vehicles are exempt but not
commercial ones. She confirmed that the administration is in
favor of repealing the fee, which earned $1.5 million in the
first full year of its implementation.
SENATOR OLSON remarked that the governor's announced reduction
in the state budget would bring about cuts in other departments,
and asked for plans to make up for the shortfall.
MS. BALES said she didn't have that information.
SENATOR OLSON said that the state won't be saving any money if
the tax technician is kept on the payroll, and asked if any
other taxes are being proposed.
MS. BALES answered that the cruise ship passenger tax will bring
in more money, and that the tire tax technician would take a
position working for that project.
SENATOR COWDERY commented on tire damage to asphalt and said the
problem lies with the mix used in making asphalt.
SENATOR OLSON said that the problem may be that projects are
going to the lowest bidder.
SENATOR COWDERY said that it is not the fault of the
contractors, because the DOT provides the specifications.
1:54:05 PM
GREG WICHICH, an Anchorage small business owner, said that he
has been collecting the fee from his customers and submitting it
to the state. The system has been difficult to administer, and
the state online payment system is burdensome to his staff and
his customers. The tax penalizes people who try to be safe on
the state's roads, which doesn't make sense.
SENATOR OLSON asked about the difference between a retail level
tax and a sales tax.
MR. WITCHICH said he couldn't answer that question.
SENATOR OLSON asked if Mr. Witchich has been subject to
penalties as a result of the difficulty of paying this tax.
MR. WICHICH replied yes and explained his particular situation.
SENATOR COWDERY asked if he received a fee for collecting the
tax.
MR. WITCHICH answered yes if it is timely. He reiterated he
doesn't understand why the public should want to tax itself in
this way.
1:59:47 PM
SENATOR WIELECHOWSKI commented that the governor hasn't included
the tax receipts in her current budget.
SENATOR COWDERY made a motion to move SB 41 from committee with
individual recommendations and attached fiscal note(s). There
being no objection, CSSB 41(L&C) moved from committee.
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