Legislature(2003 - 2004)
01/29/2004 01:41 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
January 29, 2004
1:41 P.M.
TAPE HFC 04 - 16, Side A
CALL TO ORDER
Co-Chair Williams called the House Finance Committee meeting
to order at 1:41 P.M.
MEMBERS PRESENT
Representative John Harris, Co-Chair
Representative Bill Williams, Co-Chair
Representative Kevin Meyer, Vice-Chair
Representative Mike Chenault
Representative Eric Croft
Representative Hugh Fate
Representative Richard Foster
Representative Mike Hawker
Representative Reggie Joule
Representative Bill Stoltze
MEMBERS ABSENT
Representative Carl Moses
ALSO PRESENT
Representative Bruce Weyhrauch; Peter Ecklund, House Finance
Committee Staff, Representative Bill Williams; Sue
Stancliff, Staff, Representative Speaker Pete Kott; Linda
Sylvester, Staff, Representative Bruce Weyhrauch; Michael
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Kendall, Commander, Chief of Search & Rescue, 17 Coast
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Guard District; Michael Swanson, 17 Coast Guard District
Boating Safety Assistant
PRESENT VIA TELECONFERENCE
Janis Hales, Department of Revenue, Anchorage; Sue Hargis,
United States Coast Guard, Juneau
SUMMARY
HB 93 An Act relating to boating safety; repealing secs.
3, 5, 7, 9, 11, 14, 16, 18, 20, 23, 26, 27, and
30, ch. 28, SLA 2000; and providing for an
effective date.
CS HB 93 (FIN) was reported out of Committee with
a "no recommendation" recommendation and with a
new fiscal note by the Department of
Administration and a new zero note by Department
of Revenue.
HB 347 An Act exempting taxicabs from the passenger
vehicle rental tax; and providing for an effective
date.
HB 347 was HEARD and HELD in Committee for further
consideration.
HOUSE BILL NO. 93
An Act relating to boating safety; repealing secs. 3,
5, 7, 9, 11, 14, 16, 18, 20, 23, 26, 27, and 30, ch.
28, SLA 2000; and providing for an effective date.
Co-Chair Williams inquired if the sponsor of the bill wanted
to make a statement of clarification regarding the
legislation.
REPRESENTATIVE BRUCE WEYHRAUCH noted that the U.S. Coast
Guard was present to answer any questions of the Committee.
Co-Chair Harris referenced language on Page 2, Section 4, "a
boat that is not equipped with mechanical propulsion" and
asked if a sailboat of any length would be exempt.
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MICHAEL KENDALL, COMMANDER, CHIEF OF SEARCH & RESCUE, 17
COAST GUARD DISTRICT, JUNEAU, responded that it would be
exempt and would not be a problem for the Coast Guard. If
the boat had a kicker or dysfunctional motor, it could fall
under the provision.
Co-Chair Harris questioned why the Coast Guard would want to
exempt them. Commander Kendall responded that it does not
make a difference to the Coast Guard. Co-Chair Harris
acknowledged that it would not be affecting the Coast Guard.
Co-Chair Harris asked why the sunset is not being extended
so the law remains as currently written.
TH
MICHAEL SWANSON, 17 COAST GUARD DISTRICT BOATING SAFETY
ASSISTANT, JUNEAU, noted that would not be a problem except
that it would need to be "revisited" again at the end of
that sunset.
Co-Chair Harris asked if consideration had been given to
extending only the sunset. Representative Weyhrauch advised
that the reason he introduced the bill was because of the
large presence of the Coast Guard in this region and the
requested it. He pointed out that he also had assumed
Representative Bill Hudson's seat who supported the
legislation. The program demonstrates a positive fiscal
impact on Alaska. The law has been proven to save lives.
Co-Chair Harris warned that the issue goes beyond the sunset
concern and that the bill does indicate some exemptions. He
referenced the correspondence from the Alaska Outdoor
Council (AOC), voicing concern regarding the exemptions.
(Copy on File). He inquired if it would be better to deal
with a "no sunset" provision as the exemptions will end up
costing the State money.
LINDA SYLVESTER, STAFF, REPRESENTATIVE BRUCE WEYHRAUCH,
advised that the exemption is projected to cost the State
$30 thousand dollars. She pointed out that the issue of
including or not including the motorized boats has become an
emotional concern for everyone and suggested that it is a
"sensibility issue". Some people feel strongly that it
would not be good policy to require registration of boats
not used often.
Ms. Sylvester added that from the federal perspective, a
portion of the proceeds come from motor fuel taxes, which
connects it and makes sense that it is a federal regulation.
She advised that the priority was to keep the Boating Safety
Program in tact. She reiterated that the legislation has
picked up heated opposition in the Interior.
Co-Chair Harris questioned how the Interior would be
affected. Ms. Sylvester mentioned the inclusion requirement
for the non-motorized boats. She added that Representative
Holm, Chairman for the House Transportation Committee had
added that exemption.
Representative Stoltze MOVED to AMEND Page 2, Section 3,
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changing the effective date to June 30, 2008, making it a
five-year effective date and then making the appropriate
change to the title.
Co-Chair Williams OBJECTED for discussion purposes, asking
that if the law takes effect immediately, would that be the
date used.
Representative Weyhrauch explained that it would become
effective by signature of the Governor and noted that there
is no effective date listed in Section 4. It would be
immediate.
Co-Chair Harris pointed out that it would require a three-
quarter vote otherwise, it would be 90-days from the time of
the signature.
Representative Hawker asked Representative Stoltze about the
amendment and if the current Section 30 would trigger a
different repealor, taking effect based on one of two sets
of circumstances, either the passage of July 1, 2005 or the
90-days after the signature. He asked if it was the intent
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that the repealor trigger only the June 30, 2008 date.
Representative Stoltze believed that there was a complicated
series of effective dates and that the way in which the bill
was drafted reflects that. He hoped that the conceptual
amendment was "broad" enough to provide "leeway" for the
drafter.
PETER ECKLUND, HOUSE FINANCE COMMITTEE STAFF, REPRESENTATIVE
BILL WILLIAMS, explained that in current law, the sunset
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date is July 1, 2005. The conceptual amendment would
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change that to July 1, 2008, leaving the second repealor
that deals with receipt of the federal receipts. He
reiterated that there would still be two mechanisms in
place.
Representative Stoltze MOVED to AMEND the amendment,
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changing the date to July 1, 2010. Co-Chair Williams
WITHDREW his OBJECTION.
Representative Hawker OBJECTED to ask the sponsor if that
would be an acceptable amendment. Representative Weyhrauch
replied it would.
Representative Hawker WITHDREW his OBJECTION.
Representative Croft OBJECTED. He disagreed with keeping
the bill in its current form with the 2010 date. He
emphasized that the bill should not have a sunset as it
clearly is saving lives.
Representative Croft WITHDREW his OBJECTION and Amendment #1
was ADOPTED.
Representative Foster MOVED to report CS HB 93 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
CS HB 93 (FIN) was reported out of Committee with a "no
recommendation" and with a new fiscal note by the Department
of Administration and a new zero note by the Department of
Natural Resources.
HOUSE BILL NO. 347
An Act exempting taxicabs from the passenger vehicle
rental tax; and providing for an effective date.
Representative Croft MOVED to ADOPT Amendment #1, #23-
LS1311\D.7, Kurtz, 1/29/04. Co-Chair Williams OBJECTED.
Representative Croft explained that the amendment would
address the concern with the U-Hauls. He noted that
vehicles over 10,000# would be exempt not only the ones over
26,000#, primarily used commercially. The amendment removes
a narrow category of trucks and provides a "tighter"
definition.
At-Ease: 2:03 P.M.
Reconvene: 2:06 P.M.
Representative Croft corrected, Amendment #1 does not
address the U-Haul issue, but primarily changes the 26,000#
to the 10,000# limit. A new class of trucks would be exempt
and it would solve the concern brought forward by the
Trucking Association. He added, apparently, U-Hauls do not
fit into the commercial motor vehicle category.
Co-Chair Williams maintained his objection.
Co-Chair Harris asked how much revenue the State would loose
through adoption of the amendment. Representative Croft
responded that the taxpayers would save $400 thousand
dollars.
SUE STANCLIFF, STAFF, REPRESENTATIVE SPEAKER PETE KOTT,
deferred to Co-Chair William objection.
Co-Chair Williams reminded members that the intent of the
legislation was to help taxi cab drivers. He was concerned
with the repercussions of changing language in the bill.
Co-Chair Harris asked if the amendment would only deal with
vehicles that are rented and without inclusion of a driver.
Representative Croft did not know. Co-Chair Harris thought
that would make a big difference. He believed that a
vehicle with a driver would be excluded.
Vice Chair Meyer asked what type of trucks were being
addressed in the amendment. Representative Croft did not
want to exempt big 6,000#-7,000# vehicles. The bill would
not change that as it only effects those between 10,000#-
26,000#.
A roll call vote was taken on the motion.
IN FAVOR: Joule, Chenault, Croft
OPPOSED: Hawker, Meyer, Stoltze, Fate, Williams,
Harris
Representative Foster and Representative Moses were not
present for the vote.
The MOTION FAILED (3-6).
Representative Croft MOVED to ADOPT Amendment #2, #23-
LS1311\D.6, Kurtz, 1/29/04. Co-Chair Williams OBJECTED.
Representative Croft explained that Amendment #2 would
address concerns with the U-Hauls used primarily to
transport personal property.
Co-Chair Williams reminded members that the bill is intended
to be a revenue generating measure and that the choice to
use a U-Haul would be personal.
A roll call vote was taken on the motion.
IN FAVOR: Joule, Croft
OPPOSED: Hawker, Meyer, Stoltze, Chenault, Fate,
Foster, Williams, Harris
Representative Moses was not present for the vote.
The MOTION FAILED (2-9).
Co-Chair Harris referenced the letter from the Alaska
Trucking Association, Inc. (Copy on File). He read the
definition that the bill uses for commercial motor vehicles:
"All vehicles over 26,000# are exempt from the user fee".
He noted that large portions of equipment within that pound
range would be subject to the user fee. Co-Chair Harris
asked if the bill would tax semi-trucks or trailers used for
commerce in the 10,000#-26,000# range.
Ms. Stancliff did not believe they would be taxed. She
noted that the Department of Revenue provided information
regarding the 10,000#-26,000# range with a small number of
vehicles falling into it such as the Ford F-350 and the Ram
3500. There are a small number of commercial pick-ups on
the North Slope that fall into that category, as do the U-
Hauls. She did not know about semi-trucks or flat bed
trucks and recommended that the Department of Revenue answer
that question.
Co-Chair Harris asked if he owned a trucking company and
wanted to rent a semi-truck, weighing that amount, would the
company pay a rental tax on that semi even though they are a
trucking company. Ms. Stancliff did not know the answer.
Co-Chair Harris stressed that this is important information.
Ms. Stancliff recommended calling the Department of Revenue.
Co-Chair Harris interjected that those truck owners
currently pay tax and that the proposed tax should not be
added.
JANIS HALES, (TESTIFIED VIA TELECONFERENCE), DEPARTMENT OF
REVENUE, ANCHORAGE, noted that in AS 28.4100, it is
clarified that a commercial motor vehicle is a motor vehicle
that is a combination of a motor vehicle and one or more
vehicles. A semi-truck is a motorized car as well as a
semi-trailer and would weigh over 26,000#.
Co-Chair Harris asked what would happen if the second
trailer was not rented. Ms. Hales did not know how much a
semi alone would weigh. Usually, the Department would look
at the entire unit. Co-Chair Harris stressed that there are
a number of trucking companies in the State that provide
their own trailers. Ms. Hales stated that if only the semi
was rented, it would be taxable as the law is currently
written.
Co-Chair Harris clarified that if the vehicle was used to
haul commerce around the State, would it then be taxed. Ms.
Hales reiterated that it would as the bill is currently
written.
Representative Croft pointed out that Amendment #1 addresses
not only the poundage but also the concern for "commercial
purposes". He believed that the amendment could provide a
"fix".
Representative Hawker understood that the facts could be
easily determined and reminded members that the Gross
Vehicle Weight (GVW), which is greater than the dry weight
of the vehicle, was being discussed.
Vice Chair Meyer commented that the car rental tax was not
unique to the State of Alaska. He thought that it would be
easy to document.
Co-Chair Harris MOVED to HOLD the bill in Committee until
that information is clarified. There being NO OBJECTION,
the bill was held.
HB 347 was HELD in Committee for further consideration.
ADJOURNMENT
The meeting was adjourned at 2:24 P.M.
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