04/06/2008 04:00 PM House FINANCE

HOUSE BILL NO. 106                                                                                                            
                                                                                                                                
     "An  Act  repealing fees  imposed  on  the sale  of  new                                                                   
     tires,  the  sale  of certain  studded  tires,  and  the                                                                   
     installation  of  certain  metal  studs  on  tires;  and                                                                   
     providing for an effective date."                                                                                          
                                                                                                                                
JOHANNA BALES,  DEPUTY DIRECTOR, TAX DIVISION,  DEPARTMENT OF                                                                   
REVENUE, explained  the bill repeals the fees  imposed on the                                                                   
sale of new  and studded tires.   She said it is  a deterrent                                                                   
to  those  who  would  not replace  old,  worn  tires.    The                                                                   
Administration  does not  believe  that the  tire  fee is  an                                                                   
efficient  way to  raise money  and  acts as  a deterrent  to                                                                   
those who should replace old or worn tires.                                                                                     
                                                                                                                                
Ms. Bales  pointed out  that the  fiscal note should  address                                                                   
the repeal  this year instead  of last year.   Co-Chair Meyer                                                                   
said that change would be made by amendment.                                                                                    
                                                                                                                                
Vice-Chair Stoltze  commented on needing to  replace money in                                                                   
the budget for the Glenn Highway.                                                                                               
                                                                                                                                
6:36:01 PM                                                                                                                    
                                                                                                                                
Co-Chair Chenault  asked what the annual income  has been for                                                                   
this  legislation  since  2003.    Ms.  Bales  reported  that                                                                   
approximately  $1.5 million  has  been collected  each  year.                                                                   
Co-Chair  Chenault  related  that  in  FY 08  the  fees  were                                                                   
expected  to  bring  in  $3.3 million  to  $5  million,  when                                                                   
actually  it was $1.184  million.   He asked  why that  might                                                                   
have been.   Ms.  Bales said  it was  a combination  of over-                                                                   
estimating  the number  of tires  sold and  a change in  what                                                                   
kind of tires were purchased.                                                                                                   
                                                                                                                                
Co-Chair  Chenault noted  in 2003 the  fiscal note  estimated                                                                   
that it would  cost $53,000 a year to implement  the program.                                                                   
The current fiscal note shows a greater cost.                                                                                   
                                                                                                                                
6:39:56 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer MOVED to ADOPT  Amendment 1 to change the date                                                                   
on page 1, line 1, from July 1, 2007, to July 1, 2008.                                                                          
                                                                                                                                
Co-Chair Chenault OBJECTED.                                                                                                     
                                                                                                                                
Co-Chair   Chenault  asked   if  the   amendment  fixes   the                                                                   
department's concern.  Ms. Bales said it did.                                                                                   
                                                                                                                                
Co-Chair  Chenault WITHDREW  his  OBJECTION.  There being  NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
6:41:14 PM                                                                                                                    
                                                                                                                                
Representative  Foster MOVED to  REPORT CSHB 106(FIN)  out of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal  note.  There being NO  OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CSHB 10  106(FIN) was  REPORTED out of  Committee with  a "do                                                                   
pass"  recommendation and  with  previously published  fiscal                                                                   
note #2 by the Department of Revenue.                                                                                           
                                                                                                                                
Representative  Thomas  thought   that  arbitrage  should  be                                                                   
halted.   No one  should be  able to  borrow state  money and                                                                   
profit from it.