Legislature(2015 - 2016)CAPITOL 106
04/07/2015 08:00 AM House STATE AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| HB77 | |
| HB173 | |
| HB55 | |
| HJR19 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 77 | TELECONFERENCED | |
| *+ | HJR 19 | TELECONFERENCED | |
| *+ | HB 173 | TELECONFERENCED | |
| *+ | HB 55 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 173-REGISTRATION OF LEASED VEHICLES
8:10:48 AM
CHAIR LYNN announced that the next order of business was HOUSE
BILL NO. 173, "An Act relating to the registration of leased
motor vehicles; and providing for an effective date."
8:11:12 AM
REPRESENTATIVE KREISS-TOMKINS, as prime sponsor, introduced HB
173. He said the proposed legislation would address a loophole
related to leasing certain vehicles. The issue was brought to
the sponsor's attention by one of his constituents. He said a
person who leases a vehicle ends up paying commercial
registration fees, which are substantially higher than the
registration fees a vehicle owner pays. He said in the last few
weeks, he realized that the extent of the proposed changes under
HB 173 would be dramatic, and he ventured that consideration of
the fiscal note may result in the committee's taking its "foot
off the accelerator."
8:13:19 AM
BERETT WILBER, Staff, Representative Kreiss-Tomkins, Alaska
State Legislature, answered questions during the hearing on HB
173, on behalf of Representative Kreiss-Tomkins, prime sponsor.
In response to Chair Lynn, she explained that when a person
leases a vehicle, the DMV considers it a commercial vehicle,
irrespective of how the person leasing the vehicle uses it. For
example, if a person leases a truck to use as a family vehicle,
the DMV would require the person to pay commercial registration
fees on the truck because it was being leased.
CHAIR LYNN said he thought when he leased a vehicle 12-15 years
ago, the [registration] fee had been the same as it was for a
privately owned vehicle.
8:14:48 AM
AMY ERICKSON, Director, Division of Motor Vehicles (DMV),
Department of Administration (DOA), explained that under
statute, a vehicle that is owned by a company pays commercial
fees, and vehicles that are leased are owned by a company. In
response to Representative Stutes, she confirmed that the
company name was the name of the firm from which the person was
leasing the vehicle.
8:15:49 AM
MS. WILBER offered her understanding that a typical lease length
ranges from two to five years. She said new to the discussion
between sponsor and staff was figuring out what to do for
shorter lease periods or rentals, and she deferred to Ms.
Erickson to address that question. In response to a question
from Representative Vazquez, she clarified that HB 173 did not
list any specific lease periods; therefore, she said she did not
feel comfortable stating how long a specific lease would be.
REPRESENTATIVE VAZQUEZ concluded that hypothetically a person
could lease a vehicle for just a week and [be charged commercial
registration fees].
8:17:52 AM
REPRESENTATIVE STUTES asked if a person required to pay
commercial registration fees would also be required to pay to
insure the vehicle at the commercial level.
REPRESENTATIVE KELLER noted that the property taxes on a house
may not be visible in the rent payment. He said he observed
while reading the proposed legislation that the person paying
the tax would be the person leasing the vehicle. He said he
assumed the company who owned the vehicles could design the
lease contract "to emphasize the tax or not." He stated, "...
It's not necessarily that we are currently taxing individuals
who happen to lease; we tax ... commercial companies that lease
cars." He noted there are different variations of risks for the
company and the person leasing.
8:19:34 AM
MS. ERICKSON stated the following:
With a rental car, ... they're commercial vehicles and
they pay commercial fees. Whereas, if you lease a
vehicle, ... presumably the company would be paying
the higher fee for the commercial rate, because they
are the ones who are leasing the vehicle, but they
pass it on to the consumer. So, I agree with
Representative Keller, who said you could apply that
to your contract; I think that's probably the most
appropriate way to handle it."
MS. ERICKSON told Representative Vazquez that DMV registrations
are for two years or could be one year for a commercial vehicle.
CHAIR LYNN closed public testimony on HB 173. He noted that the
bill sponsor had requested that the committee hold HB 173.
REPRESENTATIVE KELLER indicated that the issue that HB 173 would
address was a valid one.
8:21:22 AM
REPRESENTATIVE KREISS-TOMKINS said he introduced HB 173 to close
a loophole, but had realized in the process that the loophole
was larger than he originally had thought, applied to many
people, and there were many ways to look at the issue.
CHAIR LYNN remarked on the variety of issues that are heard by
the legislature.
8:22:44 AM
CHAIR LYNN announced that HB 173 was held over.