Legislature(2013 - 2014)SENATE FINANCE 532
04/08/2014 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| Confirmation Hearing: Appointee John Mcclellan of Anchorage, Alaska Mental Health Trust Authority Board of Trustees. | |
| SB178 | |
| SB201 | |
| HB19 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 119 | TELECONFERENCED | |
| + | HB 278 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| = | SB 201 | ||
| = | HB 19 | ||
| = | HB 263 | ||
| = | SB 178 | ||
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 |