Legislature(2013 - 2014)BUTROVICH 205
03/20/2014 01:30 PM Senate TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| SB178 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 178 | TELECONFERENCED | |
| += | SB 211 | TELECONFERENCED | |
| += | SB 94 | TELECONFERENCED | |
| += | SB 197 | TELECONFERENCED | |
| + | HJR 10 | TELECONFERENCED | |
SB 178-PASSENGER VEHICLE RENTAL TAX
2:34:15 PM
CHAIR EGAN announced SB 178 to be up for consideration. He
removed his objection and CSSB 178(), version 28-LS1406\C was
before the committee. He invited Brittany Hutchison to explain
the changes in version C.
2:35:40 PM
At ease from 2:35 to 2:36 p.m.
2:36:50 PM
BRITTANY HUTCHISON, staff to Senator Click Bishop, sponsor of SB
178, said section 1 on page 1, line 4, consolidates existing
sections regarding the terms "passenger" and "recreational" for
better organization of the statutes. Section 2, page 1, line 10,
reduced the term from 90 days to 30 for which a lease or rental
is exempt from the tax. Section 3 on page 2, line 6,
consolidates the terms "passenger" and recreational" to better
organize that statute, but they are taxed separately; passenger
vehicles are taxed at 10 percent and recreational vehicles are
taxed at 3 percent.
Section 4, page 2, line 13, amends the term "passenger vehicle"
to specify it is for the primary purpose of transporting
passengers. Section 4, subsection (f), page 2, line 28, reduces
the gross vehicle weight (GVW) from 8,500 to 6,500 lbs. Section
5, page 3, line 7, repeals AS 43.52.030 and .040, since they are
no longer needed. She noted that SB 178 also had a Letter of
Intent.
2:38:28 PM
SENATOR FAIRCLOUGH asked if the sponsor had a new fiscal note;
she expressed concern about the financial impact on current
revenues of renting vehicles over 30 days and under 90.
MS. HUTCHISON said the new fiscal note states there is a
possible 10 percent reduction in revenue. Right now the tax
brings in roughly $8.3 million and the reduction is estimated to
be $800 thousand to $1.6 million.
SENATOR FAIRCLOUGH noted public testimony had to do with
vehicles on the North Slope that should be exempt, and asked
what that number would be inside of the $800,000.
SENATOR FRENCH said he thought the committee was interested in
exploring, forgiving, or eliminating collection of the tax on
trucks that operate on the North Slope that is free of state
maintenance and state services.
SENATOR FAIRCLOUGH said the public has said two times they have
been unfairly called upon to owe a tax; some said they never
collected the tax and that they shouldn't have collected it
because they were operating on the North Slope in a commercial
capacity versus on Alaska's highways. Their perception of the
original intent of the legislation was that it was for tourists
but that some Alaskans would be affected by it. But the folks
who testified were small equipment rental companies with some
trucks that are lighter than the weight load that is in statute.
MS. HUTCHISON said the intent of reducing the weight from 8,500
lbs. to 6,500 is to get back to the original intent of the
legislation - that only those trucks that are for passengers,
not equipment, would be taxed.
2:44:37 PM
SENATOR BISHOP asked how much of the estimated $800 thousand to
$1.6 million a year can be identified as coming out of the North
Slope rental.
SENATOR FAIRCLOUGH asked if the fiscal note is prospective or
shows the state losing actual revenue.
2:45:55 PM
MATT FONDER, Director, Tax Division, Alaska Department of
Revenue (DOR), Anchorage, Alaska, said the fiscal note is an
estimate for future revenues, so future rental taxes would be
decreasing.
2:47:19 PM
ANGELA RODELL, Commissioner, Department of Revenue (DOR),
Anchorage, Alaska, explained that they attempted to write a
fiscal note based on the contracts as they have seen them. The
difficulty is that they don't distinguish those contracts and
don't have the information by region. The rental companies are
submitting their vehicle rental tax through their headquarters,
so they don't distinguish the money they might have collected in
Bethel or Nome versus Anchorage and Juneau.
One of the current version is that the reduction to 6,500 lbs.
will exclude the Suburbans and large Jeep vehicles that Avis and
Hertz routinely rent in Anchorage. So, they are trying to
determine by size of vehicle more so than the region from which
they are being rented.
SENATOR FAIRCLOUGH commented that their estimate was based on
past experiences, but she was trying to project an estimate into
future, so it's a little bit of both.
COMMISSIONER RODELL answered that is right; they are making
their best guess based on what they know.
SENATOR FRENCH said it would be tricky to pull this off and to
cut out vehicles that had not touched a state maintained road.
Pt. Thomson is a perfect example of a truck that will never
touch a state maintained road; there is no road; it is an ice
road and the trucks will stay there. Kuparuk is another example
where the road is 30 miles from the Haul Road, so the chances
are those trucks will never touch a state road. But in Dead
Horse, trucks leased to Great Bear - all the work they are doing
is on the Haul Road and plenty of Dead Horse trucks drive to
Fairbanks and come back. This is a good idea that may be hard to
pull off.
SENATOR DYSON asked the basis for deciding on 6,500 lb. GVW.
2:50:57 PM
SENATOR BISHOP said development of the North Slope had started
with using gasoline driven vehicles and had evolved to using
diesel, and now industry is going back to gas vehicles. Pickup
trucks have grown and a half-ton pickup is heavier and there are
more crew cab, half-ton, 6,500 lbs. trucks.
SENATOR DYSON asked if he intended to tax Suburbans as passenger
vehicles.
SENATOR BISHOP said he didn't know about the weight of a full-
sized Suburban, but they would fall in line with 6,500 lbs.
2:53:17 PM
SENATOR DYSON said that is what he thought, but the Commissioner
said it wouldn't.
2:53:40 PM
COMMISSIONER RODELL said she wanted to get the definition of
"transporting passengers" on the record, because many times she
is by herself and rents a vehicle and might be hauling
furniture. She wanted to understand their intent, because they
would have to write regulations if this bill moves forward as
written. She was specifically looking at page 2, line 16.
SENATOR DYSON suggested using "transport people."
2:55:40 PM
COMMISSIONER RODELL said the challenge is that this tax will be
passed on to the renter and they will be looking to the vehicle
rental company to consolidate and remit this tax on behalf of
the state, so they will want the companies to certify that these
cars were used for the purposes they outline, and enforcement
becomes a challenge in some cases.
SENATOR DYSON moved to report CSSB 178(), version 28-LS1406\C,
from committee to the next committee of referral with attached
fiscal notes and individual recommendations. There were no
objections and CSSB 178(TRA) moved from the Senate
Transportation Standing Committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 4407 MOU.pdf |
STRA 3/20/2014 1:30:00 PM |
SB 211 |
| Egan SB211 Response.pdf |
STRA 3/20/2014 1:30:00 PM |
SB 211 |
| Happy Valley Docs.pdf |
STRA 3/20/2014 1:30:00 PM |
SB 211 |
| Project Flow Chart.pdf |
STRA 3/20/2014 1:30:00 PM |
SB 211 |
| Wilson HB371 Response.pdf |
STRA 3/20/2014 1:30:00 PM |
HB 371 |
| Wilson HB371 Response.pdf |
STRA 3/20/2014 1:30:00 PM |
SB 211 |
| SB211_milius,milles,smith_response3-18-14.pdf |
STRA 3/20/2014 1:30:00 PM |
SB 211 |