Legislature(2003 - 2004)
01/29/2004 01:41 PM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
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.