Legislature(2003 - 2004)

01/29/2004 01:41 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= 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"                                                                   
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                                                                   
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#-                                                                   
A roll call vote was taken on the motion.                                                                                       
IN FAVOR:      Joule, Chenault, Croft                                                                                           
OPPOSED:       Hawker, Meyer, Stoltze, Fate, Williams,                                                                          
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                                                                   
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                                                                   
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                                                                   
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                                                                   
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.                                                                         

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