Legislature(2003 - 2004)

04/21/2004 09:09 AM 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."                                                                                 
                                                                                                                                
                                                                                                                                
This was  the second  hearing for  this bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair  Wilken  explained  that  this  legislation   would  exempt                                                            
taxicabs  from the  passenger vehicle  rental tax  by removing  them                                                            
from the definition  of a passenger  vehicle. He reminded  that this                                                            
tax, which specified that  a ten-percent vehicle would be imposed on                                                            
the rental and  lease of passenger vehicles, was enacted  during the                                                            
previous  Legislative Session.  He informed  the Committee  that the                                                            
fiscal "unintended consequence"  of adopting Amendment #1 during the                                                            
first hearing  on this bill was a $400,000 decrement  to the budget.                                                            
                                                                                                                                
Amendment  #1: This amendment  changes the  bill's title to  read as                                                            
follows.                                                                                                                        
                                                                                                                                
     "An  Act exempting taxicabs  and certain  other motor  vehicles                                                          
     from  the passenger vehicle  rental tax;  and providing  for an                                                            
     effective date."                                                                                                           
                                                                                                                                
In  addition,  the  amendment  deletes,  in  Section  1,  subsection                                                            
(2)(E), the word "or" on  page two, line two and inserts language on                                                            
page two,  line three following  the word  "taxicab." This  language                                                            
would read as follows.                                                                                                          
                                                                                                                                
     (E) a taxicab, [or]                                                                                                        
     (f)  a vehicle  that is  used exclusively  for  the hauling  or                                                          
     delivery of cargo;                                                                                                       
                                                                                                                                
Furthermore,  the amendment  inserts  new language  in Sec. 2,  page                                                            
two, line seven following "taxicabs" as follows.                                                                                
                                                                                                                                
     IMPLEMENTATION. The  Department of Revenue shall refund any tax                                                            
     collected  and remitted to the department under  AS 43.52.010 -                                                            
     43.52.099 on the rental  of taxicabs and other rentals that are                                                          
     exempt  from the passenger  vehicle rental  tax because  of the                                                          
     amendments  to AS 43.52.099(2)  made by  sec.1 of this  Act for                                                          
     rentals made on or after January 1, 2004,…                                                                               
                                                                                                                                
     New Text Underlined [DELETED TEXT BRACKETED]                                                                             
                                                                                                                                
Co-Chair Green  moved to rescind the March 9, 2004  Committee action                                                            
of adopting Amendment #1.                                                                                                       
                                                                                                                                
There  being  no  objection,   the  Committee  action   of  adopting                                                            
Amendment # 1 was RESCINDED.                                                                                                    
                                                                                                                                
Co-Chair  Wilken  specified, therefore,  that  HB 347,  Version  23-                                                            
LS1311\D is before the Committee.                                                                                               
                                                                                                                                
JAMES  BRENNAN,  Attorney,  representing  Anchorage  Taxicab  Permit                                                            
Owners Association, testified  via teleconference from Anchorage and                                                            
commented that he is available  to answer questions. He noted that a                                                            
copy  of his  April 7,  2004  letter [copy  on file],  addressed  to                                                            
Senator Wilken is included in Members' packets.                                                                                 
                                                                                                                                
Senator Olson  asked the Association's position on  the legislation.                                                            
                                                                                                                                
Mr. Brennan  responded that the Association  "is strongly  in favor"                                                            
of this legislation  as the tax "accidentally"  imposed a  burden on                                                            
taxicab  drivers.   He  explained  that  the  sponsor   of  the  tax                                                            
legislation that  was adopted the previous year, were  unaware that,                                                            
"imbedded   in  the  Anchorage  taxicab   industry"  was   a  rental                                                            
arrangement in which independent  drivers rent their taxicab vehicle                                                            
from "an  operator,"  who maintains  the taxicab  and pays for  such                                                            
things as liability insurance.  Therefore, he continued, the taxicab                                                            
drivers  rent the  vehicle and  are therefore  subject  to the  ten-                                                            
percent  tax.  Furthermore,  he  detailed  that  these  rentals  are                                                            
considered  daily rentals.  He  shared that  there  are 158  general                                                            
permits and that a taxicab  could be rented out for both a day shift                                                            
and night  shift. In all  cases, he continued,  the taxicab  drivers                                                            
are local Anchorage  residents. He stated that it  came to "a shock"                                                            
to  the  bill's  sponsor,  Representative  Pete  Kott,  and  to  the                                                            
Department  of Revenue that these  drivers would be subject  to this                                                            
tax. Therefore, he urged  that this legislation be adopted to remove                                                            
this burden from taxicab drivers.                                                                                               
                                                                                                                                
Co-Chair Wilken surmised  therefore, that the testifier is "strongly                                                            
in favor" of the legislation.                                                                                                   
                                                                                                                                
Mr. Brennan concurred.                                                                                                          
                                                                                                                                
The bill was HELD in Committee.                                                                                                 
                                                                                                                                

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