Legislature(1999 - 2000)
02/16/1999 01:35 PM TRA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SB 64-MOTOR VEHICLE REGISTRATION FEES MS. JUANITA HENSLEY, Administrator, Division of Motor Vehicles stated that SB 64 and its companion bill, HB 73, correct an oversight made last year in HB 404. HB 404, in switching fees from trailers to the registration of the trucks omitted the collection of municipal taxes by DMV. She said that SB 64 corrects that. It also adds a time frame of Jan 1 - March 31, 1999 during which DMV would continue to collect the registration fees, raise the fees and phase out the trailers to give time for the industry and municipalities to work together on a solution. SB 64 and HB 73 correct the problem of municipal tax collection. Number 048 SENATOR MILLER remarked that another unintended consequence of HB 404 last year affected the tour buses that come to Alaska once or twice a year, with the bus operators caught short by the increased fees. He asked Ms. Hensley, for the record, if this bill does not increase those fees over last year's level. He acknowledged that the department worked with the industry to mitigate some of the problems this was causing. Number 065 MS. HENSLEY replied last year's bill included a temporary or trip permit for the out-of-state commercial vehicles traveling inside the state. Some of the tour bus industry were caught by surprise at having to pay $350 at the Tok way station for a 30-day temporary permit. They had an option of either paying that trip permit or registering the bus for $168 for a 2-week period. Many have chosen the 2-week registration. A private industry in Tok contracts with the state to provide the service. This bill does not address those trip permits at all, which is still in statute. This deals strictly with the registration of in-state trucks. Number 100 MR. FRANK DILLON, Alaska Trucking Association, a forty year old trade association representing Alaska's truck users geograph- ically throughout the state, spoke in support of SB 64. He said that this bill corrects last year's problem that would have eliminated a revenue stream to municipalities who collect a local municipal motor vehicle tax. HB 404 was intended to be revenue neutral. SB 64 and its companion bill represent a cooperative effort resulting from meetings with the independent truckers, the municipalities, the trucking industry and the Teamsters to come up with a way to replace that money to municipalities. It was agreed that a $75 increase in the two heaviest classes of commercial vehicles, those 12,000# and 18,000# and up, would cover all of the trailer lost revenues to the 13 municipalities which collect this local tax. MR. DILLON stated the bill reiterates the current fees that will be sunsetted March 30, 1999 if SB 64 is not enacted. The only new change is the $75 increase on those two heaviest vehicles. He added that some of the independent truckers feel this is an unfair increase. The heaviest weight classes that do not pull a trailer would see an increase without a direct benefit. Only a handful of independent truckers operate a flatbed or dump truck without pulling a trailer. He calculated that an average year for construction truckers, with the current high volume of federal and state funded projects, would amount to 3.5 to 4 cents an hour for the operation of their truck, which can gross $70.0 to $100.0 a year. He concluded that the adjustment in operating expenses without a direct benefit would be minimal. MR. DIllON said the state would benefit by at least $100.0. Those truck fleets that operate multiple trailers would benefit substantially by not having to track down hundreds of trailers they currently put an annual sticker on, and instead, writing the check producing the same revenue to the state, with a permanent plate affixed to those trailers. The truck fleets currently operate under the schedule in SB 64, and the state has been issuing at least a couple thousand permanent trailer plates. He stated his association would like to see this continue and meet the difficult time line of March 30 for completion, or the sunset provision of HB 404 will go into effect, taking them back to "square one" with difficult questions to answer, including: how do you get back the permanent plates, how do you refund the money for the trucks that have registered under the new schedule, as well as other operating problems. He encouraged the committee to pass out SB 64. LISA MARKQUISS of Carlisle Enterprises, a trucking company based in Anchorage, stated they transport several different types of trailer equipment, totaling about 500 pieces. She said that Carlisle Enterprises supports SB 64 for the reasons Mr. Dillon mentioned. Their biggest concerns are administration and shop labor to match tags to so much equipment. MR. JIMMY DOYLE, Vice President of Weaver Brothers Trucking, an ongoing trucking operation in Alaska since 1947, stated that his company has a large number of trucks and trailers. He has reviewed and helped draft the bill. He supports SB 64 because it is revenue neutral for the state, it has direct benefits to the state with the decrease in yearly tag distribution, and for its advantages to the trucking industry. It also addresses the unintended consequences of last year's bill. Number 221 MS. BARBARA HUFF TUCKNESS, Teamsters Local 959, referred to the letter to the committee from Jerry Hood dated February 11 which outlines the Teamsters' support for SB 64. She said that Peter Blanoff, a Teamster who testified last week on the House side, could not testify in Senate Transportation today, but he commented off the record that independent truckers could not afford the $75 increase. He was concerned about the potential safety of those trucks running on the highway. She stated the Teamsters go on record in support of SB 64, because from an overall industry perspective it will bring a savings that all can or should enjoy later on. Number 249 SENATOR HALFORD asked Chairman Ward if the committee had the department go through the bill. CHAIRMAN WARD responded yes. SENATOR HALFORD brought up an example of a constituent who leases his personal family car but because it's leased, it's considered a commercial vehicle and he pays a commercial rate. When his staff talked to the department, they couldn't provide the total number of people affected. SENATOR HALFORD asked Ms. Hensley what the department's position would be if the committee tried to amend the bill to ensure that a car leased as a home vehicle would not be paying the commercial rate. He assumed, by the increase in advertisements by dealers, the leases are increasing. MS. HENSLEY replied that the division has looked on it as if the vehicle is being leased like a rental car. The person leasing the vehicle should be negotiating with the company to pay those commercial fees since it is a commercial vehicle, and they are deriving their income from it. SENATOR HALFORD responded that in the Ford Motor credit company's leasing program, those costs will be passed on to consumer, who, in this case, is really a noncommercial consumer. Number 281 MR. CHUCK HOSACK, Deputy Director of DMV, addressed Senator Halford's concern via teleconference. He stated that the leased vehicles are registered in the company name of the leasing corporation, and as a commercial operation are required to pay commercial fees on those vehicles whether it's a passenger car or heavy truck. The contract between the person who's using the car and the leasing company often includes a requirement to pay the registration fees. The company is using the vehicle in a business so they pay the higher fees; that's the way the law is currently written. CHAIRMAN WARD asked Mr. Hosack if he knows what the total volume might be. MR. HOSACK replied that he does not have numbers on leased vehicles because they are registered as commercial vehicles. SENATOR HALFORD stated that he feels this is unfair at the consumer level. He said he would defer to the committee, because he supports the bill as it's drafted, but he asserted that this is the place to change that. He requested that the department tell the committee what the fiscal note of that change would be. He said he wants the bill to pass, but there is a basic injustice in the treatment of personal use leased vehicles. CHAIRMAN WARD asked Senator Halford if he has an amendment to address this. SENATOR HALFORD said that he does, but that he did not want to offer the amendment without having the department understand. He was unable to get an answer from DMV regarding cost. CHAIRMAN WARD clarified that the bill goes to Finance. SENATOR HALFORD said he does not want to slow the bill down, but the committee could put the amendment on the bill and have Finance look at it. Number 313 SENATOR PEARCE asked Senator Halford whom he would make respons- ible for policing whether the vehicle is being used for personal use or for commercial use. SENATOR HALFORD replied if it is leased to an individual, and it's a vehicle traditionally used as an individual vehicle; but he said he does not know the answer. He asked Ms. Hensley if you license a vehicle in your personal name that would otherwise qualify under these commercial weight categories, do you pay the commercial weight categories? MS. HENSLEY answered yes, you would pay the commercial weight. She referred to page 1, line 14, and said that for a passenger car you would pay $158 as opposed to $100. The car is registered to the owner, Ford Motor Company, with the lessee's name on it. SENATOR HALFORD clarified that he means on this whole schedule, if it's a noncommercial individual. MS. HENSLEY replied they would pay this amount as well, because a leased vehicle is considered to be a commercial vehicle. SENATOR HALFORD stated it would be policed the same way the department polices the difference between commercial and non- commercial vehicles now. He again asked how the department determines whether a vehicle is commercial or noncommercial. MS. HENSLEY replied it is the way the vehicle is registered. If it's registered in a company name, it's considered a commercial vehicle; if registered in a conference name, it's considered a private vehicle. (The Capitol Building fire alarm sounded, disrupting the proceedings) SENATOR HALFORD offered his amendment. The text follows. Page 2, line 18: Delete "a new subsection" Insert "new subsections" Page 2, following line 20: Insert a new subsection to read: "(j) For purposes of this section, a leased vehicle that is not used by the lessee for commercial purposes shall be registered as a noncommercial vehicle." SENATOR HALFORD moved the amendment. There being no objection, the amendment was adopted. SENATOR HALFORD moved CSSB 64(TRA) from committee with individual recommendations. There being no objection, it was so ordered and CHAIRMAN WARD adjourned the meeting at 1:55 p.m.