Legislature(1999 - 2000)

02/16/1999 01:35 PM TRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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             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.                                                                                

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