HOUSE BILL NO. 56 "An Act excluding motorcycles and motor-driven cycles from the passenger vehicle rental tax; and providing for an effective date." JAMES WALDO, STAFF, REPRESENTATIVE LINDSEY HOLMES, explained that the bill would eliminate the passenger vehicle rental for the purposes of motorcycle rentals. He noted the motorcycle rentals contributed to a small portion of the passenger vehicle rental tax. He relayed that when the tax was originally passed by the legislature motorcycles had not been considered. The legislature had exempted recreation vehicles such as RV rentals from the 10 percent tax. He asserted that motorcycles were rented for recreational tourism only and only during certain times of the year. He stated that the cost of rental a motorcycle was significantly higher than renting a car. Motorcycles were rented for approximately $200 per day, which made the 10 percent tax, over a 10 day excursion, nearly as much as another day's rental. Travelers that rented motorcycles stayed in hotels and eat in restaurants, thus already contributing to the states local sales and bed taxes. Elimination of the tax would aid people in growing motorcycle rental businesses in the state and would bring more independent travelers into the state for extended visits. 10:03:32 AM Co-Chair Meyer noted that the bill sponsor had been amicable to a smaller tax amount, but once the total amount of the smaller tax was examined it was clear that the cost to collect the tax would surpass the revenues it would generate. 10:04:13 AM Co-Chair Meyer wondered about the impetus for the legislation. Mr. Waldo responded that the concept was introduced by the motorcycle rental businesses. The Department of Revenue had only decided a few years prior to tax the businesses, which had been a surprise to the industry. The department had originally asked for back taxes for the previous 19 years that they had been collection the passenger vehicle rental tax, but had decided against the punitive measure. 10:05:48 AM Senator Bishop wondered if snow machine rentals were taxed. BRANDON SPANOS, AUDIT SUPERVISOR, TAX DIVISION, DEPARTMENT OF REVENUE (via teleconference), testified that he was unsure whether snow machines were taxed. He offered to get back to the committee with the information. 10:06:52 AM Co-Chair Meyer though that the tax would pertain to snow machines. Mr. Spanos understood that the tax was for highway use vehicles. 10:07:14 AM NANCY HULL, ALASKA MOTORCYCLE ADVENTURES, MAT-SU VALLEY (via teleconference), testified in support of HB 56. 10:09:29 AM Co-Chair Meyer noted that Ms. Hull had submitted written testimony as well(copy on file). 10:09:48 AM Co-Chair Meyer CLOSED public testimony. 10:10:01 AM Vice-Chair Fairclough noted the fiscal note reflected the loss of revenue of $12,000 per year from FY15 and into future years. 10:10:29 AM Vice-Chair Fairclough MOVED to REPORT HB 56 out of committee with individual recommendations and the accompanying fiscal note. There being NO OBJECTION, it was so ordered. HB 56 was REPORTED out of committee with a "do pass" recommendation and with previously published fiscal impact note: FN1 (REV). 10:10:59 AM Vice-Chair Fairclough wondered if an amendment for HB 30 could be considered at the 1:30pm meeting. Co-Chair Meyer said yes.