1994-02-18                     House Journal                      Page 2458
HB 509                                                                       
HOUSE BILL NO. 509 by the House Rules Committee by request of                  
the Governor, entitled:                                                        
                                                                               
"An Act relating to the tax on transfers or consumption of motor              
fuel, and to the proceeds from the tax; and providing for an                   
effective date."                                                               
                                                                               
was read the first time and referred to the Labor & Commerce, State            
Affairs and Finance Committees.                                                
                                                                               
The following fiscal notes apply:                                              
                                                                               
Fiscal note, Dept. of Revenue, 2/18/94                                         
Zero fiscal note, Dept. of Environmental Conservation, 2/18/94                 
Zero fiscal note, Dept. of Transportation & Public Facilities, 2/18/94         
                                                                               
                                                                               
The Governor's transmittal letter, dated February 18, 1994, appears            
below:                                                                         
                                                                               
"Dear Speaker Barnes:                                                          
                                                                               
Under the authority of art. III, sec. 18, of the Alaska Constitution, I am     
transmitting a bill raising the tax rate on transfers or consumption of        
motor fuel.  The bill would bring our tax rate more in line with that of       
other states and raise much-needed revenue for highway maintenance.            
Additionally, the bill would make certain changes regarding the                
proceeds from the tax.                                                         
                                                                               

1994-02-18                     House Journal                      Page 2459
HB 509                                                                       
Alaska is one of only three states with motor fuel tax rates of less than      
10 cents per gallon (Georgia, seven and one-half cents; Alaska, eight          
cents; and Wyoming, nine cents).  The mean national tax rate on motor          
fuel is 18.66 cents.  The tax rates in other western states on motor fuel      
are:  Washington, 23 cents; Oregon, 24 cents; Idaho, 21 cents;                 
Colorado, 22 cents; California, 17 cents; and Nevada, 24 cents.                
                                                                               
The bill would raise the motor fuel tax rate for most fuels to 25 cents        
per gallon.  Aviation fuel and fuel used in and on watercraft would            
remain at their current rates as set by statute.                               
                                                                               
One cent of the 25-cent tax would go into a special "storage tank              
assistance" account in the general fund, added by sec. 4 of the bill.          
The legislature may appropriate from this account into the storage tank        
assistance fund established by AS46.03.410.  That fund provides                
grants, testing, and site analysis to owners and operators of                  
underground petroleum storage tanks.                                           
                                                                               
Currently, anyone who uses motor fuel, other than aviation fuel or fuel        
for watercraft, in any engine other than a motor vehicle licensed for          
the public highways is entitled to a refund of six cents of the existing       
eight-cent tax.  The refund would remain at the current statutory rate         
of six cents.                                                                  
                                                                               
I urge your prompt consideration and passage of this important bill.           
                                                                               
										Sincerely,                                                           
										/s/                                                                  
										Walter J. Hickel                                                     
										Governor"