2008-07-09                     House Journal                      Page 3201
HB 4004                                                                                                                       
HOUSE BILL NO. 4004 by the House Rules Committee by request of                                                                  
the Governor, entitled:                                                                                                         
                                                                                                                                
     "An Act suspending the motor fuel tax; and providing for an                                                                
     effective date."                                                                                                           
                                                                                                                                

2008-07-09                     House Journal                      Page 3202
was read the first time and referred to the Labor & Commerce and                                                                
Finance Committees.                                                                                                             
                                                                                                                                
                                                                                                                                
The following fiscal note(s) apply:                                                                                             
                                                                                                                                
1.  Fiscal, Dept. of Revenue                                                                                                    
                                                                                                                                
                                                                                                                                
The Governor's transmittal letter dated July 8, 2008, follows:                                                                  
                                                                                                                                
"Dear Speaker Harris:                                                                                                           
                                                                                                                                
Under the authority of art. III, sec. 18, of the Alaska Constitution, I am                                                      
transmitting a bill that would provide a one-year suspension of the                                                             
state motor fuel tax.  The tax applies to gasoline, aviation gasoline,                                                          
aviation ("jet") fuel, and marine motor fuel.                                                                                   
                                                                                                                                
Alaskans face some of the highest fuel prices in the nation.  These                                                             
high prices affect passenger travel and the cost of just about                                                                  
everything we use or consume.  Alaskans are particularly vulnerable to                                                          
high fuel costs.                                                                                                                
                                                                                                                                
Most goods have to be shipped very long distances to get to store                                                               
shelves in Alaska.  Each year, hundreds of thousands of containers                                                              
carrying items Alaskans use every day have to be shipped by sea or                                                              
truck 2,000 miles or more just to reach our population center in                                                                
Anchorage.  From there, goods must be shipped again to the many                                                                 
Alaska communities (roughly 82 percent) that can only be reached by                                                             
air transportation.  The reverse situation is also true as containers                                                           
carrying Alaska's exports and seafood are shipped south or overseas.                                                            
                                                                                                                                
This movement of goods over long distances consumes large amounts                                                               
of fuel and subjects Alaskans to a heavy impact from fuel price                                                                 
increases.                                                                                                                      
                                                                                                                                
Similarly, as aviation gas and jet fuel prices rise, air carriers are forced                                                    
to increase prices for passenger service.  This hinders the ability of                                                          
Alaskans to move between our remote communities and urban areas.                                                                
                                                                                                                                

2008-07-09                     House Journal                      Page 3203
Suspending the motor fuel tax is a step towards providing some relief                                                           
to Alaskans and the Alaska economy.  Some examples of benefits are:                                                             
                                                                                                                                
     · An Alaska fisherman putting around 2,000 hours a year on his                                                             
         engine and generator and using about 11 gallons per hour                                                               
         would save about $1,200.                                                                                               
     · A regional air carrier using 3,500,000 gallons of aviation                                                               
         gasoline a year would save roughly $164,500.                                                                           
                                                                                                                                
It is important to note that while suspending the motor fuel tax will                                                           
provide a temporary reduction in the cost of motor fuel, we still need                                                          
to work together to seek additional solutions to the energy cost issues                                                         
facing us.                                                                                                                      
                                                                                                                                
I urge your prompt and favorable action on the bill.                                                                            
                                                                                                                                
                                 Sincerely,                                                                                    
                                /s/                                                                                             
                                Sarah Palin                                                                                    
                                 Governor"