2017-01-18                     Senate Journal                      Page 0036
SB 25                                                                                                                         
SENATE BILL NO. 25 BY THE SENATE RULES COMMITTEE                                                                                
BY REQUEST OF THE GOVERNOR, entitled:                                                                                           
                                                                                                                                
          "An Act relating to the motor fuel tax; relating to the                                                               
          disposition of revenue from the motor fuel tax;                                                                       
          relating to a transportation maintenance fund; and                                                                    
          providing for an effective date."                                                                                     
                                                                                                                                
was read the first time and referred to the Transportation and Finance                                                          
Committees.                                                                                                                     
                                                                                                                                
The following fiscal information was published today:                                                                           
Fiscal Note No. 1, Department of Revenue                                                                                        
Fiscal Note No. 2, zero, Department of Transportation and Public                                                                
 Facilities                                                                                                                     
                                                                                                                                
Governor's transmittal letter dated January 17:                                                                                 
                                                                                                                                
Dear President Kelly:                                                                                                           
                                                                                                                                
Under the authority of Article III, Section 18 of the Alaska                                                                    
Constitution, I am transmitting a bill relating to the taxation of motor                                                        
fuels.                                                                                                                          
                                                                                                                                
The bill would raise the tax rates on the categories of motor fuel                                                              
currently taxed under AS 43.40.010 (motor fuel tax) by increasing the                                                           
currently outdated tax rates on motor fuels, including all motor fuel                                                           
sold or transferred within the state, aviation gasoline, aviation fuel                                                          
other than gasoline and motor fuel used in and on watercraft. The tax                                                           
increase would be phased in, with a first increase effective July 1,                                                            
2017, and the second increase effective July 1, 2018. The two-part                                                              
implementation approach in the bill will assist in easing the transition                                                        
to a more practical tax base.                                                                                                   
                                                                                                                                
While the proposed tax increase may appear to represent a significant                                                           
increase, the tax rates on motor fuel sold or transferred within the state                                                      
have not been raised in many years; for example, the tax on highway                                                             
fuel has remained at eight cents a gallon since 1970. This bill would                                                           
bring Alaska's tax rate on highway fuel very close to the current                                                               
national average of 25 cents a gallon.