Legislature(1993 - 1994)
03/17/1994 03:00 PM House L&C
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 509 - INCREASE MOTOR FUEL TAX Number 425 BRUCE CAMPBELL, Commissioner, Department of Transportation, testified in support HB 509. He commented that Mr. Stansby's figures of $82 million as the amount of revenue generated by passage of HB 509 is different than the $109 million figure his agency shows. COMMISSIONER CAMPBELL stated that the funds generated by HB 509 are not dedicated funds. However, he was supportive of the language the administration calls "pseudo dedicated funds" that states that the proceeds of the tax shall be deposited in a special highway fuel tax account within the general fund. Commissioner Campbell stated that this type of language is found in three or four other funds he's familiar with and the legislature has only appropriated out of these accounts for the particular purpose they were set up for. COMMISSIONER CAMPBELL stated that this type of set-up would not be truly a dedicated fund in a constitutional sense; at least it would be in a practical sense. The administration felt this scenario could work and would save money by not having to get a constitutional amendment. COMMISSIONER CAMPBELL added that he believes that a major raise in the fuel tax is important because the revenue generated would nearly fund the budget of the Department of Highways. COMMISSIONER CAMPBELL explained to the committee that the State of Alaska is considered a recipient state; the state receives $600.00 for every dollar the state pays in federal fuel and excise taxes. He added that Alaska is the highest state in the union in the disproportionate ratio. The donor states are joining together to change the way the federal monies are proportioned. Alaska would lose in this scenario. Commissioner Campbell noted that one of the things he hears during meetings with other transportation and highway officials is that Alaska is the biggest recipient of federal aid and has one of the lowest gas taxes. COMMISSIONER CAMPBELL concluded by saying that this is going to be an issue our congressional delegation will have to deal with. Number 496 RESA JERREL, Lobbyist, National Federation of Independent Business, testified against HB 509. She reiterated her earlier testimony regarding HB 413 and the NFIB's position that they want the state government spending under control before any taxes are passed. Number 500 PAUL DICK, Department of Revenue, testified that the fiscal note the Department of Revenue offered was $82.2 million, using the current level of consumption. Number 521 REP. PORTER asked if the department looked back to 1983 when the last tax increase took place to see what happened. MR. DICK responded that he did not. CHAIRMAN HUDSON asked what the average Alaskan's cost increase would be if HB 509 passed. Number 545 REP. MULDER asked if Mr. Dick had any idea why there was a discrepancy between figures of the Departments of Transportation and Revenue. He also asked what the total revenue would be if the tax were doubled and not tripled. Number 550 MR. DICK replied that he had not had a chance to look at DOT's figures, but would get together with them to figure out the differences. Mr. Dick stated that doubling the current tax rate would result in revenues of approximately $40 million. Number 556 MARK HICKEY, Valdez Creek Mine, testified against HB 509. Mr. Hickey stated that the mine is located 70 miles on the Denali Highway about 70 miles east of Cantwell. He stated that four years ago they reached an agreement with the Department of Transportation to share the cost of winter maintenance of the road. MR. HICKEY stated that the mine is not opposed to a doubling of the tax, but not a triple increase. They would also like to see the tax be dedicated to highway maintenance. MR. HICKEY noted a side effect of the proposal that is troubling for the mine and that is called the off-highway tax. Currently Alaskans pay an off-highway tax of eight cents per gallon and receive a rebate of six cents. He said HB 509 eliminates the rebate and actually raises the off- highway tax to 17 cents. This would be a 3% increase in the cost of doing business for the mine. MR. HICKEY proposed a solution that would eliminate the increased tax on off-highway usage. TAPE 94-26, SIDE A Number 001 CHAIRMAN HUDSON stated that he was leaning towards supporting the increased gas tax, but not as high as the administration is asking for. He added that he liked the language in the bill that doesn't dedicate the funds but strongly favors appropriation towards highway facilities. Number 061 REP. PORTER declared a conflict of interest due to the fact that he ran a company that provided security for the mine Mr. Hickey is representing and is still a consultant for that company. CHAIRMAN HUDSON stated that the committee recognizes that and does not believe it is in conflict. CHAIRMAN HUDSON asked for comments from the committee regarding passage of HB 509. Number 075 REP. MULDER stated that his constituents want the funds to be dedicated to highway maintenance and not to go into the general fund. He added that he could live with the proposal of an increase to 17 cents as long as it was dedicated. Number 113 REP. WILLIAMS stated he didn't have any comment at this time. Number 116 REP. SITTON stated that he did not want to see any tax measures until the budget situation was figured out. Number 120 REP. PORTER stated that he thinks it's appropriated to move these bills in order to give the Finance Committee all the tools required to make their decisions. Number 138 CHAIRMAN HUDSON stated that he believes the legislature will make some significant reductions in the budget this year and he believes the tax bills should go forward to give the legislature all the tools necessary. However, he does not want to see the gas tax be tripled as this bill calls for. Number 179 REP. MULDER moved Amendment 1 to HB 509 to reflect a 17 cent increase as opposed to a 25 cent increase. No objections were heard; it was so ordered. Number 198 REP. SITTON moved Amendment 2 to HB 509 on page 2, line 21, adding a new section increasing the refund on the tax for non-highway use. Number 220 REP. PORTER moved CSHB 509(L&C) with adjusted fiscal note and individual recommendations. No objections were heard; it was so ordered. Number 230 CHAIRMAN HUDSON adjourned the meeting at 4:52 p.m.
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