03/26/1994 08:00 AM House STA

  CSSJR 46 - WAIVE IRS DIESEL FUEL DYE RULE                                    
                                                                               
  CHAIRMAN VEZEY opened CSSJR 46 for discussion.                               
                                                                               
  Number 605                                                                   
                                                                               
  DAVE THOMPSON, STAFF, SENATOR RICK HALFORD, gave the sponsor                 
  statement.  He stated, due to the IRS passage of the 1993                    
  Ombudsman Reconciliation Act, 95 percent of the diesel fuel                  
  in Alaska has to have dye added to it.  Originally, blue dye                 
  was requested; however, the Federal Aviation Administration                  
  (FAA) pointed out it is too similar to AV gas 100.  They had                 
  the same problem with red dye.  He noted CSSJR 46 would                      
  eliminate the dying process entirely, for two reasons:  1)                   
  FAA safety concerns; and 2) logistics in rural areas make it                 
  very difficult to put dye in diesel fuel.  He stated there                   
  were at least three federal agencies, as well as Alaska                      
  state agencies, who are involved in waiving the dye                          
  requirement.  CSSJR 46 would state the support of the                        
  legislature in pursuing the waiver.                                          
                                                                               
  Number 626                                                                   
                                                                               
  CHAIRMAN VEZEY felt the title of CSSJR 46 might be improper                  
  because it states "nontaxable diesel fuel."  He noted diesel                 
  fuel is a motor fuel, thereby being taxable.  Heating fuel                   
  is not taxable.  He asked if there had been discussion on                    
  that point.                                                                  
                                                                               
  MR. THOMPSON responded the question had not come up.  He                     
  noted CSSJR 46 was the first draft by Legislative Affairs.                   
                                                                               
  Number 639                                                                   
                                                                               
  CHAIRMAN VEZEY stated he did not believe there was a legal                   
  definition of diesel.                                                        
                                                                               
  Number 642                                                                   
                                                                               
  REPRESENTATIVE G. DAVIS pointed out the first WHEREAS                        
  indicates that the Omnibus Budget Reconciliation Act of 1993                 
  "requires dyeing of diesel fuel that is exempt from the                      
  federal diesel fuel tax;..."                                                 
                                                                               
  CHAIRMAN VEZEY replied he could be wrong, but the question                   
  dealt with usage.  He thought it might be a point to bring                   
  up.                                                                          
                                                                               
  Number 658                                                                   
                                                                               
  REPRESENTATIVE KOTT moved to pass CSSJR 46 from committee                    
  with individual recommendations with accompanying zero                       
  fiscal note.                                                                 
                                                                               
  IN FAVOR:      REPRESENTATIVES VEZEY, KOTT, B. DAVIS,                        
                 G. DAVIS                                                      
  ABSENT:        REPRESENTATIVES ULMER, OLBERG                                 
                                                                               
  (REPRESENTATIVE SANDERS indicated he was in favor via                        
  Anchorage teleconference.)                                                   
                                                                               
  MOTION PASSED                                                                
                                                                               
  CHAIRMAN VEZEY called for a recess at 8:52 a.m.  The meeting                 
  reconvened at 9:00 a.m.