03/12/2020 01:00 PM House TRANSPORTATION

               SB 115-MOTOR FUEL TAX; EV REG FEES                                                                           
                                                                                                                                
1:12:41 PM                                                                                                                    
                                                                                                                                
CHAIR STUTES announced that the  first order of business would be                                                               
CS FOR  SENATE BILL  NO. 115(FIN)(efd fld),  "An Act  relating to                                                               
vehicle registration fees; and relating to the motor fuel tax."                                                                 
                                                                                                                                
1:13:21 PM                                                                                                                    
                                                                                                                                
CHAIR STUTES opened public testimony on CSSB 115(FIN)(efd fld).                                                                 
                                                                                                                                
1:13:46 PM                                                                                                                    
                                                                                                                                
WILLIAM HARRINGTON  testified in opposition  to SB 115.   He said                                                               
money  raised by  SB  115  would be  inconsequential  in the  big                                                               
picture  and taking  equal amounts  from  rich and  poor was  not                                                               
equal representation or taxation.                                                                                               
                                                                                                                                
1:16:23 PM                                                                                                                    
                                                                                                                                
JOE MICHEL,  Alaska Trucking Association, informed  the committee                                                               
Alaska Trucking  Association (ATA) has  endorsed fuel tax  in the                                                               
past.   He said ATA  members support SB  115 in general  but want                                                               
assurance that the money collected  would indeed be used for road                                                               
maintenance.                                                                                                                    
                                                                                                                                
1:17:38 PM                                                                                                                    
                                                                                                                                
KATHERINE WOOD testified in support of  SB 115.  She said looking                                                               
for additional revenue  sources was a better  idea than "touching                                                               
the  corpus" of  the Permanent  Fund  Dividend (PFD).   She  said                                                               
Alaska's infrastructure  is far behind  the rest of the  U.S. and                                                               
state funding  for transportation  was limited.   She  added that                                                               
transportation  infrastructure   underpins  regional   and  local                                                               
economies and  is crucial for  quality of life for  all Alaskans,                                                               
and the  state capital  budget for  transportation infrastructure                                                               
is "anemic at  best."  Federal highway  infrastructure appears to                                                               
be  stable, she  said, but  with the  federal highway  trust fund                                                               
depleted, the future is uncertain.   She opined there should be a                                                               
tax on electric  vehicles (EVs) calculated by  miles traveled, as                                                               
opposed to a flat fee per year.                                                                                                 
                                                                                                                                
1:20:47 PM                                                                                                                    
                                                                                                                                
CHAIR STUTES closed public testimony on CSSB 115(FIN)(efd fld).                                                                 
                                                                                                                                
1:20:55 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 1:20 p.m. until 1:21 p.m.                                                                    
                                                                                                                                
1:21:00 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  EDGMON moved  to adopt  Amendment 1,  labeled 31-                                                               
LS0895\K.A.7, Nauman, 3/12/20, which read as follows:                                                                           
                                                                                                                                
     Page 3, lines 22 - 30:                                                                                                     
          Delete all material and insert:                                                                                       
        "* Sec. 5. AS 43.40.030(a) is amended to read:                                                                      
          (a)  Except as specified in AS 43.40.010(j), a                                                                        
     person who uses motor fuel to operate                                                                                      
               (1)  an internal combustion engine is                                                                        
     entitled to a motor fuel tax refund of 12 [SIX] cents                                                                  
     a gallon if                                                                                                                
               (A) [(1)]  the tax on the motor fuel has                                                                     
     been paid;                                                                                                                 
               (B) [(2)]  the motor fuel is not aviation                                                                    
     fuel, or motor fuel used in or on watercraft; and                                                                          
               (C) [(3)]  the internal combustion engine is                                                                 
       not used in or in conjunction with a motor vehicle                                                                       
     licensed to be operated on public ways; or                                                                             
               (2)  a watercraft used for commercial                                                                        
     fishing is entitled to a motor fuel tax refund of five                                                                 
      cents a gallon if the tax on the motor fuel has been                                                                  
     paid."                                                                                                                 
                                                                                                                                
1:21:54 PM                                                                                                                    
                                                                                                                                
CHAIR STUTES objected, for the purpose of discussion.                                                                           
                                                                                                                                
1:22:02 PM                                                                                                                    
                                                                                                                                
SARA PERMAN,  Staff, Representative  Louise Stutes,  Alaska State                                                               
Legislature, presented  Amendment 1,  which updated Section  5 of                                                               
CSSB 115(FIN)(efd fld).  Amendment  1 would remove the additional                                                               
$.05 tax  for commercial fishing  vessels.  All  other watercraft                                                               
including cruise ships and tour  boats would still be required to                                                               
pay the additional tax, she added.                                                                                              
                                                                                                                                
1:23:18 PM                                                                                                                    
                                                                                                                                
CHAIR STUTES moved  to adopt Conceptual Amendment  1 to Amendment                                                               
1,   to  insert   the  following   language  between   the  words                                                               
"commercial fishing"  and "is entitled" in  the proposed language                                                       
of  paragraph  (2):   "that  has  a  valid license  issued  under                                                               
16.05.490 or 16.05.530".                                                                                                        
                                                                                                                                
1:24:44 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DRUMMOND objected, for  the purpose of discussion,                                                               
and asked whether the license applied only to Alaska licenses.                                                                  
                                                                                                                                
1:25:20 PM                                                                                                                    
                                                                                                                                
CHAIR  STUTES answered  that the  license  applied to  Commercial                                                               
Fisheries Entry  Commission (CFEC)-registered vessels and  that a                                                               
vessel  could be  from  outside Alaska  if it  had  a valid  CFEC                                                               
permit to fish in Alaska.                                                                                                       
                                                                                                                                
1:25:35 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  STORY  said she  understood  the  reason for  the                                                               
amendment, especially due to the Chinese tariffs.                                                                               
                                                                                                                                
1:25:52 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DRUMMOND  removed  her  objection  to  Conceptual                                                               
Amendment 1  to Amendment 1.   There being no  further objection,                                                               
it was so ordered.                                                                                                              
                                                                                                                                
1:26:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TALERICO  asked to  hear the  opinion of  the bill                                                               
sponsor's staff on Amendment 1, as amended.                                                                                     
                                                                                                                                
1:26:45 PM                                                                                                                    
                                                                                                                                
DARWIN  PETERSON,  Staff,  Senator  Click  Bishop,  Alaska  State                                                               
Legislature, on behalf  of Senator Bishop, prime  sponsor of CSSB
(FIN)(efd fld), responded that the  amendment was not what the                                                               
sponsor  wanted  but  that  he  would respect  the  will  of  the                                                               
committee.                                                                                                                      
                                                                                                                                
1:27:13 PM                                                                                                                    
                                                                                                                                
CHAIR STUTES  removed her objection  to Amendment 1,  as amended.                                                               
There being no further objection, it was so ordered.                                                                            
                                                                                                                                
1:27:39 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 1:27 p.m. to 1:28 p.m.                                                                       
                                                                                                                                
1:28:13 PM                                                                                                                    
                                                                                                                                
CHAIR STUTES  clarified that  Amendment 1,  as amended,  had been                                                               
adopted.                                                                                                                        
                                                                                                                                
1:28:32 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STORY,  referencing Mr. Michel's  testimony, asked                                                               
how revenue  generated by SB  115 would  be certain to  go toward                                                               
road maintenance.                                                                                                               
                                                                                                                                
1:30:43 PM                                                                                                                    
                                                                                                                                
ROB CARPENTER, Deputy  Commissioner, Department of Transportation                                                               
& Public Facilities, replied that  revenue would be designated by                                                               
statute to go toward road maintenance,  but it would be up to the                                                               
legislature to appropriate the money.                                                                                           
                                                                                                                                
1:31:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TALERICO asked  whether [revenue  generated] fell                                                               
under what was considered receipt authority.                                                                                    
                                                                                                                                
MR.  CARPENTER replied  that it  would not,  as it  was a  tax on                                                               
users, whereas  receipts were established to  cover operations of                                                               
a division.                                                                                                                     
                                                                                                                                
REPRESENTATIVE TALERICO  said that most of  his constituents were                                                               
in opposition to CSSB 115(FIN)(efd fld).                                                                                        
                                                                                                                                
1:33:39 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  EDGMON said  he thought  it took  courage to  put                                                               
CSSB 115(FIN)(efd  fld) before the  public, because no  one liked                                                               
paying  additional   taxes.    He   said  he  saw   the  proposed                                                               
legislation as bringing Alaska into  the modern era, and although                                                               
it  wasn't   necessarily  "likeable,"  the   services  additional                                                               
taxation would provide would benefit Alaskans.                                                                                  
                                                                                                                                
1:35:36 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CLAMAN said that  his constituents had suggested a                                                               
higher increase,  especially if it was  going to take so  long to                                                               
implement  change.     He  added   that  while   supporting  CSSB
(FIN)(efd fld) was not exactly  easy, because no one wanted to                                                               
raise taxes, he saw it not only  as a positive step for roads but                                                               
a positive step for the future of Alaskan communities.                                                                          
                                                                                                                                
1:37:36 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DRUMMOND  asked how much the  refund to commercial                                                               
fishing  vessels in  Amendment  1, [as  amended],  would mean  to                                                               
projected revenue.                                                                                                              
                                                                                                                                
1:38:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE EDGMON  replied that  $5 million of  the projected                                                               
$33 million  was tied to marine  fuel but within that  $5 million                                                               
it  was anyone's  guess  how many  fishermen  would complete  the                                                               
necessary paperwork to receive the refund.                                                                                      
                                                                                                                                
1:38:52 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DRUMMOND   commented  that   the  lack   of  road                                                               
maintenance and,  therefore, repair  costs, were harder  on lower                                                               
income families who tended to drive older vehicles.                                                                             
                                                                                                                                
1:40:34 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE EDGMON moved to report  CSSB 115(FIN)(efd fld), as                                                               
amended,  out of  committee with  individual recommendations  and                                                               
the accompanying  fiscal notes.   There  being no  objection, HCS                                                               
CSSB  115(TRA)  was  reported out  of  the  House  Transportation                                                               
Standing Committee.