Legislature(2017 - 2018)BARNES 124

02/21/2017 01:30 PM TRANSPORTATION

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 60 MOTOR FUEL TAX;TRANSPORTATION MAINT. FUND TELECONFERENCED
Heard & Held
Presentation: Committee Substitute
*+ HB 131 RELOCATION ASSISTANCE FOR FED. PROJ/PROG TELECONFERENCED
Heard & Held
*+ HB 117 ART PUBLIC FACILITIES: EXEMPT ST. FERRIES TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
        HB 60-MOTOR FUEL TAX;TRANSPORTATION MAINT. FUND                                                                     
                                                                                                                                
1:34:05 PM                                                                                                                    
                                                                                                                                
CO-CHAIR WOOL  announced that the  first order of  business would                                                               
be HOUSE  BILL NO. 60,  "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."                                                                                                             
                                                                                                                                
1:34:30 PM                                                                                                                    
                                                                                                                                
CO-CHAIR STUTES moved to adopt  the proposed committee substitute                                                               
(CS)  for  HB 60,  Version  30-GH1794\D,  Nauman, 2/20/17,  as  a                                                               
working  document.   There  being  no  objection, Version  D  was                                                               
before the committee.                                                                                                           
                                                                                                                                
1:35:07 PM                                                                                                                    
                                                                                                                                
LAURA STIDOLPH,  Staff to Representative Adam  Wool, Alaska State                                                               
Legislature, discussed  changes to  HB 60 proposed  under Version                                                               
D.   She said that the  first change is  in the title on  page 1,                                                               
line  2, and  it inserts  "establishing" after  "fuel tax".   She                                                               
explained that  the change in the  title makes it clear  that the                                                               
Transportation   Maintenance   Fund   ("the   fund")   is   being                                                               
established under HB  60.  Ms. Stidolph continued  that Section 1                                                               
is new and it is  legislative intent language that clarifies that                                                               
each subaccount of  the fund (motor fuel,  aviation/jet fuel, and                                                               
marine  fuel)   be  used  specifically  for   infrastructure  and                                                               
expenses  related to  each user  group.   She explained  that Co-                                                               
Chairs  Wool and  Stutes wanted  the intent  of this  bill to  be                                                               
clear  to ensure  that all  revenue  generated would  be used  to                                                               
improve roads, highways, harbors, ports, airports, and ferries.                                                                 
                                                                                                                                
MS. STIDOLPH  explained that the  next five changes were  made to                                                               
Sections 7, 8, 9,  10, and 11 to ensure funds  cannot be used for                                                               
anything other than that which  they are specified.  She declared                                                               
that funds do not lapse and  remain available for the next fiscal                                                               
year.   She explained the intent  for this was so  the Department                                                               
of  Transportation &  Public Facilities  (DOT&PF)  would have  to                                                               
build  and  maintain infrastructure  for  each  user group  being                                                               
taxed.                                                                                                                          
                                                                                                                                
1:37:09 PM                                                                                                                    
                                                                                                                                
MATT GRUENING, Staff, Representative  Louise Stutes, Alaska State                                                               
Legislature,  stated that  the language  in Section  12, page  6,                                                               
lines 26-27,  of Version D  was added  to allow an  exemption for                                                               
commercial  fishing  watercraft.   He  noted  that a  mistake  in                                                               
drafting Version  D resulted in  the use of the  term "commercial                                                               
watercraft"; the  correct term should be  ["watercraft engaged in                                                               
commercial fishing"].  He explained  the reason for the exemption                                                               
was because a  fisheries tax would be forthcoming  next year, and                                                               
commercial fishermen  are a user  group that would be  double hit                                                               
by both  the fuel  tax increase and  the upcoming  fisheries tax.                                                               
Mr.  Gruening  explained  the  reason  for  specifying  that  the                                                               
watercraft are  engaged in commercial  fishing is so  that barges                                                               
and cruise  ships would  not be  included in  the exemption.   He                                                               
said that although  commercial fisherman would be  eligible for a                                                               
three-cent  rebate, they  would still  have an  overall increase.                                                               
He clarified  that the user  group currently pays five  cents per                                                               
gallon,  under  the proposed  legislation  that  amount would  be                                                               
doubled  to  [10 cents],  and  then  with the  rebate  commercial                                                               
fisherman would be paying seven cents per gallon in fuel tax.                                                                   
                                                                                                                                
1:38:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NEUMAN  offered his  understanding that it  is the                                                               
intent to  carve out a  special reduction for  commercial fishing                                                               
watercraft.                                                                                                                     
                                                                                                                                
MR. GRUENING answered that is correct.                                                                                          
                                                                                                                                
REPRESENTATIVE NEUMAN inquired whether  a licensed and registered                                                               
sport guide who used their  boat professionally would qualify for                                                               
the exemption.                                                                                                                  
                                                                                                                                
MR.  GRUENING  explained  that  currently  the  term  "commercial                                                               
watercraft" or  "commercial fishing  watercraft" are  not defined                                                               
in  HB  60 or  in  statute.    He  indicated that  a  forthcoming                                                               
amendment to Version D would clarify the terminology.                                                                           
                                                                                                                                
1:39:46 PM                                                                                                                    
                                                                                                                                
MR.  GRUENING continued  with the  sectional analysis.   He  said                                                               
that Section  13, page 7, lines  6-8 is another reference  to the                                                               
three-cent rebate for  what is supposed to  be commercial fishing                                                               
marine fuel.  Mr. Gruening  pointed out that the most substantive                                                               
change is in Section 19, on page  8, line 16, of Version D, which                                                               
would change  the effective  date from  2018 to  2019.   He noted                                                               
that  Co-Chairs  Wool  and  Stutes  feel that  a  year  break  in                                                               
administering the tax  increase is necessary to  provide a little                                                               
relief to allow industry time to adapt.                                                                                         
                                                                                                                                
REPRESENTATIVE  NEUMAN mentioned  that  the  committee had  heard                                                               
from the  department about motor  fuel tax revenue going  back to                                                               
different  user groups.   He  inquired how  the state  would keep                                                               
track of the taxes generated by  each user group.  He also wanted                                                               
to  know  how  the  state would  ensure  revenues  are  equitably                                                               
allocated to  maintain infrastructure for the  proper user group.                                                               
Representative  Neuman asked  specifically  about "snow  machine"                                                               
operators in  the Matanuska-Susitna (Mat-Su) Borough  and how the                                                               
state  would  ensure the  revenue  generated  from off-road  fuel                                                               
purchases would be used on trail maintenance.                                                                                   
                                                                                                                                
MR. GRUENING  shared that under Alaska  State Constitution, funds                                                               
cannot really be  dedicated.  He clarified that there  is no real                                                               
mechanism   to   ensure   funds   are  allocated   for   use   on                                                               
infrastructure for the  proper user group.  He noted  that one of                                                               
the reasons for  the inclusion of the intent  language in Version                                                               
D is  to show the  sponsor's attempt to  do the most  possible to                                                               
suggest  that funds  be used  for their  intended purposes.   Mr.                                                               
Gruening  added  that  the bill  sponsors  did  not  specifically                                                               
address  the off-road  [vehicle]  use in  the  tightening of  the                                                               
sections in Version D.                                                                                                          
                                                                                                                                
REPRESENTATIVE  NEUMAN offered  his understanding  that there  is                                                               
already language in statute suggesting  that the money go back to                                                               
where it is  collected.  He asked whether there  is currently any                                                               
money that goes back into trails  from what is collected from all                                                               
of the people that buy fuel for all-terrain vehicles (ATVs).                                                                    
                                                                                                                                
CO-CHAIR  WOOL  stated  that  right  now  off-road  vehicles  are                                                               
eligible  for  a  rebate.   He  explained  that  currently  users                                                               
purchasing  fuel  for heavy  equipment,  four  wheelers, or  snow                                                               
machines have  to fill  out the  paperwork and  turn it  into the                                                               
state.   Co-Chair  Wool noted  that  under the  current fuel  tax                                                               
structure,  as well  as the  proposed legislation,  there are  no                                                               
funds allocated  for trails.   He offered his  understanding that                                                               
there is a current suggested  designation for licensing fees from                                                               
snow machines to go  back into trails.  He added  that there is a                                                               
rumor the funds were not used for trails.                                                                                       
                                                                                                                                
REPRESENTATIVE NEUMAN suggested that  the committee could work on                                                               
something  to help  designate funds  from  off-road vehicle  fuel                                                               
purchases to  go toward maintenance.   He shared his  belief that                                                               
Governor Walker  vetoed $250 thousand from  the Snowmobile Trails                                                               
Advisory Council (SnowTRAC) fund  in 2016.  Representative Neuman                                                               
shared that  he would like  the bill  to ensure the  various user                                                               
groups feel  comfortable knowing  the taxes paid  go back  to the                                                               
reason why  the taxes  were propagated  in the  first place.   He                                                               
provided his  recollection that the federal  government gives the                                                               
state  money   back  from   federal  gasoline   taxes  collected.                                                               
Representative Neuman  questioned whether any of  that money went                                                               
back toward trails.                                                                                                             
                                                                                                                                
1:44:52 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SULLIVAN-LEONARD  stated that she  had Legislative                                                               
Legal Services  draft an opinion  in regard to  designated funds.                                                               
She  shared her  opinion  that  as much  as  Version  D looks  to                                                               
tighten the allocation  of funds, "the true  nature of designated                                                               
funds  still   are  not  truly  designated   for  any  particular                                                               
purpose."  She  asked how it could be ensured  that, for example,                                                               
the Alaska  Marine Highway System  (AMHS) wouldn't be  allowed to                                                               
pull  funds  over  from motor  fuel.    Representative  Sullivan-                                                               
Leonard offered that  she still had concerns because  there is no                                                               
true mechanism to allow funds to stay in one particular area.                                                                   
                                                                                                                                
MR.  GRUENING  described  that  there  are  dedicated  funds  and                                                               
designated funds.   He  noted that  there is  no way  to dedicate                                                               
funds for a  specific purpose, but future legislators  do look at                                                               
legislative  intent as  a guide  to follow.   Mr.  Gruening added                                                               
that commitments  from the department and  the administration can                                                               
be secured  to help bolster  intent language.   He said  that the                                                               
more intent  that can be  put into  legislation the easier  it is                                                               
for future committees  to look at and see what  the committee was                                                               
thinking.                                                                                                                       
                                                                                                                                
CO-CHAIR  WOOL  stated that  amendments  to  Version D  would  be                                                               
accepted [until] tomorrow at 3 p.m.                                                                                             
                                                                                                                                
[HB 60 was held over.]                                                                                                          
                                                                                                                                

Document Name Date/Time Subjects
HB60 OMB Response 2.15.17.pdf HTRA 2/21/2017 1:30:00 PM
HB 60
HB131 ver D.PDF HTRA 2/21/2017 1:30:00 PM
HB 131
HB131 Sponsor Statement.pdf HTRA 2/21/2017 1:30:00 PM
HB 131
HB131 Fiscal Note DOT-DES 2.17.17.pdf HTRA 2/21/2017 1:30:00 PM
HB 131
HB117 v D 2.13.17.pdf HTRA 2/21/2017 1:30:00 PM
HB 117
HB117 Sponsor Statement 02.20.17.pdf HTRA 2/21/2017 1:30:00 PM
HB 117
HB117 Fiscal Note DOT 02.19.17.pdf HTRA 2/21/2017 1:30:00 PM
HB 117
HB117 1% for Art Q&A.pdf HTRA 2/21/2017 1:30:00 PM
HB 117
SB3 Supporting Document - ASCA Letter 2.6.17.pdf HTRA 2/21/2017 1:30:00 PM
SB 3
CSHB60 (TRA) ver D Work Draft.pdf HTRA 2/21/2017 1:30:00 PM
HB 60