Legislature(2017 - 2018)BARNES 124

02/23/2017 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
Moved CSHB 60(TRA) Out of Committee
Amendments
*+ HB 132 TRANSPORTATION NETWORK COMPANIES TELECONFERENCED
<Bill Hearing Canceled>
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 131 RELOCATION ASSISTANCE FOR FED. PROJ/PROG TELECONFERENCED
Moved HB 131 Out of Committee
        HB 60-MOTOR FUEL TAX;TRANSPORTATION MAINT. FUND                                                                     
                                                                                                                              
1:42:11 PM                                                                                                                    
                                                                                                                                
CO-CHAIR WOOL announced that the  next 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."   [Before the committee,  adopted as  a work                                                               
draft on 2/20/17, was the  proposed committee substitute (CS) for                                                               
HB 60, Version 30-GH1794, Nauman, 2/20/17.]                                                                                     
                                                                                                                                
1:42:33 PM                                                                                                                    
                                                                                                                                
CO-CHAIR STUTES  moved that  the committee  adopt Amendment  1 to                                                               
Version D, labeled 30-GH1794\D.2, Nauman, 2/21/17, which read:                                                                  
                                                                                                                                
     Page 6, line 26:                                                                                                           
     Delete "commercial watercraft"                                                                                         
     Insert "watercraft engaged in commercial fishing"                                                                      
                                                                                                                                
     Page 6, line 27, following "paid":                                                                                     
     Insert  ";  in  this  paragraph,  "commercial  fishing"                                                                
     means  the taking  of, fishing  for,  or possession  of                                                                
     fish, shellfish,  or other  fishery resources  with the                                                                
     intent of disposing of them for profit or by sale"                                                                     
                                                                                                                                
     Page 7, line 7:                                                                                                            
     Delete "commercial watercraft"                                                                                             
     Insert "watercraft engaged in commercial fishing"                                                                          
                                                                                                                                
     Page 7, line 8, following "paid":                                                                                          
     Insert  ";  in  this  paragraph,  "commercial  fishing"                                                                    
     means  the taking  of, fishing  for,  or possession  of                                                                    
     fish, shellfish,  or other  fishery resources  with the                                                                    
     intent of disposing of them for profit or by sale"                                                                         
                                                                                                                                
CO-CHAIR WOOL objected for discussion purposes.                                                                                 
                                                                                                                                
1:42:50 PM                                                                                                                    
                                                                                                                                
MATT  GRUENING,   Staff,  Representative  Stutes,   Alaska  State                                                               
Legislature, stated that Amendment 1  would fix an error from the                                                               
previously  drafted   committee  substitute.     He   noted  that                                                               
Amendment 1  would allow the  three-cent rebate to apply  only to                                                               
commercial  fishing  vessels  and  vessels  actively  engaged  in                                                               
commercial fishing activities.  He  explained that the use of the                                                               
term  "commercial watercraft"  in Version  D unfortunately  would                                                               
include a lot  of other types of activity that  were not intended                                                               
to be  eligible for the rebate.   He said that  Amendment 1 would                                                               
not  only clarify  the definition,  but also  would put  into the                                                               
bill  a definition  of  commercial fishing  as,  "the taking  of,                                                               
fishing  for,   or  possession  of  fish,   shellfish,  or  other                                                               
fisheries resources  with the  intent of  disposing for  them for                                                               
profit or by sale".                                                                                                             
                                                                                                                                
1:43:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   NEUMAN  moved   that  the   committee  adopt   a                                                               
conceptual amendment to Amendment 1, which read as follows:                                                                     
                                                                                                                                
     For the  purposes of  this chapter,  commercial fishing                                                                    
     vessel means a vessel,  homeported or registered in the                                                                    
     state that  is engaged in  the catching, by  any method                                                                    
     or means, of a salt or freshwater fishery resource.                                                                        
                                                                                                                                
CO-CHAIR WOOL objected for discussion purposes.                                                                                 
                                                                                                                                
REPRESENTATIVE NEUMAN  stated that he  supports Amendment 1.   He                                                               
cited that the  reason for his conceptual amendment  is to ensure                                                               
that  the reduction  in  rates is  exclusively  for Alaska  based                                                               
vessels and not non-Alaska based  vessels.  He disclosed that his                                                               
conceptual amendment  could have some issues  with the Interstate                                                               
Commerce clause.   He  noted that  he did not  want the  state to                                                               
have to pay a fine of $70 million  like it did a couple years ago                                                               
in the case  of the State v.  Olsen (ph).  He said  that he would                                                               
continue to work on the issue.                                                                                                  
                                                                                                                                
Representative Neuman withdrew his conceptual amendment.                                                                        
                                                                                                                                
1:45:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SULLIVAN-LEONARD  inquired whether  the  proposed                                                               
definition  of commercial  fishing  would pertain  to Upper  Cook                                                               
Inlet  fishing  businesses  such  as sport  fishing  and  tourism                                                               
groups.                                                                                                                         
                                                                                                                                
CO-CHAIR WOOL deferred to Co-Chair Stutes.                                                                                      
                                                                                                                                
CO-CHAIR STUTES  stated that the  proposed Amendment 1  would not                                                               
encapsulate  the  user   groups  Representative  Sullivan-Leonard                                                               
mentioned.   She explained that  the reasoning is  because sports                                                               
fishermen  and tourism  groups  do  not pay  the  same fees  that                                                               
commercial fishermen  are required to  pay.  She  elaborated that                                                               
sport fishermen and  tourism groups don't pay a raw  fish tax and                                                               
the  licensing  fees  are  not  nearly  equivalent  to  what  the                                                               
licensing fees are for commercial fishermen.                                                                                    
                                                                                                                                
REPRESENTATIVE  SULLIVAN-LEONARD offered  her  belief that  sport                                                               
fishermen and tourism groups pay an increased rate for fuel.                                                                    
                                                                                                                                
CO-CHAIR WOOL  shared that he  was unsure but offered  his belief                                                               
that if  sport fishermen pay the  same price for fuel,  then they                                                               
would pay the same fuel tax as other user groups.                                                                               
                                                                                                                                
REPRESENTATIVE  SULLIVAN-LEONARD  shared her  understanding  that                                                               
sport fishermen and tourism groups  would absorb the increase for                                                               
their businesses  but would not  have the same benefits  as other                                                               
commercial fishing businesses.                                                                                                  
                                                                                                                                
CO-CHAIR WOOL  offered his belief that  the intent is to  use the                                                               
revenue  from  taxes   for  harbors  and  ports,   so  sport  and                                                               
commercial fishermen will probably see  some of the same benefits                                                               
if their boats  are in a harbor  or port.  He  clarified that the                                                               
amendment would  be just a  rebate, "for  a certain class  of ...                                                               
individuals or companies  that have fishing ...  as their primary                                                               
business and also of a certain ... size".                                                                                       
                                                                                                                                
REPRESENTATIVE SULLIVAN-LEONARD  stated that her concern  is that                                                               
one group  is seeking a rebate  over and above other  groups that                                                               
also  have   businesses  surrounding  fishing,  which   makes  an                                                               
inequity.                                                                                                                       
                                                                                                                                
REPRESENTATIVE  NEUMAN, in  regard to  Co-Chair Stutes'  previous                                                               
comment about  licenses, said that  although sport  fishermen pay                                                               
less  for  licenses,  they  do  not  use  nearly  the  amount  of                                                               
resources that commercial  fishermen do.  He noted  that fish are                                                               
a resource that  belongs to all Alaskans.   Representative Neuman                                                               
added that he would  like to see the committee do  what it can to                                                               
support commercial  fishing all  around the state.   He  cited an                                                               
economic impact statement from six  years ago that showed a $1.25                                                               
billion impact  to the state  through sport fisheries.   He added                                                               
that just from the Cook Inlet  fishery alone over $750 thousand a                                                               
year is added  to the local economy.  He  noted the importance of                                                               
the fishing  industry all  around the  state, but  its particular                                                               
importance  to Southeast  and Southwest  Alaska.   Representative                                                               
Neuman  reiterated that  sport fishermen  still have  to carry  a                                                               
commercial  license  and  their  boats   can  only  be  used  for                                                               
commercial fishing.                                                                                                             
                                                                                                                                
1:49:01 PM                                                                                                                    
                                                                                                                                
CO-CHAIR WOOL said,  "I agree they're a commercial  operation.  I                                                               
think initially  the intent  was having to  do with  an impending                                                               
fishing  tax  which I  don't  think  sport fisherman  are  paying                                                               
fishing tax".                                                                                                                   
                                                                                                                                
CO-CHAIR STUTES  confirmed that is  correct.  She  explained that                                                               
there  is an  anticipated  increase for  interim  use permits  by                                                               
"lifting the  lid off" of  the Alaska Commercial  Fisheries Entry                                                               
Commission (CFEC) permit.  She  said that neither the CFEC permit                                                               
increase  nor  an  impending fisheries  tax  would  affect  sport                                                               
fishermen.  She  said that currently commercial  fisheries pay an                                                               
"off the top, three percent, raw-fish sales tax."                                                                               
                                                                                                                                
1:50:17 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  WOOL  removed his  objection  to  the motion  to  adopt                                                               
Amendment 1.                                                                                                                    
                                                                                                                                
REPRESENTATIVE SULLIVAN-LEONARD objected.                                                                                       
                                                                                                                                
1:50:43 PM                                                                                                                    
                                                                                                                                
A  roll  call vote  was  taken.   Representatives  Kopp,  Claman,                                                               
Neuman, Drummond,  Wool, and Stutes  voted in favor  of Amendment                                                               
1.      Representative   Sullivan-Leonard   voted   against   it.                                                               
Therefore, Amendment 1 was adopted by a vote of 6-1.                                                                            
                                                                                                                                
1:51:22 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KOPP  moved that the committee  adopt Amendment 2,                                                               
labeled 30-GH1794\D.1, Nauman, 2/21/17, which read:                                                                             
                                                                                                                                
     Page 3, line 2:                                                                                                            
          Delete "24"                                                                                                         
          Insert "20"                                                                                                         
                                                                                                                                
     Page 3, line 4:                                                                                                            
          Delete "14.1"                                                                                                       
          Insert "11.75"                                                                                                      
                                                                                                                                
     Page 3, line 6:                                                                                                            
          Delete "15"                                                                                                         
          Insert "12.5"                                                                                                       
                                                                                                                                
     Page 3, line 7:                                                                                                            
          Delete "9.6"                                                                                                        
          Insert "eight"                                                                                                      
                                                                                                                                
     Page 4, line 1:                                                                                                            
          Delete "24"                                                                                                         
          Insert "20"                                                                                                         
                                                                                                                                
     Page 4, line 2:                                                                                                            
          Delete "14.1"                                                                                                       
          Insert "11.75"                                                                                                      
                                                                                                                                
     Page 4, line 4:                                                                                                            
          Delete "15"                                                                                                         
          Insert "12.5"                                                                                                       
                                                                                                                                
     Page 4, line 5:                                                                                                            
          Delete "9.6"                                                                                                        
          Insert "eight"                                                                                                      
                                                                                                                                
     Page 7, line 1:                                                                                                            
          Delete "18"                                                                                                         
          Insert "15"                                                                                                         
                                                                                                                                
                                                                                                                                
CO-CHAIR STUTES objected for discussion purposes.                                                                               
                                                                                                                                
REPRESENTATIVE KOPP  stated that  Amendment 2  is in  response to                                                               
testimony heard  from the trucking  and aviation industries.   He                                                               
said that while  the industries overall support a  motor fuel tax                                                               
increase,  they   cautioned  Alaska   against  how   quickly  and                                                               
dramatically  the  increase  would   be  implemented.    He  said                                                               
Amendment  2   would  keep  the  governor's   budget  intact,  as                                                               
proposed,  because  the budget  includes  the  first $40  million                                                               
infusion  and the  amendment speaks  only to  the portion  of the                                                               
proposed legislation that would take  effect July 1, 2019, on the                                                               
second  increase.   He added  that  Amendment 2  would limit  the                                                               
second increase by 50 percent of what was previously proposed.                                                                  
                                                                                                                                
REPRESENTATIVE KOPP  clarified that Amendment 2  would lessen the                                                               
tax increases  proposed in  Section 4 of  Version D,  as follows:                                                               
proposed motor tax  from 24 cents to 20  cents; aviation gasoline                                                               
from 14.1  cents to 11.75  cents; and motor  fuel used in  and on                                                               
watercraft  from 15  cents to  12.5 cents.   Representative  Kopp                                                               
said that the  same changes in Section 4 are  repeated in Section                                                               
6.   He said Amendment  2 would also  change the rebate  from the                                                               
currently purposed 12 cents to a rebate of 15 cents.                                                                            
                                                                                                                                
REPRESENTATIVE KOPP said that  although adding legislative intent                                                               
language is not  as prescriptive as statutory  law, he recognized                                                               
the difficulty  in putting language  into statute.   He explained                                                               
that  Amendment  2  would  allow  for  a  chance  to  assess  the                                                               
successfulness of the  fuel tax increase.  He  offered his belief                                                               
that the dollar  amount is responsive to  industry concerns about                                                               
having time  to change business models.   He added that  the time                                                               
and  amount proposed  in Amendment  2 would  show whether  or not                                                               
industry could absorb  the cost itself or if the  cost would have                                                               
to  be passed  along  to  consumers.   He  stated  that his  main                                                               
concern is  for the  increases to  not go  "too much,  too fast."                                                               
Representative Kopp  shared that if  in two years  the department                                                               
feels more money  is needed in the fund, then  it can request the                                                               
additional money.                                                                                                               
                                                                                                                                
1:54:44 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SULLIVAN-LEONARD  shared   her  appreciation  for                                                               
Amendment  2.   She  indicated  the  maker  of the  proposal  has                                                               
considered  both  constituents and  industry.    She stated  that                                                               
Amendment 2 could  help to "soften the blow" of  absorbing such a                                                               
large tax increase.                                                                                                             
                                                                                                                                
1:55:14 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CLAMAN [objected  to Amendment  2] but  expressed                                                               
appreciation for  the spirit behind  it.  He  said that HB  60 is                                                               
slightly  different  from last  year's  motor  fuel tax  increase                                                               
bill.   He  offered  his  belief that  with  the state's  current                                                               
fiscal  situation,  Alaska  really  needs  the  second  increase.                                                               
Representative  Claman  stated  his  belief  that  Alaska  cannot                                                               
continue  to  support  its  highways  during  a  time  of  fiscal                                                               
deficit.  He  noted that even after the  second increase Alaska's                                                               
fuel tax  rate would still  be one of  the lowest in  the nation.                                                               
He said that he is also  cognizant that motor fuel taxes have not                                                               
been increased in more than 30 years.                                                                                           
                                                                                                                                
REPRESENTATIVE NEUMAN said that  while he appreciates the attempt                                                               
to try to  reduce the increase, he does not  support the increase                                                               
at  all.   He  called  attention to  the  over 34,000  Matanuska-                                                               
Susitna (Mat-Su) residents that drive  100 miles round trip every                                                               
day,   into   Anchorage   to   support   the   state's   economy.                                                               
Representative  Neuman  stated  that  he  would  not  support  an                                                               
increase unless it was fair and  balanced.  He elaborated that it                                                               
is not  fair to expect  the Mat-Su  commuters to pay  hundreds of                                                               
extra dollars a month.                                                                                                          
                                                                                                                                
CO-CHAIR  WOOL  said that  Representative  Claman  raised a  good                                                               
point  that Alaska  has not  raised  motor fuel  taxes since  the                                                               
'70s.   He stated his  belief that it would  not be so  simple to                                                               
come back  asking to  increase the  motor fuel  tax again  if the                                                               
proposed  increases  are not  enough.    He  said that  while  he                                                               
supports  taking a  year between  increases,  he also  recognizes                                                               
that the state needs revenue.   He said that means if $20 million                                                               
is taken  out of the proposed  increase $20 million will  have to                                                               
be moved from somewhere else to make up for it.                                                                                 
                                                                                                                                
1:58:45 PM                                                                                                                    
                                                                                                                                
CO-CHAIR STUTES said that she  likes the idea behind Amendment 2,                                                               
but  she also  recognizes the  state is  facing a  huge financial                                                               
void.  She credited Representative  Kopp for the idea of skipping                                                               
a  year on  increasing the  motor fuel  tax she  included in  the                                                               
adopted Amendment 1.                                                                                                            
                                                                                                                                
1:59:56 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DRUMMOND shared that she  grew up in New York City                                                               
(NYC) where  there are high sales  and income taxes.    She added                                                               
that the  population in NYC  continues to grow, which  shows that                                                               
people are perfectly  willing to pay for the  privilege of living                                                               
in a  place like NYC that  is supported by high  taxes, fees, and                                                               
tolls.   She requested clarification  of the numbers  in relation                                                               
to the  proposed increases.   Representative  Drummond questioned                                                               
Representative  Neuman's previous  comment that  Mat-Su commuters                                                               
would pay  hundreds of  dollars in  extra fuel  taxes.   She said                                                               
that when  she did  the math, she  figured 25,000  miles annually                                                               
driven,  100 miles  a day,  and  an average  of 25  miles to  the                                                               
gallon for a  total of $160 additional a year  that would be paid                                                               
in the first iteration of fuel  tax increases.  She said that she                                                               
recognizes the  high cost to commute  but that is just  a part of                                                               
life.   She suggested  that now  might be  a good  time to  get a                                                               
commuter rail system started from Mat-Su to Anchorage.                                                                          
                                                                                                                                
2:02:19 PM                                                                                                                    
                                                                                                                                
CO-CHAIR WOOL  pointed out to Representative  Drummond that there                                                               
is a handout, included in  the committee packet, giving the exact                                                               
numbers of  25,000 miles per  year and 25  miles per gallon.   He                                                               
added  that after  the  second  increase the  taxes  would be  an                                                               
additional $240, which equates to about $5 a week.                                                                              
                                                                                                                                
REPRESENTATIVE  DRUMMOND  suggested  that  drivers  start  making                                                               
their own  lattes to make up  for the extra amount  that would be                                                               
paid in motor fuel taxes.                                                                                                       
                                                                                                                                
REPRESENTATIVE KOPP  said that he appreciated  the comments about                                                               
getting the railroad going.   He explained that Amendment 2 would                                                               
still permit  a $60 million  infusion into Alaska's  economy, $40                                                               
million now  then another $20  million in  two years.   He shared                                                               
his  hope  that Alaska's  revenue  situation  would be  a  little                                                               
better than  "as bleak as  ... we think it  could be."   He noted                                                               
that  Amendment 2  was not  intended  to be  an argument  against                                                               
Alaska's tax  rate tier ranking  among states, but  asked members                                                               
to reflect that  industry does model its plan on  the state rates                                                               
and when the  rate changes rapidly it causes industry  to have to                                                               
readjust.                                                                                                                       
                                                                                                                                
CO-CHAIR  STUTES removed  her objection  to the  motion to  adopt                                                               
Amendment 2.                                                                                                                    
                                                                                                                                
REPRESENTATIVE CLAMAN maintained his objection.                                                                                 
                                                                                                                                
2:04:44 PM                                                                                                                    
                                                                                                                                
A roll call  vote was taken.  Representative Kopp  voted in favor                                                               
of  Amendment 2.    Representatives  Drummond, Claman,  Sullivan-                                                               
Leonard, Neuman, Stutes,  and Wool voted against  it.  Therefore,                                                               
Amendment 2 failed to be adopted by a vote of 1-6.                                                                              
                                                                                                                                
2:05:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NEUMAN  moved that  the committee  adopt Amendment                                                               
3,  labeled  30-GH1794\D.3,  Nauman,  2/23/17.  [Amendment  3  is                                                               
provided at the end of the minutes on HB 60.]                                                                                   
                                                                                                                                
CO-CHAIR WOOL objected for discussion purposes.                                                                                 
                                                                                                                                
REPRESENTATIVE NEUMAN  said that  he is  aware Amendment  3 looks                                                               
long, but  it is  mostly just legal  jargon discussing  each tax.                                                               
He explained  that Amendment 3  would suspend the motor  fuel tax                                                               
if the  average price per  barrel for  North Slope crude  oil, in                                                               
the previous calendar year, went above $85.                                                                                     
                                                                                                                                
CO-CHAIR STUTES  said that although  she appreciates  the intent,                                                               
she would like to see the  state on a sustainable pathway that is                                                               
not dependent  on fluctuating  oil prices but  based on  what the                                                               
state can  afford.  She  added her belief  that if oil  prices go                                                               
up,  then the  state could  have "a  pretty fat  savings account"                                                               
once again and continue on with necessary capital improvements.                                                                 
                                                                                                                                
2:07:32 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SULLIVAN-LEONARD  stated that she  finds Amendment                                                               
3 to be very reasonable.  She  shared that she does not think the                                                               
state wants to  tax its residents to a point  that it is onerous.                                                               
She opined that  providing some relief to commuters  would be the                                                               
responsible thing to do. She said that she supports Amendment 3.                                                                
                                                                                                                                
REPRESENTATIVE NEUMAN  shared his belief  that when the  price of                                                               
oil is  close to  $100 per  barrel the state  would again  have a                                                               
balanced  budget.   He said  that  Alaska is  facing its  current                                                               
budget dilemma because  the price of oil per  barrel dropped down                                                               
below $30.  He stated that  the legislature had a balanced budget                                                               
when oil was $96 dollars a  barrel.  He said that the legislature                                                               
has  made some  very  significant reductions  over  the past  few                                                               
years.   Representative Neuman conveyed  that last year  when the                                                               
budget was passed the state was  at the same per capita spending,                                                               
based on inflation,  as was being spent in  1977.  Representative                                                               
Neuman  shared that  because of  all  the other  taxes and  bills                                                               
currently  facing  the legislature,  he  expected  the budget  to                                                               
continue being reduced.   He noted the importance  in making sure                                                               
Alaska  has  a long-term,  sustainable  budget.   He  shared  his                                                               
thoughts  that  relaxing  some   of  the  taxes  received  though                                                               
royalties and corporation  taxes would send a  signal to industry                                                               
that Alaska wants  to create an environment  conducive to attract                                                               
industry's  investment of  its capital  dollars.   Representative                                                               
Neuman  opined that  taking  money out  of  the economy,  through                                                               
taxation, at the start of a  recession is the wrong decision.  He                                                               
said that he  offered Amendment 3 to show a  willingness to place                                                               
a cap  for when oil  reaches $85 a barrel  again.  He  added that                                                               
under Amendment  3, the  marine highway system  would get  a fuel                                                               
trigger  cap allowing  additional  money to  go  to the  ferries.                                                               
Representative Neuman  shared his  belief that Amendment  3 would                                                               
show  that this  legislature has  an interest  in showing  fiscal                                                               
restraint.                                                                                                                      
                                                                                                                                
2:12:25 PM                                                                                                                    
                                                                                                                                
CO-CHAIR WOOL  maintained his  objection to  the motion  to adopt                                                               
Amendment 3.                                                                                                                    
                                                                                                                                
2:12:33 PM                                                                                                                    
                                                                                                                                
A roll  call vote was  taken.   Representatives Sullivan-Leonard,                                                               
Neuman, and Kopp voted in  favor of Amendment 3.  Representatives                                                               
Drummond, Claman, Wool, and Stutes  voted against it.  Therefore,                                                               
Amendment 3 failed to be adopted by a vote of 3-4.                                                                              
                                                                                                                                
REPRESENTATIVE SULLIVAN-LEONARD  declared that  she is  still not                                                               
comfortable with HB 60 as it  is written and amended.  She shared                                                               
her thought  that many parts of  the bill pit one  part of Alaska                                                               
over another,  particularly her district.   She noted  that those                                                               
who don't commute every day would  not feel the sting as badly as                                                               
her  constituents.    Representative Sullivan-Leonard  said  that                                                               
while  other areas  would receive  certain  exemptions, her  area                                                               
would be  paying the full  share.  She maintained  her opposition                                                               
to HB 60.                                                                                                                       
                                                                                                                                
2:14:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NEUMAN stated that he does  not support HB 60.  He                                                               
expressed his  concerns that the proposed  legislation is neither                                                               
balanced nor fair and that he  does not think it wise to increase                                                               
taxes just as the state is  going into a recession.  He mentioned                                                               
that  there  was   an  amendment  offered  that   tried  to  make                                                               
adjustments and  recognize that commercial sport  fishermen still                                                               
have  to abide  by commercial  standards.   Representative Neuman                                                               
reiterated his  belief that both  commercial and  sport fishermen                                                               
are professional  commercial operators.   He declared that  he is                                                               
not concerned with  the "fish wars" in the state.   He noted that                                                               
he absolutely  supports Alaska's commercial fishing  industry and                                                               
that  he supported  the reduction  for  them.   He stressed  that                                                               
sport  commercial  fishermen  are   not  subsistence  fishing  to                                                               
support their families; it is  strictly business.  Representative                                                               
Neuman shared  his belief that  it is  good that landing  fees go                                                               
back  into  the  commercial  fishing  industry  for  things  like                                                               
advertising  through  the   Alaska  Seafood  Marketing  Institute                                                               
(ASMI).                                                                                                                         
                                                                                                                                
REPRESENTATIVE NEUMAN reiterated  that the state needs  to find a                                                               
more  balanced  and equitable  proposal.    He shared  that  when                                                               
looking  at the  whole situation  Alaska is  facing, he  finds it                                                               
very difficult to imagine the state  is going to continue to make                                                               
reductions in  the budget while  pulling additional money  out of                                                               
the  public's hands,  at the  start of  a recession,  to give  to                                                               
state government to fund the budget.                                                                                            
                                                                                                                                
CO-CHAIR STUTES  clarified that the  fees that  go to ASMI  are a                                                               
total  separate tax  that  has been  self-imposed  by the  salmon                                                               
fishermen.  She  noted that the raw  fish tax is 3  percent.  She                                                               
explained   that  1.5   percent   of  that   goes  toward   local                                                               
municipalities for infrastructure and  the other 1.5 percent goes                                                               
to the state.                                                                                                                   
                                                                                                                                
CO-CHAIR WOOL  said that  the bottom line  is that  people drive,                                                               
people use fuel,  and people use infrastructure.   He stated that                                                               
those all  come at a  cost to the  state, whether through  use of                                                               
infrastructure or resources used.   He explained that even if all                                                               
the   money  from   fuel  taxes   went  to   the  Department   of                                                               
Transportation &  Public Facilities  (DOT&PF), it  still wouldn't                                                               
be enough; more general fund  (GF) dollars are needed in DOT&PF's                                                               
budget.  In regard  to Representative Sullivan-Leonard's comments                                                               
about Mat-Su  commuter residents,  Co-Chair Wool said  that there                                                               
are other places in Alaska where  people drive and "wear and tear                                                               
up"  the roads.   He  shared his  belief that  although increased                                                               
motor fuel taxes might encourage  more fuel-efficient vehicles on                                                               
the roads,  the roads won't  know that  and will still  get worn.                                                               
He pointed  out that better  fuel efficiency would mean  less gas                                                               
being purchased, so the state  needs more revenue.  Co-Chair Wool                                                               
stated  that  Alaska  is  in a  tough  position  financially  and                                                               
although smart  cuts can  be made  the bottom  line is  that more                                                               
revenue flowing into  Alaska's account is needed.   He noted that                                                               
Alaska's motor  fuel tax hasn't  been raised in many  decades and                                                               
even after  both increases would  still remain one of  the lowest                                                               
in the nation.                                                                                                                  
                                                                                                                                
2:19:04 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  STUTES moved  to  report  CSHB60, Version  30-GH1794\D,                                                               
Nauman,  2/20/17, as  amended, out  of committee  with individual                                                               
recommendations and the accompanying fiscal notes.                                                                              
                                                                                                                                
REPRESENTATIVE SULLIVAN-LEONARD objected.                                                                                       
                                                                                                                                
2:19:40 PM                                                                                                                    
                                                                                                                                
A roll  call vote was  taken.  Representatives  Drummond, Claman,                                                               
Kopp, Wool,  and Stutes voted  in favor  of CSHB 60,  Version 30-                                                               
GH1794\D,   Nauman,  2\20\27,   as   amended.     Representatives                                                               
Sullivan-Leonard and  Neuman voted against  it.   Therefore, CSHB
60 (TRA)  was reported out  of the House  Transportation Standing                                                               
Committee by a vote of 5-2.                                                                                                     
                                                                                                                                
                           AMENDMENTS                                                                                         
                                                                                                                                
The following amendment to HB 60.....                                                                                           
                                                                                                                                
     Page 2, line 15, through page 4, line 12:                                                                                  
     Delete all material and insert:                                                                                            
        "* Sec. 3. AS 43.40.010(a) is amended to read:                                                                      
     (a)    In  addition   to  the  surcharge  levied  under                                                                    
     AS 43.40.005,  if  the  average price  per  barrel  for                                                                
     Alaska North  Slope crude  oil for  sale on  the United                                                                
     States West Coast during the previous calendar year is                                                                 
     (1) more  than $85,   there  is levied  a tax  of eight                                                                
     cents  a gallon  on all  motor fuel  sold or  otherwise                                                                    
     transferred within the state, except that the tax on                                                                   
     (A) [(1)   THE  TAX ON] aviation  gasoline is  four and                                                                
     seven-tenths cents a gallon;                                                                                               
     (B)  [(2)   THE  TAX  ON] motor  fuel  used  in and  on                                                                
     watercraft of all descriptions is five cents a gallon;                                                                     
     (C)  [(3)   THE TAX  ON] all  aviation fuel  other than                                                                
     gasoline is three and two-tenths cents a gallon; and                                                                       
     (D) [(4)   THE TAX RATE ON] motor fuel  that is blended                                                                
     with alcohol  is the  same tax rate  a gallon  as other                                                                    
     motor fuel; however,  in an area and  during the months                                                                    
     in  which fuel  containing  alcohol is  required to  be                                                                    
     sold, transferred, or  used in an effort  to attain air                                                                    
     quality standards  for carbon  monoxide as  required by                                                                    
     federal or  state law  or regulation,  the tax  rate on                                                                    
     motor fuel that is blended  with alcohol is six cents a                                                                    
     gallon  less  than the  tax  on  other motor  fuel  not                                                                    
     described in (A)  - (C) [(1) - (3)]  of this paragraph;                                                            
     or                                                                                                                     
     (2)  less  than or equal to $85, there  is levied a tax                                                                
     of  16  cents  a  gallon  on all  motor  fuel  sold  or                                                                
     otherwise  transferred within  the  state, except  that                                                                
     the tax on                                                                                                             
     (A)  aviation gasoline is 9.4 cents a gallon;                                                                          
     (B)   motor  fuel  used  in and  on  watercraft of  all                                                                
     descriptions is 10 cents a gallon;                                                                                     
     (C)   all  aviation  fuel other  than  gasoline is  6.4                                                                
     cents a gallon; and                                                                                                    
     (D)   motor fuel  that is blended  with alcohol  is the                                                                
     same tax  rate a gallon  as other motor  fuel; however,                                                                
     in  an  area  and  during  the  months  in  which  fuel                                                                
     containing   alcohol   is    required   to   be   sold,                                                                
     transferred,  or  used  in  an  effort  to  attain  air                                                                
     quality standards  for carbon  monoxide as  required by                                                                
     federal or  state law  or regulation,  the tax  rate on                                                                
     motor fuel that is blended  with alcohol is six cents a                                                                
     gallon  less  than the  tax  on  other motor  fuel  not                                                                
     described in (A) - (C) of this paragraph [SUBSECTION].                                                                 
        * Sec. 4.  AS 43.40.010(a), as amended by  sec. 3 of                                                                  
     this Act, is amended to read:                                                                                              
     (a)    In  addition   to  the  surcharge  levied  under                                                                    
     AS 43.40.005,  if  the  average price  per  barrel  for                                                                    
     Alaska North  Slope crude  oil for  sale on  the United                                                                    
     States West Coast during the previous calendar year is                                                                     
     (1)   more than  $85, there  is levied  a tax  of eight                                                                    
     cents  a gallon  on all  motor fuel  sold or  otherwise                                                                    
     transferred within the state, except that the tax on                                                                       
     (A)   aviation gasoline is four  and seven-tenths cents                                                                    
     a gallon;                                                                                                                  
     (B)   motor  fuel  used  in and  on  watercraft of  all                                                                    
     descriptions is five cents a gallon;                                                                                       
     (C)   all aviation  fuel other  than gasoline  is three                                                                    
     and two-tenths cents a gallon; and                                                                                         
     (D)   motor fuel  that is blended  with alcohol  is the                                                                    
     same tax  rate a gallon  as other motor  fuel; however,                                                                    
     in  an  area  and  during  the  months  in  which  fuel                                                                    
     containing   alcohol   is    required   to   be   sold,                                                                    
     transferred,  or  used  in  an  effort  to  attain  air                                                                    
     quality standards  for carbon  monoxide as  required by                                                                    
     federal or  state law  or regulation,  the tax  rate on                                                                    
     motor fuel that is blended  with alcohol is six cents a                                                                    
     gallon  less  than the  tax  on  other motor  fuel  not                                                                    
     described in (A) - (C) of this paragraph; or                                                                               
     (2)  less  than or equal to $85, there  is levied a tax                                                                    
     of 24  [16] cents a  gallon on  all motor fuel  sold or                                                                
     otherwise  transferred within  the  state, except  that                                                                    
     the tax on                                                                                                                 
     (A)  aviation gasoline is 14.1 [9.4] cents a gallon;                                                                   
     (B)   motor  fuel  used  in and  on  watercraft of  all                                                                    
     descriptions is 15 [10] cents a gallon;                                                                                
     (C)   all  aviation  fuel other  than  gasoline is  9.6                                                                
     [6.4] cents a gallon; and                                                                                                  
     (D)   motor fuel  that is blended  with alcohol  is the                                                                    
     same tax  rate a gallon  as other motor  fuel; however,                                                                    
     in  an  area  and  during  the  months  in  which  fuel                                                                    
     containing   alcohol   is    required   to   be   sold,                                                                    
     transferred,  or  used  in  an  effort  to  attain  air                                                                    
     quality standards  for carbon  monoxide as  required by                                                                    
     federal or  state law  or regulation,  the tax  rate on                                                                    
     motor fuel that is blended  with alcohol is six cents a                                                                    
     gallon  less  than the  tax  on  other motor  fuel  not                                                                    
     described in (A) - (C) of this paragraph.                                                                                  
        * Sec. 5. AS 43.40.010(b) is amended to read:                                                                         
     (b)    In  addition   to  the  surcharge  levied  under                                                                    
     AS 43.40.005,  if  the  average price  per  barrel  for                                                                
     Alaska North  Slope crude  oil for  sale on  the United                                                                
     States West Coast during the previous calendar year is                                                                 
     (1)   more than  $85, there  is levied  a tax  of eight                                                                
     cents a  gallon on all  motor fuel consumed by  a user,                                                                    
     except that the tax on                                                                                                 
     (A) [(1)   THE  TAX ON]  aviation gasoline  consumed is                                                                
     four and seven-tenths cents a gallon;                                                                                      
     (B)  [(2)   THE  TAX  ON] motor  fuel  used  in and  on                                                                
     watercraft of all descriptions is five cents a gallon;                                                                     
     (C)  [(3)   THE TAX  ON] all  aviation fuel  other than                                                                
     gasoline is three and two-tenths cents a gallon; and                                                                       
     (D) [(4)   THE TAX RATE ON] motor fuel  that is blended                                                                
     with alcohol  is the  same tax rate  a gallon  as other                                                                    
     motor fuel; however,  in an area and  during the months                                                                    
     in  which fuel  containing  alcohol is  required to  be                                                                    
     sold, transferred, or  used in an effort  to attain air                                                                    
     quality standards  for carbon  monoxide as  required by                                                                    
     federal or  state law  or regulation,  the tax  rate on                                                                    
     motor fuel that is blended  with alcohol is six cents a                                                                    
     gallon  less  than the  tax  on  other motor  fuel  not                                                                    
     described in (A)  - (C) [(1) - (3)]  of this paragraph;                                                            
     or                                                                                                                     
     (2)  less  than or equal to $85, there  is levied a tax                                                                
     of  16  cents  a  gallon  on all  motor  fuel  sold  or                                                                
     otherwise  transferred within  the  state, except  that                                                                
     the tax on                                                                                                             
     (A)  aviation gasoline is 9.4 cents a gallon;                                                                          
     (B)   motor  fuel  used  in and  on  watercraft of  all                                                                
     descriptions is 10 cents a gallon;                                                                                     
     (C)   all  aviation  fuel other  than  gasoline is  6.4                                                                
     cents a gallon; and                                                                                                    
     (D)   motor fuel  that is blended  with alcohol  is the                                                                
     same tax  rate a gallon  as other motor  fuel; however,                                                                
     in  an  area  and  during  the  months  in  which  fuel                                                                
     containing   alcohol   is    required   to   be   sold,                                                                
     transferred,  or  used  in  an  effort  to  attain  air                                                                
     quality standards  for carbon  monoxide as  required by                                                                
     federal or  state law  or regulation,  the tax  rate on                                                                
     motor fuel that is blended  with alcohol is six cents a                                                                
     gallon  less  than the  tax  on  other motor  fuel  not                                                                
     described in (A) - (C) of this paragraph [SUBSECTION].                                                                 
        * Sec. 6.  AS 43.40.010(b), as amended by  sec. 5 of                                                                  
     this Act, is amended to read:                                                                                              
     (b)    In  addition   to  the  surcharge  levied  under                                                                    
     AS 43.40.005,  if  the  average price  per  barrel  for                                                                    
     Alaska North  Slope crude  oil for  sale on  the United                                                                    
     States West Coast during the previous calendar year is                                                                     
     (1)   more than  $85, there  is levied  a tax  of eight                                                                    
     cents a  gallon on all  motor fuel consumed by  a user,                                                                    
     except that the tax on                                                                                                     
     (A)   aviation  gasoline  consumed is  four and  seven-                                                                    
     tenths cents a gallon;                                                                                                     
     (B)   motor  fuel  used  in and  on  watercraft of  all                                                                    
     descriptions is five cents a gallon;                                                                                       
     (C)   all aviation  fuel other  than gasoline  is three                                                                    
     and two-tenths cents a gallon; and                                                                                         
     (D)   motor fuel  that is blended  with alcohol  is the                                                                    
     same tax  rate a gallon  as other motor  fuel; however,                                                                    
     in  an  area  and  during  the  months  in  which  fuel                                                                    
     containing   alcohol   is    required   to   be   sold,                                                                    
     transferred,  or  used  in  an  effort  to  attain  air                                                                    
     quality standards  for carbon  monoxide as  required by                                                                    
     federal or  state law  or regulation,  the tax  rate on                                                                    
     motor fuel that is blended  with alcohol is six cents a                                                                    
     gallon  less  than the  tax  on  other motor  fuel  not                                                                    
     described in (A) - (C) of this paragraph; or                                                                               
     (2)  less  than or equal to $85, there  is levied a tax                                                                    
     of 24  [16] cents a  gallon on  all motor fuel  sold or                                                                
     otherwise  transferred within  the  state, except  that                                                                    
     the tax on                                                                                                                 
     (A)  aviation gasoline is 14.1 [9.4] cents a gallon;                                                                   
     (B)   motor  fuel  used  in and  on  watercraft of  all                                                                    
     descriptions is 15 [10] cents a gallon;                                                                                
     (C)   all  aviation  fuel other  than  gasoline is  9.6                                                                
     [6.4] cents a gallon; and                                                                                                  
     (D)   motor fuel  that is blended  with alcohol  is the                                                                    
     same tax  rate a gallon  as other motor  fuel; however,                                                                    
     in  an  area  and  during  the  months  in  which  fuel                                                                    
     containing   alcohol   is    required   to   be   sold,                                                                    
     transferred,  or  used  in  an  effort  to  attain  air                                                                    
     quality standards  for carbon  monoxide as  required by                                                                    
     federal or  state law  or regulation,  the tax  rate on                                                                    
     motor fuel that is blended  with alcohol is six cents a                                                                    
     gallon  less  than the  tax  on  other motor  fuel  not                                                                    
     described in (A) - (C) of this paragraph."                                                                                 
                                                                                                                                
     Page 6, lines 20 - 22:                                                                                                     
     Delete "12 [SIX] cents a gallon if                                                                                     
     (A) [(1)]  the tax on the motor fuel has been paid;                                                                    
     (B) [(2)]"                                                                                                             
     Insert "six  cents a gallon  if the tax was  paid under                                                                
     AS 43.40.010(a)(1) or  (b)(1) or  12 cents a  gallon if                                                                
     the tax  was paid  under AS 43.40.010(a)(2)  or (b)(2),                                                                
     and                                                                                                                    
     (A) [(1)  THE TAX ON THE MOTOR FUEL HAS BEEN PAID;                                                                     
     (2)]"                                                                                                                      
                                                                                                                                
     Reletter the following subparagraph accordingly.                                                                           
                                                                                                                                
     Page 7, lines 1 - 2:                                                                                                       
     Delete "18 [12] cents a gallon if                                                                                      
     (A)  the tax on the motor fuel has been paid;                                                                              
     (B)"                                                                                                                       
     Insert "six  cents a gallon  if the tax was  paid under                                                                    
     AS 43.40.010(a)(1) or (b)(1) or 18  [12] cents a gallon                                                                
        if the tax was paid under AS 43.40.010(a)(2) or                                                                         
     (b)(2), and                                                                                                                
     (A)"                                                                                                                       
                                                                                                                                
     Reletter the following subparagraphs accordingly.                                                                          

Document Name Date/Time Subjects
#1 CSHB60 (TRA) Draft Proposed Amendment ver D.2.pdf HTRA 2/23/2017 1:30:00 PM
HB 60
#2 CSHB60 (TRA) Draft Proposed Amendment ver D.1.pdf HTRA 2/23/2017 1:30:00 PM
HB 60
#3 CSHB60 (TRA) Draft Proposed Amendment ver D.3.pdf HTRA 2/23/2017 1:30:00 PM
HB 60
Conceptual Amendment to #1 CSHB60 (TRA) Draft Proposed Amendment.pdf HTRA 2/23/2017 1:30:00 PM
HB 60