Legislature(2019 - 2020)BARNES 124

03/10/2020 01:00 PM TRANSPORTATION

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 253 SALE, TRANSFER, OR DISPOSAL OF FERRIES TELECONFERENCED
Moved HB 253 Out of Committee
-- Public Testimony --
+ SB 115 MOTOR FUEL TAX; EV REG. FEE TELECONFERENCED
Heard & Held
-- Testimony <Invitation Only> --
+ Bills Previously Heard/Scheduled TELECONFERENCED
               SB 115-MOTOR FUEL TAX; EV REG FEES                                                                           
                                                                                                                                
1:22:18 PM                                                                                                                    
                                                                                                                                
CHAIR STUTES announced that the  final order of business would be                                                               
CS FOR  SENATE BILL  NO. 115(FIN)(efd fld),  "An Act  relating to                                                               
vehicle registration fees; and relating to the motor fuel tax."                                                                 
                                                                                                                                
1:23:18 PM                                                                                                                    
                                                                                                                                
SENATOR  CLICK   BISHOP,  Alaska  State  Legislature,   as  prime                                                               
sponsor,  presented  CSSB 115(FIN)(efd  fld).    He informed  the                                                               
committee motor  fuel tax, which  accounted for 6 percent  of the                                                               
state's budget, had not been raised  since 1970.  The base excise                                                               
rate for  motor fuel is still  $.08 per gallon, he  imparted, and                                                               
marine  fuel is  still  $.05  per gallon.    After adjusting  for                                                               
inflation,  the  motor  fuel  tax  rate  of  1970  would  be  the                                                               
equivalent of  $.52 today.  Alaska  fuel tax has lost  82 percent                                                               
of its purchasing power since 1970,  he said.  With the increase,                                                               
Alaska would move from fiftieth  to forty-first in the nation, he                                                               
related.  No proposed increases in  aviation or jet fuel would be                                                               
included in  SB 115, he  added.   The revenue sources  book shows                                                               
that Alaska is  losing between 1 and 2 percent  a year in income,                                                               
he said.                                                                                                                        
                                                                                                                                
SENATOR BISHOP related  that cars get better  fuel mileage today,                                                               
about 25  miles per gallon.   Electric vehicles (EV)  and plug-in                                                               
hybrid  vehicles increase  "wear  and  tear" but  do  not add  to                                                               
revenue, he said,  and a good transportation  system is necessary                                                               
to move  goods and  commerce.  Approximately  $33 million  in new                                                               
revenue  would be  generated  by  SB 115  and  would move  Alaska                                                               
forward on deferred  road maintenance.  Senator  Bishop urged the                                                               
passage  of  SB  115  for  the purpose  of  citizens'  safety  on                                                               
Alaska's highways.                                                                                                              
                                                                                                                                
1:28:22 PM                                                                                                                    
                                                                                                                                
The committee took a brief at-ease at 1:28 p.m.                                                                                 
                                                                                                                                
1:28:41 PM                                                                                                                      
                                                                                                                                
DARWIN  PETERSON,  Staff,  Senator  Click  Bishop,  Alaska  State                                                               
Legislature,  gave  a  PowerPoint  presentation on  SB  115  CSSB                                                               
115(FIN)(efd fld)  [hard copy included in  the committee packet],                                                               
on  behalf of  Senator  Bishop, prime  sponsor.   Beginning  with                                                               
slide 2,  Mr. Peterson showed  a brief  primer on motor  fuel tax                                                               
history.   In  1945,  as the  slide showed,  motor  fuel tax  was                                                               
levied at  $.01 per gallon.   In 1970, the last  increase brought                                                               
it to  $.08 per gallon.   In 1977 and  1994, marine fuel  tax and                                                               
aviation  tax were  raised  respectively to  $.05  and $.047  per                                                               
gallon; from  September 1,  2008, until August  31, 2009,  a fuel                                                               
tax "holiday"  took place in  which motor fuel tax  was suspended                                                               
on all  types; and  in 2015,  House Bill 158  added a  $.0095 per                                                               
gallon surcharge on motor fuel  intended for spill prevention and                                                               
response fund, Mr. Peterson imparted.                                                                                           
                                                                                                                                
1:30:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STORY  asked why CSSB 115(FIN)(efd  fld) would not                                                               
include an  increase on  marine and aviation  fuel and  how those                                                               
types of fuel compared to other states.                                                                                         
                                                                                                                                
1:30:46 PM                                                                                                                    
                                                                                                                                
MR. PETERSON  replied that  an increase  was proposed  for marine                                                               
fuel but  not jet and  aviation fuel.   He explained there  was a                                                               
more competitive  advantage in  Alaska than  in other  states for                                                               
jet  and  aviation  fuel,   currently  ranking  thirty-sixth  and                                                               
fortieth,  respectively.    Cargo   flying  through  Ted  Stevens                                                               
Anchorage International  Airport was quite a  benefit to Alaska's                                                               
economy,  he explained,  so the  competitive  advantage with  jet                                                               
fuel  need  not be  jeopardized.    Money  generated by  jet  and                                                               
aviation fuel is required by  the Federal Aviation Administration                                                               
(FAA) to be spent on  airports, so there are federal requirements                                                               
if those fuels were to undergo a tax increase.                                                                                  
                                                                                                                                
1:32:38 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DRUMMOND  asked  whether   the  FAA  would  allow                                                               
revenue  to be  spent  on state  airports  or only  international                                                               
airports.                                                                                                                       
                                                                                                                                
MR. PETERSON answered that it  wasn't restricted to region; money                                                               
just needed to be spent on maintenance or upkeep to airports.                                                                   
                                                                                                                                
1:33:24 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DRUMMOND said  it had been proposed  to transfer a                                                               
couple of  rural airports  to local communities.   She  asked Mr.                                                               
Peterson how much  jet and aviation tax would  be directed toward                                                               
the smaller airports.                                                                                                           
                                                                                                                                
1:33:58 PM                                                                                                                    
                                                                                                                                
MR. PETERSON  replied there  was a  municipal sharing  program in                                                               
which  revenue was  shared with  municipalities that  owned their                                                               
airports,  and he  estimated 60  percent went  to municipalities.                                                               
He  added this  was  in statute  so could  be  raised or  lowered                                                               
according to the will of the legislature.                                                                                       
                                                                                                                                
1:34:33 PM                                                                                                                    
                                                                                                                                
ROB CARPENTER, Deputy  Commissioner, Department of Transportation                                                               
and  Public Facilities,  said the  FAA did  require that  revenue                                                               
generated at  an airport be spent  at that airport.   Ted Stevens                                                               
Anchorage  International  Airport   and  Fairbanks  International                                                               
Airport were  considered a "system,"  meaning revenue  was shared                                                               
between  those two  airports.    All the  rural  airports were  a                                                               
system  as well,  so any  revenue  generated at  a rural  airport                                                               
could be used for any rural airport.                                                                                            
                                                                                                                                
1:35:54 PM                                                                                                                    
                                                                                                                                
CHAIR  STUTES   asked  how   Juneau  International   Airport  was                                                               
designated.                                                                                                                     
                                                                                                                                
MR.  CARPENTER  replied  that Juneau  International  Airport  was                                                               
owned by the City & Borough of Juneau (CBJ).                                                                                    
                                                                                                                                
1:36:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   STORY  asked   whether   there   was  any   more                                                               
information about rural airports which would be closing.                                                                        
                                                                                                                                
1:36:33 PM                                                                                                                    
                                                                                                                                
MR. CARPENTER  replied that there was  some information regarding                                                               
into which  airports DOT&PF was  considering divesting,  and that                                                               
it would be provided to the committee.                                                                                          
                                                                                                                                
1:36:52 PM                                                                                                                    
                                                                                                                                
MR.  PETERSON moved  on to  slide 3,  which showed  current motor                                                               
fuel tax  rates and  what they would  be under  CSSB 115(FIN)(efd                                                               
fld):  highway  fuel and marine fuel would increase  from $.08 to                                                               
$.16 and $.05  to $.10, respectively; aviation fuel  and jet fuel                                                               
would stay  the same  at $.047 and  $.032, respectively;  and the                                                               
off-road  use  refund would  increase  from  $.06  to $.12.    He                                                               
explained  the  off-road  refund  applied to  gas  used  in  snow                                                               
machines  or other  vehicles that  did  not use  the public  road                                                               
system,  and to  receive the  refund, receipts  must be  kept and                                                               
sent  to  the Department  of  Revenue  (DOR).   The  refund  also                                                               
applied to mines that bought fuel for machinery, he said.                                                                       
                                                                                                                                
1:39:39 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STORY asked  whether there was a  breakdown of the                                                               
total revenue received  from highway fuel, marine  fuel, and off-                                                               
road use.                                                                                                                       
                                                                                                                                
MR. PETERSON replied  it hadn't been broken down as  such for the                                                               
fiscal  note,  but  the  rough   number  was  at  $33.8  million,                                                               
approximately $5 million  of which came from the  marine fuel tax                                                               
and $28.8 million from the highway tax.                                                                                         
                                                                                                                                
1:40:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CLAMAN  asked why, after adjusting  for inflation,                                                               
motor fuel  tax had been  set at $.52  and whether there  was any                                                               
reason why CSSB  115(FIN)(efd fld) was not  increasing motor fuel                                                               
tax more.                                                                                                                       
                                                                                                                                
MR. PETERSON replied  that a previous attempt to  increase by two                                                               
tiers had not passed, so Senator  Bishop had decided not to "bite                                                               
off such  a big chunk" and  instead just pass something  that had                                                               
support.                                                                                                                        
                                                                                                                                
REPRESENTATIVE CLAMAN  asked whether  these funds  were dedicated                                                               
or designated.                                                                                                                  
                                                                                                                                
MR. PETERSON replied that they  were designated; none of the fuel                                                               
tax categories  were dedicated.  Designated  funds were sub-funds                                                               
of the  general fund,  he said.   All  highway fuel  tax proceeds                                                               
were deposited  into the highway maintenance  account, all marine                                                               
fuel  tax proceeds  were deposited  into the  watercraft account,                                                               
and off-road has its account meant to be used for trails.                                                                       
                                                                                                                                
1:43:39 PM                                                                                                                    
                                                                                                                                
MR. PETERSON  moved on to slide  4, regarding the impact  the tax                                                               
increase  would  have  on  the  average  Alaska  consumer.    The                                                               
Division  of  Motor  Vehicles  (DMV)  put  the  total  number  of                                                               
registered cars  and trucks  in Alaska  at 654,826,  Mr. Peterson                                                               
stated.   The average  number of  miles per  year per  vehicle by                                                               
Kelley Blue  Book was estimated  at 15,000.   To get  the average                                                               
miles  per gallon  (mpg), the  average for  cars, 24.2,  plus the                                                               
average for trucks,  17.5, was divided, coming up  with 20.85 mpg                                                               
total.   To reach the  number of gallons  of fuel used  per year,                                                               
15,000  miles was  divided  by  20.85 mpg  to  come  up with  719                                                               
gallons  per   year.    The   annual  cost  per   vehicle,  then,                                                               
multiplying  719 gallons  by $.08  per  gallon, was  found to  be                                                               
$57.52.                                                                                                                         
                                                                                                                                
MR.  PETERSON  continued  with  slide  5,  the  Electric  Vehicle                                                               
Registration Fee.   There is  an additional registration  fee for                                                               
EVs,  he imparted,  because they  do contribute  to the  need for                                                               
road maintenance  and are heavier than  gasoline-powered vehicles                                                               
due to  the rechargeable  batteries.  About  half of  U.S. states                                                               
charge an  additional registration  fee for  EVs for  purposes of                                                               
maintenance  since they  do  not  buy gasoline,  he  added.   The                                                               
proposal is  to increase fees  for EVs,  of which there  are 600-                                                               
plus in  Alaska, from $100  to $200, as  well as that  of plug-in                                                               
hybrid  vehicles, of  which there  are 300-plus  in Alaska,  from                                                               
$100  to $150.   The  revenue will  be collected  by the  DMV and                                                               
deposited into the highway maintenance fund.                                                                                    
                                                                                                                                
1:48:58 PM                                                                                                                    
                                                                                                                                
CHAIR STUTES  said that as an  EV owner she personally  was happy                                                               
to pay a fee to use the roads.                                                                                                  
                                                                                                                                
1:49:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  STORY asked  whether after  eight years  it would                                                               
still be in  effect to obtain permanent registration  for EVs and                                                               
plug-in hybrids.                                                                                                                
                                                                                                                                
1:49:44 PM                                                                                                                    
                                                                                                                                
MR.  PETERSON  replied  that  was   correct,  for  boroughs  that                                                               
participated.   He  added  that Juneau  was  not a  participating                                                               
municipality.                                                                                                                   
                                                                                                                                
REPRESENTATIVE  STORY asked  whether  Mr. Peterson  knew how  the                                                               
permanent registration came to be.                                                                                              
                                                                                                                                
MR. PETERSON said  that he did not, but he  would research it and                                                               
let the committee know.                                                                                                         
                                                                                                                                
1:51:38 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CLAMAN  asked why CSSB 115(FIN)(efd  fld) showed a                                                               
$100 increase in fees but the PowerPoint showed $200.                                                                           
                                                                                                                                
1:52:05 PM                                                                                                                    
                                                                                                                                
MR. PETERSON  replied that Section 1  in SB read "in  addition to                                                               
other fees imposed",  so the EV charge of $100  and $50 for plug-                                                               
in  hybrids was  in  addition to  the  regular registration  fee,                                                               
making EVs $250 and plug-in hybrids $150.                                                                                       
                                                                                                                                
REPRESENTATIVE CLAMAN  said folks  have complained that  a higher                                                               
registration  for  EVs  and hybrids  created  a  disincentive  to                                                               
purchase  those vehicles,  and asked  Mr. Peterson  how he  would                                                               
respond to  the criticism  that the increased  fee makes  it more                                                               
difficult for people to purchase  vehicles that have some obvious                                                               
positive advantages in terms of climate change.                                                                                 
                                                                                                                                
MR.  PETERSON  reiterated EVs  did  provide  more wear  and  tear                                                               
because  of  their  weight,  but   the  sponsor  had  taken  into                                                               
consideration that  EVs and plug-in  hybrids were better  for the                                                               
environment,  so that  is why  the increase  was still  lower bi-                                                               
annually than those with gas tax vehicles were paying per year.                                                                 
                                                                                                                                
1:56:11 PM                                                                                                                      
                                                                                                                                
MR. PETERSON moved on to slide  6, which compared Alaska to other                                                               
states in  terms of fuel  tax rates.   Alaska has the  lowest tax                                                               
rate on  highway fuel and marine  fuel of any state,  he informed                                                               
the committee.  In most states,  he added, the marine rate is the                                                               
same as  the highway  rate, so  Alaska is one  of the  few states                                                               
that separates  and charges a  separate rate for marine  fuel and                                                               
highway fuel.   With the passage  of SB 115, Alaska  would remain                                                               
well  below the  national average  in highway  fuel, moving  from                                                               
fiftieth to forty-first,  and would still have the  lowest tax on                                                               
marine fuel in the U.S.                                                                                                         
                                                                                                                                
MR.  PETERSON showed  slide 7,  a  graph that  depicted the  base                                                               
excise tax  beside other  fees and taxes  imposed by  each state.                                                               
He pointed out  Pennsylvania, which had the  second highest taxes                                                               
in  the U.S.  after  California,  even though  they  had no  base                                                               
excise tax.  Showing the other  fees was important for "apples to                                                               
apples" comparison,  he related.   The chart did not  include the                                                               
$.18 per  gallon federal  excise tax charged  in every  state, he                                                               
added.  Mr. Peterson pointed  out where Alaska currently stood at                                                               
the graph's  far left, the lowest  in the U.S.   With the passage                                                               
of CSSB  115(FIN)(efd fld), Alaska  would move ten spaces  to the                                                               
right as indicated on the graph.                                                                                                
                                                                                                                                
1:59:18 PM                                                                                                                    
                                                                                                                                
CHAIR STUTES opened invited testimony on CSSB 115(FIN)(efd fld).                                                                
                                                                                                                                
1:59:39 PM                                                                                                                    
                                                                                                                                
DANIEL  NICHOLS, American  Society of  Civil Engineers,  informed                                                               
the  committee  that  the American  Society  of  Civil  Engineers                                                               
(ASCE)  was one  of the  oldest civil  organizations in  the U.S.                                                               
with  150,000 members.   In  Alaska there  are about  900 members                                                               
across the state, he said,  and they are politically motivated in                                                               
terms  of infrastructure.   In  2017 the  organization issued  an                                                               
"Alaska  infrastructure report  card," and  Alaska's grade  of C-                                                               
was still  higher than the  national average  of D+.   Alaska has                                                               
almost 5,600 miles of road, 60  to 70 percent of which are paved,                                                               
and  all   of  which   are  extremely   important  in   terms  of                                                               
transporting people and  goods.  Funding has  not increased since                                                               
the report  had been  done in  2017, he said.   It  was estimated                                                               
that  there was  about a  $22  million deficit  in operation  and                                                               
maintenance, and  ASCE had  long been advocating  for a  fuel tax                                                               
increase.    In  2013 ASCE  estimated that  failure to  invest in                                                               
roads was costing American families  $3,400 per year in increased                                                               
transportation  costs.   He related  anecdotally  that hitting  a                                                               
pothole  with  a sport  utility  vehicle  cost  $500 to  $600  to                                                               
repair.   If that number  were multiplied per number  of vehicles                                                               
in a family, then it would start to add up quickly.                                                                             
                                                                                                                                
2:05:34 PM                                                                                                                      
                                                                                                                                
MR. NICHOLS related  to the committee the  different metrics used                                                               
by  DOT&PF, including  a performance  and economic  rating system                                                               
which helped identify  the condition of a  road through different                                                               
factors on a scale  from 2.5 to 4.  Roads  in Alaska were largely                                                               
around 3.1, which  was considered marginal, he said.   The system                                                               
had  been devised  in 2017,  he reminded  the committee,  and the                                                               
transportation  budget had  not  increased since  then.   As  Mr.                                                               
Nichols  pointed  out,  the fatalities  on  roads,  however,  had                                                               
increased.                                                                                                                      
                                                                                                                                
2:08:06 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 2:08 p.m. to 2:09 p.m.                                                                       
                                                                                                                                
2:09:02 PM                                                                                                                      
                                                                                                                                
NILS  ANDREASSEN,  Executive  Director, Alaska  Municipal  League                                                               
(AML), spoke  on the  need for a  healthy DOT&PF,  which included                                                               
communities and "everything in  between communities," he related.                                                               
Mr.   Andreassen,   referencing   slide   2   of   a   PowerPoint                                                               
presentation,  entitled   "Funding  Transportation:     Municipal                                                               
Perspective,"  said  it  was  understood  municipalities  managed                                                               
about  5,500  road  miles,  equal  to DOT&PF  road  miles.    The                                                               
municipal transportation budget, or  the budget for roads, ports,                                                               
harbors,   and    airports,   was   $190   million,    he   said.                                                               
Municipalities' annual need as it  applied to roads, when looking                                                               
at a $28,000 per mile  national average, was around $154 million,                                                               
and the state  of Alaska's need was $308 million,  he stated.  He                                                               
could  also  point to  $2.8  billion  in  need  when it  came  to                                                               
projects within boroughs,  he said, and $1.9 billion  in need for                                                               
projects outside boroughs.                                                                                                      
                                                                                                                                
MR. ANDREASSEN continued with slide  3, which looked at specifics                                                               
on ports  and harbors.   He pointed to a  2010 study by  the Army                                                               
Corps of Engineers which stated  roughly $600 million was needed.                                                               
He  said  AML   would  update  the  figure   to  include  coastal                                                               
infrastructure   needs.     Mr.   Andreassen  provided   detailed                                                               
information regarding port and harbor  matching grants, which are                                                               
related to SB 115 directly, from 2007  to 2019:  98 of these were                                                               
requested;  45 were  awarded.   Of  the grants  awarded, 30  were                                                               
considered Tier  I and  15 were considered  Tier II.      He also                                                               
looked  at debt  reimbursement for  DOT&PF projects,  as provided                                                               
for under House Bill 528  [passed during the Twenty-Second Alaska                                                               
State  Legislature].   Reimbursement  stood at  16.4 million,  he                                                               
imparted.  Regarding ferry terminals,  another $68.25 million was                                                               
needed, he added.                                                                                                               
                                                                                                                                
2:12:45 PM                                                                                                                    
                                                                                                                                
MR.  ANDREASSEN directed  the committee's  attention to  slide 4,                                                               
which   listed  municipal   airports:     Juneau   International,                                                               
maintained by CBJ; Merrill Field,  maintained by the municipality                                                               
of  Anchorage;  Ketchikan  International,  managed  by  Ketchikan                                                               
Gateway  Borough;  Kenai   Municipal  Airport;  Kodiak  Municipal                                                               
Airport; and  Wasilla Municipal Airport.   Only a  few localities                                                               
had a motor  fuel tax, he stated, looking at  slide 5.  Anchorage                                                               
was at  $.10 per gallon,  and Cold Bay and  Larsen Bay were  at 4                                                               
and 3  percent, respectively.   Whittier and Bettles  were others                                                               
with  very  minimal  local  taxation   for  motor  fuel  tax,  he                                                               
imparted.   Marine fuel  tax was  available for  appropriation to                                                               
port and  harbor facilities, he said.   In terms of  airports the                                                               
state  did share  60 percent  with municipalities  that owned  or                                                               
managed  airports.   These were  Akutan, Anchorage,  Craig, Delta                                                               
Junction,   Egegik,  Haines,   Juneau,   Kake,  Kenai,   Klawock,                                                               
Ketchikan, Kodiak, Nenana, North  Slope Borough, Palmer, Pelican,                                                               
Port Alexander,  Seldovia, Sitka, Soldotna, Thorne  Bay, Wasilla,                                                               
Whale  Pass, Wrangell,  and Yakutat,  Mr. Andreassen  shared with                                                               
the committee.                                                                                                                  
                                                                                                                                
2:14:24 PM                                                                                                                    
                                                                                                                                
MR.   ANDREASSEN  said   that  SB   115  would   improve  things.                                                               
Referencing  slide  6,  which  looked  at  motor  fuel  tax,  the                                                               
additional  $30.5 million  within DOT&PF  would cover  Southcoast                                                               
operations, he  said.  It  would cover General Fund  (GF) funding                                                               
for Central and  Southcoast divisions.  It  would cover one-fifth                                                               
of the funding necessary for  road maintenance.  For marine fuel,                                                               
the  additional $5.7  million  wouldn't  go a  long  way and  was                                                               
probably insufficient considering the  need.  The state requested                                                               
$12.5  million  and there  is  $5  million  budgeted.   The  $5.7                                                               
million would  cover just  under one percent  of port  and harbor                                                               
infrastructure needs, he related.                                                                                               
                                                                                                                                
MR.  ANDREASSEN  turned  to  slide  7, a  map  published  by  the                                                               
American  Petroleum  Institute,  of  gasoline  taxes  nationwide.                                                               
Alaska was  in the  "less than  $.40 per  gallon" category.   The                                                               
average  was found  to  be $.55.   Slide  8  showed gasoline  tax                                                               
increases  or   reforms  enacted  between  2013   and  2019;  Mr.                                                               
Andreassen acknowledged that  more recent data could  be found on                                                               
these.  Slide 9 showed  states with variable-rate gasoline taxes,                                                               
in which inflation  and fuel economy indexing, as well  as EV and                                                               
plug-in hybrid  vehicle fees were  taken into consideration.   In                                                               
many  ways  SB 115  mirrored  nationwide  trends, Mr.  Andreassen                                                               
imparted, although  it still had  a way to  go in terms  of fully                                                               
funding infrastructure.   Referencing slide  10, he added  SB 115                                                               
increased Alaska's  purchasing power as  it applied to  roads and                                                               
reiterated there was a critical  need for the funding and support                                                               
of DOT&PF.   He pointed out marine fuel tax  sharing is important                                                               
to  local governments  responsible for  the entirety  of Alaska's                                                               
coastal infrastructure.   Last, Mr. Andreassen said  a portion of                                                               
SB 115 should be reserved for community infrastructure needs.                                                                   
                                                                                                                                
2:18:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  EDGMON pointed  out the  last state  to institute                                                               
income tax  was Connecticut, and  most states have had  sales tax                                                               
in  place  for  many  years.    He  offered  Mr.  Andreassen  the                                                               
opportunity to  comment why this  was not the case  with gasoline                                                               
tax.                                                                                                                            
                                                                                                                                
MR. ANDREASSEN replied  that the taxes are  considered user fees,                                                               
so for  a nation that  has huge infrastructure gaps  states could                                                               
make a pretty  strong argument for increasing a tax  such as this                                                               
and directing it toward improved living conditions.                                                                             
                                                                                                                                
REPRESENTATIVE EDGMON  clarified a  point Mr. Andreassen  made on                                                               
slide 5 that state fuel tax went to GF for DOT&PF.                                                                              
                                                                                                                                
2:21:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CLAMAN said  that SB 115 would add  $70 million in                                                               
state revenue and that may not  pay the capital match to meet the                                                               
federal  fund.   In the  future there  would need  to be  an even                                                               
bigger federal  match.  He  asked whether the  legislature should                                                               
consider  a  slightly  higher  fuel rate  that  would  provide  a                                                               
greater chance of meeting the federal match fund-wise.                                                                          
                                                                                                                                
2:23:22 PM                                                                                                                    
                                                                                                                                
MR. ANDREASSEN  asked whether the  match to  which Representative                                                               
Claman referred was capital needs versus operations.                                                                            
                                                                                                                                
REPRESENTATIVE  CLAMAN replied  that the  question was  still how                                                               
much was  being contributed  to transportation.   If  the federal                                                               
funds increased, he  stated, the amount needed to  make the match                                                               
would increase.                                                                                                                 
                                                                                                                                
MR. ANDREASSEN  agreed with Representative Claman  and said AML's                                                               
potential  to increase  the  funding source  during  a period  of                                                               
fiscal crisis  should be considered.   Whether for infrastructure                                                               
or operations, there was a deficit  and a challenge, he said.  It                                                               
would work better  for AML members to support  an increase beyond                                                               
what was  proposed if  some of  the increase  came back  to local                                                               
governments, which  might in turn  supply a local match  for some                                                               
of the same projects.                                                                                                           
                                                                                                                                
2:25:10 PM                                                                                                                    
                                                                                                                                
FRANCIS LEACH,  Executive Director,  United Fishermen  of Alaska,                                                               
representing 36  commercial fishing  groups in  Alaska, testified                                                               
regarding the  marine fuel tax  in SB  115.  United  Fishermen of                                                               
Alaska (UFA)  understood that the  tax was necessary  to maintain                                                               
infrastructure and that it had not  been raised in some time, but                                                               
UFA  has faced  numerous additional  expenses over  the past  few                                                               
years,  Ms. Leach  stated,  and  a tax  increase  would  be at  a                                                               
detriment  to commercial  fishermen.   Kodiak  saw  a 25  percent                                                               
increase  in solid  waste collection  and disposal  fees in  both                                                               
2016 and  2017, she offered.   In 2018  there was an  increase in                                                               
the  sales  tax cap  from  $750  to  $3000,  or 300  percent,  on                                                               
groceries and fuel.                                                                                                             
                                                                                                                                
MS. LEACH said  the City of Kodiak increased harbor  fees by 18.5                                                               
percent starting in  July of 2017 and 2.8  percent annually after                                                               
that; this  was the trend all  over Alaska ports and  was hitting                                                               
boaters hard.  She stated  that Chinese tariffs were also hurting                                                               
fishermen:   as  of January  2020, 37  to 42  percent tariffs  on                                                               
seafood into China  and "tariff on, tariff off  again" policy was                                                               
forcing down prices  overall.  With the drop of  fish prices, the                                                               
pink  salmon disaster,  lack of  Pacific cod  fisheries, rise  in                                                               
fuel costs,  continued trade tensions between  the European Union                                                               
over  World  Trade Organization  trade  disputes,  and the  novel                                                               
Coronavirus  threatening to  further  impact  tourism, Ms.  Leach                                                               
said  that SB  115 could  harm the  commercial fishing  industry,                                                               
which in 2017 paid $172,000,000 in taxes.                                                                                       
                                                                                                                                
MS. LEACH  mentioned that  it was  not only  commercial fishermen                                                               
who  would be  adversely  affected but  all  boat and  watercraft                                                               
users, especially  those who catered  to tourism.  She  asked the                                                               
committee  to  consider   relief  under  SB  115   for  boat  and                                                               
watercraft users.                                                                                                               
                                                                                                                                
2:29:18 PM                                                                                                                    
                                                                                                                                
CHAIR STUTES announced that CSSB  115(FIN)(efd fld) would be held                                                               
over.                                                                                                                           

Document Name Date/Time Subjects
HB 253 v. M 2.17.20.PDF HTRA 2/25/2020 1:00:00 PM
HTRA 3/3/2020 1:00:00 PM
HTRA 3/10/2020 1:00:00 PM
HB 253
HB 253 Sponsor Statement 2.17.20.pdf HTRA 2/25/2020 1:00:00 PM
HTRA 3/3/2020 1:00:00 PM
HTRA 3/10/2020 1:00:00 PM
HB 253
HB 253 Sectional v. M 2.17.20.pdf HTRA 2/25/2020 1:00:00 PM
HTRA 3/3/2020 1:00:00 PM
HTRA 3/10/2020 1:00:00 PM
HB 253
HB 253 Support Document - AMHS Vessel Status 2.21.19.pdf HTRA 2/25/2020 1:00:00 PM
HTRA 3/3/2020 1:00:00 PM
HTRA 3/10/2020 1:00:00 PM
HB 253
HB 253 Fiscal Note - DOT&PF 2.22.2020.pdf HTRA 2/25/2020 1:00:00 PM
HTRA 3/3/2020 1:00:00 PM
HTRA 3/10/2020 1:00:00 PM
HB 253
HB 253 Testimony - Received by 3.02.2020.pdf HTRA 3/3/2020 1:00:00 PM
HTRA 3/10/2020 1:00:00 PM
HB 253
HB 253 Amendment #1.pdf HTRA 3/10/2020 1:00:00 PM
HB 253
HB 253 Testimony Submitted by 3.10.2020.pdf HTRA 3/10/2020 1:00:00 PM
HB 253
CSSB 115(FIN)(efd fld) ver. K.A 3.3.20.PDF HTRA 3/10/2020 1:00:00 PM
HTRA 3/12/2020 1:00:00 PM
SB 115
SB 115 Sponsor Statement 3.2.20.pdf HTRA 3/10/2020 1:00:00 PM
SB 115
SB 115 Sectional Analysis 3.2.20.pdf HTRA 3/10/2020 1:00:00 PM
SB 115
SB 115 Fiscal Note - DOR 2.24.20.PDF HTRA 3/10/2020 1:00:00 PM
HTRA 3/12/2020 1:00:00 PM
SB 115
SB 115 Fiscal Note - DOA 2.24.20.PDF HTRA 3/10/2020 1:00:00 PM
HTRA 3/12/2020 1:00:00 PM
SB 115
SB 115 Fiscal Note - DOT&PF 2.20.20.PDF HTRA 3/10/2020 1:00:00 PM
HTRA 3/12/2020 1:00:00 PM
SB 115
Senate Bill 115 PowerPoint 3.3.2020.pptx HTRA 3/10/2020 1:00:00 PM
SB 115
SB 115 - FAQs.pdf HTRA 3/10/2020 1:00:00 PM
HTRA 3/12/2020 1:00:00 PM
SB 115
SB 115 Motor Fuel Tax by State Graph 2.12.2020.pdf HFIN 3/20/2020 9:00:00 AM
HTRA 3/10/2020 1:00:00 PM
HTRA 3/12/2020 1:00:00 PM
SB 115
SB 115 Anchorage Daily News editorial 2.8.20.pdf HTRA 3/10/2020 1:00:00 PM
HTRA 3/12/2020 1:00:00 PM
SB 115
SB 115 Letter of Support - Alaska Municipal League 1.30.20.pdf HTRA 3/10/2020 1:00:00 PM
HTRA 3/12/2020 1:00:00 PM
SB 115
SB 115 Letter of Support - JEVA 2.20.2020.pdf HTRA 3/10/2020 1:00:00 PM
HTRA 3/12/2020 1:00:00 PM
SB 115
SB 115 Letter of Support - Fairbanks Chamber of Commerce 2.27.20.pdf HTRA 3/10/2020 1:00:00 PM
HTRA 3/12/2020 1:00:00 PM
SB 115
SB 115 Letter of Support - AFL-CIO 3.8.2020.pdf HTRA 3/10/2020 1:00:00 PM
SB 115
SB 115 Support Document - Fall 2019 Revenue Sources Book Chapter 5.pdf HTRA 3/10/2020 1:00:00 PM
SB 115
SB 115 Support Document - 2018 Motor Fuel Tax Report, Tax Division, Department of Revenue.pdf HTRA 3/10/2020 1:00:00 PM
HTRA 3/12/2020 1:00:00 PM
SB 115
SB 115 Support Document - Federation of Tax Administrators, motor fuel tax rates, January 2019.pdf HTRA 3/10/2020 1:00:00 PM
SB 115
SB 115 Support Document - Leg. Research MFT revenue 1993-2018.pdf HTRA 3/10/2020 1:00:00 PM
HTRA 3/12/2020 1:00:00 PM
SB 115
SB 115 Support Document - LFD Fund Sources_Motor Fuel Tax_2018.pdf HTRA 3/10/2020 1:00:00 PM
HTRA 3/12/2020 1:00:00 PM
SB 115
SB 115 Presentation from AML 3.10.2020.pptx HTRA 3/10/2020 1:00:00 PM
SB 115