03/21/1994 09:11 AM Senate FIN

  CSSB 256(TRA): An Act relating  to the tax on  transfers and                 
                 consumption of aviation  fuel; and  providing                 
                 for an effective date.                                        
                                                                               
                 Senator Sharp  spoke in  support  of SB  256.                 
                 Discussion  was  had   by  Co-chair   Pearce,                 
                 Senators Rieger, Kelly, and  Sharp, regarding                 
                 rural landing fees and fuel taxes.   Co-chair                 
                 Pearce announced that CSSB  256(TRA) would be                 
                 HELD in committee until more information  was                 
                 obtained comparing jet  fuel prices in Alaska                 
                                                                               
                                                                               
                 with  the  lower 48  states.   (The  bill was                 
                 heard again on Friday, March 25, 1994.)                       
                                                                               
  CS FOR SENATE BILL NO. 256(TRA):                                             
                                                                               
       An Act relating to the tax on transfers and consumption                 
       of aviation fuel; and providing for an effective date.                  
                                                                               
  Co-chair  Pearce  announced  that  SB  256  was  before  the                 
  committee.                                                                   
                                                                               
  Senator  Sharp  said   the  bill   was  introduced  by   the                 
  Transportation  Committee and it  addressed the statement in                 
  last year's operations budget where  the situation was noted                 
  that rural  landing fees  in rural  airports  should not  be                 
  considered.  They  were difficult and expensive  to collect.                 
  This  bill  was another  option  to landing  fees  for rural                 
  airports.  Some organizations did support it.   Without this                 
  bill, rural landing  fees would have  to be reinstated.   He                 
  said SB  256 would sunset in  the year 2000.   It prohibited                 
  charging rural landing fees while this tax was in effect.                    
                                                                               
  Co-chair Pearce commented that  Northern Air Cargo supported                 
  the bill.   An unidentified  man in the  audience also  said                 
  that Alaska Air Carriers supported the bill.                                 
                                                                               
  Senator Sharp said he thought  Alaska Airlines supported the                 
  bill.                                                                        
                                                                               
  REED  STOOP,  Alaska  Air   Carriers  Association,  said  he                 
  believed that Alaska  Airlines would be  beneficiaries under                 
  this bill.   They  would pay  less in  fuel taxes than  they                 
  would in  landing fees if landing fees were the alternative.                 
  There had been  some mixed  correspondence but Kim  Daniels,                 
  Alaska Airlines, had  told him that  they did not object  to                 
  the bill.                                                                    
                                                                               
                                                                               
  Mr. Stoop  said his  organization was  very appreciative  of                 
  Commissioner Campbell's  efforts  last year  to suspend  the                 
  landing fee program which none of  the carriers liked.  Most                 
  agreed with  the Commissioner when he made  the decision not                 
  to  reinstate  the landing  fees.    At that  time,  the air                 
  carries agreed  that they  would not  object to  a fuel  tax                 
  increase that  would raise  an equivalent  amount of  money.                 
  They felt  it would be a fair  tax and a better alternative.                 
  If the money was not raised,  the department would be forced                 
  to make cuts  to its  operation in rural  airports and  that                 
  would hurt the air carriers.                                                 
                                                                               
  Co-chair Pearce felt  that all members  of ATA that  opposed                 
  the bill in  some way had to benefit  from having the feeder                 
  lines going  into Anchorage  and going  back out  to provide                 
  other  passenger  and  cargo  service  throughout the  state                 
  because so  many towns  and villages  were not  on the  road                 
  system  and relied on  air travel.  She  agreed that lack of                 
  upkeep at rural airports would cut down on service for these                 
  carriers.                                                                    
                                                                               
  Mr. Stoop agreed with Co-chair Pearce's statement.  He  said                 
  that an  earlier  recommendation by  Commissioner Turpin  to                 
  raise the tax 2 to 2.5 cents was unacceptable and would have                 
  raised 3 or  four times  what was being  collected in  rural                 
  landing fees.  He said SB 256 was a more modest contribution                 
  of  $1.5M  and he  knew  the Department  of Transportation's                 
  budget  cuts  were  beginning to  effect  the  rural airport                 
  maintenance support.                                                         
                                                                               
  Co-chair  Pearce  asked for  a  jet fuel  comparison between                 
  Alaska's  large cities  like  Anchorage and  Fairbanks,  and                 
  other major airports in  the lower 48.  An  unidentified man                 
  in the audience said that it was his understanding that fuel                 
  costs were more reasonable  in Alaska than in the  lower 48.                 
  Senator  Sharp said he  would have that  information for the                 
  committee in a few days.                                                     
                                                                               
  Discussion was had between Senator Kelly and Co-chair Pearce                 
  regarding  the  new  Albuquerque  airport  and  how  it  was                 
  financed.  Co-chair Pearce noted that it was an old military                 
  base and some funding was paid for or such things as fencing                 
  had already been installed by the federal government.                        
                                                                               
  Senator Rieger asked  why the year  2000 had been chosen  as                 
  the  sunset  date.   Senator  Sharp  said  he  did not  know                 
  anything special about the year  2000 but the Transportation                 
  Committee had wanted a sunset in the bill.                                   
                                                                               
  Co-chair  Pearce announced  that  SB 256  would  be HELD  in                 
  committee until Senator Sharp requested  that it back before                 
  the committee.                                                               
                                                                               
  Discussion followed  by Co-chair Pearce, Senators  Sharp and                 
                                                                               
                                                                               
  Kelly regarding the report regarding jet fuel costs in other                 
  states.                                                                      
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  The meeting was adjourned at approximately 9:40 a.m.