03/23/1994 08:06 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.