Legislature(2019 - 2020)SENATE FINANCE 532

02/03/2020 09:00 AM FINANCE

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Audio Topic
09:00:29 AM Start
09:02:18 AM SB115
10:29:28 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 115 MOTOR FUEL TAX TELECONFERENCED
Heard & Held
-- Public Testimony --
SENATE BILL NO. 115                                                                                                           
                                                                                                                                
     "An Act relating to the motor fuel tax; and providing                                                                      
     for an effective date."                                                                                                    
                                                                                                                                
9:02:18 AM                                                                                                                    
                                                                                                                                
SENATOR  CLICK BISHOP,  SPONSOR, presented  the legislation.                                                                    
He stated  that the bill  would increase the motor  fuel tax                                                                    
by $0.80.  He commented that  he had supported a  motor fuel                                                                    
tax  for several  years at  various iterations.  He remarked                                                                    
that  there  was  a  growing  use  of  hybrid  and  electric                                                                    
vehicles,  so  the  fuel revenue  was  continuing  to  trend                                                                    
downward.  He  noted  that  five  maintenance  stations  had                                                                    
recently closed in  his district. He remarked  that only two                                                                    
other  states  would have  a  lower  fuel tax  than  Alaska,                                                                    
should the  bill pass: Maine  and Vermont. He  remarked that                                                                    
the administration in the year  prior had wanted an $800,000                                                                    
increment for  Maintenance and Operations in  the Department                                                                    
of Transportation and Public  Facilities (DOT/PF) budget. He                                                                    
felt the reason  for the request was because  the motor fuel                                                                    
tax  receipts were  trending downward.  He  stated that  the                                                                    
request of the governor did  not move forward, but there was                                                                    
another maintenance  closure in the meantime.  He understood                                                                    
that  there would  be a  Constitutional amendment  to ensure                                                                    
that the  tax was  used for  maintenance. He  referenced the                                                                    
Revenue  Sources Book,  which  stated  that remaining  motor                                                                    
fuel  tax  revenue  was   considered  designated  funds.  He                                                                    
remarked  that it  would  be a  meaningful  step toward  the                                                                    
ability  to  maintain the  roads.  He  stressed that  safety                                                                    
should always be the most  important consideration, and felt                                                                    
that DOT/PF  should not always  have the burden  in deciding                                                                    
which roads  would get  attention. He  recalled that  he had                                                                    
attended  a meeting  in Fairbanks  with the  Alaska Truckers                                                                    
Association,  and noted  that there  was  such an  expensive                                                                    
year  to repair  the trucks  travelling to  Prudhoe Bay.  He                                                                    
stated  that,  in 1970,  the  motor  fuel tax  attributed  6                                                                    
percent of  the operating budget.  He did not know  what the                                                                    
math would  attribute to in  modern times, but he  felt that                                                                    
it would be at much lower current percentage.                                                                                   
                                                                                                                                
Co-Chair  von  Imhof  acknowledged Senator  Giessel  in  the                                                                    
meeting.                                                                                                                        
                                                                                                                                
9:08:03 AM                                                                                                                    
                                                                                                                                
DARWIN PETERSON, STAFF, SENATOR  CLICK BISHOP, discussed the                                                                    
presentation,  "Senate Bill  115;  Motor  Fuel Tax;  Senator                                                                    
Click Bishop;  February 3,  2020; Senate  Finance Committee"                                                                    
(copy  on file).  He  looked  at slide  2,  "Motor Fuel  Tax                                                                    
History":                                                                                                                       
                                                                                                                                
     1945    Alaska's first motor fuel tax levied at                                                                            
     $.01/gallon                                                                                                                
                                                                                                                                
     1970 Motor fuel tax was increased to $.08/gallon                                                                           
                                                                                                                                
     1977 Marine fuel tax was increased to $.05/gallon                                                                          
                                                                                                                                
     1994  Aviation fuel tax was increased to $.047/gallon                                                                      
     Sept. 1, 2008      Aug. 31, 2009       Motor fuel tax                                                                      
     suspended on all fuel types                                                                                                
                                                                                                                                
     2015  HB 158 added a $.0095/gallon surcharge on motor                                                                      
     fuel intended for spill prevention and response fund                                                                       
                                                                                                                                
Mr. Peterson  explained that in  1970, 8 cents a  gallon was                                                                    
considered very typical compared  to other states. He stated                                                                    
that, since then, every other  state had gradually increased                                                                    
its motor fuel tax rates to keep pace with inflation.                                                                           
                                                                                                                                
9:09:59 AM                                                                                                                    
                                                                                                                                
Mr.  Peterson highlighted  slide  3, "Motor  Fuel Tax  Rates                                                                    
(cents/gallon)":                                                                                                                
                                                                                                                                
     Highway Fuel                                                                                                               
     Current: $.08; SB 115 (proposed): $.16                                                                                     
                                                                                                                                
     Marine Fuel                                                                                                                
     Current: $.05; SB 115 (proposed):  $.10                                                                                    
                                                                                                                                
     Aviation Fuel                                                                                                              
     Current: $.047; SB 115 (proposed):  $.047                                                                                  
                                                                                                                                
     Jet Fuel                                                                                                                   
     Current: $.032; SB 115 (proposed):  $.032                                                                                  
                                                                                                                                
     Off-Road Use Refund                                                                                                        
     Current: $.06; SB 115 (proposed):  $.12                                                                                    
                                                                                                                                
Co-Chair Stedman  wondered how  many people applied  for the                                                                    
refunds, and the bureaucratic costs of the overhead.                                                                            
                                                                                                                                
Mr. Peterson agreed to provide that information.                                                                                
                                                                                                                                
Co-Chair von  Imhof noted the  requested a bar graph  of all                                                                    
50 states to  show how Alaska compared to  other states. She                                                                    
noted  that  the  jet  fuel   was  remaining  constant,  and                                                                    
reiterated     the     comments    regarding     maintaining                                                                    
competitiveness in  Alaska. She  stressed the  importance of                                                                    
keeping Alaska  competitive. She noted the  "uplift charge",                                                                    
which was unique in Alaska,  which increased the cost of the                                                                    
jet fuel taxes that went toward the local jurisdictions.                                                                        
                                                                                                                                
9:14:24 AM                                                                                                                    
                                                                                                                                
Senator  Wielechowski noted  that Anchorage  had a  gas tax,                                                                    
and  wondered  whether  other  states  had  local  community                                                                    
taxes.  He asked  whether that  changed the  state's ranking                                                                    
against the other states.                                                                                                       
                                                                                                                                
Mr.  Peterson replied  that there  would be  a slide  on the                                                                    
competitiveness.  He  remarked  that   he  had  intended  to                                                                    
discuss it  at that point,  but agreed to  currently discuss                                                                    
the point.  He explained  that there was  documentation that                                                                    
showed each state's charge as  their base tax rate for motor                                                                    
fuel as  well as  state fees combined  with local  taxes. He                                                                    
pointed out that  most other states did  not separate marine                                                                    
fuel and highway  fuel, because they were taxed  the same in                                                                    
other  states. He  shared  that Alaska  would  still be  the                                                                    
lowest in  the nation for  marine fuel. He shared  that with                                                                    
highway fuel tax at 16 cents  a gallon would bring Alaska to                                                                    
48th  in  the  nation,  above New  Jersey  and  Vermont.  He                                                                    
stressed that other  New Jersey and Vermont  taxes and state                                                                    
fees  were  still  significantly   higher  than  Alaska.  He                                                                    
explained  that   taking  the   local  Anchorage   tax  into                                                                    
consideration   would  still   keep  Alaska   very  low   in                                                                    
comparison to  the other states.  He felt that,  taking into                                                                    
consideration  fees and  taxes in  other states  would still                                                                    
result in Alaska being the lowest in the nation.                                                                                
                                                                                                                                
Co-Chair  von Imhof  felt that  a one-page  table with  that                                                                    
information would be more useful to the committee.                                                                              
                                                                                                                                
Co-Chair Stedman remarked on the  marine fuel tax. He stated                                                                    
that in the  decade prior, the legislature had  moved of the                                                                    
harbor systems  to the local  communities. He  remarked that                                                                    
the harbors  had since been  rebuilt. He questioned  how the                                                                    
tax would be integrated back  to the user group, because the                                                                    
harbors were under local control.  He noted that the highway                                                                    
fuel had a target of  road maintenance, but queried the need                                                                    
and  impact  on marine  fuel.  He  stressed that  the  local                                                                    
harbors  needed  to create  separate  funds  for the  harbor                                                                    
system,  and in  doing  so  there would  not  be  a need  to                                                                    
request funds from  the state in the future.  He stated that                                                                    
the  state would  help to  build the  harbor, but  would not                                                                    
provide  funds to  repair old  infrastructure. He  looked at                                                                    
the road maintenance portion, and  felt that there should be                                                                    
more funds for roads. He  was concerned that the net benefit                                                                    
would be  zero. He  felt that there  should be  an assurance                                                                    
that  it was  an additive,  rather than  supplementing other                                                                    
funds, otherwise  there was  not a  maintenance net  gain on                                                                    
the  highways. He  requested a  conversation about  ensuring                                                                    
that   the  tax   increase  the   maintenance  rather   than                                                                    
supplement what is already allotted in spending.                                                                                
                                                                                                                                
9:22:22 AM                                                                                                                    
                                                                                                                                
Senator Olson  noted the  off-road use  for the  refund, and                                                                    
noted the  application to snowmobiles and  four-wheelers. He                                                                    
wondered  whether  there  was  relief  for  those  who  live                                                                    
throughout  the  state  without harbors  or  boat  slips  to                                                                    
maintain.                                                                                                                       
                                                                                                                                
Mr. Peterson responded  that there was no  relief for marine                                                                    
fuel tax  that was purchased  in an area without  harbors or                                                                    
boat slips.  He agreed  to work with  Senator Olson  on that                                                                    
issue.  He  explained  that  the off  road  use  refund  was                                                                    
currently in statute.                                                                                                           
                                                                                                                                
Senator  Bishop   furthered  that   the  refunds   could  be                                                                    
submitted on a quarterly basis.                                                                                                 
                                                                                                                                
Mr. Peterson agreed.                                                                                                            
                                                                                                                                
Co-Chair   von  Imhof   stated  that   there  would   be  an                                                                    
opportunity   to   address    the   bill   with   clarifying                                                                    
information.                                                                                                                    
                                                                                                                                
9:24:34 AM                                                                                                                    
                                                                                                                                
Mr. Peterson  addressed slide 4,  "Impact on  Average Alaska                                                                    
Consumer":                                                                                                                      
                                                                                                                                
     Registered Passenger Vehicles (cars and trucks only) =                                                                     
     654,826 (per DOT/PF)                                                                                                       
                                                                                                                                
     Average Miles per Year per Vehicle = 15,000 (per                                                                           
     Kelley Blue Book)                                                                                                          
                                                                                                                                
     Average Miles Per Gallon (24.2 (cars) + 17.5 (trucks)                                                                      
     / 2) = 20.85 (per DOT/PF)                                                                                                  
                                                                                                                                
     Gallons of Fuel per Year (15,000/20.85) = 719                                                                              
                                                                                                                                
     Annual Cost per Vehicle (719 x $.08) = $57.52                                                                              
                                                                                                                                
Co-Chair Stedman understood that  the state always struggled                                                                    
with  ensuring  that  all  the  constituents  received  fair                                                                    
treatment.  He noted  an interest  in a  clearer directional                                                                    
change  from piston-fired  engines  to  electrical cars.  He                                                                    
wondered how there would be  fairness to ensure all vehicles                                                                    
were  sharing  the burden  of  maintenance.  He queried  the                                                                    
thought around  ensuring that the  electric cars  paid their                                                                    
fair share, and the implementation thereof.                                                                                     
                                                                                                                                
Mr. Peterson replied that there  were many considerations of                                                                    
that  issue, and  stated that  there was  a draft  committee                                                                    
substitute   which  would   propose  an   increase  to   the                                                                    
registration fee  for electric  vehicles. He  explained that                                                                    
many  other states  had an  additional registration  fee for                                                                    
electric vehicles.                                                                                                              
                                                                                                                                
9:31:23 AM                                                                                                                    
                                                                                                                                
Co-Chair  von   Imhof  wondered   how  much  the   money  in                                                                    
registration would replace the lost  fuel tax. She wanted to                                                                    
see the bill in the future,  and wanted to hear any possible                                                                    
amendments from the committee members  to be included in the                                                                    
committee substitute.                                                                                                           
                                                                                                                                
Mr.  Peterson  displayed  slide   5,  "Comparison  to  Other                                                                    
States":                                                                                                                        
                                                                                                                                
     Alaska has the lowest tax rate on highway fuel and                                                                         
     marine fuel of any state (in most states, the marine                                                                       
     rate is the same as the highway rate).                                                                                     
                                                                                                                                
     With passage of SB 115,  Alaska would remain well below                                                                    
     the national average moving from  50th to 48th with New                                                                    
     Jersey   ($10.5   cents/gallon)  and   Vermont   ($12.1                                                                    
     cents/gallon) being lower.                                                                                                 
                                                                                                                                
     Alaska currently  has a more competitive  ranking among                                                                    
     other  states for  jet fuel  (36th)  and aviation  fuel                                                                    
     (40th).                                                                                                                    
                                                                                                                                
Co-Chair von Imhof requested a Sectional Analysis.                                                                              
                                                                                                                                
Senator Wielechowski requested information about the state                                                                      
financial effects of the 3 cent refund for miners.                                                                              
                                                                                                                                
Senator Bishop wanted to see the effect on the civil heavy                                                                      
and highway contractors.                                                                                                        
                                                                                                                                
9:34:51 AM                                                                                                                    
                                                                                                                                
Mr. Peterson discussed the Sectional Analysis (copy on                                                                          
file):                                                                                                                          
                                                                                                                                
     Sec. 1  Changes the per-gallon tax  rates for qualified                                                                    
     dealers for two categories  of motor fuel: highway fuel                                                                    
     and gasohol from  $0.08 to $0.16; and  marine fuel from                                                                    
     $0.05 to $0.10.                                                                                                            
                                                                                                                                
     Sec. 2 Changes  the per-gallon tax rates  for users for                                                                    
     two categories of motor fuel:  highway fuel and gasohol                                                                    
     from  $0.08 to  $0.16; and  marine fuel  from $0.05  to                                                                    
     $0.10.                                                                                                                     
                                                                                                                                
     Sec. 3  Changes the  refund for  non-road use  of taxed                                                                    
     motor fuel from $0.06 to $0.12 per gallon.                                                                                 
                                                                                                                                
     Sec. 4 Transition language  allowing for the Department                                                                    
     of Revenue to adopt regulations.                                                                                           
                                                                                                                                
     Sec.  5 Provides  for an  immediate effective  date for                                                                    
     Section 4.                                                                                                                 
                                                                                                                                
     Sec. 6 Provides  for a July 1, 2019  effective date for                                                                    
     all other provisions of the bill.                                                                                          
                                                                                                                                
Senator Olson  noted that the  states that were  included in                                                                    
most of the  comparisons were "back east."  He remarked that                                                                    
there were a  fair amount of toll roads in  that area of the                                                                    
country, which  was different than Alaska's  road system. He                                                                    
wondered   how   those   toll  roads   factored   into   the                                                                    
comparisons.                                                                                                                    
                                                                                                                                
Senator  Bishop replied  that he  believed  that toll  roads                                                                    
were built with private funds.                                                                                                  
                                                                                                                                
Mr. Peterson agreed to provide the research information.                                                                        
                                                                                                                                
Co-Chair von Imhof OPENED public testimony.                                                                                     
                                                                                                                                
9:39:43 AM                                                                                                                    
                                                                                                                                
JOE  MICHEL,  ALASKA  TRUCKING ASSOCIATION,  ANCHORAGE  (via                                                                    
teleconference),  testified in  support of  the legislation.                                                                    
He looked  forward to  working with  the sponsor.  He stated                                                                    
that  the  association  has  always  supported  a  fuel  tax                                                                    
increase,  because  of  the  wear and  tear  caused  to  his                                                                    
member's vehicles.                                                                                                              
                                                                                                                                
9:41:00 AM                                                                                                                    
                                                                                                                                
ALICIA  SIIRA,   EXECUTIVE  DIRECTOR,   ASSOCIATIVE  GENERAL                                                                    
CONTRACTORS  OF  ALASKA,   ANCHORAGE  (via  teleconference),                                                                    
spoke in support  of the bill. She remarked  that Alaska had                                                                    
not  increased its  motor  fuel tax  rates  since 1970.  She                                                                    
stated that  Alaska had the  lowest motor fuel tax  rates in                                                                    
the  nation.  The  proposed  increase  would  only  slightly                                                                    
adjust that ranking.                                                                                                            
                                                                                                                                
9:42:29 AM                                                                                                                    
                                                                                                                                
MIKE  COONS,   SELF,  PALMER  (via   teleconference),  spoke                                                                    
against the proposed the legislation.  He stated that he had                                                                    
submitted an  email detailing his  opposition. He  felt that                                                                    
there were aspects of the  presentation that were laughable,                                                                    
particularly related to the electric and hybrid vehicles.                                                                       
                                                                                                                                
9:45:17 AM                                                                                                                    
                                                                                                                                
CRIS  EICHENLAUB, SELF,  EAGLE  RIVER (via  teleconference),                                                                    
spoke in opposition  to the bill. He felt that  it was a way                                                                    
to  "nickel and  dime"  the private  sector.  He noted  that                                                                    
Alaska had the second highest fuel prices in the nation.                                                                        
                                                                                                                                
9:47:31 AM                                                                                                                    
                                                                                                                                
PATRICK  MULLIGAN,  PETRO  MARINE SERVICES,  ANCHORAGE  (via                                                                    
teleconference), spoke  against the  marine fuel  tax aspect                                                                    
of the bill.                                                                                                                    
                                                                                                                                
Co-Chair Stedman  noted that Dutch  Harbor was also  a large                                                                    
fishing hub. He noted that  Petro Marine Services was mostly                                                                    
in Southeast Alaska.                                                                                                            
                                                                                                                                
Mr.  Mulligan  agreed. He  felt  that  the same  dynamic  in                                                                    
Southeast Alaska would apply to Dutch Harbor.                                                                                   
                                                                                                                                
9:51:19 AM                                                                                                                    
                                                                                                                                
HERMAN MORGAN,  SELF, ANIAK  (via teleconference),  spoke in                                                                    
opposition to the bill. He  stressed that gas was over $6.00                                                                    
a gallon in  his community. He remarked that  many people in                                                                    
his community  were on a  fixed income, so the  tax increase                                                                    
would have a detrimental effect on them.                                                                                        
                                                                                                                                
9:53:56 AM                                                                                                                    
                                                                                                                                
DAVID NEEF,  SELF, ANCHORAGE (via  teleconference), remarked                                                                    
that there  was a  problem with  information, and  felt that                                                                    
the  American  Petroleum  Institute  information  about  all                                                                    
income for taxes  and the impacts should be  included in the                                                                    
presentation.  He  shared  that  he worked  for  the  cruise                                                                    
lines. He felt  that there should be  further examination of                                                                    
the history of the tax.                                                                                                         
                                                                                                                                
9:56:27 AM                                                                                                                    
                                                                                                                                
VIKKI  KENNEDY, SELF,  JUNEAU (via  teleconference), opposed                                                                    
the legislation, because it would  not be fair for the older                                                                    
population.  She  stated that  a  toll  road could  also  be                                                                    
beneficial. She also spoke in support of an income tax.                                                                         
                                                                                                                                
9:59:07 AM                                                                                                                    
                                                                                                                                
NILS ANDREASSEN,  ALASKA MUNICIPAL  LEGAL, JUNEAU,  spoke in                                                                    
support  of the  legislation. He  remarked that  the members                                                                    
had voted in support of the  bill. He noted that the tax had                                                                    
not kept  pace with behavior, inflation,  and increased need                                                                    
for  maintenance. He  remarked  that  the municipal  budgets                                                                    
included  transportation  budgets  that  were  significantly                                                                    
high.                                                                                                                           
                                                                                                                                
10:02:09 AM                                                                                                                   
                                                                                                                                
CLARK MILNE, SELF, FAIRBANKS  (via teleconference), spoke in                                                                    
support of the bill. He shared  that he was a civil engineer                                                                    
and had been following the  information about motor fuel tax                                                                    
for  many  years.  He  had  significant  experience  on  the                                                                    
subject. He explained the  difference between dedication and                                                                    
designation.                                                                                                                    
                                                                                                                                
10:04:51 AM                                                                                                                   
                                                                                                                                
BERT  HOUGHTALING,  SELF,  BIG  LAKE  (via  teleconference),                                                                    
spoke  against the  legislation. He  stressed that,  because                                                                    
Anchorage  had increased  its fuel  tax, he  no longer  used                                                                    
Anchorage to purchase gas. He  felt that the focus should be                                                                    
on  opening   Pebble  Mine   and  encouraging   the  logging                                                                    
industry. He also added that  other ways to open various oil                                                                    
rigs should be a part of the consideration.                                                                                     
                                                                                                                                
10:06:44 AM                                                                                                                   
                                                                                                                                
SHEILA   SCHATZ,   SELF,   WASILLA   (via   teleconference),                                                                    
testified  in opposition  to  the  legislation. He  stressed                                                                    
that  there   were  many  increases  in   expenses  for  the                                                                    
residents  of the  state, and  the  Permanent Fund  Dividend                                                                    
(PFD) was  experiencing continued reductions. She  felt that                                                                    
the budget could be fixed without taxation.                                                                                     
                                                                                                                                
10:07:29 AM                                                                                                                   
                                                                                                                                
ADAM HYKES, SELF, HOMER  (via teleconference), spoke against                                                                    
the bill. He did not believe  that money could not return to                                                                    
the  people through  designated or  dedicated funds.  He did                                                                    
not support  any new  taxes until the  there was  a balanced                                                                    
budget.                                                                                                                         
                                                                                                                                
10:08:12 AM                                                                                                                   
                                                                                                                                
WES HUMBYRD, SELF, HOMER  (via teleconference), testified in                                                                    
opposition   to  the   marine   fuel  tax   aspect  of   the                                                                    
legislation.  He had  been a  commercial fisherman,  and did                                                                    
not understand how that money  could be used for maintenance                                                                    
on the water.  He remarked that there was already  a 25 cent                                                                    
sales tax on fuel in Homer.                                                                                                     
                                                                                                                                
10:09:01 AM                                                                                                                   
                                                                                                                                
COLLEEN  BAGOT,  SELF,  PALMER (via  teleconference),  spoke                                                                    
against the  bill. She remarked  that there were  many older                                                                    
people  in the  state who  did not  even use  the roads.  He                                                                    
encouraged the committee to balance the budget.                                                                                 
                                                                                                                                
Co-Chair von Imhof CLOSED public testimony.                                                                                     
                                                                                                                                
10:10:30 AM                                                                                                                   
                                                                                                                                
MARY    SIROKY,   DEPUTY    COMMISSIONER,   DEPARTMENT    OF                                                                    
TRANSPORTATION AND PUBLIC  FACILITIES, JUNEAU, discussed the                                                                    
fiscal note.  She stated  that the  legislature appropriated                                                                    
all of the  motor fuel tax and aviation fuel  tax to DOT/PF.                                                                    
She  explained  that  in the  current  fiscal  year,  DOT/PF                                                                    
received $33.3  million in motor  fuel tax; $4.7  million in                                                                    
aviation tax;  and $3.6 million  in motor fuel  tax receipts                                                                    
for the Alaska Marine Highway.  She stated that in 2020, the                                                                    
legislature  appropriated  all  of  the motor  fuel  tax  to                                                                    
DOT/PF, however the  state would not collect  the motor fuel                                                                    
tax.                                                                                                                            
                                                                                                                                
Co-Chair Stedman  noted that the  budgetary process  had not                                                                    
yet  begun,  and  encouraged  the   department  to  draft  a                                                                    
lookback  of  15 years  of  maintenance  dollars across  the                                                                    
state for the  subcommittee. He noted that there  had been a                                                                    
substantial  increase  in  highway maintenance  dollars  ten                                                                    
years  prior,  so  he  wanted  to see  the  impact  of  that                                                                    
appropriation.                                                                                                                  
                                                                                                                                
Ms. Siroky agreed to provide  that information. She stressed                                                                    
that  the  fiscal  note  would be  the  vehicle  to  getting                                                                    
funding into the department's budget.                                                                                           
                                                                                                                                
Co-Chair  von   Imhof  felt  that  Co-Chair   Stedman's  was                                                                    
requesting a list of priorities for deferred maintenance.                                                                       
                                                                                                                                
Co-Chair Stedman  added that there  was a similar  request a                                                                    
few years prior,  and he recalled that DOT/PF  would not see                                                                    
an added increase on maintenance,  rather it would only be a                                                                    
tax on the citizens.  Therefore, DOT/PF's maintenance budget                                                                    
would remain  unchanged. He felt  that implementing  the tax                                                                    
increase would result in the maintenance budget.                                                                                
                                                                                                                                
Senator  Bishop  requested  that   the  staffing  levels  be                                                                    
included in the lookback.                                                                                                       
                                                                                                                                
10:18:31 AM                                                                                                                   
                                                                                                                                
Senator  Wielechowski  wondered whether  the  administration                                                                    
was in support or opposition to the bill.                                                                                       
                                                                                                                                
Ms.  Siroky  replied  that  she  was  available  to  provide                                                                    
information on the bill.                                                                                                        
                                                                                                                                
Senator Wielechowski  wondered the  governor would  veto the                                                                    
legislation.                                                                                                                    
                                                                                                                                
Ms. Siroky agreed to ask that question to the governor.                                                                         
                                                                                                                                
Co-Chair  von   Imhof  wondered   whether  there   was  more                                                                    
information.                                                                                                                    
                                                                                                                                
Ms. Siroky replied "no."                                                                                                        
                                                                                                                                
10:19:45 AM                                                                                                                   
                                                                                                                                
BRANDON  SPANOS, DEPUTY  DIRECTOR, TAX  DIVISION, DEPARTMENT                                                                    
OF  REVENUE, ANCHORAGE  (via teleconference),  addressed the                                                                    
fiscal note. He explained that  there was an anticipation of                                                                    
doubling in revenue for the motor fuel tax.                                                                                     
                                                                                                                                
Co-Chair  von Imhof  noted the  estimation of  capital costs                                                                    
for the  revenue management systems.  She recalled  that the                                                                    
governor added $1.7  million in UGF in  the operating budget                                                                    
for the tax revenue management  system, which would be added                                                                    
to the base  budget. She wondered whether  the extra $50,000                                                                    
would be  needed if the $1.7  million was also added  to the                                                                    
base budget.                                                                                                                    
                                                                                                                                
Mr. Spanos replied  that they would not  need the additional                                                                    
revenue for the fund.                                                                                                           
                                                                                                                                
10:21:55 AM                                                                                                                   
                                                                                                                                
Co-Chair von  Imhof felt that  it made sense to  include the                                                                    
system in  the budget,  because the conversations  about the                                                                    
issue were important to process.                                                                                                
                                                                                                                                
Senator Wielechowski requested an  explanation of what point                                                                    
the tax was captured.                                                                                                           
                                                                                                                                
Mr.  Spanos wondered  whether the  question was  about where                                                                    
the tax was paid.                                                                                                               
                                                                                                                                
Senator Wielechowski replied in  the affirmative. He further                                                                    
explained  that he  wanted  to know  who  would be  directly                                                                    
taxed.                                                                                                                          
                                                                                                                                
Mr. Spanos replied that the distributor was taxed.                                                                              
                                                                                                                                
Senator  Wielechowski   recalled  testimony  related   to  a                                                                    
company  who was  shipping gas  to  themselves. He  wondered                                                                    
whether that person would be considered a distributor.                                                                          
                                                                                                                                
Mr. Spanos  replied that there  were some allowances  in the                                                                    
regulation  for someone  who was  buying gas  for a  tax-off                                                                    
purpose.                                                                                                                        
                                                                                                                                
Senator  Wielechowski  queried  the  types  of  fuel  exempt                                                                    
purposes, and  an estimate of  how much was used  for exempt                                                                    
purposes.                                                                                                                       
                                                                                                                                
Mr.  Spanos  replied  that  it was  not  reported  from  the                                                                    
distributors  for their  tax-off sales.  He stated  that the                                                                    
information  could be  found during  an  audit. He  remarked                                                                    
that there  were some  estimates that  had been  included in                                                                    
some past  legislation. He stated that  some exemptions were                                                                    
for  heating  fuel;  federal,  state,  and  government  use;                                                                    
foreign fuel used in foreign  flights; fuel used in exports;                                                                    
charitable  institutions;   and  fuel   transferred  between                                                                    
qualified dealers.                                                                                                              
                                                                                                                                
Co-Chair von Imhof requested  the previous information about                                                                    
the estimate. She wondered whether  the ferry pay the marine                                                                    
fuel tax.                                                                                                                       
                                                                                                                                
Mr.  Spanos replied  that he  did  not know,  and agreed  to                                                                    
provide that information.                                                                                                       
                                                                                                                                
Ms. Siroky stated that the  state ferry was exempt from that                                                                    
tax.                                                                                                                            
                                                                                                                                
10:27:37 AM                                                                                                                   
                                                                                                                                
Co-Chair  Stedman requested  an  analysis  of Department  of                                                                    
Transportation and Public Facilities (DOT/PF) by region.                                                                        
                                                                                                                                
Co-Chair von  Imhof requested  that amendments  and concerns                                                                    
be  submitted  to  her  office  as  soon  as  possible.  She                                                                    
discussed the following day's agenda.                                                                                           
                                                                                                                                
SB 115 was HEARD and HELD in committee for further                                                                              
consideration.                                                                                                                  
                                                                                                                                

Document Name Date/Time Subjects
SB 115 2018 Motor Fuel Tax Report Tax Division Department of Revenue.pdf SFIN 2/3/2020 9:00:00 AM
SB 115
SB 115 Fall 2019 Revenue Sources Book Chapter 5.pdf HFIN 3/20/2020 9:00:00 AM
HTRA 3/12/2020 1:00:00 PM
SFIN 2/3/2020 9:00:00 AM
SB 115
SB 115 FAQs by Sponsor 1.15.2020.pdf SFIN 2/3/2020 9:00:00 AM
SB 115
SB 115 Federation of Tax Administrators motor fuel tax rates January 2019.pdf HFIN 3/20/2020 9:00:00 AM
SFIN 2/3/2020 9:00:00 AM
SB 115
SB 115 Leg. Research MFT revenue 1993-2018.pdf HFIN 3/20/2020 9:00:00 AM
SFIN 2/3/2020 9:00:00 AM
SB 115
SB 115 LFD FundSources_Motor Fuel Tax_2018.pdf HFIN 3/20/2020 9:00:00 AM
SFIN 2/3/2020 9:00:00 AM
SB 115
SB 115 Sectional Analysis v. A 1.15.2020.pdf HTRA 3/12/2020 1:00:00 PM
SFIN 2/3/2020 9:00:00 AM
SB 115
SB 115 Sponsor Statement 1.15.2020.pdf HTRA 3/12/2020 1:00:00 PM
SFIN 2/3/2020 9:00:00 AM
SB 115
SB115 support letter AML 1.30.20.pdf SFIN 2/3/2020 9:00:00 AM
SB 115
SB 115 PowerPoint 2.3.2020.pdf SFIN 2/3/2020 9:00:00 AM
SB 115
SB 115 Testimony Erickson.pdf SFIN 2/3/2020 9:00:00 AM
SB 115
SB 115 Public Testimony Edens.pdf SFIN 2/3/2020 9:00:00 AM
SB 115
SB115 Public Testimony Coleman.pdf SFIN 2/3/2020 9:00:00 AM
SB 115
SB 115 Public Testimony S. Erickson.pdf SFIN 2/3/2020 9:00:00 AM
SB 115
SB 115 Public Testimony Brock.pdf SFIN 2/3/2020 9:00:00 AM
SB 115