04/11/1994 01:50 PM Senate JUD

  CHAIRMAN ROBIN TAYLOR  called the Judiciary Committee meeting to             
 order at 1:50 p.m.  He brought  SB 327  (TAX ON RESIDUAL MARINE FUEL     L    
 OIL) before the committee as the first order of business.                     
                                                                               
 SENATOR LITTLE explained the legislation allows the state to do               
 some creative economic development.  Currently, the state charges             
 5 cents per gallon for residual fuel, and SB 327 would allow the              
 state to continue to collect the 5 cents per gallon for the                   
 residual fuel until the existing amount of tax has been collected.            
 The historical amount has been approximately $205,000, and after              
 that amount is collected, the bill would allow for the tax to go to           
 1 cent per gallon.  She said dropping the tax to 1 cent per gallon            
 will create an incentive for cruise ships to purchase their fuel in           
 Seward.                                                                       
                                                                               
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 RAY GILLESPIE, representing Petro Marine Services, said Petro                 
 Marine is based in Seward, and their marketing director, Jim Burns,           
 worked with the cruise industry to try to develop a new market for            
 bunker fuels.  He said the purpose of the legislation is to expand            
 the market by making the product more competitive without costing             
 the state treasury any money.                                                 
                                                                               
 SENATOR LITTLE noted that Sitka is very enthused about the                    
 legislation as it may create some economic opportunities there as             
 well.                                                                         
                                                                               
 Number 136                                                                    
                                                                               
 SENATOR LITTLE moved that SB 327 be passed out of committee with              
 individual recommendations.  Hearing no objection, it was so                  
 ordered.