Legislature(2003 - 2004)

04/14/2003 01:41 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                  HOUSE FINANCE COMMITTEE                                                                                       
                       April 14, 2003                                                                                           
                         1:41 P.M.                                                                                              
                                                                                                                                
TAPE HFC 03 - 57, Side A                                                                                                        
TAPE HFC 03 - 57, Side B                                                                                                        
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Williams called the House  Finance Committee meeting                                                                   
to order at 1:41 P.M.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative John Harris, Co-Chair                                                                                            
Representative Bill Williams, Co-Chair                                                                                          
Representative Kevin Meyer, Vice-Chair                                                                                          
Representative Eric Croft                                                                                                       
Representative Richard Foster                                                                                                   
Representative Mike Hawker                                                                                                      
Representative Reggie Joule                                                                                                     
Representative Carl Moses                                                                                                       
Representative Bill Stoltze                                                                                                     
Representative Jim Whitaker                                                                                                     
                                                                                                                                
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Mike Chenault                                                                                                    
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
William  Corbus, Commissioner,  Department  of Revenue;  John                                                                   
MacKinnon,   Deputy   Commissioner,   Highways   and   Public                                                                   
Facilities,  Office   of  the  Commissioner,   Department  of                                                                   
Transportation  & Public  Facilities;  Kevin Ritchie,  Alaska                                                                   
Municipal   League,    Juneau;   Linda   Sylvester,    Staff,                                                                   
Representative   Bruce   Weyhrauch;  Mark   Johnson,   Chief,                                                                   
Community Health  and Emergency Medical Services,  Department                                                                   
of Health and Social Services                                                                                                   
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Robynn  Wilson,  Tax  Auditor, Department  of  Revenue;  Mike                                                                   
Folkerts,  Recreational  Boating  Safety, U.S.  Coast  Guard;                                                                   
Chuck Hosack,  Deputy Director,  Division of Motor  Vehicles,                                                                   
Department of Administration                                                                                                    
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 93     An Act relating to boating safety; repealing secs.                                                                    
          3, 5, 7, 9, 11, 14, 16, 18, 20, 23, 26, 27, and                                                                       
          30, ch. 28, SLA 2000; and providing for an                                                                            
          effective date.                                                                                                       
                                                                                                                                
          HB 93 was HEARD and HELD in Committee for further                                                                     
          consideration.                                                                                                        
                                                                                                                                
HB 156    An Act increasing the  motor fuel tax and repealing                                                                   
          the special tax rates on blended fuels; and                                                                           
          providing for an effective date.                                                                                      
                                                                                                                                
          HB 156 was HEARD and HELD in Committee for further                                                                    
          consideration.                                                                                                        
                                                                                                                                
HOUSE BILL NO. 156                                                                                                            
                                                                                                                                
     An Act increasing the motor fuel tax and repealing the                                                                     
     special tax rates on blended fuels; and providing for                                                                      
     an effective date.                                                                                                         
                                                                                                                                
Co-Chair  Williams noted  that it  was not  his intention  to                                                                   
move HB 156 from Committee at this meeting.                                                                                     
                                                                                                                                
WILLIAM CORBUS,  COMMISSIONER, DEPARTMENT OF  REVENUE, stated                                                                   
that under the  authority of article III, section  18, of the                                                                   
Alaska  Constitution,  HB  93   would  increase  the  State's                                                                   
highway  motor fuel  tax rate  from 8  cents a  gallon to  20                                                                   
cents a gallon and repeal the special rate for gasohol.                                                                         
                                                                                                                                
Commissioner Corbus noted that  in order for Alaska's economy                                                                   
to grow and diversify, the State  must expand and improve the                                                                   
transportation infrastructure.   Alaska must  adequately fund                                                                   
highway construction and maintenance  activities.  Currently,                                                                   
Alaska spends  nearly $50  million per  year in general  fund                                                                   
dollars  to match  the Federal  Highway  Capital Program  and                                                                   
nearly $60 million dollars per year on maintenance.                                                                             
                                                                                                                                
At  the current  eight  cents  per gallon,  Alaska's  highway                                                                   
motor fuel  tax rate is now the  lowest in the nation.   Even                                                                   
after the proposed  increase, thirty-eight states  would have                                                                   
higher rates, and  Alaska's fuel tax would be  at the 20-cent                                                                   
national  average.    Had  the  tax  rate  been  indexed  for                                                                   
inflation when it  was initiated in 1961, it  would be nearly                                                                   
two and a half times the rate proposed in the bill.                                                                             
                                                                                                                                
Commissioner  Corbus pointed  out  that  under existing  law,                                                                   
revenue from  the motor fuel tax  used on roads  and highways                                                                   
is deposited  in a  highway fuel tax  account in  the general                                                                   
fund.   That   fund   is  available   for   maintenance   and                                                                   
construction of highway projects and ferries.                                                                                   
                                                                                                                                
HB   156   would    delete   AS   43.40.010(a)(4)    and   AS                                                                   
43.40.010(b)(4),  which  provide   a  special  tax  rate  for                                                                   
blended fuel.   Working with  industry and private  citizens,                                                                   
Alaska  no longer  requires the  use of  oxygenated fuels  to                                                                   
meet air quality standards.  However,  the U.S. Environmental                                                                   
Protection Agency requires that  the State be able to rapidly                                                                   
re-impose a requirement  for the use of oxy  fuels should the                                                                   
air quality  deteriorate.   The proposal  represents  a user-                                                                   
pays approach  to expanding and improving  the transportation                                                                   
infrastructure.                                                                                                                 
                                                                                                                                
Representative  Foster  pointed out  that  since the  revenue                                                                   
would be  used for  improvements of  the roads and  highways,                                                                   
would the  village areas  be exempt from  the motor  fuel tax                                                                   
since  there  are no  roads  in  those areas.    Commissioner                                                                   
Corbus  advised that  Department of  Transportation &  Public                                                                   
Facilities would need to respond to that concern.                                                                               
                                                                                                                                
Co-Chair Harris observed that  there are a number of modes of                                                                   
transportation  throughout  the  State  such  as  the  Alaska                                                                   
Marine Highway  system and the associated truckers,  which an                                                                   
increase  in fuel tax  would hit  hard.   He asked about  the                                                                   
"fairness" of  the proposal.   Commissioner Corbus  could not                                                                   
responded to those issues.                                                                                                      
                                                                                                                                
Vice-Chair  Meyer  inquired  if  it were  possible  that  the                                                                   
proposed  legislation could  hurt  the State's  economy.   He                                                                   
noted that the trucking industry  currently works on a "thin"                                                                   
margin.  Commissioner  Corbus acknowledged that  the proposed                                                                   
legislation would create an increased  cost in doing business                                                                   
for the transportation industry.   However, he added that the                                                                   
consequences  of not addressing  the current fiscal  concerns                                                                   
are more serious than those costs.                                                                                              
                                                                                                                                
Vice-Chair  Meyer asked  if the  cars now  using natural  gas                                                                   
would be exempt.  Commissioner Corbus did not know.                                                                             
                                                                                                                                
Representative Hawker  pointed out the Governor's  opposition                                                                   
to the  House Transportation version  of the bill.   He asked                                                                   
what  specific  changes  were   needed  to  warrant  support.                                                                   
Commissioner  Corbus explained that  version does  not create                                                                   
the   immediate  revenues   needed   by  the   State.     The                                                                   
transportation  version would  create no revenue for FY04 and                                                                   
only  a  small  amount  for FY05.    He  reiterated  concerns                                                                   
regarding the cash flow.                                                                                                        
                                                                                                                                
Representative  Moses  asked   if  the  Administration  would                                                                   
support an increase  to sixteen cents a gallon,  giving eight                                                                   
cents  per gallon  back  to  the municipalities  to  maintain                                                                   
their  roads.     Commissioner  Corbus  responded   that  the                                                                   
Administration's  position is that  the State needs  enhanced                                                                   
revenues and lower expenditures.   If the State can determine                                                                   
a  way  to hold  the  deficit  at  a point  outlined  by  the                                                                   
Governor,  then  the  Administration  will  be  receptive  to                                                                   
changes.                                                                                                                        
                                                                                                                                
Co-Chair Harris  asked if  Commissioner Corbus was  referring                                                                   
to  the section  of  the bill  which  would  not take  effect                                                                   
unless  a Constitutional  amendment  was  added addressing  a                                                                   
dedicated fund.   Commissioner  Corbus acknowledged  that was                                                                   
correct.                                                                                                                        
                                                                                                                                
Co-Chair Harris  questioned if the Department  had considered                                                                   
an increase  to the marine fuel  tax as a revenue  source for                                                                   
assuming the small  boat harbors.  Commissioner  Corbus noted                                                                   
the  emphasis behind  HB  156, attempts  to  pay for  highway                                                                   
maintenance  costs.  He  added that the  fuel tax  for marine                                                                   
vessels would be a different consideration.                                                                                     
                                                                                                                                
Co-Chair   Harris  clarified   that  the   emphasis  of   the                                                                   
Administration   is  to   place  some   money  into   highway                                                                   
maintenance,  replacing general funds  in that category  with                                                                   
other funds.  In  that situation, it would be  a tax increase                                                                   
and  a   decrease  on   the  amount  of   the  draw   to  the                                                                   
Constitutional  Budget Reserve  (CBR).   Commissioner  Corbus                                                                   
agreed.                                                                                                                         
                                                                                                                                
Representative Joule understood  that the Administration does                                                                   
not  support HB  156  being  tied to  another  constitutional                                                                   
dedicated  fund amendment.   He asked  if the  Administration                                                                   
would   support  dedicated   funds  outside   of  the   bill.                                                                   
Commissioner  Corbus  replied   that  he  did  not  know  the                                                                   
Administration's  position   regarding  that  concern.     He                                                                   
offered to find out and get back to Committee members.                                                                          
                                                                                                                                
ROBYNN WILSON, TAX AUDITOR, DEPARTMENT  OF REVENUE, responded                                                                   
to  the  question   from  Representative  Foster   about  the                                                                   
exemption of the  village areas from the tax.   She clarified                                                                   
that  for off-road  use,  the  user would  be  entitled to  a                                                                   
refund.  Under present law, the  off-road user is entitled to                                                                   
six cents of  the eight cents per gallon; under  the proposed                                                                   
legislation,  the  user would  be  entitled  to a  discounted                                                                   
price per gallon.                                                                                                               
                                                                                                                                
Representative Joule asked about  the eligibility process for                                                                   
the  rebate, collecting  receipts  throughout the  year.   He                                                                   
inquired the  rebate amount expected  to be received  for the                                                                   
twenty-cent gas tax.                                                                                                            
                                                                                                                                
Ms.  Wilson  explained  that  the  purchaser  would  have  to                                                                   
collect  their  receipts and  submit  them  as often  as  was                                                                   
convenient  for them throughout  the year.   They could  file                                                                   
once a  month or  yearly; there  is no statutory  requirement                                                                   
regarding  how often they  must file  as long  as it  is that                                                                   
same  one-year period.    The proposed  version  of the  bill                                                                   
offers  a refund  of eighteen  cents per  twenty cents  paid.                                                                   
The  net effect  will be  the  same as  the amount  currently                                                                   
being paid by the user.                                                                                                         
                                                                                                                                
Representative  Joule asked  if the  age and/or  type of  the                                                                   
vehicle  would matter  if they  were classified  as off  road                                                                   
vehicles.  Ms.  Wilson responded that the age or  type of the                                                                   
vehicle  does not  matter  except that  the  vehicle must  be                                                                   
licensed to  not be used on public  ways.  She added  that in                                                                   
some of  the more  remote areas,  no requirement exists  that                                                                   
the vehicle  be licensed  and that  absolutely, the  off-road                                                                   
refund would be granted.                                                                                                        
                                                                                                                                
Representative  Joule questioned if  many people  had pursued                                                                   
getting reimbursement  on the tax  paid.  Ms.  Wilson replied                                                                   
that the  claims are  somewhat  "spotty".   She added,  it is                                                                   
difficult  to  quantify  because   the  user  can  accumulate                                                                   
receipts  for extended  periods of time  before sending  them                                                                   
in.  She did not have specific information.                                                                                     
                                                                                                                                
Co-Chair  Williams  requested further  information  regarding                                                                   
sharing of tax revenue among the municipalities.                                                                                
                                                                                                                                
JOHN  MACKINNON,  DEPUTY COMMISSIONER,  HIGHWAYS  AND  PUBLIC                                                                   
FACILITIES,  OFFICE   OF  THE  COMMISSIONER,   DEPARTMENT  OF                                                                   
TRANSPORTATION  & PUBLIC  FACILITIES, pointed  out that  idea                                                                   
had  been suggested  by the  Alaska  Municipal League  (AML),                                                                   
which he  thought would  be a  policy call  of the House  and                                                                   
Senate.     Mr.   MacKinnon   did   not  believe   that   the                                                                   
Administration would support the idea.                                                                                          
                                                                                                                                
Since 1991,  when the  legislation was  passed on a  national                                                                   
level,  there  were  federal  highway  funds to  be  used  on                                                                   
municipal  roads,  an  ability  granted to  Puerto  Rico  and                                                                   
Alaska.    No other  state  in  the Union  was  allowed  that                                                                   
option.  In  1991, when the program first started,  there was                                                                   
$200  thousand dollars  put into  the  federal highway  fund,                                                                   
federal  gas tax  for  the municipal  roads.    In 2002,  the                                                                   
amount  was  over   $72  million  dollars.     Mr.  MacKinnon                                                                   
emphasized  that there  has been  a  significant increase  of                                                                   
federal money put into municipal roads.                                                                                         
                                                                                                                                
Representative  Croft  inquired about  the  refund for  those                                                                   
Alaskans living rurally.  Ms.  Wilson explained that there is                                                                   
a form  available on  the Department's  web site;  otherwise,                                                                   
the Department  can  mail out  the forms upon  request.   She                                                                   
pointed out the five cents per gallon marine tax.                                                                               
                                                                                                                                
Representative  Croft  understood  that the  federal  highway                                                                   
money was to  be used for construction not  maintenance.  Mr.                                                                   
MacKinnon  explained that was  technically correct,  however,                                                                   
in practice that is not the way  it happens.  There is a fine                                                                   
line between  what is construction  and what are  maintenance                                                                   
costs.  Some State programs use  federal construction monies.                                                                   
                                                                                                                                
Co-Chair  Harris questioned  the "fairness"  of the  proposed                                                                   
legislation  to  the Alaska  Marine  Highway  system and  the                                                                   
trucking industry.   Mr. MacKinnon  did not believe  that the                                                                   
tax would  apply to the marine  highway, as he did  not think                                                                   
that  the  State  could  tax a  State  entity  and  that  the                                                                   
legislation  does  exempt  State and  federal  agencies  from                                                                   
paying.    Mr.   MacKinnon  understood  that   there  was  an                                                                   
amendment that would apply to the Alaska Railroad.                                                                              
                                                                                                                                
Co-Chair   Harris    asked   if   the   Administration    was                                                                   
contemplating an increase to the  marine fuel tax in order to                                                                   
help communities take over the  maintenance and operations of                                                                   
the boat  harbors.   Mr. MacKinnon  advised that at  present,                                                                   
the   Administration   is  not   looking   at   that.     The                                                                   
Administration  is considering  the  longstanding program  of                                                                   
boat harbors,  rebuilding  and bringing  them up to  standard                                                                   
and then transferring  the maintenance and operations  to the                                                                   
municipalities.                                                                                                                 
                                                                                                                                
Representative  Stoltze noted that  he had questions  for the                                                                   
Department of  Education & Early Development  regarding pupil                                                                   
transportation.  He commented  that the legislation would add                                                                   
costs  to that  concern.   Representative  Stoltze  requested                                                                   
that  the Department  of  Education  & Early  Development  be                                                                   
present at the next meeting.                                                                                                    
                                                                                                                                
Vice-Chair Meyer understood that  the Department of Education                                                                   
& Early  Development would  be exempt  from the  legislation.                                                                   
Representative  Stoltze  pointed out  the  number of  private                                                                   
contractors involved with pupil transportation moving.                                                                          
                                                                                                                                
Vice-Chair Meyer  asked if natural gas burning  fuel would be                                                                   
exempt.   Mr.  MacKinnon believed  it  would be  exempt.   He                                                                   
offered to get back to the Committee  regarding that concern.                                                                   
Ms. Wilson added that there is  currently an exemption in the                                                                   
motor fuel tax law, which exempts liquefied petroleum gas.                                                                      
                                                                                                                                
Representative  Foster   commented  that  the   general  fund                                                                   
portion  of   the  Department  of  Transportation   &  Public                                                                   
Facilities  budget last  year was  $97 million  dollars.   He                                                                   
asked how much  would the eight cents per gallon  raise.  Mr.                                                                   
MacKinnon understood  that it  would raise approximately  $28                                                                   
million dollars.                                                                                                                
                                                                                                                                
Representative  Stoltze inquired if  there was a  concept for                                                                   
"kicking"  back to  the municipalities  and how  it would  be                                                                   
determined.   Ms. Wilson explained  that the manner  in which                                                                   
current  statute is  written,  the tax  is  collected at  the                                                                   
wholesale level.    There would be no recording  of where the                                                                   
fuel was sold  retail.  If there is municipal  sharing, there                                                                   
would need to be some sort of  recording requirement from the                                                                   
distributors.                                                                                                                   
                                                                                                                                
KEVIN RITCHIE,  ALASKA MUNICIPAL LEAGUE, JUNEAU,  stated that                                                                   
in the  Alaska Municipal League  (AML) policy  statement, AML                                                                   
supports an increase  in motor vehicle registration  fees and                                                                 
motor vehicle fuel taxes as long as:                                                                                            
                                                                                                                                
   ·    Fuel tax and vehicle registration fees are used to                                                                      
        fund State and municipal highway road operation,                                                                        
        maintenance, and improvements; and                                                                                      
   ·    The motor vehicle fuel tax and vehicle registration                                                                     
        fees are shared on an equitable basis between local                                                                     
        and State government based on the proportion of                                                                         
        local vs. State maintained roads.                                                                                     
                                                                                                                                
Representative Joule  reiterated his concern for  the smaller                                                                   
village communities,  which are  already paying a  high price                                                                   
for  gas.   Mr.  Ritchie  acknowledged  that there  are  many                                                                   
people that do not support a gas  tax and that AML would like                                                                   
to work with them.   One of the advantages of  a gas tax over                                                                   
a sales tax  is that percentage tax penalizes  commodities in                                                                   
different parts  of the State.   One  of the advantages  of a                                                                   
gas tax, is that it is more equitable.                                                                                          
                                                                                                                                
Representative   Croft   introduced    Amendment   #1,   #23-                                                                   
GH1118\H.1, Kurtz, 4/14/03.  (Copy on File).                                                                                    
                                                                                                                                
Representative Croft stated that  the amendment would help to                                                                   
address concerns voiced by Mr.  Ritchie.  The amendment would                                                                   
clarify that  if revenue  sharing is  fully funded,  then the                                                                   
entire amount  of the  tax could  be collected.   If  less is                                                                   
send  to municipalities,  the  amount that  can be  collected                                                                   
would decrease.                                                                                                                 
                                                                                                                                
Representative Joule  spoke to Amendment  #2, #23-GH1118\H.2,                                                                   
Kurtz, 4/14/03.  (Copy on File).                                                                                                
                                                                                                                                
Representative  Joule noted that  the amendment  would exempt                                                                   
rural areas not connected to the  main road system from being                                                                   
taxed.                                                                                                                          
                                                                                                                                
Representative  Joule questioned  if  HB 156  had received  a                                                                   
referral to the  Ways and Means Committee for  discussion and                                                                   
inclusion in  the statewide fiscal  plan.  Co-Chair  Williams                                                                   
noted that at this time, it had not received that referral.                                                                     
                                                                                                                                
Co-Chair  Williams  stated  that  HB  156 would  be  HELD  in                                                                   
Committee for further consideration.                                                                                            
                                                                                                                                
HOUSE BILL NO. 93                                                                                                             
                                                                                                                                
     An Act relating to boating safety; repealing secs. 3,                                                                      
     5, 7, 9, 11, 14, 16, 18, 20, 23, 26, 27, and 30, ch.                                                                       
     28, SLA 2000; and providing for an effective date.                                                                         
                                                                                                                                
LINDA  SYLVESTER,  STAFF,  REPRESENTATIVE   BRUCE  WEYHRAUCH,                                                                   
testified that HB  93 was the reauthorization  of the Boating                                                                   
Safety Act.   She  advised that  the "form"  of the  bill was                                                                   
confusing.  In  2000, HB 108, the Alaska Boating  Safety Act,                                                                   
sponsored  by Representative  Bill  Hudson was  passed.   She                                                                   
noted that  HB 93 had been  introduced at the request  of the                                                                   
Coast Guard.                                                                                                                    
                                                                                                                                
Ms. Sylvester  pointed out that  the Act would  eliminate the                                                                   
sunset provision.   Additionally, if the steady  funding does                                                                   
not  come through,  the  program would  be  eliminated.   The                                                                   
legislation guarantees that the  funds are there and that the                                                                   
language,  which   would  sunset  the  provision,   would  be                                                                   
eliminated.                                                                                                                     
                                                                                                                                
She  noted  that the  bill  had  been  amended in  the  House                                                                   
Transportation  Committee.   That  Committee  eliminated  the                                                                   
most  controversial  provision,   the  requirement  for  non-                                                                   
powered  boats  to  be  registered.     The  Coast  Guard  is                                                                   
"comfortable"   with  that   change   as  is   Representative                                                                   
Weyhrauch.   The  State of  Alaska  would be  missing out  on                                                                   
about  $39,000 dollars  in registration  fees  that would  be                                                                   
used to register non-powered boats, ten feet and over.                                                                          
                                                                                                                                
Representative  Stoltze asked  if  the bill  would allow  for                                                                   
someone from  out of State  to bring  a truck full  of kayaks                                                                   
into Alaska, creating  a little summer industry.   He thought                                                                   
that  could  cost the  Coast  Guard  a  lot  of money.    Ms.                                                                   
Sylvester replied  that would be  allowed if those  boats did                                                                   
not have a motor and were less than ten feet long.                                                                              
                                                                                                                                
Representative  Joule asked if  the umiaks from  the northern                                                                   
Alaskan coastal communities would have to be registered.                                                                        
                                                                                                                                
Co-Chair  Harris asked  if it  was automatic  that the  Coast                                                                   
Guard requires registration for any commercially used boat.                                                                     
                                                                                                                                
                                                                                                                                
TAPE HFC 03 - 57, Side B                                                                                                      
                                                                                                                                
                                                                                                                                
MIKE FOLKERTS,  (TESTIFIED VIA TELECONFERENCE),  RECREATIONAL                                                                   
BOATING SAFETY  SPECIALIST, U.S. COAST GUARD,  commented that                                                                   
the Coast  Guard does support  HB 93.   The Coast  Guard does                                                                   
carry on  the Boating  Safety Program  under #131,  Title 46,                                                                   
the United States Code.  The goal  is to encourage the states                                                                   
to  assume the  major  role in  providing  the boater  safety                                                                   
mission.    Federal  financial  assistance to  the  state  is                                                                   
provided   through  the  boating   safety  account,   Aquatic                                                                   
Resources Trust  Fund, also known  as the Wallop  Trust Fund.                                                                   
Part of  the eligibility requirement  to receive  the funding                                                                   
was achieved in  HB 108.  That bill was passed  with a sunset                                                                   
clause that  would allow the  Legislature to revisit  the law                                                                   
to assure that consistent and  adequate funding was in place.                                                                   
HB  93  repeals  that  sunset  allowing  the  law  to  become                                                                   
permanent.  That  action will help build a  long-term program                                                                   
and reduce recreational boating fatalities.                                                                                     
                                                                                                                                
Mr. Folkerts reiterated that the  Coast Guard does support HB                                                                   
93 and  will maintain  their relationship  with the  State of                                                                   
Alaska.   He added  that under  current law,  if the  boat is                                                                   
over ten feet long, registration  is required; however, under                                                                   
federal law that is not true unless the craft is powered.                                                                       
                                                                                                                                
Representative Stoltze  inquired why the bill was  not up for                                                                   
another sunset  consideration.   Mr. Folkerts responded  that                                                                   
the benefit of  the repeal would make the law  permanent.  He                                                                   
noted  that there  are a couple  things within  the law  that                                                                   
need to  be fixed  and that  once the  law became  permanent,                                                                   
then those  concerns could  be more  inline with the  federal                                                                   
requirements.  He stressed that  at this point, it is a "bare                                                                   
bones" law.   If the law  does sunset, the State  could loose                                                                   
all their federal  funding plus the registration  money.  The                                                                   
federal  government,   through  Title  46,  is   required  to                                                                   
transfer responsibility of the  boating safety regulations to                                                                   
each state.                                                                                                                     
                                                                                                                                
Representative   Stoltze   interjected  that   Mr.   Folkerts                                                                   
testimony made  him uncomfortable  with anything more  than a                                                                   
sunset.  Representative Stoltze  indicated that he would like                                                                   
to maintain a  certain amount of control over  the program in                                                                   
order  to  guarantee   that  the  State  can   "revisit"  any                                                                   
problems.    He  reiterated  that  he  would  prefer  another                                                                   
extension.                                                                                                                      
                                                                                                                                
Representative  Croft asked  if  the bill  would  be held  in                                                                   
Committee as he had concerns with  the "non-motorized" issue.                                                                   
He stated  that the  non-motorized registration  has  been an                                                                   
overly burdensome requirement that frustrates people.                                                                           
                                                                                                                                
Co-Chair Harris referenced the  fiscal note by the Department                                                                   
of Administration,  pointing out the one increased  part time                                                                   
position.  Ms. Sylvester countered  that the note indicates a                                                                   
decrease, not an increase of one position.                                                                                      
                                                                                                                                
Representative  Stoltze   requested  that  the   Coast  Guard                                                                   
provide  a breakdown of  their rescue  costs associated  with                                                                   
both  the non-motorized  and  motorized  boats  for the  next                                                                   
scheduled  meeting   on  the   legislation.    Mr.   Folkerts                                                                   
responded  that he  would  make that  information  available.                                                                   
Ms.  Sylvester interjected  that  from evidence  provided  in                                                                   
other  committee  hearings,  there  is  no  justification  to                                                                   
eliminate non-powered  boats.  She added that  a person would                                                                   
be just  as likely  to drown on  a non-powered  boat as  on a                                                                   
powered boat.   The common  risk factor  is the "water".   It                                                                   
would  be  a policy  decision  made  by the  State  regarding                                                                   
whether to register the small "fun" crafts.                                                                                     
                                                                                                                                
Co-Chair  Harris  noted that  his  staff had  indicated  from                                                                   
information  supplied by  the Coast  Guard, that  25% of  all                                                                   
boating  fatalities  from  1991-2000  were  in  non-motorized                                                                   
craft.   He  stressed  the significant  impact  on the  Coast                                                                   
Guard rescue.                                                                                                                   
                                                                                                                                
Representative  Stoltze  mentioned   that  there  is  growing                                                                   
resentment within his constituency,  paying for programs that                                                                   
they do not like.   He recommended that there  should be some                                                                   
type of equity issue, forcing  people to look at the value of                                                                   
the program.                                                                                                                    
                                                                                                                                
MARK JOHNSON,  CHIEF, COMMUNITY HEALTH AND  EMERGENCY MEDICAL                                                                   
SERVICES,  DEPARTMENT OF  HEALTH AND  SOCIAL SERVICES,  noted                                                                   
that the Department of Health  & Social Services supports the                                                                   
bill.   He  commented  that  the Department  is  particularly                                                                   
interested  in  seeing  the  deaths  from  drowning  reduced.                                                                   
Prior  to  the  legislation,   there  were  approximately  29                                                                   
drownings  per  year;  since  the  legislation  passed,  that                                                                   
number has been reduced to approximately  16-21.  Some of the                                                                   
money, which Alaska has become  eligible for from the federal                                                                   
government, has  been used in the Emergency  Medical Services                                                                   
office  in communities  throughout  the State  for the  "Kids                                                                   
Don't Float  Program".   Mr. Johnson  concluded that  boating                                                                   
safety is working statewide.                                                                                                    
                                                                                                                                
Co-Chair Williams  asked the  Department's view  on motorized                                                                   
versus non-motorized  boats.   Mr. Johnson acknowledged  that                                                                   
some drownings  have resulted in the non-motorized  vehicles.                                                                   
He agreed it would be a judgment  call for the Legislature to                                                                   
make.                                                                                                                           
                                                                                                                                
CHUCK   HOSACK,  (TESTIFIED   VIA   TELECONFERENCE),   DEPUTY                                                                   
DIRECTOR,   DIVISION  OF   MOTOR   VEHICLES,  DEPARTMENT   OF                                                                   
ADMINISTRATION, pointed  out that the Division  has submitted                                                                   
a  fiscal note  indicating a  decrease  in the  budget and  a                                                                   
slight  decrease in revenue  in dropping  the requirement  to                                                                   
register non-motorized  boats.   He added that  the part-time                                                                   
position should be indicated as  a loss of one position.  Mr.                                                                   
Hosack offered to answer questions regarding the program.                                                                       
                                                                                                                                
Co-Chair  Williams stated  that  the bill  would  be HELD  in                                                                   
Committee for further consideration.                                                                                            
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 2:42 P.M.                                                                                          
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects