Legislature(2017 - 2018)HOUSE FINANCE 519

04/05/2017 01:30 PM FINANCE

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Audio Topic
02:07:32 PM Start
02:08:50 PM Confirmation Hearing: Alaska Mental Health Trust Board of Trustees
02:44:37 PM HB60
04:16:30 PM HB127
04:47:48 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Delayed to 2:00 PM --
+ Confirmation Hearing: Mental Health Board of TELECONFERENCED
Trustees
+ HB 60 MOTOR FUEL TAX;TRANSPORTATION MAINT. FUND TELECONFERENCED
Heard & Held
+ HB 127 CRIM. CONV. OVERTURNED: RECEIVE PAST PFD TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                       April 5, 2017                                                                                            
                         2:07 p.m.                                                                                              
                                                                                                                                
2:07:32 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Foster  called the  House Finance Committee  meeting                                                                   
to order at 2:07 p.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Neal Foster, Co-Chair                                                                                            
Representative Paul Seaton, Co-Chair                                                                                            
Representative Les Gara, Vice-Chair                                                                                             
Representative Jason Grenn                                                                                                      
Representative David Guttenberg                                                                                                 
Representative Scott Kawasaki                                                                                                   
Representative Dan Ortiz                                                                                                        
Representative Lance Pruitt                                                                                                     
Representative Steve Thompson                                                                                                   
Representative Cathy Tilton                                                                                                     
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Christopher  Cook,  Board  Appointee,  Alaska  Mental  Health                                                                   
Trust   Authority;   Jerry  Burnett,   Deputy   Commissioner,                                                                   
Treasury  Division,  Department  of Revenue;  Steven  Hatter,                                                                   
Deputy   Commissioner,  Department   of  Transportation   and                                                                   
Public   Facilities;   John  Binder,   Deputy   Commissioner,                                                                   
Department  of Transportation  and  Public Facilities;  Peter                                                                   
Bibb, Juneau Plant  Manager, Petro Marine Services,  In Room;                                                                   
Representative  Scott   Kawasaki,  Sponsor;   Steven  Hatter,                                                                   
Deputy   Commissioner,  Department   of  Transportation   and                                                                   
Public Facilities.                                                                                                              
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Nick  D'Andrea,   Vice  President,  Public  Affairs   -  UPS,                                                                   
Louisville, KY;  Dana Debel, Managing  Director of  State and                                                                   
Local Government  Affairs, Delta  Airlines, Los Angeles,  CA;                                                                   
Paul   Kendall,   Self,  Anchorage;   April   Monroe,   Self,                                                                   
Fairbanks;   Barbara   Brink,   Alaska   Innocence   Project,                                                                   
Anchorage;  Marvin Roberts, Self,  Fairbanks; Crystal  Sisto,                                                                   
Self,  Fairbanks;  Misty Nickoli,  Self,  Fairbanks;  Scherry                                                                   
Byers,  Self, Fairbanks;  Evan Eads,  Self, Fairbanks;  Marna                                                                   
Sanford,  Tanana   Chiefs  Conference,  Fairbanks;   Virginia                                                                   
McCarty,  Self,  Fairbanks;  Kathleen   Peters  Zuray,  Self,                                                                   
Tanana;  Brandon S.  Spanos, Deputy  Director, Tax  Division,                                                                   
Department of Revenue.                                                                                                          
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 60     MOTOR FUEL TAX;TRANSPORTATION MAINT. FUND                                                                             
                                                                                                                                
          HB 60 was HEARD and HELD in committee for further                                                                     
          consideration.                                                                                                        
                                                                                                                                
HB 127    CRIM. CONV. OVERTURNED: RECEIVE PAST PFD                                                                              
                                                                                                                                
          HB 127 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
CONFIRMATION  HEARING: ALASKA  MENTAL HEALTH  TRUST BOARD  OF                                                                   
TRUSTEES                                                                                                                        
                                                                                                                                
Co-Chair Foster relayed the agenda for the day.                                                                                 
                                                                                                                                
^CONFIRMATION  HEARING: ALASKA MENTAL  HEALTH TRUST  BOARD OF                                                                 
TRUSTEES                                                                                                                      
                                                                                                                                
2:08:50 PM                                                                                                                    
                                                                                                                                
CHRISTOPHER  COOK,  BOARD  APPOINTEE,  ALASKA  MENTAL  HEALTH                                                                   
TRUST  AUTHORITY,  spoke  to   his  appointment  by  Governor                                                                   
Walker.  He provided  information  about  his background.  He                                                                   
shared that he  was a retired attorney and  judge and resided                                                                   
in  the state  for  49  years. He  was  excited  to meet  the                                                                   
challenges that came  with the appointment. He  felt that his                                                                   
experience living  and working as  an attorney in  the state,                                                                   
his familiarity  with the  issues the  trust dealt  with, and                                                                   
his  past experiences  and  contacts  in rural  Alaska  would                                                                   
enable him  to serve the trust.  He opined that he  brought a                                                                   
different emphasis and fresh perspective to the trust.                                                                          
                                                                                                                                
Representative Ortiz  asked what he saw as  the challenges of                                                                   
the  board.  Mr.  Cook responded  that  the  challenges  were                                                                   
intrinsic  to  the position  because  of  the nature  of  the                                                                   
work;  providing  services  and finding  new  and  innovative                                                                   
ways   of   addressing   chronic    problems   and   relaying                                                                   
information  regarding  the trust's  services.  He noted  the                                                                   
special  challenges at  present with changes  in the  trust's                                                                   
management  and  spoke of  the  search  for a  new  executive                                                                   
director.  He mentioned  the legislative  audit underway  and                                                                   
looked  forward to  the examination  of what  the trust  does                                                                   
and  how it  carried out  its  mission. Representative  Ortiz                                                                   
could  certainly appreciate  some  of the  challenges of  the                                                                   
board.  He  wanted  to  know  how  he  viewed  the  intrinsic                                                                   
workings of  the board  currently. Mr.  Cook replied  that he                                                                   
was not  currently a  member of the  board, but had  attended                                                                   
some of  the more recent  meetings. He  was aware of  some of                                                                   
the  friction between  board members  and noted  disagreement                                                                   
in  some  areas  but also  the  many  areas  where  agreement                                                                   
existed. He  did not want to  upset any of the  current board                                                                   
members.  He noted  meeting with  many of  the board  members                                                                   
and thought  he would be able  to work with them. He  was not                                                                   
coming with any  pre-judgement. He wanted to hear  all of the                                                                   
facts  and make  wise decisions.  He  acknowledged the  great                                                                   
fiduciary responsibility  of a board member. He  did not feel                                                                   
that  any difference  of opinion  among  board members  would                                                                   
last or hinder trust operations going forward.                                                                                  
                                                                                                                                
2:15:41 PM                                                                                                                    
                                                                                                                                
Representative  Ortiz  asked  whether he  viewed  himself  as                                                                   
offering   direction  for  the   board  or   as  more   of  a                                                                   
facilitator. Mr.  Cook indicated that he was  not approaching                                                                   
the board with  an established agenda. He felt  that he could                                                                   
assist other board  members in making decisions  that were in                                                                   
the  best interest  of the  trust and  the beneficiaries.  He                                                                   
noted that  he had received  letters of support  from various                                                                   
board  members, including  the outgoing  member Larry  Noreen                                                                   
and  support from  the  members,  Carlton Smith  and  Laraine                                                                   
Derr. He thought  he had a good relationship with  all of the                                                                   
members.                                                                                                                        
                                                                                                                                
Representative  Kawasaki stated  that Mr.  Cook was once  the                                                                   
chair  of the  Alaska Democratic  Party.  Mr. Cook  responded                                                                   
affirmatively and  added that his tenure took  place 18 years                                                                   
ago.  Representative  Kawasaki  asked  if Mr.  Cook  was  the                                                                   
Alaska  Legal  Services  attorney  involved  with  the  Molly                                                                   
Hootch  case.   Mr.  Cook   responded  in  the   affirmative.                                                                   
Representative   Kawasaki  asked   how  the   case  and   his                                                                   
perspective  of  rural Alaska  would  be  useful as  a  board                                                                   
member. Mr.  Cook indicated  that he started  out as  a legal                                                                   
services attorney  in Kotzebue  in 1968.  He relayed  many of                                                                   
the duties he had  in his position in addition  to working on                                                                   
an array  of issues. He  reported on  the lack of  rural high                                                                   
schools   at  the   time.  Individuals   from  Kivalina   had                                                                   
contacted  him  and through  a  series  of actions  with  the                                                                   
state  Board of  Education, researching  education laws,  and                                                                   
consulting legal  experts he began advocating  for rural high                                                                   
schools.  Community high  schools  ended  the choice  between                                                                   
students  living  with  their   families  or  attending  high                                                                   
school.  He declared  that  the  issue was  the  core of  the                                                                   
Molly  Hootch  case.  Boarding school  settings  proved  they                                                                   
were not  right for everyone  and created many  "casualties."                                                                   
He reported  that when the case  was litigated in  the Alaska                                                                   
Supreme Court the  case lost. The litigation  did not produce                                                                   
the  desired   result.  However,  the  state   administration                                                                   
agreed  with the  principle of  local education  that he  had                                                                   
advocated  and  worked  out a  settlement  with  the  clients                                                                   
which lead  to the creation of  rural high schools.  He noted                                                                   
that much  of the  conclusion of the  case happened  after he                                                                   
left the job.                                                                                                                   
                                                                                                                                
2:23:24 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Gara  indicated  that  in  previous  confirmation                                                                   
hearings  Mr.  Cook had  not  fared  well because  he  lacked                                                                   
professional  experience   with  mental  health   issues.  He                                                                   
relayed  from   his  previous   personal  experience   as  an                                                                   
attorney seeing  Mr. Cook frequently work late  and commended                                                                   
his  work ethic.  He  thought research  and  work ethic  were                                                                   
important  to  the  appointment.   He  asked  what  Mr.  Cook                                                                   
brought to the  appointment in the areas mentioned.  Mr. Cook                                                                   
relayed  his experience  as a  trial judge  in Bethel for  10                                                                   
years where  he presided  over all  kinds of cases  including                                                                   
criminal, domestic  violence, and mental  health commitments.                                                                   
The experience familiarized  him with mental health  from the                                                                   
standpoint  of  the courts  and  law.  He observed  that  the                                                                   
criminal  justice process  did  not offer  solutions. He  was                                                                   
very  interested in  the programs  the  Alaska Mental  Health                                                                   
Trust Authority  were involved in with  beneficiaries dealing                                                                   
with  the criminal  justice system.  He  surmised that  there                                                                   
were many beneficiaries  with civil issues that,  if resolved                                                                   
would divert  them from  the criminal  system. He noted  that                                                                   
beneficiaries  had civil  needs  such as  access to  housing,                                                                   
employment,  and training  but lacked  resources. He  learned                                                                   
that  Alaska Legal  Services via  a grant  through the  AMHTA                                                                   
offered a program  for "holistic defense." He  explained that                                                                   
the  grant provided  help  to  the defendants'  civil  issues                                                                   
which  help  keep  them  from   the  revolving  door  of  the                                                                   
criminal  justice system.  He  believed much  of the  trust's                                                                   
work  involved  aspects  of  legal   interpretation  and  his                                                                   
experience  as  an attorney  would  be  very helpful  to  the                                                                   
trust.  He also  had  personal  family members  dealing  with                                                                   
mental  health   issues  which  lead  to  his   own  personal                                                                   
interest in educating himself and finding solutions.                                                                            
                                                                                                                                
2:29:01 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Gara  indicated that  his  main interest  was  to                                                                   
determine  whether  Mr.  Cook   would  do  more  research  if                                                                   
warranted. Mr. Cook  responded that he would  do the research                                                                   
and  mentioned  that  sometimes  it  would  be  a  matter  of                                                                   
requesting  that staff  engage  in further  development of  a                                                                   
particular proposal.  He also brought up the  point that just                                                                   
because  there  was  a  need did  not  mean  that  a  certain                                                                   
program would  help the  intended beneficiaries.  He believed                                                                   
that the  board's responsibility  was to ensure  funding went                                                                   
to programs that assisted beneficiaries.                                                                                        
                                                                                                                                
Co-Chair Foster  reported that Representative  Guttenberg and                                                                   
Representative Pruitt had joined the meeting.                                                                                   
                                                                                                                                
Co-Chair Seaton  wanted to  discuss the  duties of  the board                                                                   
and  trust.  He  wondered  whether   the  duties  focused  on                                                                   
treatment or if  prevention was a concern. Mr.  Cook answered                                                                   
that he hoped the  trust would do both things  as long as the                                                                   
programs  were evidence  based.  He  thought that  the  trust                                                                   
would   always   want   to  address   prevention   and   help                                                                   
beneficiaries  beyond  the  issue of  treatment.  He  thought                                                                   
expanding public knowledge was important to prevention.                                                                         
                                                                                                                                
2:34:02 PM                                                                                                                    
                                                                                                                                
Co-Chair Seaton  asked whether  he considered education  as a                                                                   
preventative  tool   and  was  something  he   viewed  as  an                                                                   
appropriate function  of the board. Mr. Cook  answered in the                                                                   
affirmative.                                                                                                                    
                                                                                                                                
Representative Guttenberg  remarked that the board  and trust                                                                   
was in  transition. He mentioned  that under the  guidance of                                                                   
Mr.  Jesse  [Jess Jessie,  former  Chief  Executive  Officer,                                                                   
AMHTA] the trust  would set up a pilot program  for the state                                                                   
to make  sure the program worked.  He asked whether  Mr. Cook                                                                   
thought  that the  board  would  continue the  practice.  Mr.                                                                   
Cook expected  so. He  viewed the trust  as an innovator  and                                                                   
wanted  the trust  to  act as  a  startup for  new  programs.                                                                   
Representative  Guttenberg  mentioned some  criticisms  about                                                                   
Mr.  Cook's lack  of mental  health  experience. He  believed                                                                   
that  Mr.  Cook   brought  a  unique  perspective   from  his                                                                   
previous  experience  as  a  judge.  He  asked  Mr.  Cook  to                                                                   
comment further.  Mr. Cook observed that as  a Superior Court                                                                   
judge  in  Bethel,  cases  often  times  ended  up  in  court                                                                   
because  other  options  in  the  community  had  failed.  He                                                                   
characterized  the situation  as the  "end of  the line"  for                                                                   
some  individuals   and  the   courts  also  did   not  offer                                                                   
solutions. He  offered that often  the individual  had issues                                                                   
such as  substance or alcohol  abuse or family  problems. The                                                                   
answers should be found before people went to jail.                                                                             
                                                                                                                                
2:40:18 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster OPENED Public Testimony.                                                                                        
                                                                                                                                
2:40:43 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster CLOSED Public Testimony                                                                                         
                                                                                                                                
Co-Chair Foster  indicated the committee would  be submitting                                                                   
Mr. Cooks name forward for confirmation.                                                                                        
                                                                                                                                
2:41:19 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:44:15 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
HOUSE BILL NO. 60                                                                                                             
                                                                                                                                
     "An  Act relating  to the  motor fuel  tax; relating  to                                                                   
     the  disposition of  revenue  from the  motor fuel  tax;                                                                   
     relating  to  a  transportation  maintenance  fund;  and                                                                   
     providing for an effective date."                                                                                          
                                                                                                                                
2:44:37 PM                                                                                                                    
                                                                                                                                
JERRY  BURNETT,   DEPUTY  COMMISSIONER,  TREASURY   DIVISION,                                                                   
DEPARTMENT    OF   REVENUE,    introduced   the    PowerPoint                                                                   
Presentation: "HB 60 Motor Fuel Tax."                                                                                           
                                                                                                                                
Mr. Burnett began with slide 2: "Motor Fuel Tax Increase":                                                                      
                                                                                                                                
     "An  Act relating  to the  motor fuel  tax; relating  to                                                                   
     the  disposition of  revenue  from the  motor fuel  tax;                                                                   
     relating  to the  transportation  maintenance fund;  and                                                                   
     providing for an effective date."                                                                                          
                                                                                                                                
Mr. Burnett scrolled to slide 3: "Motor Fuel Tax History":                                                                      
                                                                                                                                
   · Began in 1945                                                                                                              
                                                                                                                                
   · Tax rates have increased over time, but structure                                                                          
     unchanged                                                                                                                  
        · Last increase: highway 1970, marine 1977,                                                                             
          aviation fuel 1994                                                                                                    
                                                                                                                                
   · Tax was suspended from Sept. 1, 2008, to Aug. 31, 2009                                                                     
                                                                                                                                
   · In 2015, HB 158 added $0.0095 surcharge on motor fuels                                                                     
     and some other refined fuels                                                                                               
        · Intended for spill prevention and response fund                                                                       
                                                                                                                                
Mr. Burnett offered  a historical perspective on  the tax. He                                                                   
relayed that  the last  motor fuel tax  increase was  in 1970                                                                   
when gas  was priced  at about  30 cents  per gallon  and the                                                                   
tax averaged  20 to  25 percent  of the cost  of a  gallon of                                                                   
gasoline.  The budget for  the prior  Department of  Highways                                                                   
was $9  million paid  for via  the motor  fuel tax.  He added                                                                   
that  the  entire  state  budget in  1970  amounted  to  $319                                                                   
million in general  funds (GF). The tax was a  per gallon tax                                                                   
rather than a percentage tax.                                                                                                   
                                                                                                                                
2:47:11 PM                                                                                                                    
                                                                                                                                
Mr.  Burnett turned  to  slide 4:  "Relative  Motor Fuel  Tax                                                                   
Rate":                                                                                                                          
                                                                                                                                
   · Alaska's fuel taxes are among lowest in U.S.1                                                                              
        · Highway fuel: lowest and the longest time since                                                                       
          increase                                                                                                              
        · Jet fuel: 35th out of 50                                                                                              
        · Aviation gas: 24th out of 50                                                                                          
                                                                                                                                
   · Under this bill, Alaska taxes would be:                                                                                    
        · Below national average for highway fuel                                                                               
        · Above national average for jet/aviation fuel                                                                          
                                                                                                                                
     1 Per  Institute on  Taxation and  Economic Policy  2017                                                                   
     No  comprehensive  data for  other  states' marine  fuel                                                                   
     taxes.  However,  we believe  that  in most  states  the                                                                   
     "marine"  rate is  the  "highway"  rate. Therefore,  our                                                                   
     "marine" rate is likely also one of the lowest in the                                                                      
      country.                                                                                                                  
                                                                                                                                
Mr.  Burnett  reported  that  many  states  did  not  have  a                                                                   
separate marine tax.                                                                                                            
                                                                                                                                
Mr. Burnett advanced  to slide 5: "Motor Fuel  Tax Proposal."                                                                   
He pointed out  that the chart was from the  original version                                                                   
of   HB   60.   He   indicated   that   the   current   House                                                                   
Transportation Committee  Substitute (CS) moved  the proposed                                                                   
second increase  to July  1, 2019 instead  of 2018.  The bill                                                                   
increased  the highway  tax from  .08 cents  to .16 cents  on                                                                   
July 1,  2017 and increased  to .24 cents  July 1,  2019. The                                                                   
following fuels increased on the same stepped schedule:                                                                         
                                                                                                                                
        · Marine fuel increased from .05 cents to .10 cents                                                                     
          to .15 cents                                                                                                          
        · Jet fuel increased from .032 cents to .064 cents                                                                      
          to .096 cents                                                                                                         
        · Aviation gas increased from .047 cents to .094                                                                        
          cents to .141 cents                                                                                                   
        · "Off-road use" credit increased from .06 cents to                                                                     
          .12 cents to .18 cents                                                                                                
                                                                                                                                
Mr.  Burnett detailed  that  the  "Off-road use"  credit  was                                                                   
typically  used by  mining and  large construction  companies                                                                   
operating  vehicles  off  of the  highways.  The  credit  was                                                                   
available  to users  of  other  off-road vehicles  like  snow                                                                   
machines but  the Department of  Revenue (DOR)  received most                                                                   
of their credit refund applications from large operators.                                                                       
                                                                                                                                
Co-Chair  Foster  asked  whether   the  Off-road  use  credit                                                                   
applied to both  diesel and gasoline. Mr. Burnett  replied in                                                                   
the affirmative.                                                                                                                
                                                                                                                                
2:50:26 PM                                                                                                                    
                                                                                                                                
Mr. Burnett  continued to  slide 6:  "Motor Fuel Tax  Impacts                                                                   
(examples)."  He   noted  that  the  figures   on  the  chart                                                                   
represented  some  examples of  the  tax burden.  He  relayed                                                                   
that the  highway tax  for someone  commuting 25,000  miles a                                                                   
year  getting  15  mpg  (miles  per  gallon)  equaling  1,666                                                                   
gallons  per year  would  currently  spend $133.00  per  year                                                                   
($0.08  per  gallon tax)  and  $266.00  per year  ($0.16  per                                                                   
gallon tax) on  July 1, 2017 and $399.00 per  year ($0.24 per                                                                   
gallon tax)  on July 1, 2019.  He continued that  the highway                                                                   
fuel tax  for freight  estimated at  30,000 pounds  (lbs.) of                                                                   
freight  driven  360  miles  at 5  mpg  totaling  72  gallons                                                                   
calculated  at .02  cents per  100 lbs.  was currently  $5.76                                                                   
per trip ($0.08  per gallon tax), $11.52 at  $0.04 cents, and                                                                   
$17.28  at $0.06   cents on  the same  stepped schedule.  The                                                                   
slide contained  examples for marine, jet fuel,  and aviation                                                                   
gas.                                                                                                                            
                                                                                                                                
Representative  Guttenberg wanted  to make  sure the  freight                                                                   
amounts  listed  on  the  chart  where  in  addition  to  the                                                                   
freight  rate and  not  a tax  on  the freight.  Mr.  Burnett                                                                   
responded in the affirmative.                                                                                                   
                                                                                                                                
2:52:43 PM                                                                                                                    
                                                                                                                                
Mr. Burnett reviewed slide 7: "Disposition of Revenues":                                                                        
                                                                                                                                
   · Creates "Transportation Maintenance Fund" as a new                                                                         
     fund within the General Fund                                                                                               
        · Aviation fuel taxes are Designated General Fund                                                                       
          under current law                                                                                                     
        · HB 60 moves taxes on highway and marine fuel from                                                                     
          Undesignated General Fund to Designated General                                                                       
          Fund for budgeting                                                                                                    
        · Creates confidence that revenues from motor fuel                                                                      
          will be used to build and maintain transportation                                                                     
          infrastructure                                                                                                        
                                                                                                                                
Representative Kawasaki  relayed that his question  had first                                                                   
been  posed   in  a   Department  of   Public  Safety   (DPS)                                                                   
subcommittee  hearing.  He  explained   that  DPS  wanted  to                                                                   
utilize some  funds from the Transportation  Maintenance Fund                                                                   
due  to the  fact  that  Troopers "maintained  the  traffic."                                                                   
He  asked how  restrictive the  fund would  be. He  indicated                                                                   
that  the  request  was  granted  using  GF  because  he  had                                                                   
reservations about  using the fund  for the DPS  request. Mr.                                                                   
Burnett  responded that  the definition  was  in statute  and                                                                   
allowed  use for  safety concerns  of  the nature  described.                                                                   
The DPS  request reflected  an allowable  use, which  was why                                                                   
the appropriation  was in the budget. He delineated  that the                                                                   
legislature  ultimately determined  the use  of the fund.  He                                                                   
did not anticipate  a problem as long as the  money was first                                                                   
appropriated to  the Department of Transportation  and Public                                                                   
Facilities (DOT) and  passed through to DPS or  flowed the in                                                                   
the opposite direction.                                                                                                         
                                                                                                                                
2:55:17 PM                                                                                                                    
                                                                                                                                
Representative   Kawasaki  asked  if   the  funds   would  be                                                                   
apportioned  based   on  the   type  of  fuel.   Mr.  Burnett                                                                   
explained that  proceeds from the  aviation gas and  jet fuel                                                                   
taxes had  to be used  exclusively at  airports. The  tax was                                                                   
also  used  for smaller  airports  handling  smaller  turbine                                                                   
engines.  He reminded  the committee  that a  portion of  the                                                                   
revenue  was shared with  municipalities  that owned its  own                                                                   
airport.  Representative  Kawasaki   asked  whether  proceeds                                                                   
from the  marine fuel tax would  be dedicated for  the Marine                                                                   
Highway and  if highway  tax funds also  apply to  the Marine                                                                   
Highway. Mr. Burnett deferred to DOT for the answer.                                                                            
                                                                                                                                
Representative  Wilson asked whether  only the aviation  fuel                                                                   
tax was dedicated  and only applied to airports.  She deduced                                                                   
that  the remaining  fuel  taxes could  be  utilized for  any                                                                   
type of state  expenditure. She viewed them  as two different                                                                   
taxes. Mr.  Burnett clarified  that the  aviation fuel  taxes                                                                   
had to be  used at the airports.  The legislation sets  out a                                                                   
designation  for  how  the  other  revenue  from  fuel  taxes                                                                   
should  be  spent  but  the  decision  would  be  up  to  the                                                                   
legislature.  Representative  Wilson  wondered why  the  fuel                                                                   
tax  revenue  was   not  dedicated  as  matching   funds  for                                                                   
Alaska's  highways. Mr.  Burnett relayed  that the  structure                                                                   
of  the fund  allowed for  it to  be used  as matching  funds                                                                   
under the designation.                                                                                                          
                                                                                                                                
2:59:20 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Gara thought  there  were pros  and  cons to  the                                                                   
legislation. He noted  that a negative was the  high price of                                                                   
fuel  in the  state.  He asked  Mr.  Burnett  to provide  his                                                                   
reason for supporting  the legislation as a  revenue measure.                                                                   
Mr. Burnett responded  that motor fuel tax was  a traditional                                                                   
method of paying  for highway infrastructure in  the country.                                                                   
He suggested  that as long  as the revenue  was spent  on its                                                                   
designated purpose  for highway infrastructure  citizens tend                                                                   
to support  the tax.  He believed  the motor  fuel tax  was a                                                                   
fair  way  to  spread  costs  and  worked  elsewhere  in  the                                                                   
country. The  legislation was  a reasonable proposition  at a                                                                   
reasonable  level of taxation.  He recognized  that fuel  was                                                                   
expensive  but the  proposed tax  amounted to  a "very  small                                                                   
portion" of the costs.                                                                                                          
3:02:09 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Gara asked  why the  tax was  staggered over  two                                                                   
years.  Mr. Burnett  replied that  he was unaware  of all  of                                                                   
the reasons  the tax increase  was stepped. He knew  that the                                                                   
stepped  approach   eased  in  the  increase   lessening  the                                                                   
immediate  impact.  In  addition,  some  companies  that  use                                                                   
fuel,  i.e., trucking  companies,  set rates  in advance  and                                                                   
needed time to adjust for the increase to reset rates.                                                                          
                                                                                                                                
Representative  Guttenberg  spoke   to  previous  legislative                                                                   
efforts  to  deal  with  highway   maintenance.  He  did  not                                                                   
believe  the roughly  $80 million  generated  each year  from                                                                   
the proposed  motor fuel tax  covered DOT's yearly  costs for                                                                   
maintenance.  He   thought  that  some  would   advocate  for                                                                   
holding  spending  to the  level  collected yet,  the  public                                                                   
demanded  adequate road  maintenance. He  indicated that  the                                                                   
legislature  retained  the  ability to  appropriate  the  tax                                                                   
proceeds  anywhere  in  the  budget.  He asked  how  the  tax                                                                   
created  confidence  and  support  when  the  tax  would  not                                                                   
entirely   fund    maintenance,   new   roads,    and   other                                                                   
infrastructure  needs.  He  acknowledged  that the  bill  was                                                                   
only a component  of the costs. Mr. Burnett  responded that a                                                                   
team effort  was necessary  to create a  plan that  filled in                                                                   
all of the missing pieces.                                                                                                      
                                                                                                                                
3:06:13 PM                                                                                                                    
                                                                                                                                
Mr.  Burnett  explained slide  8:  "Transportation  Committee                                                                   
Change to the CS":                                                                                                              
                                                                                                                                
   · Refund for Commercial Fishing Operations                                                                                   
                                                                                                                                
     · (2) a watercraft engaged in commercial fishing is                                                                        
        entitled to a motor fuel tax refund  of three cents a                                                                   
        gallon if the  tax on the  motor fuel has  been paid;                                                                   
        in this  paragraph,  "commercial  fishing" means  the                                                                   
        taking  of,  fishing  for,  or  possession  of  fish,                                                                   
        shellfish,  or  other  fishery  resources   with  the                                                                   
        intent of disposing of them for profit or by sale.                                                                      
                                                                                                                                
Mr. Burnett  recounted that the  only other modification  was                                                                   
the  change  of   the  effective  date  of   the  second  tax                                                                   
increase.                                                                                                                       
                                                                                                                                
Representative  Wilson asked about  the loss in  revenue. She                                                                   
wondered about  the reason for  the change on the  slide. Mr.                                                                   
Burnett answered  that the  change had  been proposed  by the                                                                   
House Transportation  Committee and came  at a cost  that was                                                                   
reflected  in the  fiscal  note. He  would  address the  cost                                                                   
later in  the presentation.  Representative Wilson  requested                                                                   
information regarding  the cost of  passing the refund  on to                                                                   
truckers as well.                                                                                                               
                                                                                                                                
Representative    Pruitt    surmised   that    the    state's                                                                   
administrative  cost would  rise with  implementation of  the                                                                   
tax.  He   asked  whether   the  refund  provision   required                                                                   
additional employees.                                                                                                           
                                                                                                                                
Mr. Burnett answered  that one full time  equivalent position                                                                   
was necessary  at a cost  of approximately $64,500  per year.                                                                   
Representative  Pruitt clarified  that the  one position  was                                                                   
only  related  to  the  refund component  of  the  bill.  Mr.                                                                   
Burnett replied in the affirmative.                                                                                             
                                                                                                                                
Mr. Burnett advanced to slide 9: "Revenue Impact":                                                                              
                                                                                                                                
   · Additional revenue about $40 million first year $80                                                                        
     per year thereafter                                                                                                        
        · $0.4 million will be shared with municipal-owned                                                                      
          airports                                                                                                              
        · Remainder:    Transportation   maintenance    fund,                                                                   
          special accounts for road, water transport, and                                                                       
          aviation facilities                                                                                                   
                                                                                                                                
   · Estimates based on fall 2016 revenue forecast                                                                              
                                                                                                                                
   · Does not account for changes in fuel demand or                                                                             
     stockpiling                                                                                                                
                                                                                                                                
Representative  Guttenberg  referenced   slide  9  and  asked                                                                   
about the  $0.4 million  shared with  municipal airports.  He                                                                   
asked for details  regarding how the revenue  sharing worked.                                                                   
Mr. Burnett  responded that  he did  not have the  accounting                                                                   
details. He deferred  to DOT for a complete  answer. He would                                                                   
follow up to the extent possible.                                                                                               
                                                                                                                                
3:09:58 PM                                                                                                                    
                                                                                                                                
Mr. Burnett continued to slide 10: "Implementation Cost":                                                                       
                                                                                                                                
   · Dept. of Revenue must update:                                                                                              
        · Tax Revenue Management System (TRMS)                                                                                  
        · Revenue Online (ROL) which allows a taxpayer to                                                                       
          file a return and apply for a dealer license                                                                          
          online                                                                                                                
        · Tax return forms                                                                                                      
                                                                                                                                
   · One-time implementation cost of $50,000 to recreate                                                                        
     tax forms and reprogram and test the tax system to                                                                         
     accommodate the rate changes                                                                                               
                                                                                                                                
   · No additional costs to administer the tax program from                                                                     
     tax change                                                                                                                 
                                                                                                                                
   · Transportation Committee amendment will require 1 tax                                                                      
     technician at an annual cost of $64,500 to process tax                                                                     
     refunds                                                                                                                    
                                                                                                                                
Co-Chair  Foster  asked  whether   the  off-road  tax  credit                                                                   
applied to both diesel and gasoline.                                                                                            
                                                                                                                                
BRANDON   S.   SPANOS,   DEPUTY   DIRECTOR,   TAX   DIVISION,                                                                   
DEPARTMENT  OF REVENUE (via  teleconference), explained  that                                                                   
the  exemption  specific  to diesel  was  a  regulation  that                                                                   
allowed  federally recognized  tribes  and municipalities  to                                                                   
purchase diesel  tax free  for their own  use and  for resale                                                                   
to  tribal   members.  He  reported   that  the   tax  credit                                                                   
available  for gas  or  diesel  was a  .06  cents per  gallon                                                                   
refund for  off-road use  and was  not an upfront  exemption.                                                                   
The full tax was paid when purchased.                                                                                           
                                                                                                                                
3:12:26 PM                                                                                                                    
                                                                                                                                
Representative Pruitt  related last year's  concern regarding                                                                   
the impact resulting  from the jet fuel increase  and removal                                                                   
of the  exemption  for international  flights. The  exemption                                                                   
was not included  in the current version of  the legislation.                                                                   
He recounted  that  the previous  legislature requested  that                                                                   
DOT analyze  the cost  of imposing  landing fees. He  thought                                                                   
that a  fee for  service model  would fund  a portion  of the                                                                   
airports' costs  that currently were not covered.  He queried                                                                   
why a  jet fuel tax was  being reconsidered this  year versus                                                                   
landing fees.                                                                                                                   
                                                                                                                                
3:14:21 PM                                                                                                                    
                                                                                                                                
JOHN    BINDER,    DEPUTY   COMMISSIONER,    DEPARTMENT    OF                                                                   
TRANSPORTATION  AND  PUBLIC  FACILITIES,  answered  that  the                                                                   
department  had been tasked  to investigate  landing  fees at                                                                   
Dead  Horse  and other  certificated  airports.  He  detailed                                                                   
that  certificated airports  were  generally  the larger  hub                                                                   
type airports  around the state.  Based on landing  data from                                                                   
2013,   DOT    discerned   that   landing    fees   generated                                                                   
approximately  $6  million in  revenue.  Through  discussions                                                                   
with the aviation  community, stakeholders,  various aviation                                                                   
groups,  and the Aviation  Advisory Board  the consensus  was                                                                   
that   the  least   administratively   burdensome  and   most                                                                   
equitable  way   to  generate  additional  revenues   was  to                                                                   
increase    taxes.    Representative   Pruitt    asked    the                                                                   
commissioner  to  identify  the largest  competitors  to  the                                                                   
Anchorage  International  Airport.  Mr. Binder  replied  that                                                                   
the   competitors    to   the    Anchorage   and    Fairbanks                                                                   
International  Airports were  related to  air cargo  carriers                                                                   
travelling to  and from Asia.  The competitive  airports were                                                                   
located in  Seattle, Vancouver, and Edmonton.  Representative                                                                   
Pruitt asked  what the  "excess amount  of taxes per  gallon"                                                                   
were.                                                                                                                           
                                                                                                                                
3:17:18 PM                                                                                                                    
                                                                                                                                
Mr.  Binder   responded  that  state  taxes   were  currently                                                                   
exempted   on  all   international  flights.   Representative                                                                   
Pruitt asked what  the equivalent fees and taxes  were at the                                                                   
competitor  airports.  Mr.  Binder  did  not  currently  have                                                                   
access to the  figures. Representative Pruitt  asked how many                                                                   
people   were  employed   at   the  Anchorage   International                                                                   
Airport.  Mr. Binder  responded  that employment  related  to                                                                   
aviation  in the Anchorage  area numbered  47 thousand  jobs.                                                                   
Representative  Pruitt  asked  what impact  the  increase  in                                                                   
fuel  taxes would  have on  the associated  jobs. Mr.  Binder                                                                   
reported that  DOT did not anticipate  an impact on  jobs. He                                                                   
furthered that  the repercussions  to removing the  exemption                                                                   
for international  flight was  nearly impossible  predict. He                                                                   
guessed  that the  reaction could  range  from negligible  to                                                                   
significant.   Representative   Pruitt  recapped   that   the                                                                   
economic impact  on jobs  from the  "increase" "based  on the                                                                   
fact" that Alaska  was in completion "with other  airports in                                                                   
the Pacific  Northwest" was not  really understood.  He asked                                                                   
whether   his  understanding   was   correct.  Mr.   Binder's                                                                   
clarified   that  the   legislation's   impact  on   domestic                                                                   
carriers  was negligible.  He furthered  that if  a fuel  tax                                                                   
was imposed  on the international  carriers, DOT  anticipated                                                                   
that the  amount of tax  would double  the cost of  a carrier                                                                   
landings and  eliminated Anchorage's competitive  edge in the                                                                   
air cargo market.                                                                                                               
Representative  Wilson stated  that  "equitable meant  fair."                                                                   
She asked  how much  state funding  was appropriated  to both                                                                   
airports. Mr.  Binder replied  that neither airport  received                                                                   
state funding:  both were self-sustained through  air carrier                                                                   
and  tenant  rates  and  fees.  Representative  Wilson  asked                                                                   
whether  the  airports  were self-sustained  at  the  current                                                                   
level  of taxes.  Mr. Binder  responded that  the fuel  taxes                                                                   
collected at both  airports flowed into the  general fund. He                                                                   
remarked  that the funds  that sustained  both airports  were                                                                   
unrelated to  the fuel  tax. Representative Wilson  clarified                                                                   
that both  airports were  self-sustainable without  the state                                                                   
tax revenue.  Mr. Binder  affirmed her  statement. She  asked                                                                   
how much  the state funding  for other airports  amounted to.                                                                   
Mr.  Binder answered  that the  state spent  $40 million  per                                                                   
year on  the remaining  rural airport system.  Representative                                                                   
Wilson asked how  much revenue the other  airports generated.                                                                   
Mr.  Binder  explained  that  the  rural  airports  generated                                                                   
approximately  $5   million  primarily  related   to  leasing                                                                   
revenue from  land rent  and concession fees.  Representative                                                                   
Wilson recounted  that  the same discussion  took place  last                                                                   
year.  She wondered  why  the  administration  would ask  the                                                                   
international  airports   to  subsidize  the   rural  airport                                                                   
system  even  more. She  wondered  why  the state  would  not                                                                   
charge landing  fees and why the  state "put so  much stress"                                                                   
on its  international airports  in order  to subsidize  other                                                                   
airports. Mr. Binder  answered that landing fees  were always                                                                   
an  option for  revenue generation.  He  reiterated that  the                                                                   
fuel tax  was the aviation  communities' requested  method of                                                                   
fairly generating  state revenue.  He indicated that  a large                                                                   
number  of passengers  and  freight  from the  Anchorage  and                                                                   
Fairbanks airports  were using  the rural airport  system. He                                                                   
added that  a large portion of  passengers flying out  of the                                                                   
state used  rural carriers  to connect  through Anchorage  or                                                                   
Fairbanks.  He felt  that  it was  reasonable  to expect  the                                                                   
larger carriers  to help support  the airports  that provided                                                                   
them with passengers.                                                                                                           
                                                                                                                                
3:25:09 PM                                                                                                                    
                                                                                                                                
Representative  Wilson countered  that freight benefited  the                                                                   
communities.  She was  concerned that  the Aviation  Advisory                                                                   
Board   was  comprised   of   members   from  "mostly   small                                                                   
airports." She exemplified  the Dead Horse Airport  and asked                                                                   
why the state "would  let them off for free."  Mr. Binder was                                                                   
uncertain  that  the  state was  "letting  airports  off  for                                                                   
free."  Representative  Wilson thought  that  the Dead  Horse                                                                   
Airport  was different  than rural  airports. She  elaborated                                                                   
that the  Dead Horse  Airport was  commercialized. She  asked                                                                   
why DOT  did not believe that  the Dead Horse  Airport should                                                                   
be as sustainable  as the international airports.  Mr. Binder                                                                   
communicated  that  DOT desired  moving  all of  the  state's                                                                   
airports towards  self-sustainability. He  felt that  many of                                                                   
the  passengers  departing  in  Dead Horse  travelled  on  to                                                                   
rural  Alaska and  felt  that landing  fees  imposed on  Dead                                                                   
Horse  still  impacted rural  Alaska.  Representative  Wilson                                                                   
asked  for  a  funding  breakdown  of  each  of  the  state's                                                                   
airports by revenue  generated and state funding  received in                                                                   
the last year.                                                                                                                  
                                                                                                                                
Co-Chair Foster OPENED Public Testimony.                                                                                        
                                                                                                                                
3:28:53 PM                                                                                                                    
                                                                                                                                
PETER  BIBB, JUNEAU  PLANT  MANAGER, PETRO  MARINE  SERVICES,                                                                   
spoke  in  opposition to  the  marine  fuel increase  in  the                                                                   
bill. He  indicated that tripling  the marine fuel  tax would                                                                   
impose  additional  negative  impacts  on  the  "contracting"                                                                   
economy and would  generate very little revenue.  The company                                                                   
supported a  further increase  in the proposed  highway motor                                                                   
fuel  tax   and  determined  that   much  more   revenue  was                                                                   
generated  via a highway  tax  than a marine  tax. He  shared                                                                   
that   Petro  Marine   Services  operated   12  marine   fuel                                                                   
terminals in Southeast  and Southcentral Alaska.  Much of the                                                                   
company's  customer  base  was  comprised  of  Seattle  based                                                                   
large volume  users that  were sensitive  to fuel prices.  He                                                                   
thought  that tripling  the marine tax  provided the  Seattle                                                                   
based customers  an added incentive to further  minimize fuel                                                                   
purchases  in Alaska,  which  was  a customary  practice.  He                                                                   
thought  that  the   increased  marine  tax  would   have  an                                                                   
"adverse  financial  impact"  on  Alaskan  marine  businesses                                                                   
that could lead  to a reduction in marine fuel  purchases. As                                                                   
a result, less  marine fuel purchased could  reduce local tax                                                                   
revenues in marine  communities that depended on  the income.                                                                   
He  reiterated his  support  for  adjusting the  highway  tax                                                                   
higher than  proposed instead  of increasing the  marine fuel                                                                   
tax.                                                                                                                            
                                                                                                                                
3:32:29 PM                                                                                                                    
                                                                                                                                
Representative Ortiz  asked Mr. Bibb about the  services that                                                                   
Petro  Marine  provided.  He  understood  that  Petro  Marine                                                                   
Services was the  main motor fuel providers  for retail sales                                                                   
in Southeast Alaska.  Mr. Bibb responded in  the negative. He                                                                   
noted  that the  market  was  extremely competitive  and  was                                                                   
comprised  mainly  of  three large  bulk  fuel  distributors;                                                                   
Petro Marine, Crowley,  and Delta Western that  supplied fuel                                                                   
"for all sectors."                                                                                                              
                                                                                                                                
Representative  Thompson asked what  the marine fuel  tax was                                                                   
in other  places such  as Seattle or  Portland. Mr.  Bibb was                                                                   
uncertain  but believed Seattle  did not  have a marine  fuel                                                                   
tax.                                                                                                                            
                                                                                                                                
3:34:20 PM                                                                                                                    
                                                                                                                                
NICK  D'ANDREA,   VICE  PRESIDENT,  PUBLIC  AFFAIRS   -  UPS,                                                                   
LOUISVILLE,  KY (via  teleconference), opposed  the jet  fuel                                                                   
portion  of  HB 60.  He  read  a prepared  statement  of  his                                                                   
testimony:                                                                                                                      
                                                                                                                                
     UPS appreciates  our long-standing working  relationship                                                                   
     with  Alaska,  and we  are  proud  to employ  more  than                                                                   
     1.100 UPSers  in the state,  including there.  No matter                                                                   
     where  we operate,  we strive  to play  our part in  the                                                                   
     local economy  as a  responsible corporate citizen.  UPS                                                                   
     currently pays  $6 million in  taxes each year  and more                                                                   
     than  $7  million  in landing  fees  annually  to  cover                                                                   
     airport  costs  incurred  at Ted  Stevens  International                                                                   
     Airport.                                                                                                                   
                                                                                                                                
     Two  components  of  Alaska's proposed  motor  fuel  tax                                                                   
     bill, however,  stand to  directly impact UPS.  While we                                                                   
     support   a   motor   fuel    tax   increase   to   fund                                                                   
     infrastructure  building and repair, we  strongly oppose                                                                   
     the jet fuel tax increase contained in the same bill.                                                                      
                                                                                                                                
     As we  see it, the  motor fuel tax  portion is  purely a                                                                   
     user  fee.  UPS  uses  all   the  roads  in  Alaska  and                                                                   
     absolutely  believes that we  should pay our  fair share                                                                   
     for  infrastructure. Alaska  also currently  has one  of                                                                   
     the lowest  motor fuel  tax rates in  the nation.  It is                                                                   
     obviously  difficult to fund  2017 transportation  needs                                                                   
     with 1970s  funding; for this reason, UPS  is supportive                                                                   
     of the motor fuel tax increase.                                                                                            
                                                                                                                                
     The jet  fuel tax increase,  though, is not a  user fee.                                                                   
     In fact, it would effectively tax UPS twice.                                                                               
                                                                                                                                
     UPS already  pays more than $7 million  dollars annually                                                                   
     in  aviation  user fees  in  the  form of  landing  fees                                                                   
     incurred  at Ted  Stevens  International Airport.  These                                                                   
     fees  go  directly  into   the  aviation  infrastructure                                                                   
     where  we  operate  (Anchorage).  In  fact,  the  Alaska                                                                   
     International Airport  System is self-sustaining  due to                                                                   
     the  landing  fee paid  by  its  users. This  means  the                                                                   
     current  fuel  tax  generated   is  paying  for  smaller                                                                   
     airports, which  UPS does not utilize, and  which do not                                                                   
     charge  landing  fees  to  sustain  their  airport.  The                                                                   
     proposal to  triple the jet  fuel tax is asking  UPS and                                                                   
    other carriers to subsidize airports we do not use.                                                                         
                                                                                                                                
     We  also  believe  increasing  the jet  fuel  tax  could                                                                   
     impact Alaska's  role in the cargo  industry. Currently,                                                                   
     it is  situated perfectly as  UPS's gateway to  and from                                                                   
     Asia.  We have  a good  relationship  with the  airport,                                                                   
     and  Alaska  has  always   had  a  fair  cost  of  doing                                                                   
     business.  As   aircraft  continue  to   evolve,  flying                                                                   
     longer ranges  with better payload capacity,  it is safe                                                                   
     to assume those  in the cargo industry  will continue to                                                                   
     evaluate the  most efficient options for  each carrier's                                                                   
     network.                                                                                                                   
                                                                                                                                
     We  understand the  difficult  situation  you and  other                                                                   
     lawmakers  are facing  and  we appreciate  the work  you                                                                   
     are  doing  for  your constituents,  including  our  own                                                                   
     UPSers. While  we support  the motor fuel  tax increase.                                                                   
     I hope you  understand our concerns to  increase the jet                                                                   
     fuel  tax. We  aren't opposed  to paying  user fees  for                                                                   
     infrastructure  we use, but  subsidizing other  airports                                                                   
     we don't use  and who do not levy landing  fees is not a                                                                   
     sustainable   was    to   fund   Alaska'    s   aviation                                                                   
     infrastructure.                                                                                                            
                                                                                                                                
3:38:43 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Gara  "sincerely"  appreciated UPS'  presence  in                                                                   
Alaska. He  noted that  legislators had  a duty to  represent                                                                   
the Alaskan  citizenry.  He calculated  that if the  business                                                                   
portion of  the motor fuel taxes  were removed the  tax would                                                                   
fall on  consumers and  especially hard  on those with  lower                                                                   
income.  He believed  the  tax  would become  regressive.  He                                                                   
also deduced that  the increase in aviation  gas prices would                                                                   
impact  UPS  operations   by  less  than  one   percent.  Mr.                                                                   
D'Andrea  answered  that  UPS  endorsed  highway  motor  fuel                                                                   
taxes  and viewed  them as  a  "user fee."  However, he  felt                                                                   
that asking  UPS to subsidize  taxes on airports they  do not                                                                   
utilize  was unfair.  He  offered that  labor  and fuel  were                                                                   
cost   drivers   and   increased   jet   fuel   taxes   would                                                                   
significantly add to its cost drivers.                                                                                          
                                                                                                                                
Representative  Pruitt  recalled  that  489 UPS  pilots  were                                                                   
domiciled in Alaska  and that the company trained  pilots for                                                                   
flying 747 and  MD11 jets in Anchorage. He  reported that the                                                                   
jet  models  were  being  phased out  for  newer  models.  He                                                                   
queried  whether UPS  would train  pilots on  the more  fuel-                                                                   
efficient,   newer   models  in   Anchorage.   Mr.   D'Andrea                                                                   
responded that  the company had  recently purchased  14 747-8                                                                   
models  that were  the  largest 747's  available  and had  an                                                                   
option  to purchase  14  more. He  indicated  that UPS  could                                                                   
technically fly  directly from Seattle to Asia,  resulting in                                                                   
a "huge  hit  to the  payload." He  qualified that  Vancouver                                                                   
and other  locations were cheaper  in terms of  landing fees.                                                                   
He noted that  one company was flying 777's  directly to Asia                                                                   
from Oakland,  California. He  qualified that increased  fuel                                                                   
taxes "could be catastrophic in Anchorage."                                                                                     
                                                                                                                                
3:44:24 PM                                                                                                                    
                                                                                                                                
DANA   DEBEL,  MANAGING   DIRECTOR   FOR   STATE  AND   LOCAL                                                                   
GOVERNMENT AFFAIRS,  DELTA AIRLINES, LOS  ANGELES, CALIFORNIA                                                                   
(via teleconference),  spoke  in opposition  to the jet  fuel                                                                   
tax  in  HB 60.  She  noted  that over  100  Delta  employees                                                                   
resided  in Alaska. She  stated that  the threefold  increase                                                                   
placed  the   state  15th  in   states'  ranked   by  highest                                                                   
effective  jet fuel  tax  rate.  She informed  the  committee                                                                   
that the  effective  "all in"  jet fuel tax  rate in  Seattle                                                                   
was 2.4 cents and  was 3 cents per gallon in  Portland. Delta                                                                   
currently operated  17 peak day  flights to and  from Alaska.                                                                   
Delta  served  Juneau,  Sitka,   and  Ketchikan  during  peak                                                                   
summer  travel  months  and  Anchorage   and  Fairbanks  year                                                                   
around.  She  indicated that  due  to  the power  of  Delta's                                                                   
network and hubs,  Alaska was really one stop  away from over                                                                   
600 destinations  throughout the world not  including partner                                                                   
airlines. She  thought the reach  would expand  even further.                                                                   
She  believed that  Delta  was only  one  of many  commercial                                                                   
carriers  with   employees  in   Alaska  and  cited   Federal                                                                   
Aviation  Administration (FAA)  statistics  that 56  thousand                                                                   
jobs  were located  in Alaska;  only  three states  outranked                                                                   
Alaska  in the  number  of aviation  jobs.  She related  that                                                                   
Alaska was  a "very challenging  place" to offer  service and                                                                   
that   even   though   the  increase   seemed   minimal   the                                                                   
repercussions  could be significantly  impactful on  the cost                                                                   
of operating  a flight.  She referenced  an Office  of Budget                                                                   
and  Management  (OMB)  state   study  that  assigned  a  per                                                                   
passenger  cost to  the increase  in  the jet  fuel tax.  She                                                                   
considered the analysis  flawed in many ways.  She maintained                                                                   
that the  amount of  jet fuel  for each  flight was  variable                                                                   
depending  on a variety  of conditions  and was not  stagnant                                                                   
for each  flight. The  flights were not  always sold  out and                                                                   
in reality,  the load factor  in Alaska was approximately  85                                                                   
percent.  She furthered  that the airline  was the  purchaser                                                                   
of jet  fuel and  not the  consumer. The  cost of an  airline                                                                   
ticket  was determined  on  supply and  demand  and what  the                                                                   
consumer was  willing to pay and  not a function of  the cost                                                                   
of the inputs.  Therefore, Delta could not charge  the amount                                                                   
that  covered the  cost of  operation  in Alaska  and make  a                                                                   
profit on  top of  cost recovery.  Finally, the analysis  was                                                                   
based  on a  shorter  stage length,  flying  from Seattle  to                                                                   
Juneau  and was  not typical.  She  understood the  budgetary                                                                   
challenges  the  state was  facing  but  did not  support  an                                                                   
increase in jet fuel.                                                                                                           
                                                                                                                                
3:52:06 PM                                                                                                                    
                                                                                                                                
PAUL  KENDALL, SELF,  ANCHORAGE  (via teleconference),  spoke                                                                   
to  matters  other  than  HB   60.  He  discussed  his  ideas                                                                   
regarding  how   to  cut  the   budget.  He  felt   that  the                                                                   
legislature  should  be more  responsive  to the  public  and                                                                   
strongly  disagreed with  using any  Permanent Fund  Dividend                                                                   
(PFD) money for government services.                                                                                            
                                                                                                                                
3:54:59 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster CLOSED Public Testimony.                                                                                        
                                                                                                                                
3:55:20 PM                                                                                                                    
                                                                                                                                
STEVEN   HATTER,    DEPUTY   COMMISSIONER,    DEPARTMENT   OF                                                                   
TRANSPORTATION  AND PUBLIC FACILITIES,  commented that  HB 60                                                                   
offered  DOT an  opportunity  for  an improved,  stable,  and                                                                   
predictable    funding   source    to   "provide    necessary                                                                   
transportation  results and  services." He  believed the  tax                                                                   
provided  "a  mechanism for  clear  accountability  regarding                                                                   
what   Alaskans  were   paying   for."   He  introduced   the                                                                   
PowerPoint Presentation.                                                                                                        
                                                                                                                                
3:56:19 PM                                                                                                                    
                                                                                                                                
Mr. Hatter began with slide 2: "Scope":                                                                                         
                                                                                                                                
     This    briefing    addresses    the    Department    of                                                                   
     Transportation & Public Facilities (DOT&PF) operating                                                                      
     budget.                                                                                                                    
          •The  funds generated  by Alaska's  Motor Fuel  Tax                                                                   
          that  will be placed  in the Alaska  Transportation                                                                   
          Maintenance  Fund  (DGF/Other)   replace  an  equal                                                                   
          amount  of Unrestricted  General  Funds (UGF)  that                                                                   
         currently fund DOT&PF's operating budget.                                                                              
               •UGF to DGF fund swap: $64.8M                                                                                    
               •UGF to Other fund swap (Aviation): $4.5M                                                                        
               •Total fund swap: $69.3M                                                                                         
                                                                                                                                
          •The budget  components that are recipients  of the                                                                   
          fuel  tax  revenue  are  the  regional  Highways  &                                                                   
          Aviation components  and the Alaska  Marine Highway                                                                   
          System.                                                                                                               
                                                                                                                                
3:57:04 PM                                                                                                                    
                                                                                                                                
Mr.  Hatter moved  to slide  3:  "FY2018 Governor's  Proposed                                                                   
Operating  Budget  All  Funding   Sources"  that  graphically                                                                   
depicted the  funding sources.  He highlighted that  the four                                                                   
funding  sources   for  the   department  were  color   coded                                                                   
designated on  the lower right  of the slide. Two  pie charts                                                                   
in  the  upper   right  corner  compared  the   total  FY  17                                                                   
management plan to  the FY 18 governor's budget.  The largest                                                                   
change in  distribution in  fund categories was  undesignated                                                                   
general funds (UGF)  and designated general funds  (DGF). The                                                                   
new proposed  fund accounted  for the  larger DGF  percentage                                                                   
in FY 18  and provided a  direct and clear link  for services                                                                   
from  taxes "paid  at the  pump."  The tax  revenue would  be                                                                   
used  to   preserve  and   operate  Alaska's   transportation                                                                   
infrastructure and  was similar to  a fee for  service model.                                                                   
He continued that  the bubble chart on the  slide was colored                                                                   
to depict  the funding  category and the  size of  the bubble                                                                   
was proportionate to the amount of the funding spent.                                                                           
                                                                                                                                
3:58:31 PM                                                                                                                    
                                                                                                                                
Mr.  Hatter  continued  to  slide   4:  "Keep  Alaska  Moving                                                                   
through  service and  infrastructure." He  reviewed the  four                                                                   
core services of the department aligned with DOT's mission.                                                                     
                                                                                                                                
     PRESERVE ALASKA'S TRANSPORTATION INFRASTRUCTURE                                                                            
          Off-Surface Preservation                                                                                              
          Surface Preservation                                                                                                  
          Vehicle Management                                                                                                    
          Bridge Preservation                                                                                                   
          Vessel/Terminal Preservation                                                                                          
                                                                                                                                
     OPERATE ALASKA'S TRANSPORTATION INFRASTRUCTURE                                                                             
          Illumination                                                                                                          
          Signals                                                                                                               
          Snow & Ice Removal                                                                                                    
          Signage                                                                                                               
          Striping                                                                                                              
          Operate Certificated Airports                                                                                         
                                                                                                                                
     MODERNIZE ALASKA'S TRANSPORTATION INFRASTRUCTURE                                                                           
          Plan Infrastructure                                                                                                   
          Design/Engineer                                                                                                       
          Construct                                                                                                             
                                                                                                                                
     PROVIDE TRANSPORTATION SERVICES                                                                                            
          Manage Ferry Reservation System                                                                                       
          Operating Ferry Terminals                                                                                             
          Operating Ferries on Routes                                                                                           
          Retain and Expand Business                                                                                            
          Transit                                                                                                               
                                                                                                                                
Mr.  Hatter   emphasized  the   department's  commitment   to                                                                   
accountability.  He indicated  that the department  developed                                                                   
clear  performance metrics  to  measure  its performance  and                                                                   
efficiency when  delivering the core services.  He emphasized                                                                   
that  as stewards  of  state funding,  measuring  performance                                                                   
resulted  in  accountability.  He  reiterated  that  the  tax                                                                   
revenue  would flow primarily  to preserve  and operate  core                                                                   
services.                                                                                                                       
                                                                                                                                
3:59:59 PM                                                                                                                    
                                                                                                                                
Mr. Hatter reviewed slide 5: "Preserve":                                                                                        
                                                                                                                                
     Preserve Alaska's Transportation Infrastructure                                                                            
                                                                                                                                
     Preserve extends  the life of existing  infrastructure -                                                                   
     it is the  responsibility of the department  to maximize                                                                   
     the lifespan  of our  transportation infrastructure;  to                                                                   
     ensure  assets  meet federal  transportation  standards;                                                                   
     and to  restore deficiencies  in the various  structures                                                                   
     upon which the system operates.                                                                                            
                                                                                                                                
     Direct Services that support Preserve:                                                                                     
     •Surface Preservation                                                                                                      
     •Off-Surface Preservation                                                                                                  
     •Bridge Preservation                                                                                                       
     •Vehicle Management                                                                                                        
     •Vessel/Terminal Management                                                                                                
                                                                                                                                
Mr.  Hatter  turned  to slide  6:  "FY2017  Management  Plan:                                                                   
Operating  Budget:  Preserve $138.998.5."  He  detailed  that                                                                   
the slide  depicted the current  budgeting by  the department                                                                   
and pointed  out that UGF  decreased and DGF  increased under                                                                   
the provisions in HB 60.                                                                                                        
                                                                                                                                
Mr.  Hatter advanced  to slide  7: "Off-Surface  Preservation                                                                   
$26.255.5." He  noted the measures  that the department  used                                                                   
to demonstrate accountability in Off-Surface Preservation.                                                                      
                                                                                                                                
     Measures:                                                                                                                  
                                                                                                                                
       1. Percent of System Meeting Service Standards                                                                           
        2. Maintenance    Cost/Lane      Miles     Maintained                                                                   
                                                                                                                                
Mr.  Hatter  noted   that  the  slide  portrayed   photos  of                                                                   
examples of desired  and insufficient standards.  A pie chart                                                                   
denoted  fund  source  percentages  to  the  direct  services                                                                   
level  and the  apportionment  to the  regions and  statewide                                                                   
agencies.  He   underlined  that  the  data   offered  better                                                                   
clarity   about    where   the   funding   was    spent   and                                                                   
accountability  on how  effective and  efficiently the  funds                                                                   
were spent.                                                                                                                     
                                                                                                                                
4:02:31 PM                                                                                                                    
                                                                                                                                
Mr. Hatter scrolled to slide 8: "Operate":                                                                                      
                                                                                                                                
     Operate Alaska's Transportation Infrastructure                                                                             
                                                                                                                                
     Operate  allows movement  on  existing infrastructure  -                                                                   
     it  is the responsibility  of the  department to  insure                                                                   
     our  transportation  system   functions  smoothly;  that                                                                   
     streets  and runways  are  free of  snow  and ice;  that                                                                   
     lighting,  signage  and  signals  are  all  operational;                                                                   
     that roads  are swept and striping is  visible. Airports                                                                   
     are  operated  for  the  safe  movement  of  people  and                                                                   
     cargo.                                                                                                                     
     Direct Services that support Operate:                                                                                      
     •Illumination                                                                                                              
     •Snow & Ice Removal                                                                                                        
     •Operate Certificated Airports                                                                                             
     •Striping                                                                                                                  
     •Signage                                                                                                                   
     •Signals                                                                                                                   
     •Information Transportation Services                                                                                       
                                                                                                                                
Mr.  Hatter  explained  slide  9:  "FY2017  Management  Plan:                                                                   
Operating  Budget: Operate  $105.292.8."  He  pointed to  how                                                                   
the  funds flowed  in the  FY  17 management  plan under  the                                                                   
category  and noted  the  large UGF  bar  that would  shorten                                                                   
with increased DGF with implementation of the tax plan.                                                                         
                                                                                                                                
Mr. Hatter advanced  to slide 10: "Snow and  Ice Removal." He                                                                   
noted  the measures  that lead  to the  desired standards  of                                                                   
safety after a weather event:                                                                                                   
                                                                                                                                
   Measures:                                                                                                                    
                                                                                                                                
     1. Average Time per event to Achieve performance target                                                                    
        for each priority level                                                                                                 
     2. Average equipment and labor costs per event/lane                                                                        
        mile                                                                                                                    
                                                                                                                                
Mr.  Hatter remarked  that  the slide  also  contained a  pie                                                                   
chart  showing the  funding percentages  broken  down to  the                                                                   
direct service  level and  apportionment  to the regions  and                                                                   
statewide  agencies.   He  repeated  his   previous  comments                                                                   
regarding    the   measures    leading    to   clarity    and                                                                   
accountability.  He  scrolled  to slide  11:  "Comparison  of                                                                   
Fund Category  Distribution: FY2018  Governor's Proposed  vs.                                                                   
FY2017." that  depicted the  same pie charts  on slide  3. He                                                                   
reiterated that the  motor fuel tax which created  the Alaska                                                                   
Transportation  Maintenance   Fund  was  an   opportunity  to                                                                   
decrease  UGF  via  increased  DGF and  clearly  linked  core                                                                   
direct  services and  performance  and was  also a  mechanism                                                                   
for accountability.                                                                                                             
                                                                                                                                
4:05:44 PM                                                                                                                    
                                                                                                                                
Representative  Ortiz  referenced   slide  6,  regarding  the                                                                   
operating budget  spend. He wondered  what percentage  of the                                                                   
72  percent "Other"  fund  category  was federal  funds.  Mr.                                                                   
Hatter  responded that  he did  not have  the exact  numbers.                                                                   
Representative  Ortiz asked Mr.  Hatter for an  estimate. Mr.                                                                   
Hatter offered to provide the information later.                                                                                
                                                                                                                                
Representative  Wilson pointed  to  slide 11  and noted  that                                                                   
the  pie  chart  depicted  the   amount  of  overall  federal                                                                   
funding.   She  wondered   what  the   "Other"  funding   was                                                                   
comprised of.  Mr. Hatter  cited slide 3  and pointed  to the                                                                   
breakdown of the  "Other" funding category in  the dark green                                                                   
bubbles.  He pointed  to "CIP  Receipts"  and explained  that                                                                   
represented  the  authority  to   spend  federal  dollars  by                                                                   
allowing  the   charge  of   personal  expenses   to  capital                                                                   
projects.  He  mentioned the  International  Airport  Revenue                                                                   
Fund  was  a   self-contained  fund  for   the  international                                                                   
airports.  The Highway  Equipment  and Working  Capital  fund                                                                   
was   appropriated  for   the  state   equipment  fleet.   He                                                                   
mentioned  that  the remaining  other  funds in  the  smaller                                                                   
bubbles  represented   "quite  a   bit"  of  other   funding.                                                                   
Representative  Wilson  inquired  what percentage  of  Marine                                                                   
Highway System  Funds were GF  and whether the  Maine Highway                                                                   
"paid for  itself." Mr. Hatter  offered to provide  the exact                                                                   
percentage  breakdown. He  remembered that  the rate  charges                                                                   
and fees  contributed to  a "relatively  small amount  of the                                                                   
total costs."                                                                                                                   
                                                                                                                                
4:09:41 PM                                                                                                                    
                                                                                                                                
Representative  Wilson   asked  when  the  rates   were  last                                                                   
increased.  Mr.  Hatter  answered  that the  rates  had  been                                                                   
increased over the  last two years and he would  follow up by                                                                   
providing a rate schedule and timing of the rate increases.                                                                     
                                                                                                                                
Vice-Chair  Gara expressed frustration  with the  department.                                                                   
He  believed  that  the  department   attempted  to  obstruct                                                                   
information he  had requested  and was never "responsive"  to                                                                   
his concerns.  He identified $20  million in maintenance  and                                                                   
operation  of the Dalton  Highway and  asked DOT whether  the                                                                   
state  could impose  a toll designed  for the  end users.  He                                                                   
reported  receiving a  negative  answer with  a  30 year  old                                                                   
Attorney   General  opinion  attached.   He  researched   and                                                                   
discovered  that a  toll  was possible  on  all users  except                                                                   
Alyeska. He believed  the department was stuck  in the status                                                                   
quo and he  had to do much  of his own research  after asking                                                                   
questions to the  department in the past. He  queried why the                                                                   
department was  not charging landing  fees at the  Dead Horse                                                                   
Airport  and  received  an answer  that  "side  stepped"  the                                                                   
question  regarding charges  for  property  use that  covered                                                                   
airport  costs but  did  not address  landing  fees. He  felt                                                                   
"side  stepped" by  the department  on both  issues. He  felt                                                                   
that  the  issues  represented  $20 million  DOT  should  not                                                                   
need. He requested real answers from the department.                                                                            
                                                                                                                                
4:13:42 PM                                                                                                                    
Mr. Hatter  responded that  his message  was received  and he                                                                   
would take the  request back to the commissioner.  Vice-Chair                                                                   
Gara  wanted  proactive  help  from DOT  when  answering  his                                                                   
questions.  He   referred  to  the  question   Representative                                                                   
Wilson  had  asked  about  the Dead  Horse  Airport  and  the                                                                   
testifier  answered with  a reference  to rural users.  Vice-                                                                   
Chair Gara  thought that  the Dead  Horse Airport was  almost                                                                   
exclusively  used  by industry.  Deputy  Commissioner  Hatter                                                                   
agreed with Vice-Chair Gara.                                                                                                    
                                                                                                                                
HB  60   was  HEARD  and   HELD  in  committee   for  further                                                                   
consideration.                                                                                                                  
                                                                                                                                
HOUSE BILL NO. 127                                                                                                            
                                                                                                                                
     "An Act  relating to  a permanent  fund dividend  for an                                                                   
     individual   whose   conviction    has   been   vacated,                                                                   
     reversed,   or   dismissed;    and   relating   to   the                                                                   
     calculation   of  the  value   of  the  permanent   fund                                                                   
     dividend  by including payment  to individuals  eligible                                                                   
     for a  permanent fund dividend  because of  a conviction                                                                   
     that has been vacated, reversed, or dismissed."                                                                            
                                                                                                                                
4:16:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SCOTT  KAWASAKI,  SPONSOR, provided  a  brief                                                                   
overview of the  legislation. He reminded the  committee that                                                                   
the  state  relinquished  incarcerated   Alaskans  rights  to                                                                   
their  Permanent Fund  Dividends  (PFD).  He elaborated  that                                                                   
the   legislation  provided   the  PFD   to  Alaskans   whose                                                                   
convictions were vacated,  reversed, or dismissed. If passed,                                                                   
those  eligible  must  apply  for the  PFD  within  120  days                                                                   
following  the  new  judgment  or  within  120  days  of  the                                                                   
effective  date  of the  bill.  He  believed that  the  state                                                                   
providing  PFD's to individuals  wrongfully convicted  helped                                                                   
them reestablish  a normal  life. It  was incumbent  upon the                                                                   
legislature to recognize  the injustice. He pointed  out that                                                                   
last year  that state had  the highest number  of individuals                                                                   
with overturned convictions that were wrongly incarcerated.                                                                     
                                                                                                                                
Co-Chair Foster  stated that Vice-Chair  Gara would act  as a                                                                   
stand-in chair of the meeting.                                                                                                  
                                                                                                                                
4:19:34 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster OPENED Public Testimony.                                                                                        
4:19:39 PM                                                                                                                    
                                                                                                                                
APRIL  MONROE, SELF,  FAIRBANKS  (via teleconference),  spoke                                                                   
in favor of the  legislation. She shared that she  had done a                                                                   
lot  of advocacy  work on  the  issue. She  stressed that  it                                                                   
would be a travesty  to deny a person their  dividend because                                                                   
of  a  wrongful  conviction. She  could  not  imagine  anyone                                                                   
opposing the legislation.                                                                                                       
                                                                                                                                
4:21:22 PM                                                                                                                    
                                                                                                                                
BARBARA  BRINK,  ALASKA  INNOCENCE  PROJECT,  ANCHORAGE  (via                                                                   
teleconference),  spoke in favor of  HB 127. She  thanked the                                                                   
co-sponsors  of  the  bill.  She  shared  that  she  was  the                                                                   
volunteer president  of the project's  board and  relayed her                                                                   
extensive  career involving  indigent criminal  defense  as a                                                                   
state and federal  public defender attorney over  the last 35                                                                   
years. She  elucidated that  under the  current law  a person                                                                   
lost  eligibility   for   the  PFD  if   sentenced  or   were                                                                   
incarcerated for  a felony conviction. The bill  was "stating                                                                   
the  obvious"  for  individuals  found not  guilty,  or  when                                                                   
convictions  were  vacated  or   reversed,  or  charges  were                                                                   
dismissed. The  legislation recognized  that a person  should                                                                   
be  eligible for  the PFD  under the  stated conditions.  She                                                                   
provided  an  example of  a  person  found not  guilty  after                                                                   
being  convicted  of  a  DUI  who  could  have  his  driver's                                                                   
license  reinstated.  She  emphasized  that  the  legislation                                                                   
continued  to  right a  wrong  and  let "truth  and  justice"                                                                   
prevail.  The  measure  was  not a  compensation  bill  or  a                                                                   
punitive  damage  claim. She  offered  the example  of  Texas                                                                   
that  statutorily  provided  $80  thousand for  each  year  a                                                                   
person  was imprisoned  due  to  a wrongful  conviction.  She                                                                   
thanked the committee.                                                                                                          
                                                                                                                                
4:25:06 PM                                                                                                                    
                                                                                                                                
Representative   Thompson   wondered    whether   a   vacated                                                                   
conviction  still carried  the felony  conviction. Ms.  Brink                                                                   
remarked that the  language was tricky. She  responded that a                                                                   
vacated  sentence  did  not infer  innocence  but  a  vacated                                                                   
conviction  lead   to  a   re-trial  or  dismissed   charges.                                                                   
Dismissed  charges or  acquittal  meant that  the person  was                                                                   
innocent  and  not  convicted   of  a  crime.  Representative                                                                   
Thompson  noted  that a  portion  of  inmates PFD's  went  to                                                                   
their  healthcare while  incarcerated  and  the remainder  to                                                                   
victim's compensation.  He wondered  whether the  money spent                                                                   
on  healthcare  would be  deducted  from  the PFD  money  the                                                                   
person now qualified  for. Ms. Brinks responded  that the PFD                                                                   
had not been issued  for medical costs and that  was a common                                                                   
misconception.  The person was  completely disqualified  from                                                                   
receiving   their  PFD   while   in  prison.   Representative                                                                   
Thompson  relayed   that  he  had  heard  from   the  Victims                                                                   
Compensation Board  and Department of Corrections  (DOC) that                                                                   
they  applied   for  the  PFD   in  lieu  of   the  convicted                                                                   
individual and  a percentage was  divided among  the inmate's                                                                   
health  care and  victim's  compensation.  He wanted  further                                                                   
clarification.                                                                                                                  
                                                                                                                                
Representative    Wilson   indicated   that    Representative                                                                   
Thompson  was correct and  the percentage  that DOC  received                                                                   
was used collectively for all inmates medical prison costs.                                                                     
                                                                                                                                
Vice-Chair  Gara  did  not  believe  that  wrongly  convicted                                                                   
individuals could be compensated enough for the injustice.                                                                      
                                                                                                                                
4:29:41 PM                                                                                                                    
                                                                                                                                
MARVIN ROBERTS,  SELF, FAIRBANKS (via teleconference),  spoke                                                                   
in support  of HB  127. He  was one  of the "Fairbanks  Four"                                                                   
who  had  been  wrongfully  incarcerated  for  18  years.  He                                                                   
thanked all  of the  legislators who  supported the  bill. He                                                                   
indicated that  the result  of the bill  would go a  long way                                                                   
to  help him  and  his family  and all  wrongfully  convicted                                                                   
individuals.                                                                                                                    
                                                                                                                                
Vice-Chair Gara sincerely apologized for what happened.                                                                         
                                                                                                                                
4:31:17 PM                                                                                                                    
                                                                                                                                
CRYSTAL SISTO,  SELF, FAIRBANKS  (via teleconference),  spoke                                                                   
in favor  of HB 127.  She related that  she was close  to one                                                                   
of the "Fairbanks  Four." George Frese, one of  the four, was                                                                   
the father of  Ms. Sisto's daughter, who lost  her father and                                                                   
his emotional  and financial  support 18  years ago  when she                                                                   
was  3 years  old. She  suggested  that the  PFD money  would                                                                   
substantially help  Mr. Frese rebuild his life  and reconnect                                                                   
with his family  which presently included  grandchildren. She                                                                   
relayed her daughters  support for the bill  and informed the                                                                   
committee  that she  had lost  faith in the  system from  her                                                                   
experience. She urged support for the bill.                                                                                     
                                                                                                                                
4:33:17 PM                                                                                                                    
                                                                                                                                
MISTY NICKOLI,  SELF, FAIRBANKS  (via teleconference),  spoke                                                                   
in support of HB  127. She shared that she had  advocated for                                                                   
the  Fairbanks Four  and that  George Frese  was her  cousin.                                                                   
She offered  that she was  struggling to reconcile  her sense                                                                   
of  belonging and  trust with  the judicial  system. The  PFD                                                                   
was  unjustly confiscated  from  the four  and  she felt  the                                                                   
bill was one step toward reestablishing justice and equity.                                                                     
                                                                                                                                
4:35:20 PM                                                                                                                    
                                                                                                                                
SCHERRY BYERS,  SELF, FAIRBANKS  (via teleconference),  urged                                                                   
support  for HB  127. She  relayed  that she  was a  licensed                                                                   
clinical  social worker  and worked  in  bush villages  since                                                                   
1984. She  spoke of sadness  and frustration that  the effort                                                                   
to prove  the four's  innocence took over  $1 million  in pro                                                                   
bono  attorney  work  and  intense   community  support.  She                                                                   
wanted people  to truly understand  that "everyone  knew that                                                                   
the four  were not guilty." She  recounted that the  four men                                                                   
were  just  graduating  high  school at  the  time  of  their                                                                   
wrongful conviction  and were  robbed of their  opportunities                                                                   
to develop  work and career lives.  She felt that was  a very                                                                   
significant  part of the  story unrelated  to the PFD  issue.                                                                   
She added  that at least  three out of  the four  were Alaska                                                                   
natives.  She believed  that  the  PFD money  was  rightfully                                                                   
theirs.  She thought  that if  the legislation  did not  pass                                                                   
people would keep fighting the issue.                                                                                           
                                                                                                                                
Vice-Chair  Gara remarked  that  Representative Kawasaki  was                                                                   
educating his fellow legislators about the issue.                                                                               
                                                                                                                                
4:39:12 PM                                                                                                                    
                                                                                                                                
EVAN EADS,  SELF, FAIRBANKS  (via teleconference),  supported                                                                   
HB 127.  He spoke of  an event he  attended on behalf  of the                                                                   
Fairbanks Four. He  stated that the event was  moving for the                                                                   
attendees  and for the  four men  themselves. He thought  the                                                                   
bill  was  a small  gesture:  returning  something  that  was                                                                   
unjustly  confiscated.  He  thought  it was  not  a  partisan                                                                   
issue and supported passage of the bill.                                                                                        
                                                                                                                                
4:41:17 PM                                                                                                                    
                                                                                                                                
MARNA  SANFORD,  TANANA  CHIEFS  CONFERENCE,  FAIRBANKS  (via                                                                   
teleconference),  supported HB  127 and  advocated for  post-                                                                   
conviction  release  reform.  She  agreed  with  all  of  the                                                                   
previous  testifiers.   She  thought  the  bill   was  a  "no                                                                   
brainer." She  appreciated Representative Kawasaki's  support                                                                   
and urged for passage of the bill.                                                                                              
                                                                                                                                
4:43:21 PM                                                                                                                    
                                                                                                                                
VIRGINIA  MCCARTY,  SELF,  FAIRBANKS   (via  teleconference),                                                                   
supported  HB  127. She  relayed  that  she had  no  specific                                                                   
testimony.                                                                                                                      
                                                                                                                                
KATHLEEN  PETERS ZURAY,  SELF,  TANANA (via  teleconference),                                                                   
stated her  and her  husband's support  and urged members  to                                                                   
support HB 127.  She wanted to see the PFD's  restored to the                                                                   
four wrongfully convicted men.                                                                                                  
                                                                                                                                
4:45:11 PM                                                                                                                    
                                                                                                                                
Vice-Chair Gara CLOSED Public Testimony for HB 127.                                                                             
                                                                                                                                
HB  127  was   HEARD  and  HELD  in  committee   for  further                                                                   
consideration.                                                                                                                  
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
4:47:48 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 4:47 p.m.                                                                                          

Document Name Date/Time Subjects
HB 127 Supporting Documents- Supporting Letters 3.20.17.pdf HFIN 4/5/2017 1:30:00 PM
HB 127
HB127 Opposing Documents- Letters of Opposition 3.20.17.pdf HFIN 4/5/2017 1:30:00 PM
HB 127
HB127 Sectional Analysis ver A 3.20.17.pdf HFIN 4/5/2017 1:30:00 PM
HB 127
HB127 Sponsor Statement 3.20.17.pdf HFIN 4/5/2017 1:30:00 PM
HB 127
HB127 Supporting Document- Annual PFD Individual Payouts 3.20.17.pdf HFIN 4/5/2017 1:30:00 PM
HB 127
HB127 Supporting Document- Support Screenshot 3.20.17.pdf HFIN 4/5/2017 1:30:00 PM
HB 127
HB60 Sponsor Statement - Governor's Transmittal letter.pdf HFIN 4/5/2017 1:30:00 PM
HB 60
HB60 Supporting Document - DOR Presentation - 4.5.17.pdf HFIN 4/5/2017 1:30:00 PM
HB 60
HB60 Motor Fuel Tax Briefing - 5 April 2017.pdf HFIN 4/5/2017 1:30:00 PM
HB 60
Motor Fuel Tax Background Information.pdf HFIN 4/5/2017 1:30:00 PM
HB 60
HB 60 DOC (005HB 60 Opposition Documents 4.5.17.pdf HFIN 4/5/2017 1:30:00 PM
HB 60
HB 60 Opposition Letter.pdf HFIN 4/5/2017 1:30:00 PM
HB 60
HB 60 SILC Position Paper Two Cents for Transit (Recovered) (004).pdf HFIN 4/5/2017 1:30:00 PM
HB 60
HB 60 Support Documents 4.5.17.pdf HFIN 4/5/2017 1:30:00 PM
HB 60
HB60 Supporting Document - DOR Presentation - 4.5.17.pdf HFIN 4/5/2017 1:30:00 PM
HB 60