07/28/2008 04:00 PM House FINANCE

                  HOUSE FINANCE COMMITTEE                                                                                       
                       July 28, 2008                                                                                            
                        4:21 p.m.                                                                                               
                                                                                                                                
 CALL TO ORDER                                                                                                                
                                                                                                                                
 Vice-Chair Bill Stoltze called the House Finance Committee                                                                     
 meeting to order at 4:21:36 PM.                                                                                              
                                                                                                                                
 MEMBERS PRESENT                                                                                                              
                                                                                                                                
 Representative Bill Stoltze, Vice-Chair                                                                                        
 Representative Les Gara                                                                                                        
 Representative Mike Hawker                                                                                                     
 Representative Mike Kelly                                                                                                      
 Representative Bill Thomas Jr.                                                                                                 
                                                                                                                                
 MEMBERS ABSENT                                                                                                               
                                                                                                                                
 Representative Mike Chenault, Co-Chair                                                                                         
 Representative Harry Crawford                                                                                                  
 Representative Kevin Meyer, Co-Chair                                                                                           
 Representative Richard Foster                                                                                                  
 Representative Reggie Joule                                                                                                    
 Representative Mike Kelly                                                                                                      
 Representative Mary Nelson                                                                                                     
                                                                                                                                
 ALSO PRESENT                                                                                                                 
                                                                                                                                
                                                                                                                                
 PRESENT VIA TELECONFERENCE                                                                                                   
                                                                                                                                
 Paul Vinsel, Executive Director, United Fishermen of Alaska;                                                                   
 Paul D. Kendall, Anchorage; Jerry McCutcheon, Anchorage;                                                                       
 Deborah Williams, President, Alaska Conservation Solutions.                                                                    
                                                                                                                                
 GENERAL SUBJECT(S):                                                                                                          
                                                                                                                                
The  following overview was  taken  in  log note  format.                                                                       
Handouts will be on file with the House Finance Committee                                                                       
through the  25th Legislative  Session, contact 465-6814.                                                                       
After the 25th Legislative Session they will be available                                                                       
through the Legislative Library at 465-3808.                                                                                    
                                                                                                                                
HOUSE BILL NO. 4004                                                                                                           
                                                                                                                                
     "An Act suspending the motor fuel tax; and providing                                                                       
     for an effective date."                                                                                                    
                                                                                                                                
                                                                                                                                
TIME        SPEAKER        DISCUSSION                                                                                       
4:21:52 PM PAUL VINSEL     Spoke in favor of HB 4004. He described                                                            
            EXECUTIVE DIR. SE Alaska Fishermen's Alliance petition                                                              
            UNITED         which calls for emergency federal                                                                    
            FISHERMEN   OF income tax credit for the high cost of                                                               
            ALASKA (UFA)   fuel so that fishermen could get out on                                                              
                           the fishing  grounds. There have been                                                                
                           1853 signatures.                                                                                   
4:25:50 PM  Representative Testified to the high cost of fishing                                                              
            Thomas         because of fuel costs and suggested                                                                  
                           taking   the    petition   to   local                                                                
                           municipalities.                                                                                    
4:26:32 PM Mr. Vinsel      He talked about taking the petitions to                                                            
                           local municipalities.                                                                              
4:26:41 PM Vice-Chair      Suggested putting a moratorium on local                                                            
            Stoltze        governments regarding fuel taxes to                                                                  
                           provide relief.                                                                                    
4:27:46 PM PAUL         D. Suggested      converting     Alaskan                                                              
            KENDALL,       infrastructure    to     all-electric,                                                               
            ANCHORAGE      including electric vehicles. He spoke                                                                
            testified  via about  a  summit meeting.  He thought                                                                
            teleconference leadership was key.  He spoke  to the                                                                
                           pipeline and AGIA and the need to move                                                               
                           away from fossil fuels. He was opposed                                                               
                           to HB 4004 as a short gap measure.                                                                 
4:34:17 PM JERRY           Spoke in opposition to HB 4004. He                                                                 
            MCCUTCHEON,    testified that there is not enough                                                                   
            ANCHORAGE      taxes to make a difference. It gives a                                                               
            testified  via tax break to those who don't need it.                                                                
            teleconference It   would  mean  undoing   accounting                                                               
                           systems. Finally, at some future date                                                                
                           the state will  want to reinstate the                                                                
                           tax which will be expensive.                                                                       
4:35:39 PM DEBORAH         Testified in opposition to HB 4004. She                                                            
            WILLIAMS,      thought the relief offered should                                                                    
            PRESIDENT,     benefit the consumers. She referred to                                                               
            ALASKA         ACS documents delineating the reasons                                                                
            CONSERVATION   they are opposed to the legislation (On                                                              
            SOLUTIONS      File). ACS thought the situation was a                                                               
            testified  via good opportunity to find more creative                                                               
            teleconferencesolutions.  The  quick  fix  will hurt                                                                
            , (ACS)        Alaskans in the long run. She listed                                                                 
                           the six reasons the  legislation would                                                               
                           not lower the price  of motor fuel to                                                                
                           the full extent of the suspension:                                                                   
                             · Will not result in actually                                                                      
                                lowering prices  for   consumers.                                                               
                                According to recent findings about                                                              
                                doing a   similar thing  at  the                                                                
                                federal level, eliminating federal                                                              
                                tax would  only transfer revenue                                                                
                                from the government to companies.                                                             
                              · Alaska already has the lowest                                                                   
                                prices in the country.                                                                          
                              · Will be politically difficult to                                                                
                                reinstate the tax, which makes the                                                              
                                suspension indefinite.                                                                          
                              · All vehicles impose wear and tear                                                               
                                on infrastructure and ought to                                                                  
                                contribute to maintain it.                                                                      
                              · Taxes are collected from visitors;                                                              
                                suspension would lose that income.                                                              
                              · Eight cents represents only 1.7                                                                 
                                percent of what consumers pay.                                                                  
                            Ms. Williams suggested other methods of                                                             
                            saving the money.                                                                                 
 4:44:55 PM Representative Noted how difficult it was to bring                                                                
            Gara            back the state income tax once it was                                                               
                            suspended. He thought  that could  be                                                               
                            avoided by only suspending the tax when                                                             
                            oil is  over  a  certain  amount  per                                                               
                            barrel.                                                                                           
 4:46:30 PM Ms. Williams    Thought that approach would be complex                                                            
                            and  awkward.   She  reiterated   her                                                               
                            concerns and urged energy conservation,                                                             
                            energy  efficiency,   and   renewable                                                               
                            energy.                                                                                           
 4:48:12 PM Vice-Chair      Acknowledged that HB 4004 would not                                                               
            Stoltze         save a lot of money but still thought                                                               
                            it was a step in the right direction.                                                             
 4:48:29 PM Representative Discussed a lottery for hybrid cars                                                                
            Thomas          which would lower the carbon footprint.                                                           
                                                                                                                              
 4:49:24 PM RECESS                                                                                                            
 5:09:43 PM RECONVENE                                                                                                         
 ADJOURNMENT                The meeting was adjourned at 5:09 PM.