Legislature(2015 - 2016)HOUSE FINANCE 519
04/05/2016 05:00 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB319 | |
| HB250 | |
| HB249 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 319 | TELECONFERENCED | |
| *+ | HB 250 | TELECONFERENCED | |
| + | HB 249 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
April 5, 2016
5:02 p.m.
5:02:46 PM
CALL TO ORDER
Co-Chair Thompson called the House Finance Committee
meeting to order at 5:02 p.m.
MEMBERS PRESENT
Representative Mark Neuman, Co-Chair
Representative Steve Thompson, Co-Chair
Representative Dan Saddler, Vice-Chair
Representative Bryce Edgmon
Representative Les Gara
Representative Lynn Gattis
Representative David Guttenberg
Representative Scott Kawasaki
Representative Cathy Munoz
Representative Lance Pruitt
Representative Tammie Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Jane Pierson, Staff, Representative Steve Thompson;
Representative Cathy Tilton, Sponsor, House District 12;
Ben Ellis, Director, Alaska Division of State Parks and
Outdoor Recreation, Department of Natural Resources; Steven
Samuelson, Self, Petersberg; Randall Hoffbeck,
Commissioner, Department of Revenue; Brandon S. Spanos,
Deputy Director, Tax Division, Department of Revenue; Jerry
Burnett, Deputy Commissioner, Treasury Division, Department
of Revenue; Mark Luiken, Commissioner, Department of
Transportation and Public Facilities.
PRESENT VIA TELECONFERENCE
Al Barrette, Self, Fairbanks; Rod Arno, Alaska Outdoor
Council, Palmer.
SUMMARY
HB 249 ELECTRONIC TAX RETURNS & MOTOR FUEL TAX
HB 249 was HEARD and HELD in committee for
further consideration.
HB 250 INDIV. INCOME TAX: CREDITS; RETURNS
HB 250 was HEARD and HELD in committee for
further consideration.
HB 319 SNOWMOBILE REGISTRATION FEES
CSHB 319 (FIN) was REPORTED out of committee with
a "do pass" recommendation and with one new
fiscal impact note from the Department of
Administration.
Co-Chair Thompson reviewed the schedule for the meeting.
5:03:36 PM
HOUSE BILL NO. 319
"An Act relating to registration fees for snowmobiles
and off-highway vehicles."
5:03:36 PM
Co-Chair Neuman MOVED to ADOPT proposed committee
substitute for HB 319, Work Draft 29-LS1444\H
(Wallace/Martin, 4/1/16). There being NO OBJECTION, it was
so ordered.
JANE PIERSON, STAFF, REPRESENTATIVE STEVE THOMPSON,
explained that the only difference in the new version was a
repealer added for July 1, 2019.
5:04:54 PM
REPRESENTATIVE CATHY TILTON, SPONSOR, HOUSE DISTRICT 12,
explained HB 319:
Passage of House Bill 319 would increase two-year
snowmobile registration fees from $10 to $20 and allow
a six-year registration fee of $50.
The measure has support from snow machine users as a
way to help the state during cash-strapped times and
back funding to develop and maintain snowmobile trails
and provide safety and educational programs.
Current snowmobile registration fees generate up to
$250,000 a year for the Snowmobile Trail Development
Program which is managed by the Department of Natural
Resources' Division of Parks and Outdoor Recreation
and the nine-member Snowmobile Trails Advisory Council
(SnowTRAC).
SnowTRAC approved a resolution last August in support
of the provisions of HB 319, saying Alaska's
snowmobile trails program is revenue-neutral, self-
funded, and user-based. The council also said the
demands for trail maintenance, development, and safety
continue to grow and that support for winter trails
brings increased business and recreational
opportunities to communities across the state.
HB 319 helps promote snowmobile user safety and enjoys
support from those who are willing to pay more for a
service they need and enjoy.
5:08:52 PM
Co-Chair Neuman wanted to clarify that no state money would
be funding the bill.
Representative Tilton responded correct.
Co-Chair Neuman asked when the rates were last adjusted.
Representative Tilton responded that the rates were
adjusted in 2008, at the program's inception.
Co-Chair Neuman asked whether the groups were supportive of
the bill, because of the high cost of fuel.
Representative Tilton replied in the affirmative.
Representative Gattis wondered whether the stickers were
the same as the state park stickers.
Representative Tilton replied that the stickers for state
parks were a separate program. She explained that the
registration fees on a snow mobile was at the point of
purchase.
Representative Gattis wondered whether an unregistered
snowmobile would be against the law.
Co-Chair Thompson explained that it was just like
registering the car.
Representative Gattis felt confused about the difference
between the separate registration stickers.
Co-Chair Neuman stressed that a snow machine must be
registered in order to use it on state land. He explained
that the Department of Motor Vehicles (DMV) would use the
money for that sticker for trail grooming.
Representative Gattis surmised that a one must have a state
park sticker and a registration sticker.
Co-Chair Neuman shared that a state park sticker was not
required, but a snow machine must be registered to use on
state land.
Representative Gattis placed on record that she had been
registered the entire time.
5:13:27 PM
Representative Guttenberg wondered if there was a list of
grantees.
Representative Tilton replied that the monies were
delivered through the capital projects through the
Snowmobile Trail Development Program. She explained that
SnowTRAC administered the funds. She announced that, in the
last year's cycle, the funds were administered to seventeen
different organizations such as Big Lake, the Denali
Highways Trails Club, Hatcher's Pass, Juneau, the Chena
River State Recreational Area, Petersville, Willow Area
Trails, and the Yukon Quest Trail.
Representative Guttenberg wondered if the grants were
allocated proportionately by community or in another way.
Representative Tilton deferred to Ben Ellis.
5:16:09 PM
BEN ELLIS, DIRECTOR, ALASKA DIVISION OF STATE PARKS AND
OUTDOOR RECREATION, DEPARTMENT OF NATURAL RESOURCES, stated
that the percentage of distribution depended on the type of
request. He shared that SnowTRAC was an advisory board, and
ranked the grant requests. He stated that there were
approximately 50 percent more requests than funds
available. He stated that the recipients would receive a
portion of the request, and either reduce grooming activity
or seek alternative funding. He stressed that the requests
were granted at the beginning of the season, so there was
no way of knowing the exact grooming requirements. He
stated that leftover money was rolled over year to year,
and became part of the entire pool that could be used for
safety and education the following year.
Representative Wilson wondered whether there was any
attempt to allocate funds based on areas in which people
were registered.
Mr. Ellis replied in the negative.
Representative Wilson wondered whether a scoring process
was used.
Mr. Ellis responded that there was a scoring process
established by the SnowTRAC Board. He stressed that it was
an advisory board, so there were times when he may not
adhere to the recommendations.
Representative Gattis relayed that there were many people
that purchased registrations in Anchorage who would use the
machines in the Mat-Su
5:22:51 PM
AL BARRETTE, SELF, FAIRBANKS (via teleconference), strongly
opposed HB 319. He talked about people who never re-
registered their machines in the Interior. He did not feel
that he should have to support a dog race with his
registration fee. He referred to Page 1, Line 4 which
defined an "Off-road vehicle." He thanked the committee.
5:25:38 PM
ROD ARNO, ALASKA OUTDOOR COUNCIL, PALMER (via
teleconference), supported the legislation. Users were
willing to pay their own way. He thought that with the
additional in the committee substitute would give the users
the opportunity to observe the use of the funds to see the
benefits of the program. He thanked the sponsor for putting
the bill forward and urged support for the bill.
5:27:37 PM
STEVEN SAMUELSON, SELF, PETERSBERG, did not support the
bill. He had paid registration for his snow machine. He had
never seen grooming done on the trails he had used. He did
not support paying fees that would cover the cost of
grooming elsewhere.
Co-Chair Thompson CLOSED public testimony.
Co-Chair Thompson discussed the fiscal note.
Co-Chair Neuman was a high use snow machine user. He
remarked that much of the money would be used for safety
instruction classes.
5:33:00 PM
Vice-Chair Saddler relayed that in his experience thought
it was appropriate that a self-funded program benefit the
recreation zones.
Representative Edgmon was going to support the bill but did
not think much of the funding would reach the area he
represents.
Co-Chair Thompson addressed the sunset date.
Representative Wilson mentioned that in Section 6 there was
a repealer but another part took effect. She could not
support the bill.
5:35:44 PM
Ms. Pierson explained that the way it was written if it did
not be re-implemented. The repealer returns to the previous
registration fee.
Representative Wilson stressed that the tags were required,
but would require no action by the legislature in 2019.
Ms. Pierson responded that Representative Wilson was
correct.
Representative Wilson had a problem with the bill was
because she did not think that all users would benefit. Her
larger issue was because it was not a user fee. She was not
willing to place additional taxes on people.
5:38:16 PM
Co-Chair Neuman MOVED to REPORT CSHB 319 (FIN) out of
committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CSHB 319 (FIN) was REPORTED out of committee with a "do
pass" recommendation and with one new fiscal impact note
from the Department of Administration.
5:38:16 PM
AT EASE
5:41:22 PM
RECONVENED
5:41:38 PM
HOUSE BILL NO. 250
"An Act relating to the taxation of income of
individuals; repealing tax credits applied against the
tax on individuals under the Alaska Net Income Tax
Act; and providing for an effective date."
5:41:59 PM
RANDALL HOFFBECK, COMMISSIONER, DEPARTMENT OF REVENUE,
introduced himself. He recognized the bill was one of the
most controversial piece of legislation. He explained that
why an income tax was chosen over other taxes. The bill
would establish a personal income tax equal to six percent
of taxpayers total federal tax liability for Alaska
residents and nonresidents with income from a source in the
state. Because the tax that would be established by the
bill is calculated based on federal tax liability and not
on income, the bill effectively incorporates federal
brackets and exemptions and so permits this bill, and the
personal income tax system it would create to be as simple
and transparent as possible.
5:46:31 PM
BRANDON S. SPANOS, DEPUTY DIRECTOR, TAX DIVISION,
DEPARTMENT OF REVENUE, introduced the PowerPoint
Presentation: "Individual Income Tax: HB 250."
Mr. Spanos addressed slide 2: "Individual Income Tax."
"An Act relating to the taxation of income of
individuals; repealing tax credits applied against the
tax on individuals under the Alaska Net Income Tax
Act; and providing for an effective date."
Mr. Spanos reviewed slide 3: "Income Tax History."
Began in 1949 at 10 percent of federal tax liability
By 1961, the tax was 16 percent of federal tax
liability
In 1975, Alaska switched from federal tax liability to
its own tax brackets
Ranged from 3 percent to 14.5 percent on taxable
income
Alaska repealed personal income tax in 1980 after oil
revenue boom
Mr. Spanos turned to slide 4: "Tax Proposal."
Creates a tax on an individual's income. The proposed
rate is 6 percent of a person's federal income tax
liability
Mr. Spanos explained slide 5: "Income Tax Proposal
(Continued)." He stated that the slide addressed the
current federal tax brackets.
Vice-Chair Saddler looked at the third column and wondered
whether that was taxable income, or gross income.
Mr. Spanos responded that it was taxable income.
Mr. Spanos slide 6: "Income Tax Proposal (Continued)."
Tax applies to nonresidents' income from a source in
Alaska
Residents receive credit for taxes paid in other
states
Provides for employers to withhold taxes and remit
them to the state
5:50:11 PM
Representative Guttenberg asked how he defined resident.
Mr. Spanos responded that in the bill the term "resident"
was defined several times.
Representative Wilson wondered if the $3 billion of "out of
state" workers were defined as residents or nonresidents.
Mr. Spanos stated that the $3 billion was wages earned in
Alaska by nonresidents. He understood that there may be
other nonresidents who may receive the Permanent Fund
Dividend (PFD). He shared that there were other sources of
income, other than wages, that would be taxable for
residents.
Representative Wilson did not feel that the definition
would work.
Vice-Chair Saddler queried the amount of money earned in
wages by Alaska residents in Alaska, if $3 billion was
earned by non-residents.
Commissioner Hoffbeck would have to provide the information
at a later time.
Representative Pruitt wondered whether military personnel
would be taxed, or was it all the other individuals who
could receive the PFD but not live the state.
Mr. Spanos responded to the extent that the pay resident
tax, if they were to pay federal income tax.
Commissioner Hoffbeck stated that the income tax would be
based on their income in Alaska or from an Alaska source.
Representative Pruitt thought it was cumbersome to manage
the income tax, to require those living outside of the
state to pay the income tax on the PFD.
Commissioner Hoffbeck replied that their residency allowed
for a credit in other states against the Alaska tax. He
explained that some of the money earned in other states
could be transferred if the Alaska tax rate was higher than
the other state. He stated that the individual would need
to fill out a state income tax return.
Representative Pruitt asked about the cost to the state. He
was skeptical about really collecting any money.
Commissioner Hoffbeck agreed that all taxes would have to
be processed.
5:56:44 PM
Vice-Chair Saddler mentioned military members. He wondered
if those living outside the state, retaining residency, who
received a PFD would be required to pay the state income
tax.
Mr. Spanos replied that other states dealt with the same
issue. He stated that they would be required to pay the
taxes in their home state.
Vice-Chair Saddler surmised that they would be subject to
Alaska income tax.
Mr. Spanos agreed.
Representative Gara surmised that the tax was a percentage
of federal tax. He stressed that the state taxes were
deducted from the federal tax. He wondered how that loop
would be solved.
Mr. Spanos stated the IRS made it fairly simple with the
use of W-2's.
Mr. Spanos continued to discuss slide 6.
Mr. Spanos moved to slide 7: "Income Tax Estimates:
Estimated tax for married couple filing jointly with 2
children." He reported that he slide showed an example of
what an individual or family might pay in taxes.
Mr. Spanos provided another example on slide 8: "Income Tax
Estimates: Estimated tax for head of household with 2
children." He pointed out that the head of household had a
slightly different deduction allowance.
6:01:10 PM
Mr. Spanos advanced to slide 9: "Relative Tax Rate":
43 states currently have an income tax
Among states with an income tax, Alaska's rate would
be lowest
North Dakota would be second-lowest
Average state income tax is about 30 percent of
federal liability, five times Alaska's proposed
rate
Six states would still have zero state income tax1
Two states tax only dividends and interest2
Mr. Spanos discussed slide 10: "Impacts of Tax Proposal":
Income from subchapter S corporations and partnerships
will be taxed
Taxed on income with a source in Alaska
Not currently subject to state Corporate Income
Tax
Income earned in Alaska by both non-residents and
residents will be taxed
Rough estimate: 20 percent - 30 percent of Alaskans
would pay zero tax
Mr. Spanos scrolled to slide 11: "Revenue Impact":
· DOR estimates $100 million in FY17 due to the tax
taking effect in January 2017
o This amount is from withholding
o No tax returns filed until April 2018
· DOR estimates $200 million in FY18 based on modeling
using aggregated federal income data for Alaska
residents
Mr. Spanos moved to slide 12: "Implementation Cost."
· Implementing an individual income tax in 18 months
will be a significant challenge
o Need to draft regulations
o Need to design, develop, and test technology to
administer tax that would have estimated 450,000
tax returns filed annually.
· Estimated $250,000 supplemental appropriation for a
contractor to work with DOR on an implementation plan
· Estimated $14,000,000 one-time capital appropriation
to build income tax into our current tax revenue
system
o Includes withholding and online filing
· Annual staffing cost of about $6,000,000 for 52 FTE
employees
6:04:43 PM
Commissioner Hoffbeck addressed slide 13: "Closing the
Budget Gap" and slide 14: "Closing the Budget Gap
(Continued)." The components used to close the budget gap
included the FY 17 baseline revenue (after proposed
legislation; FY 17 spending reductions; and new revenue
components.
Mr. Spanos asked if he should address the sectional
analysis.
Co-Chair Thompson replied in the negative and relayed it
could be taken up at a later date. He recalled that the
income tax in the 1960s was a one-page form and very
simple. He felt that the current system was too
complicated. He wondered if there was a simpler method.
Mr. Spanos replied that the form would still be simple, but
it was based on the complicated federal income tax. He
stated that the cost projection was based one-half
Montana's structure. He stated that Vermont had a similar
population as Alaska, so they had relayed that they belied
Alaska's proposal was reasonable. He stated that the
auditors and computer system were essential to processing
the system.
Co-Chair Thompson wondered whether the federal system would
be connected to the state's system.
6:07:46 PM
Mr. Spanos replied in the affirmative.
Representative Wilson pointed to slide 8, and surmised that
one would pay $7 dollars for a $40,000 income; and $97 for
$50,000.
Mr. Spanos replied in the affirmative.
Representative Wilson surmised that the state would have
someone do all of the paperwork for $7.00.
Representative Gattis referred to nonresident pilots flying
Alaskan routes and sports teams. She wondered if the state
would recoup any of those dollars.
Mr. Spanos replied that most states had some kind of daily
limit income earned in the state.
Representative Gattis hoped the state did not use
California as a role model.
6:10:09 PM
Vice-Chair Saddler queried the rates for those individuals
who earned higher than $100,000.
Co-Chair Thompson asked if he was referring to slide 5.
Commissioner Hoffbeck replied that the highest rate was
2.38 percent, and agreed to provide more information.
Representative Guttenberg referred to the state form that
specified how much state and federal taxes were paid.
Commissioner Hoffbeck replied that a person would pay
whatever their federal tax bracket and 20 percent of that
for state income tax.
Representative Munoz asked about auditors.
Mr. Spanos answered replied with a rough estimate and the
department relied on a contractor to see if they estimated
too high or low.
Representative Munoz wondered if the audits would be random
and meaningful.
Mr. Spanos replied in the affirmative.
6:13:39 PM
Representative Gara wondered if the state income tax was
deducted from the federal income tax.
Co-Chair Thompson replied in the affirmative.
Representative Gara requested a chart related to the
percentages related to what would actually be paid by the
individual.
Commissioner Hoffbeck agreed that the department could
provide the information.
Representative Gara wondered whether everyone had the
opportunity to take tax reductions or were itemizations
required.
Mr. Spanos responded that only those who itemized would
qualify for the reductions.
Representative Gara queried families and single people.
Commissioner Hoffbeck thought the information had been
provided previously.
Representative Munoz wondered why the fiscal note had a
smaller number of employees in the fiscal note.
Commissioner Hoffbeck replied that he limited the number of
employees.
6:16:39 PM
Vice-Chair Saddler asked whether someone under 16 would be
subject the taxes.
Mr. Spanos responded that it depended on their level of
income. He stressed that if they filed federally they also
must file for the state. He shared that the parents may
need to pay taxes if the minor earned at a certain level.
He agreed to provide more information.
Vice-Chair Saddler wondered whether the 20 percent of
Alaskans who would not pay were citizens or wage earners.
Mr. Spanos referenced the ISER report. He believed it was
wage earners.
Vice-Chair Saddler queried the standard deduction.
Mr. Spanos responded that it was $12,600 for a married
couple; and $6,300 for a single individual.
HB 250 was HEARD and HELD in committee for further
consideration.
6:19:00 PM
HOUSE BILL NO. 249
"An Act requiring the electronic submission of a tax
return or report with the Department of Revenue;
relating to the motor fuel tax; and providing for an
effective date."
6:19:32 PM
JERRY BURNETT, DEPUTY COMMISSIONER, TREASURY DIVISION,
DEPARTMENT OF REVENUE, would run through the presentation.
It was a simple presentation which he introduced the
PowerPoint Presentation: "Motor Fuel Tax: HB 249."
Mr. Burnett looked at slide 2: "Motor Fuel Tax Increase."
"An Act relating to the motor fuel tax; relating to
the duties of the commissioner of revenue; relating to
the disposition of revenue from the motor fuel tax;
and providing for an effective date."
Mr. Burnett 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
Mr. Burnett advanced to slide 4: "Motor Fuel Tax History
(Continued)."
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 turned to slide 5: "Motor Fuel Tax Proposal."
He explained that the proposal was to increase the taxes,
but to change the off-road use credit of 6 cents of the 8
cents. He stressed that it required electronic filing; and
provided an exemption process.
Representative Guttenberg referred to the jet fuel. He
wondered if an analysis of the international travel.
Mr. Burnett responded that most of the jet fuel used for
international travel was exempt from state taxation. He
stated that the genesis of the large increase was from the
Aviation Advisory Committee. There were proposals in the
previous year to add landing fees at certain state
certificated airports. The committee advised the state to
raise the jet fuel tax, rather than increase the landing
fees.
Co-Chair Thompson assumed the federal government would be
exempt.
Representative Guttenberg asked who would be paying for jet
fuel.
Mr. Burnett responded that it would be regional and
domestic carriers.
6:24:58 PM
Mr. Burnett discussed slide 6: "Relative Motor Fuel Tax
Rate."
Alaska's fuel taxes are among lowest in U.S.1
Highway fuel: lowest
Jet fuel: 35th out of 50
Aviation gas: 24th out of 50
Under this bill, Alaska taxes would be:
Below national average (20.17 cents)
for highway fuel
Above national average for jet/aviation fuel
Mr. Burnett moved to slide 7: "Impacts of Tax Proposal."
Gas prices at the pump would rise
More aviation taxes to fund certificated urban and
rural airports
Requested by aviation advisory committee as
preferable to landing fee increases
Mr. Burnett advanced to slide 8: "Revenue Impact."
Dept. of Revenue estimates increasing the tax rate
will more than double tax collections
Additional revenue about $49 million per year
$0.2 million will be shared with municipal-owned
airports
Remainder: general fund and special accounts for
road, water transport, and aviation facilities
Mr. Burnett turned to slide 9: "Revenue Impact
(Continued)":
Estimates based on fall 2015 revenue forecast
Does not account for changes in fuel demand or
stockpiling
Mr. Burnett talked about 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
Mr. Burnett moved to slide 11: "Motor Fuel Tax-Changes made
in Committee Substitute":
If average price of ANS crude oil is more than $85 per
barrel during the previous year-no change to current
tax rates
If average price of ANS crude oil is less than $85 per
barrel during the previous year-tax rates increase
Motor fuel used for commercial fishing remains at 5
cents a gallon
Tax increase sunsets after 2 years (July 1, 2018)
6:31:45 PM
Vice-Chair Saddler asked what the commercial fishing
exemption.
Mr. Burnett responded that it was $4.2 million.
Vice-Chair Saddler wondered whether the state could take
advantage of more federal transportation funding with the
increase in fuel taxes.
Mr. Burnett responded that the highway taxes go towards the
general fund, and the general fund paid the match for
federal dollars. He stated that there was no direct
linkage, but the state tax and number of gallons were
reported. He assumed that the U.S. Congress may wee a
linkage when examining the authorization bills for the
state.
Co-Chair Thompson did not believe that the federal
government turned away any money collected from highway
dollars.
Mr. Burnett explained slide 12: "Closing the Budget Gap."
He explained that the motor fuel tax was after changes to
oil and gas; and income tax.
Co-Chair Thompson thought the state had been collecting
about $80 million in fuel tax
Mr. Burnett thought the number was closer to $40 million.
He stated that the proposal would bring the number closer
to $90 million.
6:34:53 PM
Representative Wilson wondered if the adjustment had
already occurred with the change from collected land fees
to collecting the fuel tax.
Mr. Burnett replied that there was a recommendation to
increase the tax, but it had not yet been increased.
Representative Wilson wondered if the taxes would be
increased, should the bill fail to pass.
Mr. Burnett replied that it would probably require an
increase in landing fees.
Representative Wilson stressed that there would not be an
increase to landing fees.
Mr. Burnett indicated she was correct, and that it would be
new landing fees.
Representative Wilson queried a way to balance to ensure
that airports were not paying more than what they were able
to utilize, and not pay for someone else's airport. She
wondered whether Anchorage and Fairbanks should have a
separate rate than other airports.
Mr. Burnett deferred to Commissioner Luiken.
MARK LUIKEN, COMMISSIONER, DEPARTMENT OF TRANSPORTATION AND
PUBLIC FACILITIES, answered that the airports were already
covered by the carriers through landing fees, rates, fees,
etc. He stated that the tax would impact the carriers
across the state. He stated that the board made the
recommendation, because they felt it was the fairest way to
impact all of the users of the system and distribute the
cost the most fairly. He stated that the board did not
believe the landing fees was fair, because it would only be
levied at certificated airports.
Co-Chair Thompson asked how many airports the Department of
Transportation and Public Facilities (DOT/PF) maintained.
Commissioner Luiken replied that DOT/PF maintained 249
airports in the state.
Representative Wilson felt that the legislation was not
fair to the Fairbanks airport.
Commissioner Luiken stated that the larger airports
supported the broader system in the state.
Representative Wilson mentioned that the air carriers were
not very happy with the legislation.
Co-Chair Thompson remarked that he had hard form air
carriers also.
6:40:51 PM
Representative Pruitt wondered whether FedEx and UPS would
pay the tax.
Commissioner Luiken understood that for those cargo
carriers flying a domestic route the jet fuel tax would
apply.
Representative Pruitt thought Alaska was putting itself in
a sticky position by tripling their taxes, because jobs
were at stake.
Co-Chair Thompson asked about a comparison.
Commissioner Luiken would be happy to supply a cost
comparison between Anchorage, Seattle, Portland, and
Anchorage. The fact was that Alaska's jet fuel tax was only
a portion of fees charged.
Mr. Burnett added that he sat on the Alaska Industrial
Development and Export Authority (AIDEA) board.
6:47:34 PM
Representative Kawasaki wondered how the commercial fishing
tax would be remitted.
Mr. Burnett responded that as a person pulled up to a
station, the state would administer the tax through a
rebate.
Vice-Chair Saddler supported moving towards a motor fuel
tax rather than an airport landing tax.
HB 249 was HEARD and HELD in committee for further
consideration.
Co-Chair Thompson thanked the presenters for being
available. He reviewed the agenda for the following day.
ADJOURNMENT
6:50:58 PM
The meeting was adjourned at 6:50 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 319 CS WORKDRAFT FIN v.H 4-1-16.PDF |
HFIN 4/5/2016 5:00:00 PM |
HB 319 |
| DOR Tax Division Presentation INCOME HB250 4-4-16 final.pdf |
HFIN 4/5/2016 5:00:00 PM |
HB 250 |
| HB 249 DOR Tax Division Presentation MOTOR FUEL HB249 4-5-16 final.pdf |
HFIN 4/5/2016 5:00:00 PM |
HB 249 |
| HB319 Supporting Documents - Dan Mayfield letter of support, 5 April 2016.pdf |
HFIN 4/5/2016 5:00:00 PM |
HB 319 |
| HB 249 DOT Response International Fuel Tax (5).pdf |
HFIN 4/5/2016 5:00:00 PM |
HB 249 |
| HB 250 DOR Response to House Finance - 4.14.16 Signed by RH.pdf |
HFIN 4/5/2016 5:00:00 PM |
HB 250 |