Legislature(2007 - 2008)CAPITOL 120
07/23/2008 03:00 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB4004 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB4004 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
July 23, 2008
3:35 p.m.
MEMBERS PRESENT
Representative Kurt Olson, Chair
Representative Mark Neuman, Vice Chair
Representative Carl Gatto
Representative Gabrielle LeDoux
Representative Jay Ramras
Representative Robert L. "Bob" Buch
Representative Berta Gardner
MEMBERS ABSENT
All members present
OTHER LEGISLATORS PRESENT
Representative John Harris
COMMITTEE CALENDAR
HOUSE BILL NO. 4004
"An Act suspending the motor fuel tax; and providing for an
effective date."
- MOVED CSHB 4004(L&C) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB4004
SHORT TITLE: SUSPENDING MOTOR FUEL TAX
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
07/09/08 (H) READ THE FIRST TIME - REFERRALS
07/09/08 (H) L&C, FIN
07/11/08 (H) L&C AT 9:00 AM CAPITOL 120
07/11/08 (H) Heard & Held
07/11/08 (H) MINUTE(L&C)
07/23/08 (H) L&C AT 3:00 PM CAPITOL 120
WITNESS REGISTER
RANDY RUARO, Special Staff Assistant
Office of the Governor
Juneau, Alaska
POSITION STATEMENT: Provided comments and answered questions on
HB 4004.
MICHAEL WALLERI, General Counsel
Tanana Chiefs Conference (TCC)
Fairbanks, Alaska
POSITION STATEMENT: Testified on HB 4004.
JOHANNA BALES, Excise Audit Manager
Anchorage Office
Tax Division
Department of Revenue (DOR)
Anchorage, Alaska
POSITION STATEMENT: Testified and answered questions on HB
4004.
CLYDE (ED) SNIFFEN, JR., Senior Assistant Attorney General
Commercial/Fair Business Section
Department of Law (DOL)
Anchorage, Alaska
POSITION STATEMENT: Answered questions on HB 4004.
DEBORAH WILLIAMS, President
Alaska Conservation Solutions
Anchorage, Alaska
POSITION STATEMENT: Testified on HB 4004.
ACTION NARRATIVE
CHAIR KURT OLSON called the House Labor and Commerce Standing
Committee meeting to order at 3:35:37 PM. Representatives Buch,
Gatto, Gardner, LeDoux, and Olson were present at the call to
order. Representatives Neuman and Ramras arrived as the meeting
was in progress.
HB4004-SUSPENDING MOTOR FUEL TAX
3:35:44 PM
CHAIR OLSON announced that the only order of business would be
HOUSE BILL NO. 4004, "An Act suspending the motor fuel tax; and
providing for an effective date."
3:36:22 PM
RANDY RUARO, Special Staff Assistant, Office of the Governor,
explained that not only will ordinary Alaskans obtain
significant savings from the motor fuel tax suspension that
other groups of Alaskans will also benefit, including commercial
fishermen, charter fishermen, regional air carriers, and that
Alaskans will benefit from lower barge and air costs.
3:37:12 PM
REPRESENTATIVE GARDNER referred to a letter in members' packets
dated July 21, 2008 from Mr. Ruaro to paragraph 3, which offers
that tender vessels that transport fish would save approximately
$25,000 from the motor fuel tax suspension. She inquired as to
how many tender vessels are owned by Alaskans.
MR. RUARO answered that he did not know how many tender vessel
owners were Alaskans. He related that he attempted to address
the benefits and savings that would primarily affect Alaskan
fishermen. He explained that negotiations often occur between
the catcher and processor vessels to set fish prices. Thus,
savings can be passed on to Alaskan fishermen, whether the fish
processor is a non-resident owned or partially owned processer.
Furthermore, sometimes the profit margin can be as little as
$.005 or $.01 per pound since the fish processors deal with
large quantities of fish. Therefore, the $.08 cents addressed
in the bill could result in significant savings.
REPRESENTATIVE GARDNER inquired as to whether Mr. Ruaro is
confident that the savings would benefit local fishermen and not
just the vessel owner.
MR. RUARO pointed out that the motor fuel tax suspension would
benefit both the local fishermen and vessel owners. However,
certainly fishermen would be aware of any motor fuel tax
suspension and could factor that into their negotiations with
the fish processors, he stated.
3:39:10 PM
CHAIR OLSON recalled several issues were raised at the July 11,
2008, House Labor and Commerce Standing Committee meeting. He
referred to a July 15, 2008 memorandum from Donald M. Bullock,
Jr., legislative counsel, that addresses the legal issues
previously raised. He noted that one issue related to whether
an antitrust issue arises if fuel dealers do not pass on the tax
reduction to consumers. The other legal issue related to
whether or not highway matching funds would be jeopardized, he
further noted.
3:39:39 PM
MR. RUARO, in response to Representative Gatto, clarified that
the motor fuel tax on vehicles is currently set at $.08 and for
marine fuels [used in and on watercraft] is currently set at
$.05.
3:40:31 PM
MICHAEL WALLERI, General Counsel, Tanana Chiefs Conference
(TCC), stated that TCC generally supports the concept behind the
bill, but has two concerns and recommends the committee amend
the bill. He stated that at the current time the bill does not
ensure that the reduction of taxes is necessarily passed on to
the end user. He opined that to be meaningful in terms of
addressing high energy costs, the savings must be passed on to
the consumer. He recalled past fuel abatement programs that
resulted in the tax savings not being passed through to the
consumer. At the current time, TCC is developing a discounted
fuel program to assist villages in obtaining discounts on bulk
fuel purchase prices. He highlighted that under the program
vendors must agree to pass on the discount to consumers. He
offered that problems have plagued and undermined similar
programs in other states. He suggested that HB 4004 be amended
to add a provision to ensure retailers pass on the tax savings
to consumers. He opined that HB 4004 requires substantial
reporting requirements including a requirement that invoices be
attached to the report, which may be difficult for rural vendors
to comply. He suggested that the [Department of Revenue]
commissioner be given the appropriate flexibility to adopt
regulations that would allow venders to summarize sales in the
required reports for compliance and to ensure that consumers
receive the benefits of the suspended motor fuel tax.
MR. RUARO agreed that Mr. Walleri is correct that HB 4004 does
not contain specific language to guarantee that the benefit is
passed on to consumers. He opined that the market is
competitive and that legal counsel, Mr. Sniffen, has advised his
belief that significant savings would be passed on to consumers.
He referred to a six-month suspension of a gas tax in Indiana
and Illinois in 2000. He referred to a study completed by the
Massachusetts Institute of Technology (MIT) that determined that
60 to 80 percent of the tax savings were passed on to consumers.
He opined that the competitive market will help ensure that a
significant amount of "pass through" would occur. Additionally,
the administration has also prepared an amendment for the
committee to consider that would require specific signage to
provide notice to consumers.
3:45:19 PM
REPRESENTATIVE LEDOUX made a motion to adopt Amendment 1,
labeled 25-GH4060\A.4, which read:
Page 1, line 1, following "tax;":
Insert "requiring a retail dealer of motor fuel
to post a sign notifying a consumer of the tax
suspension and providing a penalty for failing to post
the sign;"
Page 1, following line 2:
Insert a new bill section to read:
"* Section 1. AS 45.50.471(b) is amended by adding
a new paragraph to read:
(53) failing to post a sign on a pump
notifying a consumer that the motor fuel tax has been
suspended during the period of a suspension."
Page 1, line 3:
Delete "Section 1"
Insert "Sec. 2"
Renumber the following bill sections accordingly.
Page 1, line 7:
Delete "a period beginning August 1, 2008, and
ending July 31, 2009"
Insert "the 12 consecutive calendar months
immediately following the month of the effective date
of this Act"
Page 2, following line 2:
Insert a new subsection to read:
"(c) During the period described in (a) of this
section during which the motor fuel tax is suspended
and may not be collected, a retail dealer that sells
or transfers motor fuel for highway use shall post a
sign on each pump that (1) describes the period during
which the tax is suspended; (2) states that the amount
of tax that would otherwise be collected during the
suspension is eight cents a gallon; and (3) states
that the price for the motor fuel on the pump reflects
the elimination of the tax during the period of
suspension. The Department of Revenue shall determine
the specific language that must be included on the
sign. The sign must be four inches by eight inches and
easily and clearly visible to the consumer. Failure to
post the sign on each pump is a violation of
AS 45.50.471, and the retail dealer is subject to a
fine of up to $5,000 a pump for each day on which the
sign required under this subsection is not posted on a
pump."
Reletter the following subsection accordingly.
Page 2, line 5:
Delete all material and insert:
"* Sec. 3. AS 45.50.471(b)(53) is repealed the
first day immediately following the last day of the
period described in sec. 2(a) of this Act during which
the motor fuel tax is suspended and may not be
collected."
3:46:05 PM
REPRESENTATIVE GARDNER related her understanding that Amendment
1 relates to motor fuel, which is set at $.08 per gallon. She
pointed out that the bill also applies to aviation fuel and
motor boat fuels. She inquired as to whether a provision should
also be made for those fuels. She said that it seems to her
that one area in which consumers notice fuel tax increases is
for fuel surcharges on airline tickets. She wondered whether
under the bill those surcharges would also be reduced for
Alaskan travelers.
MR. RUARO acknowledged that the airline industry benefits
significantly from HB 4004 since the industry purchases large
amounts of aviation jet fuel in-state, particularly in
Anchorage. He offered that if the tax is suspended, the
industry would have the ability to pass on some savings to
consumers. In further response to Representative Gardner, Mr.
Ruaro stated that the definition of motor fuels includes all the
subtypes of fuels and would also apply to aviation and motor
boat fuel.
3:47:35 PM
MR. WALLERI referred to the MIT study previously mentioned and
noted other studies showed that consumers benefited less than
the 60 percent referenced in MIT study. He pointed out that
competition "makes sense in Chicago", but does not make sense in
rural Alaska since rural villages often only have one vendor in
the community. Thus, competition will not assure that savings
will be passed on since no competition exists. He said that TCC
feels strongly that [the state] cannot rely on theoretical
competition and must ensure that gas savings are passed on to
consumers and that it does very little as a practical matter to
rely upon competition to provide benefits of the motor fuel tax
suspension in rural areas.
3:49:27 PM
REPRESENTATIVE LEDOUX, with respect to Representative Gardner's
concern that the airlines pass on savings to consumers, noted
that airlines such as Alaska Airline would be considered "the
consumer" when they purchase the aviation gas. Thus, under the
bill airlines would not be required to pass on their fuel cost
savings to customers.
MR. RUARO noted his agreement that since the airlines are not
fuel retailers, but use the fuel in the service they provide.
He further agreed that the airlines are not bound to pass on the
savings to its customers. However, he pointed out that the
airlines would have the ability to voluntarily do so.
REPRESENTATIVE LEDOUX surmised that competition for airline
customers would also apply in the free market system.
3:51:22 PM
REPRESENTATIVE GATTO, with respect to aviation jet fuel, noted
that the airlines may purchase the fuel in Anchorage, but may
"burn it elsewhere." However, he noted that the airlines will
receive the benefits from a motor fuel tax suspension on
aviation gas. He inquired as to whether that raises an issue
that should be considered by the committee.
3:52:07 PM
JOHANNA BALES, Excise Audit Manager, Anchorage Office, Tax
Division, Department of Revenue (DOR), stated that the motor
fuel tax is applied nationwide at the point in which aviation
gas is purchased. Thus, the state in which the aviation gas is
purchased benefits from the fuel tax. She offered that fuel
that is purchased in the state of Washington is not specifically
used in that state. Ms. Bales acknowledged that Representative
Gatto is correct, that the fuel would not be burned solely in
Alaska, but that providing the cost savings also will benefit
the airline businesses that operate in Alaska and largely employ
Alaskans. She further noted that the department hopes that the
motor fuel tax suspension will also benefit consumers.
3:53:33 PM
REPRESENTATIVE GARDNER referred to the fiscal note that
indicates the approximate $40 million reduction in revenues from
the motor fuel tax suspension. She inquired as to whether Ms.
Bales could separate out the amount of revenues by the type of
fuel, such as fuel used for vehicles, fishing boats and
aircraft.
MS. BALES answered that of the motor fuel tax collected in FY
2007, $29 million was collected from highway fuel taxed at $.08
per gallon, $5.5 million was collected from marine fuel taxed at
$.05 per gallon, $4.1 million was collected for jet fuel taxed
at $.032 per gallon, and $685,000 was collected for aviation
gasoline - used in smaller aircraft - taxed at $.047 per gallon.
She recapped that the bulk of the tax collected is from highway
vehicle use.
3:55:11 PM
REPRESENTATIVE NEUMAN recalled prior discussions with Mr. Ruaro
about various methods to implement and extend the motor fuel tax
suspension. He inquired as to whether Mr. Ruaro had compiled
information for a proposal to adjust the motor fuel tax based on
the current oil taxes due to ANS West Coast pricing on oil.
Additionally, Representative Neuman offered that an inflation
rate of 4 percent would be used in the model.
MR. RUARO highlighted that he discussed the concept and has
considered drafting language, but that at this time he does not
yet have any specific information to pass on. He inquired as to
whether Ms. Bales could discuss the feasibility of administering
such a scenario.
MS. BALES also recalled the discussion with Representative
Neuman. She opined that not only would it be administratively
burdensome for DOR, but that it would be difficult for the
taxpayer to monitor since fuel is purchased at different rates
and the fuel is comingled. She noted that as the prices
fluctuate that to track and separate out the inventory at the
retail level would be difficult and burdensome. She related a
scenario in which a distributor purchases fuel with a motor fuel
tax rate of $.08 per gallon, but two weeks later the cost of a
barrel of oil increases. Subsequently, the distributor
purchases additional fuel. However, the prior fuel is not yet
completely sold, but the tax rate has changed. She maintained
her concern that the retailer may not be able to easily separate
out the tax. Additionally, she opined that the chances of
passing on the tax savings to consumers would be greatly reduced
since the retailer would need to continually adjust the rates
and track his/her inventory.
3:58:39 PM
REPRESENTATIVE NEUMAN asked the agencies to continue to look for
ways to adjust the tax based on current oil prices. He referred
to the fiscal note of $36 million reduction of revenues. He
inquired as to what it will cost to post notices on fuel pumps.
4:00:02 PM
CLYDE (ED) SNIFFEN, JR., Senior Assistant Attorney General,
Commercial/Fair Business Section, Department of Law (DOL),
related that he was not certain if the department or the
retailers would absorb the cost of the posting notices at the
pump since the bill is silent on that matter. He explained that
the intent of the amendment is to require notice in the form of
a "pump sticker" to provide pressure on retail gas station
owners to pass on the motor fuel tax savings to consumers. He
offered this is the approach that Illinois used and referred to
the MIT study that showed a 60 to 80 percent pass through to
consumers. He acknowledged that in rural Alaska that one can't
rely on competitive forces to affect prices. Still, in
monopolistic markets the owners can currently charge what prices
they want to charge, he stated. He noted that the amendment
would provide pressure on some owners to advise the public that
they passed on savings to the motor fuel tax savings to
consumers. He also noted that if a gas station did not pass on
savings, that the matter could be litigated through the DOL or
in class action litigation.
4:03:17 PM
REPRESENTATIVE NEUMAN offered that retail gas stations are
required to make quarterly reports. He recalled from a prior
discussion with Ms. Bales, that the DOR could verify that the
tax was passed on to consumers and that it would not be
administratively burdensome to do so.
MS. BALES recalled her initial discussion with Representative
Neuman, but noted that she later discovered that retailers do
not use a standard mark-up for fuel. Thus, she pointed out that
it could be significantly burdensome for DOR to calculate the
mark-up costs. She related that only the qualified dealers are
licensed and pay the motor fuel tax and that the retail gas
stations are not. Ms. Bales explained that currently retail gas
stations are not required to file reports with the DOR. Thus,
it would require a change to implement new reporting
requirements and the department would have to develop the mark-
up costs used by individual retailers in order to determine if
the motor fuel tax cost savings had been passed on to consumers.
Furthermore, she related that she discussed the matter with the
DOL. She noted that retailers can mark-up prices for various
reasons, not just for increases in the motor fuel tax.
REPRESENTATIVE NEUMAN commented that he was not sure how the
notice in the form of stickers on the pump would be implemented
and whether a state employee would post the notice and then need
to verify that the notice is posted.
4:06:52 PM
DEBORAH WILLIAMS, President, Alaska Conservation Solutions,
referred to her previously submitted document labeled, "Six
Reasons Not to Suspend the Motor Fuel Tax." She highlighted the
six reasons not to suspend motor fuel tax. She offered the
first reason is that based on economic theory and experience,
the motor fuel tax suspension may not result in lowering the
price of motor fuel to the full extent of the motor fuel tax
suspension. She opined that the reason to reduce state revenues
by $40 million is to pass on fuel savings on to consumers. She
offered her belief that it does not make sense to proceed unless
evidence exists that all or most of the benefits will pass
through to consumers. She opined that the evidence is lacking
in that regard. She highlighted that several presidential
candidates proposed suspending the motor fuel tax this summer.
However, she noted that the proposal was denounced by economists
including Nobelist Joseph Stiglitz who do not believe that the
savings will be transferred to the consumers. She highlighted
that much discussion has ensued at the federal and at state
level, but that generally this approach has been rejected since
consumer savings cannot be substantiated.
MS. WILLIAMS stated that her second point is that in comparing
motor fuel taxes with taxes "paid at the pump" that no
correlation exists between motor fuel taxes imposed by the state
and prices that consumers pay. She opined that this is due to
many factors. She offered an example in which consumers in
Seattle pay a motor fuel tax of $.375. However, Seattle
consumers pay less at the pump than Alaskans pay, she noted.
MS. WILLIAMS further opined that if the legislature chooses to
suspend the motor fuel tax that it will be difficult to re-
impose the tax especially if oil prices remain high.
4:10:27 PM
MS. WILLIAMS continued by stating that most people believe that
"cost causers should be cost payers." Thus, she related her
fourth point that the consumers of motor fuels ought to
contribute to the maintenance costs of the highways and other
forms of infrastructure their vehicles use.
MS. WILLIAMS brought up her fifth point and noted that motor
fuel taxes are collected, in part, from visitors to the state.
Suspending the motor fuel tax will result in loss of revenues
collected from non-residents, she noted.
MS. WILLIAMS opined that instead of the approximately $40
million revenue loss due to a motor fuel tax suspension, that
the revenues from the motor fuel tax could be used to invest in
public transit or other programs that would proactively reduce
energy costs and greenhouse gas emissions. She characterized
the long term remedy as the means to help Alaskans reduce their
costs and reduce their consumption. Thus, if the legislature
can invest $40 million in ways that will help reduce consumer
energy usage, it will provide benefits for many years to come.
She urged the legislature to first examine other possibilities
such as to provide loans for marine engine efficiency
conversion, expanding the use of bio fuels especially from fish
waste, and carpooling will benefit individuals in the long term
instead of suspending the motor fuel taxes.
CHAIR OLSON pointed out that automatic reinstatement of the
motor fuel tax in one year.
4:14:35 PM
CHAIR OLSON, after first determining that no one else wished to
testify, closed public testimony on HB 4004.
4:14:49 PM
REPRESENTATIVE GATTO stated that he calculated the $.08 per
gallon savings using a scenario in which a person drives a
vehicle 15,000 miles per year, based on a vehicle that obtains
20 miles per gallon, which would use 750 gallons total per year.
He offered that the savings in suspending the motor fuel tax of
$ .08 per gallon would result in a total savings of about $55
per year, which he opined is not a substantial amount of
savings. He acknowledged that commuters "take biggest beating."
He inquired as to whether the requirement to post the sign on
the pump might prove difficult. He surmised that the sign only
needs to be visible to the consumer. He also wondered if it is
it reasonable to post the sign on or adjacent to the pump. He
inquired as to whether the sign needs to be on the pump at all.
CHAIR OLSON pointed out that currently notices are posted on
pumps to notify consumers when the measuring device for the pump
was last tested for accuracy.
REPRESENTATIVE GATTO expressed concern over the specific size
and dimensions of the proposed posting.
4:16:48 PM
MR. RUARO stated that the weights and measures stickers are
smaller than the proposed sign in the bill. He noted that
currently each pump must have a sticker posted showing that it
has met the state's requirements for accurate fuel dispensing.
REPRESENTATIVE GATTO agreed. He maintained his concern that the
bill would require adding a second sign on the pump.
MR. RUARO noted his agreement.
4:17:44 PM
REPRESENTATIVE RAMRAS recalled prior legislation with respect to
documentation.
4:18:15 PM
REPRESENTATIVE NEUMAN commented that he is contemplating an
amendment to remove the provision for signage. He offered that
the consumers will be aware of the motor fuel tax suspension,
and that the requirement to providing the noticing at the pump
will add a fiscal note. He suggested that one consideration for
an amendment could be to delete lines 2 and 3 of Amendment 1.
MR. RUARO noted his agreement. He offered that he has discussed
the issue with a larger retailer in Anchorage who advised him
that the retailer would pass on savings due to the competitive
nature of the urban market.
4:19:28 PM
REPRESENTATIVE GARDNER referred to her prior question with
respect to the $25,000 savings to the fishing vessels mentioned
in the letter of July 21, 2008 from Mr. Ruaro. She noted that
the $25,000 savings to large processors is significant.
Additionally, she noted that a newsletter in members' packets
from Senator Lisa Murkowski that advises that she is working on
a bill that would provide tax allowances for Alaska fishermen.
Representative Gardner pointed out that the newsletter also
mentions that fish prices are set by the seafood processor
sector and are tied to prices in the global seafood market.
Furthermore, the global market pricing also indicates very
little fluctuation exists due to local costs. She said, "I'm
really dubious that the $25,000 savings of these seafood
processing vessels that may or may not be Alaskans, are going to
be passed on to fishermen. So that's a concern of mine."
MR. RUARO recalled that the statement in Senator Murkowski's
press release relates to the seafood retail price that the
processor charges on the open market. He suggested that his
remarks were directed at the wholesale price that the processors
pay the fishermen, which is subject to negotiations. He
commented that if the collective group of fishermen is aware
that the processor obtains "a break" on the fuel prices, the
fisherman can factor that knowledge into their negotiations.
4:21:57 PM
REPRESENTATIVE GARDNER stated that she hopes that is so.
However, she opined that she does not have confidence in that
assessment. She expressed her concern over the requirement in
HB 4004 that requires that invoices must be attached to the
report and submitted to the department. She inquired as to
whether sales tax must also be reported. She further opined
that the reporting requirement might be burdensome for the small
gas stations throughout the state. She pointed out that the
bill has a provision that would impose a $5,000 penalty for
failure to provide the monthly report or supporting invoices.
MS. BALES explained that only about 100 qualified dealers in the
state would be required to report under HB 4004. She noted that
the dealers are comprised of wholesalers and large distributors.
She explained that the "mom and pop" gas stations are not
subject to the reporting requirement since they are not
considered dealers under the statutory definition of a
"qualified motor fuel dealer" in the state. Although the
approximate 100 dealers currently report to the state, they are
not currently required to attach invoices. However, the DOR
wants invoices submitted for review to ensure that the tax is
not included when the fuel is sold to retailers, she noted. Ms.
Bales referred to the penalty provision in HB 4004 and pointed
out that while the bill allows the DOR to assess a penalty up to
$5,000, that the department would clarify the penalty provisions
in regulation. She surmised that the penalty provision would be
imposed on those dealers that continually failed to meet the
reporting requirements.
4:25:20 PM
REPRESENTATIVE GARDNER inquired as to whether a service station
owner who purchases fuel from a dealer is allowed to set his/her
own price.
MS. BALES answered that the independent retailer sets his/her
own price.
REPRESENTATIVE GARDNER surmised that consumers and the state
would have no way of knowing for certain that the price of fuel
was reduced by the $.08 motor fuel tax suspension.
MS. BALES noted her agreement.
REPRESENTATIVE GARDNER surmised that the reports required in HB
4004 do not provide the information the state needs to make that
assessment.
MS. BALES answered that the reports allow the DOR to meet the
federal highway requirements to ensure that the federal highway
funds continue to come to the state during the period of
suspension. Also, the reports help to ensure that the dealers
have not charged the dealers the $.08 motor fuel tax suspension.
REPRESENTATIVE GARDNER related her understanding that whether
the retailer passes on the motor fuel tax savings to the
customer is not known.
MS. BALES noted her agreement.
4:26:56 PM
REPRESENTATIVE NEUMAN made a motion to adopt Conceptual
Amendment 1 to Amendment 1, to delete lines 2-10, after page 1,
line 1, following "tax;", which read:
Insert "requiring a retail dealer of motor fuel
to post a sign notifying a consumer of the tax
suspension and providing a penalty for failing to post
the sign;"
Page 1, following line 2:
Insert a new bill section to read:
"* Section 1. AS 45.50.471(b) is amended by adding
a new paragraph to read:
(53) failing to post a sign on a pump
notifying a consumer that the motor fuel tax has been
suspended during the period of a suspension."
REPRESENTATIVE NEUMAN explained that he offers a Conceptual
Amendment to Amendment 1 since the amendment would add
additional bureaucracy. Further, he expressed his concern over
the fiscal impact of requirement for posting signs.
4:27:33 PM
There being no objection, Conceptual Amendment 1 to Amendment 1
was adopted.
CHAIR OLSON noted that Amendment 1, as amended, was before the
committee and asked if there was any objection to it.
REPRESENTATIVE GARDNER objected.
REPRESENTATIVE GARDNER explained that HB 4004 does not require
that a person selling the fuel must pass the tax savings along
to consumers.
MR. RUARO clarified that the bill does not guarantee that the
tax savings will be passed on. However, he noted that if the
tax is not suspended that Alaskans will continue to pay the
motor fuel tax.
4:28:17 PM
REPRESENTATIVE GARDNER referred to Amendment 1 [as amended] page
2, line 5-6, which she read, as follows:
...(3) states that the price for the motor fuel on the
pump reflects the elimination of the tax during the
period of suspension.
REPRESENTATIVE GARDNER said, "So, if a retailer does not want to
give his/her customers the benefit of the $.08 per gallon tax
savings, that the retailer is still required..."
CHAIR OLSON interjected that the Conceptual Amendment to
Amendment 1 that was adopted is "conceptual in nature" and thus
the drafter would remove any language that related to posting
signs since the requirement was removed by the Conceptual
Amendment to Amendment 1.
REPRESENTATIVE GARDNER related her understanding that Conceptual
Amendment 1 to Amendment 1 that was just adopted also removes
the requirement on page 2, lines 5-6, since the posting of a
sign at the pump is no longer required. Representative Gardner
paused, and then removed her objection.
4:29:10 PM
CHAIR OLSON reiterated for members that Conceptual Amendment 1
to Amendment 1 that was previously adopted was a "conceptual
amendment" and would delete all references to the signage.
Chair Olson announced that Amendment 1 [as amended] is now
before the committee.
4:29:24 PM
REPRESENTATIVE GATTO pointed out that deleting lines 1-10 in
Amendment 1 still leaves a reference to the penalty, which is no
longer necessary. He inquired as to whether the language on
page 2 of Amendment 1 [as amended], relative to the penalty,
would also be removed.
4:29:53 PM
REPRESENTATIVE NEUMAN asked to call for the vote if an objection
is pending.
REPRESENTATIVE GARDNER offered that she had previously removed
her objection.
There being no further objection, Amendment 1 [as amended] was
adopted.
4:30:28 PM
The committee took an at-ease from 4:30 p.m. to 4:31 p.m.
4:31:01 PM
REPRESENTATIVE NEUMAN made a motion to rescind the committee's
action [in adopting Amendment 1 as amended.]
CHAIR OLSON clarified that the remaining language in Amendment 1
[as amended] would change the effective date of the bill.
There being no objection, the motion to adopt Amendment 1 [as
amended] was rescinded.
4:31:18 PM
REPRESENTATIVE NEUMAN made a motion to adopt Amendment 2,
labeled 25-GH4060\A.3, Bullock, 7/11/09, as follows:
Page 1, line 7:
Delete "a period beginning August 1, 2008, and
ending July 31, 2009"
Insert "the 12 consecutive calendar months
immediately following the month of the effective date
of this Act"
Page 2, line 5:
Delete all material.
Renumber the following bill section accordingly.
There being no objection, Amendment 2 was adopted.
4:31:24 PM
REPRESENTATIVE NEUMAN moved to report HB 4004, as amended, out
of committee with individual recommendations and accompanying
fiscal notes.
REPRESENTATIVE GARDNER objected.
4:31:45 PM
A roll call vote was taken. Representatives Gatto, Neuman,
Olson, and Ramras voted in favor of moving HB 4004, as amended,
from committee. Representatives Buch and Gardner voted against
it. Therefore, CSHB 4004(L&C) was reported from the House Labor
and Commerce Standing Committee by a vote of 4-2.
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
4:32 p.m.
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