Legislature(1995 - 1996)

02/14/1996 01:42 PM House TRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
            HOUSE TRANSPORTATION STANDING COMMITTEE                            
                       February 14, 1996                                       
                           1:11 a.m.                                           
                                                                               
                                                                               
 MEMBERS PRESENT                                                               
                                                                               
 Representative Gary Davis, Chairman                                           
 Representative Beverly Masek, Vice Chair                                      
 Representative Jeanette James                                                 
 Representative Jerry Sanders                                                  
 Representative Bill Williams                                                  
 Representative Don Long                                                       
                                                                               
 MEMBERS ABSENT                                                                
                                                                               
 Representative Tom Brice                                                      
                                                                               
 COMMITTEE CALENDAR                                                            
                                                                               
 HOUSE JOINT RESOLUTION NO. 49                                                 
 Proposing amendments to the Constitution of the State of Alaska               
 creating a highway fund.                                                      
                                                                               
      - HEARD AND HELD                                                         
                                                                               
 PREVIOUS ACTION                                                               
                                                                               
 BILL:  HJR 49                                                              
 SHORT TITLE: DEDICATED HIGHWAY FUND                                          
 SPONSOR(S): REPRESENTATIVE(S) JAMES                                           
                                                                               
 JRN-DATE     JRN-PG            ACTION                                         
 05/16/95      2238    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 05/16/95      2239    (H)   STATE AFFAIRS, TRANSPORTATION, FINANCE            
 02/01/96              (H)   STA AT 08:00 AM CAPITOL 102                       
 02/01/96              (H)   MINUTE(STA)                                       
 02/02/96      2597    (H)   STA RPT  CS(STA) NT 3DP 2NR                       
 02/02/96      2597    (H)   DP: PORTER, GREEN, JAMES                          
 02/02/96      2597    (H)   NR: OGAN, IVAN                                    
 02/02/96      2598    (H)   FISCAL NOTE (DOT)                                 
 02/02/96      2598    (H)   REFERRED TO TRANSPORTATION                        
 02/14/96              (H)   TRA AT 01:00 PM CAPITOL 17                        
                                                                               
 WITNESS REGISTER                                                              
                                                                               
 SAM S. KITO III, Special Assistant                                            
 Office of the Commissioner                                                    
 Department of Transportation and Public Facilities                            
 3132 Channel Drive                                                            
 Juneau, Alaska  99801-7898                                                    
 Telephone:  (907) 465-3904                                                    
 POSITION STATEMENT:  Provided information on CSHJR 49(STA) and                
       CSHJR 49(TRA)                                                           
                                                                               
 DAVID W. HAUGEN, Vice-President                                               
 Lynden Transport, Incorporated                                                
 1029 West 3rd Avenue                                                          
 Anchorage, Alaska  99501                                                      
 Telephone:  (907) 279-7501                                                    
 POSITION STATEMENT:  Testified on CSHJR 49(STA) and CSHJR 49(TRA)             
                                                                               
 ACTION NARRATIVE                                                              
                                                                               
 TAPE 96-5, SIDE A                                                             
 Number 000                                                                    
                                                                               
 The House Transportation Standing Committee was called to order by            
 Chairman Gary Davis at 1:11 p.m.  Members present at the call to              
 order were Representatives G. Davis, Masek, James, Sanders, and               
 Long.  A quorum was present.                                                  
                                                                               
 CHAIRMAN GARY DAVIS announced the agenda was CSHJR 49(STA).                   
 HJR 49 DEDICATED HIGHWAY FUND                                                
                                                                            
 Number 066                                                                    
                                                                               
 REPRESENTATIVE JEANETTE JAMES, sponsor of CSHJR 49(STA), said it              
 was developed narrowly, utilizing state taxes on fuel used for the            
 propulsion of motor vehicles, allowing the legislature to                     
 appropriate money from this fund only for the maintenance of roads            
 and highways.  She referred to other bills, involving proposals for           
 highway maintenance funds, that failed due, in part, to the                   
 complexity of those bills.  Those bills utilized revenues from                
 state license and fees for the registration, operation and use of             
 motor vehicles, aircraft and water craft as well as from the use of           
 the state transportation facilities, including the state ferry                
 system.  She added that these bills allowed the legislature to                
 appropriate money from the fund for maintenance and operation of a            
 state or local government transportation facility, for the                    
 improvement and construction of harbor facilities, or the                     
 administration and enforcement of motor vehicle laws.  She said               
 historically when a bill moves through the legislative process, a             
 "Christmas Tree" approach happens, by this she meant the adding of            
 additional clauses to a simple bill.  She said this approach was              
 what killed similar bills.                                                    
                                                                               
 REPRESENTATIVE JAMES described her involvement with CSHJR 49(STA).            
 She said she negotiated this issue last year and had filed another            
 bill which had a broader scope.  She decided against the other bill           
 because she felt a narrow approach was needed in order for CSHJR
 49(STA) to pass.  She said she was willing to negotiate the issues,           
 but didn't want changes made so that control over the fund was                
 lost.  She said, in discussions with the public, that they didn't             
 mind paying a higher road or use tax as long as that tax was used             
 only for highway maintenance.                                                 
                                                                               
 Number 295                                                                    
                                                                               
 REPRESENTATIVE JAMES said that the current tax, 24 cents per                  
 gallon, brings in $24 million a year with the current road                    
 maintenance cost totaling $75 million per year.  She said the                 
 current tax would need to be tripled in order to pay for current              
 maintenance.  She said, if you triple the tax a fund must be set up           
 to guarantee that the tax won't fund something else.                          
                                                                               
 Number 352                                                                    
                                                                               
 REPRESENTATIVE JAMES said this CSHJR 49(STA) was an important                 
 constitutional amendment which would be put on the ballot.  She               
 said everyone she talked to was in favor of CSHJR 49(STA).  She               
 said she did not approve of dedicated funds, but this is an                   
 appropriate fund, and added that many other states have a dedicated           
 fund for this purpose.  She advocated giving the legislature the              
 ability to appropriate funds, and said there was no sense of going            
 to meet on budget issues when everything had already been decided.            
 She said she would be willing to answer any questions on CSHJR
 49(STA).                                                                      
                                                                               
 Number 392                                                                    
                                                                               
 CHAIRMAN GARY DAVIS said that it has been his experience that the             
 public complains most about permanent fund dividend accounts, and             
 the second grievance was usually about the maintenance of roads, in           
 regards to the condition and plowing of the roads.  He asked for              
 clarification on a specific point and was told that section was               
 deleted from the current version of CSHJR 49(STA).                            
                                                                               
 Number 450                                                                    
                                                                               
 REPRESENTATIVE JAMES said she deleted that section because the                
 focus of the CSHJR 49(STA) was getting too broad.  She added that             
 license fees pay, into the general fund, about three times what it            
 costs to maintain that service.                                               
                                                                               
 Representative Bill Williams joined the committee meeting at 1:16             
 p.m.                                                                          
                                                                               
 CHAIRMAN GARY DAVIS mentioned a proposed CSHJR 49(TRA), but said he           
 wanted to keep the discussion focused on CSHJR 49(STA) and to                 
 decide later in the meeting which version the committee would chose           
 as its working document.  He reiterated that the amount the fuel              
 tax earns is less than the maintenance cost of $75 million, which             
 does not include the cost of capital projects.                                
 Number 600                                                                    
                                                                               
 REPRESENTATIVE DON LONG said, in Barrow, roads are owned and                  
 maintained locally.  He questioned a tax which would be imposed in            
 his district, but wouldn't receive the benefits of it.                        
                                                                               
 Number 632                                                                    
                                                                               
 REPRESENTATIVE JAMES said that because no highway use tax is paid             
 in Barrow, then CSHJR 49(STA) does not affect Barrow.  She said the           
 only roads, that this tax applies towards, are maintained by the              
 highway road system.  She said other vehicles that are off the                
 state roads, have an exemption and do not pay this tax.  She cited            
 the example of logging trucks in the timber areas who are not                 
 subject to this tax.                                                          
                                                                               
 Number 701                                                                    
                                                                               
 REPRESENTATIVE LONG asked if this intent was going to be identified           
 in CSHJR 49(STA).                                                             
                                                                               
 Number 717                                                                    
                                                                               
 REPRESENTATIVE JAMES said she believed this intent was automatic,             
 because of the definition of highway use.  She said fuels can                 
 sometimes be purchased for vehicles that don't use state highways             
 and roadways, but that a claim can be filed to get the tax back.              
 She believed that, if you do not have any state owned roads, you              
 would not be affected by this tax.                                            
                                                                               
 Number 782                                                                    
                                                                               
 REPRESENTATIVE LONG clarified that a tax was being currently                  
 collected, and CSHJR 49(STA) would merely place that tax in a                 
 special fund.                                                                 
                                                                               
 Number 808                                                                    
                                                                               
 CHAIRMAN GARY DAVIS said CSHJR 49(STA) allows the legislature to              
 make changes to the collection and allocation of those funds.                 
                                                                               
 Number 834                                                                    
                                                                               
 REPRESENTATIVE BILL WILLIAMS asked how CSHJR 49(STA) would affect             
 the Alaska Marine Highway System.                                             
                                                                               
 Number 847                                                                    
                                                                               
 REPRESENTATIVE JAMES said CSHJR 49(STA) does not affect the Alaska            
 Marine Highway System because it doesn't collect any marine fuel              
 tax.  She said the proposed CSHJR 49(TRA) involves the Alaska                 
 Marine Highway System as well as aircraft, but deferred comment on            
 CSHJR 49(TRA) to its sponsor, Chairman Gary Davis.                            
                                                                               
 Number 834                                                                    
                                                                               
 REPRESENTATIVE WILLIAMS pointed out that the Alaska Marine Highway            
 System is a highway system that has trouble getting funds to                  
 maintain its operations.                                                      
                                                                               
 Number 937                                                                    
                                                                               
 REPRESENTATIVE JERRY SANDERS asked whether Barrow or the Alaska               
 Marine Highway System pays this highway user fee.                             
                                                                               
 CHAIRMAN GARY DAVIS deferred that question to Mr. Kito.                       
                                                                               
 Number 971                                                                    
                                                                               
 SAM S. KITO III, Special Assistant, Office of the Commissioner,               
 Department of Transportation and Public Facilities (DOT/PF), was              
 next to testify.  He said the current tax collected is 8 cents per            
 gallon which generates about $24 million.  He said CSHJR 49(STA) is           
 approximately a "$2.6 million per penny increase".  The taxes are             
 collected at the pump per gallon of gas, so if Barrow is selling              
 gas to automobile users through a gas pump, they are probably                 
 paying the 8 cents per gallon.  If the gas is being used off road,            
 they can apply for a refund also called an exemption, for off-road            
 use which is currently 6 cents per gallon.                                    
                                                                               
 Number 1036                                                                   
                                                                               
 MR. KITO said the Alaska Marine Highway System does not pay a tax.            
 He said if we were to fund the Alaska Marine Highway System, it               
 would most likely be funded out of taxes collected through highway            
 use because of the definition of the marine highway system.  He               
 said this definition specifies that the Alaska Marine Highway                 
 System is part of the state highway system.                                   
                                                                               
 Number 1060                                                                   
                                                                               
 REPRESENTATIVE WILLIAMS asked for additional clarification on the             
 Alaska Marine Highway System being linked to the highway system.              
                                                                               
 Number 1067                                                                   
                                                                               
 MR. KITO said, currently, if CSHJR 49(STA) provided for funding for           
 the Alaska Marine Highway System, the funding would be taken out of           
 the highway fuel tax.  The reason for this is that the highway fuel           
 tax is related to the mode of highways and under the statutory                
 definition the Alaska Marine Highway System is included under this            
 definition.                                                                   
                                                                               
 Number 1096                                                                   
 REPRESENTATIVE JAMES asked if some of the $75 million, currently              
 paid on highway maintenance, is being used for the maintenance of             
 the Alaska Marine Highway System.                                             
                                                                               
 Number 1115                                                                   
                                                                               
 MR. KITO said no, it is not.  The Alaska Marine Highway System                
 maintenance is paid out of a separate appropriation.  He said to              
 permit funding of the Alaska Marine Highway System through some               
 type of dedicated fund, the funding would probably come through               
 taxes related to highway motor fuel.                                          
                                                                               
 Number 1133                                                                   
                                                                               
 REPRESENTATIVE JAMES said the sponsors intent was to take the                 
 highway use tax, or the tax that is actually causing the need for             
 maintenance, to be related to the maintenance.  She said if the               
 fund, proposed under CSHJR 49(STA) allowed the maintenance of the             
 Alaska Marine Highway System, then it is a discrepancy.  She added            
 that she had no problem including the Alaska Marine Highway System            
 if there is a tax that is appropriate to the use of that system to            
 pay for the maintenance costs.  She felt that the highway tax was             
 the most fair tax, because it had a direct correlation between the            
 user and the use of the highway.                                              
                                                                               
 Number 1204                                                                   
                                                                               
 CHAIRMAN GARY DAVIS said he believed any version of CSHJR 49(STA)             
 allowed the legislature to dedicate a tax.  He said, if you want to           
 dedicate a tax, it could be done later through statute.  He added             
 that CSHJR 49(STA) could specifically exempt the Alaska Marine                
 Highway System from this process.                                             
                                                                               
 Number 1264                                                                   
                                                                               
 REPRESENTATIVE JAMES said CSHJR 49(STA) specifies that the revenue            
 from June 30, 1997, derived from state taxes on the fuel used for             
 the propulsion of motor vehicles designed for and used on highways            
 and roads, less refunds, credits, and the cost of collection of               
 that tax, shall be placed in a highway fund.  "Except as provided             
 in (d) of this section, the legislature may appropriate money from            
 the fund only for the maintenance of roads and highways by the                
 state or a local government."  She said her intent was that it                
 would not include the Alaska Marine Highway System.  She said she             
 would like to exclude the Alaska Marine Highway System, unless                
 there is some provision of tax that comes from the use of the                 
 ferries that are paid into this dedicated fund.  She didn't believe           
 that, currently, there was any such tax.                                      
                                                                               
 Number 1333                                                                   
                                                                               
 MR. KITO said the way CSHJR 49(STA) is currently drafted, the fund            
 could only be used on a surface highway or road.  He said if it was           
 worded, "highway system," then it would include the Alaska Marine             
 Highway System.                                                               
                                                                               
 Number 1354                                                                   
                                                                               
 REPRESENTATIVE WILLIAMS said the Alaska Marine Highway System has             
 a maintenance program of approximately $4 million per year to                 
 maintain Coast Guard safety regulations.  He said the $4 million is           
 appropriated yearly by the legislature and he expressed the                   
 difficulty involved with keeping the ferries maintained each year.            
                                                                               
 Number 1428                                                                   
                                                                               
 CHAIRMAN GARY DAVIS said if you look at any dedicated road or                 
 highway tax, the purpose is to replenish and refurbish any damage             
 that is being done by driving that vehicle on that road.  He said             
 that CSHJR 49(STA) could specifically mention this point or it                
 could be left in broad language to be later interpreted through               
 statute.                                                                      
                                                                               
 Number 1471                                                                   
                                                                               
 REPRESENTATIVE JAMES clarified that the Alaska Marine Highway                 
 System is paid for by the state and that the system pays no tax.              
 She said this is why there is a general fund appropriation, because           
 the Alaska Marine Highway System has no way of creating any                   
 revenues from its action, as compared to the direct correlation of            
 a cars debilitation of a highway.  She expressed interest on                  
 working on the issue of funding for the Alaska Marine Highway                 
 System, but that CSHJR 49(STA) was not intended to solve that                 
 issue.  She said if you were to include funding for the Alaska                
 Marine Highway System, you would have a problem getting public                
 approval for CSHJR 49(STA).                                                   
                                                                               
 Number 1555                                                                   
                                                                               
 MR. KITO said for conceptual purposes, the DOT/PF would look at the           
 Alaska Marine Highway System as a bridge that links one point to              
 another and, in that way, it is part of the highway system.                   
                                                                               
 Number 1575                                                                   
                                                                               
 REPRESENTATIVE WILLIAMS asked if Chairman Gary Davis intended to              
 move CSHJR 49(STA) today.                                                     
                                                                               
 Number 1580                                                                   
                                                                               
 CHAIRMAN GARY DAVIS said he had that intention, but the issues                
 raised needed to be addressed before CSHJR 49(STA) was moved.                 
                                                                               
 Number 1608                                                                   
 REPRESENTATIVE WILLIAMS made a point regarding the fact that those            
 people in Southeast Alaska are the only ones who have to pay to use           
 a highway system.  He said he would like to talk with the sponsor             
 of CSHJR 49(STA) and with the Administration to see if there is a             
 way around this issue.                                                        
                                                                               
 Number 1643                                                                   
                                                                               
 REPRESENTATIVE JAMES said the Administration looked favorably on a            
 bill such as CSHJR 49(STA).  She asked if the Administration was              
 also looking at a dedicated fund to be used for the maintenance of            
 the Alaska Marine Highway System.                                             
                                                                               
 Number 1665                                                                   
                                                                               
 MR. KITO said the Administration had looked at some concepts to               
 fund the Alaska Marine Highway System through a dedicated fund, but           
 the conclusion reached was that there was a lot of need without a             
 lot of revenue.  He said they were never able to come up with what            
 revenue stream might work in terms of the amount needed.                      
                                                                               
 Number 1691                                                                   
                                                                               
 REPRESENTATIVE JAMES said the full intent and purpose of the tax              
 that people pay to drive on the roads, through the fuel pump, is              
 maintenance of the roads.  The full intent and purpose of CSHJR
 49(STA) is to allocate those taxes, paid to drive on the road, to             
 fix the roads.  She added that when you expand CSHJR 49(STA) into             
 the Alaska Marine Highway System, the intent changes.  She said she           
 would be willing to look at some other source to provide that                 
 funding.  She again referred to public opinion and the need to have           
 CSHJR 49(STA) directly correlate between taxes and use.                       
                                                                               
 Number 1758                                                                   
                                                                               
 CHAIRMAN GARY DAVIS reiterated the point that CSHJR 49(STA) needed            
 to be "sellable" to the voters.  He added that CSHJR 49(STA) was              
 already being complicated through committee suggestions as well as            
 CSHJR 49 (TRA).  He said he wished to discuss CSHJR 49(TRA).                  
                                                                               
 Number 1804                                                                   
                                                                               
 REPRESENTATIVE SANDERS asked if Barrow, currently, paid the fuel              
 tax.                                                                          
                                                                               
 Number 1812                                                                   
                                                                               
 MR. KITO said that if a place has a road system, and they are                 
 selling gasoline through a pump for automobiles on their road                 
 system, then they are paying a motor fuel tax.  He said if you are            
 off a road or highway, not specifically a state road or highway,              
 then you don't need to pay that tax.  He cited examples where this            
 was the case, including four wheelers and generators, and said a              
 fuel tax exemption could be filed on the gas bought for those                 
 purposes.                                                                     
                                                                               
 MR. KITO said, that places where roads were owned and maintained by           
 the municipality still pay the 8 cent tax on the gas bought, even             
 though none of the revenue would be coming back from the state to             
 maintain those roads.                                                         
                                                                               
 Number 1885                                                                   
                                                                               
 REPRESENTATIVE SANDERS clarified that the municipalities could pay            
 a tax and not have that tax go back and support that municipal                
 road.                                                                         
                                                                               
 Number 1891                                                                   
                                                                               
 MR. KITO said that was correct, except for the component which is             
 tied to the Department of Community and Regional Affairs (DCRA)               
 revenue sharing for roads.  He said it is not a direct tie.  He               
 said the community receives a stipend for each center line mile of            
 road that it owns.                                                            
                                                                               
 Number 1908                                                                   
                                                                               
 REPRESENTATIVE JAMES said the Fairbanks North Star Borough road               
 service areas receive money from the DCRA.  She added that she was            
 not aware that Barrow was paying a fuel tax from which they did not           
 receive any money.                                                            
                                                                               
 Number 1930                                                                   
                                                                               
 CHAIRMAN GARY DAVIS said it would be difficult to estimate the                
 amount of time people spend driving on state roads as compared to             
 municipal roads.                                                              
                                                                               
 Number 1955                                                                   
                                                                               
 REPRESENTATIVE JAMES said if this constitutional amendment, CSHJR
 49(STA), were to go through and it appeared that money raised from            
 the tax could be channeled back to the locality.  She said those              
 localities would be better off under CSHJR 49 (STA), then they are            
 currently.                                                                    
                                                                               
 Number 1977                                                                   
                                                                               
 MR. KITO said they could be better off under CSHJR 49(STA), if                
 enough money was collected and deposited into the fund.  Currently            
 the money collected from the fuel tax does not meet state                     
 maintenance needs.  If more money were collected, under CSHJR
 49(STA), that money could be used to fund DCRA revenue sharing for            
 local roads.                                                                  
 Number 2001                                                                   
                                                                               
 CHAIRMAN GARY DAVIS then discussed the proposed CSHJR 49(TRA).  He            
 said the proposed CSHJR 49(TRA) changes the fund to a                         
 transportation fund, instead of limiting it solely to a highway               
 fund.  Taxes are collected from motor vehicles, marine or water               
 craft tax, and aircraft tax and put into a dedicated transportation           
 fund.  CSHJR 49(TRA) also allows the legislature to appropriate               
 money from that fund for maintenance and operation of state and               
 local government transportation systems.  He said CSHJR 49(TRA) is            
 a broader resolution allowing the legislature to dedicate funds for           
 ports and harbors, airports as well as highway systems, including             
 the Alaska Marine Highway System.  He said CSHJR 49(TRA) addresses            
 the long term issue of the possibility of receiving more revenues             
 which under CSHJR 49(TRA) could then be dedicated to other                    
 purposes.                                                                     
                                                                               
 Number 2162                                                                   
                                                                               
 REPRESENTATIVE JAMES reiterated the intent of CSHJR 49(STA) was to            
 directly correlate the use of the tax with the user.  She thought             
 the idea of marine taxes going to marine use and aircraft taxes               
 going to airports was a good thing, but expressed concern that the            
 public might perceive the taxes they pay in the highway tax, might            
 go to fix docks rather than the highways.  She understood that                
 legislation can specify how money is allocated, but without the               
 specific wording, it is left open to public speculation on what               
 might happen.  She again cited the "Christmas tree" example and her           
 intent of CSHJR 49(STA).                                                      
                                                                               
 Number 2247                                                                   
                                                                               
 CHAIRMAN GARY DAVIS clarified that if more tax was collected than             
 spent on maintenance costs, then the fuel tax would be cut.  He               
 then asked if both the CSHJR 49(STA) and the proposed CSHJR 49(TRA)           
 could be on the table for testimony.                                          
                                                                               
 Number 2279                                                                   
                                                                               
 MR. KITO said the DOT/PF would like to see harbors, not so much               
 aviation, in a dedicated fund.  He said if the state has a                    
 dedicated revenue stream for the harbors program, the state would             
 then be able to transfer harbors back to the communities.  He said            
 in the past five years, the revenue collected through the marine              
 motor fuel tax has been in the neighborhood of $7 million, of which           
 37 percent has gone to harbor facilities with the rest going into             
 the general fund.  In a marine dedicated fund, the Administration             
 would like a move away from maintenance and operations towards the            
 construction and operation of facilities.  He said the mooring fees           
 collected by the communities pays for the harbors, but that the               
 dedicated fund could be used for a replacement fund for their                 
 harbor systems.                                                               
 Number 2347                                                                   
                                                                               
 MR. KITO said separating the taxes collected into a dedicated fund            
 makes it easier to sell to the public.  He said the DOT/PF would              
 support the construction of highways from this fund, if at some               
 point revenues collected are more than the cost of the yearly                 
 maintenance.                                                                  
                                                                               
 Number 2378                                                                   
                                                                               
 MR. KITO said, in regards to aviation, current revenue collected              
 through taxes is not enough to cover half of aviation operation and           
 maintenance costs.                                                            
                                                                               
 Number 2391                                                                   
                                                                               
 REPRESENTATIVE SANDERS asked if it takes a third of the $7 million            
 collected for marine fuel taxes to maintain the facilities.                   
                                                                               
 MR. KITO said from a historical perspective, 37 percent has been              
 spent on harbors over the past five years.                                    
                                                                               
 Number 2400                                                                   
                                                                               
 REPRESENTATIVE JAMES asked if there was a need to spend more than             
 that amount on harbors.                                                       
                                                                               
 Number 2404                                                                   
                                                                               
 MR. KITO said yes, according to the DOT/PF there is a need to spend           
 more for harbor repair and replacement.  He said DOT/PF is                    
 currently in the process of transferring harbors to communities,              
 but the revenue does not exist to do this.  He cited the DOT/PF               
 expenditure of $100,000 for the South Cove harbor facility to                 
 transfer it over to the city of Craig.  The Administration hoped              
 that through a dedicated revenue stream, more of this could happen            
 with the 90 harbors Alaska currently owns, with the exception of 22           
 facilities not under the jurisdiction of specific communities.                
                                                                               
 Number 2448                                                                   
                                                                               
 DAVID W. HAUGEN, Vice-President, Lynden Transport, Incorporated,              
 was next to testify.  He said his company was in general support of           
 CSHJR 49(STA).  He said Lynden has operations in all modes within             
 the state of Alaska including the air cargo business, the trucking,           
 as well as in marine operations.  He said the dedicated fund, as              
 specified by Representative James, makes sense and his company                
 would support it.                                                             
                                                                               
 TAPE 96-5, SIDE B                                                             
 Number 000                                                                    
                                                                               
 MR. HAUGEN said his company is not sure what the amount of tax                
 would be, but that his company would be willing to pay their fair             
 share of that tax, as long as they were reassured that the money              
 would go directly to the dedicated fund.  He said this is how the             
 trucking aspect of his company perceives CSHJR 49(STA).                       
                                                                               
 Number 030                                                                    
                                                                               
 MR. HAUGEN said his company would defer any comments about the                
 proposed CSHJR 49(TRA) as they had just received a copy of it.  He            
 said he would like to see more clarification regarding the                    
 different components of the transportation committee substitute,              
 specifically how the Alaska Marine Highway System would fit in with           
 CSHJR 49(TRA).  He also questioned how a dedicated fund would work            
 as far as aviation was concerned.  He said the air cargo portion of           
 Lynden operates out of Anchorage International Airport which is               
 already a dedicated fund between the Anchorage and Fairbanks                  
 airports.                                                                     
                                                                               
 Number 069                                                                    
                                                                               
 CHAIRMAN GARY DAVIS clarified that the trucking part of Lynden                
 Transport, Incorporated would not object to a motor fuels tax if it           
 was dedicated to benefiting the highways.  He then asked if his               
 company would conceptually accept a higher marine fuel tax if it              
 was dedicated to improve port facilities around the state.                    
                                                                               
 Number 096                                                                    
                                                                               
 MR. HAUGEN said that was "true at this time" because of lack of               
 information regarding this issue.  He added that this would also be           
 true under the air component of Lynden Transportation.  He said               
 CSHJR 49(TRA) appears to be a more complicated version, especially            
 in regards to going between modes.  He said his company would                 
 insist that the modes be kept separate, so that money derived from            
 marine fuel taxes go to marine projects, as the same with airports            
 and surface transportation.  He felt this could be accomplished               
 within the language of the legislation.  He said if it could be               
 done and it was a fair treatment, his company would not object to             
 paying a higher tax.  However, his company would object if they               
 felt they were paying for something that they did not utilize or              
 money is used in ways that they have no control over to fund                  
 something that is well beyond the scope of something Lynden                   
 Transport, Incorporated does as part of their business.                       
                                                                               
 Number 154                                                                    
                                                                               
 CHAIRMAN GARY DAVIS said in the committee packet, a 1988 study was            
 included, which discussed the transportation system in the state of           
 Alaska.                                                                       
                                                                               
 Number 183                                                                    
 MR. KITO said the current amount collected through aviation                   
 gasoline and jet fuel was approximately $9.5 million.                         
                                                                               
 CHAIRMAN GARY DAVIS said there is a question of how to incorporate            
 language between the sponsor and Representative Williams.  He said            
 there was also the question of which committee substitute the House           
 Standing Committee on Transportation wants to adopt.  He said he              
 would amend the transportation committee substitute to separate the           
 taxes by modes.                                                               
                                                                               
 Number 253                                                                    
                                                                               
 REPRESENTATIVE JAMES repeated the figures of collecting $24                   
 million, spending $75 million and said that the amount being spent            
 on operation and maintenance of the highways was insufficient.  She           
 clarified that most of the motor fuel tax collected is going back             
 to the localities.  She concluded that a lot of taxes were being              
 collected, but not enough was going back for the actual                       
 maintenance.                                                                  
                                                                               
 REPRESENTATIVE JAMES added that only 37 percent of the marine fuel            
 tax is going towards maintenance, which is a different situation              
 than that of the highway and road system.  She then asked Mr. Kito            
 what percentage of aviation tax was spent on maintenance.                     
                                                                               
 Number 293                                                                    
                                                                               
 MR. KITO said the amount spent on aviation operation and                      
 maintenance was approximately $23 million.                                    
                                                                               
 Number 300                                                                    
                                                                               
 REPRESENTATIVE JAMES said the aviation system and the highway                 
 system are similar, but that the marine system is different.  She             
 said if you separate the modes, and only 37 percent is going to be            
 spent on the marine facilities, the public will object to that high           
 tax.  She said when you try to make a fair assessment of how these            
 taxes ought to be collected and used, we find that the state is               
 completely out of balance.  She said it is going to be a hard sell            
 to the people, who want more money spent on the roads, to tell them           
 the amount they spend is not even starting to pay for the services            
 currently provided.  She said people are willing to pay more, if it           
 is going to be spent on the roads.  She said she preferred her                
 narrow version of CSHJR 49(STA), but she would be willing to see if           
 any language could be inserted, separating the modes for collection           
 and dispersement.                                                             
                                                                               
 REPRESENTATIVE JAMES stated that the Alaska Marine Highway System             
 was a different type of situation then the situation proposed under           
 CSHJR 49(STA).  She said allocation of funds for maintenance of the           
 Alaska Marine Highway System will need to be done under the general           
 fund, fares, or some other provision.  She said she would want to             
 specifically exclude the Alaska Marine Highway System so that the             
 language in CSHJR 49(STA) translates into surface roads and                   
 highways.                                                                     
                                                                               
 Number 404                                                                    
                                                                               
 CHAIRMAN GARY DAVIS clarified that the state collects $7 million in           
 marine fuel taxes annually and we spend 35 percent on operation and           
 maintenance.                                                                  
                                                                               
 Number 421                                                                    
                                                                               
 MR. KITO said of the marine fuel tax revenue collected for capital            
 projects, over the past five years, the state has spent an                    
 estimated 37 percent.  He added that revenue generated thorough               
 moorage fees at the harbors, are used at those harbors for very               
 basic maintenance and operations costs.  The Administration                   
 believes that the harbors would still continue to take care of                
 their operations and some minor maintenance.  The issue is making             
 a provision for long term or replacement of harbor facilities.  He            
 said none of the $7 million goes to the communities.  He said if              
 money was put into a dedicated fund, that revenue would go to                 
 assisting the state in transferring facilities to communities.                
 Eventually, at some point, the state would share the revenue                  
 collected in taxes with communities that own their harbors.                   
                                                                               
 Number 473                                                                    
                                                                               
 CHAIRMAN GARY DAVIS said the state contracts most of the operation            
 and maintenance of the harbors and port facilities.  He then asked            
 if the state had any control over moorage or slip fees.                       
                                                                               
 Number 482                                                                    
                                                                               
 MR. KITO said no.  He said, typically, the communities will charge            
 fees in correlation with the operational cost of their facility,              
 but defer to the state for long term maintenance and replacements             
 costs which the state has not been able to do over the past few               
 years.                                                                        
                                                                               
 Number 515                                                                    
                                                                               
 REPRESENTATIVE JAMES made a motion to adopt the CSHJR 49(STA) as              
 the working document.                                                         
                                                                               
 CHAIRMAN GARY DAVIS objected for purposes of discussion.                      
                                                                               
 Number 534                                                                    
                                                                               
 REPRESENTATIVE SANDERS said he felt that CSHJR 49(STA) should go              
 through, and that CSHJR 49(TRA) should be submitted as a separate             
 bill.                                                                         
 CHAIRMAN GARY DAVIS said that the CSHJR 49(TRA) would be amended to           
 take out the aviation component because the highway fuel tax will             
 lack additional revenue.                                                      
                                                                               
 Number 584                                                                    
                                                                               
 REPRESENTATIVE LONG clarified that both the CSHJR 49(STA) and the             
 CSHJR 49(TRA) want to create either a transportation or a highway             
 fund.  He said the voters would adopt this resolution, and that it            
 would end up giving the legislature the ability to do what they               
 want with the fund.  He therefore proposed an "amendment to both              
 copies which is going to be the same, it's taking out all of the              
 section on page two, section 2 through 11, and move on line one,              
 `as provided by law' behind transportation fund."  He clarified               
 that he was referring to the CSHJR 49(TRA).   His ability to put              
 forth this amendment was discussed and Representative Long                    
 reiterated his point about giving the legislature such an                     
 authority.                                                                    
                                                                               
 Number 680                                                                    
                                                                               
 REPRESENTATIVE JAMES said a number of things need to be addressed             
 and the proper place to start is with the CSHJR 49(STA).                      
                                                                               
 Number 700                                                                    
                                                                               
 CHAIRMAN GARY DAVIS asked if the wording, "highway fund", can still           
 address the marine system.                                                    
                                                                               
 Number 725                                                                    
                                                                               
 REPRESENTATIVE JAMES said the CSHJR 49(STA) can be amended in any             
 way necessary.                                                                
                                                                               
 CHAIRMAN GARY DAVIS asked if there was any interest in the proposed           
 CSHJR 49(TRA), seeing none, CSHJR 49(STA) was the working document            
 before the House Standing Committee on Transportation.                        
                                                                               
 Number 785                                                                    
                                                                               
 REPRESENTATIVE JAMES said combining three modes into one bill                 
 creates three different scenarios.  The highway use tax collected             
 is a lot less than what the state is spending.  The marine tax that           
 is collected is a lot more than we are spending and an aircraft               
 fuel tax is another place where we collect a lot less then we                 
 spend.  To combine those three aspects into one bill will be                  
 difficult, but she said she was willing to do it if it is possible.           
                                                                               
 Number 830                                                                    
                                                                               
 CHAIRMAN GARY DAVIS said the aviation mode should be eliminated               
 from the proposed changes to CSHJR 49(STA).                                   
 Number 847                                                                    
                                                                               
 REPRESENTATIVE JAMES said the aviation fuel tax is not                        
 representative to the amount that is being spent, and she added               
 that she didn't feel the users were willing to increase their taxes           
 a sufficient amount to do so at this point in time.  She said "it             
 is not fair to talk about marine taxes or another bill, but you               
 know, Representative Moses had another bill on marine taxes that              
 would have increased the marine tax and shared half of the marine             
 tax with the locality so that they would have the money to spend on           
 docks and facilities."  She said that bill was a good solution to             
 take care of local harbors and docks.  She suggested that maybe               
 there was something that could be done, outside of a constitutional           
 amendment, to correct the marine problem.                                     
                                                                               
 Number 907                                                                    
                                                                               
 CHAIRMAN GARY DAVIS said the problem with Representative Moses bill           
 was that it increased the tax without the assurance that half of              
 the money would go to the localities because of the dedicated fund            
 issue.                                                                        
                                                                               
 REPRESENTATIVE JAMES said the assumption was that the localities              
 would fix those things.                                                       
                                                                               
 CHAIRMAN GARY DAVIS asked if Representative James wanted CSHJR
 49(STA) to specify that a share would go to local municipalities.             
                                                                               
 REPRESENTATIVE JAMES said yes, when it was fair, and when the                 
 municipality had road powers.                                                 
                                                                               
 Number 933                                                                    
                                                                               
 CHAIRMAN GARY DAVIS established a working group composed of                   
 Representatives Williams, James and G. Davis to go over the draft             
 and come up with changes.                                                     
 ADJOURNMENT                                                                   
                                                                               
 As there was no further business to come before the House                     
 Transportation Standing Committee, Chairman Gary Davis adjourned              
 the meeting at 2:20 p.m.                                                      
                                                                               

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