Legislature(2007 - 2008)CAPITOL 17
04/12/2007 01:30 PM House TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| HB185 | |
| HJR18 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 185 | TELECONFERENCED | |
| * | HJR 18 | ||
ALASKA STATE LEGISLATURE
HOUSE TRANSPORTATION STANDING COMMITTEE
April 12, 2007
1:34 p.m.
MEMBERS PRESENT
Chair Kyle Johanson
Representative Mark Neuman
Representative Anna Fairclough
Representative Vic Kohring
Representative Mike Doogan
MEMBERS ABSENT
Representative Craig Johnson
Representative Woodie Salmon
COMMITTEE CALENDAR
HOUSE BILL NO. 185
"An Act relating to certain municipal service areas that provide
road services."
- MOVED CSHB 185(CRA) OUT OF COMMITTEE
HOUSE JOINT RESOLUTION NO. 18
Opposing the enactment of the provisions in the Next Generation
Transportation System Financing Reform Act of 2007 that increase
aviation fuel and aviation gas taxes.
- HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 185
SHORT TITLE: MUNICIPAL ROAD SERVICE AREAS
SPONSOR(s): REPRESENTATIVE(s) COGHILL
03/12/07 (H) READ THE FIRST TIME - REFERRALS
03/12/07 (H) CRA, TRA
03/22/07 (H) CRA AT 8:00 AM BARNES 124
03/22/07 (H) Heard & Held
03/22/07 (H) MINUTE(CRA)
03/27/07 (H) CRA AT 8:00 AM BARNES 124
03/27/07 (H) Moved CSHB 185(CRA) Out of Committee
03/27/07 (H) MINUTE(CRA)
03/28/07 (H) CRA RPT CS(CRA) 2DP 4NR
03/28/07 (H) DP: DAHLSTROM, FAIRCLOUGH
03/28/07 (H) NR: NEUMAN, OLSON, SALMON, LEDOUX
04/12/07 (H) TRA AT 1:30 PM CAPITOL 17
BILL: HJR 18
SHORT TITLE: OPPOSE FED AVIATION FUEL TAX INCREASE
SPONSOR(s): REPRESENTATIVE(s) JOHANSEN
04/05/07 (H) READ THE FIRST TIME - REFERRALS
04/05/07 (H) TRA
04/12/07 (H) TRA AT 1:30 PM CAPITOL 17
WITNESS REGISTER
CAROL BEECHER, Intern
to Representative John Coghill
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 185 on behalf of the sponsor,
Representative Coghill.
CATHY WASSERMAN
Alaska Municipal League (AML)
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 185.
RENE BROKER, Borough Attorney
Fairbanks North Star Borough (FNSB)
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 185.
TAMMIE WILSON
Fairbanks, Alaska
POSITION STATEMENT: Expressed concerns with HB 185.
STUART DAVIES
Fairbanks, Alaska
POSITION STATEMENT: Encouraged the committee to vote in favor
of HB 185 and pass it this year.
LUKE HOPKINS, Member
Fairbanks North Star Borough Assembly
Fairbanks, Alaska
POSITION STATEMENT: Stated his support for HB 185.
RANDY FRANK, Member
Fairbanks North Star Borough Assembly;
Chair, Road Service Area Committee
Fairbanks, Alaska
POSITION STATEMENT: Testified on HB 185.
ED MAHONEY, Chair
Service District 1
Kodiak, Alaska
POSITION STATEMENT: During hearing of HB 185, testified that
everyone within a road service area should pay the taxes.
LORI DAVEY
South Golden View Rural Road Service Area
Anchorage, Alaska
POSITION STATEMENT: Testified in favor of HB 185.
SANDRA WILSON
Fairbanks, Alaska
POSITION STATEMENT: Testified in opposition to HB 185.
SONIA CHRISTENSON, Staff
to Representative Johansen
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HJR 18.
WILFRED RYAN, President
Alaska Air Carriers Association (AACA);
President, Arctic Transportation Services
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to the concept of
the Next Gen, especially in regard to expanded user fees.
ANDY CEBULA, Executive Vice President
Government Affairs
Aircraft Owners and Pilots Association (AOPA)
(No address provided)
POSITION STATEMENT: Testified that AOPA believes the passage of
HJR 18 is important.
DEE HANSON, Executive Director
Alaska Airmen's Association
(No address provided)
POSITION STATEMENT: Testified that HJR 18 is important to
general aviation and Alaskans.
TOM GEORGE, Alaska Representative
for the Aircraft Owners & Pilots Association
Fairbanks, Alaska
POSITION STATEMENT: During hearing of HJR 18, expressed
concerns with the federal legislation.
ACTION NARRATIVE
CHAIR KYLE JOHANSEN called the House Transportation Standing
Committee meeting to order at 1:34:18 PM. Representatives
Johansen, Doogan, Kohring, and Fairclough were present at the
call to order. Representative Neuman arrived as the meeting was
in progress.
HB 185-MUNICIPAL ROAD SERVICE AREAS
1:34:18 PM
CHAIR JOHANSEN announced that the first order of business would
be HOUSE BILL NO. 185, "An Act relating to certain municipal
service areas that provide road services." [Before the
committee is CSHB 185(CRA)].
1:34:36 PM
CAROL BEECHER, Intern to Representative John Coghill, Alaska
State Legislature, provided the following testimony:
The bill, HB 185, ... deals with alteration of road
service area boundaries to ensure taxpayer fairness.
Under existing law, the borough lacks any effective
means to alter existing road service area boundaries,
even when necessary to ensure taxpayer fairness.
Because only those properties within the service area
boundaries can be required to contribute to the cost
of the service area. The borough's inability to
adjust boundaries creates two taxpayer fairness issues
that the proposed legislation attempts to resolve.
Currently, resolution of both problems depends upon
taxpayers' willingness to vote against their own
financial interest.
Presently, state law permits borough residents living
outside a road service area to use road service area
roads for their sole or legally required access.
These residents derive a direct benefit equal to
residents within the service area, yet they can refuse
to contribute to the cost of construction or
maintenance of these roads by voting down any
annexation attempt. This problem usually arises
because of subsequent development near a service area
which utilizes existing service area roads for access.
While the borough demands, through its subdivision
laws, that the owner, subdividers, consent to
annexation into the service area as part of the
subdivision application, state law still requires an
election if anyone resides in the area, including the
subdivider. These annexation votes typically fail as
individuals are reluctant to join a service area when
they can instead use these maintained roads for free.
The proposed change to state law would fix this
problem by allowing a service area to annex property
that uses its roads for their sole or legally required
access without a separate vote of the property to be
annexed.
The second problem is the direct opposite. Here,
people find themselves, either because of the way the
original boundaries were drawn or due to subsequent
road development, paying into a road service area even
though they do not utilize the service area roads for
access on to their property. Service areas, however,
are often reluctant to vote to remove property from
the service area because that effectively raises taxes
on the remaining property owners. The proposed change
to state law would fix this problem by allowing the
assembly to exercise its judgment to alter, by
ordinance, the service area boundary to exclude that
property or properties that do not use service area
roads.
1:37:26 PM
REPRESENTATIVE KOHRING related his understanding that if there
were to be an annex, the monies collected from taxes would go
directly to the road used.
MS. BEECHER clarified that [a taxpayer] who lives in the borough
would continue to pay his/her property taxes. The portion taken
for the road service area would be taken out for that purpose.
REPRESENTATIVE KOHRING said that he wants to be sure that a
resident who is forcibly annexed has his/her taxes resulting
from the annexation go directly to the roads being used to
access the property.
MS. BEECHER indicated her agreement.
1:38:56 PM
REPRESENTATIVE FAIRCLOUGH, drawing upon her knowledge from
representing a district with road service areas, shared her
understanding that road service areas only function to maintain
the roads in that service area. She mentioned that there may be
an administrative charge, through local government, if someone
else is managing the road service area's money.
1:40:02 PM
CATHY WASSERMAN, Alaska Municipal League (AML), related AML's
support for HB 185. She informed the committee that in the last
year AML's membership has discussed this issue and has included
the following statement in its FY 2007 Policy Statement:
The League supports legislative changes that would
enable local government to regain control and
management of its service areas. By regaining this
authority, local governments can ensure that service
areas are established, operated, and altered in a
manner consistent with the constitutional purpose of
service areas and the overall public good.
As the law now reads, boroughs have no way to address
the needs of service area residents when the solution
might [result in the] alteration of boundaries.
Especially in situations of taxpayer fairness, borough
hands are tied. If residents of a newly developed
area must use service area roads for their only or
legally required access and they live outside the
service area, the boroughs only option for solving
this issue is to hope like heck that these people will
positively jump at the chance to increase their taxes.
To date, that has not been a popular stance.
This bill would allow for annexation of the newly
developed property without a separate vote of the
property to be annexed. Another problem that has
arisen due to boroughs lacking the authority to alter
their own service areas is that if a road is no longer
used by residents of the service area, either due to
new roads, changes of population patter, and so forth,
they will still be required to pay into that road
service area. However, again, the current law would
require a vote by service area residents to willingly
raise taxes on the remaining residents. If that
particular unused road area was removed, HB 185 would
allow borough assemblies to exercise their own
judgment to alter service area boundaries in
situations where property should be excluded due to
lack of use.
Again, our position is that local governments should
be allowed to control and manage service areas within
their borough boundaries, and to that end we support
House Bill 185.
1:42:29 PM
RENE BROKER, Borough Attorney, Fairbanks North Star Borough
(FNSB), related that FNSB is in support of HB 185, which both
the FSNB's road service committee and assembly have unanimously
supported. She explained that the aforementioned support is
achieved because HB 185 allows boroughs to address inequities in
the system and restore some basic fairness principles to the
service area taxation system. After all, the borough's name is
on the tax bill received by the taxpayers, and therefore the
borough has an interest in ensuring that the tax bill is fair
and equitable. This legislation provides boroughs a manner in
which they can ensure that the tax burden resulting from the
cost of a service provided by a road service area is fairly
borne by all property owners using the roads constructed by the
road service area for their sole or legal access to their
property. However, the legislation still preserves the right of
the service area to vote on whether it wants property added to
its service area. Therefore, it's ultimately still the service
area's call, through a vote, to determine whether the increased
revenue is worth the increased obligation or potential problems.
Ms. Broker emphasized that this legislation doesn't force
property on service areas.
1:44:23 PM
TAMMIE WILSON informed the committee that last October she was
involved in a vote for a road service area. Although her
section of the road wouldn't be maintained, she would still have
to pay the same amount of taxes and maintain the private section
of the road because the access to her road would be via the
public road service area. She expressed concern that if there's
another vote, the boundary lines could be drawn such that she
would be excluded so that the vote could pass and then use HB
185 to annex her road. She related that when she approached the
borough to determine what would happen, she received a letter
specifying that since she has a private road, that road couldn't
be annexed because it wouldn't be maintained. However, this
legislation doesn't specify what a public road is versus a
private road. Additionally, she expressed concern with regard
to fairness. She explained that currently residents pay taxes
in a road service area based on property taxes. In order to be
fair, everyone would pay the same amount, no matter the property
value. Ms. Wilson emphasized that her largest concern is that
the legislation removes the right to vote.
1:46:26 PM
REPRESENTATIVE FAIRCLOUGH asked whether Ms. Wilson's family pays
road taxes into a service area.
MS. WILSON replied no, adding that everyone contributes and the
[family] clears the roads. In further response to
Representative Fairclough, Ms. Wilson confirmed that she drives
on other roads besides her driveway and for which she doesn't
pay. She explained that currently no one pays for those roads
because that road service area was voted down last year. She
mentioned that the road service area will likely be voted on
again this next October.
REPRESENTATIVE FAIRCLOUGH stated that one of the issues is that
service areas only pay for roads inside the service area while
commuters travel on a road network to which they don't
contribute. Although Representative Fairclough noted her
agreement with Ms. Wilson's thought process regarding fairness,
she said it's difficult to assess all the traffic and which
roads an individual uses in order to determine a specific
charge. She related that in the district she represents, there
is a dual charge in which constituents are charged, at the
borough level, for all the roads outside their driveways and for
maintenance of the roads inside the service area.
Representative Fairclough highlighted, "The issue is a bit
larger than just individual driveways in that there are other
roads that are maintained throughout the system and the network
that people drive on."
MS. WILSON informed the committee that she was told that she
would be exempt because her driveway came to the private road
where it would then meet the public accessible road. The
aforementioned calls into question whether only that property
connecting to a road service area can be annexed or can an
entire section of property be connected, she pointed out.
1:48:26 PM
STUART DAVIES began by informing the committee that although he
is a member of the 23-mile service area, he is speaking as a
concerned citizen. He related his understanding that the
language change proposed in HB 185 would only impact those
residents of a subdivision who can't access their property any
other way than traveling through a road service area.
CHAIR JOHANSEN relayed that the sponsor of HB 185 is nodding in
agreement.
MR. DAVIES surmised then that HB 185 isn't annexing any property
owners, which he said he understood to be a separate process.
REPRESENTATIVE FAIRCLOUGH noted her disagreement.
MR. DAVIES explained that he lives within the 23-mile road
service area. He estimated that at least 14 parcels use 90
percent of the service area roads as their only access to their
property. Those individuals aren't currently included in the
23-mile road service area. He related his understanding that in
order to become part of the road service area, both the taxpayer
and the service area taxpayers have to vote in the affirmative.
This legislation, he opined, amends the language such that those
outside of the road service area wouldn't have an ability to
vote. Mr. Davies characterized HB 185 as a way of streamlining
the annexation process, but doesn't mean that those individuals
living on parcels within a road service area would automatically
be annexed. In conclusion, Mr. Davies encouraged the committee
to vote in favor of HB 185 and pass it this year.
1:52:14 PM
LUKE HOPKINS, Member, Fairbanks North Star Borough Assembly,
related his support for passage of HB 185. He noted that he is
available for questions.
1:52:45 PM
RANDY FRANK, Member, Fairbanks North Star Borough Assembly;
Chair, Road Service Area Committee, stressed that the idea for
this bill originated from some road service area commissioners
who saw a problem and wanted to fix it. He went on to say that
if HB 185 passes, the assembly will still have to go through a
public process for an annexation or for a property to withdraw
from a service area.
1:54:20 PM
ED MAHONEY, Chair, Service District 1, related that within
Service District 1 there are state-maintained roads and borough
ordinance specifies that those properties using the state-
maintained roads are exempt from paying the taxes to the service
area. Mr. Mahoney opined that everyone within [the road service
area] should pay the taxes otherwise it places an undue burden
on those that do pay the taxes. He characterized paragraph (4)
on page 2, which allows the exclusion of a parcel, as an
inequity.
1:56:00 PM
LORI DAVEY, South Golden View Rural Road Service Area, explained
that the South Golden View area in Anchorage has been the
recipient of much growth over the last seven years. In fact,
the area has accommodated over 50 percent of the growth for the
Hillside area in Anchorage. The growth has resulted in an
additional burden on the roads since many of the new
developments aren't annexing into the rural road service area,
although they predominantly use the rural road service area
roads to access their property. Furthermore, the roads face the
devastation created by the equipment used to build the new
housing. The road service area bears the burden of maintaining
the roads, she pointed out. In the last several years, the
limited road service area hasn't been able to keep up with
maintenance and thus it has changed to a rural road service area
in order to obtain the ability to improve the roads. This
legislation would help correct the inequities that the area has
experienced with the unmaintained roads and new developments
that are paying for the roads or the service area that the
residents are using. Ms. Davey noted that it may not be
financially feasible to bring in all the additional roads
outside of the service area because they would have to be
brought to a standard in which they could be maintained.
Therefore, the road service area may choose to maintain some of
the roads, although it may not choose to annex those roads
because of the associated expense.
1:58:22 PM
SANDRA WILSON began by informing the committee that although she
is an intern for Representative Carl Gatto, she is testifying on
her own behalf today. Ms. Wilson testified in opposition to HB
185. In regard to fairness, she reminded the committee that the
[taxes in a road service area] are based on the resident's
assessed property value. She pointed out that an individual
with the highest assessed value home in a road service area
could have only one vehicle while an individual with the lowest
assessed property value might have multiple vehicles. In such a
scenario, the individual with the highest assessed property
value and one vehicle is paying more whereas the individual with
the lowest assessed property value and multiple vehicles is
paying less. She shared her belief that the aforementioned is
unfair. She questioned what would occur in a situation in which
a subdivision is constructed in front of an established road
service area and the road service area residents have to use the
subdivision's roads to access their property. In such a
situation it doesn't seem fair that the subdivision could force
the road service area into the subdivision's road service area,
she opined. Ms. Wilson then pointed out that HB 185 doesn't
address a situation in which there are two established road
service areas. Therefore, one established road service area may
use the road service area roads of another and not be charged
for that.
2:00:07 PM
Chair JOHANSEN, upon determining there was no one else who
wished to testify, closed public testimony.
REPRESENTATIVE FAIRCLOUGH informed the committee that she has
contacted the Municipality of Anchorage and the presidents of
local road service areas from whom she received general support
for HB 185. She then inquired as to why paragraph (4) of the
legislation is important.
MS. BEECHER explained that paragraph (4) addresses a situation
in which there is a parcel for a subdivision that is attached to
a road service area that isn't using that road service area for
its legally required access to that parcel. That provision
would allow that subdivision to petition the assembly to request
removal from the road service area so that the property owner
doesn't have to pay for service that he/she isn't using. Ms.
Beecher specified that the provision is included so that the
property owner doesn't have to obtain a vote from the other
subdivision because they don't want to relinquish the properties
that are paying into the road service area, even if the property
owners aren't using those roads. She directed the committee's
attention to the map labeled "Cordes Drive Road Service Area" as
an example.
REPRESENTATIVE FAIRCLOUGH commented that she is in support of HB
185. She said, "As local governments try to have development
encroach on those who have been long-time residents of
communities, it is extremely difficult to provide adequate
safety access and payment for that access in a roadway system
that does not allow some judicious consideration by local
authorities." She acknowledged that it's painful for those
property owners who don't want to be annexed, and this
legislation provides due process for that annexation and
inability to vote since the grievance can be taken to the local
governing body. However, she pointed out that in some instances
there is an over-arching need for a community to make
modifications to service areas.
2:04:24 PM
REPRESENTATIVE NEUMAN related that he spoke with folks in the
Mat-Su Valley about this legislation, and they expressed concern
in regard to paragraph (4) on page 2. The concern was that
although one may not use the [road service area roads] to access
his/her property, the roads are used to travel through the
community. However, he opined that both sides of the matter
have been considered in the legislation.
2:06:36 PM
REPRESENTATIVE NEUMAN moved to report CSHB 185(CRA) out of
committee with individual recommendations and the accompanying
fiscal notes. There being no objection, CSHB 185(CRA) was
reported from the House Transportation Standing Committee.
The committee took an at-ease from 2:07 PM to 2:09 PM.
HJR 18-OPPOSE FED AVIATION FUEL TAX INCREASE
2:09:21 PM
CHAIR JOHANSEN announced that the final order of business would
be HOUSE JOINT RESOLUTION NO. 18, Opposing the enactment of the
provisions in the Next Generation Transportation System
Financing Reform Act of 2007 that increase aviation fuel and
aviation gas taxes.
REPRESENTATIVE NEUMAN made a motion to adopt CSHJR 18, Version
25-LS0830\C, Kane, 4/10/07, as the working document. There
being no objection, Version C was before the committee.
2:09:41 PM
SONIA CHRISTENSON, Staff to Representative Johansen, Alaska
State Legislature, provided the following testimony:
HJR 18 is a resolution opposing the enactment of the
provisions in [Federal Aviation Administration] FAA's
Next Generation Air Transportation System Financing
Reform Act of 2007 [Next Gen] that imposes air traffic
control user fees and increases aviation fuel and
aviation gas taxes. ... As you all know, because of
Alaska's unique geography and limited road access,
Alaska depends heavily on aviation for transportation,
medical needs, mail distribution, recreation, and
supplies and goods. With the aviation fuel and
aviation gas tax increase, FAA's legislation, ... also
called "Next Gen," will make flying much more
expensive for Alaskans and increase the price of
shipping goods and supplies. With the FAA
legislation, air traffic control user fees will
decrease the Congressional role in determining FAA
spending. This gives more power to the FAA to make
decisions for all airports, not taking into
consideration Alaska's special needs, and favoring the
needs of larger airline hubs.
2:11:04 PM
REPRESENTATIVE NEUMAN asked whether there has been any contact
with Alaska's Congressional delegation on this matter.
MS. CHRISTENSON replied no, although she said that she has read
that Alaska's Congressional delegation has yet to comment on it.
REPRESENTATIVE NEUMAN inquired as to the economic impact of the
Next Gen legislation on Alaska. He noted that although this
would impact a large number of small airplanes, it would also
impact the Ted Stevens International Airport.
MS. CHRISTENSON indicated that she could research that.
CHAIR JOHANSEN announced that he doesn't intend to move HJR 18
at this time.
2:13:08 PM
WILFRED RYAN, President, Alaska Air Carriers Association (AACA);
President, Arctic Transportation Services, explained that the
Alaska Air Carriers Association represents a diverse group
ranging from single pilot operators to [Federal Aviation
Regulations] FAR-Part 121 regional and national carriers. The
AACA objects to the concept of the Next Gen, especially in
regard to expanded user fees. He highlighted that the industry
already pays skill taxes, passenger ticket taxes, and freight
taxes. Mr. Ryan informed the committee that the Next Gen also
eliminates the current passenger ticket and freight tax and
implements a fee associated with the use of the Federal Airway
System and communications network. Additionally, part of the
federal proposal removes Congressional oversight of the FAA.
Mr. Ryan then related that the AACA objects to any change that
grants the FAA independence from Congress. He suggested that
the resolution should be amended to reflect the position of the
Alaska Air Carriers Association, consistent with the opinions of
its membership. The aforementioned requires more time, and
therefore he recommended that the resolution remain in committee
until the AACA fully develops amendments to the resolution that
appropriately address the issues.
2:15:09 PM
REPRESENTATIVE FAIRCLOUGH asked if there is a deadline for
responding to the federal legislation.
MR. RYAN related his understanding that [AACA] has through the
end of this month, and perhaps into May, to draft positions on
the federal legislation.
REPRESENTATIVE FAIRCLOUGH highlighted that the Alaska State
Legislature should have completed its session by mid May.
Therefore, if the resolution is held in committee, the state
won't be able to comment on the matter. She related her concern
with regard to the Next Gen, but expressed her hope that AACA
could forward its objections within the next two weeks otherwise
the state will forego its opportunity, as a legislature, to
comment to Congress. She suggested that perhaps if AACA has
further objections, those could be addressed as the resolution
moves through the process. She then asked if AACA objects to
anything in the current version of HJR 18.
MR. RYAN related his understanding that Congress is willing to
move forward on the Next Gen on May 10th. He then noted his
agreement that HJR 18 needs to move quickly through the House.
He said that it would take no more than a week to suggest
amendments to HJR 18. Mr. Ryan clarified that the committee
needs to understand that while the user fee impacts the single
pilot and the small 135 operators, it benefits the large 121
regional national carriers. He related that AACA would be
comfortable moving HJR 18 forward with a few amendments.
REPRESENTATIVE FAIRCLOUGH said that she didn't oppose waiting
one week. She then requested clarification regarding the
initial concern with moving HJR 18 forward.
MR. RYAN explained that the original HJR 18 only addressed the
fuel tax user fees. While AACA is opposed to the increase on
fuel tax fees, it must take care that AACA's entire membership
benefits. Therefore, AACA is attempting to find a balance
between the new taxes imposed on single pilot operators and
small on-demand charter organizations along with the benefits
created for some of the larger main line operators. The AACA
would like to add language to address the fees associated with
the air traffic control system to which AACA disagrees.
Furthermore, AACA objects to the elimination of Congressional
oversight of the FAA.
REPRESENTATIVE FAIRCLOUGH requested that further information
regarding how the higher level companies will benefit be emailed
to her.
MR. RYAN explained that passengers pay a 7.5 percent excise tax
on every ticket purchased. The regional and national carriers
operate long-haul routes with high-cost tickets. For example,
7.5 percent on a $1,000 roundtrip ticket amounts to $75 in
excise tax. The proposed fuel tax reduction for those carriers
benefits the large carriers tremendously. Currently, small
operators and 135 on-demand tour operators don't pay any tax
associated with the carriage of passengers, and thus they face a
quadruple increase. Therefore, AACA is attempting to find a
balance between the two groups.
2:21:46 PM
REPRESENTATIVE NEUMAN inquired as to the meaning of 121 and 135
carriers.
MR. RYAN explained that 135 carriers operate with airplanes of
less than 10 passenger seats while 121 carriers operate with
more than 10 passengers seats.
2:22:33 PM
ANDY CEBULA, Executive Vice President, Government Affairs,
Aircraft Owners and Pilots Association (AOPA), began by
informing the committee that the Aircraft Owners and Pilots
Association represent more than 411,000 pilots across the
country and over 4,200 pilots in the State of Alaska are
members. Mr. Cebula highlighted concerns with Next Gen,
including the tax increase, the imposition of user fees, and the
loss of Congressional control and oversight of the FAA. There
are also cuts in federal investment in airports. In regard to
the tax increase, he explained that the initial increase would
be $.50 per gallon and could increase further. He then informed
the committee that on average over the last two years the price
of aviation gasoline has increased by $.68 per gallon.
Therefore, this proposed tax would add an additional $.50. Mr.
Cebula noted that there is already a drop in aviation fuel sales
as a result of the price increase. In fact, the sale of
aviation gasoline reached a five-year low last year. More
importantly, 80 percent of the members of AOPA have stated they
will reduce their flying if this tax is implemented.
MR. CEBULA then turned to the user fees. Although currently the
user fees aren't a well-defined proposal, the FAA wants to
target large and small commercial operators with fees on their
use of the air traffic control system, he explained. In some
areas, primarily around large cities, general aviation would be
affected. At this point, there is no city in Alaska that would
be impacted for general aviation flights, although many
commercial operators would be impacted. Mr. Cebula related, as
has been observed in other countries, once a federal bureaucracy
has the authority to impose user fees, it will only expand that
authority. Therefore, he fully expected that the fees charged
will be increased as well as the scope of what they will be
charging for the fees. The federal legislation gives the FAA
the ability to unilaterally raise fees. The only appeal is to
the U.S. Department of Transportation, which results in very
little oversight, he stated. Mr. Cebula opined that it's not in
the state's best interest for aviation and the community to have
bureaucrats in Washington, D.C., making decisions without the
oversight to ensure the state's needs are met. In regard to the
airport spending side, the desire is to cut the overall
investment in airports by $1 billion, which would eliminate some
of the entitlements for the smallest airports in Alaska. The
aforementioned would also reduce the rate of the entitlements
for other general aviation airports in the state. He opined
that the FAA doesn't need to do the aforementioned. Although
[the U.S.] needs to modernize its air traffic control system,
Congress's own General Accountability Office and the Department
of Transportation Inspector General have all said that the
existing taxing mechanism can be used to finance modernization,
airports, and the operation of the FAA.
2:27:16 PM
MR. CEBULA related that AOPA believes the passage of HJR 18 is
important. It's important because in Alaska the federal
legislation would cause an increase in the cost for
transportation and would lessen the attention on the air
transportation needs for Alaska. Therefore, Mr. Cebula
requested that the legislature join general aviation
organizations like AOPA, Alaska Airmen's, local communities who
have formed national aviation alliances, etcetera to oppose the
FAA legislation. Mr. Cebula then related to the committee that
in a letter to one of Alaska's AOPA members, U.S. Representative
Don Young said that he doesn't endorse the proposed plan
submitted to Congress. In conclusion, Mr. Cebula requested the
committee's action on HJR 18.
2:28:35 PM
MR. CEBULA, in response to Representative Neuman, confirmed that
the federal legislation would cut up to $1 billion for airport
improvements. In further response to Representative Neuman, Mr.
Cebula opined that the federal legislation will place the small
rural airports in competition for a much smaller pot of money.
Therefore, it will be more difficult for small rural airports to
obtain the necessary financing. However, he noted that airports
in Alaska are treated differently than in the Lower 48 and thus
the effect in Alaska won't be as significant due to the work of
Alaska's Congressional delegation to ensure the unique needs of
the state are known.
2:29:48 PM
DEE HANSON, Executive Director, Alaska Airmen's Association,
began by informing the committee that she is a third generation
Alaskan who flies a 1955 Super Cub once owned by her
grandfather. Ms. Hanson provided the following testimony:
This resolution is important to general aviation and
to Alaskans. The Alaska Airmen's Association mission
is to promote general aviation in Alaska. We have
over 2,200 members across the state. The Airmen's
Association is opposed to the FAA refinancing act and
is practically concerned about the impact of the
proposed increase in gas tax in Alaska for general
aviation aircraft. As you know, a very large
percentage of our state is accessible only by
aircraft. In Alaska, the airplane is not a luxury
item; it is a tool. Alaskans use airplanes as if it
were a vehicle or a pickup truck to haul groceries,
building supplies, fuel, and family not to mention
weekly visits to our remote coastal distribution
centers. Alaskans use airplanes to travel to
neighboring communities to watch rival athletic
events. We rely on our airplanes for recreation, and
hunting, as well as business applications, such as
guiding, flight seeing, game surveys, and very
importantly, search and rescue. The price of fuel
today is already a concern. At Lake Hood Seaplane
Base, the largest seaplane base in the world, fuel
costs are currently $4.67 per gallon, which is up from
$2.95 two years ago. For those of our members that
rely on their airplane to commute to and from work,
this would be a financial hardship. We have members
that live remotely, flying their private general
aviation aircraft to Anchorage to Big Lake and
Talkeetna. Those of us living in remote villages who
depend solely on aircraft will have no choice at all.
Our urban members are certainly looking at whether to
fly or not. With this increased fuel cost you can be
assured that people will be flying their aircrafts
less, canceling the perceived advantage of increased
revenue from this bill tax.
The other side of this is that people who are flying
less are less proficient in their piloting skills.
Therefore, this now becomes a very important safety
issue. There will also be an impact on businesses
that support aviation, such as maintenance facilities,
avionics shops, part suppliers, and small aviation
parts manufacturers. Many of these businesses are
Alaskan owned and operated. They are not large state-
side corporations. In conclusion, the Alaska Airmen's
Association does not support the FAA Transportation
Financing Reform Act that increases aviation fuel and
gas taxes. Adding $.70 a gallon to the backs of
general aviation pilots with already historically high
fuel prices is moving in the wrong direction. It is
our understanding that the current tax structure will
adequately support the FAA and we want to stay with
this system, which has been proven to work.
2:33:07 PM
REPRESENTATIVE NEUMAN questioned what impact this would have on
the Civil Air Patrol and air rescue programs.
MS. HANSON replied that any increase in fuel prices will have an
impact, as it will drive up costs.
2:34:00 PM
TOM GEORGE, Alaska Representative for the Aircraft Owners &
Pilots Association, provided the following testimony:
Of course, we already know how important aviation is
to the state. We've got something over 200
communities that have no road access, that rely on
aviation as their main year-round link to the rest of
the world. The user fees is a fascinating ... and ...
complex challenge and it affects different segments of
the aviation communities in different ways. One thing
that the FAA is looking at in this bill is essentially
access to airspace. The plan charges air taxi
operators to land and take off at airports with
control towers that exceed certain capacities. And in
Alaska that would be Fairbanks, Anchorage, Juneau, and
Bethel. So, there'd actually be a charge ... for the
services provided going in and out of those airports.
But we think this is, again, merely the camel's nose
under the tent because we've seen in other countries
where these fees have expanded as more services have
been included, such as weather briefings, touch-and-
gos, flight plans, etcetera. Of course, they're
calculated on the historical traffic, but if the fuel
prices and taxes go higher, the flying is reduced.
Then those user fee rates will increase to cover the
FAA's cost. In aviation we call that a descending
spiral or a graveyard spiral.
The other aspect ... is aviation safety. We already
have an accident rate that's higher than the rest of
the country. And there's been a lot of work, both
with the Alaska aviation community and the FAA
capstone program that's made significant gains over
the past five years with some pioneering work they've
done in Southwest Alaska. However, if pilots start
avoiding services, such as access to weather,
instrument approaches, towered airports because of
costs associated ... with those changes, we could
actually see a decline in aviation safety which, of
course, is the very thing we're trying to turn around
and go the other way with.
We've talked about the control of the FAA. Part of
this plan is to establish an Air Transportation System
Advisory Board, which would have the approval over the
user fee system, and, as has been mentioned already,
removing Congress more and more from the oversight of
this. And, of course, in Alaska, ... the impacts of
various FAA mandates have really hit Alaska hard over
the years and without our Congressional delegation's
ability to get the attention of the FAA for us to get
fair and equitable treatment, it'd be very difficult
to continue to do business. So, any move away from
that, we think, is very bad for Alaska, for all
segments of the industry.
Finally, on the fuel costs I can add my own ...
personal data point. I have a small business that
acquires vertical aerial photography around the state
and last week while working on my taxes, I learned
that I'd spent over $8,000 on [aviation] gas in the
last year and an average price of $4.88 a gallon. And
that ranged from a low price in Fairbanks, which is
where I'm based, at $3.40 a gallon to a high of $7.00
a gallon in Galena. Well, already that inexpensive
$3.40 gas in Fairbanks is up to $4.26 a gallon today.
So, we've already seen that increase and it's
certainly going to be going up proportionally in those
other areas. So, adding a $.50 fuel tax to that cost
is really, again, taking us in the wrong direction.
So, we definitely appreciate your efforts on this and
would be happy to help it move forward any way we can.
2:37:55 PM
CHAIR JOHANSEN reminded the committee that HJR 18 would be held
over.
ADJOURNMENT
There being no further business before the committee, the House
Transportation Standing Committee meeting was adjourned at 2:38
p.m.
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