Legislature(1995 - 1996)
05/13/1995 05:30 PM Senate FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
MAY 13, 1995
5:30 P.M.
TAPES
SFC-95, #74, Side 1, (250-575)
SFC-95, #74, Side 2, (575-700)
CALL TO ORDER
Senator Rick Halford, Co-chairman, convened the meeting at
approximately at 5:30 p.m.
PRESENT
In addition to Co-chairman Halford, Senators Phillips,
Sharp, Rieger, and Zharoff were present. Co-chairman Frank
and Senator Donley arrived shortly after the meeting began.
Also Attending: Representative Moses; Paul Dick, Juneau
Operations, Dept of Revenue; Mike Greany, Director,
Legislative Finance Division; and Sam Kito III, Legislative
Liaison, Dept of Transportation.
SUMMARY INFORMATION
HB 122 MARINE MOTOR FUEL TAX
Representative Moses testified in support of HB 122.
Amendment #1 offered by Senator Sharp was ADOPTED.
SCSCSHB 122 (FIN) was REPORTED OUT of committee with
individual recommendations and a fiscal note from
the Dept of Revenue in the amount of $50.6.
HOUSE BILL NO. 122
An Act authorizing payment of a portion of the motor
fuel tax on boats and watercraft as refunds to
municipalities; and providing for an effective date.
Representative Moses was asked to join members at the
committee table and present testimony on HB 122. He said
that the bill would enable development of a smaller boat
fleet. A local resident fishery is absent from St. Paul
where an estimated 90.9% of the fishery is going out of
state because it lacks needed facilities. The bill is, on a
long term basis, a tool for creating economic development.
Senator Zharoff expressed concern regarding application of a
tax to municipalities. He mentioned that there are a number
of unorganized communities that also provide fuel service to
vessels. Within his district, eight communities are
effected. He voiced concern that the bill is too
restrictive. He expressed a desire to ensure that anybody
who is selling fuel has an opportunity to recover. He
referenced harbor needs and responsibility for vessels, that
come and go on a regular basis, to be serviced.
Representative Moses explained that the bill is patterned
after the fish tax sharing. There will be discrepancies
which the Dept. of Community & Regional Affairs could handle
after July, 1996.
Senator Sharp expressed concern regarding municipalities
that may have multiple harbor facilities (state, city, or
private-owned), such as Juneau, as well as those under lease
or under an operating agreement. He asked how the
Department of Transportation would distribute funds.
Representative Moses responded that there have always been
such problems in this state. The Department of
Transportation is concerned regarding whether the funds
would go to harbor facilities. He acknowledged Senator
Sharp's amendment which addresses the concern. He noted
that in his district, there is a great need for a facility.
He stressed need for communities to be allowed to accumulate
credits from the sale of fuel for a future boat harbor. The
greatest interest is getting the statute in place to allow
for building of new facilities or maintaining present
facilities. A 1991 study by the Dept of Transportation
revealed that deferred maintenance on boat harbors amounts
to over $250 million. The department recommended a $.10 tax
at that time.
Senator Sharp offered an amendment to correct problems with
multiple harbor facilities. It incorporates the idea of
reimbursing municipalities that have an approved plan for
construction of a boat harbor. He then asked who would
receive funds in a municipality where there is a mixture of
state, city, and private harbor facilities, such as in
Juneau. Paul Dick of the Department of Revenue responded
that the bill is modeled after the fisheries tax. There
would be a sharing of funds based on locality. For example,
the fuel tax collected in Juneau would be shared with all
facilities.
Co-chair Halford made reference to a Petro Marine Services
memo regarding sale of fuel by municipal facilities. Is a
private company taxed to support a competitor selling fuel
from a municipal dock? Representative Moses said they are
taxed $.05/gallon whether they collect it or not. If a
private source sells fuel to a processor or crab boat, and
the owner goes bankrupt without paying the vendor, there is
still a responsibility for paying taxes on that fuel to the
state. He suggested that the vendor should not have to pay
the state for uncollected funds.
Sam Kito III, Legislative Liaison, Dept of Transportation
said that the department supports the intent of the
legislation. There is also support for Senator Sharp's
amendment. It allows communities to accept ownership and
take part in the revenue sharing, if they accept ownership
of their state-owned facilities. In turn, it would provide
for capitalization of new facilities for communities that
sell marine fuel but do not have existing facilities.
Senator Sharp asked if the state is interested in turning
ownership of the small boat harbors over to the
municipalities? Mr. Kito responded that the state has been
actively involved in suggesting that communities accept
ownership of their harbor facilities. That would enable the
state to remove itself from the business of capitalizing,
repairing, and maintaining ports and harbors. The state has
been providing incentives, as evidenced in Craig's South
Cove Harbor transfer of $500,000.0 for float upgrades for
the harbor. The intent is to encourage the city of Craig to
accept ownership of the facility. There is no attempt by
the state to collect revenues to pay for reconstruction.
Senator Sharp asked if the $.03/gallon rebate would be an
incentive to municipalities? Mr. Kito stated that it would
be an incentive which would encourage them to accept
ownership of the harbor facilities.
Senator Zharoff stated that the money could be used to pay
refunds to municipal water and harbor facilities. He
questioned whether language in the amendment was too
restrictive and asked how many communities would be excluded
as a result of the amendment. Rep Moses stated that it
depends on the sharing mechanism. He said there are some
communities that might not sell any fuel through their
facilities. Facilities that might sell more stand to gain
more revenue. Senator Zharoff expressed concern regarding
patterning the bill after the raw fish tax. He suggested
that harbors have nothing to do with the tax. The tax is
based on where the fuel is sold. The 3% is the amount that
is supposed to go back to the area in which it is sold,
basically for harbor improvements. In situations where
there is a city and a borough, and the borough receives one-
half, they may opt to put some of the money back into the
community or into another community wanting to create a fuel
facility.
Rep. Moses suggested that constituents will make sure that
local government is placing the funds where they belong.
Regarding the borough receiving one-half and the city
receiving one-half, he voiced his expectation that the
borough would see to it that it goes to the proper use. He
acknowledged that there will be inequities, but he stressed
that the good would overshadow inequities that might
surface.
End Tape #74, Side 1
Begin Tape #74, Side 2
Rep. Moses voiced his understanding of the restriction. He
noted that in his area, boats dump garbage which is
subsequently used as landfill. He said he could see the tax
going towards that effort as well. Water and sewer lines
should also be covered.
Senator Zharoff expressed concern regarding "municipally
owned and operated". He suggested that a list of qualifying
communities be compiled. In light of the state's intention
to turn over facilities to municipalities, a deterring
factor may be that many communities, such as Port Lyons, do
not have the ways and means to operate and manage the
facility. He noted that it is not the intent to put the
state in a liable situation. This bill could do harm to
potential for return of revenue to communities or
municipalities that have water and harbor facilities.
Mr. Kito said that the amendment is not restrictive to
communities that have water and harbor facilities. They can
submit a plan to DOT with certification to the Dept of
Revenue that a proposed harbor facility will benefit the
community.
Senator Sharp MOVED for adoption of Amendment No. 1. He
said he was not in support of a municipality leasing or
operating a state-owned facility. Senator Zharoff OBJECTED.
He noted that it restricts activities since some
municipalities will be excluded. He asked that DOT research
which municipalities would find themselves unable to
participate as a result of the amendment. Senator Zharoff
then WITHDREW his OBJECTION, saying that if DOT information
indicates a large number of communities are unable to
participate, there remains ample opportunity between now and
July, 1996, to readjust the legislation. No further
objection having been heard, Amendment No. 1 was ADOPTED.
Senator Rieger MOVED to adopt SCSCSHB 122 (FIN) with
individual recommendations. No objection being heard,
SCSCSHB 122 (FIN), was REPORTED OUT of committee with a
$50.6 fiscal note from the Dept of Revenue. Senator Sharp
and Senator Rieger signed the committee report with a "do
pass" recommendation. Co-chairmen Frank and Halford, and
Senators Donley and Zharoff signed "no recommendation."
Senator Phillips signed, "Do not pass."
ADJOURNMENT
The meeting was adjourned at approximately 6:10 p.m.
| Document Name | Date/Time | Subjects |
|---|