Legislature(1993 - 1994)
02/01/1994 03:35 PM Senate TRA
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SENATE TRANSPORTATION COMMITTEE
February 1, 1994
3:35 p.m.
MEMBERS PRESENT
Senator Bert Sharp, Chair
Senator Randy Phillips, Vice Chair
Senator Tim Kelly
Senator Jay Kerttula
MEMBERS ABSENT
Senator Georgianna Lincoln
COMMITTEE CALENDAR
SPONSOR SUBSTITUTE FOR SENATE BILL NO. 260
"An Act naming the Petersburg James A. Johnson Airport."
SENATE BILL NO. 261
"An Act relating to municipal sales and use taxes involving air
carriers; and providing for an effective date."
PREVIOUS SENATE COMMITTEE ACTION
SB 260 - No previous senate committee action.
SB 261 - No previous senate committee action.
WITNESS REGISTER
Robert Hallford, Vice President
Northern Air Cargo
3900 International Airport Rd., Anchorage AK 99502¶243-3545
POSITION STATEMENT: in favor of SB 261
Kent Swisher
Alaska Municipal League
217 2nd St., Juneau, AK 99801¶586-1325
POSITION STATEMENT: testified on SB 261
Reed Stoops
Alaska Air Carriers Association
240 Main Street, #600, Juneau, AK 99801¶463-3223
POSITION STATEMENT: in favor of SB 261
ACTION NARRATIVE
TAPE 94-2, SIDE A
Number 001
CHAIRMAN SHARP calls the Senate Transportation Committee meeting to
order at 3:35 p.m.
Number 005
CHAIRMAN SHARP announces that SB 260 NAMING PETERSBURG AIRPORT will
not be heard today at the request of the sponsor.
Number 007
CHAIRMAN SHARP brings up SB 261 NO MUNICIPAL SALES TAXES ON AIR
CARRIERS as the next order of business before the committee. The
chairman notes that there is a sponsor statement and a committee
substitute for SB 261 and calls the first witness.
Number 037
ROBERT HALLFORD, Vice President, Northern Air Cargo, testifying
from Anchorage, states Northern Air Cargo supports SB 261 because
it will clarify federal regulations regarding municipal taxing of
interstate air carriers.
Number 084
CHAIRMAN SHARP notes for the record that Senators' Kerttula, Sharp,
Randy Phillips, and Kelly are in attendance.
Number 095
SENATOR RANDY PHILLIPS asks Mr. Hallford how the weather in
Anchorage is. Mr. Hallford replies it has been hot and dusty.
SENATOR KERTTULA asks if the Wasilla airport is open. Mr. Hallford
responds that it is open.
Number 106
CHAIRMAN SHARP calls the next witness on SB 261.
Number 109
KENT SWISHER, Alaska Municipal League, says the municipal league
has some reservations about SB 261, because the league is unsure of
the impact of the legislation upon municipalities. The league
generally opposes any state mandated exemptions on local taxing
authority. The municipal league believes any necessary exemptions
could be addressed locally, as they have been among various modes
of transportation. Mr. Swisher states the Alaska Municipal League
concerned with the retroactive date of January 1, 1993. A
retroactive date would disrupt 1994 budgets of communities involved
and would require a refund for 1993 collections. The municipal
league does not know to what extent the legislation will effect
communities, and the public will be injured for what was an
appropriate and lawful action at the time the taxes were collected.
If this statute is enacted, we ask that the effective date not be
before January 1, 1995. The Alaska Municipal League believes this
subject to be more complex than it appears and would like to know
all the ramifications of SB 261.
Number 155
SENATOR RANDY PHILLIPS notes for Mr. Swisher that SB 261 will go to
the Senate Community and Regional Affairs and Finance Committees,
so there will be ample time to review any concerns with SB 261.
Number 163
SENATOR KERTTULA asks how much tax has been or is being collected
that would be affected by SB 261.
Number 169
CHAIRMAN SHARP responds that none of the legal opinions or results
of court cases in the possession of the committee show that not
much, if any, tax has been collected. The committee has requested
the Department of Community & Regional Affairs (DC&RA) to report
what collections have been made that would be affected by SB 261.
The information should be available to the legislature by the time
the Senate Community & Regional Affairs Committee has their first
hearing on the bill.
Number 184
MR. HALLFORD comments he supports the Alaska Municipal League's
stand on opposing any state mandated exemptions on local taxing
authority, however, the issue SB 261 addresses is not a viable
revenue source for the communities. He supports SB 261 in order to
clear up the issue so communities and air carriers don't spend
fortunes and years of time and effort battling the issue in court.
SB 261 should not change any community's revenue situation.
Number 209
CHAIRMAN SHARP notes that committee files on SB 261 include legal
opinions by Bogle & Gates, and a copy of the Federal Aviation Act
of 1958.
Number 212
SENATOR KELLY asks Mr. Hallford if Northern Air Cargo is currently
paying any taxes affected by SB 261.
Number 216
MR. HALLFORD replies Northern Air Cargo is not paying taxes that
would be affected by SB 261, nor does he know of any other carrier
paying taxes that would be affected by SB 261. However, Northern
Air Cargo is challenging a case in the city of St. Marys.
Number 218
SENATOR KELLY says since it does not appear any carriers have paid
taxes affected by SB 261, it is not an issue.
Number 219
SENATOR KERTTULA states Senator Kelly is probably correct in his
analysis, but he would feel more comfortable if there was no
potential for municipalities to have to refund any payments made to
them by air carriers. Senator Kerttula would rather not see a
retroactive effective date on SB 261.
Number 235
CHAIRMAN SHARP explains that is the reason the committee asked for
an analysis from DC&RA.
Number 238
SENATOR KELLY asks the chairman why the air carriers referred to in
the committee substitute for SB 261 are defined as federally
certificated.
Number 240
CHAIRMAN SHARP replies that the term "federally certificated air
carriers" tracks the mandated federal exemption. Most air carriers
in the state are federally certified.
Number 250
SENATOR KERTTULA asks if there is any legal advice contrary to the
opinion of Bogle and Gates.
Number 255
CHAIRMAN SHARP responds he has been unable to find an opinion
contrary to that of Bogle and Gates. The chairman calls the next
witness.
Number 256
REED STOOPS, Alaska Air Carriers Association, states the
association supports SB 261. The association is not aware of any
municipalities collecting an air cargo tax at present and presumes
SB 261 will not have an effect on current municipal revenues. The
Alaska Air Carriers Association's position is premised on the fact
that they are attempting to avoid the expense of litigation that
comes up from time to time on an issue that is unclear to the
parties involved.
Number 273
SENATOR KELLY moves the adoption of CSSB 261(TRA).
Number 275
CHAIRMAN SHARP, hearing no objection, states CSSB 261(TRA) has been
adopted.
Number 276
SENATOR KELLY makes a motion to discharge CSSB 261(TRA) from
committee with individual recommendations.
Number 277
CHAIRMAN SHARP, hearing no objection, orders CSSB 261(TRA) be
released from the Senate Transportation Committee with individual
recommendations. The chairman announces that the next meeting of
the Senate Transportation Committee will be Thursday, February 3,
1994 at 4:30 p.m. and will be a joint meeting with the House
Transportation Committee.
Number 285
CHAIRMAN SHARP adjourns the meeting at 3:49 p.m.
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