Legislature(1993 - 1994)
02/04/1993 03:45 PM TRA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE TRANSPORTATION COMMITTEE February 4, 1993 3:45 p.m. MEMBERS PRESENT Senator Bert Sharp, Chairman MEMBERS ABSENT Senator Randy Phillips, Vice Chairman Senator Tim Kelly Senator Jay Kerttula Senator Georgianna Lincoln COMMITTEE CALENDAR SENATE JOINT RESOLUTION NO. 18 Proposing amendments to the Constitution of the State of Alaska creating a transportation fund. PREVIOUS SENATE COMMITTEE ACTION SJR 18 - No previous action to record. WITNESS REGISTER John Watts Board of Directors Alaska Air Carriers Association P.O. Box 787 Bethel, Alaska 99551 POSITION STATEMENT: Testified on SJR 18. Kim Daniels, Executive Director Alaska Air Carriers Association 1117 East 35th, Number 102 Anchorage, Alaska 99508 POSITION STATEMENT: Testified against SJR 18. Frank Dillon, Executive Director Alaska Trucking Association 3443 Minnesota Drive Anchorage, Alaska 99503 POSITION STATEMENT: Testified in support of SJR 18. ACTION NARRATIVE TAPE 93-3, SIDE A Number 001 CHAIRMAN SHARP called the Senate Transportation Committee meeting to order at 3:45 p.m. The only order of business was SJR 18 (CONSTITUTIONAL AMENDMENT FOR TRANSPORTATION FUND), sponsored by the Senate Rules Committee by request of the governor. FRANK TURPIN, Commissioner, Department of Transportation and Public Facilities gave a brief overview of the resolution. He indicated that the resolution proposes a constitutional amendment to allow revenues derived from taxes on motor fuel, marine fuel and aviation fuel; revenue derived from license fees for the registration and operation of motor vehicles, aircraft and watercraft; and, revenue derived from the use of state transportation facilities, to be placed into a transportation fund dedicated for the maintenance and operation of transportation facilities. The marine highway ticket revenues will be used in the operation of the marine system, marine fuel taxes can be used for maintenance or construction of harbor facilities, he explained. Commissioner Turpin indicated that there is very strong support from many constituents. Polls have shown that up to seventy-five percent of the people favor the resolution. Numerous organizations have passed resolutions supporting the proposal such as the State Chamber of Commerce, the Alaska Trucking Association, organized labor, the Municipal League, Southeast Conference, Southwest Conference, the Harbor Masters, etc. There has also been editorial support from all of the state's major newspapers. Commissioner Turpin explained that there is some opposition from the Alaska Air Carriers, and indicated he isn't sure what their objection may be. Commissioner Turpin said the change will pay for the administrative costs of collecting vehicle registration and operator's licensing fees. It also contains an escape clause where the funds could be used for any purpose by a three-fourths vote of each house. He said he would be happy to answer any questions. Number 024 JOHN WATTS, Board of Directors, Alaska Air Carriers Association, said one of the biggest problems is maintaining the accountability of the funding. If all questions by the Alaska Air Carriers can be answered relating to accountability, the commissioner may gain the support of the Alaska Air Carriers as a group. Mr. Watts said he would like to hear other questions and responses from other people testifying on the bill. KIM DANIELS, Executive Director, Alaska Air Carriers Association, testified in opposition to SJR 18. She explained her organization was founded in 1966, and currently represents 128 commercial airline companies operating in Alaska. In the past, the Air Carriers Association has taken a strong position in opposition to a dedicated fund and it is their opinion that the current situation is no different today than before. She said that her organization has asked that the administration to more clearly define and justify the dedicated fund concept and they received no response. An accounting of the existing appropriations and a justification for approximately $7 to $8 million appropriated for rural airport maintenance and operations was asked for and a response was not received. Ms. Daniels said her organization has asked for and was promised a roll back in landing fees if the aviation fuel tax audit money was found. The audit money was found, but the administration has not followed through on its promise to roll back landing fees. She said the Alaska Air Carriers don't necessarily oppose the concept of a dedicated fund, they cannot presently support SJR 18 or any other similar proposal without more clearly detailed definition. COMMISSIONER TURPIN referred to the accounting question and said the maintenance of the airports is often done by the same people, and in many cases by the same person who also does highway maintenance. He discussed the situation in Talkeetna where one man who maintains the airport and thirty-nine miles of highways. The department isn't able to tell him how much time should be charged to airports and highways. It is difficult to give an exact figure of what the maintenance of many of the airports would be. Commissioner Turpin referred to the audit of tax funds collected and said he believes that the Air Carriers were concerned that a lot of taxes were not being collected from various aviation units. DOT/PF had the Department of Revenue performed an audit which indicated that the collection was very accurate. He noted that in one case about $75 thousand was returned due to an error in the collection. Commissioner Turpin said the department has informed the Air Carriers that they prefer an increase in aviation gasoline as opposed to landing fees at the certified airports. There hasn't been an increase in aviation taxes and the department is not proposing that. Number 085 FRANK DILLON, Executive Director, Alaska Trucking Association, said the association has been in existence for thirty-three years and is comprised of approximately 300 members throughout Alaska. He explained that they support the dedicated transportation fund. The Alaska Trucking Association discussed dedicated funding and are convinced that it is in the best interest of Alaska. It is the association's belief that a dedicated fund, which fairly taxes and collects fees from different transportation modes to be used in maintaining facilities related to those modes, will in the long term provide the very best way to meet the financial needs of maintenance and repair work on Alaska's highways, airports, and port facilities. He indicated that the association believes it is important to retain legislative appropriation in the process. Mr. Dillon asked several questions as to how will spending from the fund will be prioritized. He asked who will be eligible - which agencies and which programs. There is also concern as to how the criteria for establishing eligibility will be determined. Mr. Dillon noted concern that because of Alaska's small tax base and there not being lot of people, it may not be possible or practical to fully fund the maintenance needs of the transportation infrastructure through user fees and taxes. He suggested that the door be left open so that at discretion of the legislature, supplements to the transportation fund can be made. COMMISSIONER TURPIN explained that most of the details of any tax program that is associated with the fund would be included in the bill that would provide the taxes. Number 121 CHAIRMAN SHARP referred to page 2, line 7 and asked why it has maintenance and operation and not construction. He also asked why line 10 says, "improvement and construction" and not "maintenance and operation of harbor facilities." Commissioner Turpin explained that virtually all of Alaska's construction money for highways now comes from the federal government. The amount of that funding is so vast compared to the tax receipts. The department felt that it would be a much more desirable situation to have the maintenance money provided by the gasoline taxes as the federal gasoline taxes are providing construction funds. Commissioner Turpin said the maintenance of the boat harbors can be provided by the users of the harbors in berth fees. He said the tax monies in marine fuels could be very effective when used in the state for retiring bonds and constructing or renovating boat harbors rather than just for maintenance. Chairman Sharp asked if there are state built harbor facilities operated by the municipalities that collect the berthing fees and do the maintenance. Commissioner Turpin explained that in many cases the municipalities collect the berthing fees which are used to operate the city. Very little is put into maintenance. He noted that is the case of Whittier. Chairman Sharp referred to highway and airport construction federal matching money and asked if the state's matching money would come out of the general fund and not the dedicated fund. Commissioner Turpin indicated the chairman is correct. Chairman Sharp referred to page 2, lines 17, and 18 and asked the commissioner to give an example of a public corporation whose revenue must by federal law be retained and managed by the corporation. Commissioner Turpin said the Alaska Railroad. Number 164 Chairman Sharp said the bill would be scheduled for action by the committee the following week. He continued to discuss the scheduling for the following week. Number 183 CHAIRMAN SHARP adjourned the Senate Transportation meeting at 4:10 p.m.