Legislature(1993 - 1994)

02/04/1993 03:45 PM Senate TRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= 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                 
  4:10 p.m.                                                                    

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