Legislature(1993 - 1994)

02/01/1994 03:35 PM TRA

Audio Topic
* first hearing in first committee of referral
+ 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                                                                    
 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                  
 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             
 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           
 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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