SCS CSHB 63(RLS) AM S: "An Act relating to the tax on motor fuel; amending the definition of `motor fuel' under the state's motor fuel tax to add, as a part of the tax exemption set out in that definition, exemption from the tax for fuel sold for use in jet propulsion aircraft operating in flights that continue from foreign countries, subject to termination of the exemption for that fuel if a refiner operating a refinery at which the fuel was produced fails to comply with terms of a voluntary agreement entered into by the refiner to use Alaska residents, contractors, and suppliers to provide goods and services when the refinery's capacity is expanded, to add exemption from the tax for certain number 6 `residual fuel oil,' also known as bunker fuel, and to delete the exemption from the tax for fuel that is at least 10 percent alcohol by volume; and repealing ch. 42, SLA 1994, the Act providing for the imposition of a different tax levy on residual fuel oil used in and on certain watercraft until June 30, 1998; and relating to use of ethanol to satisfy oxygenated fuel requirements; and providing for an effective date."
00 01 "An Act relating to the tax on motor fuel; amending the definition of `motor 02 fuel' under the state's motor fuel tax to add, as a part of the tax exemption 03 set out in that definition, exemption from the tax for fuel sold for use in jet 04 propulsion aircraft operating in flights that continue from foreign countries, 05 subject to termination of the exemption for that fuel if a refiner operating a 06 refinery at which the fuel was produced fails to comply with terms of a 07 voluntary agreement entered into by the refiner to use Alaska residents, 08 contractors, and suppliers to provide goods and services when the refinery's 09 capacity is expanded, to add exemption from the tax for certain number 6 10 `residual fuel oil,' also known as bunker fuel, and to delete the exemption from 11 the tax for fuel that is at least 10 percent alcohol by volume; and repealing 12 ch. 42, SLA 1994, the Act providing for the imposition of a different tax levy 13 on residual fuel oil used in and on certain watercraft until June 30, 1998; and 14 relating to use of ethanol to satisfy oxygenated fuel requirements; and providing
01 for an effective date." 02 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 03 * Section 1. LEGISLATIVE INTENT. It is the legislature's intent that the Department 04 of Environmental Conservation work with the Municipality of Anchorage to obtain an 05 exemption from oxygenated fuel use requirements that encourage the use of ethanol. 06 * Sec. 2. AS 43.40.010(a) is amended to read: 07 (a) There is levied a tax of eight cents a gallon on all motor fuel sold or 08 otherwise transferred within the state, except that 09 (1) the tax on aviation gasoline is four and seven-tenths cents a gallon; (2) the tax on motor fuel used in and 10 on watercraft of all descriptions 11 is five cents a gallon; [AND] 12 (3) the tax on all aviation fuel other than gasoline is three and two- 13 tenths cents a gallo n; and 14 (4) the tax rate on motor fuel that is blended with alcohol is the 15 same tax rate a gallon as other motor fuel; however, 16 (A) in an area and during the months in which fuel 17 containing alcohol is required to be sold, transferred, or used in an effort 18 to attain air quality standards for carbon monoxide as required by federal 19 or state law or regulation, the tax rate on motor fuel that is blended with 20 alcohol is six cents a gallon less than the tax on other motor fuel not 21 described in (1) - (3) of this subsection; 22 (B) notwithstanding (A) of this paragraph, through June 30, 23 2004, the tax on motor fuel sold or otherwise transferred within the state 24 is eight cents a gallon less than the tax on other motor fuel not described 25 in (1) - (3) of this subsection if the motor fuel 26 (i) is at least 10 percent alcohol by volume, has been 27 produced from the processing of lignocellulose derived from wood, 28 and was produced in a facility that processes lignocellulose from 29 wood, but this reduction in the rate of tax applies to motor fuel sold 30 or transferred that contains alcohol that was produced only during 31 the first five years of the facility's processing of lignocellulose from
01 wood; or 02 (ii) is at least 10 percent alcohol by volume, has been 03 produced from the processing of waste seafood, and was produced 04 in a facility that processes alcohol from waste seafood, but this 05 reduction in the rate of tax applies to motor fuel sold or transferred 06 that contains alcohol that was produced only during the first five 07 years of the facility's processing of alcohol from waste seafood . 08 * Sec. 3. AS 43.40.010(a), as repealed and reenacted by sec. 3, ch. 127, SLA 1994, is 09 amended to read: 10 (a) There is levied a tax of eight cents a gallon on all motor fuel sold or 11 otherwise transferred within the state, except that 12 (1) the tax on aviation gasoline is four cents a gallon; 13 (2) the tax on motor fuel used in and on watercraft of all descriptions 14 is five cents a gallon; [AND] 15 (3) the tax on all aviation fuel other than gasoline is two and one-half 16 cents a gallo n; and 17 (4) the tax rate on motor fuel that is blended with alcohol is the 18 same tax rate a gallon as other motor fuel; however, 19 (A) in an area and during the months in which fuel 20 containing alcohol is required to be sold, transferred, or used in an effort 21 to attain air quality standards for carbon monoxide as required by federal 22 or state law or regulation, the tax rate on motor fuel that is blended with 23 alcohol is six cents a gallon less than the tax on other motor fuel not 24 described in (1) - (3) of this subsection; 25 (B) notwithstanding (A) of this paragraph, through June 30, 26 2004, the tax on motor fuel sold or otherwise transferred within the state 27 is eight cents a gallon less than the tax on other motor fuel not described 28 in (1) - (3) of this subsection if the motor fuel 29 (i) is at least 10 percent alcohol by volume, has been 30 produced from the processing of lignocellulose derived from wood, 31 and was produced in a facility that processes lignocellulose from
01 wood, but this reduction in the rate of tax applies to motor fuel sold 02 or transferred that contains alcohol that was produced only during 03 the first five years of the facility's processing of lignocellulose from 04 wood; or 05 (ii) is at least 10 percent alcohol by volume, has been 06 produced from the processing of waste seafood, and was produced 07 in a facility that processes alcohol from waste seafood, but this 08 reduction in the rate of tax applies to motor fuel sold or transferred 09 that contains alcohol that was produced only during the first five 10 years of the facility's processing of alcohol from waste seafood . 11 * Sec. 4. AS 43.40.010(b) is amended to read: 12 (b) There is levied a tax of eight cents a gallon on all motor fuel consumed 13 by a user, except that 14 (1) the tax on aviation gasoline consumed is four and seven-tenths cents 15 a gallon; 16 (2) the tax on motor fuel used in and on watercraft of all descriptions 17 is five cents a gallon; [AND] 18 (3) the tax on all aviation fuel other than gasoline is three and two- 19 tenths cents a gallo n; and 20 (4) the tax rate on motor fuel that is blended with alcohol is the 21 same tax rate a gallon as other motor fuel; however, 22 (A) in an area and during the months in which fuel 23 containing alcohol is required to be sold, transferred, or used in an effort 24 to attain air quality standards for carbon monoxide as required by federal 25 or state law or regulation, the tax rate on motor fuel that is blended with 26 alcohol is six cents a gallon less than the tax on other motor fuel not 27 described in (1) - (3) of this subsection; 28 (B) notwithstanding (A) of this paragraph, through June 30, 29 2004, the tax on motor fuel consumed by a user within the state is eight 30 cents a gallon less than the tax on other motor fuel not described in (1) - 31 (3) of this subsection if the motor fuel
01 (i) is at least 10 percent alcohol by volume, has been 02 produced from the processing of lignocellulose derived from wood, 03 and was produced in a facility that processes lignocellulose from 04 wood, but this reduction in the rate of tax applies to motor fuel 05 consumed by a user that contains alcohol that was produced only 06 during the first five years of the facility's processing of 07 lignocellulose from wood; or 08 (ii) is at least 10 percent alcohol by volume, has been 09 produced from the processing of waste seafood, and was produced 10 in a facility that processes alcohol from waste seafood, but this 11 reduction in the rate of tax applies to motor fuel consumed by a 12 user that contains alcohol that was produced only during the first 13 five years of the facility's processing of alcohol from waste seafood . 14 * Sec. 5. AS 43.40.010(b), as repealed and reenacted by sec. 5, ch. 127, SLA 1994, is 15 amended to read: 16 (b) There is levied a tax of eight cents a gallon on all motor fuel consumed 17 by a user, except that 18 (1) the tax on aviation gasoline consumed is four cents a gallon; 19 (2) the tax on motor fuel used in and on watercraft of all descriptions 20 is five cents a gallon; [AND] 21 (3) the tax on all aviation fuel other than gasoline is two and one-half 22 cents a gallo n; and 23 (4) the tax rate on motor fuel that is blended with alcohol is the 24 same tax rate a gallon as other motor fuel; however, 25 (A) in an area and during the months in which fuel 26 containing alcohol is required to be sold, transferred, or used in an effort 27 to attain air quality standards for carbon monoxide as required by federal 28 or state law or regulation, the tax rate on motor fuel that is blended with 29 alcohol is six cents a gallon less than the tax on other motor fuel not 30 described in (1) - (3) of this subsection; 31 (B) notwithstanding (A) of this paragraph, through June 30,
01 2004, the tax on motor fuel consumed by a user within the state is eight 02 cents a gallon less than the tax on other motor fuel not described in (1) - 03 (3) of this subsection if the motor fuel 04 (i) is at least 10 percent alcohol by volume, has been 05 produced from the processing of lignocellulose derived from wood, 06 and was produced in a facility that processes lignocellulose from 07 wood, but this reduction in the rate of tax applies to motor fuel 08 consumed by a user that contains alcohol that was produced only 09 during the first five years of the facility's processing of 10 lignocellulose from wood; or 11 (ii) is at least 10 percent alcohol by volume, has been 12 produced from the processing of waste seafood, and was produced 13 in a facility that processes alcohol from waste seafood, but this 14 reduction in the rate of tax applies to motor fuel consumed by a 15 user that contains alcohol that was produced only during the first 16 five years of the facility's processing of alcohol from waste seafood . 17 * Sec. 6. AS 43.40.015(d) is amended to read: 18 (d) A certificate of use is not required 19 (1) for fuel exempted under AS 43.40.100(2)(C) [, (F),] or (J) [(K)]; 20 and 21 (2) for fuel exempted under AS 43.40.100(2)(I) [AS 43.40.100(2)(J)] 22 other than fuel sold or transferred under this exemption to a person who is engaged in 23 construction or mining activity. 24 * Sec. 7. AS 43.40 is amended by adding a new section to read: 25 Sec. 43.40.092. Disallowance of exemption from motor fuel tax for certain 26 fuel sold for use in jet propulsion aircraft operating in flights that continue from 27 foreign countries. (a) The provisions of this section apply to disallow the exemption 28 for motor fuel sold for use by a dealer or used by a user in jet propulsion aircraft 29 operating in flights that continue from foreign countries if, for motor fuel produced by 30 a refiner, 31 (1) the refiner determines, on or after the effective date of this section,
01 that the refiner will expand capacity or expand the refinery to produce more residual 02 fuel oil used in watercraft; 03 (2) on or after the effective date of this section, the refiner has 04 voluntarily committed by agreement entered into with the commissioner that, if the 05 refiner expands its oil refining capacity in order to produce additional supplies of fuel 06 for use in jet propulsion aircraft that qualify for the tax exemption, when the refiner 07 expands capacity, the refiner will 08 (A) use the refiner's best efforts to advertise for, recruit, and 09 employ in the construction activities associated with expanding refinery 10 capacity resident workers who have experience in the specific fields in which 11 they are hired to work; 12 (B) contract with licensed Alaska firms to prepare materials that 13 are used in construction activities and to provide services in conjunction with 14 activities associated with expanded refinery capacity and, in contracting with 15 those firms, to encourage the refiner's contractors to employ and, when 16 necessary, train state residents; and 17 (C) enter into contracts with Alaska-licensed vendors, 18 contractors, and suppliers for the provision of supplies and services used in 19 conjunction with activities associated with expanding refinery capacity; and 20 (3) the commissioner determines that a dealer or user claiming the 21 exemption for motor fuel acquired from a refiner who has entered into an agreement 22 described in (2) of this subsection acquired the motor fuel for which the exemption is 23 claimed from a refiner who has not complied with the requirements of the agreement 24 in completing expansion of its oil refining capacity under the agreement described in 25 (1) of this subsection. 26 (b) For purposes of this section, 27 (1) the term "resident worker" means an individual who 28 (A) is physically present in the state with the intent to remain 29 in the state indefinitely and has a home in the state; 30 (B) demonstrates that intent by maintaining a residence in the 31 state;
01 (C) possesses a resident fishing, trapping, or hunting license, or 02 receives a permanent fund dividend; and 03 (D) may be required to state under oath that the individual is 04 not claiming residency outside of the state or obtaining benefits under a claim 05 of residency outside of the state; 06 (2) the phrases "Alaska-licensed contractors" and "Alaska firms" mean 07 a contractor or firm that 08 (A) has held an Alaska business license for one year before 09 performing any work in connection with the commitment described in (a) of 10 this section; 11 (B) has maintained for one year a place of business within the 12 state that deals in the supplies, services, or construction of the nature required 13 for the commitment described in (a) of this section; and 14 (C) is 15 (i) a sole proprietorship and the proprietor is an Alaska 16 resident; 17 (ii) a partnership and more than 50 percent of the 18 partners are Alaska residents; 19 (iii) a corporation that has been incorporated in the state 20 or is authorized to do business in the state; or 21 (iv) a joint venture composed entirely of ventures that 22 qualify under this subparagraph. 23 * Sec. 8. AS 43.40.100(2) is amended to read: 24 (2) "motor fuel" means fuel used in an engine for the propulsion of a 25 motor vehicle or aircraft, and fuel used in and on watercraft for any purpose, or in a 26 stationary engine, machin e, or mechanical contrivance that [WHICH] is run by an 27 internal combustion motor; "motor fuel" does not include 28 (A) fuel consigned to foreign countries; 29 (B) fuel sold for use in jet propulsion aircraft operating in 30 flights 31 (i) to foreign countrie s; or
01 (ii) that continue from foreign countries, unless 02 exemption of the motor fuel from taxation is disallowed because of 03 the refiner's failure to comply with the provisions of a voluntary 04 agreement under AS 43.40.092 in conjunction with expansion of 05 refinery capacity ; 06 (C) fuel used in stationary power plants operating as public 07 utility plants and generating electrical energy for sale to the general public; 08 (D) fuel used by nonprofit power associations or corporations 09 for generating electric energy for resale; 10 (E) fuel used by charitable institutions; 11 (F) [FUEL WHICH IS AT LEAST 10 PERCENT ALCOHOL 12 BY VOLUME; 13 (G)] fuel sold or transferred between qualified dealers; 14 (G) [(H)] fuel sold to federal, state, and local government 15 agencies for official use; 16 (H) [(I)] fuel used in stationary power plants that generate 17 electrical energy for private residential consumption; 18 (I) [(J)] fuel used to heat private or commercial buildings or 19 facilities; 20 (J) [(K)] fuel used for other nontaxable purposes as prescribed 21 by regulations adopted by the department; 22 (K) [OR (L)] fuel used in stationary power plants of 100 23 kilowatts [KW] or less that generate electrical power for commercial 24 enterprises not for resale; or 25 (L) residual fuel oil used in and on watercraft if the residual 26 fuel oil is sold or transferred in the state or consumed by a user; for 27 purposes of this subparagraph, "residual fuel oil" means the heavy refined 28 hydrocarbon known as number 6 fuel oil that is the residue from crude oil 29 after refined petroleum products have been extracted by the refining 30 process and that may be consumed or used only when sufficient heat is 31 provided to the oil to reduce its viscosity rated by kinetic unit and to give
01 it fluid properties sufficient for pumping and combustion; 02 * Sec. 9. Chapter 42, SLA 1994, is repealed. 03 * Sec. 10. CONDITIONAL EFFECT OF SECTIONS 3 AND 5. Sections 3 and 5 of this 04 Act take effect only if, under sec. 6, ch. 127, SLA 1994, secs. 3 and 5, ch. 127, SLA 1994, 05 take effect because the Department of Transportation and Public Facilities, before January 1, 06 2000, increases the fee it charges under AS 02.15.090(a) for the privilege of landing aircraft 07 at rural airports, as that term is defined in 17 AAC 40.795(2), above the amount of the fee in 08 effect on January 1, 1994. 09 * Sec. 11. Sections 1, 2, 4, and 6 - 10 of this Act take effect July 1, 1997. 10 * Sec. 12. (a) If secs. 3 and 5 of this Act take effect under sec. 10 of this Act and sec. 6, 11 ch. 127, SLA 1994, they take effect on the later of 12 (1) the 30th day after the effective date of the landing fee increase described 13 in sec. 10 of this Act; or 14 (2) the day after the day that sec. 10 of this Act becomes law. 15 (b) The commissioner of transportation and public facilities shall promptly notify the 16 commissioner of revenue, the lieutenant governor, and the revisor of statutes of a landing fee 17 increase described in sec. 10 of this Act.