1994-02-22                     Senate Journal                      Page 2913
SB 334                                                                       
SENATE BILL NO. 334 BY THE SENATE RULES COMMITTEE                              
BY REQUEST OF THE GOVERNOR, entitled:                                          
                                                                               
"An Act relating to the tax on transfers or                                   
consumption of motor fuel, and to the proceeds                                 
from the tax; and providing for an effective date."                            
                                                                               
was read the first time and referred to the Transportation, Labor and          
Commerce, Judiciary and Finance Committees.                                    
                                                                               
Fiscal note from Department of Revenue and zero fiscal notes from              
Department of Environmental Conservation and Department of                     
Transportation and Public Facilities published today.                          
                                                                               
Governor's transmittal letter dated February 18:                               
                                                                               
Dear Mr. President:                                                            
                                                                               
Under the authority of art. III, sec. 18, of the Alaska Constitution,          
I am transmitting a bill raising the tax rate on transfers or                  
consumption of motor fuel.  The bill would bring our tax rate more             
in line with that of other states and raise much-needed revenue for            
highway maintenance.  Additionally, the bill would make certain                
changes regarding the proceeds from the tax.                                   
                                                                               
Alaska is one of only three states with motor fuel tax rates of less           
than 10 cents per gallon (Georgia, seven and one-half cents; Alaska,           
eight cents; and Wyoming, nine cents).  The mean national tax rate             
on motor fuel is 18.66 cents.  The tax rates in other western states           
on motor fuel are:  Washington, 23 cents; Oregon, 24 cents; Idaho,             
21 cents; Colorado, 22 cents; California, 17 cents; and Nevada, 24             
cents.                                                                         
                                                                               
The bill would raise the motor fuel tax rate for most fuels to 25              
cents per gallon.  Aviation fuel and fuel used in and on watercraft            
would remain at their current rates as set by statute.                         
                                                                               
One cent of the 25-cent tax would go into a special "storage tank              
assistance" account in the general fund, added by sec. 4 of the bill.          
The legislature may  appropriate from  this  account into the storage          
                                                                               

1994-02-22                     Senate Journal                      Page 2914
SB 334                                                                       
tank assistance fund established by AS46.03.410.  That fund                    
provides grants, testing, and site analysis to owners and operators of         
underground petroleum storage tanks.                                           
                                                                               
Currently, anyone who uses motor fuel, other than aviation fuel or             
fuel for watercraft, in any engine other than a motor vehicle licensed         
for the public highways is entitled to a refund of six cents of the            
existing eight-cent tax.  The refund would remain at the current               
statutory rate of six cents.                                                   
                                                                               
I urge your prompt consideration and passage of this important bill.           
                                                                               
						Sincerely,                                                               
						/s/                                                                      
						Walter J. Hickel                                                         
						Governor