1999-01-22                     House Journal                      Page 0067
HB 59                                                                        
HOUSE BILL NO. 59 by the House Rules Committee by request of the               
Governor, entitled:                                                            
                                                                               
"An Act relating to the motor fuel tax; and providing for an effective        
date."                                                                         
                                                                               
was read the first time and referred to the Transportation and Finance         
Committees.                                                                    
                                                                               
The following fiscal notes apply:                                              
                                                                               
Fiscal note, Dept. of Revenue, 1/22/99                                         
Fiscal note, Dept. of Transportation & Public Facilities, 1/22/99              
                                                                               
The Governor's transmittal letter dated January 20, 1999, appears below:       
                                                                               
"Dear Speaker Porter:                                                          
                                                                               
In order for Alaska's economy to grow and diversify, we must improve           
our transportation infrastructure.  With additional funds available under      
the new federal transportation law, the state can secure $400 million in       
federal highway construction dollars each year for the next five years by      
meeting the required $50.6 million state match.  We can meet the state         
match for this enormous opportunity with a reasonable user-pays motor          
fuels tax increase of nine cents per gallon, as proposed in this bill I        
transmit today.                                                                
                                                                               
At the current eight cents per gallon, Alaska's gas taxes are now the          
lowest in the nation.  Even after the proposed increase, forty-five states     
would have higher rates.  We would still be well below the 23.4 cent           
average for large western states.  In fact, had the tax rate been indexed      
for inflation when it was last raised in 1961, it would currently be 43        
cents per gallon.                                                              
                                                                               
Under existing law, revenue from the motor fuel tax used on roads and          
highways is deposited in a highway fuel tax account in the general fund.       
Under the bill, that account is renamed the highway construction and           
maintenance account.  Its recommended use is, first, for planning, design,     
and construction of highway projects, ferries, and ferry terminals and,        
second,  for secondary road paving and deferred maintenance projects.          

1999-01-22                     House Journal                      Page 0068
HB 59                                                                        
This bill would not affect taxes on aviation or marine fuel nor the current    
seasonal tax reduction allowed for gasohol users.                              
                                                                               
This proposal represents a modest, user-pays approach to leveraging            
valuable federal highway dollars.  The benefit to Alaska would be              
multiplied many times over.                                                    
                                                                               
							Sincerely,                                                              
							/s/                                                                     
							Tony Knowles                                                            
							Governor"