2016-01-19                     House Journal                      Page 1440
HB 249                                                                                                                        
HOUSE BILL NO. 249 by the House Rules Committee by request of                                                                   
the Governor, entitled:                                                                                                         
                                                                                                                                
     "An Act requiring the electronic submission of a tax return or                                                             
     report with the Department of Revenue; relating to the motor fuel                                                          
     tax; and providing for an effective date."                                                                                 
                                                                                                                                

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was read the first time and referred to the Transportation and Finance                                                          
Committees.                                                                                                                     
                                                                                                                                
                                                                                                                                
The following fiscal note(s) apply:                                                                                             
                                                                                                                                
1.  Fiscal, Dept. of Revenue                                                                                                    
                                                                                                                                
The Governor's transmittal letter dated January 15, 2016, follows:                                                              
                                                                                                                                
"Dear Speaker Chenault:                                                                                                         
                                                                                                                                
Under the authority of Article III, Section 18 of the Alaska                                                                    
Constitution, I am transmitting a bill relating to the taxation of motor                                                        
fuels.                                                                                                                          
                                                                                                                                
The bill would raise the tax rates on the four categories of motor fuel                                                         
currently taxed under AS 43.40.010 (motor fuel tax), but would not                                                              
amend the refined fuel surcharge levied under AS 43.40.005 and                                                                  
passed last session. Instead, the bill would increase the currently                                                             
outdated tax rates on all motor fuels including all motor fuel sold or                                                          
transferred within the state, aviation gasoline, and motor fuel used on                                                         
watercraft. The bill increases highway fuel from $0.08 to $0.16 per                                                             
gallon; aviation fuel from $0.047 to $0.10 per gallon; marine fuel from                                                         
$0.05 to $0.10 per gallon; jet fuel from $0.032 to $0.10 per gallon;                                                            
gasohol from $0.08 to $0.16 per gallon; and also increases the credit                                                           
for off road use from $0.06 to $0.12 per gallon. The bill would                                                                 
generate approximately $49,000,000 annually in increased revenue.                                                               
                                                                                                                                
While this may at first appear to represent a significant increase, the                                                         
tax rates on motor fuel sold or transferred within the state have not                                                           
been raised in many years; for example, the tax on highway fuel has                                                             
remained at eight cents a gallon since 1970. This bill would bring                                                              
Alaska's tax rate on highway fuel closer to the current national average                                                        
of 25 cents a gallon.                                                                                                           
                                                                                                                                
To increase administrative efficiency for the Department of Revenue                                                             
and state taxpayers, the bill would require the electronic submission of                                                        
tax returns with an exemption available upon request.                                                                           
                                                                                                                                

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The bill is an integral component of the New Sustainable Alaska Plan                                                            
to provide a balanced and sustainable budget for Alaska's long-term                                                             
fiscal stability.                                                                                                               
                                                                                                                                
I urge your prompt and favorable action on this measure.                                                                        
                                                                                                                                
Sincerely,                                                                                                                      
/s/                                                                                                                             
Bill Walker                                                                                                                     
Governor"