Legislature(1997 - 1998)
05/08/1997 08:10 AM Senate FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CS FOR HOUSE BILL NO. 63(2d RLS)
"An Act 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, t o
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 providing for an
effective date."
Paul Bowers, Director, Statewide Aviation, Leasing,
Department of Transportation and Public Facilities was
invited to join the committee. He explained the
department's standing on the bill. Senator Adams referred
to SB 256 of last year and said concerning the aviation tax
he was worried about how this might affect rural aviation.
Mr. Bowers responded and noted that PFC's would not be
affected. All taxes collected at the airport would be used
for capital projects at the specific airport.
Senator Donley asked if the Governor supported the alcohol
exemption on page 4, line 29. Mr. Bowers said he did not
know this status. He did feel, however, everyone should pay
the same amount of tax. Senator Donley said it was an
inequity removing the tax on aviation fuel. Mr. Bowers
indicated that last year they dealt with the problem of
inequity, but there was no way to stop fuel coming in
through the foreign trade zone.
Bob Bartholomew, Deputy Director, Division of Income and
Excise Audit, Department of Revenue, was invited to join the
committee. He explained the legal opinion and said under
this opinion the State would lose the challenge on tax. It
was "preempted by Federal law". Senator Torgerson asked if
incoming fuel to the foreign trade zone could be restricted
and Mr. Bartholomew said it had not been asked. Mr. Bowers,
however, informed that the Department of Transportation had
asked if restrictions could be placed on the incoming fuel
but they go nowhere on that issue. Co-chair Sharp said that
the ethanol exemption had resulted in a loss the last three
years of over $17 million. Senator Pearce asked if we were
being sold fuel even if we did not need it and Co-chair
Sharp indicated "yes". Senator Pearce said we should only
purchase ethanol gas as needed.
Jeff Cook, MAPCO, was invited to join the committee. He
explained MAPCO's understanding of the bill. He said there
was an eight cent state credit. The cost for ethanol was
$1.35. They could inject MTB at the truck. The credit
would equal the cost of the project to blend. Senator
Donley inquired the mandatory period and Mr. Cook said it
was November through March.
Mark Necessary, TESORO, was invited to join the committee.
He said their standing was different than MAPCO. They do
have the flexibility to manufacture octane and they do
export some gasoline. Ultimately, the market will dictate
what will happen. Senator Donley requested TESORO provide
certain information. He noted the price would go up in
Anchorage.
Mr. Cook said that ethanol also had a fluctuating price.
The Anchorage market, specifically, had a tremendous
fluctuation and the prices may vary from station to station.
Senator Phillips said he noted higher MAPCO prices in poorer
sections.
Senator Pearce moved CSHB 63(2d RLS) with individual
recommendations and accompanying fiscal notes. Senator
Donley objected.
AMEND #1 moved by Senator Donley failed by a vote of 3 - 3
(Torgerson, Pearce, Sharp).
AMEND #2 moved by Senator Donley failed by a vote of 3 - 3
(Torgerson, Pearce, Sharp).
AMEND #3 moved by Senator Donley failed by a vote of 2 - 4
(Torgerson, Parnell, Pearce, Sharp).
There followed miscellaneous discussion by the committee
members. Senator Phillips said he was not interested in a
bill providing a special tax break. He said it was one of
the worst pieces of legislation he had seen especially since
everyone was opposed to it. Senator Donley said deletion of
the tax exemption was unfair to Anchorage. He felt it was a
very ill advised bill. It would be extremely devastating to
trucking and transportation in Anchorage. The City of
Anchorage provided its' own services and it was not fair to
say they live with this 20% increase. The bill contained
many inequities.
Co-chair Sharp asked the roll be called and by a vote of 5 -
2 (Donley, Phillips) HB 63(2d RLS) was reported out with
individual recommendations and accompanying fiscal notes.
Senator Pearce introduced SCR 16 and read the sponsor
statement. There were four new bargaining agreements. She
explained her amendment #1 and noted the change on page 2,
line 1. Senator Pearce moved amendment #1 and without
objection it was adopted. Senator Parnell moved CSSCR
16(FIN) and by a vote of 5 - 2 (Donley, Adams) it was
reported out with individual recommendations and
accompanying zero fiscal note from the Senate Finance
Committee.
Co-chair Sharp called SB 159.
| Document Name | Date/Time | Subjects |
|---|