Legislature(2021 - 2022)ADAMS 519
05/11/2021 09:00 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB104 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 104 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 104
"An Act relating to vehicle registration and
registration fees; relating to the motor fuel tax; and
providing for an effective date."
9:03:14 AM
Co-Chair Merrick indicated the committee previously heard
the bill on May 7, 2021.
9:03:27 AM
Co-Chair Merrick OPENED public testimony.
ERICA JENSEN, AMERICAN COUNCIL OF ENGINEERING COMPANIES,
ANCHORAGE (via teleconference), briefly spoke in support of
HB 104 and noted another member of the council would
testify in detail when called on.
9:04:10 AM
DONNA SCHANTZ, PRINCE WILLIAMS SOUND REGIONAL CITIZENS
ADVISORY COUNCIL, VALDEZ (via teleconference), spoke in
strong support of HB 104, particularly section 5 of the
bill. She voiced that reduced revenue had resulted in
chronic underfunding for the Oil and Hazardous Substance
Prevention and Response Fund also called the 470 fund. The
budget shortfall diminished the ability of the state to
prevent or maintain an adequate readiness to rapidly
respond to a spill. The bill provided for an increase on
the refined fuel surcharge from under one cent to 1.5
cents. The revenue from the increase would be deposited
into the prevention account within the 470 fund. She
believed that the increase was necessary to close the
revenue gap. She shared that the 470 fund was designed to
be self-sustaining to ensure the Spill Prevention and
Response Division (SPAR) of the Department of Environmental
Conservation (DEC) had adequate funds for an immediate
response and maintain an effective prevention program
without the need for supplemental General Funds (GF). She
elaborated that the prevention account was one of two
within the fund and provided most of the operational money
for the SPAR division. The division had 17 positions
eliminated since 2015 and the governors proposed budget
eliminated 5 more positions. The elimination of additional
positions would add increased workload responsibilities for
the remaining staff, including a caseload of over 2000
active contaminated sites. The division was currently not
able to properly meet statutory requirements. The current
situation was hindering the states ability to find and
retain qualified staff for SPAR. She believed prevention
and a robust response to a spill was critical in protecting
the environment, as well as the autonomy, health and
safety, and welfare of Alaskans. She reiterated the strong
support of the council for the bill.
9:07:08 AM
WILL WEBB, ALASKA PROFESSIONAL DESIGN COUNCIL, ANCHORAGE
(via teleconference), spoke in support of HB 104 and
believed it was an opportunity to fund the operation and
maintenance of the states transportation system.
9:07:52 AM
MARC LUIKEN, SELF, ANCHORAGE (via teleconference), spoke in
support of HB 104. He believed that every Alaska was
dependent on the highway system and the states
transportation was critical to its economic vitality. He
listed the ways a highway system supported the public and
economic activity in the state. The highway system was a
vital link between the states ports of entry and the North
Slope oil fields that generated state revenue. He
delineated that 90 percent of the funding for the highway
systems capital improvements was obtained from the federal
government. Every year over $500 million was invested in
highway projects through the National Highway Performance
Program. However, the federal funds could not be used to
operate and maintain the system. He stressed that effective
road maintenance extended the life of the highway system
and supported the capital investments, which kept costs
down. Most other states supported highway operation and
maintenance through user fees that included motor fuels
taxes, road tolls, vehicle registration fees, etc. He
maintained that most Americans pay the fees because they
knew it was a good investment for safety and maintenance.
He indicated that the states motor fuels tax was the
lowest in the nation and was last raised in 1971 50 years
ago. He posed the question of what other fees had remained
the same over 50 years. He pointed out that the current tax
revenues generated $40 million per year and the remaining
costs were supported via GF. He thought that the $.08 fee
was a modest increase and supported it. He shared that he
was a fiscal conservative and understood the unpopular
nature of the bill. In his experience at the Department of
Transportation and Public Facilities (DOT) as a prior
commissioner he understood the need to generate revenue
from the users of the states transportation system. The
state had received some federal Covid-19 funding but once
it was expended the state would revert to the same
situation of inadequate transportation funding. He
emphasized that the small increase would help to maintain
critical infrastructure.
9:12:50 AM
Co-Chair Foster thanked the former commissioner for calling
in. He asked Mr. Luiken to repeat statistics he had cited.
Mr. Luiken replied that all the states transportation
related taxes combined amounted to roughly $40 million per
year.
9:13:50 AM
Co-Chair Merrick indicated representative Wool and
Representative Johnson had joined the meeting.
9:14:12 AM
DAVID GAMEZ, AMERICAN SOCIETY OF CIVIL ENGINEERS, ANCHORAGE
(via teleconference), spoke in support of HB 104. He noted
that he was the past president of the American Society of
Civil Engineers and also spoke on behalf of the American
Council of Engineering, both were member organizations of
the American Design Council representing 5000 professionals
across Alaska. He believed that adequate funding for
designing, operating, and maintaining transportation
systems should be provided by a comprehensive program with
sustainable revenue sources that included user fees via
increased motor fuels taxes and vehicle registration fees.
He noted a report that graded the states transportation
system, which recommended additional funding was necessary
to develop and maintain Alaskas transportation
infrastructure. He reported that the states motor fuels tax
was the lowest in the country. The increase in fuel
efficiency over the last 50 years meant less revenue for
transportation needs. He recommended a firewall around
the revenue collected in transportation fees, so the
funding was not diverted to other budget items.
9:16:56 AM
MARKA BROOKS, SELF, ANCHORAGE (via teleconference),
reported that she was a civil engineer in private practice.
She testified in support of HB 104. She believed that
Alaska was in dire need of maintenance of its
transportation infrastructure. She felt it was important
for Alaskans to help pay for their transportation
infrastructure and that doubling the tax was a start. The
tax would help to offset costs that were being pulled from
GF for highway maintenance. She informed the committee that
capital maintenance funds were used to reconstruct roads
due to inadequate maintenance from lack of funding. She
maintained that Alaska could grow and expand its
transportation system by collecting additional motor fuel
taxes.
9:19:20 AM
NILS ANDREASSEN, EXECUTIVE DIRECTOR, ALASKA MUNICIPAL
LEAGUE, JUNEAU (via teleconference), spoke in favor HB 104.
He indicated that infrastructure funding continued to be a
challenge for Alaska. He focused on the states ports and
harbor needs. He informed the committee that there was $1.6
billion planned for ports and harbors projects and noted
that an additional $350 million was needed for
improvements. He mentioned the additional significant need
for the Port of Anchorage. He elucidated that roughly half
of the harbor matching grants request was funded and the
current years request was $14 million. He recalled that in
2002 the Alaska Legislature had committed to fully
reimburse the debt service on many port and harbor projects
and the debt service funding was not included in the
current years budget. The remaining amount of debt was
roughly $17 million. He concluded that the needs of
Alaskas ports and harbors were great.
9:22:10 AM
SARAH LEFEBVRE, SELF, FAIRBANKS (via teleconference), spoke
in support of HB 104. She shared that she worked in the
construction industry for 23 years. She believed that the
increase was long overdue. She mentioned the long work
commutes by many who were not supportive of the motor fuel
tax increase. Commuting increased the need for road safety
and maintenance. She spoke about the poor condition of
Alaskas highways especially in the Interior. She believed
Alaskans should step up and invest in services it relied
on. She urged members support of the bill.
9:23:48 AM
Co-Chair Merrick CLOSED public testimony.
9:23:53 AM
Co-Chair Merrick indicated the committee would hear invited
testimony.
9:24:11 AM
ALICIA SIIRA, EXECUTIVE DIRECTOR, ASSOCIATED GENERAL
CONTRACTORS OF ALASKA, ANCHORAGE (via teleconference),
called in support of HB 104. She shared that the Associated
General Contractors of Alaska (AGC) was the largest
construction trade association in the state with over 600
members. She voiced that adjusting the motor fuel tax was
a meaningful and reasonable step in addressing the
states massive backlog of transportation infrastructure
maintenance needs. She reiterated that the tax was the
lowest in the country and had not kept pace with inflation.
Although the state might see an influx of supplemental
federal funding it was only temporary, and the shortfall
situation would reoccur. She believed that the increase was
good for industry and would positively impact businesses,
communities and all Alaskans that depended on safe
infrastructure. She commented that AGC had long-supported
an increase in motor fuel tax. She reiterated her support
for the bill.
9:25:50 AM
JOE MICHEL, ALASKA TRUCKING ASSOCIATION, ANCHORAGE (via
teleconference), testified in favor of the bill. He had
supplied a one page information sheet to members (copy on
file). He relayed that the Alaska Trucking Association
(ATA) fully supported HB 104. He noted that ATAs main
concern regarded statute AS 43.40.10 (g) that defined what
the tax would be used for. He wanted the fund to be used
for clearing slush rather than be a slush fund for the DOT.
He asked the committee to clearly define the uses for the
fund. He thanked the committee for hearing the bill.
9:27:29 AM
Representative Josephson appreciated ATAs support of the
legislation. He asked if the trucking association had found
some of the uses of the current motor fuel tax
unacceptable. Mr. Michel responded in the negative. He
voiced that the department had done a phenomenal job with
the funds use for road maintenance.
Co-Chair Merrick indicated there would be another
opportunity to hear public testimony.
HB 104 was HEARD and HELD in committee for further
consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 104 Public Testimony by 051021.pdf |
HFIN 5/11/2021 9:00:00 AM |
HB 104 |