Legislature(2021 - 2022)ADAMS 519
05/18/2021 09:00 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB104 | |
| HJR1 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 104 | TELECONFERENCED | |
| + | SB 71 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HJR 1 | 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."
9:06:49 AM
Co-Chair Merrick RE-OPENED public testimony.
9:07:05 AM
DENISE KOCH, SELF, JUNEAU (via teleconference), was the
former director of the Division of Spill Prevention and
Response (SPAR) within the Department of Environmental
Conservation (DEC). She strongly supported HB 104. She
urged members to pass the bill out immediately. She
supported the entire bill but wanted to speak specifically
to the refined fuel surcharge provision. It would increase
the revenue for SPAR. She explained that SPAR was unique at
DEC because the division did not receive undesignated
general funds. Rather, it was a user fee program. The
refined fuel surcharge was originally passed to provide
SPAR with sustainable funding. Unfortunately, at the time,
the Department of Revenue (DOR) underestimated collections
and did not identify exclusions. She thought the effect of
passing HB 104 would be the facilitation of SPAR's original
purpose.
Ms. Koch continued that SPAR had a serious revenue problem.
However, it was not a result of uncontrolled spending. The
Division of Spill Prevention and Response currently had the
lowest amount of staff in over 25 years. She had worked at
DEC over the course of many years within three different
divisions. There had always been a pressure to stay lean.
She recalled frequent conversations about streamlining and
efficiencies. She agreed that it was good to apply a
critical eye to a program making changes and cuts when
needed. However, at the heart of the work of SPAR was its
people. Since 2015 SPAR had eliminated 17 positions. She
urged members to pass HB 104, a sustainable refined fuel
surcharge bill which would help SPAR fulfill its mission.
9:09:16 AM
MIKE COONS, PRESIDENT, ASSOCIATION OF MATURE AMERICAN
CITIZENS, PALMER (AMAC) (via teleconference), spoke in
opposition to HB 104. He pointed to a letter sent to
Speaker Stutes, Representative Tuck, and Representative
Tilton opposing HB 104 from AMAC. The letter strongly
opposed the motor fuel tax provisions of HB 104. Sections
5, 6, 7, and 8 contained the the fossil fuel tax increases.
The letter indicated that the taxes were significant and
punitive to Alaskans on fixed and limited incomes, such as
seniors. He suggested that imposing more taxes at a time
when the nation and Alaska were struggling to recover from
the economic adversity resulting from Covid-19 was not a
good idea. He relayed that such taxes would further hurt
Alaska's economy. He also noted that energy taxes would
increase the state and local government costs adding to the
tax payer's burden. He reiterated noted many of the rising
costs in the nation. He reiterated his opposition to the
bill.
9:11:37 AM
BERT HOUGHTALING, SELF, BIG LAKE (via teleconference),
strongly opposed HB 104. He spoke of Alaska's economy being
decimated by Draconian lockdowns due to the COVID-19
pandemic. He reported many businesses losing everything. He
suggested that folks such as himself put many miles on
their vehicles and would see their bills increase by the
thousands. If the bill were to pass, he would personally
experience a loss of more than $1500 per year to cover the
gap increase. He would be forced to pass the increase on to
his customers. He queried the response by the trucking
industry. He thought it was the wrong action at the wrong
time. He suggested that legislators would not use the money
raised by the tax for its intended purpose. He implored
members to reject HB 104.
9:13:44 AM
Representative Josephson commented that his office had
looked at the claims made by the testifier. The testifier
would have to drive 180,000 miles per year consuming 18,000
gallons of fuel to have an increase in taxes of $1500. He
thought the testifier had overstated the issue.
Representative Carpenter requested an at ease.
9:14:27 AM
AT EASE
9:16:19 AM
RECONVENNED
CHRIS EICHENLAUB, SELF, WASILLA (via teleconference),
opposed HB 104. He agreed with the previous testifier. He
noted in the prior year an exact match bill was offered and
failed to pass. He recalled contacting his legislator to
speak in opposition of the bill. At the time, the
legislator did not support the bill. He hoped they would
continue to oppose a motor fuel tax bill. He argued that
Alaska paid the second highest gas prices in the nation.
All he heard was that Alaska paid the lowest tax on motor
fuel. He suggested that if Alaskans paid more in fuel
prices, they should pay less in taxes. He thought it was
easier to cut $60 million from the budget, rather than
putting the burden on Alaskans. The legislature was already
taking their Permanent Fund Dividends (PFD) away.
9:18:33 AM
Representative Rasmussen asked how many miles he drove per
year.
Mr. Eichenlaub was retired but sympathized with commuters.
He estimated that a round trip from the Mat-Su to Anchorage
was about 100 miles.
9:19:21 AM
MARCY SOWERS, SELF, WASILLA (via teleconference), opposed
the motor fuel tax legislation. She mentioned the high
price for fuel presently. She thought increasing the gas
tax would compound financial issues due to the economic
crisis the state was in. She opposed the bill. She asked
members to support the voice of the people.
9:21:29 AM
Representative Rasmussen asked how many miles her husband
drove per year.
Ms. Sowers was uncertain. However, she drove to Anchorage
for medical appointments frequently. She did not want
things more difficult for Alaskans.
9:22:42 AM
Co-Chair Merrick CLOSED public testimony.
Co-Chair Merrick asked Ms. Larson from the Department of
Environmental Conservation (DEC) to review one of the two
fiscal notes from the department (control code: MEOOQH).
9:23:21 AM
TIFFANY LARSON, DIRECTOR, DIVISION OF SPILL PREVENTION AND
RESPONSE, DEPARTMENT OF ENVIRONMENTAL CONSERVATION,
FAIRBANKS (via teleconference), indicated DEC's fiscal note
was zero.
9:23:42 AM
Co-Chair Merrick directed Ms. Reynolds from the Tax
Division to review the department's fiscal note (control
code: KLFPY).
9:24:01 AM
NICOLE REYNOLDS, DEPUTY DIRECTOR, TAX DIVISION, DEPARTMENT
OF REVENUE (via teleconference), relayed the department
estimated that the increase in the fuel surcharge would
generate about $1.5 million of new revenue in FY 22. The
department estimated an increase in revenue of $3.7 million
in FY 23. The amount of revenue would reduce to about $3.4
million by FY 27. The surcharge revenue would be deposited
into the unrestricted general fund. However, the proceeds
would be set aside for the oil and hazardous substance
release prevention account.
Ms. Reynolds continued that as for the tax and refund
provisions of the bill, the department estimated for FY 22
there would be an increase in designated general fund
revenues in the amount of $12.2 million. In FY 23 the
amount would increase to about $31.35 million. By FY 27 the
amount would reduce to approximately $29.7 million.
9:25:42 AM
Representative Carpenter asked why the revenue was doubling
between FY 22 and FY 23.
Ms. Reynolds explained that the bill had an effective date
of January 1, 2022 which was halfway through the fiscal
year. The numbers for FY 22 represented half of a fiscal
year.
9:26:35 AM
Co-Chair Merrick asked Mr. Schmitz from the Division of
Motor Vehicles to review the department's fiscal note
(control code: JLZKL).
JEFFREY SCHMITZ, DIRECTOR, DIVISION OF MOTOR VEHICLES,
DEPARTMENT OF REVENUE (via teleconference), explained that
the fiscal note, related to section 3 of the bill, dealt
with registration fees for electric vehicles. It reflected
programming costs necessary to alter the DMV's system and
anticipated revenues resulting from the increase in
registration fees for electric vehicles.
Co-Chair Merrick asked Mr. Mills from the Department of
Transportation and Public Facilities (DOT) to review the
department's fiscal note (control code: RBASY).
9:28:05 AM
ANDY MILLS, SPECIAL ASSISTANT TO THE COMMISSIONER,
DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES (via
teleconference), reported the fiscal note reflected a
decline in motor fuel tax over several years that impacted
the two results delivery units (RDU's) within the
department. He indicated the Highways, Aviation, and
Facilities RDU had experienced a shortfall. Motor fuel tax
constituted about one-fourth of the funding for the RDU
that was further appropriated to the three regional highway
and aviation components for DOT: Northern Region, Central
Region, and South Coast Region. The receipts the department
received for the Alaska Marine Highway System (AMHS)
constituted about 3 percent of funding for AMHS. Receipts
had declined over the years due to hybrid and electric
vehicle promulgating on the streets. Also, in the prior
year because of Covid-19 there were not as many cars on the
road. There was approximately $4.4 million less in FY 21
with an estimated shortfall in FY 22 of $600,000. He
pointed to the list on the bottom of the fiscal note
showing what things might be accomplished with increased
motor fuel tax receipts. The list was first seen in a slide
presentation on the committee's first hearing of the bill.
9:30:19 AM
Co-Chair Merrick directed Ms. Kostik to review the
department's fiscal note (control code: MEOQH).
RUTH KOSTIK, ADMINISTRATIVE SERVICES DIRECTOR, DEPARTMENT
OF ENVIRONMENTAL CONSERVATION (via teleconference),
reported that the fiscal note reflected the funds transfer
of the refined fuel surcharge from the general fund into
the prevention account of the oil and hazardous substance
release prevention and response fund.
9:31:00 AM
AT EASE
9:32:58 AM
RECONVENNED
Co-Chair Merrick relayed that she would provide an
amendment deadline at the afternoon's meeting.
HB 104 was HEARD and HELD in committee for further
consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 104 Public Testimony by 051721.pdf |
HFIN 5/18/2021 9:00:00 AM |
HB 104 |
| HJR 1 Public Testimony by 051921.pdf |
HFIN 5/18/2021 9:00:00 AM |
HJR 1 |