Legislature(2021 - 2022)BARNES 124
03/04/2021 01:30 PM House TRANSPORTATION
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| Audio | Topic |
|---|---|
| Start | |
| Presentation: Statewide Aviation & International Airports | |
| HB104 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| *+ | HB 104 | TELECONFERENCED | |
HB 104-MOTOR FUEL TAX; VEHICLE REG. FEE
2:26:08 PM
REPRESENTATIVE ANDY JOSEPHSON, Legislator, Alaska State
Legislature, as prime sponsor, introduced 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." A doubling of fuel tax from $.08 to $.16 as HB 104
proposed did nothing to keep up with inflation, he stated. The
$.08 was set when the average wage was $9K per year; in 2021 it
was $75K per year. Extra money would go toward road conditions
and safety concerns, still leaving Alaska with one of the lowest
tax rates in the country. Spill prevention and response would
also benefit from the additional tax, he added, as in 2015 House
Bill 158 added a $.0095/gallon surcharge on motor fuel intended
for the spill prevention and response fund. For the average
driver, the cost would be about $10 per year: this is how HB
104 came to be known as the "two-latte tax."
2:31:34 PM
REPRESENTATIVE HANNAN asked why aviation taxes have not
increased since 1994?
NATHANIEL GRABMAN, Staff to Representative Andy Josephson,
Alaska State Legislature, said taxes on airports went toward
airport maintenance; if those fees had been increased, they
would not be available to DOT&PF for road maintenance. Also,
fees on aviation fuel and jet fuel put DOT&PF in a more
competitive position nationally; concern had been raised that an
increase would have a detrimental effect on planes coming into
Alaska.
2:33:15 PM
REPRESENTATIVE JOSEPHSON clarified the "two-latte tax" referred
to the urban driver; in rural areas it would be more.
2:33:57 PM
MR. GRABMAN presented HB 104, sharing Alaska's first motor fuel
tax was levied in 1945 at $.01/gallon. In 1970, motor fuel tax
increased to $.08/gallon, which is where it still is now. In
1977, marine fuel tax increased to $.05/gallon, and in 1994
aviation fuel tax increased to $.047/gallon. From September 1,
2008 until August 31, 2009 motor fuel tax was suspended on all
fuel types, and in 2015, House Bill 158 added a $.0095/gallon
surcharge on motor fuel intended for spill prevention and
response fund, as Representative Josephson had mentioned.
MR. GRABMAN went over the current rates followed by what they
would change to under HB 104: highway fuel would go from $.08 to
$.16; marine Fuel would go from $.05 to $.10; aviation fuel and
jet fuel would remain the same at $.047 and $.032 respectively;
the refined fuels surcharge would go from $.0095 to $.015; and
the off-road use refund would go from $.06 to $.12. Mr. Grabman
mentioned there was a refund for fuel intended for commercial
fishing vessels contained in HB 104.
2:36:07 PM
REPRESENTATIVE SPOHNHOLZ asked about the off-road use refund.
MR. GRABMAN replied fuel users on non-DOT&PF sponsored roads
could apply for and receive refunds for snow machines, four
wheelers, lawn mowers, and the like.
REPRESENTATIVE MCCABE offered it was known as the "Farmers'
refund."
CHAIR HOPKINS asked if one just "went up to the counter" to
receive the off-road use refund.
MR. GRABMAN replied yes.
2:37:54 PM
MR. GRABMAN went over slide 4 on HB 104's impact on the typical
driver in Alaska. According to the Alaska Department of Motor
Vehicles (DMV) there were about 645,434 registered passenger
vehicles driven an average of 9,111 miles per year. If the
average miles per year per Alaskan vehicle (9,111) is divided by
the average miles per gallon (18.1) it can be determined that
503 gallons of fuel per year multiplied by the current motor
fuel tax of $.08 could be $40.24 per year per driver. There
would also be an increase to the biennial registration fee
charged to electric vehicles (EVs) and plug-in hybrid vehicles,
he added, as noted on slide 5. This fee would increase from
$100 to $200 and $150 per year respectively, he stated. The
reason for the increase in registration is that EVs and hybrids
still create wear and tear on roads, they should be paying a
commensurate amount in fees.
MR. GRABMAN noted on slide 6 Alaska had the lowest tax rate on
both highway fuel and marine fuel of any state; in most states,
he pointed out, the marine rate was the same as the highway
rate. With passage of HB 104, Alaska would remain well below the
national average, moving from 50th to 43rd in highway fuel tax
rate in comparison to other states, and would remain last in
marine fuel taxes. Alaska currently has a more competitive
ranking among other states for jet fuel (36th) and for aviation
fuel (40th).
MR. GRABMAN reiterated Alaska's motor fuel tax of $0.08/gallon
had not changed since 1970. By way of comparison, he offered the
Consumer Price Index (CPI) had increased by a factor of 6.74
times since 1970. Also, the average cost of a gallon of gas in
the US was $0.36/gallon in 1970, and in 2021 was now $2.72 (7.56
times higher). In 1970, Alaskan per capita annual income was
$5,911. As of 2019, it was $62,806 (10.63 times higher).
2:41:50 PM
CHAIR HOPKINS asked how, after the doubling of motor fuel tax,
Alaska would go from 50th (lowest in the US) to 43rd place.
MR. GRABMAN directed attention to slide 9, which showed Alaska
having the lowest rate. When HB factored in taxes and fees, it
became 43rd, since states had different taxes. Pennsylvania did
not have a state excise tax, he pointed out by way of example,
despite having the second-highest motor fuel tax rate in the US.
2:46:16 PM
MR. GRABMAN explained slide 8 was a graph that represented the
reduction of the real value of Alaska's motor fuel tax from 1970
to 2021. If HB 104 were to pass, an additional $30 million per
year would be added annually, he pointed out. In terms of
marine fuels, approximately $5.5 million would be added, less
the commercial fishing refund. The refined fuel surcharge would
bring in an additional $3.5 million annually, and the additional
registration fees for EVs and hybrids about $87K if their use
remained constant, more if their use continued to increase.
MR. GRABMAN moved on to slide 11, in which he discussed Silver
Tip Maintenance Station's 2019 closure. Lower-than-expected
revenue from the Motor Fuel Tax was cited in the closure, he
imparted. DOT&PF has a deferred maintenance backlog of $153.8
million for highways, and $264.5 million total, he shared, and
additional revenue could be used for any of the following:
increased safety and maintenance response times; increased
maintenance operators; increased winter maintenance; increased
response time to priority 1 roadways with more resources;
availability to respond to priority 3 and 4 roads; increased
number of maintenance stations; reduction of, and more
manageable areas of, responsibility for operators; decreases in
response times during storms; decreases in road closure times
due to acts of nature; increased surface treatment chemicals and
materials; and increased ability and resources to repair
potholes and guardrails.
MR. GRABMAN showed a graph which showed that without additional
revenue the Division of Spill Prevention and Response (SPAR)
account faced insolvency in the very near future. Multiple
staff positions have been lost, despite workload staying the
same in that department.
2:48:25 PM
REPRESENTATIVE SPOHNHOLZ asked for an unpacking of the
relationship between the SPAR account and HB 104.
MR. GRABMAN replied there was a $.0095 surcharge on all fuels;
that surcharge went toward SPAR account. At the time the charge
was instated, it was not realized that certain entities such as
local governments would be exempt. An increase to $.015 in
refined fuel surcharge would ameliorate this, he stated.
2:49:58 PM
REPRESENTATIVE HANNAN asked if there have been more spills, more
things the account is being used for, or just erosion over time?
MR. GRABMAN said he would have to check.
2:51:26 PM
REPRESENTATIVE HANNAN asked what DOT&PF uses of SPAR account.
ROB CARPENTER, Deputy Commissioner, DOT&PF, replied maybe for
cleanup and maintenance, but in terms of the operating and
capital budgets he was not sure if any was used.
| Document Name | Date/Time | Subjects |
|---|---|---|
| House Trans - Aviation Overview (3-4-21 FINAL).pdf |
HTRA 3/4/2021 1:30:00 PM |
DOTPF - Aviation and Airports Overview |
| HB 104 Supporting Document - State Motor Fuel Tax Rates, Federation of Tax Administrators 2.25.2021.pdf |
HTRA 3/4/2021 1:30:00 PM |
HB 104 |
| HB 104 Sponsor Statement 2.25.2021.pdf |
HTRA 3/4/2021 1:30:00 PM |
HB 104 |
| HB 104 Supporting Document - LFD Motor Fuel Tax Receipts 2018-2022 2.25.2021.pdf |
HTRA 3/4/2021 1:30:00 PM |
HB 104 |
| HB 104 Supporting Document - PWSRCAC Letter of Support 2.26.2021.pdf |
HTRA 3/4/2021 1:30:00 PM |
HB 104 |
| HB 104 FAQ 2.25.2021.pdf |
HTRA 3/4/2021 1:30:00 PM |
HB 104 |
| HB 104 Supporting Document - Fall 2020 RSB Non Petroleum Revenue 2.25.2021.pdf |
HTRA 3/4/2021 1:30:00 PM |
HB 104 |
| HB104 HTRA Hearing Request 2.25.2021.pdf |
HTRA 3/4/2021 1:30:00 PM |
HB 104 |
| 2021-03-04 - HB104 Presentation HTRA.pdf |
HTRA 3/4/2021 1:30:00 PM |
HB 104 |
| HB 104 Sectional Analysis 2.25.2021.pdf |
HTRA 3/4/2021 1:30:00 PM |
HB 104 |