Legislature(1993 - 1994)
03/31/1993 08:40 AM House FIN
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* first hearing in first committee of referral
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HOUSE BILL NO. 143
"An Act relating to the distribution of the revenue
obtained from imposition of the state tax on motor fuel
used in watercraft of all descriptions; and providing
for an effective date."
Representative Mackie noted that the Department of Revenue
has issued a new fiscal note based on amendments adopted by
the House Finance Committee, Work Draft for SSHB 143 (FIN).
The new fiscal note deletes a $112.1 thousand dollar request
in new positions. Changes made by the House Finance
Committee will require that municipalities eliminate the
need for the additional positions. He noted that an
estimated $9 - $10 million dollars is collected from the
program. An estimated 5 - 7 percent of the harbors are
municipally owned. Therefore 5 - 7 percent of the Fund will
be affected.
Members were presented with Amendment 1 by Representative
Mackie (Attachment 1). Representative Mackie noted that
rural areas that do not have boat harbors would be impacted
by the amendment. He emphasized that communities on river
systems pay fuel taxes and have needs due to erosion or haul
out facilities. The amendment attempts to address the needs
of these communities. He added that urban municipalities
such as Anchorage or Fairbanks could receive funding of up
to 50 percent if they apply and qualify. They would be
mandated to use the money for construction and maintenance
of public boat landing areas used by residents of the
municipality or or for local efforts initiated to prevent or
repair the effects of erosion along shorelines used as
public boat landing areas.
Co-Chair MacLean MOVED to ADOPT AMENDMENT NO. 1.
Representative Hanley OBJECTED for purpose of discussion.
Representative Mackie clarified that the Department of
Revenue would be responsible for the funds. The Department
of Transportation and Public Facilities will certify the
amount. The Department of Revenue will disperse the funds
after the Department of Transportation and Public Facilities
certify the amount each municipality receives.
Co-Chair MacLean asked if the Department of Transportation
and Public Facilities will publish a list of the
municipalities that have applied.
FRANK TURPIN, COMMISSIONER, DEPARTMENT OF TRANSPORTATION AND
PUBLIC FACILITIES stated that the Department could publish a
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list of the municipalities that apply.
Representative Hanley express the concern that there is a
potential fiscal loss to the State of Alaska. He noted that
the definition of eligibility has been expanded.
Representative Mackie observed that the legislation is
designed to offset the impacts of fuel use and to take care
of harbors and boat launch facilities.
Representative Martin agreed that the amendment would
broaden eligibility. Representative Grussendorf stressed
that municipalities would address their priorities through
the Fund.
Representative Navarre stressed the need to raise new
revenues to offset the additional burden on the State's
treasury. Representative Brown asked if the Committee could
consider a small increase to offset the additional municipal
appropriation.
Representative Brown questioned if the use of "operating" on
page 1, line 13 is consistent with the use of "owned" on
page 2, line 5. She noted that the Department of
Transportation and Public Facilities owns the Anchorage
harbor facility but it is operated by the municipality.
Representative Mackie explained that the intent is that
funding will be allocated only for the portion owned by the
municipality. Members discussed the drafting language.
Representative Brown asked the definition of "municipality".
Co-Chair MacLean noted that "municipality" refers to first
and second class cities and municipalities of the state.
Representative Brown asked if fuel is sold outside of
municipalities. Co-Chair MacLean assured her that fuel is
sold in villages.
LARRY MEYERS, DIRECTOR, INCOME AND EXCISE AUDIT DIVISION,
DEPARTMENT OF REVENUE discussed the Department's fiscal
notes. He clarified that there are approximately 61 major
wholesale fuel distributors.
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Representative Grussendorf emphasized that the intent of the
amendment is to get operation and maintenance money to
municipalities for harbors or boat landing facilities. He
stressed that the cost of maintenance is cheaper than the
cost of repair.
(Tape Change, HFC 93-84, Side 2)
Co-Chair Larson asked if Title 28 would allow municipalities
to levy the tax. Mr. Meyers could not answer.
Representative Mackie noted that funding is subject to
appropriation. Representative Grussendorf did not think
municipalities could discriminate in taxing a single
commodity.
Representative Hanley reiterated his concerns that the
legislation would divert money from the State. Co-Chair
MacLean pointed out that the fuel tax is collected from all
users of motor fuels.
Representative Hanley asserted that a revenue sharing
program is being developed. He asked that the legislation
be held until the Department of Revenue presents a new
fiscal note. Representative Martin agreed.
Co-Chair MacLean WITHDREW her amendment. Co-Chair Larson
expressed concern that revenues will be withdrawn from the
State.
Representative Brown reiterated her concerns regarding the
use of "operating" on page 1, line 13 and of "owned" on page
2, line 5. Representative Mackie noted that reimbursement
is only provided to municipalities that own a portion of the
facility. Representative Brown asked if Anchorage would be
reimbursed under the legislation. Members further discussed
the criteria for reimbursement.
Representative Martin asked that HB 143 be held. Co-Chair
Larson announced that HB 143 would be held in a subcommittee
consisting of Representatives Hanley, Parnell and Brown.
Representative Grussendorf emphasized that the intention of
HB 143 is to encourage municipalities to own and operate
harbor facilities.
Representative Mackie expressed concern that HB 143 would
not meet the deadline for passage of legislation from
committee. Co-Chair Larson MOVED to report HB 143 out of
Committee with individual recommendations and with the
accompanying fiscal notes. Representative Martin OBJECTED.
A roll call vote was taken on the motion.
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IN FAVOR: Brown, Grussendorf
OPPOSED: Hanley, Martin, Parnell, Larson, MacLean
Representatives Hoffman, Navarre, Foster and Therriault were
absent from the vote.
The MOTION FAILED (2-5).
Representative Hanley detailed issues that need to be
resolved.
He stressed the need for a fiscal note by the Department of
Revenue addressing the amendment. He wanted to know how
much water fuel taxes are collected. How much fuel tas is
collected in municipalities that operate harbors. How much
is collected in municipalities that do not have state owned
docks. He noted that the issue identified by Representative
Brown regarding "operated" and "owned" also needs to be
resolved.
HB 143 was HELD in Committee.
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