05/14/2003 01:41 PM House FIN

HOUSE BILL NO. 216                                                                                                            
                                                                                                                                
     "An Act relating to municipal taxation of refined fuel                                                                     
     products."                                                                                                                 
                                                                                                                                
Co-Chair  Harris  MOVED  to  ADOPT   Work  Draft  23-LS0822\V                                                                   
(5/8/03). There being NO OBJECTION, it was so ordered.                                                                          
                                                                                                                                
RANDY RUARO,  STAFF, CO-CHAIR  WILLIAMS provided  information                                                                   
on the  bill. He explained  that the committee  substitute is                                                                   
an attempt to  address concerns expressed  by Representatives                                                                   
Croft  and  Whitaker  regarding prohibition  of  taxation  of                                                                   
fuels transiting  through  a borough  or municipality  on its                                                                   
way to  another destination.  The Sponsor  had expressed  his                                                                   
support  of the  bill. The  bill also  prohibits taxation  of                                                                   
wholesale  sales  of  fuels  refined  in a  borough  and  the                                                                   
transit  of  fuel  through a  borough  unless  that  activity                                                                   
currently exists,  in which case  it would be  grand fathered                                                                   
in.  Mr. Rauro  observed  that  the Alaska  Municipal  League                                                                   
indicated that it  would neither oppose nor  advocate for the                                                                   
legislation.                                                                                                                    
                                                                                                                                
Representative  Chenault  MOVED to  ADOPT  Amendment #2.  Co-                                                                   
Chair Williams  OBJECTED. Representative  Chenault  noted the                                                                   
technical nature  of the amendment: insert "or  transfers" on                                                                   
page 2, line 7.                                                                                                                 
                                                                                                                                
SUSAN   BURKE,   ATTORNEY,   WILLIAMS    PETROLEUM   provided                                                                   
information  on  the  Committee Substitute.  She  noted  that                                                                   
Amendment  #2  would  correct an  oversight  making  sections                                                                   
congruent in language.                                                                                                          
                                                                                                                                
Co-Chair  Williams WITHDREW  his  OBJECTION.  There being  no                                                                   
other objections, Amendment #2 was ADOPTED.                                                                                     
                                                                                                                                
Representative Hawker pointed  out that the legislation would                                                                   
restrict  a municipality's  ability to  collect local  excise                                                                   
tax. Ms.  Burke noted  that they  were attempting to  prevent                                                                   
the type  of municipal taxation  that initiative  sponsors in                                                                   
Fairbanks  tried to  get enacted:  the  physical transfer  of                                                                   
refined fuel from one container to another.                                                                                     
                                                                                                                                
Representative Hawker  questioned if Alaska  Municipal League                                                                   
would support the legislation.                                                                                                  
                                                                                                                                
Representative Foster noted that  in 1993 he sponsored a bill                                                                   
to respond  to a community that  was charging a  transfer tax                                                                   
for goods traveling through a variety of municipalities.                                                                        
                                                                                                                                
Representative Foster  MOVED to report CSHB 216  (FIN) out of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal  notes. There being NO OBJECTIONS  it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CSHB  216 (FIN)  was REPORTED  out  of Committee  with a  "do                                                                   
pass" recommendation  and three, zero fiscal notes:   two new                                                                   
fiscal  notes  from  Department  of  Community  and  Economic                                                                   
Development  (Community Assistance  & Rural Energy  Programs)                                                                   
and #2 from Department of Revenue.