Legislature(2015 - 2016)HOUSE FINANCE 519
04/05/2016 05:00 PM House FINANCE
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| HB319 | |
| HB250 | |
| HB249 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 319 | TELECONFERENCED | |
| *+ | HB 250 | TELECONFERENCED | |
| + | HB 249 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 249
"An Act requiring the electronic submission of a tax
return or report with the Department of Revenue;
relating to the motor fuel tax; and providing for an
effective date."
6:19:32 PM
JERRY BURNETT, DEPUTY COMMISSIONER, TREASURY DIVISION,
DEPARTMENT OF REVENUE, would run through the presentation.
It was a simple presentation which he introduced the
PowerPoint Presentation: "Motor Fuel Tax: HB 249."
Mr. Burnett looked at slide 2: "Motor Fuel Tax Increase."
"An Act relating to the motor fuel tax; relating to
the duties of the commissioner of revenue; relating to
the disposition of revenue from the motor fuel tax;
and providing for an effective date."
Mr. Burnett slide 3: "Motor Fuel Tax History."
Began in 1945
Tax rates have increased over time, but structure
unchanged
Last increase: highway 1970, marine 1977,
aviation fuel 1994
Mr. Burnett advanced to slide 4: "Motor Fuel Tax History
(Continued)."
Tax was suspended from Sept. 1, 2008, to Aug. 31, 2009
In 2015, HB 158 added $0.0095 surcharge on motor fuels
and some other refined fuels
Intended for spill prevention and response fund
Mr. Burnett turned to slide 5: "Motor Fuel Tax Proposal."
He explained that the proposal was to increase the taxes,
but to change the off-road use credit of 6 cents of the 8
cents. He stressed that it required electronic filing; and
provided an exemption process.
Representative Guttenberg referred to the jet fuel. He
wondered if an analysis of the international travel.
Mr. Burnett responded that most of the jet fuel used for
international travel was exempt from state taxation. He
stated that the genesis of the large increase was from the
Aviation Advisory Committee. There were proposals in the
previous year to add landing fees at certain state
certificated airports. The committee advised the state to
raise the jet fuel tax, rather than increase the landing
fees.
Co-Chair Thompson assumed the federal government would be
exempt.
Representative Guttenberg asked who would be paying for jet
fuel.
Mr. Burnett responded that it would be regional and
domestic carriers.
6:24:58 PM
Mr. Burnett discussed slide 6: "Relative Motor Fuel Tax
Rate."
Alaska's fuel taxes are among lowest in U.S.1
Highway fuel: lowest
Jet fuel: 35th out of 50
Aviation gas: 24th out of 50
Under this bill, Alaska taxes would be:
Below national average (20.17 cents)
for highway fuel
Above national average for jet/aviation fuel
Mr. Burnett moved to slide 7: "Impacts of Tax Proposal."
Gas prices at the pump would rise
More aviation taxes to fund certificated urban and
rural airports
Requested by aviation advisory committee as
preferable to landing fee increases
Mr. Burnett advanced to slide 8: "Revenue Impact."
Dept. of Revenue estimates increasing the tax rate
will more than double tax collections
Additional revenue about $49 million per year
$0.2 million will be shared with municipal-owned
airports
Remainder: general fund and special accounts for
road, water transport, and aviation facilities
Mr. Burnett turned to slide 9: "Revenue Impact
(Continued)":
Estimates based on fall 2015 revenue forecast
Does not account for changes in fuel demand or
stockpiling
Mr. Burnett talked about slide 10: "Implementation Cost."
Dept. of Revenue must update:
Tax Revenue Management System (TRMS)
Revenue Online (ROL) which allows a taxpayer to
file a return and apply for a dealer license
online
Tax return forms
One-time implementation cost of $50,000 to recreate
tax forms and reprogram and test the tax system to
accommodate the rate changes
No additional costs to administer the tax program
Mr. Burnett moved to slide 11: "Motor Fuel Tax-Changes made
in Committee Substitute":
If average price of ANS crude oil is more than $85 per
barrel during the previous year-no change to current
tax rates
If average price of ANS crude oil is less than $85 per
barrel during the previous year-tax rates increase
Motor fuel used for commercial fishing remains at 5
cents a gallon
Tax increase sunsets after 2 years (July 1, 2018)
6:31:45 PM
Vice-Chair Saddler asked what the commercial fishing
exemption.
Mr. Burnett responded that it was $4.2 million.
Vice-Chair Saddler wondered whether the state could take
advantage of more federal transportation funding with the
increase in fuel taxes.
Mr. Burnett responded that the highway taxes go towards the
general fund, and the general fund paid the match for
federal dollars. He stated that there was no direct
linkage, but the state tax and number of gallons were
reported. He assumed that the U.S. Congress may wee a
linkage when examining the authorization bills for the
state.
Co-Chair Thompson did not believe that the federal
government turned away any money collected from highway
dollars.
Mr. Burnett explained slide 12: "Closing the Budget Gap."
He explained that the motor fuel tax was after changes to
oil and gas; and income tax.
Co-Chair Thompson thought the state had been collecting
about $80 million in fuel tax
Mr. Burnett thought the number was closer to $40 million.
He stated that the proposal would bring the number closer
to $90 million.
6:34:53 PM
Representative Wilson wondered if the adjustment had
already occurred with the change from collected land fees
to collecting the fuel tax.
Mr. Burnett replied that there was a recommendation to
increase the tax, but it had not yet been increased.
Representative Wilson wondered if the taxes would be
increased, should the bill fail to pass.
Mr. Burnett replied that it would probably require an
increase in landing fees.
Representative Wilson stressed that there would not be an
increase to landing fees.
Mr. Burnett indicated she was correct, and that it would be
new landing fees.
Representative Wilson queried a way to balance to ensure
that airports were not paying more than what they were able
to utilize, and not pay for someone else's airport. She
wondered whether Anchorage and Fairbanks should have a
separate rate than other airports.
Mr. Burnett deferred to Commissioner Luiken.
MARK LUIKEN, COMMISSIONER, DEPARTMENT OF TRANSPORTATION AND
PUBLIC FACILITIES, answered that the airports were already
covered by the carriers through landing fees, rates, fees,
etc. He stated that the tax would impact the carriers
across the state. He stated that the board made the
recommendation, because they felt it was the fairest way to
impact all of the users of the system and distribute the
cost the most fairly. He stated that the board did not
believe the landing fees was fair, because it would only be
levied at certificated airports.
Co-Chair Thompson asked how many airports the Department of
Transportation and Public Facilities (DOT/PF) maintained.
Commissioner Luiken replied that DOT/PF maintained 249
airports in the state.
Representative Wilson felt that the legislation was not
fair to the Fairbanks airport.
Commissioner Luiken stated that the larger airports
supported the broader system in the state.
Representative Wilson mentioned that the air carriers were
not very happy with the legislation.
Co-Chair Thompson remarked that he had hard form air
carriers also.
6:40:51 PM
Representative Pruitt wondered whether FedEx and UPS would
pay the tax.
Commissioner Luiken understood that for those cargo
carriers flying a domestic route the jet fuel tax would
apply.
Representative Pruitt thought Alaska was putting itself in
a sticky position by tripling their taxes, because jobs
were at stake.
Co-Chair Thompson asked about a comparison.
Commissioner Luiken would be happy to supply a cost
comparison between Anchorage, Seattle, Portland, and
Anchorage. The fact was that Alaska's jet fuel tax was only
a portion of fees charged.
Mr. Burnett added that he sat on the Alaska Industrial
Development and Export Authority (AIDEA) board.
6:47:34 PM
Representative Kawasaki wondered how the commercial fishing
tax would be remitted.
Mr. Burnett responded that as a person pulled up to a
station, the state would administer the tax through a
rebate.
Vice-Chair Saddler supported moving towards a motor fuel
tax rather than an airport landing tax.
HB 249 was HEARD and HELD in committee for further
consideration.
Co-Chair Thompson thanked the presenters for being
available. He reviewed the agenda for the following day.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 319 CS WORKDRAFT FIN v.H 4-1-16.PDF |
HFIN 4/5/2016 5:00:00 PM |
HB 319 |
| DOR Tax Division Presentation INCOME HB250 4-4-16 final.pdf |
HFIN 4/5/2016 5:00:00 PM |
HB 250 |
| HB 249 DOR Tax Division Presentation MOTOR FUEL HB249 4-5-16 final.pdf |
HFIN 4/5/2016 5:00:00 PM |
HB 249 |
| HB319 Supporting Documents - Dan Mayfield letter of support, 5 April 2016.pdf |
HFIN 4/5/2016 5:00:00 PM |
HB 319 |
| HB 249 DOT Response International Fuel Tax (5).pdf |
HFIN 4/5/2016 5:00:00 PM |
HB 249 |
| HB 250 DOR Response to House Finance - 4.14.16 Signed by RH.pdf |
HFIN 4/5/2016 5:00:00 PM |
HB 250 |