04/07/2009 01:00 PM Senate TRANSPORTATION

            SB  14-EXTEND MOTOR FUEL TAX SUSPENSION                                                                         
                                                                                                                                
1:59:46 PM                                                                                                                    
CHAIR KOOKESH announced the consideration of SB 14.                                                                             
                                                                                                                                
TOM OBERMEYER,  Staff to  Senator Davis, sponsor  of SB  14, said                                                               
the  bill  extends  the  motor  fuel  tax  suspension  period  an                                                               
additional 2 years. The suspension  was initiated during times of                                                               
high fuel prices  and was designed to help  stimulate the economy                                                               
in Alaska. However,  Alaska continues to pay some  of the highest                                                               
motor fuel  prices in  the nation;  it affects  the price  of all                                                               
goods that are shipped to the state.                                                                                            
                                                                                                                                
2:01:47 PM                                                                                                                    
Air and cruise travel to Alaska  is also declining because of the                                                               
current  recession. Extending  the suspension  of the  motor fuel                                                               
tax will have  a major impact on the enormous  quantities of fuel                                                               
consumed in the transport of goods  and people in Alaska. It will                                                               
encourage cargo  carriers to maintain  flights and cargo  hubs in                                                               
Alaska,  and it  will encourage  air and  cruise lines  to reduce                                                               
fares to stimulate demand.                                                                                                      
                                                                                                                                
2:02:44 PM                                                                                                                    
CHAIR KOOKESH  noted that  Johanna Bales  with the  Department of                                                               
Revenue is available to answer questions.                                                                                       
                                                                                                                                
SENATOR MEYER said he voted in  favor of the bill in the previous                                                               
committee and  he will be  a do pass today.  This is a  bill that                                                               
will help  both urban  and rural Alaska.  However, he  would note                                                               
that DOT would like  the fuel tax to increase from  8 cents to 16                                                               
cents or  32 cents  to provide money  for repairing  and building                                                               
roads. At some point this will have to be addressed.                                                                            
                                                                                                                                
SENATOR KOOKESH closed public testimony and asked for a motion.                                                                 
                                                                                                                                
SENATOR  MENARD  moved  to  report  SB  14  from  committee  with                                                               
individual  recommendations and  attached  fiscal note(s).  There                                                               
being no  objection, SB 14  moved from the  Senate Transportation                                                               
Standing Committee.