Legislature(2019 - 2020)ADAMS 519
03/23/2020 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB55 | |
| SB172 | |
| SB115 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | SB 115 | TELECONFERENCED | |
| += | SB 55 | TELECONFERENCED | |
| += | SB 172 | TELECONFERENCED | |
CS FOR SENATE BILL NO. 115(FIN)(efd fld)
"An Act relating to vehicle registration fees; and
relating to the motor fuel tax."
2:22:07 PM
Co-Chair Foster MOVED to ADOPT the proposed committee
substitute (CS) for CSSB 115(FIN), Work Draft 31-LS0895\G
(Nauman, 3/23/20).
Co-Chair Johnston OBJECTED for discussion.
ERIN SHINE, STAFF, REPRESENTATIVE JENNIFER JOHNSTON,
reviewed the changes in the CS (version G). The CS
incorporated four amendments adopted by the committee the
previous day. Amendment 2 added new language on page 1,
lines 4 through 14 and page 2, lines 1 through 11.
Amendment 4 added new language on page 2, lines 15 through
17 as follows:
...the owner of a vehicle powered by alternative fuel
shall pay a special biennial registration fee of
$100...
Ms. Shine pointed to page 2, line 20 where the definition
of alternative fuel had been added by Amendment 4. Page 3,
Section 5, lines 19 through 21 incorporated Amendment 1.
The last change was on page 5, lines 9 and 10 included the
effective date and conforming changes. The bill specified
"Except as provided in sec. 10 of this Act, this Act takes
effect January 1, 2021." Section 10 on line 9 gave the
transition regulations an immediate effective date.
2:24:09 PM
Co-Chair Johnston asked the Department of Revenue (DOR) to
review the fiscal note.
DAN STICKEL, CHIEF ECONOMIST, ECONOMIC RESEARCH GROUP, TAX
DIVISION, DEPARTMENT OF REVENUE, relayed that DOR's fiscal
note reflected the changes made in the CS, primarily the
January 1, 2021 effective date and the increase to the
refined fuel surcharge from $0.95 per gallon to $1.50 per
gallon, which had not been included in previous versions of
the bill. The note showed an indeterminate revenue impact
for two reasons. First, the department did not have data
available to estimate the impact of the allowed refunds for
marine fuel used by vessels for commercial fishing. He
explained that under the bill, any commercial fishing
marine fuel would be allowed a refund of $0.05 per gallon,
meaning the tax would not be increased on that portion of
marine fuel. Second, it was unknown how COVID-19 may impact
fuel demand. Based on the fall revenue forecast and not
including the commercial fishing impacts, the bill would
increase revenue by $16.9 million in FY 21, $33.3 million
in FY 22, decreasing to $31 million in FY 26. He clarified
the amounts pertained only to the motor fuel tax increase
portion. There would be an additional increase for the
refined fuel surcharge component of $1.8 million in FY 21,
$3.5 million in FY 22, decreasing to $3.3 million in FY 26.
Co-Chair Johnston WITHDREW her OBJECTION to the adoption of
the CS. There being NO further OBJECTION, it was so
ordered.
Co-Chair Foster MOVED to REPORT CSSB 115(FIN) out of
committee with individual recommendations and the
accompanying fiscal notes.
Representative Sullivan-Leonard OBJECTED. She opposed the
tax. She stated there was an incredible disparity with the
tax, especially in her region of the state. She referenced
a comment that people chose where they lived. She agreed
and noted that people chose to live in rural and urban
areas; however, at a time when unemployment insurance had
risen by 500 percent, residents who drive would be taxed
more due to the bill. She did not believe it made any
sense. She realized the date had changed in the bill;
however, the concept of an increased gasoline tax did not
go unnoticed in her district.
2:28:02 PM
Representative Wool spoke to his support for the bill. He
shared that he had voted on the increase to the motor fuel
tax several years earlier that had added just under one
penny. He thought it was likely the only revenue bill the
legislature had passed during his tenure. He stated that
legislators received numerous emails asking why they were
not looking into [new] revenues. He stressed that state
coffers were decreasing by the minute and expenses were
increasing. He believed the legislature needed to look into
revenue. He highlighted it had been previously stated that
the motor fuel tax had not been raised since the 1970s. He
pointed out that the pennies increase in the 1970s equated
to about $0.50 currently. He emphasized that the state had
not kept up with inflation and had the lowest motor fuel
tax in the country. He believed the state would rank number
four or five if the tax was doubled. He reasoned that the
price of motor fuel should decrease due to the drop in oil
price, which would likely result in a net reduction at the
pump.
Representative Wool noted that the Municipality of
Anchorage had recently instituted a municipal motor fuel
tax; therefore, half the people in the state were already
paying an additional motor fuel tax. He knew that Mat-Su
residents drove to Anchorage frequently and he knew that
many of his constituents lived in remote areas like Chena
Hot Springs and other areas that required driving many
miles to town and burning substantial gas. He thought the
tax increase was the least the legislature could do,
especially when many citizens were asking it to act. He
thought the legislature should try to help citizens and
provide solutions. He supported adding the small amount of
revenue of $15 million in FY 21 and $30 million in FY 22.
He noted that people would likely not be driving and
purchasing gas the way they had in the past. He stated that
the change was a small gesture towards increasing revenue,
though he did not believe it was enough. He supported
looking into new revenue and believed the state's savings
would be rapidly diminishing. He thought the bill was a
step in the right direction.
2:30:35 PM
Representative Carpenter acknowledged the sound logic of
comments by Representative Wool; however, he noted the
argument did not account for the cost of government. He
detailed that compared to other states with a similar
population size and GDP [gross domestic product], Alaska's
government expense was significantly higher. He stated that
Alaska's cost of government was higher than it should be
based on its population and GDP. He highlighted that the
increased tax would take $16.9 million out of the private
sector to help sustain a government that was already too
large. He did not believe it made sense, especially when
considering the fiscal crisis. He guessed that the private
sector would be hurting for 12 to 24 months. He underscored
that taking $17 million out of the private sector economy
was not without consequences. He thought the state could
wait to patch potholes another year as opposed to
increasing funding. He believed it was wrong to increase
taxes on the private sector at present.
2:32:42 PM
Co-Chair Johnston believed it was very important for the
legislature to increase the tax. She shared that it was not
only her constituents who had asked for the increase. She
highlighted that the Alaska Trucking Association was asking
for and supported the increase. She explained that a
maintenance station had closed down between the districts
represented by Representative Carpenter, Representative
Knopp, and herself. She stressed it was the main
thoroughfare for getting food, safety, and supplies to the
Kenai Peninsula. She did not know how many committee
members had driven the pass on a winter night, but the
situation had been catastrophic to the safety and the needs
of the Kenai Peninsula.
Co-Chair Johnston reported that the road service in her
district had been cut dramatically back. She explained that
the first two roads classified as a level one priority out
of Anchorage were the Seward and Glenn Highways. The level
two priority included main thoroughfares in Anchorage owned
by the state. She explained that the roads up to her
district on the hillside had been poorly maintained,
sanded, and plowed due to a lack of resources and there had
been multiple accidents including buses. She had heard from
people on the Glenn Highway about issues due to lack of
sanding and plowing.
Co-Chair Johnston explained that because resources had been
stretched, the maintenance and operation [office] out of
Girdwood was responsible for the highway from Girdwood to
Anchorage and for the Seward Highway south. The Kenai
office was responsible for the Seward Highway north. She
reported that the highway was not being plowed or sanded as
could be needed for safety. She stated that the bill was
timely, and the implementation date had been postponed
until 2021 with the recognition that it was currently an
interesting time for all businesses. She supported moving
the bill forward.
2:36:04 PM
Representative Carpenter stated that the remarks made by
Co-Chair Johnston were opinion and not fact.
Co-Chair Johnston replied that the remarks were her
statement based on what she knew.
Representative Knopp had never seen the highway so poorly
maintained or shut down as many times as it had been in the
current year in his 40 years living on the peninsula. He
stated it was a fact that the Department of Transportation
and Public Facilities had lost millions of dollars in
revenue over the years. He highlighted that the documents
showing road maintenance was down did not lie. He stated it
was the current reality. He reported that the critical
maintenance station had been closed, positions had been
lost in Homer and Soldotna, and there was no longer
continuance from night shift to day shift. He referenced
Representative Wool's statement that the tax had not been
increased since the 1970s, which was a long time. He
supported the use of the funds for highway maintenance and
was hoping improvements would be made.
Representative Carpenter communicated that he had driven
the roads during the day and night, and he did not believe
they were different than in the past. He did not believe it
was accurate to say the roads had not been maintained. He
stressed that the roads had been maintained but may have
seen a delay. He believed that putting sand on a road did
not make it safer. He remarked that there were always
conditions on roads that required driving at a prudent
speed. He stated that sanding or plowing a road did not
necessarily make it safer. He did not believe the level of
maintenance was responsible for causing accidents or making
the road less safe. He countered that the speed of driving
made the road less safe in most cases. He thought Co-Chair
Johnston had used the word catastrophic.
Co-Chair Johnston could not be certain she had used the
word catastrophic.
2:39:09 PM
AT EASE
2:40:39 PM
RECONVENED
Representative LeBon shared that the past summer he and
Representative Wool had visited the trucking company
Sourdough Express based in his district in Fairbanks. He
detailed that representatives from the Alaska Trucking
Association had been present at the meeting and had
communicated that it was a crisis situation. They had been
told that the Dalton Highway from Fairbanks to the North
Slope was in desperate need of the minimum amount of
maintenance. He elaborated that they had visited a repair
shop and seen equipment that had been beaten from the
condition of the road. He stated it was real money and the
roads had to be maintained. He emphasized that the
lifeblood to the North Slope was the Dalton Highway. He
listened when the Alaska Trucking Association and the
primary operator - Sourdough Express - were telling
legislators that the monies designated for highway
maintenance were critical to their operation.
Representative Sullivan-Leonard MAINTAINED her OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Wool, Josephson, Knopp, LeBon, Ortiz, Foster,
Johnston
OPPOSED: Sullivan-Leonard, Tilton, Carpenter, Merrick
The MOTION PASSED (7/4).
There being NO further OBJECTION, it was so ordered.
CSSB 115(FIN) was REPORTED out of committee with seven "do
pass" recommendations, two "do not pass" recommendations,
and two "no recommendation" recommendations and with one
new indeterminate note from the Department of Revenue, one
new zero note from the Department of Transportation and
Public Facilities and one previously published fiscal
impact note: FN2 (ADM).
2:42:54 PM
AT EASE
2:44:04 PM
RECONVENED
Co-Chair Johnston recessed the meeting to a call of the
chair [note: the meeting never reconvened].
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 115 Public Testimony Rec'd by 032320.pdf |
HFIN 3/23/2020 1:30:00 PM |
SB 115 |
| SB 134 AMHTA Support 3.23.20.pdf |
HFIN 3/23/2020 1:30:00 PM |
SB 134 |
| SB 115 ver. G 3.23.2020.pdf |
HFIN 3/23/2020 1:30:00 PM |
SB 115 |