Legislature(2003 - 2004)
05/14/2003 01:41 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CS FOR SENATE BILL NO. 128(FIN) am
"An Act relating to licensing common carriers to
dispense alcoholic beverages; and providing for an
effective date."
RICHARD SCHMITZ, STAFF, SENATOR COWDERY, provided
information on the bill. He noted that the legislation deals
with the fact that common carriers can dispense alcohol and
are licensed by the Alcoholic Beverage Control Board. He
observed that concern was expressed that airlines would have
to license all of their planes because it would be
impossible to guarantee which plane would make a run. The
legislation was amended to enact a biannual fee of $2,000
dollars per location that Alaska Airlines serves. Pan Air
Aviation would be allowed to pay a $1,000 dollar fee for the
first aircraft and $100 fee for each additional plane. A bar
car on a train would be individually licensed. The Alcoholic
Beverage Control Board supports the bill as it cuts back on
paperwork and makes it easier to license aircraft.
Representative Berkowitz asked if on board alcohol was
taxed. After discussion, it was speculated that it was not
taxed.
Representative Foster asked if the fee pertains to each
carrier. Mr. Schultz explained that carriers can chose by
location served or by the first 10 aircraft.
Representative Foster asked why the choice was necessary.
Mr. Schultz observed that the option would affect carriers
with less than ten 10 aircraft.
TAPE HFC 03 - 94, Side A
Representative Kerttula referred to the fiscal note. She
pointed out that the choice would cost the State $39
thousand. Mr. Schultz stated that the goal, in talking with
the Alcoholic Beverage Control Board, was to lower the
paperwork cost and prevent a situation where a carrier would
have to register each of its aircraft as it expanded.
Representative Kerttula asked how much the planes made from
liquor sales each year. Representative Berkowitz asked if a
rate level had been examined to make the bill fiscally
neutral. Mr. Schultz noted that it had been discussed. He
did not think that there was opposition to making the
program revenue neutral.
LARRY PERSILY, DEPUTY COMMISSIONER, DEPARTMENT OF REVENUE
provided information. He observed that alcohol tax in Alaska
is an excise tax, not a sales tax. It is assessed at the
wholesale level. He assumed that airlines would buy from an
out-of-state distributor. The question is whether there
would be tax liability for importing the alcohol into the
state of Alaska. He did not think an excise tax had been
collected.
In response to a question by Representative Berkowitz, Mr.
Persily responded that the sale would occur in the air and
may be subject to federal law.
Representative Foster observed that airlines do not make
their profit from alcohol sales.
Mr. Schmitz noted that ERA sells alcohol on their flights.
Representative Berkowitz proposed an amendment to make the
legislation revenue neutral by increasing fees by 10
percent; insert 1,100 on page 2 line 4.
Mr. Schmitz responded that ERA Aviation would be the only
airline affected serving intrastate routes.
Vice-Chair Meyer OBJECTED for discussion. He asked if the
amount would be in line with charges by other states. Mr.
Schmitz indicated that the fee would cover the cost to
implement.
Mr. Persily recalled that many other states have lower fees
but that they have a higher volume of planes licensed. He
did not think the fee was grossly out of line with other
states.
Vice-Chair Meyer questioned if the amendment would be within
the range. Mr. Persily noted that Alaska would not be at the
highest end. He added that Alaska Airlines has considered
the issue and has been looking for a solution.
Representative Berkowitz MOVED to AMEND Amendment 1: Page 2,
line 8, delete "2,000" and insert "$3,000". Mr. Schmitz
questioned if page 2, line 4 should be amended to be in line
with the amended amendment. He did not support the
amendment.
Representative Chenault suggested that $3,000 would be $500
more than the bi-annual bar fee.
Representative Stoltze questioned if the increase was
justified.
A roll call vote was taken on the motion.
IN FAVOR: Kerttula; Meyer; Whitaker; Berkowitz, Hawker
OPPOSED: Stoltze; Chenault; Foster; Williams; Harris
The MOTION FAILED (5-5).
Representative Foster MOVED to report CSSB 128(FIN)am out of
Committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CSSB 128(FIN)am was REPORTED out of Committee with a "do
pass recommendation" and fiscal impact note #2 from
Department of Revenue.
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