Legislature(1999 - 2000)
04/21/1999 08:07 AM Senate FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE BILL NO. 148
"An Act imposing landing fees at state owned and
operated airports; and providing for an effective
date."
CURT PARKINS, Deputy Commissioner, Department of
Transportation and Public Facilities testified. The
department appreciated the committee's concern with the
cost of operating the rural airports. This would be an
additional revenue source that could help close the gap. He
advised that other impact should be looked at.
Tape: SFC - 99 #103, Side A 9:54 AM
A past effort to impose landing fees in 1993 failed. The
court had ruled that the department inappropriately imposed
those fees. This was because policy rather than regulation
instituted them. Under this bill, the department would have
the ability to impose the fees through regulation and thus
meet the court requirement.
Another effort was made by the Legislature in the increase
the aviation fuel tax to an amount that approximated what
had been collected in landing fees at the time. The 1994
legislation raising that tax stipulated the department
could not impose landing fees and the fuel tax could not
increase more than what was previously generated with the
landing fees. That provision would expire in January 1,
2000.
The benefit to the department would be that the fees
generated could be used to operate the rural airports.
He noted potential weakness in that it did not give the
department flexibility to adjust fees over time or to
modify for the weight of equipment. There was a potential
disadvantage in an inequality occurring with commercial
aircraft weighing less than 6000 lbs. He noted smaller
aircraft weighing under 6000 lbs. would not be charged the
landing fee. Two carriers servicing a community would be
charged differently according to the size of their
aircraft.
Another concern was with the ability to monitor the
activity reports to ensure compliance. He recommended
additional staff to audit. He also suggested a penalty fee
to impose on violators.
Senator Randy Phillips wanted to know if the department
charged a passenger fee for rural airports. Curt Parkins
replied that there was no passenger fee. The department
generated most of its fees through space rental. Some
funding came from the US Air Force for the Galena and Cold
Bay airports. Other funding came from the Federal Aviation
Administration.
Senator Randy Phillips asked what the department collected
versus the cost of operations. The airports generated $2.8
million in general funds statewide. He wanted to know how
much was then spent on rural airports alone. Curt Parkins
estimated the cost of operating rural airports including
the cost of leasing projects, at about $20 million. That
was about ten-percent. Senator Randy Phillips suggested the
department consider a passenger fee. Curt Parkins replied
that the department had chosen to pursue passenger charges
first at the international airports to access the public
acceptance.
Senator Al Adams suggested imposing the landing fee in
Anchorage since that was were most of the landings
occurred. He knew the legislation applied to state-owned
airports. He wanted to know if the legislation considered
state-owned and leased airports and municipal-owned
airports that were maintained by the state. Curt Parkins
said it was his understanding this would apply to airports
state-owned and operated. The airport in Ketchikan was
state-owned but was operated by the municipality and had
its own fee schedule that was considerably higher than what
was proposed here. Airports that were owned and operated by
the municipalities, such as Juneau and Kenai would remain
the same using their own fee schedules. The legislation
would apply to 25 certificated airports that the state
owned and operated.
Senator Al Adams asked if this legislation would impose the
fee based on weight rather than on the number of
passengers. Curt Parkins affirmed and detailed the fees
imposed on the different types of aircraft. A Cessna 206
and 207 would not pay any landing fee. A Navaho weighing
7000 lbs. would pay $3.50 each time it landed. A DC-6,
often used for cargo shipments would pay $50.
Senator Al Adams was concerned how this would affect Prudoe
Bay and the impact on the economy. Curt Parkins said the
fee would not be based on the number of passengers but on
the gross weight of the aircraft. He had done some figures
on what the cost per passenger would be and would give that
information to the committee it the members were
interested.
Senator Al Adams then asked about mail, noting that the
carriers were subsidized by the US Postal Service. How
would that be affected? Curt Parkins was unsure. Co-Chair
John Torgerson said it was his intention that if the mail
was handled by a private carrier they would be charged the
fee.
Senator Gary Wilken asked what was the take-off weight of a
Cessna 206 and a 207. Curt Parkins answered the 206 was
3600 lbs. and the 207 was slightly larger. Senator Gary
Wilken then wanted to know why floatplanes were exempted.
Curt Parkins understood this was similar to what was
proposed in the earlier landing fee in 1991-93. He deferred
to Steve Pabish (?) to give more information.
STEVE PARISH (incorrect last name provided by
teleconference operator) testified via teleconference from
Anchorage. He explained that the float plane operation
cost the rural airports nothing. This was discovered during
the public testimony process of the earlier attempt. There
were relatively few floatplanes that exceeded the 6000 lb.
limit.
Co-Chair John Torgerson asked why the 1992 regulations were
not written to include all commercial aircraft rather than
just charging by weight. Curt Parkins was unsure but said
they did not want to push the airlines into using smaller
aircraft to avoid the fees. He noted it was a potential
safety concern.
There was discussion between the co-chair and Curt Parkins
about the use of the different aircraft.
Senator Loren Leman asked how the Ketchikan airport landing
fees compared. Curt Parkins responded it was a different
mechanism in that a flat fee was charged up to a certain
weight. The fee was $1.62 per thousand pounds. An aircraft
weighing over 12,000 lbs. was charged $8.50 per landing.
Co-Chair John Torgerson asked if 50-cent charge was
reasonable. Curt Parkins said it was and compared it to the
Anchorage airport.
Co-Chair John Torgerson asked about the size of aircraft
using the rural airports. The fees charged various aircraft
were again discussed.
Senator Gary Wilken asked if a city-owned airport would be
exempt. Co-Chair John Torgerson said they would along with
the City of Ketchikan, which leased from the state.
Senator Al Adams compared the tax rates on air carriers to
other businesses across the state such as mining and
tourism. Curt Parkins was unable to respond but noted that
the aviation industry was crucial to development across the
state. He referred to his earlier statement that the impact
this would have in other areas should be considered.
Senator Al Adams commented that this could impact rural
development and asked for the department's position on the
bill. Curt Parkins answered that the department supported
finding mechanisms to close the funding gap for rural
airport maintenance and operation costs. This was one
mechanism and there could be other ways to meet the need.
He was not in a position to say whether the department
fully supported or opposed the legislation and that it
could be improved.
DON ETHERIDGE, Union Local #71, testified in opposition to
the bill. This affected members of the union.
KIM ROSS, Executive Director, Alaska Air Carriers
Association testified in opposition to the bill. She told
about her organization. The association wanted the
Legislature to cut the budget. However, caution and common
sense must prevail, she stressed. Any tax policy decision
should be based on accurate facts and sound analysis. She
gave a history of the prior attempt to impose a landing
fee. She then told of other carrier's attempt to comply
with FAA criteria. She gave an analogy of a carrier
operated by "Charlie". To avoid paying landing fees,
"Charlie" would choose to fly a smaller, less safe aircraft
to transport a high school basketball team. Landing fees
were discriminatory and created an additional
administrative burden.
Senator Gary Wilken wanted clarification of "Charlie's"
problem. Kim Ross had a breakdown of the amounts the
different aircraft would pay. Senator Gary Wilken wanted to
understand why "Charlie" would send the basketball team on
an unsafe aircraft in order to save $3.50. Kim Ross gave
totals of daily amounts the aircraft would pay based on the
number of flights they would have.
BUTCH HALLFORD, Vice President, Northern Air Cargo,
testified via teleconference from Anchorage in opposition
to the bill. He felt the administrative cost would cut into
the revenue generated. He believed this legislation placed
an unfair expectation on rural communities to make up
budget shortfalls.
Co-Chair John Torgerson commented that the financial load
was distributed across the state by the many bills
sponsored by the committee.
Senator Loren Leman noted there was an overall net gain to
the rural operating budget.
Butch Hallford said he had not considered that valid
because the Village Safe Water projects would be done in a
couple years and the airport fees would continue
indefinitely. He noted that the burden would fall on nine
carriers. He also pointed out that there would be a need
for more administrators to oversee the program.
Co-Chair John Torgerson clarified *.
Senator Randy Phillips asked if the witness advocated an
increase in aviation tax in lieu of this bill. Butch
Hallford chose the aviation tax.
Senator Pete Kelly pointed out that the money would have
gone away under the current structure. Therefore that tax
structure did not work.
JOHN STEINER, Assistant Attorney General, Transportation
Section, Civil Division, Department of Law, representing
the airports, testified via teleconference from Anchorage.
He noted the department was already allowed to impose
landing fees, as they felt appropriate. They had the
flexibility to give considerations
CORBY HUNT, Alaska Airlines testified via teleconference
from off net out of state. He felt the legislation was
discriminatory and should be imposed on all commercial
carriers. He also suggested the fees should be accessed on
an airport by airport basis. He noted the last time the
landing fees were imposed, they were ruled by the court.
Co-Chair John Torgerson said he felt there should be a cost
analysis for each airport anyway.
Tape: SFC - 99 #103, Side B 10:42AM
Senator Al Adams recommended the bill be left in committee.
Senator Loren Leman thought there was merit to the argument
that some commercial carriers would be charged because of
their larger aircraft. He did not have an amendment
prepared to address that.
Co-Chair John Torgerson agreed but did not think the fee
was sufficient. He felt that to impose the fee to smaller
aircraft would entail more expenses.
Senator Randy Phillips suggested the committee consider an
aviation fuel tax over the landing fee.
Co-Chair John Torgerson asked Corby Hunt if Alaska Airlines
would prefer the aviation fuel tax over the landing fee.
Corby Hunt noted the accounting of the landing fee was done
with no oversight. As far as the aviation fuel tax, he
said he would need to confer with his boss.
Senator Lyda Green was reluctant to put the Department of
Transportation and Public Facilities into the regulation
process because of the difficulties with airport leasing
regulations.
Senator Gary Wilken asked what revenues this fee would
generate. Co-Chair John Torgerson noted the fiscal note
had not yet been prepared but the department estimated
$1.5.
Senator Gary Wilken offered a motion to move SB 148 from
committee. Senator Al Adams objected. By a vote of 6-1-2,
the motion passed. Senator Al Adams cast the nay vote.
Senator Pete Kelly and Senator Sean Parnell were absent.
ADJOURNED
Senator Torgerson adjourned the meeting at 10:50 AM.
SFC-99 (23) 4/21/99
| Document Name | Date/Time | Subjects |
|---|