07/23/2008 09:00 AM Senate FINANCE

SENATE BILL NO. 4004                                                                                                          
                                                                                                                                
     "An Act suspending the motor fuel tax; and providing                                                                       
     for an effective date."                                                                                                    
                                                                                                                                
RANDALL  RUARO, SPECIAL  ASSISTANT,  OFFICE  OF THE  GOVERNOR                                                                   
stated  that  the main  benefits  of  the suspension  of  the                                                                   
state's motor  fuel tax apply  to the general public  and the                                                                   
fishing industry. They  are also a part of a tool  box at the                                                                   
federal level  to provide relief to commercial  fishermen. He                                                                   
mentioned  benefits to  regional  air carriers.  He spoke  of                                                                   
communities losing  air carrier service due to  gas taxes. He                                                                   
specifically sited  the community of Kake, Alaska.  He stated                                                                   
that the suspension would provide  relief to the trucking and                                                                   
barging industry as well.                                                                                                       
                                                                                                                                
11:33:56 AM                                                                                                                   
                                                                                                                                
Co-Chair Stedman  observed that the suspension  would be from                                                                   
        stst                                                                                                                    
August 1   2008 to July  31  2009. He  asked for data  on who                                                                   
holds fishing permits  in state and where they  were held out                                                                   
of state. He wondered if non Alaskans  were fueling up at the                                                                   
Dutch  Harbor  port.  He  asked if  the  majority  of  marine                                                                   
vehicles fueling  up at Dutch Harbor were non  Alaskan owned.                                                                   
He felt  that Dutch Harbor was  the dominant port  for marine                                                                   
fuel.   Mr.  Ruaro  stated   that  he   would  provide   that                                                                   
information as soon as he could.                                                                                                
                                                                                                                                
Co-Chair Stedman clarified that  the proposed bill if enacted                                                                   
would repeal  the marine  fuel tax  for anyone buying  marine                                                                   
fuel. Mr. Ruaro answered that  it suspends the tax for a year                                                                   
and applies on a statewide basis to all payers of the tax.                                                                      
                                                                                                                                
11:35:43 AM                                                                                                                   
                                                                                                                                
Co-Chair  Stedman asked  the  administration's  plan to  back                                                                   
fill the  $36.7 million. Mr. Ruaro  said there was  no formal                                                                   
plan at  this time.  The assumption  is that  there would  be                                                                   
that amount less general funds.                                                                                                 
                                                                                                                                
Senator  Thomas asked  if the  bill had been  broken down  by                                                                   
what the  motor fuels  do in specific  situations.  He stated                                                                   
that more  clarity was  needed between  heating fuel  and the                                                                   
fuel that powers vehicles.                                                                                                      
                                                                                                                                
Senator Huggins  asked how many  vehicles in the  state fleet                                                                   
were sport  utility vehicles (SUVs).  He asked how  the state                                                                   
could reduce  overall consumption  and suggested  that Alaska                                                                   
should set the example for the country.                                                                                         
                                                                                                                                
Senator  Huggins voiced  his  concerns maintaining  a  robust                                                                   
maintenance fund  for highways  given the tax  suspension. He                                                                   
also wondered about re-imposing the tax after suspension.                                                                       
                                                                                                                                
Co-Chair  Stedman asked  for a  geographical distribution  of                                                                   
the tax cut. Mr. Ruaro said he would work on that.                                                                              
                                                                                                                                
SB  4004  was  heard  and  HELD   in  Committee  for  further                                                                   
consideration.                                                                                                                  
                                                                                                                                
AT EASE:       11:43:03 AM                                                                                                    
RECONVENED:    11:43:28 AM