Legislature(1993 - 1994)

03/31/1993 08:40 AM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
  HOUSE BILL NO. 143                                                           
                                                                               
       "An Act  relating to  the distribution  of the  revenue                 
       obtained from imposition of the state tax on motor fuel                 
       used in watercraft  of all descriptions; and  providing                 
       for an effective date."                                                 
                                                                               
  Representative Mackie  noted that the Department  of Revenue                 
  has issued a new fiscal note  based on amendments adopted by                 
  the House Finance Committee, Work Draft for  SSHB 143 (FIN).                 
  The new fiscal note deletes a $112.1 thousand dollar request                 
  in  new positions.    Changes  made  by  the  House  Finance                 
  Committee will  require that   municipalities eliminate  the                 
  need  for  the  additional  positions.   He  noted  that  an                 
  estimated $9  - $10 million  dollars is  collected from  the                 
  program.   An estimated  5 -  7 percent  of the  harbors are                 
  municipally owned.  Therefore 5 - 7 percent of the Fund will                 
  be affected.                                                                 
                                                                               
  Members were  presented with  Amendment 1 by  Representative                 
  Mackie (Attachment  1).   Representative  Mackie noted  that                 
  rural areas that do not have  boat harbors would be impacted                 
  by the amendment.   He emphasized that communities  on river                 
  systems pay fuel taxes and have needs due to erosion or haul                 
  out facilities.  The amendment attempts to address the needs                 
  of these communities.   He  added that urban  municipalities                 
  such as Anchorage  or Fairbanks could receive  funding of up                 
  to  50 percent  if they apply  and qualify.   They  would be                 
  mandated to use  the money for construction  and maintenance                 
  of  public  boat  landing areas  used  by  residents  of the                 
  municipality or or for local efforts initiated to prevent or                 
  repair  the  effects  of erosion  along  shorelines  used as                 
  public boat landing areas.                                                   
                                                                               
  Co-Chair  MacLean   MOVED   to  ADOPT   AMENDMENT   NO.   1.                 
  Representative Hanley OBJECTED for purpose of discussion.                    
                                                                               
  Representative  Mackie  clarified  that  the  Department  of                 
  Revenue would  be responsible for the funds.  The Department                 
  of  Transportation  and Public  Facilities will  certify the                 
  amount.  The Department  of Revenue will disperse  the funds                 
  after the Department of Transportation and Public Facilities                 
  certify the amount each municipality receives.                               
                                                                               
  Co-Chair MacLean  asked if the Department  of Transportation                 
  and  Public   Facilities  will   publish  a   list  of   the                 
  municipalities that have applied.                                            
                                                                               
  FRANK TURPIN, COMMISSIONER, DEPARTMENT OF TRANSPORTATION AND                 
  PUBLIC FACILITIES stated that the Department could publish a                 
                                                                               
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  list of the municipalities that apply.                                       
                                                                               
  Representative Hanley express  the concern  that there is  a                 
  potential fiscal loss to the State of Alaska.  He noted that                 
  the   definition   of   eligibility   has   been   expanded.                 
  Representative  Mackie  observed  that  the  legislation  is                 
  designed to offset the impacts of fuel use  and to take care                 
  of harbors and boat launch facilities.                                       
                                                                               
  Representative  Martin  agreed  that   the  amendment  would                 
  broaden  eligibility.   Representative  Grussendorf stressed                 
  that municipalities  would address their  priorities through                 
  the Fund.                                                                    
                                                                               
  Representative  Navarre  stressed  the  need  to  raise  new                 
  revenues  to  offset the  additional  burden on  the State's                 
  treasury.  Representative Brown asked if the Committee could                 
  consider a small increase to offset the additional municipal                 
  appropriation.                                                               
                                                                               
  Representative Brown questioned if the use of "operating" on                 
  page 1,  line 13 is  consistent with  the use of  "owned" on                 
  page  2,  line  5.    She   noted  that  the  Department  of                 
  Transportation  and  Public  Facilities owns  the  Anchorage                 
  harbor  facility  but it  is  operated by  the municipality.                 
  Representative  Mackie explained  that  the  intent is  that                 
  funding will be allocated only for  the portion owned by the                 
  municipality.  Members discussed the drafting language.                      
                                                                               
  Representative Brown asked the definition of "municipality".                 
  Co-Chair MacLean  noted that "municipality" refers  to first                 
  and second  class cities  and municipalities  of the  state.                 
  Representative  Brown  asked  if  fuel  is sold  outside  of                 
  municipalities.  Co-Chair MacLean  assured  her that fuel is                 
  sold in villages.                                                            
                                                                               
  LARRY  MEYERS, DIRECTOR, INCOME  AND EXCISE  AUDIT DIVISION,                 
  DEPARTMENT OF  REVENUE  discussed  the  Department's  fiscal                 
  notes.  He clarified that  there are approximately 61  major                 
  wholesale fuel distributors.                                                 
                                                                               
                                                                               
                                6                                              
                                                                               
                                                                               
  Representative Grussendorf emphasized that the intent of the                 
  amendment  is  to  get operation  and  maintenance  money to                 
  municipalities for harbors  or boat landing facilities.   He                 
  stressed that  the cost of  maintenance is cheaper  than the                 
  cost of repair.                                                              
                                                                               
  (Tape Change, HFC 93-84, Side 2)                                             
                                                                               
  Co-Chair Larson asked if Title 28 would allow municipalities                 
  to   levy  the   tax.     Mr.  Meyers   could  not   answer.                 
  Representative  Mackie  noted  that funding  is  subject  to                 
  appropriation.    Representative Grussendorf  did  not think                 
  municipalities  could   discriminate  in  taxing   a  single                 
  commodity.                                                                   
                                                                               
  Representative  Hanley  reiterated  his  concerns  that  the                 
  legislation would  divert money  from the  State.   Co-Chair                 
  MacLean pointed out that the fuel  tax is collected from all                 
  users of motor fuels.                                                        
  Representative  Hanley  asserted   that  a  revenue  sharing                 
  program is  being developed.  He asked  that the legislation                 
  be  held until  the  Department of  Revenue  presents a  new                 
  fiscal note.  Representative Martin agreed.                                  
                                                                               
  Co-Chair MacLean  WITHDREW her  amendment.   Co-Chair Larson                 
  expressed concern that  revenues will be withdrawn  from the                 
  State.                                                                       
                                                                               
  Representative Brown  reiterated her concerns  regarding the                 
  use of "operating" on page 1, line 13 and of "owned" on page                 
  2, line 5.   Representative Mackie noted  that reimbursement                 
  is only provided to municipalities that own a portion of the                 
  facility.  Representative Brown asked  if Anchorage would be                 
  reimbursed under the legislation.  Members further discussed                 
  the criteria for reimbursement.                                              
                                                                               
  Representative Martin asked  that HB 143 be  held.  Co-Chair                 
  Larson announced that HB 143 would be held in a subcommittee                 
  consisting of Representatives Hanley, Parnell and Brown.                     
                                                                               
  Representative Grussendorf emphasized  that the intention of                 
  HB 143 is  to encourage  municipalities to  own and  operate                 
  harbor facilities.                                                           
                                                                               
  Representative Mackie  expressed concern that  HB 143  would                 
  not  meet  the  deadline  for  passage of  legislation  from                 
  committee.  Co-Chair  Larson MOVED to  report HB 143 out  of                 
  Committee  with  individual  recommendations  and  with  the                 
  accompanying fiscal notes.  Representative Martin  OBJECTED.                 
  A roll call vote was taken on the motion.                                    
                                                                               
                                                                               
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  IN FAVOR: Brown, Grussendorf                                                 
  OPPOSED:  Hanley, Martin, Parnell, Larson, MacLean                           
                                                                               
  Representatives Hoffman, Navarre, Foster and Therriault were                 
  absent from the vote.                                                        
                                                                               
  The MOTION FAILED (2-5).                                                     
                                                                               
  Representative  Hanley  detailed  issues  that  need  to  be                 
  resolved.                                                                    
  He stressed the need for a  fiscal note by the Department of                 
  Revenue  addressing the amendment.   He  wanted to  know how                 
  much  water fuel taxes are collected.   How much fuel tas is                 
  collected in municipalities that operate  harbors.  How much                 
  is collected in municipalities that  do not have state owned                 
  docks.  He noted that the issue identified by Representative                 
  Brown  regarding  "operated" and  "owned"  also needs  to be                 
  resolved.                                                                    
                                                                               
  HB 143 was HELD in Committee.                                                

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