03/14/1996 08:08 AM House STA

 HB 443 - INCREASE MOTOR FUEL TAX                                            
                                                                               
 The next order of business to come before the House State Affairs             
 Committee was HB 443.                                                         
                                                                               
 CHAIR JAMES called on Sam Kito III, Department of Transportation              
 and Public Facilities, to present the committee substitute.                   
                                                                               
 Number 1062                                                                   
                                                                               
 SAM S. KITO III, Legislative Liaison/Special Assistant, Office of             
 the Commissioner, Department of Transportation and Public                     
 Facilities, explained a brief summary of the harbor situation in              
 the state of Alaska was before the committee members for review.              
 It showed historical funding from 1989 to the present.  He further            
 explained the revised fiscal note tied the increase in tax to the             
 dedicated fund allowing the Department to receive the revenue from            
 the taxes.  It was reflected under "maintenance" for the Department           
 of Transportation and Public Facilities.                                      
                                                                               
 Number 1124                                                                   
                                                                               
 CHAIR JAMES wondered how that related to the constitutional                   
 amendment in the House Finance Committee.  Did the constitutional             
 amendment allow the money to be spent on the maintenance of public            
 facilities?                                                                   
                                                                               
 Number 1132                                                                   
                                                                               
 MR. KITO III replied the constitutional amendment allowed the                 
 spending of revenue from the dedicated fund for maintenance of a              
 highway system.  A definition was offered recently in the House               
 Finance Committee that stated "maintenance" included any associated           
 facilities with the highway system.                                           
                                                                               
 Number 1168                                                                   
                                                                               
 CHAIR JAMES announced she did not have a written amendment prepared           
 today.  Nonetheless, she suggested an amendment to divide the 14              
 cents of gas tax into two year implementations - 7 cents one year,            
 7 cents the next.  She called on a committee member to support and            
 move her amendment.                                                           
                                                                               
 Number 1218                                                                   
                                                                               
 REPRESENTATIVE PORTER stated previous testimony indicated there was           
 concern about the jump to 14 cents.  The amendment was one approach           
 to "soften the blow."                                                         
                                                                               
 Number 1261                                                                   
                                                                               
 REPRESENTATIVE ROBINSON also supported the amendment.  It was a               
 major increase.  She believed it was needed, however.  She was                
 confused about the constitutional amendment in the House Finance              
 Committee and asked for an explanation.                                       
                                                                               
 CHAIR JAMES replied the House Finance Committee was working on the            
 constitutional amendment passed from the House State Affairs                  
 Committee earlier.  It was amended to include a marine fuel tax in            
 the House Transportation Committee.  There was concern because the            
 motor fuel tax would not cover the current cost ($75 million spent,           
 $21 million brought in), while the marine fuel tax would cover the            
 current cost ($1 million spent, $7 million brought in).  Therefore,           
 $6 million of existing taxes would be taken from the general fund             
 to be used for harbors and docks.  There was also discussion of               
 transferring harbors and docks to the local municipalities for                
 future maintenance.  Consequently, CSHB 443(STA) was subject to the           
 passage of the constitutional amendment.                                      
                                                                               
 Number 1426                                                                   
                                                                               
 REPRESENTATIVE PORTER wondered what the mechanism would be to                 
 channel the tax money to the municipalities to maintain the ports.            
                                                                               
 Number 1455                                                                   
                                                                               
 MR. KITO III replied the increase in the marine motor fuel tax                
 would be used to offer capital appropriations to upgrade and                  
 transfer facilities.  The Department was planning to implement a              
 sharing program with the localities.  The revenue collected by the            
 legislature into the dedicated fund could be appropriated directly            
 to the communities.  If, at the end of the transfer program the               
 state decided it was no longer interested in collecting taxes for             
 the harbors, the tax rate could be lowered by a future legislature.           
 The intent was to transfer state facilities out-of-state hands.               
                                                                               
 Number 1525                                                                   
                                                                               
 REPRESENTATIVE PORTER wondered if the immediate intent was to                 
 upgrade the facilities so that they could not be transferred.                 
                                                                               
 Number 1530                                                                   
                                                                               
 MR. KITO III replied, "yes."                                                  
                                                                               
 Number 1535                                                                   
                                                                               
 CHAIR JAMES wondered if the purpose of the marine fuel tax was to             
 only fix docks and harbors, or did it also have a general fund                
 implication.  Currently, it did have a general fund implication.              
 Moreover, she aired her concern of the issue of the fishing vessels           
 that did not buy their marine fuel tax from Alaska because it could           
 be bought cheaper from Seattle.  She suggested a use tax to help              
 solve this issue.  She announced it was possible to attach language           
 to address the issue in CSHB 443(STA).  She explained to the                  
 committee members that she was going in that direction.                       
                                                                               
 Number 1646                                                                   
                                                                               
 REPRESENTATIVE PORTER moved to adopt the conceptual amendment to              
 include a two year implementation of the 14 cents gas tax of 7                
 cents the first year and 7 cents the next year.  Hearing no                   
 objection, it was so adopted.                                                 
                                                                               
 Number 1660                                                                   
                                                                               
 REPRESENTATIVE ROBINSON commented the amendment would change the              
 fiscal note.                                                                  
                                                                               
 Number 1677                                                                   
                                                                               
 CHAIR JAMES also commented it would change the fiscal note.                   
                                                                               
 Number 1677                                                                   
                                                                               
 CHAIR JAMES suggested deleting Section 5, "TAX REFUND ADJUSTMENT."            
 The legislature needed to follow the issue further to determine if            
 more taxes or less taxes were needed.                                         
                                                                               
 Number 1726                                                                   
                                                                               
 REPRESENTATIVE OGAN moved to delete Section 5, "TAX AND REFUND                
 ADJUSTMENT."  Hearing no objection, it was so deleted.                        
                                                                               
 CHAIR JAMES announced she was willing to move the bill forward to             
 the next committee of referral before including the use tax                   
 amendment.                                                                    
                                                                               
 Number 1780                                                                   
                                                                               
 REPRESENTATIVE WILLIS moved that CSHB 443(STA) move from the                  
 committee with individual recommendations and attached fiscal                 
 notes.  Hearing no objection, it was so moved from the House State            
 Affairs Committee.                                                            
                                                                               
 Number 1832                                                                   
                                                                               
 REPRESENTATIVE OGAN stated he did not object to moving the bill               
 forward.  It was tied to the constitutional amendment and to the              
 people.  He believed every chance should be given to the people to            
 vote directly on tax issues.