Legislature(2007 - 2008)CAPITOL 17
02/15/2007 01:30 PM House TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| HB102 | |
| HJR8 | |
| HB8 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 102 | TELECONFERENCED | |
| *+ | HB 126 | TELECONFERENCED | |
| *+ | HJR 8 | TELECONFERENCED | |
| *+ | HB 8 | TELECONFERENCED | |
HJR 8 - WASHINGTON CONTAINER FEE 1:48:48 PM VICE CHAIR NEUMAN announced that the next order of business would be HOUSE JOINT RESOLUTION NO. 8, Opposing the enactment by the Washington State Legislature of a bill proposing to impose a fee on the processing of shipping containers in the State of Washington because of the negative impact of the fee on the people and the economy of this state. 1:49:04 PM REPRESENTATIVE BILL THOMAS, Alaska State Legislature, sponsor, outlined Alaska's dependence upon goods shipped from ports in the state of Washington. In 2003, Alaska was the fifth largest trading partner out of Washington, accounting for about 103,500 jobs and $4 billion in income to that state. Currently before the Washington State Senate, he explained, is Senate Bill 5207 which would impose a fee of $50 per each 20-foot shipping van or its equivalent each time it enters and again as it exits any port in that state, regardless of whether the container is full or empty. Port terminal operators in Washington would receive 10 percent of the fees collected and the remaining 90 percent would go to the State of Washington. He said he opposes this tax because he believes it will devastate the residents and the commercial fishermen in Alaska communities by adding as much as 10 percent to the cost of moving goods. Representative Thomas further noted that 97 percent by weight and 60 percent by value of all goods shipped to Alaska are shipped by water. He asked the committee to support the resolution so it could be sent to the Washington State Legislature. 1:52:57 PM VICE CHAIR NEUMAN asked how much of the gross product used or consumed in Alaska is imported. REPRESENTATIVE THOMAS estimated that for his home town of Haines, 90-97 percent of the goods arrive by marine van. VICE CHAIR NEUMAN inquired as to whether truckers driving up via the Alcan Highway would be affected. REPRESENTATIVE THOMAS said that he did not know, but that a trucker hauling a [marine] van that had been put onto the truck trailer would be affected. 1:54:13 PM VICE CHAIR NEUMAN noted that the tax will increase the costs to every person in the state of Alaska for nearly every item purchased. REPRESENTATIVE THOMAS reiterated his statement that 97 percent by weight and 60 percent by value of all goods shipped to Alaska are shipped to Alaska by marine van. 1:54:56 PM REPRESENTATIVE JOHNSON moved to adopt the proposed committee substitute (CS) for HJR 8, Version 25-LS0533\C, Bullock, 2/12/07, as the work draft. There being no objection, Version C was before the committee. REPRESENTATIVE THOMAS advised the committee that he had no objection to the amendments proposed in the CS. 1:55:42 PM REPRESENTATIVE JOHNSON suggested that Alaska implement a $100 per container tax for the empty vans returning to Washington. REPRESENTATIVE THOMAS responded that he is not ready to retaliate because he is hoping the State of Washington will either kill the bill or sit on it. 1:56:31 PM REPRESENTATIVE JOHNSON related his assumption that most or all of the containers that come to Alaska go back to Washington. REPRESENTATIVE THOMAS answered yes. The fee is $100 for a 40- foot van or equivalent both in and out of Washington for a total tax of $200, and that's why it is so devastating. He said one of the shippers he is working with predicts the tax will increase the cost of goods to Alaska by as much as 10 percent. 1:56:57 PM VICE CHAIR NEUMAN observed that the cost would be even higher for a 53-foot van which is used more often than 40-foot vans for shipments to Alaska. 1:57:01 PM REPRESENTATIVE JOHNSON asked whether the tax is only for vans coming to Alaska or for everything that goes out of Washington ports. REPRESENTATIVE THOMAS related his understanding that Washington is trying to target vans coming from and going to Japan and China, and that Washington failed to take into consideration the impact the tax would have on Alaska. 1:57:32 PM VICE CHAIR NEUMAN read an e-mail he received from a constituent in Prudhoe Bay suggesting that the State of Alaska impose a 25 cent tax per barrel of oil shipped to Washington. The constituent said that this works out to be $100 for the volume of oil that it would take to fill a standard 40-foot container. 1:58:30 PM REPRESENTATIVE DOOGAN queried whether Representative Thomas has given any consideration to what Alaska might do if Washington does not come to its senses after receiving HJR 8. REPRESENTATIVE THOMAS quipped that he had, but only jokingly, such as a tax on oil shipped to Cherry Point, Washington. 1:59:49 PM VICE CHAIR NEUMAN related that Washington State Senator Haugen, sponsor of SB 5207, has purportedly stated that she would not proceed with her bill unless California also passes similar legislation. 2:00:18 PM RANDY RUARO, Staff to Representative Kyle Johansen, Alaska State Legislature, reviewed page 2, lines 26-31, of the CS where language was added urging the attorney general to commence researching some of the issues that are involved with imposing a container tax. He said Legislative Legal and Research Services has advised him that there are numerous potential legal issues with such a tax, including an import/export clause in the United States Constitution. Mr. Ruaro reported that the attorney general has said he does not have any problems with the amendment language or the research request. 2:02:17 PM EVERETT BILLINGSLEY, Attorney for the Lynden Family of Companies, testified that Lynden strongly supports HJR 8 and is particularly pleased with the CS because it addresses the questions about the constitutionality of the proposed tax. He pointed out that Lynden is actively working in the Washington State Legislature in opposition to [SB 5207]. He stated that the tax would be $132.50, each way, on the 53-foot containers used by Lynden. He conveyed that the Washington Legislature is looking for money to pay for freight mobility infrastructure, roads and rail, used for moving containers through Washington and on to the other Lower 48 states. The impact on Alaska was an unintended consequence because most containers return from Alaska empty, he said. MR. BILLINGSLEY emphasized that because the majority of goods shipped to Alaska move through Washington ports, essentially all of Alaska's goods will be subject to the tax. Alaska has very few alternatives to using Washington ports and this will cause a disproportionate impact. The Washington State Legislature and governor need to hear about this disproportionate impact and HJR 8 accomplishes that goal. He pointed out that last year Lynden Transport and Alaska Marine Lines together moved roughly 124,000 20-foot equivalent units (TEU) between Washington and Alaska. Had the tax been in effect, Lynden customers would have incurred an additional $6.2 million in costs. This equates to a rate increase of 10 percent or more depending upon the commodity and the destination, he declared. MR. BILLINGSLEY advised that California is contemplating introduction of a similar tax there. He said if that happens, it will be as devastating to Hawaiian residents as it is for Alaskans. He urged the Alaska State Legislature to contact California officials as well as Washington officials. 2:05:56 PM REPRESENTATIVE JOHNSON inquired as to whether Alaska currently pays any taxes on containers coming from Washington. MR. BILLINGSLEY said he is not aware of any. He then addressed a previous question regarding truck traffic, saying that most truck trailers are hauled to Anchorage, Alaska, aboard Roll- on/Roll-off ships and these trailers would be subject to the proposed tax. He said a small amount of truck traffic still goes over the Alcan Highway, about two or three loads a week. 2:06:35 PM BILL DEAVAR, President and COO, Totem Ocean Trailer Express (TOTE), offered TOTE's strong support for HJR 8. He said that TOTE testified before the Washington State Senate Transportation Committee opposing SB 5207 primarily because of the impact it would have upon the state of Alaska. He reported that TOTE moves about 200,000 TEU annually which would equate to an approximate $10 million impact on TOTE's customers and to residents of the Alaska Railbelt Region. He estimated that the total tax impact for all of Alaska would be $40 million. He also commented that the truck traffic moving up the Alcan Highway would not have this tax imposed upon them because it only affects containers and trailers moved across docks in Washington. He noted agreement that the impact to Alaska is an unintended consequence of SB 5207, similar to the impact to Hawaii, which will likely be impacted three-and-a-half times greater than Alaska. He said TOTE is continuing to meet with members of the Washington State Legislature. 2:09:42 PM VICE CHAIR NEUMAN asked how close the Washington State Legislature is to passing SB 5207. MR. DEAVAR recounted that at the hearings the vast majority of people testifying, particularly the international lines, opposed the tax. The ports are very concerned, he reported, because the tax could cause international carriers to divert to either Vancouver or Prince Rupert, British Columbia, and maybe California if that state does not pass a similar tax. He said the sentiment he is hearing is that the Senate side of the Washington State Legislature is intent on pushing some kind of tax and that Senator Haugen is asking opponents of her bill to come up with other suggestions for generating a revenue stream to fund infrastructure projects. The Washington Senate Transportation Committee has agreed to reduce the tax from $50 to $30 per TEU. This would reduce the total impact to Alaska from $40 million to $24 million, he said, but that would still be an onerous expense to Alaskans. VICE CHAIR NEUMAN requested Mr. Deavar to relay to Senator Haugen his suggestion, as an alternative to the tax, for her to push harder for opening up the Arctic National Wildlife Refuge. 2:12:03 PM MR. DEAVAR commented that that idea is being heard frequently. He then informed the committee that the trade imbalance for the Alaska Railbelt, the region served by TOTE, is 10 to 1 for every 10 trailers of merchandise moved north by TOTE there is only one trailer of cargo moved south. That one trailer of southbound cargo is generally household goods, fish, and some military. He said he agrees with a previous statement that the imposition of this tax is on a roundtrip basis, this adds significantly to the cost of merchandise moving to Alaska. VICE CHAIR NEUMAN asked who would collect the fee. MR. DEAVAR reported that, as the bill is currently written, Washington's terminal operators would be responsible for collecting the tax and sending 90 percent of it to the State of Washington. Terminal operators would retain the other 10 percent to pay for their administrative expenses. 2:13:56 PM AVES THOMPSON, Executive Director, Alaska Trucking Association (ATA), presented the association's support of HJR 8. He said ATA is concerned about the impact of the proposed tax on Alaska's citizens. The $30-40 million annual impact is "a huge hit" and will definitely increase the cost of living in Alaska. The majority of ATA's freight to Alaska is through Washington ports, he continued, and this has provided thousands of jobs and millions of dollars in revenue to Washington's ports and citizens. He acknowledged Washington's need for revenue to provide infrastructure improvements, but he said ATA is urging the state to find another way to raise that revenue. 2:16:31 PM PAUL FUHS, Lobbyist for Horizon Shipping Lines, agreed that there is no question this is a tax on all Alaskans because there is no place in Alaska that is not served by container. He said 80 percent of Horizon's cargo comes by container through the Port of Anchorage and is then shipped over land. He pointed out that shipping is an extremely competitive trade, partly because of the new structure of marketing and distribution in Alaska through Costco, Wal-Mart, and other big carriers who base their commitments on the cost effectiveness of shipping. There is no margin left because it is so competitive, he asserted, and this tax cost will be passed on directly to every Alaskan. He said Horizon Shipping Lines supports HJR 8 and urges Alaska's administration to also weigh in on the issue. 2:17:49 PM VICE CHAIR NEUMAN commented that whenever new taxes are imposed, it offers businesses another opportunity to raise prices. MR. FUHS agreed and stated that the extreme competition between the big stores has brought the margins down, so they will pass the cost on to the consumer. He further agreed with Vice Chair Neuman that smaller businesses will be hit even harder. He also concurred with previous statements about it being a disproportionate tax on Alaska. 2:19:01 PM REPRESENTATIVE DOOGAN inquired as to whether Mr. Fuhs agreed with the previously stated total cost estimate to Alaskans of $30-$40 million. MR. FUHS said yes, because a minimum of 200,000 40-foot containers are shipped to Alaska each year. At a roundtrip tax of $200 that is $40 million. 2:19:44 PM DON KUBLEY, Lobbyist for Sampson Tug and Barge; International Organization of Masters, Mates & Pilots; Marine Engineers Beneficial Association; and Alaska International Marketing, commended Representative Thomas for writing HJR 8 and said the organizations he is representing strongly support the resolution. 2:20:59 PM VICE CHAIR NEUMAN, after ascertaining no one else wished to testify, closed public testimony. 2:21:08 PM REPRESENTATIVE SALMON asked whether lobbyists could be sent to the Washington State Legislature to oppose the bill. REPRESENTATIVE THOMAS responded that it could be done, but that it would add a fiscal note which would delay the resolution's passage. He said the issue is getting a lot of press in Washington and that he would send one of his staff members to testify before the Washington State Legislature if necessary. REPRESENTATIVE THOMAS then directed the committee's attention to letters of support from the National Federation of Independent Business/Alaska and Ocean Beauty Seafoods, Inc. and to Resolution 2007-001 supporting HJR 8 from the Alaska State Chamber of Commerce. 2:23:13 PM REPRESENTATIVE DOOGAN inquired whether the zero fiscal note for the original HJR 8 would remain the same for the CS. MR. RUARO responded that the Department of Law has advised him that there would not be a fiscal impact. 2:24:03 PM REPRESENTATIVE JOHNSON moved to report the proposed CS for HJR 8, Version 25-LS0533\C, Bullock, 2/12/07, out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHJR 8(TRA) was reported from the House Transportation Standing Committee.
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