Legislature(2017 - 2018)BARNES 124

02/07/2017 01:30 PM House TRANSPORTATION

Note: the audio and video recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.

Download Mp3. <- Right click and save file as

Audio Topic
01:35:23 PM Start
01:36:11 PM Presentation: Proposed Committee Bill - Exemption to the 1% Art Requirement for Two New Ak Class Ferry Vessels & the Motor Vessel Tustumena Replacement
01:53:26 PM HB60
02:31:38 PM Presentation: Proposed Committee Bill -
02:32:56 PM Organizational Discussion
02:38:29 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Presentation: Proposed Committee Bill -
Exemption to the 1% Art Requirement for Two New
AK Class Ferry Vessels & the Motor Vessel
Tustumena Replacement
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
        HB 60-MOTOR FUEL TAX; TRANSPORTATION MAINT. FUND                                                                    
1:53:26 PM                                                                                                                    
CO-CHAIR WOOL announced that the  next order of business would be                                                               
HOUSE  BILL NO.  60,  "An Act  relating to  the  motor fuel  tax;                                                               
relating to the  disposition of revenue from the  motor fuel tax;                                                               
relating to a transportation maintenance  fund; and providing for                                                               
an effective date."                                                                                                             
1:54:18 PM                                                                                                                    
The committee took a brief at-ease at 1:54 p.m.                                                                                 
1:54:36 PM                                                                                                                    
BRYAN  IMUS, Member,  Laborers' Union,  Local 942,  said that  he                                                               
recognized that  during the times  of ever tightening  budgets it                                                               
is   becoming  increasingly   difficult  to   count  on   highway                                                               
construction projects that upgrade  Alaska's road system and keep                                                               
[laborers] working.  He shared that  an example of the dilemma is                                                               
reflected  in  the  state's  capital budget,  which  has  seen  a                                                               
decrease  of nearly  $2  billion over  the last  two  years.   He                                                               
stated his belief  that increasing the motor fuel  tax would both                                                               
help to  supplement the capital  budget and to fund  the projects                                                               
necessary to ensure  Alaska's transportation infrastructure would                                                               
be able to  meet the demands of the state  and ensure safe travel                                                               
between  cities,  towns, and  villages.    Mr. Imus  stated  that                                                               
although  he supports  HB 60,  he is  concerned that  the current                                                               
proposal  would  allow  the  department   to  syphon  funds  from                                                               
generated  motor   fuel  tax  revenue  for   use  toward  general                                                               
operating  costs.    He  added  that  his  concern  is  that  the                                                               
department  may  opt  to  use  motor fuel  tax  revenue  to  fund                                                               
administrative  costs rather  than  applying  it directly  toward                                                               
snow removal and road construction  projects, where it is greatly                                                               
needed.   He  expressed his  encouragement for  the committee  to                                                               
amend HB  60 to  address the  aforementioned concern  by ensuring                                                               
the funds are legislatively directed  toward capital projects and                                                               
1:56:30 PM                                                                                                                    
SHELLY  ERICKSON, Owner,  HomeRun Oil  Co., Inc.,  said that  the                                                               
weight of  collections on the  taxes and  in paying the  taxes on                                                               
cash flow  and credit card  fees falls on  her.  She  opined that                                                               
motor  fuel taxes  should be  collected  at the  refinery or  the                                                               
barge point  of sale.  She  explained that would be  the simplest                                                               
tax point of  collection and would take the pressure  off the end                                                               
seller.    She  noted  that  current marine  fuel  has  an  extra                                                               
deduction, which  means marine fuel  users are paying less.   She                                                               
added  that  if   the  same  taxes  were  left   in  place,  then                                                               
adjustments could easily  be made.  Ms. Erickson  shared that her                                                               
solution to simplify  Alaska's motor fuel tax  structure would be                                                               
to tax  everyone at the  starting point  for the same  amount and                                                               
not at  the end.   She shared her belief  that if the  motor fuel                                                               
tax increase  was the only type  of tax increase, then  the cents                                                               
per gallon could  be tolerated.  She shared  that she anticipates                                                               
other forms of taxation will  arise and therefore opines that the                                                               
aggressive  amount  per gallon  should  be  lowered by  half  the                                                               
proposed increase.   She exclaimed that  she rejects HB 60.   She                                                               
revealed that  she is watching  more and more people  struggle to                                                               
get gasoline  just to  be able to  get to their  job.   She noted                                                               
that just  in the last  year she has  noticed an increase  in the                                                               
use  of  local nonprofits  for  fuel  assistance.   Ms.  Erickson                                                               
surmised  that adding  a motor  fuel  tax is  a fair  way to  tax                                                               
everyone,  but to  add this  tax in  addition to  other forms  of                                                               
taxation would  result in negative financial  situations for many                                                               
more people.                                                                                                                    
1:58:17 PM                                                                                                                    
ANDREW BREWER opined  that rather than Alaska needing  a fuel tax                                                               
increase, what is needed is a  fuel tax reduction.  He noted that                                                               
with the  tough times Alaskan's  are facing, especially  with the                                                               
reduction of  the permeant fund dividend  (PFD), legislators need                                                               
to send the message that  they understand their constituents.  He                                                               
suggested that  instead of  increasing taxes,  legislators should                                                               
take an  opportunity to lower  taxes and provide  economic relief                                                               
to both individuals  and a state economy in recession.   He added                                                               
that not  only would  Alaskans appreciate  a fuel  tax reduction,                                                               
legislators would garnish support from a reduction as well.                                                                     
1:59:28 PM                                                                                                                    
GRETA  SCHUERCH, External  and Government  Affairs Liaison,  NANA                                                               
Regional Corporation  ("NANA"), stated  that the  primary mission                                                               
of the  corporation is  to improve  the quality  of life  for its                                                               
over  14,000 shareholders.   She  added that  NANA also  works to                                                               
maximize economic  growth, protect and enhance  land, and promote                                                               
healthy communities.  She said  that NANA monitors policy matters                                                               
that would  impact its  business, communities,  and shareholders.                                                               
She explained that  HB 60 is of concern to  NANA because it poses                                                               
significant  risk  to  NANA   shareholders  and  other  Northwest                                                               
Alaskan residents.                                                                                                              
MS. SCHUERCH declared that residents  in the Northwest region are                                                               
already challenged  with the highest  cost of living  anywhere in                                                               
the  state.   She added  that Kotzebue  residents pay  61 percent                                                               
more for  cost of  living expenses  than Anchorage  residents do.                                                               
She noted  that the cost  of living  increases even more  in more                                                               
remote villages, such as her hometown  of Kiana, and even more so                                                               
in places  like Ambler and Buckland  where the price of  fuel for                                                               
homes and for transportation is close to $10 per gallon.                                                                        
MS.  SCHUERCH stated  that in  Northwest Alaska  many businesses,                                                               
local  governments, families,  and elders  struggle to  make ends                                                               
meet with outrageous  cost of living in an  already cash strapped                                                               
economy.  She  opined that an increase to motor  fuel costs would                                                               
impact  the  cost  of  transportation   for  residents  who  rely                                                               
primarily on  snow mobiles  and boats  for hunting  and gathering                                                               
practices.   She  pointed out  that  NANA is  working with  other                                                               
regional entities to  address the high cost of energy  and is not                                                               
solely reliant  on the state  to solve  the problem.   She listed                                                               
some  of  the  projects  to include:  the  installation  of  wind                                                               
turbines; local  gas exploration; gathering wind  and stream flow                                                               
data  to  identify  other  sources  of  alternative  energy;  and                                                               
pursuing  United States  Department of  Energy and  United States                                                               
Department  of  Agriculture grants  to  deploy  solar energy  and                                                               
storage batteries  for two of  NANA's communities.   She affirmed                                                               
that NANA  and other entities are  working hard to take  steps to                                                               
resolve the  challenges that hamper  economic development  in the                                                               
region.  She said that  while NANA supports the implementation of                                                               
a long-term  fiscal plan, it  does not  support a motor  fuel tax                                                               
increase, as  it would present  further financial burdens  on the                                                               
Northwest Alaska region.                                                                                                        
2:02:06 PM                                                                                                                    
MIKE MILLIGAN stated that he  has always supported an increase in                                                               
motor fuel  taxes.  He opined  that the increases proposed  in HB
60  are too  low and  an embarrassment.   He  mentioned that  the                                                               
state of Florida, which he pointed  out does not even have to pay                                                               
for snow removal, has  a 13 cent per gallon fuel  tax.  He shared                                                               
that  he first  testified in  favor of  motor fuel  tax increases                                                               
when Andrew Halcro  was in the legislature and  introduced a bill                                                               
to  increase fuel  taxes.   To further  iterate the  need for  an                                                               
increase in motor  fuel taxes, Mr. Milligan pointed  out that the                                                               
last time  fuel taxes were increased  Elvis was still alive.   He                                                               
alluded that Alaska  is primarily able to build and  fix roads in                                                               
the state because of federal funding.   He added that the federal                                                               
funding is only there because of  fuel taxes.  He noted that even                                                               
as the deficit continues to  climb, road and highway construction                                                               
and maintenance  continue because  of the  aforementioned revenue                                                               
MIKE  MILLIGAN  offered  his  understand that  HB  60  would  not                                                               
dedicate   funds.     He  indicated   that   he  interprets   the                                                               
Constitution [of  the State of  Alaska] as not allowing  funds to                                                               
be pre-dedicated.  Notwithstanding  that, Mr. Milligan encouraged                                                               
legislators to "always dedicate  highway fuel taxes to highways."                                                               
He  said that  although there  are some  differences in  the levy                                                               
amounts in  the proposed bill,  he trusts that the  bill crafters                                                               
knew what they were doing.   He reiterated the need for Alaska to                                                               
increase  motor  fuel  taxes.    Mr.  Milligan  acknowledged  the                                                               
problems fuel  tax increases would  cause, especially in  some of                                                               
the  Western areas  of  the  state.   He  opined  that that  area                                                               
already   enjoys  many   benefits  through   airports  and   road                                                               
maintenance.   He  assessed  that Alaska  cannot  continue to  be                                                               
completely  dependent   on  federal  dollars.     He  exemplified                                                               
Alaska's dependence  on federal funding  by noting that  the last                                                               
road he worked on was 96 percent federally funded.                                                                              
2:04:36 PM                                                                                                                    
KAREN PERRY urged the committee to vote  no on HB 60.  She opined                                                               
that a  fuel tax increase would  make the lives of  Alaskans more                                                               
difficult,  and  she reminded  the  committee  that making  their                                                               
constituent's  lives more  difficult  is not  why voters  elected                                                               
them  to  serve  in  Juneau.   She  mentioned  research  done  by                                                               
Americans for Tax Reform (ATR)  that showed middle class Alaskans                                                               
would be hurt the  most by an increase in motor  fuel taxes.  She                                                               
added that  a motor fuel tax  increase would place the  burden on                                                               
hard working Alaskan  individuals and businesses.   She said that                                                               
an  increase in  fuel tax  would not  only lessen  the amount  of                                                               
money in  Alaskan's pockets that  is needed to feed,  clothe, and                                                               
keep  their families  warm;  an increase  would  also take  money                                                               
needed to  get to and from  jobs, as well as  decrease the amount                                                               
of money  being pumped into  local economies.  She  asserted that                                                               
Alaska is in  a recession and a  fuel tax increase is  one of the                                                               
worst  things that  could  be  done.   She  opined that  Governor                                                               
Walker  seems  determined  to single  handedly  destroy  Alaska's                                                               
economy.     She   reminded  the   committee  that   it  is   the                                                               
legislature's  job  to stop  to  governor.   She  reiterated  her                                                               
advice for  the committee to  do what  is right for  all Alaskans                                                               
and vote no on HB 60.                                                                                                           
2:06:30 PM                                                                                                                    
JAMES SQUYRES urged legislators to  understand that there are two                                                               
types of  rural Alaska: the  Native rural village Alaska  and the                                                               
rural  Alaska where  many individuals  simply choose  to live  in                                                               
remote areas of  the state.  He stated that  the latter describes                                                               
his home  40 miles from  Delta Junction, deep in  the unorganized                                                               
borough.  He  added that he lives  off the grid and  down a state                                                               
road that  is not maintained.   He explained that his  road would                                                               
always be  too far from  any potential  service point to  ever be                                                               
maintained.   He stressed that  his testimony is not  a complaint                                                               
against  a remote  style of  living but  rather is  an effort  to                                                               
educate the committee  about how he and other  Alaskans choose to                                                               
live out  their version of  the Alaskan lifestyle.   He disclosed                                                               
that his  largest expenses every  month are gasoline  and diesel.                                                               
He shared that he maintains two  plow trucks in order to keep his                                                               
access open.   He noted  that after  plowing his own  driveway he                                                               
plows a  mile of  state-owned road which  other Alaskans  use for                                                               
access  to  a  stocked  lake used  for  recreational  winter  ice                                                               
fishing.   He elaborated  that it  takes a  lot of  horsepower to                                                               
plow the steep and  hilly road and that it cost  him at least one                                                               
jerry can of gasoline every time he  even fires up the truck.  He                                                               
explained that  it is 80  miles roundtrip  to town just  to check                                                               
the mail or refill his jerry can.                                                                                               
MR. SQUYRES  to elaborate how  dependent his remote  lifestyle is                                                               
on gasoline,  said his family  stays warm because they  burn wood                                                               
that is  cut from their  own land.  The  wood is hauled  via snow                                                               
mobile, cut  by a chainsaw,  and finally  split by a  27-ton wood                                                               
splitter -  all of which use  gasoline.  He shared  that in order                                                               
to  make  the  call to  testify  today  he  has  to use  a  small                                                               
efficient  gasoline powered  generator to  charge a  battery that                                                               
provides light and electricity.  He  said that he has to pump his                                                               
well out once  a week.  He noted that  that operation, because of                                                               
the depth of  his well, requires a large  220-volt generator that                                                               
runs on  gasoline.  Mr.  Squyres noted  the already high  cost of                                                               
fuel in  Fairbanks, especially in  comparison to  Anchorage where                                                               
not only  gasoline is  cheaper but most  everything else  is too.                                                               
He reiterated the importance of  gasoline, diesel, and propane in                                                               
living a remote rural Alaskan lifestyle.                                                                                        
MR.  SQUYRES   pointed  out   that  there   will  never   be  any                                                               
infrastructure  in the  area where  he  lives other  than what  a                                                               
self-reliant person  can provide  for him/herself.   He indicated                                                               
that  he would  like to  see the  size, scope,  and footprint  of                                                               
government  reduced  much  further   before  trying  to  increase                                                               
revenue  off of  the  private  economy.   He  described that  the                                                               
people  in  his  area  have   been  penalized  already  from  the                                                               
governor's veto of half of the  PFD.  He elaborated that $1000 is                                                               
the  cost  of a  Honda  2000  generator,  an important  piece  of                                                               
equipment  for the  remote rural  Alaskan.   He pointed  out that                                                               
with a  population of roughly 5,000  people in his area,  the PFD                                                               
cap removed $5  million from the local economy and  at a critical                                                               
time  when final  preparations were  being made  for winter.   He                                                               
added  that with  a 1.4  multiplier effect  that would  bring the                                                               
impact to $7 million.  He said  that he and many others have long                                                               
been  advocates  of  the  "[Institute   of  Social  and  Economic                                                               
Research] (ISER)/Goldsmith"  budget target levels by  the size of                                                               
government and the  use of the other half of  the earnings of the                                                               
permanent fund without changing the  calculations of the PFD.  He                                                               
opined that  it would work  if the  other half of  those earnings                                                               
were used  by government to  be a  revenue increase and  give the                                                               
needed diversification  from gas revenue.   He concluded  that if                                                               
the committee members  woke up this morning and  flushed a toilet                                                               
and turned  on lights connected to  a power grid, then  they need                                                               
to think twice before continuing  to take action that affects the                                                               
very core of  individuals living much closer to  the basic Alaska                                                               
[lifestyle], which is the backbone of the Last Frontier.                                                                        
2:09:56 PM                                                                                                                    
AVES  THOMPSON, Executive  Director, Alaska  Trucking Association                                                               
(ATA),  explained  that  the  ATA  is  a  statewide  organization                                                               
representing the  interests of  nearly 200-member  companies from                                                               
Barrow [aka  Utqiagvik] to Ketchikan.   He declared  that freight                                                               
movement is  an essential  part of  Alaska's economy  and impacts                                                               
all Alaskans,  each and every  day.  He  pointed out that  one of                                                               
ATA's legislative  priorities for  2017 is  the development  of a                                                               
balanced  durable long-term  fiscal  plan that  utilizes cuts  to                                                               
state  government, permanent  fund earning  usage, and  taxes, if                                                               
required.   He noted that the  fuel tax increase, as  proposed in                                                               
HB 60, is  acceptable within the framework of  a long-term fiscal                                                               
plan.  He stated that ATA  maintains that action is critical this                                                               
legislative  session.   He added  that ATA  has long  supported a                                                               
fuel tax  increase, as long  as the  funds would be  dedicated to                                                               
transportation  needs.   Mr. Thompson  shared  that ATA  realizes                                                               
funds  would not  be  specifically dedicated  through  HB 60  but                                                               
feels strongly  that it needs  to help resolve the  fiscal issues                                                               
by doing  its part.   He stated that ATA  is pleased to  see that                                                               
under  HB   60,  a  transportation  maintenance   fund  would  be                                                               
established for  use by DOT&PF,  for the following  purposes, [as                                                               
shown within Section  *, Subsection (g), on page  4, lines 20-25,                                                               
which read as follows]:                                                                                                         
     direct  capital,  operating,  or maintenance  costs  of                                                            
     highways  and highway  infrastructure, construction  of                                                                
     highway projects  and ferries  included in  the program                                                                    
     provided  for in  AS  19.10.150, including  approaches,                                                                  
     appurtenances  and related  facilities and  acquisition                                                                    
     of  rights-of-way,  [or]  easements,  or  surveys  [AND                                                            
     OTHER HIGHWAY COSTS  INCLUDING SURVEYS, ADMINSITRATION,                                                                    
     AND RELATED MATTERS].                                                                                                      
MR.  THOMPSON   mentioned  a   presentation,  during   which  the                                                               
commissioner  of the  Department  of Revenue  had  stated that  a                                                               
transportation  maintenance  fund  would create  confidence  that                                                               
revenues  from motor  fuel would  be used  to build  and maintain                                                               
transportation infrastructure.  He  recognized that despite being                                                               
encouraged from the  comments of the commissioner,  ATA urges the                                                               
legislature to  write stronger intent language  to clearly define                                                               
that the special  highway fuel tax account be used  for roads and                                                               
bridges.  He  indicated that the governor's fiscal  year 2018 (FY                                                               
18) budget proposal has at  least three requested appropriations.                                                               
Mr. Thompson  told the committee  there was one  appropriation to                                                               
the  Department of  Public Safety  for  $1.5 million  and two  to                                                               
DOT&PF, one for  $1 million for mental  health transportation and                                                               
$1 million  for a public transit  match.  He noted  that it seems                                                               
the ink  is not even dry  and there is  already a line up  to tap                                                               
into  the  aforementioned  fund.   He  remarked  that  ATA  would                                                               
support a  fuel tax  increase as  part of a  larger package.   He                                                               
pointed out that  the trucking industry pays  about 40-45 percent                                                               
of the state motor fuel tax.                                                                                                    
MR. THOMPSON reviewed that under HB  60, there would be an eight-                                                               
cent increase for motor fuel tax  be in 2017 and another in 2019.                                                               
He  said there  is an  assumption that  industry can  immediately                                                               
pass on any  tax increases to customers.  He  explained that many                                                               
of ATA's  members use the  fuel surcharge to minimize  the impact                                                               
of  fuel price  and  tax increases.   He  noted  that those  same                                                               
members generally use a regional  index to determine the level of                                                               
surcharge.    He  elaborated  that   the  charges  are  generally                                                               
negotiated between  the motor  carrier and  their customers.   He                                                               
opined  that an  increase  in  motor fuel  tax  would not  likely                                                               
change  the regional  index.   Mr. Thompson  stated that  for the                                                               
aforementioned  reasons ATA  is  asking for  a two-step  increase                                                               
rather  than  an  increase  made in  two  consecutive  years,  as                                                               
currently proposed in  the bill.  He explained that  the delay in                                                               
increase  would allow  for time  to minimize  the impact  on both                                                               
customers and industry.  He  reiterated that ATA supports a motor                                                               
fuel tax increase as part  of a balanced durable long-term fiscal                                                               
plan that  includes cuts to state  government spending, permanent                                                               
fund earnings, and implementation of taxes.                                                                                     
2:13:49 PM                                                                                                                    
REPRESENTATIVE CLAMAN  pointed out that  Section 8, on page  4 of                                                               
HB 60, references  depositing funds from the motor  fuel tax into                                                               
a  special  highway  fuel  tax   account  in  the  transportation                                                               
maintenance  fund.   He said  that  it appears  to indicate  that                                                               
those monies would be paid  directly or used for federal matching                                                               
money  for  direct capital  operating  and  maintenance cost  and                                                               
highway infrastructure.   He  said that he  just wanted  to point                                                               
that section out  to Mr. Thompson.  He added  that he also wanted                                                               
to  confirm   that  the  wording  of   the  proposed  legislation                                                               
satisfied  ATA's  interest in  the  funds  being directed  toward                                                               
highway projects, including maintence.                                                                                          
2:14:40 PM                                                                                                                    
MR. THOMPSON answered that he is  familiar with that.  He offered                                                               
his belief that  the match money may be appropriate.   He offered                                                               
his  understanding that  the match  money would  be for  a public                                                               
transit vehicle  and that the other  DOT&PF appropriation request                                                               
is asking  for $1 million  for "the mental  health transportation                                                               
of patients."   He  shared that  he would like  to be  sure there                                                               
would   be   reasonably   good  protection   built   around   the                                                               
transportation fuel  tax fund  to make  sure that  money wouldn't                                                               
get syphoned off into other areas.                                                                                              
2:15:24 PM                                                                                                                    
REPRESENTATIVE  CLAMAN said  that he  would take  a look  at that                                                               
section  to  see  how  it addresses  the  concerns  Mr.  Thompson                                                               
raised.  He shared that he  broadly agrees with Mr. Thompson that                                                               
the legislature  ought to make sure  those funds would go  into a                                                               
designated general fund location.                                                                                               
2:15:55 PM                                                                                                                    
GEORGE PIERCE,  to illustrate that  the legislature is  trying to                                                               
tax Alaskans for  revenue, said that fuel taxes would  bring in a                                                               
little  over $40  million  the  first year  and  $90 million  the                                                               
second year.   He pointed out  that while there has  been mention                                                               
that Alaska  has the lowest fuel  tax rate in the  nation, it has                                                               
failed to be  mentioned that Alaskans pay the  highest prices for                                                               
fuel.   He opined that  the state  should stop funding  the 6,000                                                               
nonprofits and  the 6,000 limited liability  companies (LLCs) and                                                               
(indisc.) corporations and start making  everyone step up and pay                                                               
their fair share.  He  added that non-contributors are not paying                                                               
their fair share.   He declared that the state  needs to stop the                                                               
giveaways.   He mentioned that  the governor took  Alaskans' PFDs                                                               
and gave  over $660  million to  the oil  industry.   He surmised                                                               
that next  year it would  be over $1  billion dollars.   He urged                                                               
the  legislature to  fix Senate  Bill 21  [passed in  the Twenty-                                                               
Eighth  Alaska  State  Legislature]  and  quit  giving  away  the                                                               
credits and  incentives like it  has.  He restated  that everyone                                                               
has  to pay,  and the  state  needs to  stop the  giveaways.   He                                                               
advised that  the legislature try  representing Alaskans  and not                                                               
2:17:22 PM                                                                                                                    
PAMELA GOODE  stated her opposition  to HB  60 and asked  that it                                                               
not be reported out of committee.   She opined that over the past                                                               
10  years  both  oil  prices   and  government  spending  reached                                                               
unprecedented levels.  She remarked  on the growth of government,                                                               
and  she  opined that  the  government  was spending  on  capital                                                               
punishment,  and   "spending  like   it  was   going  to   go  on                                                               
indefinitely, all the while Alaskans  were not celebrating."  She                                                               
stated  that Alaskans  were praying  for  the prices  to go  down                                                               
because  it was  not uncommon  to have  prices of  $5 per  gallon                                                               
across the state.   She elaborated that high  gas prices effected                                                               
everything remote rural residents in  her area did, from trips to                                                               
town,  work,   heating,  electricity,  food,  farming,   and  all                                                               
maritime travel  to hunting  and fishing  locations.   She opined                                                               
that while the price of gas  went up, the government was having a                                                               
good time.  She also noted  that the tourism industry took a hard                                                               
hit when  gasoline prices were so  high.  She mentioned  that she                                                               
knew  of  private businesses  that  suffered  greatly, with  some                                                               
never recovering and eventually folding.                                                                                        
MS. GOODE alluded that government  has been putting billions into                                                               
the  Cook Inlet  Recovery  Act,  in refundable  oil  and gas  tax                                                               
credits,  to help  bring the  gas  prices in  the Anchorage  area                                                               
down.   Ms. Goode  indicated that  was also  when the  power cost                                                               
equalization  program  (PCEP) came  into  effect  for the  Native                                                               
villages  because  the villages  were  probably  seeing $6-7  per                                                               
gallon  prices.   She  expressed  that  she  felt like  now  that                                                               
Alaskans  are  all breathing  a  little  sigh of  relief  because                                                               
prices  are down,  government wants  more.   She noted  that even                                                               
though Alaska  has the lowest  motor fuel  tax rate it  still has                                                               
the  highest  gas  prices  in  the country.    She  restated  her                                                               
opposition  to HB  60  and  explained that  the  bill would  work                                                               
against  the people  and  the  overall economy  in  Alaska.   She                                                               
shared her  wish to  see a  roll call  vote taken  on HB  60 that                                                               
results  in  the  proposed  legislation   failing  to  move  from                                                               
2:19:42 PM                                                                                                                    
SHANNON  CONNELLY   recollected  about   when  gas   prices  were                                                               
extremely high.  She noted that  her husband commutes and the gas                                                               
price spike  really impacted her  family.  She added  that during                                                               
that time  her family didn't do  anything extra.  She  said there                                                               
were times  when they had  to cancel doctor  appointments because                                                               
they  didn't have  enough money  to  drive into  Anchorage.   She                                                               
acknowledged that there  are a lot of supporters of  a motor fuel                                                               
tax  increase,  but  she  opined that  the  supporters  have  not                                                               
thought through the  overall impact of what an  increase would do                                                               
to Alaska's economy.   She surmised that businesses  would not be                                                               
able  to  absorb  the  added  cost  and  the  transportation  fee                                                               
increase would  be passed down to  the users.  She  stressed that                                                               
Alaskans would not only be paying  more for gasoline but more for                                                               
goods and services too.  She shared  the she would like to see HB
60 die in committee.                                                                                                            
2:21:04 PM                                                                                                                    
KELLY  JOHNSON  recommended that  Alaska  needs  to have  a  more                                                               
diversified source  of funds.  He  mentioned one caveat:   If oil                                                               
prices  go up,  then  so too  should state  revenue,  but if  oil                                                               
prices go down,  then state revenue should go down.   He proposed                                                               
that the state should not tax  its citizens when the price of oil                                                               
is high  and, thus,  revenue is not  needed, but  should increase                                                               
taxes  when the  price of  oil goes  decreases because  the state                                                               
would need  the help then.   He said what  that would do  is make                                                               
the prices at the pump the same  all the time.  He noted that the                                                               
price  certainty would  allow for  people to  plan their  budgets                                                               
without having to  worry about the price fluctuating  up or down.                                                               
He  offered  his  belief  that  the  legislature  can't  take  an                                                               
increase at the pump  and a tax on top of that  at the same time.                                                               
He opined  that the legislature needs  to look at motor  fuel tax                                                               
as a variable  tax, that way everyone would be  able to live with                                                               
it.  He  stressed that a motor fuel tax  increase might be easier                                                               
to swallow  if the state  would agree  to give Alaskans  a little                                                               
break when oil prices are high.                                                                                                 
2:23:12 PM                                                                                                                    
CHRYSTAL SCHOENROCK  offered her understanding that  DOT&PF, both                                                               
the  airline  and  the  trucking  industries,  and  the  airports                                                               
support  a motor  fuel tax  increase, but  they don't  absorb the                                                               
cost, Alaskans  do.  She  elaborated that Alaskans end  up paying                                                               
for the  increases through added  costs and fees on  their bills.                                                               
She stated  that she is  a small business  owner.  She  said that                                                               
her  business is  down  25-30 percent  and that  it  is a  direct                                                               
result  of the  lay-offs on  the Slope.   She  added that  she is                                                               
seeing people  deal with cuts  to wages  and some people  are not                                                               
working at  all.  She stated  that people are having  a hard time                                                               
trying to make ends meet this  winter.  She shared her conviction                                                               
that a  fuel tax increase would  be ridiculous.  She  opined that                                                               
there are  other ways to cut  the budget.  She  shared her belief                                                               
that the state has multitaskers that  could do the work of two or                                                               
three people  and would take  a cut  in wages just  like everyone                                                               
else.  She urged the committee to work a little harder on HB 60.                                                                
2:24:44 PM                                                                                                                    
FRED STURMAN shared a story of  a business in Kenai that has been                                                               
in operation  for over 30 years.   He said that  to avoid letting                                                               
one employee go,  all of the employees decided to  each take a 20                                                               
percent cut by taking an extra day  off a week.  He surmised that                                                               
the government  claims that  everyone needs to  have skin  in the                                                               
game, but he  has yet to see a government  employee this year who                                                               
had  his/her  skin  in  the  game.    He  noted  that  government                                                               
employees  still all  got raises,  step increases,  medical care,                                                               
and  still have  retirement.   He shared  that he  has a  list of                                                               
nearly 800 employees that currently  make more than the governor.                                                               
He opined that  it is ridiculous Alaska is  paying employees more                                                               
than its  governor.   He said  that he  knows some  relatives who                                                               
lost 30-40  percent of their  income from  the oil industry.   He                                                               
shared that  he also  knows of several  people who  had contracts                                                               
with the  oil companies  that have  since been  discontinued, and                                                               
those contracts brought  100 percent of their income.   He opined                                                               
that the  legislature needs to  spend more time trying  to figure                                                               
out how  to reduce  government spending and  the number  of state                                                               
employees before  it starts  adding more taxes.   He  pointed out                                                               
that some  legislators in Juneau  have spent upwards  of $100,000                                                               
on travel and  he declared that is too expensive.   He urged that                                                               
the legislature reduce  the state budget before  it starts asking                                                               
for Alaskan's money.                                                                                                            
2:27:14 PM                                                                                                                    
STEPHEN  NUSS, President,  Alaska  Section,  American Society  of                                                               
Civil  Engineers  (ASCE),  shared   that  globally  the  American                                                               
Society of Civil  Engineers (ASCE) supports user fees,  such as a                                                               
motor fuel tax.   He offered ASCE's belief  that adequate funding                                                               
to operate,  maintain, and improve  transportation infrastructure                                                               
through sustainable  dedicated funds is  needed.  He  stated that                                                               
ASCE supports  a motor fuel tax.   He explained that  ASCE opines                                                               
that revenues should be used  for mode-neutral funding.  He noted                                                               
that Alaska is  a large state that relies  on aviation, highways,                                                               
and  the Alaska  Marine  Highway System  (AMHS)  to commute,  get                                                               
around,  and do  business.   He  offered ASCE's  belief that  any                                                               
revenues generated should  be mode-neutral to be  able to support                                                               
all of Alaska's transportation infrastructure  systems.  He added                                                               
that the funds  should have budgetary firewalls  to eliminate the                                                               
diversion  of   transportation  revenues   to  non-transportation                                                               
MR. NUSS pointed  out that some of the  comments heard previously                                                               
were  supportive of  the aforementioned  key protection  feature.                                                               
He said that  personally he understands what HB 60  would do.  He                                                               
stated that currently he uses about  16 gallons of gas a week, or                                                               
roughly 800-900  gallons annually.   He  said that  at 8  cents a                                                               
gallon that  equates to roughly $66  a year in motor  fuel taxes.                                                               
He noted  that under  HB 60  that amount  would raise  to roughly                                                               
$200 a year.   Mr. Nuss shared  an example of where  a motor fuel                                                               
tax can be useful.   He said that last year he  hit a pothole, on                                                               
C Street  in Anchorage,  which dented  the rim  and blew  out the                                                               
tire.   He explained that  on all-wheel drive vehicles the treads                                                               
on all four tires have to  match, so a driver cannot just replace                                                               
one  tire, he/she  would have  to replace  all four  tires, which                                                               
would  cost roughly  $800.    He stated  that  he personally  saw                                                               
benefit from paying  roughly $200 versus $800 a year.   He shared                                                               
that it  is the belief of  ASCE, both nationally as  well as with                                                               
the over  800 civil  engineers in  the state  of Alaska  that are                                                               
represented by ASCE, that a motor  fuel tax is an important thing                                                               
to sustain Alaska's infrastructure,  maintain it, improve it, and                                                               
keep Alaska running.                                                                                                            
2:29:50 PM                                                                                                                    
REPRESENTATIVE  CLAMAN asked  Mr.  Nuss where  he commutes  every                                                               
MR.  NUSS answered  from Eagle  River to  midtown Anchorage.   He                                                               
added that he puts about 40 miles a day on his vehicle.                                                                         
2:30:11 PM                                                                                                                    
CO-CHAIR WOOL asked  Mr. Nuss to clarify whether he  said that he                                                               
didn't want the  funds delineated between the  different modes of                                                               
transportation, for example  motor fuel to roads  and marine fuel                                                               
to ports.                                                                                                                       
MR. NUSS responded that in  looking at the investment in Alaska's                                                               
infrastructure systems,  it is apparent  that highways take  up a                                                               
good chunk  of it, but  Alaska also  has a significant  amount of                                                               
aviation  resources  and  a  large marine  highway  system.    He                                                               
explained  that a  mode-neutral [fund]  would allow  the greatest                                                               
flexibility in  order to be  able to maintain  the interconnected                                                               
transportation system in Alaska.   He informed the committee that                                                               
although  there   are  individuals  living  off   the  grid  that                                                               
primarily just  use the airports,  when they fly  into Anchorage,                                                               
Fairbanks,  or  Juneau  they  end up  traveling  along  the  road                                                               
system.   He  reiterated  that globally  a  mode-neutral fund  is                                                               
2:31:24 PM                                                                                                                    
CO-CHAIR  WOOL,  after  ascertaining  no one  further  wished  to                                                               
testify, closed  public testimony on  HB 60.   Industry testimony                                                               
would be heard next Thursday, he said.                                                                                          
[HB 60 was held over.]                                                                                                          

Document Name Date/Time Subjects
HB60 Opposing Documents - Letter Erickson 2.6.18.pdf HTRA 2/7/2017 1:30:00 PM
HB 60
HB60 Supporting Documents - Letter Grober 2.6.18.pdf HTRA 2/7/2017 1:30:00 PM
HB 60
HB60 DOTPF Response 2.6.17.pdf HTRA 2/7/2017 1:30:00 PM
HB 60
HB60 Supporting Documents - Motor Fuel Tax Background Information 2.6.17.pdf HTRA 2/7/2017 1:30:00 PM
HB 60
HB60 Supporting and Opposing Documents - Mats Su Letters 2.7.17.pdf HTRA 2/7/2017 1:30:00 PM
HB 60
HB60 Opposing Document-Schoenrock 02.07.17.pdf HTRA 2/7/2017 1:30:00 PM
HB 60