Legislature(2009 - 2010)BUTROVICH 205
01/28/2010 01:00 PM Senate TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| SB218 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 218 | TELECONFERENCED | |
SB 218-SUSPENDING MOTOR FUEL TAX
1:04:55 PM
CHAIR KOOKESH announced the consideration of SB 218 and said he
did not intend to move the bill today.
GINGER BLAISDELL, Director, Administrative Services Division,
Department of Revenue, read the following sponsor statement into
the record:
Escalating costs are placing a difficult burden on
many Alaskans, particularly for those who live in
rural areas of the state. Suspending the motor fuel
tax is one step toward making Alaska's living expenses
more reasonable across the state. The actual amount of
money saved would vary depending on the type of fuel
being purchased; however most consumers should save
eight cents per gallon when filling up their vehicles.
It is important to note that while the motor fuel tax
suspension would provide temporary assistance for two
years, we still need to work together to seek longer
term solutions to the energy costs facing us.
It is the needs of Alaska's families, communities, and
businesses that justify the proposal contained in this
legislation.
1:07:25 PM
Senator Myers joined the committee.
MS. BLAISDELL provided the following sectional analysis:
Section 1(a) - Suspends the motor fuel tax for two
years beginning July 1, 2010 and ending June 30, 2012.
Section 1(b) - Requires motor fuel dealers to report
the amount of motor fuel sold or transferred in the
state to the Department of Revenue and provides for a
penalty of up to $5,000 for failure to report.
Section 1(c) - The Department of Revenue would be able
to immediately draft regulations to implement the
suspension.
Section 1(d) - Motor fuel dealer is defined for
purposes of who must report sales or transfers of fuel
in the state to include anyone who would have remitted
taxes except for the fact that the fuel tax had been
suspended.
Section 2 - Repeals Section 1(a) (the tax suspension)
on June 30, 2012.
Section 3 - Repeals Section 1(b)(c) and (d) on August
31, 2012.
Section 4 - Provides for an immediate effective date.
1:08:04 PM
JOHANNA BALES, Deputy Director, Tax Division, Department of
Revenue, clarified that this bill suspends the tax for all
highway, marine, jet fuel and aviation motor fuel tax types.
SENATOR MEYER asked if this is basically the same as the bill
that passed two years ago, which suspended the $0.08 motor fuel
tax.
MS. BALES replied this would do exactly the same thing.
CHAIR KOOKESH asked where the tax would go if it weren't
suspended.
MS. BALES replied it would go to the general fund. A subaccount
in the general fund is used for highway projects and
maintenance, she added.
CHAIR KOOKESH observed that this effectively takes money from a
fund to repair and maintain highways.
MS. BALES said yes, but the fuel tax has been a very small
portion of the amount that is appropriated for highway
maintenance and repair.
CHAIR KOOKESH asked if that money is used to match federal
dollars.
MS. BALES said yes, but the total fuel tax is comparatively
small so it is heavily supplemented with other general fund
dollars.
SENATOR MENARD asked how much Alaska pays in fuel tax compared
to other states.
1:10:48 PM
MS. BALES replied Alaska has the lowest rate at $0.08/gallon.
The next closest is Georgia at $0.15/g and the top rate is
Washington at $0.375/g.
SENATOR MEYER pointed out that Alaska also has the highest fuel
prices in the nation so it's nice not to pay the additional
$0.08/g. He asked Senator Davis if she has a similar bill.
SENATOR DAVIS reported that her bill, which is in the finance
committee, is virtually the same. She noted that she has an
amendment to SB 218, but she won't offer it today. The
administration is aware of her bill and wants one or the other
to pass.
1:12:22 PM
SENATOR MEYER asked if the administration is concerned that
Congressman Young said that suspending the tax could hurt the
state as far as getting additional money from the federal
government.
MS. BALES explained that part of the matching program requires
reporting of the amount of fuel used on highways and this bill
requires those reports. As long as the state continues to
report, federal highway dollars will not be affected.
SENATOR MEYER asked if it's just a matter of reporting and
there's no obligation for the state to actually collect the fuel
tax.
MS. BALES said that's correct.
SENATOR PASKVAN asked if increasing the motor fuel tax would
result in a larger federal revenue share.
MS. BALES said no; what would affect the share is if Alaska were
to use more highway fuel.
SENATOR PASKVAN asked what the fuel tax would be if it reflected
the actual cost to maintain a road.
1:14:36 PM
MS. BALES offered to look in to that.
SENATOR PASKVAN asked if the administration has given
consideration to how electric cars or high-mpg vehicles might
contribute to road upkeep. If two vehicles travel ten miles they
should each pay roughly the same for road upkeep, he opined.
MS. BALES said the federation of tax administers, of which her
office is a member, is trying to address that issue.
1:17:02 PM
TOM OBERMEYER, Staff to Senator Davis, offered his understanding
that the $41 million fiscal note reflects revenue that is
largely produced from aviation and jet fuel. DOR could probably
break the number down further, he said.
CHAIR KOOKESH announced he would hold bill to answer questions
like that and to work with Senator Davis to align the bills.
MR. OBERMEYER said the main difference between the two relates
to the enactment language. Senator Davis's bill provides a
contingency in case the Act doesn't take effect on July 1, 2010.
SENATOR MENARD noted the email from Congressman Young warning of
the potential loss in federal funding. She offered to provide a
copy to Ms. Blaisdell.
SENATOR DAVIS asked who Congressman Young sent the letter to; it
isn't in the packet.
1:20:38 PM
SENATOR PASKVAN said his packet contains an ADN article that
discusses the correlation between the state and federal monies.
He understands that the ongoing debate on the federal level is
that Alaska receives much more than it contributes. States that
contribute more than they receive and are in deficit financing
take issue with this. It's a concern on the federal level that
we must consider, he said.
CHAIR KOOKESH asked Ms. Blaisdell at the next hearing to break
down the dollar amounts each motor fuel tax type.
SENATOR MEYER said he believes that constituents can spend the
$0.08 fuel tax more wisely than the Legislature. It helps the
overall economy by keeping costs down. He supports SB 218 and
Senator Davis's bill but he also appreciates that the Chair is
being cautious.
1:23:37 PM
CHAIR KOOKESH reiterated that he wants to have all the
information and to address all the concerns before moving the
bill. He held SB 218 for further work.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Motor fue tax suspension sponsor statement 25jan10.doc |
STRA 1/28/2010 1:00:00 PM |
SB 218 |
| Hearing Request SB218 motor fuel tax 20jan10.docx |
STRA 1/28/2010 1:00:00 PM |
SB 218 |
| PR 10-005 Governor Parnell Calls for Two-Year Motor Fuel Tax Suspension 011210.doc |
STRA 1/28/2010 1:00:00 PM |
SB 218 |
| Motor fue tax suspension sponsor statement 25jan10.doc |
STRA 1/28/2010 1:00:00 PM |