Legislature(1997 - 1998)
05/11/1997 12:48 PM Senate RLS
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* first hearing in first committee of referral
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SENATE RULES COMMITTEE
May 11, 1997
12:48 p.m.
MEMBERS PRESENT
Senator Loren Leman, Chairman
Senator Mike Miller
Senator Jim Duncan
MEMBERS ABSENT
Senator Robin Taylor
Senator John Torgerson
COMMITTEE CALENDAR
CS FOR HOUSE BILL NO. 63(RLS)
"An Act amending the definition of `motor fuel' under the state's
motor fuel tax to add, as a part of the tax exemption set out in
that definition, exemption from the tax for fuel sold for use in
jet propulsion aircraft operating in flights that continue from
foreign countries, to add exemption from the tax for certain number
6 `residual fuel oil,' also known as bunker fuel, and to delete the
exemption from the tax for fuel that is at least 10 percent alcohol
by volume; and repealing ch. 42, SLA 1994, the Act providing for
the imposition of a different tax levy on residual fuel oil used in
and on certain watercraft until June 30, 1998; and providing for an
effective date."
CS FOR HOUSE BILL NO. 208(L&C)
"An Act relating to the board of directors of the Alaska Aerospace
Development Corporation."
PREVIOUS SENATE COMMITTEE ACTION
HB 63 - Finance report 5/8/97.
HB 208 - Finance report 4/23/97.
WITNESS REGISTER
Bob Bartholomew, Deputy Director
Income & Excise Audit Division
Department of Revenue
P.O. Box 110420
Juneau, AK 99811-0420
POSITION STATEMENT: Offered information on SCS CSHB 63(RLS)
ACTION NARRATIVE
TAPE 97-7, SIDE A
Before calling the May 11 meeting to order, CHAIRMAN LEMAN
adjourned the May 10 meeting which had been in recess to a call of
the chair.
CHAIRMAN LEMAN called the Senate Rules Committee May 11 meeting to
order at 12:49 p.m., and noted the presence of Senators Miller,
Duncan and Leman.
CHAIRMAN LEMAN introduced CSHB 63(RLS) (MOTOR FUEL TAX EXEMPTION)
as the first order of business. He noted there was a proposed
Rules SCS for the committee's consideration, which, in the non-
attainment areas, puts a seasonal exemption of 4 cents on during
the months that is required by the state and the EPA to meet
quality standards. As incentives, there is also a full 8 cent
exemption if the alcohol for the addition to the fuel is produced
from lignocellulose or from seafood waste.
BOB BARTHOLOMEW , Deputy Director, Income & Excise Audit Division,
Department of Revenue, explained the Rules SCS makes one change to
the previous bill. The previous bill repealed the exemption for
gasohol that is currently in the statute. It will change that
from completely being exempt from the tax to being subject to a 4
cent a gallon tax, which is one half of the current motor fuel tax
rate that is paid throughout the state.
Mr. Bartholomew related that a rough financial analysis by the
division shows that the industry has testified that over the last
years the cost of the additive to a gallon of gas has ranged from
13 cents to 20 cents a gallon. He said if you look at the federal
tax credit, which is 5 cents a gallon, and the state tax credit
under this proposal, which would be 4 cents a gallon, the actual
cost increase for an additive ranges from 4 cents to 11 cents a
gallon. However, he said information shows that the price of gas
shouldn't have to vary whether ethanol is being sold or not.
Addressing the fiscal impact from the change, Mr. Bartholomew said
an additional $8 million in revenue would be collected, and this
change would reduce the $8 million by $1.4 million, so the new
revenue coming in from motor fuel would be $6.6 million.
The current fiscal note shows a net of all of the provisions of the
bill being $4.5 million in new revenue, after the aviation jet fuel
change and the marine fuel change. The new fiscal note for the
Rules SCS will show almost $2.2 million as the net increase in
revenue.
SENATOR LEMAN asked what the difference would be if the exemption
in the non-attainment areas would be 8 cents seasonally. MR.
BARTHOLOMEW replied that it would go down approximately another
$1.5 million.
SENATOR MILLER moved the adoption of SCS CSHB 63(RLS). Hearing no
objection, it was so ordered.
SENATOR MILLER moved SCS CSHB 63(RLS) be approved for calendaring
at the discretion of the Chair. Hearing no objection, it was so
ordered.
CHAIRMAN LEMAN brought CSHB 208(L&C) (ALASKA AEROSPACE DEVELOPMENT
CORP. BOARD) before the committee, and hearing no discussion, he
requested a calendaring motion on the legislation.
SENATOR MILLER moved CSHB 208(L&C) be approved for calendaring at
the discretion of the Chair. Hearing no objection, it was so
ordered.
There being no further business to come before the committee, the
meeting adjourned at 12:58 p.m.
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