CSSB 256(TRA): An Act relating to the tax on transfers and consumption of aviation fuel; and providing for an effective date. Senator Sharp spoke in support of SB 256. Discussion was had by Co-chair Pearce, Senators Rieger, Kelly, and Sharp, regarding rural landing fees and fuel taxes. Co-chair Pearce announced that CSSB 256(TRA) would be HELD in committee until more information was obtained comparing jet fuel prices in Alaska with the lower 48 states. (The bill was heard again on Friday, March 25, 1994.) CS FOR SENATE BILL NO. 256(TRA): An Act relating to the tax on transfers and consumption of aviation fuel; and providing for an effective date. Co-chair Pearce announced that SB 256 was before the committee. Senator Sharp said the bill was introduced by the Transportation Committee and it addressed the statement in last year's operations budget where the situation was noted that rural landing fees in rural airports should not be considered. They were difficult and expensive to collect. This bill was another option to landing fees for rural airports. Some organizations did support it. Without this bill, rural landing fees would have to be reinstated. He said SB 256 would sunset in the year 2000. It prohibited charging rural landing fees while this tax was in effect. Co-chair Pearce commented that Northern Air Cargo supported the bill. An unidentified man in the audience also said that Alaska Air Carriers supported the bill. Senator Sharp said he thought Alaska Airlines supported the bill. REED STOOP, Alaska Air Carriers Association, said he believed that Alaska Airlines would be beneficiaries under this bill. They would pay less in fuel taxes than they would in landing fees if landing fees were the alternative. There had been some mixed correspondence but Kim Daniels, Alaska Airlines, had told him that they did not object to the bill. Mr. Stoop said his organization was very appreciative of Commissioner Campbell's efforts last year to suspend the landing fee program which none of the carriers liked. Most agreed with the Commissioner when he made the decision not to reinstate the landing fees. At that time, the air carries agreed that they would not object to a fuel tax increase that would raise an equivalent amount of money. They felt it would be a fair tax and a better alternative. If the money was not raised, the department would be forced to make cuts to its operation in rural airports and that would hurt the air carriers. Co-chair Pearce felt that all members of ATA that opposed the bill in some way had to benefit from having the feeder lines going into Anchorage and going back out to provide other passenger and cargo service throughout the state because so many towns and villages were not on the road system and relied on air travel. She agreed that lack of upkeep at rural airports would cut down on service for these carriers. Mr. Stoop agreed with Co-chair Pearce's statement. He said that an earlier recommendation by Commissioner Turpin to raise the tax 2 to 2.5 cents was unacceptable and would have raised 3 or four times what was being collected in rural landing fees. He said SB 256 was a more modest contribution of $1.5M and he knew the Department of Transportation's budget cuts were beginning to effect the rural airport maintenance support. Co-chair Pearce asked for a jet fuel comparison between Alaska's large cities like Anchorage and Fairbanks, and other major airports in the lower 48. An unidentified man in the audience said that it was his understanding that fuel costs were more reasonable in Alaska than in the lower 48. Senator Sharp said he would have that information for the committee in a few days. Discussion was had between Senator Kelly and Co-chair Pearce regarding the new Albuquerque airport and how it was financed. Co-chair Pearce noted that it was an old military base and some funding was paid for or such things as fencing had already been installed by the federal government. Senator Rieger asked why the year 2000 had been chosen as the sunset date. Senator Sharp said he did not know anything special about the year 2000 but the Transportation Committee had wanted a sunset in the bill. Co-chair Pearce announced that SB 256 would be HELD in committee until Senator Sharp requested that it back before the committee. Discussion followed by Co-chair Pearce, Senators Sharp and Kelly regarding the report regarding jet fuel costs in other states. ADJOURNMENT The meeting was adjourned at approximately 9:40 a.m.