SENATE TRANSPORTATION COMMITTEE January 27, 1994 3:35 p.m. MEMBERS PRESENT Senator Bert Sharp, Chair Senator Randy Phillips, Vice Chair Senator Tim Kelly Senator Jay Kerttula MEMBERS ABSENT Senator Georgianna Lincoln COMMITTEE CALENDAR SENATE BILL NO. 256 "An Act increasing the tax on transfers and consumption of aviation fuel." PREVIOUS SENATE COMMITTEE ACTION SB 256 - No previous senate committee action. WITNESS REGISTER Bruce A. Campbell, Commissioner Department of Transportation & Public Facilities 3132 Channel Drive, Juneau, AK 99801-7898¶465-3901 POSITION STATEMENT: in favor of SB 256 Reed Stoops Alaska Air Carriers Association 240 Main St., #600, Juneau, AK 99801¶463-3223 POSITION STATEMENT: in favor of SB 256 ACTION NARRATIVE TAPE 94-1, SIDE A Number 001 CHAIRMAN SHARP calls the meeting to order at 3:35 p.m. Number 004 CHAIRMAN SHARP brings up SB 256 INCREASE AVIATION FUEL TAX as the only order of business before the Senate Transportation Committee today. The chairman calls the Commissioner of the Department of Transportation & Public Facilities as the first witness. Number 020 BRUCE A. CAMPBELL, Commissioner, Department of Transportation & Public Facilities (DOT), states the department began developing SB 256 to help offset maintenance costs at rural airports. Originally DOT simply instituted regulations to charge landing fees at rural airports, but some air carriers took the department to court, and the court declared that the regulations had been improperly adopted. So the regulations were declared null and void. Commissioner Campbell says he met with some of the air carriers in Anchorage, and a compromise was reached in which the carriers stated they would support a minor increase in the fuel tax over reinstituting landing fees at rural airports. This is also preferable to Commissioner Campbell because it is difficult to collect fees at some of the small, rural airports. Number 058 SENATOR RANDY PHILLIPS asks Commissioner Campbell why the air carriers are opposed to landing fees. Number 065 COMMISSIONER CAMPBELL replies that landing fees are difficult to monitor and DOT would have to rely on the records kept by the air carriers. The air carriers with regularly scheduled flights had a fear that less regular carriers would not keep very good records of flights; as a result, the regular carriers would end up paying more than their fair share. Number 071 SENATOR RANDY PHILLIPS asks Commissioner Campbell how much money the landing fees would have generated. Number 075 COMMISSIONER CAMPBELL responds that landing fees would have generated about 1.4 to 1.5 million dollars, while the slight increase in gas tax will generate about 1.7 million dollars. The slightly higher figure for a gas tax takes into account inflation. Number 080 SENATOR RANDY PHILLIPS comments he does not like taxes but he sure likes fees. Number 083 CHAIRMAN SHARP asks Senator Kelly if he recalls when landing fees were disallowed by the courts last year and fees had to be refunded to the carriers, so the legislature was asked to look at another approach. Senator Kelly does not recall working on that. The chairman calls the next witness. Number 092 REED STOOPS, representing the Alaska Air Carriers Assn., states the Alaska Air Carriers Assn. has approximately 120 members and represents all the major carriers, most of the medium sized carriers, and even some of the small carriers. The Alaska Air Carriers Assn. supports SB 256. The association prefers an increase in fuel tax as opposed to landing fees. An additional reason the association supports an increase in fuel tax, other than the reason previously stated by Commissioner Campbell, is that there is a higher cost involved in collecting landing fees than there is in collecting additional fuel taxes. This means there will be a greater net amount of money available for maintenance of airports if fuel taxes are increased, rather than imposing landing fees. Mr. Stoops adds that the Alaska Air Carriers Assn. prefers the draft committee substitute to the original bill. Number 140 SENATOR KELLY asks if this increase in fuel taxes will totally do away with landing fees at rural airports. Commissioner Campbell replies it will only do away with landing fees at rural airports, and does not do away with landing taxes at larger airports. It will not have any effect on personnel, since the landing fees were collected by existing personnel based in Anchorage. Senator Kelly asks what the difference is between SB 256 and the committee substitute. Number 154 CHAIRMAN SHARP responds the main difference is on page 1, lines 7 through 9, and essentially says you can't have both landing fees and increased fuel taxes. Number 158 SENATOR KELLY moves the adoption of CSSB 256(TRA). Number 161 SENATOR KERTTULA and SENATOR RANDY PHILLIPS state they are opposed to SB 256, but will not oppose releasing it from committee. Number 167 CHAIRMAN SHARP states CSSB 256(TRA) has been adopted. Number 171 SENATOR KELLY asks CSSB 256(TRA) be moved from committee with individual recommendations. Number 174 CHAIRMAN SHARP, hearing no objection, discharges CSSB 256(TRA) from the Senate Transportation Committee. Number 180 CHAIRMAN SHARP adjourns the meeting at 3:46 p.m.