The Daily Alaska empire., 1945-03-05
 SPLIT ON
 GAS LEVY
Tax Rate Is Reduced 10 } Gents GdIlon-SedpIdne
 Exemption Moves Fail

The first really wide-open divis-
 ional split of this session came into | the open in the Territorial Senate this morning, over amendments tC the proposed Gasoline Tax act, Sen- ate Bill No. 35.
 Only one major change in the bill
 had been adopted by the time tho noon recess rolled around. The Sen ate concurred in the proposal bJ President Edward D. Coffey to lower the rate of tax from five cents tc three cents per gallon on motor fuel Senator N. R. Walker led the fight of First Division Senators to exclude seaplanes from tax liability under the act, maintaining that their air. ports are natural and cost the Territory nothing. The Ketchi- kan Senator made three attempts to secure special treatment for water planes all failed. Then, in des- peration, he moved to kill the whole measure, asking indefinite postpone ment He was voted down on that also.
 Aircraft Exemption
 A try, by Senator Coffey, to have all aircraft exempted from the tax received similar negative treatment. President Coffey turned over his gayel to Senator Grenold Collins while he took the floor to argue that the claim has always been made that high transportation costs have been
 the greatest factor in retarding the development of Alaska. This bill would only add to those costs, he af- | firmed
 Senator Coffey opposed special treatment for First Division sea- planes on the ground that aircraft in the Third Division likewise oper- ate on floats for six months of the year and should be entitled to similar
 benefits during that period.
 Senator Frank Gordon was the lone representative of the interior area to espotise the principle of ex- empting aircraft from the bill. His arguments were based on the con- tension that passengers would pay the tax in the end; that it would be passed on through increased rates. Argue For Measure
 Senators Whaley and Collins, both aircraft operators and both sponsors of the bill found themselves in the peculiar position of attempting to tax themselves, but argued fori the measure on the ground that if air. craft companies were made to, con tribute to the costs of facilities furnished them. they would be in a better position to make demands for improvement of those facilities.
 Senator Whaley stated, that ac- cording to best estimates, the tax tat the original five cents per gallon rate) would derive $30000 year revenue from seaplanes and about sl80,O00 from all sources. The revenues. he said, would build up a fund for highway and airport con- struction and improvements. It has been stated that such fund would be necessary to enable the Territory to benefit from any extension to Alaska of the Federal Aid Highway Act.
  < Senator Walker, after failure of two attempts to exclude seaplanes from the act. proposed tax of only pne cent per gallon on their fuel, but had no better success with that move than with his previous ones.
 The Senators took time off for lunch while still in the middle of second reading of the Bill. Still more inter-divisional battling was foreshadowed for the afternoon meeting by an amendment proposed to the title by Senator O. D. Coch- ran, to include all boats under the tax liability. His motion was with drawn until later, when the provis- ion of the measure excluding water craft is reached.
 Previous to taking ,lp the Gaso- line Tax bill, the Senate this fore noon voted to "lay on the table Senate Bill No. 25, by Senator Cof- fey, the so-called "G. I. Bill o1 Rights for Alaska" The measure x,oc tohlad Laco,,ca of douht oc tr the legality of one of its provisions; also because it was contended that Federal legislation already covers the subject. The bill may be brought to life again should Anthony E. Karnes, Alaskan Representative for the Veterans Administration. put in an appearance before the body and point out need for it.
 Senate Substitute for House Bill No. 3l. special appropriation