03/10/2020 01:00 PM House TRANSPORTATION

         HB 253-SALE, TRANSFER, OR DISPOSAL OF FERRIES                                                                      
                                                                                                                                
1:07:56 PM                                                                                                                    
                                                                                                                                
CHAIR STUTES announced that the  first order of business would be                                                               
HOUSE  BILL NO.  253,  "An  Act relating  to  the  powers of  the                                                               
Department of Transportation and  Public Facilities; and relating                                                               
to the sale, transfer, or disposal of state ferries."                                                                           
                                                                                                                                
1:08:56 PM                                                                                                                    
                                                                                                                                
CHAIR STUTES opened public testimony on HB 253.  After                                                                          
ascertaining that there was no one who wished to testify, she                                                                   
closed public testimony.                                                                                                        
                                                                                                                                
1:09:24 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DRUMMOND moved to adopt Amendment 1, labeled 31-                                                                 
LS1541\M.4, Fisher, 3/10/20, which read as follows:                                                                             
                                                                                                                                
     Page 1, following line 7:                                                                                                  
          Insert a new bill section to read:                                                                                    
        "* Sec. 2. AS 19.65.060(a) is amended to read:                                                                      
          (a)  There is created, as a special account in                                                                        
     the  general fund,  the  Alaska  marine highway  system                                                                    
     fund, into which shall be deposited                                                                                        
               (1)  the gross revenue of the Alaska marine                                                                      
     highway system;                                                                                                            
               (2)  money that is appropriated to the                                                                           
     Alaska marine  highway system  fund by  the legislature                                                                    
     in an amount  that is consistent from year  to year and                                                                    
     is the  amount necessary, after consideration  of gross                                                                    
     revenue,  to  provide  stable services  to  the  public                                                                    
     consistent with  the provisions  of AS 19.65.050(b)(4),                                                                    
     which  appropriations are  not one-year  appropriations                                                                    
     and  the   balances  of  which   do  not   lapse  under                                                                    
     AS 37.25.010; [AND]                                                                                                        
               (3)  any other money that is appropriated to                                                                     
     the   Alaska  marine   highway  system   fund  by   the                                                                    
     legislature,  which  appropriations  are  not  one-year                                                                    
     appropriations and  the balances of which  do not lapse                                                                    
     under AS 37.25.010; and                                                                                                
               (4)  the proceeds from the sale, transfer,                                                                   
     or disposal  of a ferry,  except for proceeds  that are                                                                
     required to  be used for  an eligible purpose  under 23                                                                
     U.S.C."                                                                                                                
                                                                                                                                
1:09:29 PM                                                                                                                    
                                                                                                                                
CHAIR STUTES objected, for the purpose of discussion.                                                                           
                                                                                                                                
1:09:36 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DRUMMOND  said Amendment  1 would ensure  that any                                                               
proceeds from sale, transfer or  disposal of ferries would return                                                               
funds to the appropriate account.                                                                                               
                                                                                                                                
1:10:08 PM                                                                                                                    
                                                                                                                                
SARA PERMAN,  Staff, Representative  Louise Stutes,  Alaska State                                                               
Legislature, on  behalf of  Representative Stutes,  prime sponsor                                                               
of  HB  253, explained  that  Amendment  1  would add  a  section                                                               
stating that  any proceeds from  the sale, transfer,  or disposal                                                               
of a  ferry - except  for those  classified in Title  23, Federal                                                               
Highway Administration dollars - would  be returned to the Alaska                                                               
Marine Highway System  (AMHS) fund.   Vessels  built with federal                                                               
dollars were not eligible to  go straight to AMHS, she explained.                                                               
Funds that were not able to be separated could go back to AMHS.                                                                 
                                                                                                                                
1:11:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DRUMMOND presented  an  example  wherein a  ferry                                                               
that  had been  built  with 90  percent  federal funds  generated                                                               
$200,000, and  she asked  whether $180,000  would be  returned to                                                               
the federal fund.                                                                                                               
                                                                                                                                
1:11:54 PM                                                                                                                    
                                                                                                                                
MS. PERMAN  responded that the  lifetime of  a vessel was  also a                                                               
factor:   if  a vessel  had  lived its  lifetime there  may be  a                                                               
different calculation  in terms of  which funds were  returned to                                                               
the federal fund.                                                                                                               
                                                                                                                                
1:14:16 PM                                                                                                                    
                                                                                                                                
The committee took a brief at-ease at 1:14 p.m.                                                                                 
                                                                                                                                
1:14:51 PM                                                                                                                    
                                                                                                                                
MATT  MCLAREN,   Business  Development  Manager,   Alaska  Marine                                                               
Highway,  replied that  it  was not  simply a  matter  of a  ship                                                               
having been built with federal  funds, but any federal funds used                                                               
on the  vessel from  the date  it was  built through  the current                                                               
date, as  well as  improvements made  using federal  dollars that                                                               
would be  factored in, as  well as how  much money the  state had                                                               
put  into the  vessel  over  the years.    Inflation  was also  a                                                               
factor, he said.   In terms of the motor  vessel (M/V) Taku, 63.9                                                               
percent was the federal portion,  and 36.1 percent was determined                                                               
to go to the state.                                                                                                             
                                                                                                                                
1:15:48 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CLAMAN   asked  whether  the  AMHS   fund  was  a                                                               
designated or a dedicated fund.                                                                                                 
                                                                                                                                
1:16:19 PM                                                                                                                    
                                                                                                                                
ROB CARPENTER, Deputy  Commissioner, Department of Transportation                                                               
and  Public Facilities,  replied  that funds  are designated  for                                                               
AMHS, not dedicated.                                                                                                            
                                                                                                                                
1:16:30 PM                                                                                                                    
                                                                                                                                
CHAIR STUTES reopened public testimony on HB 253.                                                                               
                                                                                                                                
1:16:49 PM                                                                                                                    
                                                                                                                                
JANICE WRENTMORE, Chair, Skagway  AdHoc Marine Highway Committee,                                                               
testified  in support  of HB  253.   She said  she would  like to                                                               
learn what  happens to  vessels, and  she offered  her experience                                                               
and  understanding that  communities  that  inquire almost  never                                                               
hear  back from  AMHS staff.   Ms.  Wrentmore remarked  that AMHS                                                               
does not get much from the sale  of vessels.  She said she thinks                                                               
there  should  be  some  public   scrutiny  of  the  process  and                                                               
suggested the  information could  be provided in  the form  of an                                                               
engineer's  report,  so  folks could  learn  about  the  vessel's                                                               
issues.  She then suggested  that AMHS offer [retired] vessels to                                                               
Alaska communities.                                                                                                             
                                                                                                                                
1:19:22 PM                                                                                                                    
                                                                                                                                
CHAIR  STUTES  removed  her  objection to  the  motion  to  adopt                                                               
Amendment  1.   There  being  no  further  objection, it  was  so                                                               
ordered.                                                                                                                        
                                                                                                                                
1:19:52 PM                                                                                                                    
                                                                                                                                
CHAIR STUTES closed public testimony on HB 253.                                                                                 
                                                                                                                                
1:20:48 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 1:20 p.m. to 1:21 p.m.                                                                       
                                                                                                                                
1:21:14 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE EDGMON moved to report  HB 253, as amended, out of                                                               
committee  with individual  recommendations and  the accompanying                                                               
fiscal  notes.   There  being  no  objection, CSHB  253(TRA)  was                                                               
reported out of the House Transportation Standing Committee.