Legislature(2005 - 2006)CAPITOL 124
02/28/2006 08:00 AM House COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB391 | |
| HB478 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 391 | TELECONFERENCED | |
| *+ | HB 478 | TELECONFERENCED | |
HB 478-MUNICIPAL HARBOR FACILITY GRANTS 8:58:33 AM CO-CHAIR OLSON announced that the final order of business would be HOUSE BILL NO. 478, "An Act relating to the municipal harbor facility grant program; and providing for an effective date." 8:58:56 AM IAN FISK, Staff to Representative Thomas, Alaska State Legislature, pointed out that the committee packet should include a proposed committee substitute. 8:59:22 AM REPRESENTATIVE NEUMAN moved to adopt CSHB 478, Version 24- LS1694\G, Cook, 2/24/06, as the working document. There being no objection, Version G was before the committee. MR. FISK informed the committee that HB 478 is a companion to SB 291 sponsored by Senator Stedman. He explained that for about the past 15 years the Department of Transportation & Public Facilities (DOT&PF) has been transferring harbor ownership from the state to the municipalities. In so doing, the state has provided grants to the municipalities in order to address some of the deferred maintenance issues that were transferred as well. The legislation was brought forward by the Alaska Association of Harbor Masters and Port Administrators and is supported by municipal government officials who recognize the deferred maintenance needs for the harbors. He explained that the legislation proposes a 50:50 matching grant and creates the municipal harbor facility grant fund into which the legislature can appropriate money from whatever source it sees fit. The legislation spells out the watercraft fuel tax account. The change embodied in Version G is located on page 1, lines 9-11. The legislation, he added, would allow [the state] to take appropriations from the fisheries business tax revenue after the municipalities have been addressed through the sharing program. Furthermore, DOT&PF is established as the agency that would administer grants from the fund. The legislation specifies eligibility criteria for grant applications, such as the criteria that the grant has to be for capital improvement projects not preventative maintenance. Furthermore, municipalities would have to demonstrate that they hold adequate insurance for their harbor facilities and have a preventative maintenance plan in place. The legislation also specifies the criteria for the award of grants. The intent, he explained, is to prioritize, repair, and [perform] major maintenance versus new projects. However, once much of the deferred maintenance needs have been addressed, new projects can be considered eligible for grants under this proposed program. The legislation also specifies that a harbor can only receive one grant per year in an amount [not to exceed] $5 million. Furthermore, the legislation specifies that municipalities must operate independent of state aid in the future. Mr. Fisk highlighted further criteria for the award of grants such as public safety needs, the amount spent by the municipality on maintenance of the harbor. Moreover, DOT&PF may make suggestions and changes to the grant applicants. 9:02:56 AM REPRESENTATIVE LEDOUX asked if there is any money attached to the mechanism that HB 478 seems to provide. MR. FISK agreed that the legislation provides a mechanism to which the legislature may make appropriations, which is why the legislation has a zero fiscal note. 9:03:44 AM REPRESENTATIVE NUEMAN inquired as to how much money would be available to the harbors. Therefore, he asked if there are any guidelines with regard to how much money would be distributed to the municipalities/harbors. He inquired as to how it's determined where the need is the greatest. MR. FISK pointed out that the committee packet should include a list of the existing deferred maintenance needs, which are considerable. He suggested that DOT&PF could assess/prioritize the needs on a case-by-case basis. 9:05:50 AM REPRESENTATIVE CISSNA asked if any ways have been identified to obtain funding without state revenues. MR. FISK noted that for certain harbor projects federal dollars are available. He suggested that all three levels of government could be utilized. In further response to Representative Cissna, Mr. Fisk clarified that the notion with HB 478 is to look at the large picture in a comprehensive approach. 9:07:58 AM CO-CHAIR THOMAS moved that the committee adopt Conceptual Amendment 1, which read [original punctuation provided]: p. 2, Line 17: after "grant;" and: "state funds shall not be used by municipality as their matching funds for grants under this program" REPRESENTATIVE NEUMAN objected, and opined that "it" seems to tell the municipalities how to spend their funds. He further opined that [the legislation] seems to place a restriction on a municipality using state money on a grant. CO-CHAIR THOMAS explained that Conceptual Amendment 1 would address the double dipping concern and encourage municipalities to put their own money forward. REPRESENTATIVE NEUMAN withdrew his objection. There being no further objection, Conceptual Amendment 1 was adopted. 9:10:06 AM SCOTT RANSOM, Harbormaster, City of Seward, informed the committee that the City of Seward and its council support HB 478. He further informed the committee that Seward faces over $6 million in deferred maintenance for its original floats. Mr. Ransom noted that the city has funded new floats. He also noted that Seward has already had two rate increases as well as a passenger fee increase as a means to help take care of the harbor facility. 9:11:30 AM ALAN SORUM, Port Director/Harbormaster, City of Valdez, informed the committee that he became very involved with the issues of deferred maintenance and harbor transfers during his two years as president of the Alaska Association of Harbor Masters and Port Administrators. He noted that many communities have supported efforts to support the fund established in HB 478 in cooperation with DOT&PF. Mr. Sorum related his impression that many communities have simply been overwhelmed with the prospect of repairing their facilities. Since there has been no maintenance funding for the state-owned harbors for many years, renovation of these facilities is a major undertaking. He discussed the increased costs, specifically in relation to construction itself. He highlighted that harbors represent a valuable and important transportation link for the state's coastal communities, tourism, commercial and recreational fishing, and subsistence gathering and hunting; and therefore, he encouraged the committee's support for HB 478. 9:13:34 AM JOHN HOLST, Member, Assembly, City & Borough of Sitka, began by characterizing HB 478 as good legislation in that it provides a vehicle for funding local municipalities with large amounts of deferred maintenance. He reviewed some of the major projects in Sitka. He related that the Ports & Harbor Commission of Sitka has already recommended a $.25 per foot increase in moorage rates each year for the next five years. The aforementioned will practically double Sitka's moorage rates, which will be very problematic for much of the local fishing fleet. He related his fear that if moorage fees increase too fast, it will cause local fishermen to leave and at the same time folks from down South may come in since they are accustomed to paying much more. Therefore, it could result in a situation in which the local fishing fleet is displaced, which isn't desirable. This legislation would help the local communities pay for some of the capital improvements because without it the struggle will be borne by local fishermen, he opined. 9:16:12 AM MARTY OWEN, Harbormaster, City of Kodiak, said that he would discuss the economic benefits of harbors across the state. Mr. Owen characterized harbors as economic lifeboats in coastal communities because initially a high percentage of the wealth in a coastal community is created by harbor users, especially by commercial fishermen and tourism-related businesses, who are the economic foundation for almost every business. However, without modern docks and floats, businesses and fishing can't grow. Furthermore, economic activity becomes stagnate and populations decline. Mr. Owen highlighted that most of Alaska's harbors were built over 25 years ago, and since then the vessels have become longer, heavier, and wider and need more electrical support. To remain competitive in a global seafood market, commercial fishermen upgraded their vessels, however the state's harbors haven't kept pace. MR. OWEN then turned attention to the future and how the various rationalization schemes will impact harbor use and development. He explained that to some degree the fleets have consolidated and more [consolidation] seems inevitable. Still, fishing isn't going away. Therefore, Alaska needs to support and sustain the fleet as it matures and modernizes. He characterized the current period as an adjustment period, which state and local governments can help by supporting harbors to meet the needs of the modern fleet in order to stabilize the coastal economies. He then used Kodiak as an example. Just a few a years ago, DOT&PF offered Kodiak $7.5 million and the deed to its two harbors. With the aforementioned funds, the smaller and older of the two harbors was replaced. He related that it will cost over $14 million to replace the remaining harbor. He noted that although Kodiak's moorage fees were some of the highest in the state for many years, they barely covered operating and maintenance costs and nothing was left to set aside for major replacement projects. Since Kodiak has taken over ownership of the harbors, moorage rates have increased three times and two more increases have been authorized by the city council. He informed the committee that for the larger vessels, the moorage rate increased over a five-year period from $25 per foot per year to nearly $100 per foot per year, which is a 400 percent increase. In conclusion, Mr. Owen opined that HB 478 is good legislation that will be good for all of Alaska. 9:22:10 AM JIM STROMDAHL, Harbormaster, City of Petersburg, spoke in support of HB 478. He related that since the City of Petersburg has taken over operation of its harbors, moorage rates have increased by 50-70 percent as well as an additional 10 percent in 2007 and 2008. Furthermore, the City Council of Petersburg has allocated a portion of the raw fish tax. The City of Petersburg plans to utilize the aforementioned for its 50 percent match to the proposed grant in HB 478. He opined that the funding [that can be leveraged] under HB 478 will help keep operations running in the future. 9:23:57 AM JOHN STONE, President, Alaska Association of Harbormasters and Port Administrators (AAHPA), noted that his prepared statement is included in the committee packet. He informed the committee that AAHPA represents 27 harbor systems throughout the state and is in strong support of HB 478, which will help fulfill the original intent of the transfer of the harbors to the municipalities. 9:25:07 AM JOHN MACKINNON, Deputy Commissioner of Highways & Public Facilities, Office of the Commission, Department of Transportation & Public Facilities (DOT&PF), characterized HB 478 as good legislation. He commented that the use of the marine fuel tax and the fisheries business tax is almost a user fee, which is appropriate. 9:26:13 AM CO-CHAIR OLSON, upon determining that no one else wished to testify, closed public testimony. 9:26:21 AM CO-CHAIR THOMAS thanked everyone for helping put this together because it has taken a year to get this far. 9:27:08 AM REPRESENTATIVE NEUMAN moved to report CSHB 478, Version 24- LS1694\G, Cook, 2/24/06, as amended, out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 478(CRA) was reported from the House Community and Regional Affairs Standing Committee.
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