Legislature(2009 - 2010)CAPITOL 17
02/09/2010 01:00 PM House TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| HJR42 | |
| HB329 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HJR 42 | TELECONFERENCED | |
| *+ | HB 329 | TELECONFERENCED | |
HB 329-DEDICATED TRANSPORT FUND/PUB TRANSPORT
CHAIR P. WILSON announced that the final order of business would
be HOUSE BILL NO. 329, "An Act relating to the transportation
infrastructure fund, to local public transportation, to motor
fuel taxes, and to the motor vehicle registration fee; and
providing for an effective date."
REBECCA ROONEY, Staff, Representative Peggy Wilson, Alaska State
Legislature, stated that she would not discuss reasons for the
dedicated transportation fund since she previously outlined
them. She offered to provide a section-by-section analysis, on
behalf of the prime sponsor of HB 329, Representative Peggy
Wilson. She stated that HB 329 would define the Alaska
Transportation Infrastructure Fund (ATIF), including management
of the fund and expenditures from the fund. Section 1 would
provide legislative intent to appropriate $1 billion in seed
money. She referred to two graphs in members' packets that
depict what the proposed Dedicated Transportation Fund would
look like over time. The first graph shows the potential growth
for the fund with a $1 billion appropriation, the second graph
also includes anticipated revenue from the state's motor fuel
tax.
MS. ROONEY stated that Section 2 would amend AS 28.10.421 (g),
and would deposit motor fuel fees collected by the department
into the proposed dedicated transportation fund, the Alaska
Transportation Infrastructure Fund (ATIF). Fees from the
special license plates, as previously discussed, would continue
to be deposited to the general fund. Three percent of the fees
destined for the ATIF will be deposited to the general fund for
administration of the Alaska Mandatory Insurance Act. The goal
of this section is not to divert funding from programs currently
funded by vehicle registration fees. Under Section 3, the
Watercraft Fuel Tax Account reference was removed since this tax
is being used to help fund the proposed ATIF. However, a
mechanism that makes appropriations to the Municipal Harbor
Grant Fund still exists, but the legislature may also
appropriate money to the fund from the fisheries business tax.
The ATIF can appropriate 8 percent of the ATIF to the Municipal
Harbor Grant Fund, which is detailed in a provision contained in
Section 4.
2:01:01 PM
MS. ROONEY stated that Section 4 would provide technical
corrections to the statutes. Section 5 details the description
of the proposed ATIF, which will consist of appropriations made
to the fund. Secondly, any revenue derived from the motor fuel
tax after April 1, 2011, and from vehicle registration fees
collected after April 1, 2011 will be deposited to the fund.
The Alaska Department of Revenue (DOR) will manage the fund as
an endowment, and will invest funds to yield at least a 6
percent return on investment over time. Funds remaining in the
account at the end of the fiscal year will remain in the ATIF.
The DOR will report on the health of the fund and the amount
available for appropriation, which is 6 percent of the average
of the percentage of market value over the previous five years.
The appropriation will be used for capital projects for
transportation. Appropriations will not be made for federal
match unless the total match does not exceed 10 percent of the
amount available for appropriation. This provision was inserted
to help insure that the funds would not be used for projects
using the arduous federal construction processes. The goal is
to fund projects using state guidelines, which are faster and
less costly to construct.
2:02:25 PM
MS. ROONEY outlined the guidance for appropriations from the
fund detailed in Section 4, including that 60 percent of the
appropriations from the fund are designated for highway
projects, 13 percent for aviation projects, 12 percent for the
Alaska Marine Highway System (AMHS), as previously mentioned 8
percent can be appropriated for harbor facilities and state-
owned marine facilities, 5 percent for transit, and 2 percent
for projects related to roads and trails.
MS. ROONEY explained that a Transportation Infrastructure Fund
Advisory Council (TIFAC) is established and consists of 8
members: the chairs of the House and Senate Transportation
Committee; one legislator appointed by the House Transportation
Committee; one legislator appointed by the Senate Transportation
Committee, the Commissioner of DOT&PF, and three regional
directors of the DOT&PF. Of the legislators appointed to the
TIFAC, two legislators must represent a rural area, and two must
represent an urban area. The DOT&PF will develop criteria and
report its recommendations to the legislature by December 31 of
each year listing transportation projects that should be funded
by the ATIF.
2:04:05 PM
MS. ROONEY explained that Section 6 refunds 60 percent of the
aviation fuel back to municipalities owning and operating an
airport in proportion to the revenue collected at the airport.
All other proceeds collected on aviation fuel will be deposited
to the ATIF. Section 7 would provide that all motor fuel tax
receipts shall be paid into the ATIF. Section 8 would remove
the exception in AS 43.40.010 (j) since it is repealed in
Section 12 of the bill. Section 9 refers to motor fuel refund
checks, which will be made from the ATIF instead of the highway
fuel tax account. Section 10 amends the list of DOT&PF
responsibilities, including that the department will promote and
support methods or modes of local public transportation and
transit, and develop criteria to determine eligibility of
projects for use by the advisory committee. Section 11 removes
a reference to a deleted statute, and Section 12 is a technical
amendment to repeal the Watercraft Fuel Tax Account, the Special
Highway Fuel Tax Account and the Non-Public Highway Use Account
since those accounts would not be necessary as the fuel taxes
will be deposited to the ATIF.
MS. ROONEY stated that Section 13 would establish the transition
language for calculating the amount of the ATIF values. During
the first five years since the DOR will not have a five-year
average to use for its calculations, the transition calculation
will be to use five percent of the POMV in the first year, as of
July 1, 2011. Subsequently, the appropriation will be five
percent of the average market value of the ATIF fund as of each
year through June 30, 2015. The DOR will file a report on
October 1 of each of the first five years to provide the funds
available for appropriation. Section 14 would provide a
contingency, that the change to Alaska's constitution must be
approved by the voters before April 1, 2011 before this bill can
take effect. Section 15 would direct the DOT&PF to initiate its
work to develop the criteria for prioritization of proposed
DOT&PF projects. Section 16 would direct the motor fuel taxes
into the ATIP commencing April 1, 2011.
2:06:39 PM
REPRESENTATIVE PETERSEN referred to Section 5 and to revenues
received after April 1, 2011. He asked whether July 1 would be
a better date to use.
MS. ROONEY offered that the end of the first quarter date was
selected to allow the DOR to work out any issues before the end
of the fiscal year.
REPRESENTATIVE PETERSEN asked whether this would create any
problems to budget three-fourths of a year of revenue since the
DOR would likely need to make adjustments.
2:07:47 PM
REPRESENTATIVE PETERSEN, in response to Representative Johansen,
provided the reference as page 2, line 22 of HB 329.
CHAIR P. WILSON related that she would research the matter with
DOR.
REPRESENTATIVE JOHANSEN asked for the effective date of the
bill.
CHAIR P. WILSON related that HB 329 is contingent upon HJR42
passing, and the ballot proposition requiring a vote of the
people for passage so she was unsure of the effective date.
2:09:29 PM
REPRESENTATIVE GRUENBERG related that he has held a long
standing interest in the legal aspects of a cruise ship head
tax, which is currently under litigation. He related a line of
cases of constitutional issues help define what the cruise ship
head tax can be used to fund. He said the funds can be used for
projects directly related to cruise ships. He suggested that
funding can be spent on piers, or dredging harbors, but probably
not for projects in Interior Alaska. He suggested that since
this bill considers transportation funding, that the committee
might also consider the head tax itself, including specific
permissible uses of the taxes in HB 329 that could help bolster
it against future challenges. He offered that it would not need
to amend the constitution but could provide a dedicated fund
that is allowable under federal law. This approach would not
require a constitutional amendment, but could provide a
perpetual source of constitutionally permissible projects in the
coastal communities. He envisioned such a fund could also be
used by future coastal communities for projects as the Northwest
Passage opens up, noting that coastal communities would also
include the Aleutians and Anchorage.
2:11:50 PM
REPRESENTATIVE JOHNSON offered that funds need to be used for
tourist-related activities. He said, "I think we're way down a
rabbit hole on that one."
REPRESENTATIVE GRUENBERG understood. However, he said he
thought the proposed dedicated transportation fund could be
sequestered until that happens. By that time the state would
have time to build up a real endowment, he surmised.
REPRESENTATIVE JOHNSON remarked that would assume that members
support the imposition of a head tax in the first place.
2:12:45 PM
REPRESENTATIVE MUNOZ referred to page 4, lines 12 - 28, to the
composition of the Transportation Infrastructure Advisory
Council. She asked whether it would be better to use the
current team of DOT&PF members to determine which projects to
fund to avoid political decisions.
MR. RICHARDS related that the composition of the proposed board
closely mirrors the DOT&PF's internal team. He also mentioned
that the ATIFAC would develop the criteria and the projects
would be ranked in a consistent and fair manner.
2:14:33 PM
MR. RICHARDS, in response to Representative Munoz, responded
that legislators do not serve on the current DOT&PF criteria
team, just DOT&PF employees. He listed the group, including
regional directors.
CHAIR P. WILSON stated that legislators were added to assist the
perception of neutrality and to shift away from the sense that
the DOT&PF makes the decisions to one that is more evenly
balanced.
2:15:39 PM
REPRESENTATIVE MUNOZ expressed concern to politicize in the
decision-making process for projects.
2:15:58 PM
REPRESENTATIVE GRUENBERG asked for the reason that the ATIFAC
does not include a public member or industry to bring the
consumer perspective.
CHAIR P. WILSON agreed. She stated it is similar to the State
Transportation Improvement Plan (STIP) process.
REPRESENTATIVE GRUENBERG asked for the department's position on
the ATIFAC composition.
MR. RICHARDS related his initial reaction would be that the
legislator represents the public. The criteria will be set and
the scoring will determine which projects will be selected, and
the projects will be approved by the legislature for
appropriation. He related this ad hoc council could be large
and unwieldy to obtain transparency. He mentioned that the
current DOT&PF's structure is open and in fact, Chair Wilson
attended the scoring process last spring. He remarked that the
DOT&PF provides the technical expertise and the legislative
branch can provide the public process.
2:17:59 PM
MR. RICHARDS, in response to Representative Gruenberg, stated
that he was not certain if the DOT&PF's meetings are subject to
the Open Meetings Act. However, the DOT&PF does public notice
their processes. He deferred to the Department of Law for a
more definitive answer.
2:18:19 PM
MR. KANE, in response to Representative Gruenberg, answered that
he was not certain if the ATIFAC would be subject to the Open
Meetings Act. He offered to research and report back to the
committee.
CHAIR P. WILSON asked Mr. Kane to provide the committee with the
results.
2:19:11 PM
REPRESENTATIVE JOHANSEN asked whether the current DOT&PF's
Project Evaluation Board (PEB) process is in Open Meetings Act.
MR. RICHARDS deferred to the Department of Law.
REPRESENTATIVE JOHANSEN asked if Mr. Kane could also report on
whether the current PEB process falls under the Open Meetings
Act.
2:19:58 PM
REPRESENTATIVE JOHANSEN asked about the current PEB board and
whether the AMHS has been part of the process.
MR. RICHARDS explained that the AMHS projects are funded
primarily from the FHWA funds, which would fall under the
purview of the DOT&PF Commissioner. The needs of the AMHS are
met through planning and are driven by the U.S. Coast Guard
regulations. Thus, the DOT&PF has statutory or regulatory
requirements that it must meet.
2:21:26 PM
REPRESENTATIVE JOHANSEN referred to page 4, line 25 of HB 329,
and asked whether urban and rural terms are defined.
MS. ROONEY answered that the terms are not specifically defined,
but surmised the bill drafters used standard definitions.
2:22:33 PM
REPRESENTATIVE GRUENBERG asked for time to ask questions at the
next meeting.
CHAIR P. WILSON agreed.
2:23:11 PM
REPRESENTATIVE T. WILSON asked for the scoring process that
DOT&PF uses in determining projects.
CHAIR WILSON offered to provide the information.
2:23:25 PM
REPRESENTATIVE JOHANSEN referred to page 5, line 20, of HB 329,
and explained his understanding that an endowment would be
created and would be managed by the Department of Revenue (DOR).
He asked whether the fund will be structured to allow enough
liquidity to refund claims. He recalled that funds are often
invested and not available for use.
MS. ROONEY related that the bill addresses that since the DOR
must manage the fund with the knowledge it must pay out 6
percent of the percentage of market value (POMV). She explained
that she has not held a specific conversation, but will do so.
2:25:20 PM
CHAIR WILSON stated that she would leave the public testimony
open on HB 329 to allow for further public comments.
2:25:28 PM
REPRESENTATIVE GRUENBERG referred to page 2, lines 22 - 26,
which read, "..."from any state tax on fuel used for the
propulsion of motor vehicles, aircraft, and watercraft..." would
be deposited to the fund, as well as registration fees. He
asked whether any taxes relating to transportation would be
excluded by the previously mentioned phrases.
2:26:31 PM
CHAIR P. WILSON commented that the goal is to use state funds,
although some funds may be used on federal projects. She stated
that she did not want to deplete the general funds since the
DOT&PF will still want to fund some projects outside of the
dedicated transportation fund.
MR. RICHARDS, in response to Representative Gruenberg, stated
that the DOT&PF would like to review the various funds and will
work with the DOR to provide a response.
CHAIR P. WILSON projected that revenues for the vehicle
registration fees would generate about $40 million, and the
Motor Fuel Tax would raise about $40 million annually. Thus,
the ATIF would receive $80 million each year. She suggested
taking a cautious approach since it is important not to supplant
federal funding.
2:28:20 PM
REPRESENTATIVE GRUENBERG referred to page 1, line 8, of HB 329,
and read, "on establishment of the fund." He asked whether this
sum would be a lump sum from the general fund or if a ceiling of
$80 million per year would fund the dedicated transportation
fund.
CHAIR P. WILSON related that $1 billion in seed money will be
included in an appropriation bill as the mechanism to fund the
endowment.
REPRESENTATIVE GRUENBERG asked whether the seed money was in
addition to the $80 million from taxes.
CHAIR P. WILSON answered yes. In further response to
Representative Gruenberg, she answered that a provision was not
made for any repayment plan.
2:29:38 PM
JOHN MCKINNON, Executive Director, Associated General
Contractors (AGC), said he spoke previously on encouraging the
use of state funds for construction projects. He remarked that
it does not get any better than this. This proposed ATIF is
multi-modal and while he was unsure about the percentage of
allocation in the bill, he understood the methods used. This
bill will create jobs, but more importantly, will also create
transportation improvements. He reviewed bond issues approved
by voters between 1960 - 1982 and as many as four or five bond
issues, with at least one each year related to transportation
issues, and they all passed. During 1982 - 2002, the state had
ample general funds and did not need bonds. In 2002, GARVEE
bonds and road improvement bonds passed with good solid support
of the voters. In 2008, $315 million transportation bond issue
passed with 63 percent of the vote, without any organized group
advertising its passage. He said that Alaska loves
transportation projects. This bill can do a lot for citizens to
reduce congestion. He recalled an informal calculation done
during his time with the DOT&PF that congestion caused a daily
sum total of $60 million per year.
2:33:16 PM
MR. MCKINNON further recalled the calculation was based on the
cost of people and businesses waiting due to traffic congestion.
The rate used was an hourly rate of $100 per hour for a
commercial truck, and $15 per hour for citizens, but the sum
total added up to $60 million. This can go a long way to
improve the safety improvements. He recalled during a six year
period, from 1996 - 2002, the highway authorization bill that
the federal government required the DOT&PF to spend a certain
amount for non-highway transportation projects like trails.
Thus, the DOT&PF was required to spend $40 million over 6 years.
The politics at the time resulted in over $160 million on those
projects. He stated that the $120 million diverted to those
non-highway projects could have been spent on safety
improvements and lives could have been saved. He stated the
proposed ATIF could be used for safety improvements, new routes
and connectivity, which could result in some spin off. Some
rural villages could be connected to share airports and reduce
the necessity of having to build airports and clinics to serve
small communities. The proposed fund could add ferries, similar
the M/V Lituya which serves Metlakatla. This could help improve
access to transportation and could lower transportation costs.
2:35:35 PM
LOIS EPSTEIN, Professional Engineer; Director, Alaska
Transportation Priority Project (ATPP), stated that the ATTP
works with conservation organizations, transit advocates,
community and governmental leaders, neighborhood organizations,
engineers, and the public to promote sensible transportation
systems and policies in Alaska. She stated that ATPP believes
it is a good idea to address the upcoming decline in federal
transportation funds. However, some problems exist and it is
limited in overall effect. This bill does not include money for
maintenance and preservation, which is roughly $500 million per
year for highways and bridges, and $100 million for preserving
and operating ferries. She cautioned the state should not build
projects it cannot maintain and this dedicated transportation
fund approach does not address maintenance issues.
MS. EPSTEIN discussed the allocation between modes, including
that 60 percent is designated to major roads and bridges, and
only 5 percent for community roads and public transit. These
allocations may not be the right allocations. She related that
since HB 329 provides for an advisory council, that it does not
need to bind the decision making process so tightly. She
offered that she would not be opposed to a maximum amount to be
spent on roads between 40 to 60 percent to ensure that other
modes are appropriately funded. She related that she also
serves on the Anchorage Metropolitan Area Transportation
Solutions (AMATS) Advisory Committee, which uses ranges for
funding. Today's approach does not address the high amounts on
questionable projects like the road to Juneau or Nome road or
Gravina Bridge. There is not enough money for these projects;
but the state continues to fund studies on them at the level of
millions of dollars each year, regardless of the overall cost.
The FHWA and Federal Transit Administration recently sent a
letter dated November 2009 to the DOT&PF, which read, "Alaska
will be over-programmed in the long term and sufficient funds
are not available from current recognizable sources to complete
a number of large projects contemplated by the state's program."
The projects she just identified cost between $400 million to
$2.5 billion and would not be affected by HB 329 since the
projects would require federal dollars. She urged the
legislature and the Governor to show fiscal leadership and
cancel one or more of the projects rather than spending millions
of the state's transportation dollars each year pursing them
without any financial plan. None of those projects mentioned
have a financial plan in place. She suggested holding another
hearing.
2:39:56 PM
CHAIR P. WILSON offered to contact her to obtain information on
using ranges between modes. She expressed her willingness to
work on establishing ranges rather than have specific
percentages between modes. In response to Representative
Gruenberg, she related that it may work out to hold a conference
call.
2:40:51 PM
KATHIE WASSERMAN, Executive Director, Alaska Municipal League
(AML), stated that she is very thankful to the sponsor for
introducing the resolution and the bill. She stated that while
she has not analyzed the specifics of the proposed dedicated
transportation fund, she believed that conceptually the bill
addresses the AML's questions on how the state will address
decreasing federal funds. During the AML trips to Washington
D.C., Alaska's Congressional delegation has often acknowledged
the difficulties in obtaining federal highway funds. She
explained that the AML prepared a report, the "Alaska
Transportation Finance Study," which members have in their
packets. She related that SAFETEA-LU has been extended month-
by-month and is not any way to approach transportation funding
planning. She attended a transportation discussion at the White
House, and every time transportation was mentioned it was in
conjunction with transit. She asked how this would affect
Alaska, and the answered was that even small communities could
benefit from mass transit. Thus, she surmised that the
administration may not understand Alaska's transportation needs.
MS. WASSERMAN referred to a table that provides the per capita
to transit, stating that Wyoming receives $8.32 per capita for
mass transit, while Alaska receives $54.74 per person. Since
Alaska receives so much and pays in so little, other states
object. She stated that she serves on the National Association
of Counties Transportation Committee, and other members complain
that their potholes could be filled if Alaska did not receive so
much money. Thus, AML supports the concept that Alaska must
find ways to fill the funding gap due to reductions in federal
transportation funding. She said the AMLS realizes that a
billion dollars is a lot of money, but Alaska has many needs.
Transportation is one of the basic tenets that government does
and should provide.
2:45:51 PM
REPRESENTATIVE GRUENBERG asked what the committee can do to
maximize the capture of federal funds for urban areas in
Anchorage and Fairbanks.
MS. WASSERMAN said she did not know.
REPRESENTATIVE GRUENBERG acknowledged Ms. Wasserman's expertise
and experience in Washington, D.C. and asked her consider how
Alaska could obtain maximum federal dollars since Alaska is
clearly eligible to receive, noting that it is also important to
consider rural needs.
REPRESENTATIVE JOHNSON remarked that the purpose of HB 329 is to
avoid using federal dollars. He thought it would be
counterproductive to work to obtain federal dollars for mass
transit in HB 329. This bill is intended to provide general
fund dollars for transportation projects that can be completed
much more quickly than using federal funding, he stated. He
suggested that attempting to leverage federal funding in this
bill would be ill advised.
CHAIR P. WILSON offered her goal is to maintain the current
DOT&PF budget, including obtaining FHWA funding for projects,
but to use the dedicated transportation fund to complete
additional projects more quickly, to create jobs, and enhance
access to Alaska's natural resources. It is not the intention
of this bill to supplant transportation funding in the state.
She recalled other states established specific funds for
education, only to discover that their dedicated funds became
the only source of funding for education. She maintained she
did not want that to happen in Alaska, in terms of
transportation funding.
2:48:40 PM
REPRESENTATIVE T. WILSON remarked that completing projects more
timely will also save money in long run since the roads would
not deteriorate as quickly.
MS. WASSERMAN agreed. However, she said she thought the DOT&PF
and municipalities work as fast as possible to complete the
permitting process, but money is the driving factor.
REPRESENTATIVE T. WILSON offered her belief that all communities
in Alaska are affected by delays. She asked whether AML has
obtained similar feedback from communities on problems. She
stated that Alaska must collectively work to obtain and complete
projects.
MS. WASSERMAN stated that the AML is comprised of members from
every single community in Alaska. She suggested she is well
aware of problems statewide, especially the importance of
transportation to small communities.
2:50:11 PM
REPRESENTATIVE GRUENBERG conveyed that he also supports needs in
rural areas. He acknowledged that members are also aware of
transportation problems in his district in Mountain View. He
stated that many of his constituents do not own cars, must push
shopping carts on sidewalks, and cannot easily navigate
Anchorage without buses. He expressed concern with language in
HB 329. He referred to page 3, lines 10, which read:
"...capital projects for transportation and related facilities."
He noted that phrase also appears on page 3, lines 15 -16. He
suggested that the phrase should be defined to include public
transportation and facility maintenance, as well as general
maintenance. He recalled the Governor stating that Alaska must
maintain what it owns or the state will continually be replacing
its infrastructure. He asked if Ms. Wasserman disagreed.
MS. WASSERMAN stated no, she did not disagree.
[HB 329 was held over.]
2:53:40 PM
ADJOURNMENT
There being no further business before the committee, the House
Transportation Standing Committee meeting was adjourned at 2:53
p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 329 Sponsor Stmt.pdf |
HTRA 2/9/2010 1:00:00 PM HTRA 2/11/2010 1:00:00 PM |
HB 329 |
| HB 329 AK Trans Finance Study.pdf |
HTRA 2/9/2010 1:00:00 PM HTRA 2/11/2010 1:00:00 PM |
HB 329 |
| HJR 42 Sponsor Stmt.pdf |
HTRA 2/9/2010 1:00:00 PM |
HJR 42 |
| HJR 42 Resolution ATIF.pdf |
HTRA 2/9/2010 1:00:00 PM |
HJR 42 |
| HJR 42 Exec Summary AK Trans Finance Study.pdf |
HTRA 2/9/2010 1:00:00 PM |
|
| ATIF values w-out taxes.pdf |
HTRA 2/9/2010 1:00:00 PM |
HB 329 |
| fund values with taxes.pdf |
HTRA 2/9/2010 1:00:00 PM |
HB 329 |