Legislature(2009 - 2010)CAPITOL 17

02/11/2010 01:00 PM House TRANSPORTATION


Download Mp3. <- Right click and save file as

Audio Topic
01:03:51 PM Start
01:04:33 PM Presentation by Advisory Committee for Aviation
01:46:49 PM Update on Aviation by Christine Klein, Deputy Commissioner of Dot&pf Aviation
02:01:09 PM HB329
03:08:25 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Presentation by Advisory Committee for TELECONFERENCED
Aviation
+ Update on Aviation by Christine Klein, TELECONFERENCED
Deputy Commissioner of DOT/PF, Aviation
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 329 DEDICATED TRANSPORT FUND/PUB TRANSPORT TELECONFERENCED
Heard & Held
         HB 329-DEDICATED TRANSPORT FUND/PUB TRANSPORT                                                                      
                                                                                                                                
2:01:09 PM                                                                                                                    
                                                                                                                                
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."                                                                                               
                                                                                                                                
2:03:09 PM                                                                                                                    
                                                                                                                                
CHAIR  P.  WILSON explained  that  HB  329  is  up for  a  second                                                               
hearing.   She provided  some answers to  questions raised.   She                                                               
stated that  meetings are subject  to the Open Meetings  Act, and                                                               
Brian Kane  suggested submitting the  report to the  council, the                                                               
governor,  and  the  legislature.   She  further  stated  all  of                                                               
DOT&PF's meetings are subject to  the Open Meetings Act.  Another                                                               
question was how many states  have dedicated funds, and how other                                                               
states are  addressing transportation funding.   She offered that                                                               
she has  made a  formal request to  National Conference  of State                                                               
Legislatures  (NCSL), but  also  provided  members with  handout,                                                               
containing  research from  Illinois  that indicates  at least  15                                                               
states have dedicated funds for transit.                                                                                        
                                                                                                                                
2:04:25 PM                                                                                                                    
                                                                                                                                
CHAIR P.  WILSON advised  members that she  is working  to define                                                               
the terms  "rural" and "urban".   She recalled that a  variety of                                                               
definitions currently exist for the terms in various programs.                                                                  
                                                                                                                                
REPRESENTATIVE  GRUENBERG recalled  a debate  in the  1980s.   He                                                               
recalled that a former representative  included a bridge as being                                                               
listed as urban.                                                                                                                
                                                                                                                                
2:07:25 PM                                                                                                                    
                                                                                                                                
TOM  GEORGE,  Alaska  Representative, Aircraft  Owners  &  Pilots                                                               
Association (AOPA),  stated that the AOPA  represents the private                                                               
pilots rather than  the commercial pilots.   Nationally, the AOPA                                                               
has 415,000 members, of which  4,300 private pilots belong to the                                                               
AOPA in Alaska.  While he  is a member of the Governor's Aviation                                                               
Advisory Board, he is only speaking  today on behalf of the AOPA.                                                               
He offered to  strongly support the concept of  state funding for                                                               
transportation infrastructure, particularly  due to reductions in                                                               
federal funding.  His organization  is just starting to study the                                                               
bill so he  offered to make initial comments.   He recalled other                                                               
states  have   dedicated  transportation  funds,  and   some  are                                                               
multimodal, such as in Maryland,  which have been successful.  He                                                               
suggested  flexibility in  the percentages  of  funding for  each                                                               
mode, that  in some instances  it might  not be prudent  to limit                                                               
roads to only 60 percent.   He acknowledged frustrations with the                                                               
current DOT&PF process to prioritize  and allocate federal funds,                                                               
and  would like  to explore  a less  contentious way  to allocate                                                               
funds.  He  expressed interest in working with  the committee and                                                               
commended  it for  its leadership.   In  closing, he  thanked Ms.                                                               
Klein for  her service,  and stressed  the importance  of keeping                                                               
the aviation presence in the DOT&PF.                                                                                            
                                                                                                                                
2:10:07 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG expressed  his concern  that HB  329 is                                                               
contingent  on  passage  of  a   constitutional  amendment.    He                                                               
referred to page  9, lines 14-16, of Section 14.   He offered his                                                               
belief  that  the  language  could  remain  as  is,  but  if  the                                                               
constitutional  amendment does  not  pass,  the committee's  work                                                               
would be fruitless,  or the committee could  develop an alternate                                                               
plan to  proceed in the  event that the  constitutional amendment                                                               
does not pass.  He inquired  as to whether the sponsor would like                                                               
to consider  placing an alternate plan  in this bill or  create a                                                               
second  bill.   He  stated  that he  introduced  a  bill that  is                                                               
available,  HB  330,  and  has   no  pride  of  authorship.    He                                                               
recommended that an alternate plan be developed.                                                                                
                                                                                                                                
2:12:13 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE T.  WILSON offered her belief  that the discussion                                                               
of  a dedicated  transportation  fund is  worthwhile, whether  it                                                               
passes  or  not.     The  public  needs  to   know  that  funding                                                               
transportation projects is important.                                                                                           
                                                                                                                                
CHAIR P. WILSON expressed concern  that to present two approaches                                                               
to establish  a dedicated transportation  fund might  confuse the                                                               
public  on  the   ballot  proposition.    She   agreed  that  the                                                               
discussion is important.                                                                                                        
                                                                                                                                
REPRESENTATIVE  PETERSEN  recommended  not  mentioning  the  term                                                               
"permanent fund"  when referring to the  dedicated transportation                                                               
fund   and   to  use   the   term   "dedicated"  or   "long-term"                                                               
transportation fund so as not to confuse the public.                                                                            
                                                                                                                                
REPRESENTATIVE   MUNOZ  related   that   the   bill  contains   a                                                               
contingency  that   states  the  bill   has  no  effect   if  the                                                               
constitutional amendment to  establish a dedicated transportation                                                               
fund is not approved by the voters.                                                                                             
                                                                                                                                
2:15:14 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG  stated that  Section 14  indicates that                                                               
except for Section 10 of the bill  the rest of the bill would not                                                               
take  effect  unless the  constitutional  amendment  passes.   He                                                               
suggested  that   a  constitutional   amendment  must   pass  the                                                               
legislature with  a two-thirds vote  of each body and  a majority                                                               
of voters  must vote  to pass  the constitutional  amendment this                                                               
year  during the  November election.    Thus, the  constitutional                                                               
amendment must  pass these two hurdles.   In terms of  timing, he                                                               
thought  it would  be helpful  for  the committee  to develop  an                                                               
alternate  plan.   Otherwise, it  would  take time  for the  next                                                               
legislature  to  pass another  bill  to  create a  transportation                                                               
fund.                                                                                                                           
                                                                                                                                
2:17:58 PM                                                                                                                    
                                                                                                                                
CHAIR  P.   WILSON  recalled   the  legislature   established  an                                                               
education fund and responded that the process is a simple one.                                                                  
                                                                                                                                
REPRESENTATIVE  GRUENBERG recalled  that the  education fund  has                                                               
become somewhat  of a  "slush fund".   He  suggested that  if the                                                               
legislature developed a transportation  fund statutorily, that it                                                               
would  be important  to encourage  the funds  be used  to address                                                               
transportation needs.                                                                                                           
                                                                                                                                
2:18:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG, in response  to Chair Wilson, suggested                                                               
the  committee may  need  legal  advice and  might  want a  legal                                                               
opinion  to  identify  the  constitutional  limitations  for  the                                                               
committee  if  it decided  to  create  a transportation  fund  in                                                               
statute.                                                                                                                        
                                                                                                                                
2:19:56 PM                                                                                                                    
                                                                                                                                
CHAIR P. WILSON, in response  to Representative Johansen, related                                                               
that she previously mentioned the education fund.                                                                               
                                                                                                                                
REPRESENTATIVE GRUENBERG  recalled a  fund exists  that is  not a                                                               
constitutional dedicated  fund but is  a separate account  in the                                                               
general fund to be used for  education.  He characterized it as a                                                               
sub-account in  the general fund,  but nothing requires it  to be                                                               
used  for education.   No  penalty exists  and the  funds do  not                                                               
lapse.  He suggested a value to exploring the legal limits.                                                                     
                                                                                                                                
2:21:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHANSEN said he was  disturbed by the term "slush                                                               
fund,"  which has  negative implications,  but he  understood the                                                               
mechanics.  He referred to page  1, lines 7-8, to the legislative                                                               
intent.   He asked for  ramifications if the legislature  did not                                                               
appropriate the $1 billion.                                                                                                     
                                                                                                                                
CHAIR P.  WILSON explained another  bill, an  appropriation bill,                                                               
would provide the vehicle for the funding.                                                                                      
                                                                                                                                
2:22:29 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHANSEN referred  to Section 3, on  page 2, lines                                                               
1l-12.  He  inquired as to whether the  Municipal Harbor Facility                                                               
Grant Fund would be capitalized  as specified using the Fisheries                                                               
Business Tax.                                                                                                                   
                                                                                                                                
2:23:10 PM                                                                                                                    
                                                                                                                                
REBECCA ROONEY, Staff,  stated the intent was not  to leave small                                                               
funds  that had  potential  funding from  the  collection of  the                                                               
motor fuel  tax unfunded.   The intent  is to move  the Municipal                                                               
Harbor Facility Grant  Fund to another section.   She referred to                                                               
page  3, lines  25-26,  which  read, "(4)  eight  percent of  the                                                               
appropriations from the fund may  be used for projects related to                                                               
harbor  facilities  and  state-owned marine  facilities  and  for                                                               
deposit  into  the  Municipal  Harbor  Facility  Grant  Fund  (AS                                                               
29.60.800)."   She  stated the  Fisheries Business  Tax was  left                                                               
alone.                                                                                                                          
                                                                                                                                
2:24:33 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHANSEN  related that the Fisheries  Business Tax                                                               
specifically is  a tax  on commercial  activities fishermen.   He                                                               
expressed concern  that the commercial  fishermen may  be singled                                                               
out as a possible source of funding.                                                                                            
                                                                                                                                
MS. ROONEY  stated that  the Fisheries  Business Tax  language is                                                               
not new  language in the  statute, but is probably  referenced in                                                               
this   section  since   commercial  fishermen   use  the   harbor                                                               
facilities.                                                                                                                     
                                                                                                                                
REPRESENTATIVE  JOHANSEN   referred  to  page  2,   line  7,  and                                                               
suggested he  might offer  an amendment  to remove  the language.                                                               
It would  then read, "There  is established the  Municipal Harbor                                                               
Facility  Grant  Fund consisting  of  money  appropriated to  the                                                               
fund."  He offered to discuss this further with the sponsor.                                                                    
                                                                                                                                
2:25:56 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   GRUENBERG   related   his   understanding   that                                                               
currently, funds  from the watercraft  fuel tax can  be deposited                                                               
to the Municipal  Harbor Facility Grant Fund.  Under  HB 329, the                                                               
funding would be deposited to  the dedicated transportation fund,                                                               
and  then be  disbursed to  the Municipal  Harbor Facility  Grant                                                               
Fund.   He cautioned that  the possible amendment  would prohibit                                                               
money from the  Fisheries Business Tax from  being deposited into                                                               
the Municipal Harbor Facility Grant  Fund.  He suggested that may                                                               
be a step back.                                                                                                                 
                                                                                                                                
CHAIR  P. WILSON  recalled the  Municipal  Harbor Facility  Grant                                                               
Fund was established by Senator Bill Thomas several years ago.                                                                  
                                                                                                                                
2:27:16 PM                                                                                                                    
                                                                                                                                
BRIAN  KANE,  Attorney,  Legislative Legal  Counsel,  Legislative                                                               
Legal   and  Research   Services,  Legislative   Affairs  Agency,                                                               
explained  that  basically Section  3,  the  Watercraft Fuel  Tax                                                               
Account will not  be in existence if this bill  passes.  Thus, in                                                               
Section 3,  the money that  would be separately accounted  for is                                                               
the Fisheries Business Tax.   This is accounted for separately so                                                               
to  identify  the  balance  that could  be  appropriated  to  the                                                               
Municipal Harbor Facility Grant Fund.                                                                                           
                                                                                                                                
2:28:21 PM                                                                                                                    
                                                                                                                                
CHAIR P.  WILSON recalled that  the Watercraft Fuel Tax  would be                                                               
deposited to the dedicated transportation  fund due to the Alaska                                                               
Marine Highway System.                                                                                                          
                                                                                                                                
2:28:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHANSEN  asked if  this bill  is enacted  and the                                                               
constitutional  amendment  passes,   if  anything  precludes  the                                                               
legislature   from   appropriating   money   to   the   dedicated                                                               
transportation fund.                                                                                                            
                                                                                                                                
MR. KANE responded that if HB  329 passes, that provisions in the                                                               
resolution provide an  option for fees and taxes  to be deposited                                                               
into the  fund, as well as  an option for additional  funds to be                                                               
appropriated to the dedicated transportation fund.                                                                              
                                                                                                                                
2:29:40 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MUNOZ understood that in  Section 3 of HB 329, the                                                               
Municipal Harbor Facility Grant Fund  would remain in place while                                                               
the Watercraft Fuel Tax Account would be removed.                                                                               
                                                                                                                                
MR. KANE  answered yes.   In  further response  to Representative                                                               
Munoz, he responded that the  option to have the Municipal Harbor                                                               
Facility  Grant Fund  receive funds  from the  Fisheries Business                                                               
Tax is  not mandatory.   The funds  will be  separately accounted                                                               
for with  an option for  the legislature to appropriate  funds to                                                               
the Municipal Harbor Facility Grant Fund.                                                                                       
                                                                                                                                
MR.  KANE,  in  response  to   Chair  Wilson,  related  that  the                                                               
Fisheries  Business Tax  Fund will  be deposited  to the  general                                                               
fund,  except for  monies  directed  to dedicated  transportation                                                               
fund.   In further  response to Chair  Wilson, he  explained that                                                               
under  the bill  the  only  change is  that  less  money will  be                                                               
separately accounted  for since  the Watercraft Fuel  Tax Account                                                               
(WFTA)  will be  deleted and  the  funds that  normally would  be                                                               
deposited  to  the  WFTA  will   be  directed  to  the  dedicated                                                               
transportation fund.  He was unsure  if the WFTA is referenced in                                                               
other statutes.  He offered to research the matter.                                                                             
                                                                                                                                
CHAIR  P. WILSON  indicated  that  it was  not  her intention  to                                                               
divert  funds from  commercial fishermen,  but  wanted to  insure                                                               
that the harbors can be  maintained for the Alaska Marine Highway                                                               
System, barges, or other businesses.                                                                                            
                                                                                                                                
2:32:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHANSEN  referred to page  4, line 29,  and asked                                                               
for the  timing on the  capital projects.   He recalled  that the                                                               
capital projects  are submitted in  late summer or fall  and this                                                               
subsection  would  require  the  advisory council  to  provide  a                                                               
report on December 31 of each year.                                                                                             
                                                                                                                                
2:33:04 PM                                                                                                                    
                                                                                                                                
JEFF   OTTESEN,  Director,   Division  of   Program  Development,                                                               
Department  of  Transportation   &  Public  Facilities  (DOT&PF),                                                               
answered that  was correct, that  the Capital  Improvement Budget                                                               
(CIB)  process begins  in  late summer  to  identify projects  to                                                               
request  general   fund  authority  or  federal   funds,  federal                                                               
aviation or  highways.   The CIB  process includes  preparing the                                                               
project lists, working  with the Office of  Management and Budget                                                               
(OMB).  The  general fund projects are scrutinized and  cut.  The                                                               
revised list is submitted to the  Governor and is included in the                                                               
Governor's Budget  request to the  legislature.  This  list would                                                               
be  developed by  the  decision-making  body, the  Transportation                                                               
Infrastructure  Fund  Advisory  Council  (TIFAC),  which  uses  a                                                               
different source of funding.   He was unsure whether any conflict                                                               
exists,  but the  timeframe differs  from  the CIB  process.   In                                                               
response to  Chair Wilson, he  agreed it  would be better  if the                                                               
timeframes were  the same.  He  offered to provide the  date that                                                               
the DOT&PF submits requests to OMB.                                                                                             
                                                                                                                                
2:36:12 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHANSEN referred  to  page 4,  lines 11-28,  and                                                               
asked about the  process to select the composition  of the TIFAC.                                                               
He  recalled   that  usually  the   presiding  officers   of  the                                                               
legislature  make  appointments.    He  also  asked  whether  the                                                               
specific cite listed in subsection  (c) is correct for travel and                                                               
per diem expenses for legislative members.                                                                                      
                                                                                                                                
2:37:23 PM                                                                                                                    
                                                                                                                                
CHAIR P. WILSON agreed that  usually the appointments are made by                                                               
the  presiding officers  of  the legislature,  that  it could  be                                                               
changed, as she is open to what makes sense to the committee.                                                                   
                                                                                                                                
2:38:16 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   MUNOZ    expressed   concern    that   including                                                               
legislators as  members of the TIFAC  as a part of  the decision-                                                               
making process for projects is  risky, since they represent their                                                               
districts and may  lose sight of the statewide  perspective.  She                                                               
suggested  substituting the  director of  the AMHS,  Aviation, or                                                               
their designees since they would represent the modes.                                                                           
                                                                                                                                
2:39:05 PM                                                                                                                    
                                                                                                                                
CHAIR P. WILSON  expressed her neutrality in  the matter, stating                                                               
that that impartiality would probably depend on the person.                                                                     
                                                                                                                                
REPRESENTATIVE  MUNOZ expressed  a  preference  for the  regional                                                               
representation, but  thought that including a  director from each                                                               
of  the  major  transportation  sectors would  be  preferable  to                                                               
including elected officials.                                                                                                    
                                                                                                                                
2:40:21 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHANSEN  pointed  out that  the  proposed  TIFAC                                                               
would only function  as an advisory board, but  that the decision                                                               
making  process   would  remain  with  the   department  and  the                                                               
legislature.                                                                                                                    
                                                                                                                                
2:41:00 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG  recalled  that  the  committee  should                                                               
consider the current tax on  cruise ship passengers, which should                                                               
be reviewed.   He recalled  that a  recent U.S. Court  of Appeals                                                               
decision  questioned the  constitutionality  on  whether a  ferry                                                               
system could  charge a small  fee to  its commuters.   He further                                                               
recalled   that    the   court   considered   and    judged   the                                                               
appropriateness  of the  ferry expenditures.   He  suggested this                                                               
may be a good way to enshrine this  in state law.  He offered his                                                               
belief that  the funds could  be not  be used for  dredging since                                                               
dredging  was  not  specifically  required  for  the  ferries  to                                                               
operate.                                                                                                                        
                                                                                                                                
2:45:01 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   GRUENBERG  recalled   another   court  case   in                                                               
Louisiana in  which the U.S.  Court of Appeals upheld  that taxes                                                               
collected from  ships using the  Mississippi River that  could be                                                               
used to provide  fire-fighting services for ships.   He suggested                                                               
using  a similar  concept  on the  Alaska  Marine Highway  System                                                               
(AMHS) could also benefit fishing industry.                                                                                     
                                                                                                                                
2:46:06 PM                                                                                                                    
                                                                                                                                
CHAIR  P.  WILSON,  in   response  to  Representative  Gruenberg,                                                               
related  her  understanding  the  suggestion is  to  put  similar                                                               
concepts in statute to prevent a lawsuit.                                                                                       
                                                                                                                                
REPRESENTATIVE GRUENBERG agreed,  stating that setting provisions                                                               
in statute  on specific uses  of taxes collected  could inoculate                                                               
the state, and allow revenues to benefit coastal communities.                                                                   
                                                                                                                                
CHAIR  P. WILSON  offered to  check into  this with  the attorney                                                               
general.                                                                                                                        
                                                                                                                                
2:47:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHANSEN  expressed concern  over any  hearings on                                                               
the  constitutionality  of the  "head  tax"  since the  state  is                                                               
currently in  litigation on  the taxes  collected on  cruise ship                                                               
passengers.                                                                                                                     
                                                                                                                                
REPRESENTATIVE   GRUENBERG   agreed   it   would   need   to   be                                                               
confidential.                                                                                                                   
                                                                                                                                
REPRESENTATIVE JOHANSEN  maintained that  he would not  take part                                                               
in any  discussion of  the legality  or constitutionality  of the                                                               
cruise ship "head tax."                                                                                                         
                                                                                                                                
2:47:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE T. WILSON asked how  the allocation was arrived at                                                               
for each mode.                                                                                                                  
                                                                                                                                
CHAIR P.  WILSON responded that  the allocation  approximated the                                                               
current  expenditure.   She stated  she is  open to  suggestions.                                                               
The allocation process should provide flexibility.                                                                              
                                                                                                                                
2:48:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE T. WILSON suggested using  a matrix similar to one                                                               
currently used  by the DOT&PF  for its  other projects.   In some                                                               
years the state  might spend more on airports, and  she wanted to                                                               
insure that  the state maintains  its flexibility.   She referred                                                               
to page  3, lines 9-10, to  subsection (b), and asked  if capital                                                               
projects  for transportation  also included  deferred maintenance                                                               
costs.                                                                                                                          
                                                                                                                                
MS. ROONEY recalled  discussions with the DOT&PF,  that the major                                                               
deferred  maintenance  is provided  from  the  CIB, but  the  CIB                                                               
funding  would  not  be  used  for  snow  plowing  or  day-to-day                                                               
maintenance.                                                                                                                    
                                                                                                                                
2:50:55 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE T.  WILSON asked  whether a dollar  amount defines                                                               
the difference between a maintenance and capital project.                                                                       
                                                                                                                                
MR.  OTTESEN answered  technically  no.   However, a  maintenance                                                               
project  is typically  performed to  keep the  asset or  facility                                                               
operational.     Capital  projects  are  generally   large  scale                                                               
maintenance  projects,   such  as   the  systematic   repairs  to                                                               
guardrail on a large stretch of highway.                                                                                        
                                                                                                                                
2:52:13 PM                                                                                                                    
                                                                                                                                
MR.  OTTESEN,  in  response  to   Chair  Wilson,  clarified  that                                                               
deferred  maintenance  is  just  maintenance that  has  not  been                                                               
performed  over time.   He  characterized the  difference between                                                               
maintenance and deferred  maintenance as gray area,  even for our                                                               
federal partners to determine.                                                                                                  
                                                                                                                                
CHAIR P. WILSON offered that  she would not envision the proposed                                                               
dedicated   transportation   fund    being   used   for   routine                                                               
maintenance.                                                                                                                    
                                                                                                                                
REPRESENTATIVE T. WILSON pointed out  that it is important not to                                                               
put  off maintenance  projects, since  what is  maintenance today                                                               
could become a capital project later on.                                                                                        
                                                                                                                                
2:53:27 PM                                                                                                                    
                                                                                                                                
MR. OTTESEN  clarified that routinely  the CIB  contains projects                                                               
that might  be considered maintenance by  the federal government,                                                               
but is funded in the CIB using general fund dollars.                                                                            
                                                                                                                                
REPRESENTATIVE T.  WILSON asked what  types of projects  could be                                                               
funded in the proposed dedicated transportation fund.                                                                           
                                                                                                                                
MR.  OTTESEN offered  one example  as  the Dalton  Highway.   The                                                               
DOT&PF may  initially resurface the  Dalton Highway and  it later                                                               
need more  gravel for  resurfacing.   The federal  partners would                                                               
allow  federal funding  for  the initial  project,  but does  not                                                               
allow the state  to stockpile gravel for resurfacing.   The state                                                               
typically  would use  general funds  for stockpiling  gravel, but                                                               
this provides  a perfect  example of  how the  proposed dedicated                                                               
transportation fund could be used.                                                                                              
                                                                                                                                
2:55:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   GRUENBERG   expressed  concern   regarding   the                                                               
Anchorage transit funding.   He referred to page 3,  to lines 27-                                                               
29,   to  paragraph   (5),  which   allocates  five   percent  of                                                               
appropriations  from the  proposed dedicated  transportation fund                                                               
for  projects  related  to  local  community  transportation  and                                                               
transit.   He  assumed that  paragraph refers  to public  transit                                                               
projects.                                                                                                                       
                                                                                                                                
MR.  OTTESEN  said  he  believed  it  refers  to  public  transit                                                               
projects.                                                                                                                       
                                                                                                                                
REPRESENTATIVE  GRUENBERG  suggested   a  larger  percentage  for                                                               
transit,  and   asked  Chair   Wilson  to   flag  the   item  for                                                               
consideration.                                                                                                                  
                                                                                                                                
CHAIR P. WILSON  related that the AMATS will  receive funding for                                                               
transit.   She stated she would  flag the item but  will work for                                                               
an equitable  allocation, noting  a matrix  may provide  a better                                                               
methodology.                                                                                                                    
                                                                                                                                
REPRESENTATIVE   P.  WILSON,   in   response  to   Representative                                                               
Gruenberg, responded that a matrix  would be a scoring method for                                                               
projects.                                                                                                                       
                                                                                                                                
2:56:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  PETERSEN  referred to  page  4,  lines 29-31,  to                                                               
language previously  discussed.   He inquired  as to  whether the                                                               
report would be  submitted early enough to allow  the Governor to                                                               
include projects in the CIB.                                                                                                    
                                                                                                                                
CHAIR  P.  WILSON   answered  that  she  did   not  envision  the                                                               
Governor's  participation.    She  explained  that  the  Governor                                                               
considers  general   fund  projects.    The   proposed  dedicated                                                               
transportation fund would be a separate matter, she stated.                                                                     
                                                                                                                                
2:58:11 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHANSEN  suggested that the process  should track                                                               
or be synchronized  to achieve a smooth process.   Since millions                                                               
of  dollars  are  involved,  the  TIFAC  could  also  inform  the                                                               
governor   of   the   proposed  dedicated   transportation   fund                                                               
priorities instead  of keeping the  two project  lists completely                                                               
separate.                                                                                                                       
                                                                                                                                
CHAIR P. WILSON answered she has noted the request.                                                                             
                                                                                                                                
2:58:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MUNOZ  referred  to  the revenue  sources.    She                                                               
related that 60 percent of  the aviation proceeds are refunded to                                                               
municipalities.    She  asked for  the  total  aviation  revenues                                                               
collected.                                                                                                                      
                                                                                                                                
JERRY BURNETT, Deputy Commissioner,  Department of Revenue (DOR),                                                               
stated that the  tax on 60 percent of the  fuel sold at municipal                                                               
airports   is  shared   back  to   municipalities.     Currently,                                                               
approximately $125,000 is the total  amount shared back, although                                                               
he was unsure  of the total sales.  The  majority of the $125,000                                                               
is shared back to the Juneau International Airport (JNU).                                                                       
                                                                                                                                
MR.  BURNETT, in  response to  Representative Munoz,  agreed that                                                               
the  structure would  not change  under  the proposed  bill.   In                                                               
further response  to Representative  Munoz, Mr.  Burnett answered                                                               
that  the  Juneau  International  Airport is  not  a  state-owned                                                               
airport and that  the airport receives its  funding from planning                                                               
fees and direct federal grants.                                                                                                 
                                                                                                                                
REPRESENTATIVE MUNOZ understood that  the state participates in a                                                               
share of  the projects for  municipal airports.  She  recalled it                                                               
might be 3 to 5 percent                                                                                                         
                                                                                                                                
MS.   KLEIN  answered   that  the   municipal  airports   do  not                                                               
participate through the state but  can apply directly to the FAA.                                                               
Additionally, their  sponsor, typically  the municipality  or the                                                               
DOT&PF, would also apply for the AIP grants on their behalf.                                                                    
                                                                                                                                
REPRESENTATIVE MUNOZ inquired as to  whether the 96 percent could                                                               
be shared.                                                                                                                      
                                                                                                                                
3:02:01 PM                                                                                                                    
                                                                                                                                
MS.  KLEIN  clarified that  the  share  depends  on the  type  of                                                               
project.   Terminal projects are treated  differently than runway                                                               
projects.   The  sponsor  would still  need  to provide  matching                                                               
funds,  she  stated.    For  example,  the  Juneau  International                                                               
Airport would need to provide  its own matching funds whereas the                                                               
state airport would not.                                                                                                        
                                                                                                                                
REPRESENTATIVE  MUNOZ  asked   whether  municipalities  have  any                                                               
opportunities to receive state support.                                                                                         
                                                                                                                                
MS.  KLEIN  answered that  the  state  will participate  in  some                                                               
terminal  projects  to provide  the  matching  funds since  other                                                               
funds  for  certificated  airports  do not  exist  and  municipal                                                               
airports  do   not  have  sufficient  passengers   to  raise  the                                                               
revenues.  In  some rare instances the state  will participate by                                                               
providing   matching  funds   for   municipal  airport   terminal                                                               
projects.                                                                                                                       
                                                                                                                                
3:03:22 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG referred  to  page 3,  lines  1-4.   He                                                               
understood   that  the   funding  for   the  proposed   dedicated                                                               
transportation  fund  will  be  removed  by  appropriation.    He                                                               
pointed out  that the Governor  would participate in  the process                                                               
since he/she would  need to sign the bill.   He asked whether the                                                               
appropriations  will  be  segregated  and  would  be  a  separate                                                               
appropriation from  the general fund.   He asked if that  was the                                                               
sponsor's intent.                                                                                                               
                                                                                                                                
CHAIR P.  WILSON agreed  that was  her intent.   She  referred to                                                               
page  4, lines  1-4,  which  requires the  DOR  to determine  the                                                               
market value  of the  fund and  invest the fund.   She  asked Mr.                                                               
Burnett whether the DOR performs this function with other funds.                                                                
                                                                                                                                
MR.  BURNETT answered  yes, and  listed some  examples, including                                                               
the Children's Trust  Fund and the Public School Trust  Fund.  He                                                               
offered that the DOR manages  about 100 funds with various payout                                                               
rules.                                                                                                                          
                                                                                                                                
3:05:10 PM                                                                                                                    
                                                                                                                                
CHAIR P.  WILSON related that  the fiscal  note has not  yet been                                                               
prepared.                                                                                                                       
                                                                                                                                
MR. BURNETT  responded that the  fiscal note was  prepared today.                                                               
He explained  that the DOR would  attempt to achieve a  real rate                                                               
of return  of 5 percent,  which would  require a mix  of equities                                                               
and fixed  income securities, perhaps a  ratio of 55 to  45.  The                                                               
DOR  would charge  contractual fees  against that  since external                                                               
management  would manage  the equities.   He  estimated the  fees                                                               
based on $1  billion in appropriations would  equal $424 thousand                                                               
per year, and based on  today's market conditions would expect to                                                               
produce a  spendable income of  $50 million  the first year.   He                                                               
also estimated,  based on the  permanent fund  and constitutional                                                               
budget  reserve,   that  a  similar  asset   like  the  dedicated                                                               
transportation fund over 20 years  would probably incur losses in                                                               
15  to 20  percent  of the  time, but  the  probability that  the                                                               
earnings  would be  double the  anticipated projections  would be                                                               
about the  same percentage..  He  related that he has  not had an                                                               
opportunity to  assess the exact probabilities  for the dedicated                                                               
transportation fund.                                                                                                            
                                                                                                                                
3:07:29 PM                                                                                                                    
                                                                                                                                
[HB 329 was held over.]                                                                                                         
                                                                                                                                
3:08:25 PM                                                                                                                    
                                                                                                                                

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
Aviation advisory board Legislative Update 2010.pdf HTRA 2/11/2010 1:00:00 PM
legal opinion on open meetings.pdf HTRA 2/11/2010 1:00:00 PM
Illinois research on trans funds.pdf HTRA 2/11/2010 1:00:00 PM