Legislature(2011 - 2012)CAPITOL 17
03/24/2011 01:00 PM House TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| HB158 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 158 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 158-KNIK ARM BRIDGE AND TOLL AUTHORITY
1:07:14 PM
CHAIR P. WILSON announced that the only order of business would
be HOUSE BILL NO. 158, "An Act relating to the authority and
obligations of the Knik Arm Bridge and Toll Authority, to bonds
of the authority, and to reserve funds of the authority;
authorizing the state to provide support for certain obligations
of the authority; relating to taxes and assessments on a person
that is a party to an agreement with the authority; and
establishing the Knik Arm Crossing fund."
1:07:42 PM
REPRESENTATIVE MARK NEUMAN, Alaska State Legislature, recapped
the Knik Arm Bridge and Toll Authority (KABATA) project. He
stated that the population forecast shows the population has
significantly increased in his district. He related that the
proposed project is a huge project that would help develop other
areas in the state. He recapped the proposed project would
consist of a public-private partnership. This is one step in
the transparent public process. He indicated he has been a
nonvoting KABATA board member for four years. He highlighted
that the federal Record of Decision was issued in December 2010,
which moves forward the permitting process. He stated that HB
158 would create a mechanism for a toll bridge, including
creating a reserve fund to use until the proposed Knik Arm
Bridge is built. The fund would be repaid and then any excess
funds would be available to fund other transportation projects.
Several experts will walk members through the project details,
but in essence the public-private partnership will be reviewed
for construction costs and timeline. At that point the state
will decide if the project will move forward. He touched on
safety aspects, noting that there is not room for population
expansion along the Glenn Highway. Further, in the event of an
emergency disaster, the Knik Arm Bridge project would provide
another road access to/from Anchorage. The road project would
expand Alaska. He pointed out the U.S. Census population was
even 11 percent higher than the University of Alaska's Institute
of Social and Economic Research's (ISER) report on population
projections. The ISER report was used by KABATA to develop its
toll resource forecast. Not everyone was included in the U.S.
Census count, which reinforces the population projections used
by KABATA, he said. He characterized this project as a huge
opportunity for the state.
1:12:10 PM
REX SHATTUCK, Staff, Representative Mark Neuman, Alaska State
Legislature, on behalf of the prime sponsor, presented HB 158.
He referred to page 2, lines 17-20 of HB 158. He stated that
this provision would add to the existing statutory language that
monetary obligations incurred by the authority are obligations
of the state. He explained that this language is necessary to
clarify that the state is obligated to pay the annual lease
payment or availability payment. He referred to page 4, line
21, to language which would increase the bonding authority from
$500 to $600 million. He explained that this would authorize a
government agency to pass through federal Department of
Transportation private activity bonds issued by to the private
sector.
CHAIR P. WILSON added that the main provision is already in
statute. The KABATA, representing the state, has determined the
best method for financing. She clarified her understanding for
this project that KABATA and the state are the same.
MR. SHATTUCK referred to page 5, line 9, which would establish
the mechanism for managing toll revenue and any legislative
appropriation. He referred to page 6 lines 28-31 and page 7
1ines 1-5. He stated that the state does not pay property tax
on roads. This language exempts the proposed Knik Arm Bridge
project from property tax since it is a public project, even
though the state would have a private partner.
1:16:49 PM
MICHAEL FOSTER, Chair, Knik Arm Bridge and Toll Authority
(KABATA), Anchorage, Alaska, reiterated that the KABATA project
is proposed public-private partnership which includes an
availability payment structure. He referred to the availability
payment as a term often used in transportation projects and
sometimes has been referred to as a lease structure. In this
project the private partner would be responsible to design,
build, and operate the facility. The private partner would also
be responsible for the capital and operating costs to build and
maintain the structure. The KABATA project term would be a 35-
year term. The infrastructure would be owned from the very
beginning by the State of Alaska (SOA). The private partner
would accrue equity in the proposed crossing project, which will
be returned through the SOA's availability payment. The state
will own the revenue derived from the proposed bridge toll.
Thus, the state would own the structure, the revenue. He
reiterated that through the public-private partnership, the
private partner would design, build, and operate the facility.
The purpose of the reserve fund, which is established in the
Department of Revenue (DOR), would be to cover any shortfalls.
The KABATA has anticipated that the initial toll revenue will
not be sufficient to pay the availability payment. Once the
toll revenue becomes substantial enough to cover the SOA's
availability payment, the toll revenue would be used to repay
the reserve fund. At some point in time the reserve fund would
have a surplus, which could be used for other state projects, he
said.
1:19:23 PM
KEVIN HEMENWAY, Chief Financial Officer, Knik Arm Bridge and
Toll Authority (KABATA), stated that Chair Wilson asked KABATA
to respond to Jamie Kenworthy's testimony of March 10, 2011. He
summarized his response into four general areas. First, he
addressed the traffic control revenue issues. Mr. Kenworthy
urged the committee to "believe the cost estimates" but it
"should not believe" the projected revenue estimates. He stated
that the projected toll revenues were based on population
forecasts that are 50 and 64 percent higher than those prepared
by the Institute of Social Research (ISER) in December 2009 and
by the Department of Labor & Workforce Development (DLWD) in
December 2010, respectively. He offered that Mr. Kenworthy
misrepresented the population forecasts used by Wilbur Smith
Associates to update the traffic control revenue work. The
update was completed in February 2011 at KABATA's request. He
related that the results are reflected in the toll revenue
forecast on page 6 of the pro forma plan of finance, which is in
members' packets. As cited on page 11 of the Wilbur Smith
Associates pro forma report, the firm relied primarily on the
ISER 2009 population forecast. It also reviewed it against the
DLWD's December 2010 forecast and another forecast provided by
Woods & Poole Economics, Inc., a private Washington D.C. socio-
economic forecasting firm. All three population forecasts
correlate very closely and have been proven to be conservative
figures, he said. Last week the U.S. Census Bureau released the
2010 population data by county, pointing out that Alaska has
boroughs rather than counties. The ISER 2010 population
forecast is nearly 9,000 below the census count. The ISER
projections in Anchorage are nearly 3,000 below the U.S. Census
count. Thus, KABATA population figures fall approximately
11,000 below the actual census figures, he stated. In response
to Chair P. Wilson, he agreed that the figures KABATA used were
less than the actual U.S. Census figures.
1:22:09 PM
MR. HEMENWAY next referred to negative amortization and balloon
payments raised at the last hearing. He stated that Mr.
Kenworthy testified that the negative amortization and balloon
payments were "red flags" that the committee should be concerned
about. Under the public-private partnership structure, the SOA,
KABATA, or the DOT&PF would not be considered the borrower of
the private partner's debt or be responsible for its repayment,
he said. Mr. Kenworthy also mentioned capital appreciation
bonds, or CABs. He stated that CABs only represent five percent
of the hypothetical capital structure of the private partner as
presented in the pro forma financial plan. He advised that
Citigroup prepared the pro forma financial plan for KABATA,
which largely represents the perspective of the private partner,
and was prepared as part of due diligence process. This
provides the SOA with a sense of the proposed availability
payment proposals from the private sector. Typically CABs are
used to some extent in this type of project throughout the
world, he stated. He reported that his familiarity with this
process. He reiterated that the SOA would not be the borrower
of or responsible for any of the private partner's debts under
the public-private partnership structure. The SOA's obligation
would be to make the annual availability payment agreed to once
the SOA enters into a contract based on a competitive process
and proposals received. In further response to Chair P. Wilson,
he affirmed that the partner would borrow the money, build the
project, and operate the project.
1:24:13 PM
CHAIR P. WILSON asked for clarification on the SOA's
responsibility.
MR. FOSTER suggested that the process the KABATA would use in
the proposed Knik Arm Bridge crossing project is similar to a
property manager arrangement. The property manager would
operate the proposed Knik Arm Bridge or "the concession." The
private partner would be held responsible to maintain the bridge
to criteria the SOA would set. Contractual conditions would be
in place. The private partner would use its capital to design,
build, and operate the facility. The availability payment would
represent the state's responsibility to pay the private partner
for the investment. The asset would always be the SOA's asset.
In some respects it would be similar to a vertical structure in
which a property manager would take care of tenants and any
maintenance and operation (M&O) costs of a building. Someone
owns the building and pays the property management group for
that service. In response to Chair P. Wilson, Mr. Foster agreed
that the SOA would own the facility and would pay someone, the
private partner, to maintain and operate the facility. In
further response to Chair P. Wilson, he responded that the SOA
would not make a payment to the private partner until the
facility, the Knik Arm Bridge Crossing, is functional. At that
point, the SOA would be required to make an annual payment,
which is the availability payment. It could also be considered
a lease payment or a property management payment. At the end of
35 years the contract would be completed and the SOA could enter
into another concession, or the SOA could take over the M&O of
the bridge facility, he said.
1:27:32 PM
MR. HEMENWAY stated the third issue Mr. Kenworthy raised was the
risk of bankruptcy. He stated that Mr. Kenworthy implied a
potential bankruptcy of the private partner would reflect on the
SOA's credit rating and the state could be responsible for the
private partner's debts and other obligations. He also cited SR
125, which is a toll road in San Diego that was built under a
public-private partnership. The private partner recently filed
for bankruptcy, he said. The region has had about a 20 percent
foreclosure rate and about 20 percent unemployment due to the
depressed economy. He then said:
The simple fact is neither the State of California nor
any political subdivision of the State of California
has incurred any additional cost resulting from the
bankruptcy. The government expressly has no liability
for the private partner's debt or other obligations
and that would also be the case with the Knik Arm
Crossing project under the structure we're discussing.
MR. HEMENWAY related that in the case of SR 125, the state
receives and owns a fully functioning, well-built, and
maintained toll road. The private partners and the lenders are
working out the bankruptcy without any impact on the State of
California's credit, he said. The only potential impact the
KABATA's project would have on the SOA's credit rating would be
if the state failed to make the annual availability payment to
the private partner. He stated that the estimated toll revenue,
conservatively forecast, is expected to cover those payments by
about 1.5 times over the 35 years of operations of the planned
agreement. He stressed that the toll revenue, which is owned by
the state, would be the primary source of the annual payment.
The toll revenue would be collected by the SOA or on the state's
behalf. In further response to Chair P. Wilson, he asserted
that the state would absolutely not be liable for any private
partner bankruptcy actions. He added that would be true except
for the SOA's failure to make the availability payment.
1:29:50 PM
REPRESENTATIVE MUNOZ referred to the cumulative deficit in the
first ten years. She asked whether the deficit would be the
SOA's responsibility.
MR. HEMENWAY referred to another bill, HB 159, which he
identified as the bill that would appropriate funds into the
reserve account. The reserve would cover the deficit, which
would ultimately build to the projected $1.5 billion forecast.
He then referred to page 7 of the pro forma financial plan,
which he indicated demonstrates that the deficit would break
even at year ten. From that point on the project projected
revenues reflect a surplus, which should total $1.56 billion
over 35 years, he said.
CHAIR P. WILSON clarified that the KABATA's proposed Knik Arm
Bridge Project is contained in two bills, the appropriation
bill, which was referred to the House Finance Committee, and the
project bill, HB 158, which was referred to this committee.
1:31:25 PM
REPRESENTATIVE GRUENBERG offered his belief that Mr. Hemenway
has presented the best case scenario. He asked him to describe
the worst case scenario from the SOA's perspective.
MR. HEMENWAY answered that the worst case scenario would be if
there was zero traffic using the proposed Knik Arm Bridge. He
offered his belief that would be an implausible outcome. The
population growth has been increasing and is projected to
continue to rise. The base case traffic forecast, which
represents neither high nor low forecast, provides the most
probable outcome and would cover the annual availability payment
by a factor of 1.5. The inverse of that scenario would mean the
traffic would have to average below 67 percent of the base case
forecast before the SOA would incur any appropriation risk.
CHAIR P. WILSON related her understanding that based on the
current population, which the U.S. Census bases at 11 percent
higher than the KABATA's population projects used would tend to
reduce the potential problem.
MR. FOSTER agreed. He stated that the ISER's projected
population came in about 11 percent below the actual 2010 U.S.
Census population figures for the Matanuska-Susitna Valley. The
projection in KABATA's calculation was based on the median
probability. He agreed the worst case scenario would be that no
one drives across the Knik Arm Bridge, once built. The SOA's
total availability payment would be $3.2 billion over 35 years.
He highlighted that would represent the SOA's commitment to pay
for the Knik Arm Bridge facility. He reiterated Mr. Hemenway's
remarks. He said that the state's break-even point would be
reached if the growth and traffic fell 33 percent less than
KABATA's prediction. What that would translate to would be that
the SOA would own a bridge that was designed, built, and
operated for 35 years. However, at year 35, when the
availability payment obligation would be satisfied, the bridge
tolls would become the revenue for the SOA.
1:35:22 PM
REPRESENTATIVE GRUENBERG acknowledged that would be the amount
for the initial construction. He asked who would be responsible
for the M&O costs.
MR. FOSTER answered that M&O would be part of availability
payment. He reiterated that the SOA's availability payment to
the private developer, the private partner, would cover design,
construction, operation and maintenance of the Knik Arm Bridge
structure or concession for 35 years.
REPRESENTATIVE GRUENBERG pointed out that the Matanuska-Susitna
Borough does not currently have sufficient roads. He asked how
much additional funding would be required to build additional
roads in the Matanuska-Susitna Valley.
MR. FOSTER responded that additional transportation
infrastructure would be needed to accommodate additional
population growth, which will happen outside KABATA project
boundaries. Thus, the expansion of the Glenn Highway would
require additional funding. The bridge would not create the
need for the additional infrastructure. However, population
increases would require ongoing road improvements. He deferred
to Mr. Ottesen, DOT&PF, to discuss the specific anticipated
needs.
1:37:54 PM
REPRESENTATIVE GRUENBERG expressed his interest in minimizing
the SOA's risk. He asked KABATA to identify the risk of
potential natural damage to structure and whose responsibility
it would be to pay for any damage.
MR. FOSTER pointed out natural "Acts of God" happen. He
referred to the 1964 earthquake as an example. He stated that he
has 30 years of engineering experience. The bridge design would
be seismically designed and is a controlling factor. He related
some people have asked how a bridge can be built on the mud-
laden Cook Inlet. He answered that the mud is on the edges and
the actual area of the foundation consists of consolidated fill.
He likened it to nature's concrete. The structure's design
would meet all applicable codes, including seismic, and tsunami
wave loading or lateral loading by either ice or water. He
suggested that the worst case scenario would include a winter
tsunami winter event including a wave and ice. The engineers
would design the structure for these events. He said, in some
respects the engineering part of the project is easy, but the
financing is the difficult part. He affirmed the Knik Arm
Bridge structure would be designed to current and best standards
to mitigate natural events.
1:40:36 PM
REPRESENTATIVE GRUENBERG asked whether the structure would be
insurable.
MR. HEMENWAY answered that the terms of the contract would
require the private partner to carry insurance for routine
insurable events. Force majeure events such as earthquake,
volcanic, or seismic events would not be transferable to the
private partner but will retained by the public just as the SOA
currently assumes for all state infrastructure. He offered his
belief that this structure would be built to a much higher
standard than many of the legacy infrastructures. Currently,
only one transportation roadway exists between Anchorage and
points north of Anchorage. He hoped that one or both routes
would survive an event to provide better public safety.
1:42:22 PM
REPRESENTATIVE GRUENBERG asked for clarification on the seismic
report, including any risks.
MR. FOSTER explained that KABATA obtained a seismic report. He
suggested that the proposed design includes seismic, as well as
geotechnical, and other reports required by code. He reported
that it is not the seismic event but the acceleration factor, or
how fast the wave propagates and accelerates, that poses the
greatest danger. He reiterated it is the acceleration rate and
not the magnitude of the event that poses the greatest danger.
He related that the private partner would need to meet the
design criteria the SOA dictates. He stated that the standards
for the proposed Knik Arm Bridge would not be any different than
the criteria the SOA uses to build other bridge structures. The
bridge would undergo the same seismic review. In further
response to Representative Gruenberg, he offered to provide an
executive summary of the reports to the committee.
1:45:28 PM
REPRESENTATIVE PETERSEN pointed out that not everyone who lives
in the Matanuska-Susitna Borough (MSB) would use the bridge,
particularly those on the east side of the MSB. He said he did
not anticipate anyone would drive further or pay a toll when the
driver has the option to drive on the Glenn Highway and not pay
a toll. He asked whether the toll revenue figures are broken
down to project the toll bridge use and whether the projected
toll revenue takes into account those not likely to use the
proposed Knik Arm Toll Bridge structure.
MR. HEMENWAY agreed. He explained that traffic and revenue
consultants reviewed traffic analysis zones, which are small
areas in the MSB. He recalled approximately 90 zones exist
between Anchorage and the MSB. The study considered the current
population, households by employment type, with and without the
project. The majority of the MSB's residents reside at the
first available place along the Palmer Wasilla area. More
recently, the growth in the MSB has been in the Knik Fairview
area, which is along Knik/Goose Bay Road south and west of
Wasilla, and in the South Big Lake area. Today, the Knik
Fairview area has a higher absolute population than the combined
incorporated areas of Palmer and Wasilla. He agreed that people
in Palmer and Wasilla would not likely use the proposed bridge
since the toll would become a friction. The point at which the
population increases would be south and west, or basically the
west side of Wasilla, including South Big Lake and Knik
Fairview. He concluded that is why the population forecast
starts low. He recalled that Wilbur Smith Associates predicted
about 6,700 trips per day would be made on the proposed Knik Arm
Bridge. However, while it starts relatively low, the
anticipated toll trips increase over time. He said this project
would be a 35 year concession project for a 100-year state
asset. He suggested that the need for the transportation
infrastructure is due to the population growth in the MSB. The
current transportation network in the region would promote the
first available property north of Anchorage. Conversely, people
living in the Matanuska-Susitna Borough tend to work in
Anchorage because the average wages per the DLWD are about a
third higher in Anchorage. Currently, about 44 percent of the
Matanuska-Susitna work force commutes to or through Anchorage to
work, including North Slope workers, the fishing industry and
others. The current population would still predominately use
the existing transportation network, although all residents will
receive some benefit due to the lower congestion on the route.
The proposed Knik Arm crossing would also promote urban infill
since people will be able to buy affordable housing closer to
Anchorage, which is the economic hub of the state.
1:50:20 PM
REPRESENTATIVE PETERSEN recalled the tunnel to Whittier project.
He further recalled that the predictions were that it would take
less than 10 years for the traffic to reach the "break even"
point. He said he did not actually believe the projections, but
the projections did not materialize. He pointed out that
merchants in downtown Anchorage have difficulty getting people
to shop downtown due to the parking meter fare. He was unsure
Alaskans would pay $5 to cross a toll bridge, especially if
their vehicle has high mileage since driving the Glenn Highway
would be another option.
MR. FOSTER responded that the issue of parking in downtown
Anchorage has not been due to a lack willingness to pay for
parking but is due to the lack of parking spaces. He stated
that parking garages and airports require fees. He related that
he has a familiarity with the Whittier Project. He explained
the difference between the Whittier tunnel project and the
proposed Knik Arm Bridge project is the MSB has experienced
significant population growth. The Knik/Goose Bay Road has
represented the fastest growing area of the MSB. He recalled
that in the 70s the population was low, but since then has
significantly increased. He suggested that the Whittier tunnel
project was based on "We open the tunnel, they will come." In
this instance the population already exists. The proposed Knik
Arm Bridge project would provide the link and the additional
infrastructure necessary. He added that Representative Neuman
reminded him not to forget to mention the commercial traffic
generated from the Port of Anchorage, which could use the
proposed Knik Arm Bridge crossing to head north to Interior
Alaska and points north, including the Dalton Highway.
1:53:53 PM
MR. FOSTER explained that the north bound commercial traffic
using the proposed Knik Arm Bridge would not travel through
Anchorage, which would also reduce the wear and tear on the
Glenn Highway. He suggested the economics of this one structure
would also relieve some of the M&O, and capital costs related to
the Glenn Highway expansion, and the proposed Wasilla Bypass.
Besides the north bound commercial traffic, Anchorage also has
gravel needs, which currently has been provided by the Eklutna
pit and other pits by rail. He stated that in addition to the
passenger traffic, substantial commercial traffic exists in part
due to the gravel sources located on the west side of the inlet
that affects commercial traffic.
1:54:57 PM
REPRESENTATIVE PETERSEN referred to the expansion at Port
MacKenzie and the proposed rail extension. He asked whether
that development would lessen the number of vehicles that would
cross the proposed Knik Arm Bridge crossing.
MR. FOSTER answered that the Port of Anchorage is predominantly
a freight port whereas Port MacKenzie is more of a resource
port. The freight coming by container ship would still go north
using the proposed Knik Arm Bridge crossing as the most viable
northern route. He said the additional rail loop at Point
MacKenzie is proceeding, noting the request for funding for the
spur before the legislature. It is more likely rail would
eventually connect to Point MacKenzie, which is the resource
port. He offered his belief that the ports are not in
competition with one another and the proposed Knik Arm Bridge
crossing will probably will complement both facilities.
1:56:42 PM
MR. HEMENWAY turned to his response on unlimited government
guarantee, which he said Mr. Kenworthy implied would be the
result of HB 158. The total estimated SOA's availability
payments over 35 years would be $3.2 billion. While it is a
substantial figure, it is not an unlimited figure. The base
case toll revenue forecast, predicated on the ISER 2009
population forecast, would generate approximately $1.56 billion
in excess of surplus over the 35 years of operations in excess
of the SOA's annual availability payment total. Some of the
surplus would pay for infrastructure extensions within the
projects and the rest to be used for other infrastructure
statewide. However, the project itself would provide a 75 to
100 year asset that the state will have full control of after
the public-private partnership is completed. Over the first 60
years, about 25 after the annual SOA's availability payments
cease, the project should generate about $10 billion in surplus
funds, which could be used to cover substantial infrastructure
needs as the state grows. Additionally, the language of HB 158
makes the implicit moral obligation of the state to a
contractual commitment explicit. It does not change the legal
status of the obligation because no legislature can obligate a
future legislature and any such commitment would always be
subject to appropriation under Alaska's constitution. It would
make the moral obligation explicit to the private sector, which
could give the private sector "some comfort." That comfort
level would be reflected in the interest rates the lenders will
provide to the private partner and equity returns that the
private partner will expect in the project, which is anticipated
at 10 percent of the total cost. That should result in a lower
cost to the state because during the competitive procurement
process the teams competing "will sharpen their pencils" and
those lower interest rates will be reflected in the proposals
the state receives in terms of annual availability payments.
1:59:36 PM
CHAIR P. WILSON related her understanding that the total cost
would be $3.2 billion, but approximately $1.56 billion in excess
toll revenue is anticipated in the first 35 years. The state
would receive approximately $10 billion in total estimated
revenue over the life of the asset.
MR. FOSTER answered that she is absolutely correct. The SOA's
availability payment, which is based on KABATA's model,
represents KABATA's consultant's view of the public-private
partnership process and their estimates on the availability
payment. The consultants estimated the state would pay $3.2
billion in availability payments over the 35-year contractual
period. He noted that KABATA has not yet solicited bid
proposals for the proposed Knik Arm Bridge project. Based on
the base case traffic model, the Knik Arm Bridge crossing would
generate over $5 billion in excess of the SOA's availability
payments that could be used for project or statewide
infrastructure, he said. In year 36 the SOA's availability
payments would be satisfied. According to the model over the
next 60 years the state would receive a little over $10 billion
in return, which is the net revenue over and above the SOA's
availability payments and M&O costs.
2:01:41 PM
CHAIR P. WILSON asked him to compare the KABATA's project costs
to a scenario in which the state would build the bridge. She
related her understanding that the bridge would take 3-5 years
to complete.
MR. FOSTER stated if the state were to build the structure
without a public-private partnership, the state would need to
design, build, and operate the structure. In the instance of
public-private partnership, the private sector would put up the
capital and take the risk for construction delays or overruns.
The state would not have any liability for construction costs
unless the state is the cause of the delay, he said.
2:03:00 PM
REPRESENTATIVE FEIGE referred to page 4, line 8, to proposed
Section 2, of HB 158, AS 19.75.211 (a), and read from existing
statute the following language:
(a)...Before issuing bonds for the Knik Arm bridge,
the authority shall submit to the state bond committee
a description of the bond issue and a preliminary
prospectus, offering circular, or official statement
relating to the bond issue. Bonds may not be issued
unless the state bond committee finds, based upon the
information submitted by the authority under this
section and other information that is reasonably
available to the committee, that the Knik Arm bridge
revenue and other revenue available to the authority
can be reasonably expected to be adequate for payment
of the principal of and interest on the bonds to be
issued and that issuance of the bonds by the authority
would not be expected to adversely affect the ability
of the state or its political subdivisions to market
bonds.
REPRESENTATIVE FEIGE asked whether this language had been
removed from HB 158.
CHAIR P. WILSON recalled that this language was removed because
the private partner is the borrower and the lender would not
have any guarantee the state would not halt the project. This
specific provision would give the partner better terms to obtain
the loan, she said.
MR. HEMENWAY responded that whether language stays in is moot.
The authority will not issue bonds other than as a conduit
issuance of private activity bonds. The private partner would
be the borrower and not the state. He suggested that the issue
that should be of concern for the state is the process used to
accept the proposal and enter into a contract. The passage of
HB 158 would not obligate the state, but entering into the
contract will do so. He further stated that the process
established by KABATA is under the current state procurement law
and the governance of the authority that was established in AS
19.75. The board of directors is comprised of three public
members appointed by the governor for staggered finance terms,
commissioners of the DOR, DOT&PF, appointed by the governor for
five year terms and two state legislators, one from each body.
This is where the authority's powers and duties are vested,
including the ability to enter under contracts. Further, the
rigorous procurement process will include participation from the
attorney general's office, the DOR, the DOT&PF, outside
consultants. The authority and its board have a fiduciary
responsibility not to enter into a bad contract. So from
KABATA's point of view whether the language remains in the bill
or is removed from HB 158 is somewhat moot. It would certainly
be protective language in the event bonds were issued by KABATA,
with the state as the borrower, he said.
2:07:28 PM
MR. HEMENWAY advised that the planned structure does not
anticipate any debt on the "books of the state" other than to
make the contractual availability payment. The maximum amount
is set by the private partner and can be reduced if the private
partner is underperforming under the contract terms. He
suggested the committee needs to consider the rigorous
procurement process, the governance of the authority, and the
fiduciary responsibility that KABATA, as state employees and the
board as stewards of the state project in making the
determination on the contract. He said he certainly would not
object to the language, but he thinks it is somewhat moot.
2:08:35 PM
MR. FOSTER added that the specific language really allows KABATA
to provide assurance to the private partner. It relates to the
three items listed in the paragraphs in proposed Section 2 of
the bill: the gross revenue, the revenue received, and any
other revenue received by state appropriation. It is an
assurance to the private partner that the availability payments
will be made by the SOA. Additionally, in the event that KABATA
would need to borrow to make the availability payments or if it
needed to request additional appropriations, this specific
language will addresses the assurance and security to the
private partner that the state's availability payments will be
made, which is in the best interests of the state since "we
should get the best terms when they give us their proposal for a
payment," he said.
2:09:47 PM
JEFF OTTESEN, Director, Division of Program Development,
Department of Transportation & Public Facilities (DOT&PF),
reiterated the bridge doesn't create the project, that the
traffic has been created by the population growth in Anchorage
and the Matanuska-Susitna Borough. He pointed out that the
legislature would need to fund road work with or without this
bridge. The DOT&PF reviewed the Anchorage and Matanuska-Susitna
Borough long-range transportation plans. The DOT&PF added up
and annualized the amount through 2035. He reported that
Anchorage would need $69 million and the MSB would need $20
million. In the past two years the legislature has funded $100
million in state funds for Anchorage alone. This is not even
considering federal funds for transportation, he said.
2:11:30 PM
MR. OTTESEN stated this transportation infrastructure funding
would need to continue for a long time as the state makes
improvements to the grid in Anchorage and in the MSB, such as to
widen the Parks Highway and for the Knik/Goose Bay Road
improvements. He explained the difference with the proposed
Knik Arm Bridge is that the first $500 to $600 million would
come from bonds sold by the firm that builds the bridge and paid
for by the users. He reported this represents $600 million that
is not on the "state's books" to the region's transportation
resources. As the project continues to grow, the project will
need to encompass the links such as the link from the proposed
bridge to the Seward-Glenn Highway corridor. That connection
would be an obligation of KABATA project, he said. Thus, the
amount would be more than the initial $500 to $600 million
"that's being brought to the table by KABATA" since it would
cost at least $100 million more for that project. Finally, once
the project would produce surplus revenue and that surplus
revenue, under the agreement with the FHWA, must be spent on
highway and highway-related improvements in Alaska, subject to
appropriations by the legislature. This becomes a third source
of revenue which he predicted would not occur without the
proposed bridge. He summarized that the proposed Knik Arm
Bridge project really brings a lot of benefit to the region and
to the state that would not otherwise be available except by
legislative appropriation from the general fund.
2:13:22 PM
REPRESENTATIVE PRUITT asked for an estimate of the cost to
expand the Glenn Highway.
MR. OTTESEN answered that it would cost about $5 million per
highway lane mile to expand the Glenn Highway. He stated that
the Seward Highway to Glenn Highway Project, also called the
Highway-to-Highway or H2H project is a state project. The
KABATA has performed traffic predictions on the two main
corridors: the proposed bridge and the Glenn Highway. The H2H
project estimates are a little higher, although they are close.
He stated the estimates project between 36,000 and 37,000 trips
will be made by 2035. He stated that the H2H project actually
predicted 6,000 more trips for the Glenn Highway, he said. He
offered his belief that KABATA has used a slightly more
conservative estimate on traffic. He related his understanding
that the Glenn highway would still need to be widened, but it
may only need to be widened by two lanes instead of the proposed
four lanes if the proposed Knik Arm Bridge crossing is built.
This would result in cost savings to the state. He pointed out
that every other road in the region will be funded by either the
state's general fund or the FHWA.
2:14:51 PM
REPRESENTATIVE PRUITT asked for an estimate of the cost
projections to widen the Glenn Highway. He recalled an overpass
at Muldoon Road was estimated at $50 to $100 million.
Mr. OTTESEN responded that the Glenn Highway widening project
represents about 80 lane miles, times $5 million, or $400
million total. This would not account for major interchange
improvements or bridges, he said.
REPRESENTATIVE PRUITT recalled the Wasilla Bypass project and
asked for the DOT&PF's cost estimate for the proposed project.
MR. OTTESEN answered that the Wasilla Bypass would cost
approximately $250 million to complete.
REPRESENTATIVE PRUITT asked for the current capacity of the
Glenn Highway.
MR. OTTESEN said he was unsure, but that he believed it was
close to capacity. He said the capacity assumption would be
about 10,000 vehicles per lane. He offered his belief that the
Glenn Highway currently carries about 35,000-37,000 vehicles per
day, which is approaching the overall capacity of 40,000 per
day.
2:16:47 PM
REPRESENTATIVE PRUITT asked how many roads or bridges in Alaska
provide revenue to the state.
MR. OTTESEN answered that the state receives revenue from the
Whittier tunnel, which covers part of the operating costs. In
response to Representative Pruitt, he answered there are not any
bridges that currently provide revenue to the state.
2:17:27 PM
REPRESENTATIVE FEIGE recalled previous testimony that the
population growth in the MSB represents the primary reason for
the proposed Knik Arm Bridge project. He asked for an estimate
of any costs necessary to build roads to connect to the proposed
Knik Arm Bridge.
MR. OTTESEN responded that a certain amount of road
infrastructure will need to be built each year. With the
proposed Knik Arm Bridge project, the roads that will be built
would be roads such as the connection from the bridge to the
Parks Highway somewhere west of Wasilla or for a north south
connector somewhere closer to Big Lake.
REPRESENTATIVE FEIGE asked whether any right-of-way has been
secured on the far shore to connect to the proposed bridge.
MR. OTTESEN answered that some of the land near the project is
owned by the MSB or the state, but there is not a way for the
state to purchase new right-of-way in advance of a project. The
DOT&PF cannot use federal funds for right-of-way. In further
response to Representative Feige, he related the DOT&PF has a
process in place that it uses to purchase right-of-way,
including appraisal, review of appraisal, negotiations, fair
market value and adjudication. The DOT&PF regularly purchases
right-of-way, and although the right-of-way necessary for this
project may be difficult, it is achievable. He did not have an
estimate for potential right-of-way costs but stated that
generally the right-of-way is included in the road estimate.
2:21:22 PM
REPRESENTATIVE PETERSEN recalled commercial traffic as one group
that potentially would use the bridge. He asked whether anyone
has considered a railroad bridge as an alternative.
MR. OTTESEN answered that a railroad bridge was considered, but
he deferred to KABATA. He asked members to bear in mind that a
railroad route has different standards, including that highways
can accommodate handle steeper curves. Thus, the bridge
alignment must change to serve both. After conferring with Mr.
Foster, he said he stands corrected, that the proposed Knik Arm
Bridge project is co-compatible with a rail alignment.
MR. FOSTER answered that through the National Environmental
Policy Act (NEPA) process rail was considered and the alignment
is compatible to rail. Thus, on the Port of Anchorage side, the
bridge grade is compatible, but the structure was not designed
for rail to be added to the superstructure. He acknowledged it
could be considered, but KABATA's goal has been to accommodate
vehicular traffic. He reiterated that the embankment, the road
surface, and the grade are all rail compatible.
2:24:23 PM
REPRESENTATIVE NEUMAN stated that it is easier to build a
railroad bridge off of an existing bridge. He said the railroad
through Wasilla creates a pinch point since the lake is on one
side, the railroad, and another lake. He pointed out that the
railroad crossing creates dangers for the public. He stated
that about 4 million cars travel to Big Lake each year. The
Alaska Railroad follows the same route. He suggested the best
route is to have the Alaska Railroad take a different route. He
stressed the current situation is not safe, including that three
people died on Knik/Goose Bay Road. He highlighted the
necessity for new roads. He recalled the DOT&PF estimated an
additional $65 million is planned for Knik/Goose Bay Road. He
detailed costs to improve other projects in his district. He
related his understanding the design and engineering on the
north shore is pretty much completed. He stressed the
importance and advantages of the proposed bridge project, which
could help cover the Matanuska-Susitna valley road costs,
increase state revenues, and keep property taxes. He
characterized the proposed Knik Arm Bridge project as a
wonderful opportunity for the state.
2:29:45 PM
SUSAN DIPIETRO, Government Hill Community Council, stated the
Government Hill community has been following this project since
inception. She pointed out that the impact on her neighborhood
would be quite severe. The route chosen would go through the
government hill neighborhood and would impact 150 families on
the side adjacent to the project. The project would need to
take right-of-way and encompass 12-14 homes in her neighborhood,
which would displace those families. Since 2003, she has
attended numerous meetings and heard countless presentations.
When this project was first presented it was supposed to be
completely funded by the private partner without any additional
state funding. The AMATS committee made it a condition in the
long range transportation plan, that no additional state money
be appropriated to KABATA project. Now, KABATA is before the
legislature asking for $150 million "for starters" of additional
state funding. The KABATA began this project with $110 million
of federal and state matching funds. She offered her belief
that the $150 million requested is really just the beginning
since what KABATA really wants is a state guarantee for the
private partner. She was uncertain what guarantee the language
provides and how it obligates the state. She said, "One thing I
heard loud and clear is the state would be obligated to make the
availability payments." The KABATA hopes the toll revenues will
defray some of the cost of the availability payment. If this
bill passes the state would need to contribute the funds one way
or another. "That's a lot of money. That's a big number and it
goes up over the years. And it's a long-term commitment." She
related a scenario in which the bill moves forward, the bridge
will be built, and the state would have the infrastructure in
place. Even though considerable work has been done on tolling
information, but still have reason to believe that these toll
revenue estimates are over estimates. They are really "too
rosy."
2:33:30 PM
MS. DIPIETRO stated that if the toll revenue faces a shortfall,
the legislature could refuse to make the availability payments,
but at that point the bridge is built. It's hard to stop once
you start, which makes her nervous, as a citizen of the state.
Once HB 158 passes, KABATA has the authority to enter into a
contract, and once that contract is entered into, the state is
"on the hook." She encouraged committee members to examine the
toll revenue projections closely. "This is the key piece of
this. I think it is quite low," she said.
2:34:21 PM
MS. DIPIETRO pointed out the state owns the ferry, which could
operate between the Port of Anchorage and Point MacKenzie, which
could carry 134 people and more than 20 vehicles. She recalled
earlier testimony that it is not the bridge but is the natural
growth. She surmised that without the bridge it may happen
closer to Anchorage, in Palmer or Wasilla, where the state has
already invested a lot in infrastructure. The state has made
investments in those communities, which makes it attractive as a
place to move. The bridge would encourage growth in places that
are sparsely populated right now. It isn't necessary to assume
the population growth would require the Knik Arm Bridge project
to be built. Some population increases would continue to happen
on the western side but would continue to grow on the eastern
side of the inlet, she said. She urged member to question the
idea of the Knik Arm Bridge project as a necessary structure to
support the population growth.
2:35:47 PM
REPRESENTATIVE PETERSEN asked what kind of disruptions to the
Government Hill area would encounter if this project moves
forward.
MS. DIPIETRO answered that the project is not completely
designed so she was unsure of the boundaries and the overall
impact. She related her understanding the private partner would
dig a big trench west of the existing bridge, which would become
a cut and cover tunnel. She was also uncertain as to how
residents would access the neighborhood during the construction
phase. In phase two of the proposed Knik Arm Bridge project,
additional infrastructure would require more construction to
connect the Knik Arm Bridge to the Seward Highway. She advised
members that some of the studies completed as part of the
environmental review revealed rich historical information and
historic buildings. Government Hill is Anchorage's oldest
neighborhood. It really is a great little gem of a
neighborhood. The houses range from Quonset huts to big houses
on the bluff. She described the community, as established, with
older historic home from the early 1900s, yet one with
ethnicity, pocket parks, and a "green community."
2:38:37 PM
BOB FRENCH, Anchorage, Alaska, stated he is the President of the
Government Hill Community Council but is testifying on behalf of
himself. He asked why KABATA was happy with the existing
language with AS 19.75 and the necessity for KABATA's
obligations to become obligations of the state. Since 2003,
KABATA has been saying if this project does not make financial
sense to the private partner, the bridge will not be built. He
offered his belief that the private partners want a state
guarantee and another $150 million in a reserve fund.
Otherwise, the private sector does not want to "touch this
project" if they have to assume the financial risks. He offered
his further belief that the private partners do not believe the
toll forecast. "I don't think you should either," he said. He
referred to the toll forecast. He related that KABATA has not
yet published its 2011 toll collection estimates, but based on
2011 TIFIA loan application, it appears the most recent toll
estimates are lower in early years to match the lower
population. The population estimates are lower than KABATA's
2005 estimate, but the outer years are similar to the earlier
estimates. Even if the population estimate for the Matanuska-
Susitna Borough is 11 percent higher than previously estimated,
the current population still falls far short of the loan
payment. He stated that nearly 21,000 trips per day are
required at $5 per trip just to make the annual bond payment as
outlined in KABATA's pro forma financial plan. The current
traffic on the Glenn Highway at the Eklutna Bridge is 29,000
trips per day. It is not a shorter trip to use the proposed
Knik Arm Bridge unless the commuter lives west or south of
Wasilla. Thus, most of the Matanuska-Susitna valley commuters
will continue to use the Glenn Highway. The KABATA's toll
forecast of 20,000 trips per day only three to five years after
the proposed Knik Arm Bridge opens is not a "reality-based"
estimate. The KABATA says the Knik Arm Bridge will facilitate
state commerce since it will shorten the driving time to
Fairbanks.
2:41:55 PM
MR. FRENCH related that KABATA's own time estimate indicates it
would reduce the travel time to Fairbanks by 14 minutes. The
KABATA has letters of support from the Alaska Trucking
Association. He queried whether the truckers were advised they
would have to wait until after the Burma Road is built to
achieve the 14 minute time savings. He also wondered if the
truckers would be willing to pay the commercial toll, estimated
at $10 to $15 to save approximately 15 minutes. The KABATA
testified the Knik Arm Bridge would be part of the National
Highway System. However, phase one will not be built to
national highway standards. The proposed Knik Arm Bridge will
not be a four-lane approach or a four-lane bridge until phase 2
of the project. He agreed with Mr. Ottesen that additional
roads will need to be built. However, if the forecast is overly
optimistic, KABATA will not likely be able to finance phase 2 of
the project and will look to the state to fix problems caused by
the shortfall. He pointed out that KABATA is very clear it will
not pay for any project south of Third Avenue in Anchorage or
past the connection of the Knik/Goose Bay Road. Thus, the
traffic on the Knik/Goose Bay Road, which is overloaded and is
designated as a Highway Safety Corridor, would be the state's
obligation to upgrade, he said.
2:43:48 PM
MR. FRENCH recalled that Representative Neuman seemed anxious
for help to fund roads in the MSB, yet KABATA does not
anticipate any excess funds until 15-20 years out.
Additionally, Mr. Ottesen reported that the H2H traffic
estimates were higher than other forecasts. He related that the
Government Hill community currently has a public information
request filed with the DOT&PF that is past due. The request
made was to obtain the estimate. He offered his belief that the
Highway to Highway estimates did not include the dampening
factor of having a toll on the bridge. He explained that once a
toll is added, that it may result in a 20 to 30 percent drop-off
in the overall traffic rate. He urged members and the SOA not to
make a $3.2 billion mistake by providing a guarantee for the
$3.2 billion in availability payments just to get a $700,000
bridge. He mentioned he did not think any project ever came in
on time or under the estimate.
2:45:48 PM
MR. OTTESEN asked to respond. He explained that National
Highway Standards (NHS) roads in Alaska are almost all two-lane
highways. The standard is acceptable for NHS roadways. He
suggested that Mr. French may be thinking of an interstate which
are without failure built to a four-lane standard, with many
exceeding four-lane roads. He related that Alaska has 1,000
miles of interstate highways built to two-lane standards,
including the Parks and Glenn Highways. Alaska specifically has
an exception to allow for two-lane roadways as part of the
interstate system. However, it has tentatively been classified
as an NHS roadway by the FHWA, he said.
2:47:18 PM
REPRESENTATIVE PETERSEN asked whether Phase 1 of the Knik Arm
Bridge project would consist of two lanes.
MR. OTTESEN deferred to KABATA to answer the question.
MR. FOSTER explained that the foundation for the bridge
structure would be built out for four lanes plus a pedestrian or
bicycle lane. The initial deck during Phase one of the Knik Arm
Bridge project could potentially be a two-lane, but KABATA will
also ask for four-lane structure as an option. The concept is
to build the foundation once, build the deck for two-lanes and
as traffic expands, the additional decking would be added. He
offered that to expand the Glenn Highway, additional pavement is
added, but for bridge construction, additional foresight is
necessary. The bridge structure is set up for four lanes plus a
pedestrian lane. He reiterated that it could be either a two-
lane or a four-lane structure depending on the proposals. The
embankment structures will all be "filled out" to the full four-
lane standards. The cut and cover tunnel is constructed out to
phase two alignment so it would be cut once, covered once, and
when traffic reaches its phase two capacity, that Ingra and
Gambell Streets would provide the next connection to the Seward
Highway.
2:49:32 PM
REPRESENTATIVE PETERSEN asked whether the $700 million estimate
is for the two-lane deck.
MR. FOSTER agreed, reiterating the preparatory features to later
expand to four-lanes.
REPRESENTATIVE PETERSEN asked for an estimate for the additional
two-lane decking.
MR. FOSTER, after conferring with someone in the audience
indicated it could cost an additional $100 million.
2:50:18 PM
REPRESENTATIVE MUNOZ referred to page 2, to subparagraph (5)(B)
of HB 158. She asked whether it is typical in public-private
partnerships for the governmental agency to assume all risk.
MR. HEMENWAY answered that the government would not be assuming
all the risk in this transaction. The state would be obligated
to make the availability payment, subject to appropriation,
after toll revenue is applied. He reminded members that the
annual availability payment is predicted to be about 67 percent
of the base case traffic control revenue during the 35 year
period for the public-private partnership agreement. Under
DOT&PF procurement, the state is responsible for 100 percent of
the cost, the design build contract overruns. Further, on state
projects the state is responsible for all M&O. However, a
public public-private partnership makes transparent the life
cycle cost of the ownership of the project and puts brackets
around the state's risk and offloads a substantial amount of the
the risk to the private sector, much more so than with a
conventional public transaction. The SOA's availability
payments would cover all of the M&O to a high standard and
requires the facility, the 100 year asset, to the state in "like
new" condition at year 35. Thus, the risk is substantially
lower. Yes, the public could typically have a lower cost of
capital, but it assumes all the other itinerant risk of
constructing, operating, and maintaining the facility. He said
he would strongly argue this is a lower risk structure that is
transparent about the life cycle cost ownership. He related
that the cost is vague on maintaining and resurfacing typical
roadways without any transparent review of the life cycle of the
project. "In this case, it's all laid out before you", he said.
2:53:16 PM
REPRESENTATIVE GRUENBERG recalled the state's pipeline needs
refurbishing and the state is having increasing demands on the
limited state's revenue. He asked whether anyone reviewed or
studied how it would affect opportunity costs of the state to
maintain the state. He asked for the tradeoff in order to move
forward with the Knik Arm Bridge project.
2:54:10 PM
REPRESENTATIVE NEUMAN offered his belief that the question could
be what it will cost of not moving forward. He characterized it
as the "cost of doing nothing." The state could have congested
roads yet the population is growing. He surmised the state's
population might drop to half its size due to the pipeline
declines. He asked whether the state should continue to lose
lives due to road congestion. He said he represents 27,000
people in his district, which is north and west of Wasilla north
of the proposed Knik Arm Bridge. He related there's a hedge on
the hedge. He said, "That's why we have contracts. That's why
when this project moves past this step, when contract
negotiations are completed, that it does comes back to the
legislature and we decide, 'Are we going to move forward with
this project.'" After 35 years the proposed Knik Arm Bridge
project will be paid for and will generate revenue. He stated
that this project will offer an opportunity for hundreds of jobs
not currently available. "Those are jobs in your back yard,
Representative Gruenberg, and my back yard. So what's the cost
of doing nothing," he asked.
REPRESENTATIVE GRUENBERG responded that he would like to obtain
all the information needed before the committee votes on this
bill.
CHAIR P. WILSON pointed out that all the questions were answered
that were raised at the last meeting, as well as all the
questions raised today.
2:56:21 PM
REPRESENTATIVE GRUENBERG responded that the cost of doing
nothing depends on what does not get done. He said that if the
state only has a certain amount of revenue, some things not get
done.
CHAIR P. WILSON pointed out that has always been the case.
REPRESENTATIVE GRUENBERG continued. He asked, "What won't get
done?" He suggested the case was presented as such that without
legislative support the project would not be completed. He
asked if the project is approved, what projects would not be
built. He said:
This is a rhetorical question, but I think it's worth
the members of the committee deciding what won't get
done. Won't a ferry get built? Won't projects in the
Chickaloon area get built? Won't things in Juneau get
built that need to get built? Won't things in East
Anchorage get built? Those are the questions we have
to ask, just as you, Representative Neuman, are
answering for your constituents. I'm not being flip,
Madame Chair. This is the core question before us.
REPRESENTATIVE NEUMAN responded, "If we only had a crystal
ball."
CHAIR P. WILSON agreed.
2:58:02 PM
RON AXTELL stated that he has been an Alaskan resident for over
30 years. He has lived on Knik/Goose Bay Road for the past 29
years. Over the years he has seen the area grow, in particular
in last ten years. He asked what citizens can do to support the
state's economy. He stated that Alaska needs some areas to
grow. He further stated that showing businesses that the state
is willing to give support for development can only be seen as a
positive move. The state cannot continue to rely on oil for
income. Building the bridge will help support other types of
industry that are looking to develop in Alaska. An alternative
route to the Interior and developing our resources are two ways
the state can benefit from this project. The state also needs
to consider the future and consider the one road system in and
out of Anchorage. He offered his belief that no one would argue
that the highway will constantly need to be upgraded. He said:
What will this cost be? The money that this bill is
looking for will be pennies compared to upgrading
highways and overpasses to accommodate the amount of
traffic in the future. I believe that this bill is a
positive move to show future investors that we are
open for business. People say this is a bridge to
nowhere. Let's make it a bridge to somewhere. Thank
you for hearing me today.
3:00:15 PM
CHAIR P. WILSON, after first determining no one else wished to
testify, closed public testimony on HB 158.
3:00:26 PM
REPRESENTATIVE PRUITT moved to report HB 158 out of committee
with individual recommendations and the accompanying fiscal
notes.
REPRESENTATIVE PETERSEN objected. He related that he has not
had time to review the details of the questions raised, even
though some have been answered, questions still exist.
REPRESENTATIVE PRUITT asked whether answering any additional
questions would change his vote.
REPRESENTATIVE PETERSEN responded yes, if the questions were
answered to his satisfaction.
REPRESENTATIVE GRUENBERG asked if he could respond.
CHAIR P. WILSON said no. She said she would like to have the
secretary call the roll.
REPRESENTATIVE GRUENBERG asked to appeal the ruling of the
Chair. He said he has not had an opportunity to be heard on the
central question.
CHAIR P. WILSON responded that Representative Gruenberg has had
ample opportunity to be heard. She said the question he has
raised is a question that can only be answered by the House
Finance Committee, which will decide which projects get funded
and which ones will not get funded.
3:02:51 PM
A roll call vote was taken. Representatives Munoz, Feige,
Pruitt, Wilson voted in favor of reporting HB 158 from the House
Transportation Standing Committee. Representatives Gruenberg
and Petersen voted against it. Therefore, HB 158 was reported
out of the House Transportation Standing Committee by a vote of
4-2.
CHAIR P. WILSON reported that with 4 yeas and 2 nays, HB 158 was
reported from the House Transportation Standing Committee.
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