Legislature(2013 - 2014)BARNES 124
03/19/2013 01:00 PM House TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| HB146 | |
| HB123 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 146 | TELECONFERENCED | |
| += | HB 123 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 123-DEDICATED TRANSPORT FUND/PUB TRANSPORT
1:39:35 PM
CHAIR P. WILSON announced that the final order of business would
be HOUSE BILL NO. 123, "An Act relating to the transportation
infrastructure fund, to local public transportation, to the
municipal harbor facility grant fund, to motor fuel taxes, to
the motor vehicle registration fee, to driver's license fees, to
identification card fees, to the studded tire tax, to the
vehicle rental tax, and to other fees and taxes related to motor
vehicles; creating the Alaska Transportation Panel; and
providing for an effective date."
1:40:14 PM
CHAIR P. WILSON indicated she does not plan to move the bill
today.
The committee took an at-ease from 1:40 p.m. to 1:44 p.m.
1:44:08 PM
CHAIR P. WILSON turned the gavel over to Representative Feige.
1:44:22 PM
CHAIR P. WILSON, speaking as sponsor of HB 123, said that Alaska
has always had difficulties financing transportation
infrastructure. With the Department of Transportation & Public
Facilities (DOT&PF)'s Federal Highways Administration (FHWA)
MAP-21 presentation the committee heard, the state will have a
deep decline in the amount of funding available for communities
and local roads. Despite the aging transportation
infrastructure Alaska has not had any new roads built in the
last 30-40 years, which she characterized as being atrocious.
In fact, the state has a $20 billion backlog in transportation
projects and $700 million in deferred maintenance. Further, the
state needs open new access to natural resources and to do so
will require development of Alaska's transportation system. The
state needs to depend less on the federal government and start
taking responsibility for Alaska's roads, harbors, airports, and
railroads. She said, "Plain and simple, we need to plan for the
future [slide 2]."
1:45:47 PM
CHAIR P. WILSON recapped the work the committee has taken in the
past few years. Three years ago, the committee listened to
DOT&PF's grassroots organizations, transportation organizations,
and held hearings to identify the challenges in this
geographically diverse state. The committee traveled to rural
communities to view first-hand their airports; traveled on rural
and urban highways to observe challenges these communities face
with regard to safety, congestion, and deferred maintenance.
The committee heard from the Alaska Municipal League (AML) and
the Matanuska-Susitna Borough (MSB), as well as from national
experts at the National Conference of State Legislatures (NCSL).
The committee also heard from state experts, including a report
by Larry Persily that addressed the fiscal shortfalls with
respect to the state's long-range transportation plan. The
committee ultimately rejected the options to fix the problem by
bonding, which would commit future funds to pay off the debt.
She offered the solution she proposes today resulted from all
the hours of committee meetings, travel, and research [slide 3].
1:46:50 PM
CHAIR P. WILSON outlined the transportation funding plan.
First, the state needs to reestablish the dedication of
transportation taxes and fees as part of a transportation fund
that was in existence at statehood. The framers of the Alaska's
Constitution grandfathered in two dedicated funds related to
transportation. The first one was known as the highway fund
whose purpose was established to fund highway-related
activities. The second fund was the water and harbor facilities
fund, and proceeds were designated for water and harbor facility
expenditures. The proposed Alaska Transportation Infrastructure
Fund (ATIF) would combine these two funds into one fund and
require a vote of the people to change the constitution to
ensure that all fees and taxes paid for transportation
activities will be spent only on transportation. Second, she
highlighted that the state must continue to fund transportation
as it has been done in the past. She emphasized that this is
key to making progress to improve transportation infrastructure
in Alaska. In doing so, the state could slowly chip away at the
$20 billion backlog of projects. Third, she outlined that the
state must engage in more 100 percent state-funded projects,
which could mean savings in cost and time since the projects
would not be subject to federal constraints. For example, the
Elmore Road Extension project in Anchorage was completed in less
than 3 years as compared to the 7-10 years it would have taken
if the federal processes would have been followed. In
conclusion, her intention and goal is to provide a dedicated
revenue stream that will allow more projects to be completed
faster and with less funding while the state would continue to
provide funding for ongoing federal and state projects [slide
4].
1:49:03 PM
CHAIR P. WILSON explained that the proposed legislation would
fund and implement the ATIF. She said the legislature would
need to pass three measures: First, HJR 10 would put a
constitutional change on the ballot to allow citizens to decide
whether to implement the ATIF. Second, this bill, HB 123, would
define the laws related to the structure of the fund. Third, HB
122 would appropriate $2 billion into the fund for start-up
funds. She acknowledged the sum of $2 billion to seed ATIF is
considerable; however, it is necessary to make significant
progress in the transportation backlog. This seed money,
combined with continued funding from the state's operating and
capital budgets, would provide a steady measure of progress
against the backlog. She has heard anecdotally that a federal
dollar is worth $.75 as compared to state dollars. She
emphasized the importance of all three elements of the
transportation proposal. The annual revenue would be comprised
from [motor fuel tax, tire tax, vehicle rental tax, vehicle
registrations and driver's license fees, and new transportation
related fees or taxes], which would be deposited into the fund
and is estimated at approximately $80 million per year. She
noted any special use fees currently in place have been
preserved, including airport lease revenues [slide 5].
1:51:04 PM
CHAIR P. WILSON referred to a spreadsheet in members' packets
entitled, "Alaska Transportation Infrastructure Fund (ATIF)."
She said the department will manage the ATIF consistent with 6
percent of market value (POMV), although the rate can be
adjusted depending on the economy. Currently, the DOT&PF
manages multiple funds and has experience and a good track
record. All the profits will be reinvested in the fund each
year. Additionally, each year funds will be available for
appropriation based on 5 percent POMV over the previous five
years, plus half of the taxes and fees collected from the
previous year. Further, the fund will cover expenses for the
DMV, the cost to administer and manage the fund, and the cost of
the advisory council [slide 6]. Lastly, the fund will be self-
sufficient and not require any general funds for administration
and the appropriations from the fund will follow the regular
budget process and will be approved by the legislature and the
governor.
1:52:49 PM
CHAIR P. WILSON provided details on the Alaska Transportation
Panel (ATP), which is a panel who will prioritize projects for
funding, and submit them to the federalized State Transportation
Improvement Plan (STIP) or recommend projects be constructed
with ATIF funding, using state standards and procedures [slide
7]. She said the ATP would consist of [four] public members
appointed by the governor, the commissioner of DOT&PF, the
DOT&PF's STIP member [also considered the project evaluation
board member], and a member of the Alaska Infrastructure
Commission (AIC). The public members would include one member
from the Anchorage area, including the Matanuska-Susitna area;
one member from the greater Fairbanks area; one member from a
rural coastal community; and one member from a rural interior
community. The governor must ensure the public members bring
expertise from all modes of transportation, including roads,
ferries, and aviation. The ATP would use DOT&PF's established
guidelines to analyze all projects and all modes and determine
which would be STIP projects or AIC projects. Finally, the AIC
would prioritize the projects recommended by the ATP based
solely on statewide priorities and needs.
1:54:58 PM
CHAIR P. WILSON stated that the AIC would consist of a nine
member Alaska Infrastructure Commission, as follows: four
public members - one from each judicial district - two members
at large; two non-voting legislature members - the Chairs of the
House and Senate Transportation Committee - and the commissioner
of DOT&PF. The DOT&PF will be charged with writing the weighted
criteria used for project evaluation. The AIC's prioritized
list is due to the governor and the legislature by October 15th
of each year for inclusion into the capital budget, she said.
CHAIR P. WILSON reviewed the ATIF Projects [slide 9]. Projects
from all modes of transportation would be considered every year
and anyone can submit a project for consideration, including the
state, a borough, an unorganized borough, a municipality, a
community, or a village. She envisioned that completed
submission forms would provide the AIC sufficient information to
prioritize projects statewide. She emphasized that every
project will be considered. She said that a project using the
federal process is constrained and could use no more than 20
percent of the available ATIF funds, which should incentive more
state-funded projects. Additionally, ATIF funding cannot be
used for federal matching funds for surface transportation,
aviation, or the Alaska Marine Highway System (AMHS).
Specifically, the goal is for major projects in these areas to
be completely funded using state funds.
1:56:47 PM
CHAIR P. WILSON turned again to the spreadsheet in members'
packets, entitled "Alaska Transportation Infrastructure Fund
(ATIF)," which projects and identifies the total available for
capital appropriations if the state initially funds the ATIF
with $2 billion and also deposits transportation user fees into
the fund.
1:57:15 PM
CHAIR P. WILSON outlined the goals for the ATIF [slide 10]. The
ATIF can help Alaska plan for its future, she said. She
anticipated the ATIF would decrease the current $20 billion
transportation infrastructure backlog, eliminate deferred
maintenance, and decrease Alaska's dependence on federal
dollars, although the state will still want to leverage every
federal dollar. The ATIF would provide more direct jobs, with
an indirect employment boost, as well. Alaska's major roads are
not safe due to congestion and deterioration, she stated. The
ATIF would also improve safety on Alaska's roads, bridges,
airports, and harbors. She referred to numerous studies that
show transportation investment creates a competitive environment
attracting additional economic investment that includes
increased output, productivity, income, property value,
employment, and wages. Additionally, the ATIF will assist the
state in reductions in project costs, non-commercial travel
time, and improved quality of live, as well as provide a rate of
return equal to or greater than the social costs of capital.
The state's economy is highly dependent on resource extraction
and these industries are transportation intensive. She asserted
that Alaska needs a state-funded transportation system that is
sufficiently and predictably funded. This reliable flow of
funds allows the development of a sound transportation plan that
does fluctuate with funding or the economy.
CHAIR P. WILSON stressed that the state of the economy in Alaska
doesn't matter in terms of the ongoing necessity to maintain its
roads, and the state must continue to strive and move forward to
diversify its economy. She recapped her presentation, noting
she has identified the transportation issues, the method of
implementing the ATIF, and has addressed the broader social good
and economic process the ATIF brings to meet the state's ever-
growing transportation needs. She emphasized that the state
needs to implement the ATIF. She said, "Alaska needs to take
action now while the price of oil is still high. The Permanent
Fund recently topped $40 billion. We've fully repaid the
constitutional budget reserve and we've set aside billions more
in the statutory budget reserve." Even though the ATIF seems
like a huge expenditure, it is really an investment in the
state's economic future. In conclusion, she asked members to
put the constitutional amendment on the ballot in November 2014
and to move the three measures forward, including HB 123, to let
the people of the state decide.
2:00:32 PM
CHAIR P. WILSON referred again to the spreadsheet entitled
"Alaska Transportation Infrastructure Fund (ATIF), pointing out
the capital appropriations would initially be $68 million in the
first year, but as the fund and principal grows the state would
have $300 million each year to appropriate to transportation
projects throughout the state.
2:01:38 PM
REPRESENTATIVE JOHNSON said he supports HB 123. He asked for
clarification on the make-up of seven-member ATP and whether the
ATP's composition could actually exclude a representative from
Southeast Alaska.
CHAIR P. WILSON agreed. She clarified that the ATP's purpose is
to prioritize projects for the STIP or the ATIP. However, the
nine-member AIC would prioritize the projects across the state
in terms of importance and need.
REPRESENTATIVE JOHNSON said if she is comfortable with the
composition of the panel, then he is also.
2:02:35 PM
CHAIR P. WILSON asked the DOT&PF to describe the fiscal notes.
2:03:01 PM
JEFF OTTESEN, Director, Program Development, Department of
Transportation & Public Facilities (DOT&PF), stated that the
department's fiscal note shows a fiscal impact of $490,000 in
the first year, dropping back to $209,000 annually. The one-
time cost in the first year would cover the purchase of a suite
of software to manage the scoring process, as well as $50,000 in
legal costs to promulgate regulations. The remainder would be
personal services and travel for the commissions and expenses
for the one full-time staff serving both commissions.
2:04:23 PM
CHAIR P. WILSON asked for clarification on the software the
department uses for the STIP.
MR. OTTESEN assumed the department would purchase the software.
Currently, the department uses an Excel spreadsheet, since the
department scores approximately 40 projects, which takes two
days. He described the process as a slow slog since six members
must respond to a series of questions and votes are recorded.
The STIP also has a way to separate or pre-score the highest
projects and a sub-set of projects come before the panel.
Otherwise the full panel would need to score 300-400 projects,
which would likely take 10 days. He offered his belief that
members reach a saturation point after two days of scoring.
CHAIR P. WILSON commented that she sat in on one of the STIP
process meetings and found the scoring process interesting,
which she briefly described.
MR. OTTESEN interjected that members can hold four percent for
specific projects, but 96 percent of the STIP process is based
on firm criteria. In further response to a question, he
explained the DOT&PF will need to find a way to record votes
simultaneously if this fiscal note did not get approved. He
briefly described the voting and weighing process the software
provides, which consists of an analytical hierarchy process used
to arrive at the collective judgment of the panel. He
elaborated this software was developed during the Cold War to
evaluate options.
2:09:06 PM
COLLEEN GREENSHIELDS, Administrative Officer, Director's Office,
Division of Motor Vehicles (DMV), Department of Administration
(DOA), stated that she is filling in for Tiffany Thomas, DMV's
Driver Licensing Manager. She explained that the DMV's fiscal
note is a zero fiscal note. The division is receipt supported
and the change would move the funding from general funds into
the ATIF fund. She detailed that the department has identified
$15,725,800 in fees that would not be available to be moved. In
response to Representative Wilson, she agreed those funds are
dedicated to something else.
CHAIR P. WILSON pointed out these fees are for boat registration
fees, snowmobile registration fees, the emission maintenance
fees, the donations from the anatomical gift awareness fund, and
fees for special plates, trust, and adjustments.
MS. GREENSHIELDS colleen answered yes.
CHAIR P. WILSON remarked that these designated fees will
continue to be directed as is currently done.
2:11:26 PM
LORENE PALMER, Director, Division of Economic Development,
Department of Commerce, Community & Economic Development
(DCCED), stated that the division's fiscal note reflects the
impact if the department would develop the ATIF and any changes
in receipts for vehicle rental tax. Currently the vehicle
rental tax funding is helping support the tourism development
activities within the division. She explained the scope of
activities includes a variety of efforts to support workplace
development, including tourism, research projects, development
of niche markets, and assisting rural Alaska develop tourism
opportunities. She reported that the three staff assigned to
providing some level of tourism activities is also detailed in
the fiscal note analysis.
2:12:48 PM
CHAIR P. WILSON asked whether a percentage of funds the DCCED
receives are from the rental taxes.
MS. PALMER replied that the total amount is $338,000, but she
was unsure of the percentage of the vehicle rental taxes.
2:13:30 PM
REBECCA ROONEY, Staff, CHAIR P. WILSON, Alaska State
Legislature, stated that in the previous bills the sponsor has
had before the legislature asked for 50 percent of the vehicle
rental fees, but this bill is based on 100 percent of the fees.
She estimated the figure at $2 million; however, the department
is currently using $338,000 for tourism activities, which is
based on the purposes established for the taxes, including
tourism and roads.
CHAIR P. WILSON stated she is willing to consider changing it to
50 percent.
2:14:45 PM
MS. PALMER recalled that the total vehicle rental tax would be
$9 million. Thus the division takes a small portion to support
the tourism development activities. She stated that if the
funding was not replaced by the general fund or the ATIF, it
would significantly inhibit the department from carrying out
these activities.
2:15:41 PM
PAMELA LEARY, State Comptroller, Treasury Division, Department
of Revenue (DOR), stated that the fiscal note addresses the
management service fees which would be incurred with the fund.
The department assumptions were based on $1 billion in the ATIF,
but they are scalable. Thus depending on the dollar amount the
department can adjust the estimate. Additionally, the
department used additional revenue amounts based on the revenue
forecast for the vehicle taxes, which is $8.9 million.
REPRESENTATIVE FEIGE asked whether the amount is based on a $1
billion endowment.
MS. LEARY answered yes. She stated the fiscal note would double
with a $2 billion fund. In response to Representative Wilson,
she answered that it would depend on the fund's investments and
the fiscal note represents an estimate.
2:17:25 PM
REPRESENTATIVE JOHNSON said that there isn't a fiscal note from
the Department of Law (DOL) in members' packets. He asked
whether Mr. Ottesen had testified that the DOT&PF has legal
services [for promulgating regulations.]
MR. OTTESEN answered yes; and explained that the DOT&PF uses the
department's [DOL] attorney at $125 per hour.
2:18:48 PM
REPRESENTATIVE JOHNSON asked whether the department hires an
outside attorney.
MR. OTTESEN answered that the DOT&PF uses a Department of Law
attorney assigned to the Transportation Section; however any
consultation is charged to the department.
REPRESENTATIVE JOHNSON offered his belief that the committee
needs a fiscal note from the Department of Law to reflect an
inter-agency transfer.
2:19:33 PM
DON ETHERIDGE, Lobbyist, AFL-CIO, stated that the AFL-CIO is in
support of HB 123. He said the state has not built any new
roads in thirty years. The state's transportation
infrastructure needs maintenance, including its roads, airports,
docks and harbors. In conclusion, the AFL-CIO is fully
supportive of all three transportation bills [related to the
ATIF.]
2:20:49 PM
DALE NELSON, Chair, Legislative Committee, Alaska Professional
Design Council (APDC), stated that the APDC is comprised of
professional society organizations for engineers, surveyors,
landscape architects and architects. He offered APDC's support
for the bill. He said he would like to see it to move forward.
2:22:14 PM
The committee took an at-ease from 2:22 to 2:23 p.m.
2:23:17 PM
REPRESENTATIVE JOHNSON remarked that the ATIF is long overdue.
He said that he and CHAIR P. WILSON have fought this battle for
five or six years. He also said he has never seen anything with
so much public support meet such resistance. He stated that he
is a strong advocate of HB 123, and strongly encourages passage
of this bill.
REPRESENTATIVE FEIGE remarked that it is incumbent upon the
state to take responsibility for its transportation needs,
especially during declines in the federal funding. He
characterized the ATIF as a prudent exercise to ensure Alaska's
transportation needs are met and continue to be met in the
future.
2:24:40 PM
REPRESENTATIVE FEIGE, after first determining no one else wished
to testify, closed public testimony on HB 123.
REPRESENTATIVE GATTIS stated her district is one of the fastest
growing districts in the state and the Matanuska-Susitna area is
unable to keep up with its roads. She said she plans on voting
for this bill. She thinks this bill is one way to speed up the
process for some of the faster growing communities to keep up
with transportation projects.
2:25:17 PM
REPRESENTATIVE JOHNSON moved to report HB 123 out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, HB 123 was reported from the
House Transportation Standing Committee.
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