Legislature(2013 - 2014)BARNES 124

03/21/2013 01:00 PM TRANSPORTATION


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 23 KNIK ARM BRIDGE AND TOLL AUTHORITY TELECONFERENCED
Moved Out of Committee
+ HB 131 ABANDONED AND DERELICT VESSELS TELECONFERENCED
Moved Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
                 HB 23-KNIK ARM CROSSING; AHFC                                                                              
                                                                                                                                
CHAIR P. WILSON announced that  the first order of business would                                                               
be HOUSE BILL NO.  23, "An Act relating to bonds  of the Knik Arm                                                               
Bridge  and Toll  Authority;  relating to  reserve  funds 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."                                                                                                        
                                                                                                                                
1:04:01 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MARK NEUMAN,  Alaska State  Legislature, said  he                                                               
reviewed the  proposed amendments to  HB 23 and does  not support                                                               
any of them.  First, this  bill has undergone extensive review by                                                               
the Department of  Law (DOL) and the Department  of Revenue (DOR)                                                               
since the Knik Arm Bridge and  Toll Authority (KABATA) is a state                                                               
entity.   He  understood  one  concern that  has  been raised  is                                                               
related  to  population  estimates.   In  particular,  the  three                                                               
finalists hoping  to partner with  KABATA who will  have invested                                                               
$10  million of  private  funds will  conduct  their own  traffic                                                               
analysis.  Next,  this bill has a zero fiscal  note and simply is                                                               
the mechanism  to continue to  the next  phase, which is  for the                                                               
final design build  and construction.  Finally,  if the financial                                                               
aspects  aren't viable,  which are  ones similar  to the  process                                                               
used  any pipeline  project coming  before  the legislature,  the                                                               
bill would just continue to get us  down the road.   He asked the                                                               
committee to support HB 23, as is.                                                                                              
                                                                                                                                
1:05:41 PM                                                                                                                    
                                                                                                                                
TOM BRICE, Lobbyist, Alaska District  Council of Laborers, stated                                                               
that  the Alaska  District Council  of Laborers  is comprised  of                                                               
three unions,  including the Public Employees  Local 71, Laborers                                                               
Local 942, and Laborers  Local 341.  He said he  was asked by the                                                               
business manager to express support for  HB 23 and the efforts to                                                               
build the  Knik Arm  Crossing (KAC).   He encouraged  support for                                                               
the  project  in terms  of  creating  an alternative  route  from                                                               
Anchorage to  the Matanuska-Susitna valley in  terms of potential                                                               
economic development.   He offered that numerous  members live in                                                               
the valley  and work  in Anchorage and  the bridge  project would                                                               
assist them,  as well.   He thanked members and  encouraged their                                                               
support for HB 23.                                                                                                              
                                                                                                                                
1:07:36 PM                                                                                                                    
                                                                                                                                
PAUL GROSSI,  Lobbyist, Alaska  State Pipe  Trades UA  Local 375,                                                               
stated that  he represents the  statewide ironworkers  in Alaska.                                                               
He said that the ironworkers support  this bill in terms of jobs,                                                               
but also to stimulate the economy  and help develop the Knik side                                                               
of  Cook Inlet.    He said  that the  business  manager lives  in                                                               
Wasilla and was  caught in an eight-hour traffic delay  due to an                                                               
accident.  This brought up the  safety needs for the residents in                                                               
Anchorage  and the  Matanuska-Susitna valley.   He  urged support                                                               
for the bill since it would fund a well-needed project.                                                                         
                                                                                                                                
CHAIR P.  WILSON, after first  determining no one else  wished to                                                               
testify, closed public testimony HB 23.                                                                                         
                                                                                                                                
1:09:56 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FEIGE  said he  is not  opposed to  the idea  of a                                                               
bridge, which  would have certain  benefits, but he  has concerns                                                               
about the financing of the bridge.                                                                                              
                                                                                                                                
1:10:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FEIGE moved  to  adopt Amendment  1, labeled  28-                                                               
LS0141\A.1,  Martin, 3/20/13,  which read,  as follows  [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
     Page 2, line 6:                                                                                                            
          Delete "a new subsection"                                                                                             
          Insert "new subsection"                                                                                               
                                                                                                                                
     Page 2, following line 23:                                                                                                 
     Insert a new subsection to read:                                                                                           
          "(f)  The authority may not issue any bonds under                                                                     
     this  section   or  enter   into  an   agreement  under                                                                    
     AS 19.75.111(a)(5)  for design  or construction  of the                                                                    
     Knik Arm bridge until the  authority or its partner has                                                                    
     received a loan for at least  49 percent of the cost of                                                                    
     the  design and  construction  of the  Knik Arm  bridge                                                                    
     from the federal  government under 23 U.S.C.  601 - 609                                                                    
     (Transportation  Infrastructure Finance  and Innovation                                                                    
     Act of 1998)."                                                                                                             
                                                                                                                                
1:10:29 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTIS objected.                                                                                                 
                                                                                                                                
1:10:41 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FEIGE moved to adopt  an amendment to Amendment 1.                                                               
He pointed  out a typographical  error in  Amendment 1.   He said                                                               
the language  should be changed  from Insert "new  subsection" to                                                               
"new subsections".   There being  no objection, the  amendment to                                                               
Amendment 1 was adopted.                                                                                                        
                                                                                                                                
1:11:28 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FEIGE  explained that  the KABATA asked  the state                                                               
to   financially  support   the   project  through   availability                                                               
payments.   Future legislatures would essentially  be required to                                                               
provide  financial  backing  to   repay  the  loans  through  the                                                               
Transportation  Infrastructure Financing  Innovative Act  of 1998                                                               
(TIFIA)  program   and  bonds  that  are   issued  minus  revenue                                                               
generated by the  project.  The committee is being  asked to make                                                               
a decision today that essentially  moves the project forward with                                                               
the  state's backing  without knowing  the level  of the  state's                                                               
financial  backing.     The  financial  plan   presented  to  the                                                               
committee is  based upon the  assumption that half  the financing                                                               
for the  KAC will  be part  of the TIFIA  program.   According to                                                               
TIFIA,  "The program's  fundamental goal  is to  leverage federal                                                               
funds  by attracting  substantial private  and other  non-federal                                                               
co-investment and  critical improvements to the  nation's surface                                                               
transportation  system."   TIFIA  was created  because state  and                                                               
local governments  seeking to finance  large-scale transportation                                                               
projects   often  have   experienced   difficulty  in   obtaining                                                               
financing  at  reasonable  rates  due to  the  uncertainties  due                                                               
related to these revenue streams.   Tolls and other project-based                                                               
revenues  are   difficult  to   predict,  particularly   for  new                                                               
facilities.   He emphasized that  the legislature  is responsible                                                               
for the  spending made by  the state.  He  said he does  not feel                                                               
comfortable moving  the project forward when  the legislature has                                                               
no  idea how  much the  state will  need to  repay the  loans and                                                               
bonds and particularly  since it would subject  future members of                                                               
the legislature on whether to  appropriate money for a project or                                                               
risk  damaging  the  excellent credit  rating  the  state  enjoys                                                               
because of  the prudent spending decisions  our predecessors have                                                               
made..   This  amendment  says  the project  may  not go  forward                                                               
unless the federal  funding under TIFIA is received  as stated in                                                               
the financial  plan submitted  to the  legislature for  review as                                                               
justification  for the  possibility of  future appropriations  by                                                               
the state.                                                                                                                      
                                                                                                                                
1:13:21 PM                                                                                                                    
                                                                                                                                
MICHAEL  FOSTER, Chairman,  Knik  Arm Bridge  and Toll  Authority                                                               
(KABATA),  Department  of   Transportation  &  Public  Facilities                                                               
(DOT&PF),  in response  to the  comment that  the state  would be                                                               
responsible for repayment  of the loans and bonds,  said that was                                                               
incorrect.   He  stated that  the state's  responsibility on  the                                                               
project  through  the  public-private  partnership  (P3)  is  the                                                               
contractual obligation to pay the  availability payment, which is                                                               
the  payment  to the  developer.    He  explained that  the  term                                                               
"availability payment"  means the availability for  traffic, such                                                               
that the  state would make  a payment  to the private  partner if                                                               
the  bridge is  available for  traffic.   He emphasized  that the                                                               
state's responsibility is only for  the contractual payment terms                                                               
the  state  agrees  to  at  the  end  of  the  proposal  process.                                                               
Specifically, KABATA cannot  control what TIFIA will  or will not                                                               
finance.   The KABATA's models are  based on a 49  percent and 33                                                               
percent funding mechanism; however, it  is more likely that TIFIA                                                               
will  fund at  33  percent  [of the  project's  cost]  so the  49                                                               
percent bar  would be  an unrealistic goal.   Granted,  the TIFIA                                                               
funding is important,  but it isn't the  only financing mechanism                                                               
available to finance  the project.  If KABATA  was not successful                                                               
in obtaining  the TIFIA  loan, the  private activity  bonds (PAB)                                                               
would  be an  option, as  well as  other financing  options.   He                                                               
offered his  belief that to tie  this project to TIFIA  would not                                                               
provide  KABATA's  private  partners  opportunities  to  consider                                                               
other types of financial models.                                                                                                
                                                                                                                                
1:15:52 PM                                                                                                                    
                                                                                                                                
CHAIR P.  WILSON asked Mr.  Foster to identify the  additional 66                                                               
percent  of project  funding, if  33  percent of  the project  is                                                               
funded through the TIFIA loan.                                                                                                  
                                                                                                                                
MR.  FOSTER responded  that one  option for  the private  partner                                                               
would  be  private  activity bonds  (PABs).    Additionally,  the                                                               
private partner's equity will be  approximately 10 percent of the                                                               
project  but other  financial  opportunities  in the  marketplace                                                               
also  exist.     He  clarified   that  the  private   partner  is                                                               
responsible for  financing the project and  therefore KABATA will                                                               
not direct the private partner on how to finance the project.                                                                   
                                                                                                                                
1:16:32 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FEIGE  asked  what the  availability  payment  is                                                               
based on and for the amount of the payment.                                                                                     
                                                                                                                                
MR.  FOSTER answered  that the  model presented  is based  on the                                                               
private partner [obtaining a TIFIA loan].   He stated that he did                                                               
not have the  availability curve with him today;  however, it has                                                               
previously  been submitted  to  the committee,  in  terms of  the                                                               
availability  structure.     Additionally,  the  amount   of  the                                                               
availability  payment will  not  be known  until the  competitive                                                               
process is completed and proposals are submitted.                                                                               
                                                                                                                                
1:17:17 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FEIGE  asked  whether  it  is  safe  to  say  the                                                               
availability payments  will depend  heavily on the  interest rate                                                               
of the project's financing.                                                                                                     
                                                                                                                                
MR.  FOSTER answered  yes; the  financial model  will dictate  or                                                               
drive the availability payment structure.                                                                                       
                                                                                                                                
REPRESENTATIVE NEUMAN added that  the interest rate [falls within                                                               
payments] for a  30-year basis.  For example,  the Federal Energy                                                               
Regulatory Commission (FERC) generally  considers 12 percent as a                                                               
common  rate on  gas pipelines  and  mega projects,  so [the  KAC                                                               
project] rates  are in line  with most projects  financed through                                                               
the private  industry.  He  characterized [the interest  rate] as                                                               
the standard procedure used.                                                                                                    
                                                                                                                                
1:18:03 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KREISS-TOMKINS understood  that  Mr. Foster  does                                                               
not  think  the  49  percent  model  for  TIFIA  financing  is  a                                                               
reasonable assumption.   He asked  how that compares to  his past                                                               
statements,  with respect  to TIFIA  financing, and  how KABATA's                                                               
view on  the likelihood of  obtaining 49 percent  TIFIA financing                                                               
has evolved over the years.                                                                                                     
                                                                                                                                
MR.  FOSTER  answered  that  he  has  not  changed  his  previous                                                               
testimony.    He said  that  KABATA  has  submitted a  letter  of                                                               
interest  in [to  the U.S.  Department  of Transportation  (DOT)]                                                               
requesting 49 percent  funding.  He related that  29 projects are                                                               
in the queue  requested by 17 different states  competing for $17                                                               
billion in  capacity, although the  requests are  currently under                                                               
capacity.   After speaking to the  Federal Highway Administration                                                               
(FHWA) and  the U.S. Department  of Transportation  (DOT), KABATA                                                               
feels confident that the TIFIA  projects will likely be funded at                                                               
the 33  percent level versus the  49 percent level.   Even though                                                               
the KABATA  has requested  49 percent funding  [in its  letter of                                                               
interest for the  TIFIA loan], KABATA's expectation  is high that                                                               
the [private partner] will obtain  the TIFIA program funding, but                                                               
it will  be at  the 33 percent  level.  He  remarked that  if the                                                               
TIFIA funding came in at 49 percent, it would be a gift.                                                                        
                                                                                                                                
REPRESENTATIVE KREISS-TOMKINS asked whether  KABATA has been more                                                               
confident in the past that the  TIFIA funding would be offered at                                                               
49 percent.                                                                                                                     
                                                                                                                                
MR. FOSTER answered that in the  past, the TIFIA funding has been                                                               
set at 33 percent; however  the federal Moving Ahead for Progress                                                               
in  the  21st  Century  Act  (MAP-21) program  raised  it  to  49                                                               
percent.   He offered his  belief that  the U.S. DOT  was testing                                                               
the  waters on  it  since  the previous  allocations  were at  33                                                               
percent.                                                                                                                        
                                                                                                                                
1:19:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KREISS-TOMKINS  asked  for clarification  on  the                                                               
previous allocations.                                                                                                           
                                                                                                                                
MR. FOSTER  responded that  the previous  FHWA bill  is different                                                               
than the current  MAP-21 funding.  The prior bill  had a capacity                                                               
of approximately $1 billion, which  used a 33 percent allocation.                                                               
He said under  MAP-21 has a 49 percent and  33 percent option for                                                               
any Greenfield  project, but it  appears that most  projects will                                                               
qualify at the  33 percent allocation level.   He reiterated that                                                               
this is  the first time  the federal funding  has been at  the 49                                                               
percent allocation level                                                                                                        
                                                                                                                                
CHAIR P.  WILSON understood that no  one was able to  obtain more                                                               
than 33 percent  prior to this year, but this  year due to MAP-21                                                               
the allocation was changed.                                                                                                     
                                                                                                                                
REPRESENTATIVE NEUMAN remarked that it  is always more prudent go                                                               
on the conservative side of the financing.                                                                                      
                                                                                                                                
1:21:05 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FEIGE said  the sponsor  agrees the  availability                                                               
payments are partly based on interest  rates.  He asked what will                                                               
happen  if   the  state   defaults  and   refuses  to   make  the                                                               
availability payments.   He further  asked for the effect  on the                                                               
bridge and the state's credit rating.                                                                                           
                                                                                                                                
MR. FOSTER answered that the  infrastructure will be owned by the                                                               
state,  even during  construction.   The finished  infrastructure                                                               
will have a national highway  system (NHS) designation once it is                                                               
completed.  Thus the  bridge will be part of NHS  system.  If the                                                               
state did  not make  the availability  payments and  defaulted on                                                               
the payment, it  certainly would affect the credit  rating of the                                                               
state, he said.                                                                                                                 
                                                                                                                                
REPRESENTATIVE  NEUMAN  said  this   contract  has  been  closely                                                               
watched by the Department of  Revenue (DOR) and by the Department                                                               
of Law (DOL).   He stated that these  departments have frequently                                                               
reviewed  the  project  financing  to  ensure  that  the  state's                                                               
liability does not exceed its capacity.                                                                                         
                                                                                                                                
CHAIR P.  WILSON cautioned that  she does not want  the committee                                                               
to  go  too  deep  into  financing since  HB  23  has  a  Finance                                                               
committee  referral, so  she  asked members  to  focus on  policy                                                               
issues as much as possible.                                                                                                     
                                                                                                                                
1:22:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FEIGE  acknowledged the Chair's concerns,  but the                                                               
policy  is essentially  if the  TIFIA loan  is not  approved, the                                                               
KABATA would likely incur higher  interest rates, which will lead                                                               
to higher availability payments.   He cautioned that the terms do                                                               
not have an upper limit or any  control on the gate once the bill                                                               
passes.   He  acknowledged that  obtaining the  49 percent  TIFIA                                                               
loan is perhaps more remote than a 33 percent allocation level.                                                                 
                                                                                                                                
REPRESENTATIVE FEIGE  moved to adopt  Amendment 2 to  Amendment 1                                                               
[text  provided  previously],  to  change "49"  percent  to  "33"                                                               
percent.   There being no  objection, Amendment 2 to  Amendment 1                                                               
was adopted.                                                                                                                    
                                                                                                                                
CHAIR P.  WILSON restated a  portion of Amendment 1,  as amended.                                                               
Amendment  1,  as  amended  would   read,  as  follows  [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
     Page 2, line 6:                                                                                                            
          Delete "a new subsection"                                                                                             
          Insert "new subsections"                                                                                              
                                                                                                                                
     Page 2, following line 23:                                                                                                 
     Insert a new subsection to read:                                                                                           
          "(f)  The authority may not issue any bonds under                                                                     
     this  section   or  enter   into  an   agreement  under                                                                    
     AS 19.75.111(a)(5)  for design  or construction  of the                                                                    
     Knik Arm bridge until the  authority or its partner has                                                                    
     received a loan for at least  33 percent of the cost of                                                                    
     the  design and  construction  of the  Knik Arm  bridge                                                                    
     from the federal  government under 23 U.S.C.  601 - 609                                                                    
     (Transportation  Infrastructure Finance  and Innovation                                                                    
     Act of 1998).                                                                                                              
                                                                                                                                
1:24:26 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTIS maintained her  objection.  She offered her                                                               
belief  that  this  is  an   unrealistic  amendment  because  the                                                               
issuance  of the  TIFIA loan  is under  the control  of the  U.S.                                                               
Department of  Transportation (U.S. DOT), although  any amount of                                                               
TIFIA participation  that can be  secured will be  beneficial for                                                               
this state project.                                                                                                             
                                                                                                                                
REPRESENTATIVE FEIGE said he heard  Mr. Foster and others testify                                                               
that  if the  TIFIA loans  were not  approved, the  likelihood of                                                               
this  project moving  forward was  not very  high.   He suggested                                                               
that it is reasonable control to place on the project.                                                                          
                                                                                                                                
1:25:45 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NEUMAN  reiterated that  HB 23  has a  zero fiscal                                                               
note.  This [bill] allows [the  project] to move forward.  If the                                                               
financing package that the state  wants to sign isn't appropriate                                                               
or the  private partner doesn't  want to sign, the  project won't                                                               
go forward.  He said, "It's as simple as that."                                                                                 
                                                                                                                                
A roll  call vote was  taken.  Representatives Feige  and Kreiss-                                                               
Tomkins  voted   in  favor  of  Amendment   1.    Representatives                                                               
Isaacson, Gattis, Johnson, Lynn, and  P. Wilson voted against it.                                                               
Therefore, Amendment 1, as amended, failed by a vote of 2-5.                                                                    
                                                                                                                                
1:26:38 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FEIGE moved  to adopt  Amendment 2,  labeled [28-                                                               
LS0141\A.2, Martin,  3/21/13], which  read, as  follows [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
     Page 1, line 1, following "An Act":                                                                                      
          Insert "relating to construction of a tollway                                                                       
     from the Knik Arm bridge to the Parks Highway;"                                                                          
                                                                                                                                
     Page 1, following line 5:                                                                                                  
     Insert new bill sections to read:                                                                                          
        "* Section 1. AS 19.75.011 is amended to read:                                                                      
          Sec. 19.75.011. Purpose. The purpose of the                                                                         
     authority  created  by  this  chapter  is  to  develop,                                                                    
     stimulate,  and advance  the  economic  welfare of  the                                                                    
     state   and   further   the   development   of   public                                                                    
     transportation  systems in  the vicinity  of the  Upper                                                                    
     Cook Inlet with  construction of a bridge  to span Knik                                                                    
     Arm and  a tollway and related  infrastructure from the                                                                
     bridge  to  the  Parks  Highway to  [AND]  connect  the                                                                
     Municipality  of  Anchorage and  the  Matanuska-Susitna                                                                    
     Borough.                                                                                                                   
        * Sec. 2. AS 19.75.111 is amended to read:                                                                            
          Sec. 19.75.111. Powers and duties of the                                                                            
     authority.  (a)   Except as  otherwise explicitly  made                                                                  
     applicable  to the  authority, the  performance of  the                                                                    
     authority's  duties and  the  exercise  of its  powers,                                                                    
     including  its  powers  to issue  bonds  and  otherwise                                                                    
     incur  debt,  shall  be governed  exclusively  by  this                                                                    
     chapter. In furtherance of  its purposes, the authority                                                                    
     may                                                                                                                        
               (1)     own,  acquire,   construct,  develop,                                                                    
     create, reconstruct, equip,  operate, maintain, extend,                                                                    
     and improve the Knik  Arm bridge, [AND] its appurtenant                                                                
     facilities, and the tollway access road;                                                                               
               (2)  sue and be sued;                                                                                            
               (3)  adopt a seal;                                                                                               
               (4)   adopt,  amend,  and repeal  regulations                                                                    
     under AS 44.62 and establish bylaws;                                                                                       
               (5)  make  and execute agreements, contracts,                                                                    
     and all  other instruments  with any public  or private                                                                    
     person,  governmental unit  or agency,  corporation, or                                                                    
     other business  entity lawfully conducting  business in                                                                    
     the United  States for the  exercise of its  powers and                                                                    
     functions  under this  chapter and  for the  financing,                                                                    
     design,  construction,   maintenance,  improvement,  or                                                                    
     operation  of facilities,  properties,  or projects  of                                                                    
     the   authority,   including   making   and   executing                                                                    
     contracts   with   any   person,   firm,   corporation,                                                                    
     governmental agency,  or other  entity for  the purpose                                                                    
     of                                                                                                                         
               (A)      incurring  indebtedness,   obtaining                                                                    
     investments in  the authority's projects,  acquiring or                                                                    
     granting lump  sum payments for services  in advance or                                                                    
     in arrears, grants, and other financing; and                                                                               
               (B)        entering    into    public-private                                                                    
     partnerships or service contracts in any form;                                                                             
               (6)   in its own  name acquire,  lease, rent,                                                                    
     sell, or convey real and personal property;                                                                                
               (7)   issue  and refund  bonds in  accordance                                                                    
     with  this chapter,  in order  to pay  the cost  of the                                                                    
     Knik Arm bridge, [AND]  its appurtenant facilities, and                                                            
     the tollway access road; the  authority may also secure                                                                
     payment of the bonds as provided in this chapter;                                                                          
               (8)    incur  other  indebtedness,  including                                                                    
     lines  of  credit  and   indebtedness  to  the  Federal                                                                    
     Highway  Administration,  United States  Department  of                                                                    
     Transportation,   under    23   U.S.C.   601    -   610                                                                    
     (Transportation  Infrastructure Finance  and Innovation                                                                    
     Act of 1998), as  amended, and secure that indebtedness                                                                    
     as provided in this chapter;                                                                                               
               (9)   apply for and accept  gifts, grants, or                                                                    
     loans   from  a   federal  agency   or  an   agency  or                                                                    
     instrumentality of  the state, or from  a municipality,                                                                    
     private  organization,   or  other   source,  including                                                                    
     obtaining   title  to   state,  local   government,  or                                                                    
     privately owned land, directly  or through a department                                                                    
     of the state having jurisdiction of the land;                                                                              
               (10)   fix  and collect  fees, rents,  tolls,                                                                    
     rates, or  other charges  for the use  of the  Knik Arm                                                                    
     bridge,  [AND]  appurtenant   facilities,  and  tollway                                                            
     access road,  or for a service  developed, operated, or                                                                
     provided    by     the    authority;    notwithstanding                                                                    
     AS 37.10.050(a), fees,  rents, tolls, rates,  and other                                                                    
     charges fixed  and collected  under this  paragraph may                                                                    
     exceed  the actual  operating cost  of the  use of  the                                                                    
     bridge, facility, tollway access road, or service;                                                                     
               (11)   bring  civil  actions, refer  criminal                                                                    
     actions to  the appropriate  authority, and  take other                                                                    
     actions or  enter into agreements with  law enforcement                                                                    
     and collection  agencies to  enforce the  collection of                                                                    
     its   fees,  rents,   tolls,   rates,  other   charges,                                                                    
     penalties, and other obligations;                                                                                          
               (12)      pledge,  encumber,   transfer,   or                                                                    
     otherwise  obligate revenue  derived  by the  authority                                                                    
     from  the   ownership,  use,   or  operation   of  toll                                                                    
     facilities,  including   fees,  rents,   tolls,  rates,                                                                    
     charges,  or other  revenue of  the authority  or money                                                                    
     that the  legislature may  appropriate, except  a state                                                                    
     tax  or  license,  as  security   for  bonds  or  other                                                                    
     indebtedness or agreements of the authority;                                                                               
               (13)   deposit or  invest its  funds, subject                                                                    
     to agreements with bondholders;                                                                                            
               (14)   procure insurance against any  loss in                                                                    
     connection with its operation;                                                                                             
               (15)   contract for  and engage  the services                                                                    
     of  consultants, experts,  and financial  and technical                                                                    
     advisors  that the  authority  considers necessary  for                                                                    
     the  exercise of  its powers  and functions  under this                                                                    
     chapter;                                                                                                                   
               (16)    apply  for,  obtain,  hold,  and  use                                                                    
     permits,  licenses,   or  approvals   from  appropriate                                                                    
     agencies  of the  state, the  United States,  a foreign                                                                    
     country,  and  any  other proper  agency  in  the  same                                                                    
     manner as any other person;                                                                                                
               (17)    perform  reconnaissance  studies  and                                                                    
     engineering,  survey, and  design studies  with respect                                                                    
     to  the   Knik  Arm   bridge,  [AND]   its  appurtenant                                                                
     facilities and the tollway access road;                                                                                
               (18)   exercise powers  of eminent  domain or                                                                    
     file a declaration of taking  as necessary for the Knik                                                                    
     Arm bridge,  [AND] appurtenant facilities,  and tollway                                                            
     access road  under AS 09.55.240 - 09.55.460  to acquire                                                                
     land or  an interest in land;  the authority's exercise                                                                    
     of  powers  under this  paragraph  may  not exceed  the                                                                    
     permissible exercise of those powers by the state;                                                                         
               (19)     confer  with  municipal   and  other                                                                    
     governments,  metropolitan planning  organizations, and                                                                    
     the  department,  concerning  the Knik  Arm  bridge  or                                                                
     tollway access road;                                                                                                   
               (20)   do  all acts  and things  necessary to                                                                    
     carry out  the powers expressly granted  or necessarily                                                                    
     implied  in  this  chapter;  nothing  in  this  chapter                                                                    
     limits the  powers of the authority  that are expressly                                                                    
     granted or necessarily implied.                                                                                            
          (b)  The authority shall                                                                                              
               (1)     prepare  an  annual  report   of  its                                                                    
     operations  to  include  a  balance  sheet,  an  income                                                                    
     statement,   a  statement   of  changes   in  financial                                                                    
     position,  a   reconciliation  of  changes   in  equity                                                                    
     accounts,   a   summary   of   significant   accounting                                                                    
     principles,  an  auditor's report,  comments  regarding                                                                    
     the year's  business, and prospects for  the next year;                                                                    
     the report shall be completed  by the third day of each                                                                    
     regular session  of the legislature, and  the authority                                                                    
     shall  notify the  governor,  the  commissioner of  the                                                                    
     department,  the presiding  officers of  each house  of                                                                    
     the legislature,  and the Legislative Budget  and Audit                                                                    
     Committee that the report is available;                                                                                    
               (2)   comply with the provisions  of AS 37.07                                                                    
     (Executive Budget  Act), except that AS 37.07  does not                                                                    
     apply to  the activities  of the authority  that relate                                                                    
     to the  authority's borrowing of  money as  provided in                                                                    
     this chapter, including the  issuing of its obligations                                                                    
     or evidence of that borrowing  and the repayment of the                                                                    
     debt obligation;                                                                                                           
               (3)  establish  a personnel management system                                                                    
     for  hiring  employees   and  setting  employee-benefit                                                                    
     packages;                                                                                                                  
               (4)   establish procedures, rules,  and rates                                                                    
     governing  per   diem  and   travel  expenses   of  the                                                                    
     employees  of the  authority in  substantial conformity                                                                    
     to  statutes, procedures,  rules, and  rates applicable                                                                    
     to state employees of similar state entities;                                                                              
               (5)   coordinate the  exercise of  its powers                                                                    
     to plan,  design, construct, operate, and  maintain the                                                                    
     Knik  Arm  bridge  and tollway  access  road  with  the                                                                
     department, and with the mayors  of the Municipality of                                                                    
     Anchorage and the Matanuska-Susitna Borough;                                                                               
               (6)     have   the  exclusive   authority  to                                                                    
     determine and fix fees, rents,  tolls, rates, and other                                                                    
     charges,  including  the  tolls  for  the  use  of  the                                                                    
     bridge,  [AND]  appurtenant   facilities,  and  tollway                                                            
     access road  and for  the use  of all  other properties                                                                
     under  the  control  of  or owned  or  managed  by  the                                                                    
     authority.                                                                                                                 
        *  Sec.  3. AS 19.75  is  amended  by adding  a  new                                                                  
     section to read:                                                                                                           
          Sec. 19.75.112. Conditions required to build Knik                                                                   
     Arm  bridge. (a)  The authority  may not  construct the                                                                  
     Knik  Arm  bridge,  or   enter  into  a  public-private                                                                    
     partnership or  service contract to construct  the Knik                                                                    
     Arm bridge unless                                                                                                          
               (1) the authority designs, constructs, and                                                                       
     operates, or  enters into a  public-private partnership                                                                    
     or service contract to  design, construct, and operate,                                                                    
     a  tollway  from  the  Knik Arm  bridge  to  the  Parks                                                                    
     Highway;                                                                                                                   
               (2) the authority prepares a financial                                                                           
     report showing preliminary  costs to design, construct,                                                                    
     and operate a  tollway from the Knik Arm  bridge to the                                                                    
     Parks Highway; and                                                                                                         
               (3)  the legislature approves by law the                                                                         
     financial   report   prepared   under   (2)   of   this                                                                    
     subsection.                                                                                                                
          (b)  The tollway access road constructed under                                                                        
     (a) of this section shall                                                                                                  
               (1)  be operated as a limited access toll                                                                        
     road;                                                                                                                      
               (2)  allow for a speed limit at least equal                                                                      
     to the speed limit on the bridge; and                                                                                      
               (3)  be designed as a two-lane highway that                                                                      
     may be expanded to a four-lane divided highway.                                                                            
          (c)  The authority may enter into an agreement                                                                        
     with  the  department  for  use  of  the  rights-of-way                                                                    
     necessary for construction of the  tollway under (a) of                                                                    
     this section.                                                                                                              
          (d)  Notwithstanding another provision of this                                                                        
     title,  the  tollway  constructed  under  (a)  of  this                                                                    
     section may not be part of the state highway system."                                                                      
                                                                                                                                
     Page 1, line 6:                                                                                                            
          Delete "Section 1"                                                                                                  
          Insert "Sec. 4"                                                                                                     
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 2, following line 23:                                                                                                 
          Insert new bill sections to read:                                                                                     
        "* Sec. 7. AS 19.75.221(a) is amended to read:                                                                      
          (a)  In the discretion of the authority, an issue                                                                     
     of bonds may  be secured by a trust  indenture or trust                                                                    
     agreement  between   the  authority  and   a  corporate                                                                    
     trustee,  by   a  secured   loan  agreement   or  other                                                                    
     instrument,  or  by a  resolution  giving  powers to  a                                                                    
     corporate trustee, by means of which the authority may                                                                     
               (1)  make agreements  with the trustee or the                                                                    
     holders of  the bonds that the  authority determines to                                                                    
     be necessary  or desirable, including agreements  as to                                                                    
     the                                                                                                                        
               (A)   application, investment,  deposit, use,                                                                    
     and disposition of                                                                                                         
               (i)  the proceeds of bonds of the authority;                                                                     
               (ii)     money  or  other  property   of  the                                                                    
     authority; or                                                                                                              
               (iii)   money or other property  in which the                                                                    
     authority has an interest;                                                                                                 
               (B)   fixing and  collecting of  fees, rents,                                                                    
     tolls, rates, or other charges;                                                                                            
               (C)    assignment  by the  authority  of  its                                                                    
     rights in  any contract  with respect  to the  Knik Arm                                                                    
     bridge  or tollway  access  road or  in  a mortgage  or                                                                
     other  security interest  created with  respect to  the                                                                    
     Knik Arm  bridge or  tollway access  road to  a trustee                                                                
     for the benefit of bondholders;                                                                                            
               (D)   terms  and conditions  under which  the                                                                    
     authority may issue additional bonds;                                                                                      
               (E)  vesting in  a trustee of rights, powers,                                                                    
     duties, money, or property in  trust for the benefit of                                                                    
     bondholders,  including the  right to  enforce payment,                                                                    
     performance, and  all other rights of  the authority or                                                                    
     of the  bondholders, under a lease,  power of contract,                                                                    
     contract  of  sale,  mortgage, security  agreement,  or                                                                    
     trust by  injunction or other  proceeding or  by taking                                                                    
     possession  by agent  or otherwise,  and operating  the                                                                    
     Knik Arm bridge and  tollway access road and collecting                                                                
     rents or  other consideration and applying  the same in                                                                    
     accordance with the trust agreement;                                                                                       
               (2)    pledge,  mortgage,  or  assign  money,                                                                    
     leases,  agreements,  property,   or  other  rights  or                                                                    
     assets of the authority either  presently in hand or to                                                                    
     be received in the future, or both; and                                                                                    
               (3)    provide  for any  other  matters  that                                                                    
     affect the security or protection of the bonds.                                                                            
        * Sec. 8. AS 19.75.221(b) is amended to read:                                                                         
          (b)  Notwithstanding any other provisions of this                                                                     
     chapter, the trust agreement  must contain an agreement                                                                    
     by the authority  that the authority will  at all times                                                                    
     maintain fees,  rents, tolls,  rates, or  other charges                                                                    
     sufficient to                                                                                                              
               (1)  pay the costs of operation and                                                                              
     maintenance  of   the  Knik   Arm  bridge,   [AND]  its                                                                
     appurtenant  facilities, and  the  tollway access  road                                                                
     and  the  principal of  and  interest  on bonds  issued                                                                    
     under  the  trust  agreement  as  the  bonds  severally                                                                    
     become due and payable;                                                                                                    
               (2)  provide for debt service coverage as                                                                        
     considered   necessary  by   the   authority  for   the                                                                    
     marketing of its bonds; and                                                                                                
               (3)  provide for renewals, replacements, and                                                                     
     improvements of the Knik Arm  bridge and tollway access                                                                
     road, and  to maintain  reserves required by  the terms                                                                
     of the trust agreement."                                                                                                   
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 4, following line 13:                                                                                                 
     Insert a new bill section to read:                                                                                         
        "* Sec. 11. AS 19.75.251 is amended to read:                                                                        
          Sec. 19.75.251. Pledge of the state. The state                                                                      
     pledges to and agrees with  the holders of bonds issued                                                                    
     under  this  chapter and  with  a  federal agency  that                                                                    
     loans  or contributes  money with  [IN] respect  to the                                                                
     Knik Arm bridge and tollway  access road that the state                                                                
     will not  limit or alter  the rights and  powers vested                                                                    
     in  the authority  under this  chapter  to fulfill  the                                                                    
     terms  of a  contract made  by the  authority with  the                                                                    
     holders  or federal  agency or  in any  way impair  the                                                                    
     rights  and remedies  of the  holders until  the bonds,                                                                    
     together with  the interest on  them, with  interest on                                                                    
     unpaid  installments of  interest,  and  all costs  and                                                                    
     expenses in connection with an  action or proceeding by                                                                    
     or  on  behalf  of  the  holders,  are  fully  met  and                                                                    
     discharged. The  authority may include this  pledge and                                                                    
     agreement  of  the  state,  insofar  as  it  refers  to                                                                    
     holders of bonds  of the authority, in  a contract with                                                                    
     the holders  and, insofar  as it  relates to  a federal                                                                    
     agency, in a contract with the federal agency."                                                                            
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                              
     Page 5, following line 8:                                                                                                  
     Insert a new section to read:                                                                                              
        "* Sec. 13. AS 19.75.291 is amended to read:                                                                        
          Sec. 19.75.291. State appropriations for Knik Arm                                                                   
     bridge, [AND]  appurtenant facilities, and  tollway not                                                            
     affected. This chapter does not  prevent the state from                                                                  
     making   appropriations   for   or  in   aid   of   the                                                                    
     acquisition, design, construction,  or operation of the                                                                    
     Knik Arm bridge, [AND]  its appurtenant facilities, and                                                            
     the tollway access road."                                                                                              
                                                                                                                                
     Renumber the following bill section accordingly.                                                                           
                                                                                                                                
     Page 5, line 25:                                                                                                           
          Delete "Crossing"                                                                                                     
          Insert "bridge and tollway access road"                                                                               
                                                                                                                                
                                                                                                                                
REPRESENTATIVE GATTIS objected for the purpose of discussion.                                                                   
                                                                                                                                
1:27:56 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FEIGE  stated  that  Amendment  2  would  require                                                               
KABATA to  consider financing the  road to connect the  bridge to                                                               
the Parks  Highway.   He said  that the  KABATA project  has been                                                               
touted as  being important to  Interior Alaska;  however, freight                                                               
can only  move north if  a roadway  exists to the  Parks Highway.                                                               
Thus, building  the KAC means  a new road  must also be  built in                                                               
order to  use the bridge.   He suggested this new  roadway should                                                               
be  supported with  a  toll,  similar to  the  bridge.   Further,                                                               
Amendment 2 would also require KABATA  to use its toll revenue to                                                               
help finance  the road, which must  be built at the  same time as                                                               
the bridge.   He understood that the state  is somewhat committed                                                               
to  build the  road  using the  State Transportation  Improvement                                                               
Plan (STIP) funds; however, in  order to make the bridge generate                                                               
as much  revenue as  possible to  reduce the  cost to  the state,                                                               
means trucks and  passenger vehicles must travel  to the Interior                                                               
from  Anchorage  and  use  the  bridge  on  their  return  trips.                                                               
Therefore,  it requires  the  additional road  be  in place  upon                                                               
completion of the bridge.  If  the state pays for this road using                                                               
STIP funds  it will  reduce the availability  of those  funds for                                                               
other  transportation   projects  throughout  the  state.     The                                                               
priority  of  this road  is  much  lower  if  the bridge  is  not                                                               
constructed, he said.                                                                                                           
                                                                                                                                
1:28:25 PM                                                                                                                    
                                                                                                                                
CHAIR P. WILSON  restated that Amendment 1 failed with  a vote of                                                               
2-5.                                                                                                                            
                                                                                                                                
1:28:41 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NEUMAN said  he does not support Amendment  2.  He                                                               
explained  that  the  Matanuska-Susitna  Borough  had  originally                                                               
proposed a road from Big Lake  to Burma Road, which was estimated                                                               
at $57  million some time  ago so  he surmised the  project would                                                               
now cost  $80 million.  He  said he had secured  $250,000 for the                                                               
Big  Lake  community  to  consider  a  plan  and,  in  fact,  the                                                               
community is  currently finalizing that  plan.  The  bridge would                                                               
traverse Burma  Road -  currently a  dirt road  - and  either cut                                                               
left  to create  a new  access road  north to  Milepost 73  or it                                                               
would use  the 800-foot  utility corridor to  the port,  which is                                                               
anticipated for use  for a proposed gas pipeline.   Thus the road                                                               
could  follow that  pathway.   He  offered his  belief that  this                                                               
project will save lives, since  the Glenn Highway is currently at                                                               
capacity and it  will cost $4.5 billion to upgrade  it.  Further,                                                               
the  33 miles  to the  port  to Mile  73 is  all government  land                                                               
except for the  last half-mile.  Absent the KAC,  the state would                                                               
need   to  spend   $55   million  every   five   years  for   rut                                                               
rehabilitation.   Basically, the  proposed traffic will  be heavy                                                               
traffic  carrying freight  that will  not need  to travel  on the                                                               
Glenn Highway.   He recalled Jeff  Ottesen, DOT&PF, characterized                                                               
the  KAC as  one of  the  most cost-reducing  projects the  state                                                               
could have.   Further any  excess funds - especially  after seven                                                               
years - could be used to  fund other transportation projects.  He                                                               
cautioned  that  the  state  is currently  facing  a  $1  billion                                                               
shortfall so expanding the opportunities  to diversify income and                                                               
revenue  streams is  important.   He predicted  this toll  bridge                                                               
will bring in billions of dollars  of excess revenue to the state                                                               
within the  first 35 years.   In doing  so, the state  could fund                                                               
other STIP programs.  Again, a  lot of the land necessary for the                                                               
project is  virgin government-owned  land, which  eliminates land                                                               
acquisition, and  it would takes  traffic off the  Knik-Goose Bay                                                               
(KGB) Road,  which is  the second most  dangerous highway  in the                                                               
state.    Additionally,  due to  Wasilla's  road  congestion,  it                                                               
frequently  can currently  take an  hour to  travel the  12 miles                                                               
from  Wasilla to  the  Big Lake  cutoff.   However,  all of  this                                                               
congestion would  be eliminated since  the trucks would  [use the                                                               
KAC].   In conclusion, he  said the KAC  will save money  and put                                                               
money back into the general fund revenue.                                                                                       
                                                                                                                                
1:32:48 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GATTIS highlighted  that  just yesterday  another                                                               
fatal car accident occurred in  the Wasilla area.  She emphasized                                                               
the importance of  roads in the Matanuska-Susitna  area, which is                                                               
the fastest growing  area in Alaska.  She said,  "Those of us who                                                               
live it and drive it - we know  that - and for those who don't go                                                               
there daily,  may I  remind you that  this infrastructure  is way                                                               
behind schedule."                                                                                                               
                                                                                                                                
REPRESENTATIVE  JOHNSON expressed  his concern  about making  the                                                               
road  a toll  road,  since  it would  make  it  a limited  access                                                               
roadway,  which   would  close  off  the   area  to  development.                                                               
Further, it may  take an additional road  to access subdivisions.                                                               
He  remarked  he is  not  fond  of  limited  access roads  so  he                                                               
couldn't support  turning the road  into a  "one way on,  one way                                                               
off" corridor.   Finally, he concluded that a  lot of opportunity                                                               
exists between Big Lake and the proposed KAC.                                                                                   
                                                                                                                                
1:34:15 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTIS maintained her objection.                                                                                 
                                                                                                                                
A roll  call vote was  taken.  Representatives Feige  and Kreiss-                                                               
Tomkins  voted   in  favor  of  Amendment   2.    Representatives                                                               
Isaacson, Gattis, Johnson, Lynn, and  P. Wilson voted against it.                                                               
Therefore, Amendment 2 failed by a vote of 2-5.                                                                                 
                                                                                                                                
1:35:00 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FEIGE moved  to  adopt Amendment  3, labeled  28-                                                               
LS0141\A.3,  Martin, 3/20/13,  which read,  as follows  [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
     Page 1, line 1:                                                                                                            
          Following "Act"                                                                                                     
          Insert "relating to membership on the board of                                                                      
     directors of the Knik Arm Bridge and Toll Authority;"                                                                    
                                                                                                                                
     Page 1, following line 5:                                                                                                  
          Insert a new bill section to read:                                                                                    
        "* Section 1. AS 19.75.031(a) is amended to read:                                                                   
          (a)  The authority shall be governed by a board                                                                       
     of directors consisting of the following:                                                                                  
               (1)  the commissioner of transportation and                                                                      
     public facilities or the commissioner's designee;                                                                          
               (2)  the commissioner of revenue or the                                                                          
     commissioner's designee;                                                                                                   
               (3)  one public member, appointed by the                                                                         
     governor,  who is  a state  resident and  United States                                                                    
     citizen,  and who  is not  a resident  of and  does not                                                                
     have  a  business  interest   in  the  Municipality  of                                                                
     Anchorage or the Matanuska-Susitna Borough;                                                                            
               (4)  one public member, appointed by the                                                                         
     governor,  who is  a resident  of  the Municipality  of                                                                    
     Anchorage    and   who    has   knowledge    of   local                                                                    
     transportation issues;                                                                                                     
               (5)  one public member, appointed by the                                                                         
     governor, who  is a  resident of  the Matanuska-Susitna                                                                    
     Borough and  who has knowledge of  local transportation                                                                    
     issues;                                                                                                                    
               (6)  one nonvoting member who is a member of                                                                     
     the  state house  of representatives  appointed by  the                                                                    
     speaker of the house and  who serves at the pleasure of                                                                    
     the  speaker of  the house;  the speaker  of the  house                                                                    
     shall consider the appointment  of a legislator elected                                                                    
     from a  house district that lies  entirely or partially                                                                    
     within the Municipality of  Anchorage or the Matanuska-                                                                    
     Susitna Borough  for appointment under  this paragraph;                                                                    
     and                                                                                                                        
               (7)  one nonvoting member who is a member of                                                                     
     the  state senate  appointed by  the  president of  the                                                                    
     senate and who serves at  the pleasure of the president                                                                    
     of  the  senate;  the president  of  the  senate  shall                                                                    
     consider the  appointment of a  senator elected  from a                                                                    
     senate district that lies  entirely or partially within                                                                    
     the Municipality of  Anchorage or the Matanuska-Susitna                                                                    
     Borough for appointment under this paragraph."                                                                             
                                                                                                                                
     Page 1, line 6:                                                                                                            
          Delete "Section 1"                                                                                                  
          Insert "Sec. 2"                                                                                                     
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 5, following line 27:                                                                                                 
          Insert a new bill section to read:                                                                                    
        "*  Sec.  9. The  uncodified  law  of the  State  of                                                                
     Alaska is amended by adding a new section to read:                                                                         
          TRANSITION. (a) The amendment to AS 19.75.031(a)                                                                      
     in sec. 1  of this Act applies to  appointments made to                                                                    
     the board of directors of  the Knik Arm Bridge and Toll                                                                    
     Authority when the member  currently occupying the seat                                                                    
     under  AS 19.75.031(a)(3) leaves  the board  or at  the                                                                    
     end of the member's term, whichever comes first.                                                                           
          (b)  A member appointed under AS 19.75.031(a)(3)                                                                      
       may not be reappointed unless the member meets the                                                                       
     requirements of AS 19.75.031(a)(3), as amended by sec                                                                      
     1 of this Act."                                                                                                            
                                                                                                                                
                                                                                                                                
REPRESENTATIVE GATTIS objected for the purpose of discussion.                                                                   
                                                                                                                                
1:35:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FEIGE stated that this  project has been touted by                                                               
the bill's sponsor  and KABATA's staff as a  project of statewide                                                               
significance, yet all of the  board members are from Southcentral                                                               
Alaska.   Amendment 3 would  change the composition of  the board                                                               
to restrict  one public  member of the  board [from  residence or                                                               
business interest] in the Municipality  of Anchorage (MOA) or the                                                               
Matanuska-Susitna  Borough  (MSB).   The  change  would not  take                                                               
place  until  the  current   unrestricted  public  member's  term                                                               
expires, he said.                                                                                                               
                                                                                                                                
1:35:46 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTIS failed to see  the value of the Amendment 3                                                               
and what it would bring to the bill or the project.                                                                             
                                                                                                                                
REPRESENTATIVE FEIGE  said if this  is a statewide  project, then                                                               
the  state's interests  needs  to be  represented,  not just  the                                                               
interests of the MOA  or the MSB.  He offered  his belief that it                                                               
seems reasonable  to have at  least one KABATA board  member from                                                               
outside this area.                                                                                                              
                                                                                                                                
REPRESENTATIVE NEUMAN  said Senator  John Coghill  from Fairbanks                                                               
currently serves on KABATA's board.   He suggested that Amendment                                                               
3  makes  changes that  would  be  unprecedented.   Further,  the                                                               
governor's appointees serve  at the will of the  governor and can                                                               
be replaced.  In fact, having  people from the community serve in                                                               
that capacity  is important since  local residents can  bring the                                                               
concerns of  the community to the  board and the local  public is                                                               
most affected  by the project.   Although the KAC is  a statewide                                                               
project,  Senator  Coghill serves  on  the  board [and  brings  a                                                               
perspective outside the MOA and the MSB to the board].                                                                          
                                                                                                                                
REPRESENTATIVE LYNN agreed  the people close to  the bridge would                                                               
be  the most  familiar  with the  bridge and  can  make the  best                                                               
decisions, plus [Senator Coghill]  brings a statewide perspective                                                               
[to the KABATA board].                                                                                                          
                                                                                                                                
1:37:49 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FEIGE  asked  the   sponsor  which  seat  Senator                                                               
Coghill  holds,  since he  believes  he  serves as  a  non-voting                                                               
member.                                                                                                                         
                                                                                                                                
REPRESENTATIVE  NEUMAN agreed  Senator  Coghill  is a  non-voting                                                               
member just as  he is also a non-voting member;  however when the                                                               
discussions  come  forth, he  and  Senator  Coghill are  able  to                                                               
participate  and bring  value to  the committee.   He  was unsure                                                               
anyone  who  lives  outside the  communities  has  expressed  any                                                               
interest in  serving on the  KABATA board, although  the governor                                                               
could certainly appoint such a person.                                                                                          
                                                                                                                                
1:38:40 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON said he does  not a problem with Amendment                                                               
3; however,  he expressed concern  that it might be  difficult to                                                               
find someone who does not have  some type of business interest in                                                               
the MOA  or the MSB.   He did not wish  to imply that the  MOA or                                                               
the MSB is the center of  universe, but the area represents 60-70                                                               
percent of  the population in  the state.  He  questioned whether                                                               
someone could be selected.                                                                                                      
                                                                                                                                
REPRESENTATIVE GATTIS maintained her objection.                                                                                 
                                                                                                                                
1:40:01 PM                                                                                                                    
                                                                                                                                
A  roll call  vote  was taken.    Representatives Feige,  Kreiss-                                                               
Tomkins,  and   P.  Wilson  voted   in  favor  of   Amendment  3.                                                               
Representatives  Isaacson,  Gattis,   Johnson,  and  Lynn,  voted                                                               
against it.  Therefore, Amendment 3 failed by a vote of 3-4.                                                                    
                                                                                                                                
1:40:46 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FEIGE moved  to adopt  Amendment 4,  [labeled 28-                                                               
LS0141\A.4, Martin,  3/20/13], which  read, as  follows [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
     Page 2, line 17:                                                                                                           
          Following "that":                                                                                                     
          Insert                                                                                                                
               "(1)  the bonds are rated in one of the two                                                                      
     highest rating  categories of  at least  one nationally                                                                    
     recognized   rating   agency    without   taking   into                                                                    
     consideration  any  further   appropriations  of  state                                                                    
     money to the authority;                                                                                                    
               (2)"                                                                                                             
          Delete "other revenue available to"                                                                                   
          Insert "funds held in the name of"                                                                                    
                                                                                                                                
     Page 2, line 21:                                                                                                           
          Delete "and that"                                                                                                     
          Insert "; and                                                                                                         
               (3)"                                                                                                             
                                                                                                                                
REPRESENTATIVE GATTIS objected.                                                                                                 
                                                                                                                                
1:40:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FEIGE  said the  state enjoys  an AAA  bond rating                                                               
and there is no logical reason  for revenue from a project of the                                                               
state,  a subdivision  of  the state,  or  an entity  financially                                                               
supported by  the state to  pay anything but the  lowest interest                                                               
rate.   He said the rates  for bonds for the  KABATA project will                                                               
be based on the financial position  of KABATA and on the analysis                                                               
of the  data KABATA has  presented.  In essence,  this represents                                                               
the ability that investors believe  KABATA will have to repay the                                                               
debt.                                                                                                                           
                                                                                                                                
REPRESENTATIVE FEIGE explained that  Amendment 4 would change the                                                               
criteria the state bond committee  would use to require KABATA or                                                               
its partner  to secure bonds  comparable to those that  the state                                                               
can  secure independently.   Amendment  4 would  also change  the                                                               
requirement that  the state  bond committee  uses to  approve the                                                               
bond  offering  to  include  the  bridge  and  private  partner's                                                               
revenue as  stated in  the bill.   This changes  the requirement,                                                               
"other revenue available  to the authority" which  should only be                                                               
bridge revenue,  and instead insert  "funds held in the  name of"                                                               
which means  to also consider  funds held  by the authority.   He                                                               
explained that  this would provide  the bond committee  a process                                                               
to expect  KABATA's funds, presumably appropriated  by the state,                                                               
along with  any bridge revenue  that will be sufficient  to repay                                                               
the debt without further appropriation  by the state.  This would                                                               
place  KABATA  in  a  position  to have  to  justify  and  obtain                                                               
sufficient  funds from  the state  or other  sources in  advance,                                                               
instead  of  putting future  legislators  in  the position  which                                                               
would necessitate  funding moral  obligations created  by passage                                                               
of HB 23 in its current form.                                                                                                   
                                                                                                                                
REPRESENTATIVE NEUMAN  responded.  First, this  project financing                                                               
does not go  to the state bonding committee.   Next, the state is                                                               
not obtaining  the financials since  the private partner  has the                                                               
responsibility for  funding the  project.   Since the  state will                                                               
not finance bonds, Amendment 4 does  not make any sense, he said.                                                               
He referred  to page 2,  lines 22-23 of  HB 23, which  relates to                                                               
payment and  principal.  He read,  "... issuance of the  bonds by                                                               
the  authority would  not  be expected  adversely  to affect  the                                                               
ability  of the  state or  its political  subdivisions to  market                                                               
bonds."                                                                                                                         
                                                                                                                                
REPRESENTATIVE FEIGE replied he has a different viewpoint.                                                                      
                                                                                                                                
REPRESENTATIVE GATTIS maintained her  objection.  She offered her                                                               
belief that Amendment 4 would  prevent KABATA from using the $600                                                               
allocation in private activity bonds  (PAB) from the U.S. DOT for                                                               
the project.   She  further suggested this  would run  counter to                                                               
KABATA's mission to achieve the best value for the state.                                                                       
                                                                                                                                
1:44:26 PM                                                                                                                    
                                                                                                                                
A roll  call vote was  taken.  Representatives Feige  and Kreiss-                                                               
Tomkins  voted   in  favor  of  Amendment   4.    Representatives                                                               
Isaacson, Gattis, Johnson, Lynn, and  P. Wilson voted against it.                                                               
Therefore, Amendment 4 failed by a vote of 2-5.                                                                                 
                                                                                                                                
1:45:03 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FEIGE moved  to adopt  Amendment 5,  [labeled 28-                                                               
LS0141\A.5, Martin,  3/20/13], which  read, as  follows [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
     Page 1, lines 1 - 2:                                                                                                       
          Delete "relating to reserve funds of the                                                                              
     authority;"                                                                                                                
                                                                                                                                
     Page 2, line 24, through page 4, line 13:                                                                                  
          Delete all material.                                                                                                  
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
REPRESENTATIVE GATTIS objected.                                                                                                 
                                                                                                                                
1:45:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FEIGE  read AS  19.75.211  (c),  which states  in                                                               
part:                                                                                                                           
          (c) For the purpose of securing one or more                                                                           
     issues of  its bonds,  the authority may  establish one                                                                    
     or more special funds,  called "capital reserve funds,"                                                                    
     and  shall pay  into  those capital  reserve funds  the                                                                    
     proceeds of the sale of its bonds and any other money                                                                      
     that is available to the authority for the purposes of                                                                     
     those funds.                                                                                                               
                                                                                                                                
REPRESENTATIVE  FEIGE  said  that  existing  statute  appears  to                                                               
provide an avenue for KABATA  to secure bonds through its revenue                                                               
and  other funding  sources.   Therefore,  no  reason exists  for                                                               
KABATA to  need additional reserve  fund authority  for operating                                                               
expenses as  indicated on page  3, line 14 of  HB 23.   He stated                                                               
that KABATA,  in its  joint presentation to  the joint  House and                                                               
Senate Transportation  Committees indicated  financing operations                                                               
and  maintenance   are  the  private   partner's  responsibility.                                                               
Instead,  the  private  partner should  finance  operating  costs                                                               
against  projected payments  to  the partner.    In fact,  KABATA                                                               
needs operating  funds and the  state treasury will  make funding                                                               
available through  availability payments  to the  private partner                                                               
for  debt  service.    The  legislature  should  review  KABATA's                                                               
spending  just as  it  does  for any  other  department of  state                                                               
government, instead  of receiving  a request for  an availability                                                               
payment.                                                                                                                        
                                                                                                                                
1:46:49 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  NEUMAN  indicated  that   the  reserve  fund  was                                                               
established  several  years  ago  during  discussions  about  the                                                               
traffic build  up on the  north side of  the bridge or  the Point                                                               
MacKenzie side.   He  recalled yesterday a  bill passed  to allow                                                               
AHFC  to  finance stores  with  housing  above  them.   In  fact,                                                               
housing  in Anchorage  is not  available and  is very  expensive.                                                               
Thus,  the  opportunity  to  build out  the  area  will  increase                                                               
traffic  revenue.   He estimated  that by  year seven  [the tolls                                                               
will be  used] to cover  the availability payments.   He referred                                                               
to  page  3,  lines  [14-16], to  the  administration  costs  and                                                               
asserted that the state normally  covers administrative costs for                                                               
projects.  Finally, the reserve fund  would be paid back since it                                                               
is not  a grant, but is  a loan.   He concluded that he  does not                                                               
support Amendment 5.                                                                                                            
                                                                                                                                
MR.  FOSTER commented  that  the reserve  fund  is being  created                                                               
initially to  handle the  shortfall in the  initial years  of the                                                               
project, which  is the primary purpose  of the reserve fund.   He                                                               
pointed  out that  the  governor put  $10 million  in  his FY  14                                                               
budget, with  an additional $35  million for the next  four years                                                               
to  fund the  reserve fund  to $150  million, which  is based  on                                                               
KABATA's  estimated   funds  needed  to  meet   the  availability                                                               
payment.    After  that  point, the  reserve  fund  provides  the                                                               
mechanism by which  revenue comes into the  public corporation of                                                               
KABATA.  The reserve fund is  the mechanism which will be used to                                                               
transfer revenue  for Title  23 services,  which will  consist of                                                               
STIP   eligible   projects   statewide.     He   understood   the                                                               
transportation  fund  is  not yet  created;  however,  ideally  a                                                               
transportation fund would be established  to receive the funding,                                                               
which  could be  used statewide.    He characterized  this as  an                                                               
opportunity to forward  fund projects and the  money flowing into                                                               
the reserve would eventually end up funding STIP projects.                                                                      
                                                                                                                                
1:50:12 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON asked  if Amendment 5 were  to pass, where                                                               
the governor's  requested funds  [in the  proposed FY  14 Capital                                                               
Budget] would be directed or whether the funding would be lost.                                                                 
                                                                                                                                
REPRESENTATIVE  NEUMAN  answered  that   any  unspent  funds  are                                                               
typically swept.   He pointed out that the fiscal  note for HB 23                                                               
is still a zero fiscal note.   In short, once the project reaches                                                               
final design  and construction, if  the private partner  does not                                                               
agree or the  state does not agree, the project  won't happen and                                                               
the funds would be reappropriated or swept.                                                                                     
                                                                                                                                
1:51:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FEIGE  referred to the current  statute related to                                                               
a capital reserve  fund.  He asked whether the  bill would create                                                               
a  separate reserve  fund  or  if it  will  be  the same  capital                                                               
reserve fund.                                                                                                                   
                                                                                                                                
MR. FOSTER  answered that it  is the same  fund.  He  pointed out                                                               
the fund  will have  two components since  under the  P3 process,                                                               
part  of  the  fund  will  be  held  in  a  trust  to  cover  the                                                               
availability  payments.     Thus,  a  portion  of   it  would  be                                                               
unsubordinated to the availability payment.                                                                                     
                                                                                                                                
REPRESENTATIVE NEUMAN  offered his belief that  this represents a                                                               
capital reserve fund  in case capital funds will  be deposited to                                                               
the project fund.                                                                                                               
                                                                                                                                
1:52:18 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FEIGE  said he  understood.   He asked  whether it                                                               
would make  more sense  on page  2, line  29 of  HB 23,  to state                                                               
deposits  made  to  a  capital  reserve fund  or  if  it  is  the                                                               
sponsor's intent to establish a second fund.                                                                                    
                                                                                                                                
MR. FOSTER  answered it would  be KABATA's intent to  establish a                                                               
reserve fund,  which is  not yet  created.   He offered  to check                                                               
with DOR  to assess whether  the department has any  objection to                                                               
changing the  name or keeping  it as a  reserve fund.   The funds                                                               
being appropriated  through the  governor's capital  budget would                                                               
be directed to the DOR to be held in trust for the reserve fund.                                                                
                                                                                                                                
The committee took an at-ease from 1:53 p.m. to 1:54 p.m.                                                                       
                                                                                                                                
1:54:17 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FEIGE  referred to  AS 19.75.221 (c),  which read,                                                               
as follows:                                                                                                                     
                                                                                                                                
          (c) For the purpose of securing one or more                                                                           
     issues of  its bonds,  the authority may  establish one                                                                    
     or more special funds,  called "capital reserve funds,"                                                                    
     and  shall pay  into  those capital  reserve funds  the                                                                    
     proceeds of the  sale of its bonds and  any other money                                                                    
     that is available to the  authority for the purposes of                                                                    
     those funds.                                                                                                               
                                                                                                                                
REPRESENTATIVE FEIGE was  unsure why an additional  fund would be                                                               
necessary.                                                                                                                      
                                                                                                                                
REPRESENTATIVE NEUMAN referred to the  title, which is related to                                                               
reserve funds of the authority.  He  said the intent is to have a                                                               
reserve fund,  but his assumption is  that one would not  want to                                                               
mix funding  from tolls and other  sources.  He assumed  it would                                                               
be a mechanism for accounting.                                                                                                  
                                                                                                                                
1:55:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FEIGE was unsure of  the necessity to establish so                                                               
many funds.  He  asked to withdraw Amendment 5.   He then said he                                                               
did not intend  to offer amendments in  members' packets referred                                                               
to as A.6 and A.7.                                                                                                              
                                                                                                                                
1:56:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FEIGE  moved to adopt Amendment  [6], [labeled 28-                                                               
LS0141\A.8, Martin, 3/20/13], referred to  as A.8, which read, as                                                               
follows [original punctuation provided]:                                                                                        
                                                                                                                                
     Page 1, line 2, following "Authority;":                                                                                  
          Insert "requiring legislative approval of a                                                                         
     financial plan before the authority  may issue bonds or                                                                  
     enter into a  public-private agreement for construction                                                                  
     of the Knik Arm bridge or appurtenant facilities;"                                                                       
                                                                                                                                
     Page 1, following line 5:                                                                                                  
     Insert new bill sections to read:                                                                                          
        "* Section 1. AS 19.75.111(a) is amended to read:                                                                   
          (a)  Except as otherwise explicitly made                                                                              
     applicable  to the  authority, the  performance of  the                                                                    
     authority's  duties and  the  exercise  of its  powers,                                                                    
     including  its  powers  to issue  bonds  and  otherwise                                                                    
     incur  debt,  shall  be governed  exclusively  by  this                                                                    
     chapter. In furtherance of  its purposes, the authority                                                                    
     may                                                                                                                        
               (1)  own, acquire, construct, develop,                                                                           
     create, reconstruct, equip,  operate, maintain, extend,                                                                    
     and  improve the  Knik Arm  bridge and  its appurtenant                                                                    
     facilities;                                                                                                                
               (2)  sue and be sued;                                                                                            
               (3)  adopt a seal;                                                                                               
               (4)  adopt, amend, and repeal regulations                                                                        
     under AS 44.62 and establish bylaws;                                                                                       
               (5)  make and execute agreements, contracts,                                                                     
     and all  other instruments  with any public  or private                                                                    
     person,  governmental unit  or agency,  corporation, or                                                                    
     other business  entity lawfully conducting  business in                                                                    
     the United  States for the  exercise of its  powers and                                                                    
     functions  under this  chapter and  for the  financing,                                                                    
     design,  construction,   maintenance,  improvement,  or                                                                    
     operation  of facilities,  properties,  or projects  of                                                                    
     the   authority,   including   making   and   executing                                                                    
     contracts   with   any   person,   firm,   corporation,                                                                    
     governmental agency,  or other  entity for  the purpose                                                                    
     of                                                                                                                         
               (A)  incurring indebtedness, obtaining                                                                           
     investments in  the authority's projects,  acquiring or                                                                    
     granting lump  sum payments for services  in advance or                                                                    
     in arrears, grants, and other financing; and                                                                               
               (B)        entering    into    public-private                                                                    
     partnerships  or service  contracts  in  any form;  the                                                                
     authority may not enter into  a partnership or contract                                                                
     for  construction of  the Knik  Arm  bridge unless  the                                                                
     authority has obtained the  approval of the legislature                                                                
     of  a  financial  plan  as  provided  in  (c)  of  this                                                                
     section;                                                                                                               
               (6)  in its own name acquire, lease, rent,                                                                       
     sell, or convey real and personal property;                                                                                
               (7)   issue  and refund  bonds in  accordance                                                                    
     with  this chapter,  in order  to pay  the cost  of the                                                                    
     Knik  Arm bridge  and its  appurtenant facilities;  the                                                                    
     authority  may  also secure  payment  of  the bonds  as                                                                    
     provided in this chapter;                                                                                                  
               (8)    incur  other  indebtedness,  including                                                                    
     lines  of  credit  and   indebtedness  to  the  Federal                                                                    
     Highway  Administration,  United States  Department  of                                                                    
     Transportation,   under    23   U.S.C.   601    -   610                                                                    
     (Transportation  Infrastructure Finance  and Innovation                                                                    
     Act of 1998), as  amended, and secure that indebtedness                                                                    
     as provided in this chapter;                                                                                               
               (9)   apply for and accept  gifts, grants, or                                                                    
     loans   from  a   federal  agency   or  an   agency  or                                                                    
     instrumentality of  the state, or from  a municipality,                                                                    
     private  organization,   or  other   source,  including                                                                    
     obtaining   title  to   state,  local   government,  or                                                                    
     privately owned land, directly  or through a department                                                                    
     of the state having jurisdiction of the land;                                                                              
               (10)   fix  and collect  fees, rents,  tolls,                                                                    
     rates, or  other charges  for the use  of the  Knik Arm                                                                    
     bridge  and appurtenant  facilities, or  for a  service                                                                    
     developed,  operated,  or  provided by  the  authority;                                                                    
     notwithstanding  AS 37.10.050(a),  fees, rents,  tolls,                                                                    
     rates,  and other  charges  fixed  and collected  under                                                                    
     this paragraph may exceed the  actual operating cost of                                                                    
     the use of the bridge, facility, or service;                                                                               
               (11)   bring  civil  actions, refer  criminal                                                                    
     actions to  the appropriate  authority, and  take other                                                                    
     actions or  enter into agreements with  law enforcement                                                                    
     and collection  agencies to  enforce the  collection of                                                                    
     its   fees,  rents,   tolls,   rates,  other   charges,                                                                    
     penalties, and other obligations;                                                                                          
               (12)      pledge,  encumber,   transfer,   or                                                                    
     otherwise  obligate revenue  derived  by the  authority                                                                    
     from  the   ownership,  use,   or  operation   of  toll                                                                    
     facilities,  including   fees,  rents,   tolls,  rates,                                                                    
     charges,  or other  revenue of  the authority  or money                                                                    
     that the  legislature may  appropriate, except  a state                                                                    
     tax  or  license,  as  security   for  bonds  or  other                                                                    
     indebtedness or agreements of the authority;                                                                               
               (13)   deposit or  invest its  funds, subject                                                                    
     to agreements with bondholders;                                                                                            
               (14)   procure insurance against any  loss in                                                                    
     connection with its operation;                                                                                             
               (15)   contract for  and engage  the services                                                                    
     of  consultants, experts,  and financial  and technical                                                                    
     advisors  that the  authority  considers necessary  for                                                                    
     the  exercise of  its powers  and functions  under this                                                                    
     chapter;                                                                                                                   
               (16)  apply for, obtain, hold, and use                                                                           
     permits,  licenses,   or  approvals   from  appropriate                                                                    
     agencies  of the  state, the  United States,  a foreign                                                                    
     country,  and  any  other proper  agency  in  the  same                                                                    
     manner as any other person;                                                                                                
               (17)  perform reconnaissance studies and                                                                         
     engineering,  survey, and  design studies  with respect                                                                    
     to the Knik Arm bridge and its appurtenant facilities;                                                                     
               (18)  exercise powers of eminent domain or                                                                       
     file a declaration of taking  as necessary for the Knik                                                                    
     Arm   bridge    and   appurtenant    facilities   under                                                                    
     AS 09.55.240  -   09.55.460  to  acquire  land   or  an                                                                    
     interest in  land; the  authority's exercise  of powers                                                                    
     under  this paragraph  may not  exceed the  permissible                                                                    
     exercise of those powers by the state;                                                                                     
               (19)  confer with municipal and other                                                                            
     governments,  metropolitan planning  organizations, and                                                                    
     the department, concerning the Knik Arm bridge;                                                                            
               (20)  do all acts and things necessary to                                                                        
     carry out  the powers expressly granted  or necessarily                                                                    
     implied  in  this  chapter;  nothing  in  this  chapter                                                                    
     limits the  powers of the authority  that are expressly                                                                    
     granted or necessarily implied.                                                                                            
        * Sec.  2. AS 19.75.111 is  amended by adding  a new                                                                  
     subsection to read:                                                                                                        
          (c)  The authority may not enter into a public-                                                                       
     private   partnership    or   service    contract   for                                                                    
     construction  of the  Knik  Arm  bridge or  appurtenant                                                                    
     facilities   unless  the   authority  submits   to  the                                                                    
     legislature  a financial  plan including  all projected                                                                    
     construction, maintenance, and  operation costs for the                                                                    
     first 40  years of the  project and the  financial plan                                                                    
     has been approved by the legislature by law."                                                                              
                                                                                                                                
     Page 1, line 6:                                                                                                            
          Delete "Section 1"                                                                                                  
          Insert "Sec. 3"                                                                                                     
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 2, line 6:                                                                                                            
          Delete "a new subsection"                                                                                             
          Insert "new subsections"                                                                                              
                                                                                                                                
     Page 2, lines 6 - 23:                                                                                                      
          Delete all material and insert:                                                                                       
        "*  Sec. 5.  AS 19.75.211 is  amended by  adding new                                                                
     subsections to read:                                                                                                       
          (e)  Before issuing bonds for the Knik Arm bridge                                                                     
     under this  section, the authority shall  submit to the                                                                    
     state bond  committee a description of  the bond issue,                                                                    
     a copy of  the resolution of the board  of directors of                                                                    
     the  authority  supporting  the bond  issue,  a  report                                                                    
     setting  out the  sources and  amounts of  revenue that                                                                    
     will  be  used for  payment  of  the principal  of  and                                                                    
     interest on  the bonds and  the effect the  issuance of                                                                    
     the bonds  by the authority  would have on  the ability                                                                    
     of the state  or political subdivision of  the state to                                                                    
     market  bonds, and  a preliminary  prospectus, offering                                                                    
     circular, or  official statement  relating to  the bond                                                                    
     issue.                                                                                                                     
          (f)  Bonds may not be issued unless                                                                                   
               (1)  the state bond committee finds, based                                                                       
     on  the information  submitted by  the authority  under                                                                    
     this section  and other information that  is reasonably                                                                    
     available  to  or  requested  by  the  committee,  that                                                                    
     either the  Knik Arm bridge  revenue and  other revenue                                                                    
     available  to  the  authority or  the  revenue  of  the                                                                    
     private  person or  enterprise  under a  public-private                                                                    
     partnership  agreement entered  into  by the  authority                                                                    
     under AS 19.75.111(a) 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 adversely                                                                    
     to affect  the ability  of the  state or  its political                                                                    
     subdivisions to market bonds; and                                                                                          
               (2)      the   authority   submits   to   the                                                                    
     legislature  a financial  plan including  all projected                                                                    
     construction, maintenance, and  operation costs for the                                                                    
     first 40  years of the  project and the  financial plan                                                                    
     has been approved by the legislature by law."                                                                              
                                                                                                                                
1:56:56 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTIS objected.                                                                                                 
                                                                                                                                
REPRESENTATIVE FEIGE explained Amendment  [6] referred to as A.8.                                                               
He said the state is  responsible for guarantying the KAC project                                                               
through  legislative appropriations  so it  makes sense  that the                                                               
state  should  also  have  the ability  to  review  the  KABATA's                                                               
financial plan.   Amendment [6] would require KABATA  to submit a                                                               
financial plan  to the legislature  for approval.  In  fact, this                                                               
process  is  the   same  process  TIFIA  and   other  bond  users                                                               
essentially   require  in   order  risk   funding  on   projects.                                                               
[Amendment  6]  contains  a   significant  amount  of  conforming                                                               
language.   He referred  page 2,  line 7  and page  5, line  6 to                                                               
substantive  language and  highlighted that  Amendment [6]  would                                                               
delete material beginning on [page 2, lines 6-23 of the bill].                                                                  
                                                                                                                                
1:58:04 PM                                                                                                                    
                                                                                                                                
CHAIR P. WILSON  asked for clarification on whether  Section 3 is                                                               
being removed or if a new bill section is being inserted.                                                                       
                                                                                                                                
REPRESENTATIVE FEIGE  reiterated the language changes  on page 2,                                                               
line 7 and  page 5 of Amendment  [6].  He stated page  2, line 7,                                                               
essentially would place a gate  on the construction of the bridge                                                               
unless KABATA has  approval of legislature for  a financial plan.                                                               
The language  on page 5, line  6, of Amendment [6]  would require                                                               
KABATA  to  submit  the  plan  for  construction,  operating  and                                                               
maintenance costs for the first 40 years of the project.                                                                        
                                                                                                                                
2:00:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FEIGE offered his  belief that Amendment [6] would                                                               
give the legislature  the ability to better decide  on whether to                                                               
move  forward with  the  project after  it  reviews the  KABATA's                                                               
financial plan.                                                                                                                 
                                                                                                                                
REPRESENTATIVE  NEUMAN suggested  the legislature  needs to  keep                                                               
politics  out  of projects  such  as  this  one.   In  fact,  the                                                               
legislature doesn't take these actions  with projects such as the                                                               
proposed   Alaska  Gasline   Development  Corporation   or  other                                                               
projects.  However,  this process would give final  approval of a                                                               
project planned by  the commissioner of DOT&PF, DOR,  and DOL and                                                               
eventually  by the  governor as  the chief  administrator of  the                                                               
state.  He said, "If we had  to bring back projects like this and                                                               
go through  the legislature for financing  plans - like this  - I                                                               
don't think  we'd ever  get anything  done.   That's why  we have                                                               
experts that look at this,  again, through the Department of Law.                                                               
They are  the chief administrators  of the state."   He continued                                                               
by explaining that  the department heads conduct  the business of                                                               
the  state daily,  which  is one  reason  commissioners or  their                                                               
designees serve  on KABATA's board  and review all  the materials                                                               
to  ensure everything  is in  order.   He admitted  he is  not an                                                               
expert, nor  is anyone in  the legislature an expert  at building                                                               
roads, or executing  bonds for financing.  He  offered his belief                                                               
that  is   the  reason  for  the   administration's  involvement.                                                               
Specifically, KABATA  is an entity  of the state governed  by the                                                               
Department of  Administration, who have experts  and monitor [the                                                               
project].    In conclusion,  he  said  he  does not  support  the                                                               
Amendment [6].                                                                                                                  
                                                                                                                                
2:02:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTIS  offered her belief that  the legislature's                                                               
approval  will  not work  for  this  project  and will  create  a                                                               
chilling effect  for this  project and any  other project  in the                                                               
state that  private developers  are interested  in, plus  it will                                                               
set a dangerous  precedent.  She emphasized  that legislators are                                                               
not  the  ones to  oversee  these  large projects;  instead,  the                                                               
experts should be doing this.                                                                                                   
                                                                                                                                
2:02:55 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KREISS-TOMKINS  understood the DOL  testified that                                                               
the  state  has  a  moral obligation  to  make  the  availability                                                               
payments.    It  isn't  a  question  of  whether  the  bridge  is                                                               
available for traffic or whether or  not the state pays, but is a                                                               
question of how  much the state must pay.   He cautioned that the                                                               
full faith  and credit of Alaska  is on the line  since the state                                                               
is  morally obligated  to  make payments.   In  fact,  if he  was                                                               
morally obligated  to make payments  in the future he  would want                                                               
to know how much he needed  to pay and review the financial plan,                                                               
which would  indicate the payment  amount.  He said  the [state's                                                               
credit] seems very important to  him so he will support Amendment                                                               
[6].                                                                                                                            
                                                                                                                                
2:03:48 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON  said he has a  deep philosophical problem                                                               
with development via the legislature  and this project becoming a                                                               
"political  football."   He said  the legislature  has also  been                                                               
considering  a   potential  ballot   initiative  to   approve  or                                                               
disapprove a  mine project and  when the  legislature politicizes                                                               
development,  it creates  an environment  in  which nothing  will                                                               
happen.  Granted,  [Amendment 6] requires review,  but he offered                                                               
his  belief that  it  would likely  mean approval.    If so,  the                                                               
approval  process  would  entail  a  two-year  period  since  any                                                               
legislator can  stall a bill  for a year  or two.   He questioned                                                               
the  wisdom of  delaying a  project for  two years  for political                                                               
purposes.    In  essence, philosophically  the  specific  project                                                               
doesn't  really matter  since  the result  will  have a  chilling                                                               
effect.  If the legislature needed  to approve every drill rig on                                                               
the North Slope, wells would  never be drilled; so in conclusion,                                                               
he said  he has  a philosophical problem  with leaving  the final                                                               
approval with the legislature.                                                                                                  
                                                                                                                                
REPRESENTATIVE NEUMAN  pointed out  that the KABATA  provides the                                                               
legislature with  an annual report, which  contains the financial                                                               
information, permitting information, and the future plan.                                                                       
                                                                                                                                
2:05:52 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FEIGE  offered  to   entertain  an  amendment  to                                                               
Amendment  [6],  to change  approval  to  review.   He  said  the                                                               
legislature creates  statutes and  allocate funding.   He offered                                                               
his belief that  the [KAC] could become an albatross  in terms of                                                               
the availability  payments.  He acknowledged  the legislature has                                                               
the option, under the proposal, to  not make the payments, but at                                                               
great peril to  the state.  In fact, not  making the availability                                                               
payments  will severely  affect the  state's credit  rating.   He                                                               
said the  legislature should have the  best information possible.                                                               
The legislature will need to  commit to the availability payments                                                               
so it  is reasonable  to ask  the legislature  for approval.   He                                                               
emphasized  he supports  as much  resource development  and other                                                               
development in  Alaska as possible.   However, he  cautioned this                                                               
project would commit the state  to a considerable funding without                                                               
knowing  the amount  of availability  payments  necessary or  the                                                               
interest  to finance  the  KAC.   Although  the  state will  have                                                               
future opportunities to curtail the  project, he did not think it                                                               
was unreasonable  to ask for  a financial  plan in order  to make                                                               
the funding decision.                                                                                                           
                                                                                                                                
2:07:53 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON said  he thinks  it is  ridiculous to  go                                                               
through this process  to build a bridge.  He  suggested the state                                                               
should  fund the  bridge and  build it.   He  did not  think this                                                               
process  [Amendment 6]  is preferable.    In fact,  the state  is                                                               
responsible for building  roads and public safety  so he wondered                                                               
whether  the  state  was  shirking   its  responsibility  by  not                                                               
building the bridge  today.  The fact that the  legislature is at                                                               
this juncture tells him the state doesn't want to do it.                                                                        
                                                                                                                                
2:08:49 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KREISS-TOMKINS offered  his belief  two different                                                               
conversations exist for  this project.  He said,  "Maybe I should                                                               
have worn my  I love infrastructure shirt today...."   He said he                                                               
does  not  have   any  issue  with  building   bridges  or  other                                                               
infrastructure, in  fact, he  said he loves  it.   He highlighted                                                               
that  if the  state  wants  to [build  the  KAC] the  legislature                                                               
should bring a  bill forward to appropriate $2.5  billion or some                                                               
dollar figure  to build  the Knik Arm  Bridge.   He characterized                                                               
this bill an example of writing  a blank check.  He emphasized he                                                               
would  like  to  know  the   state's  obligation,  which  is  not                                                               
available under  this bill  since the financing  is unknown.   He                                                               
indicated  this is  a different  question than  one in  which the                                                               
state  knows  the  financial obligation.    In  conclusion,  even                                                               
though he'd  like to build  infrastructure in Alaska he  wants to                                                               
know the cost first.                                                                                                            
                                                                                                                                
2:10:01 PM                                                                                                                    
                                                                                                                                
CHAIR  P. WILSON  remarked she  understood KABATA  cannot provide                                                               
the financial answers right now even if it wanted to do so.                                                                     
                                                                                                                                
REPRESENTATIVE  JOHNSON  remarked that  he  first  heard about  a                                                               
potential bridge project, [KAC] in 1984.   He thought at the time                                                               
it  was a  good idea;  however, the  state still  doesn't have  a                                                               
bridge.  He said  it means something when a project  has to go to                                                               
these  lengths to  get built.   He  said he  should focus  on the                                                               
amendment,  but   remarked  he  is  philosophically   opposed  to                                                               
projects  being  decided in  the  political  process.   He  urged                                                               
members to build [the bridge].                                                                                                  
                                                                                                                                
2:11:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LYNN  asked to  underscore the  previous speaker's                                                               
comments.   He  agreed the  legislature has  been analyzing  this                                                               
project since 1984.   He said he is in  favor of studying issues,                                                               
but one  can get  to the  point of "paralysis  by analysis."   He                                                               
also urged members to press ahead.                                                                                              
                                                                                                                                
2:12:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FEIGE  agreed  there  are  two  separate  issues.                                                               
First,  he  said  the  issue  is whether  to  build  the  bridge.                                                               
Second,  the issue  is how  to finance  the bridge  project.   He                                                               
acknowledged that  he would like to  build the [KAC] but  he does                                                               
not want to use financing  which is potentially more expensive or                                                               
at least  holds a high  degree of  unknowns.  He  contrasted that                                                               
approach to one in which the  state simply takes the funds out of                                                               
savings to  build the bridge.   To do so  would turn cash  in the                                                               
bank  to a  solid infrastructure  investment that  could generate                                                               
revenue immediately for the state.   He acknowledged risks exist,                                                               
such as construction  risks or risks that the  population may not                                                               
support [a  toll bridge]  but at least  the bridge  will generate                                                               
benefits and  tolls.   In conclusion, he  asserted there  are too                                                               
many unknowns  and it  is appropriate for  a legislature  to have                                                               
some idea of the [cost] prior to committing funds to a project.                                                                 
                                                                                                                                
2:13:26 PM                                                                                                                    
[The  committee  treated  it   as  though  Representative  Gattis                                                               
maintained her objection].                                                                                                      
                                                                                                                                
2:13:31 PM                                                                                                                    
                                                                                                                                
A roll  call vote was  taken.  Representatives Feige  and Kreiss-                                                               
Tomkins  voted  in  favor  of  Amendment  [6].    Representatives                                                               
Isaacson, Gattis, Johnson, Lynn, and  P. Wilson voted against it.                                                               
Therefore, Amendment [6] failed by a vote of 2-5.                                                                               
                                                                                                                                
2:14:11 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTIS suggested the committee move the bill.                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON  said he has  had an opportunity  to speak                                                               
to  numerous  legislators who  served  during  the 1980s.    They                                                               
regret  they didn't  build the  Susitna Dam  and a  bridge across                                                               
Knik  Arm.     He  said  he   does  not  want  his   children  or                                                               
grandchildren to  know his  biggest regret is  the state  did not                                                               
build the  Knik Arm Crossing  (KAC).   He emphasized he  does not                                                               
want to  have those regrets.   He  acknowledged [the KAC]  may be                                                               
risky.    The current  state  funds  are generating  between  6-8                                                               
percent  earnings  and the  bond  would  be  for less  than  that                                                               
amount.   Bonding  makes  some sense,  but  sharing the  exposure                                                               
makes some  sense, too.   He said he will  wholeheartedly support                                                               
advancing this bill.  He said he  wants to be here when the first                                                               
shovel of dirt  is turned.  In  fact, he'd like to  be the person                                                               
who pays the first $5 to cross  the bridge.  He concluded that he                                                               
hopes  this  project   gets  done  while  he  is   still  in  the                                                               
legislature  and still  alive since  it could  be 2024  before it                                                               
happens.  "We have to develop this state," he said.                                                                             
                                                                                                                                
2:16:05 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON  moved to  report HB  23 out  of committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
notes.   There being no  objection, HB  23 was reported  from the                                                               
House Transportation Standing Committee.                                                                                        
                                                                                                                                
The committee took an at-ease from 2:17 p.m. to 2:19 p.m.                                                                       
                                                                                                                                
2:17:21 PM                                                                                                                    
                                                                                                                                

Document Name Date/Time Subjects
HB0131A.pdf HTRA 3/21/2013 1:00:00 PM
HB 131
HB 131 Sponsor Statement.pdf HTRA 3/21/2013 1:00:00 PM
HB 131
Washington State Derelict Vessel Program Brochure.pdf HTRA 3/21/2013 1:00:00 PM
HB 131
City of Homer resolution_13-026.pdf HTRA 3/21/2013 1:00:00 PM
HB 131
e-mail from Homer Harbormaster regarding Derelict Vessel problem.pdf HTRA 3/21/2013 1:00:00 PM
HB 131
HB 131 AAHPA Resolution.pdf HTRA 3/21/2013 1:00:00 PM
HB 131
HB 131 Cordova Article.pdf HTRA 3/21/2013 1:00:00 PM
HB 131
HB 131 Derelict vessels - DNR information.pdf HTRA 3/21/2013 1:00:00 PM
HB 131
HB 131 DNR Derelict Vessels Presentation.pdf HTRA 3/21/2013 1:00:00 PM
HB 131
HB 131 News articles on Derelict vessels in Alaska.pdf HTRA 3/21/2013 1:00:00 PM
HB 131
HB 131 Seattle Times article on Derelict vessel issue in Washington State.pdf HTRA 3/21/2013 1:00:00 PM
HB 131
HB 23 KABATA Questions from 3-12.pdf HTRA 3/21/2013 1:00:00 PM
HB 23
HB 23 Amendment A 1.pdf HTRA 3/21/2013 1:00:00 PM
HB 23
HB 23 Amendment A 3.pdf HTRA 3/21/2013 1:00:00 PM
HB 23
HB 23 Amendment A 4.pdf HTRA 3/21/2013 1:00:00 PM
HB 23
HB 23 Amendment A 5.pdf HTRA 3/21/2013 1:00:00 PM
HB 23
HB 23 Amendment A 7.pdf HTRA 3/21/2013 1:00:00 PM
HB 23
HB 23 Amendment A 8.pdf HTRA 3/21/2013 1:00:00 PM
HB 23
HB 23 Sectional Analysis.pdf HTRA 3/21/2013 1:00:00 PM
HB 23
HB 23 Amendment A 2.pdf HTRA 3/21/2013 1:00:00 PM
HB 23