Legislature(2011 - 2012)SENATE FINANCE 532

04/09/2012 01:00 PM Senate FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 163 G.O. BONDS FOR PORTS TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
= SB 192 OIL AND GAS PRODUCTION TAX RATES
Heard & Held
SENATE BILL NO. 163                                                                                                             
                                                                                                                                
     "An Act  providing for and  relating to the  issuance of                                                                   
     general obligation  bonds for the purpose  of paying the                                                                   
     cost of  municipal port projects;  and providing  for an                                                                   
     effective date."                                                                                                           
                                                                                                                                
1:07:34 PM                                                                                                                    
                                                                                                                                
Co-Chair  Hoffman  MOVED  to  ADOPT  the  proposed  committee                                                                   
substitute    for   SB    163,    Work   Draft    27-GS2769\D                                                                   
(Finley/Kirsch, 4/7/12.)                                                                                                        
                                                                                                                                
1:07:44 PM                                                                                                                    
                                                                                                                                
Co-Chair Stedman OBJECTED for the purpose of discussion.                                                                        
                                                                                                                                
1:08:01 PM                                                                                                                    
                                                                                                                                
WESTON EILER,  STAFF, SENATOR  BERT STEDMAN, highlighted  the                                                                   
changes  in the  committee  substitute  (CS).  He cited  that                                                                   
Page  1, line  1, contained  a title  revision that  expanded                                                                   
the bill's  coverage exclusively  from  ports to other  state                                                                   
transportation  projects.  He added  that  Page  1, line  10,                                                                   
amended the amount  of the general obligation  bonds (GEO) to                                                                   
$453,499,200.  He reported that  on Page  2, line 1,  renamed                                                                   
the project  fund to the  "2012 State Transportation  Project                                                                   
Fund". He noted  that on Page 2, line 8, Section  3 broadened                                                                   
the  grant  award statutes,  AS 37.05.316,  and  changed  the                                                                   
grant fund total  to $188.4 million (line 13.)  He listed the                                                                   
transportation grant  projects, which contained  changes from                                                                   
previous versions  of SB 163.  He read the list  beginning on                                                                   
Page 2 line 16:                                                                                                                 
                                                                                                                                
     PROJECT AMOUNT                                                                                                             
      Anchorage - Port of Anchorage $50,000,000                                                                                 
      Expansion                                                                                                                 
      Bethel - Harbor Dredging 4,000,000                                                                                        
      Bristol Bay Borough - Port of Bristol Bay 7,000,000                                                                       
      Expansion and Pile Dock Replacement                                                                                       
      Haines Borough - Boat Harbor Upgrades 12,000,000                                                                          
      Kodiak - Pier III Replacement 15,000,000                                                                                  
      Kotzebue - Cape Blossom Road and Port 10,000,000                                                                          
      Matanuska - Susitna Borough - Bogard Road Extension                                                                       
      13,500,000                                                                                                                
      Matanuska-Susitna Borough - Port Mackenzie                                                                                
      30,000,000 Rail Extension                                                                                                 
     Nenana - Totchaket Resource Development 6,500,000                                                                          
      Corridor Access                                                                                                           
     Newtok Traditional Council - Mertarvik Evacuation                                                                          
      4,100,000                                                                                                                 
      Road Construction                                                                                                         
      Nome - Port Design and Construction 10,000,000                                                                            
      Sand Point - Sand Point Road Rehabilitation                                                                               
      2,500,000                                                                                                                 
      Seward - Marine Industrial Center Expansion                                                                               
      10,000,000                                                                                                                
      Sitka - Sawmill Cove Industrial Park Dock 7,500,000                                                                       
      St. George - Harbor Reconstruction 3,000,000                                                                              
      Togiak - Waterfront Transit Facility 3,300,000                                                                            
                                                                                                                                
Mr.  Eiler directed  attention to  Section 4,  line 6,  which                                                                   
added  a new  section that  authorized (AS 37.07.080(e))  the                                                                   
Department of  Transportation and Public Facilities  (DOT) to                                                                   
appropriate    the   following    from    the   2012    State                                                                   
Transportation Project Fund:                                                                                                    
                                                                                                                                
      PROJECT AMOUNT                                                                                                            
      Anchorage - Glenn Highway, Hiland Road to Artillery                                                                       
      Road 35,000,000 Reconstruction                                                                                            
     Anchorage - Glenn Highway/Muldoon Road Interchange                                                                         
      15,000,000 Reconstruction                                                                                                 
      Anchorage - New Seward Highway/36th Avenue                                                                                
      26,000,000 Reconstruction                                                                                                 
      Anchorage - New Seward Highway - MP 75 - 90                                                                               
      10,000,000 Bridge Repairs                                                                                                 
      Anchorage - O'Malley Road Reconstruction 15,000,000                                                                       
      Fairbanks - Elliott Highway, MP 108 - 120                                                                                 
      Reconstruction 6,500,000                                                                                                  
      Fairbanks - Old Steese Highway to McGrath Road                                                                            
      24,000,000 Reconstruction and Extension                                                                                   
                                                                                                                                
      Fairbanks - Wendell Street Bridge Replacement                                                                             
      14,400,000                                                                                                                
      Haines - Maintenance Shop Replacement 3,000,000                                                                           
      Juneau - Glacier Highway, MP 4 - 6 Improvements                                                                           
      5,500,000                                                                                                                 
      Juneau - Mendenhall Loop Road Improvements 6,000,000                                                                      
     Kenai - Kenai Spur Road Rehabilitation 20,000,000                                                                          
      Ketchikan - Shelter Cove Road Construction and                                                                            
      Improvements 19,000,000                                                                                                   
      Mat-Su - Fairview Loop Road Reconstruction 10,000,000                                                                     
      Mat-Su - Knik Goose Bay Road Reconstruction                                                                               
      15,000,000                                                                                                                
      North Pole - Plack Road Improvements 5,000,000                                                                            
      Platinum Airport Runway Extension 3,100,000                                                                               
      Port Clarence Access Improvements 4,000,000                                                                               
     Richardson Highway - Ruby Creek Bridge Replacement                                                                         
      11,000,000                                                                                                                
      Sitka - Katlian Bay Road Construction 14,000,000                                                                          
                                                                                                                                
Mr.   Eiler  noted   that  Section   5,   Page  4   contained                                                                   
instructions   and   authorizations   for  the   State   Bond                                                                   
Committee. He read  the following language (Page  4, Lines 11                                                                   
- 15):                                                                                                                          
                                                                                                                                
     If the issuance  of the bonds is ratified  by a majority                                                                   
     of the  qualified voters  of the state  who vote  on the                                                                   
     question, the  amount of $3,599,200  or as much  of that                                                                   
     amount as  is found necessary  is appropriated  from the                                                                   
     2012 state  transportation project fund of  the state to                                                                   
     the  state bond committee  to carry  out the  provisions                                                                   
     of this  Act and  to pay expenses  incident to  the sale                                                                   
     and issuance of the bonds authorized in this Act.                                                                          
                                                                                                                                
He  concluded  with  Section  7  (Page  4,  line  26),  which                                                                   
contained   the  ballot   question  and   the  total   amount                                                                   
[$453,499,200] of the bond package.                                                                                             
                                                                                                                                
1:15:09 PM                                                                                                                    
                                                                                                                                
Senator  Thomas referred  to  Page 3,  line  23; Fairbanks  -                                                                   
Elliott Highway,  MP 108 -  120 Reconstruction  6,500,000 and                                                                   
indicated that the  project was located 118  miles outside of                                                                   
Fairbanks.  He  did  not  want   the  project  attributed  to                                                                   
Fairbanks.                                                                                                                      
                                                                                                                                
                                                                                                                                
Co-Chair  Stedman   replied  that   the  language   would  be                                                                   
remedied later on in the process.                                                                                               
Co-Chair  Stedman  REMOVED  his  OBJECTION.  There  being  NO                                                                   
further OBJECTION, Work draft 27-GS2769\D was ADOPTED.                                                                          
                                                                                                                                
KAREN  REHFELD, DIRECTOR,  OFFICE OF  MANAGEMENT AND  BUDGET,                                                                   
spoke  to the  original  version of  the  bill. She  reported                                                                   
that the original  version of SB 163 authorized  $350,000,000                                                                   
in  general obligation  bonds  for six  port projects  around                                                                   
the state. Four new projects were incorporated into the CS.                                                                     
                                                                                                                                
ANGELA   RODELL,    DEPUTY   COMMISSIONER,    TAX   DIVISION,                                                                   
DEPARTMENT  OF  REVENUE,  spoke   to  the  fiscal  note.  She                                                                   
explained  that $3,500,000  of the  bond total,  $453,499,200                                                                   
was  the associated  costs to  issue the  bonds. Upon  ballot                                                                   
approval, the  first issuance  would begin in  February, 2013                                                                   
and would  continue into  FY 14  and FY  15. She assured  the                                                                   
committee  that the proceeds  would be  expended in  a timely                                                                   
manner. She expected  a low cost for the first  bond issuance                                                                   
of  approximately   2.6  percent.  She  commented   that  the                                                                   
projects  were  long-term  and  anticipated a  20  year  bond                                                                   
issue.  The administration  planned to  finance the  projects                                                                   
over  the  20  year  period  to   free  up  funds  for  other                                                                   
priorities.                                                                                                                     
                                                                                                                                
Co-Chair Stedman  cited the fiscal  note from  the Department                                                                   
of  Revenue  (DOR)  that  appropriated  $900,000  in  general                                                                   
funds for FY 2013.                                                                                                              
                                                                                                                                
1:19:47 PM                                                                                                                    
                                                                                                                                
STEPHEN  RIBUFFO,   INTERIM  DIRECTOR,  PORT   OF  ANCHORAGE,                                                                   
ANCHORAGE (via  teleconference), testified  in support  of SB
163.  He thanked  the committee  for  the additional  funding                                                                   
totaling  $50,000,000  but  related  that  the  funding  fell                                                                   
short of the  $350,000,000 requested by the  municipality. He                                                                   
considered  the port  a statewide  project and  felt that  it                                                                   
benefited the entire state.                                                                                                     
                                                                                                                                
ALLEN JOSEPH,  VICE-CHAIR, SEA LION CORPORATION,  BETHEL (via                                                                   
teleconference), expressed  his support of SB 163.  He worked                                                                   
in  collaboration with  the  city of  Hooper  Bay on  various                                                                   
projects.  Currently,  the community  sought  to construct  a                                                                   
small boat  harbor at a  cost of $8,000,000  and to  extend a                                                                   
road at a cost  of $700,000, for the transportation  of goods                                                                   
that  arrive by  barge. The  harbor was  unprotected and  the                                                                   
goods  brought in  by barge were  trucked on  the beach.  The                                                                   
residents  of  Hooper Bay  were  concerned  that a  barge  or                                                                   
truck   accident  would   affect   subsistence  fishing.   He                                                                   
requested the project's inclusion in SB 163.                                                                                    
                                                                                                                                
CHRISTINE   KLEIN,   CALISTA  CORPORATION,   ANCHORAGE   (via                                                                   
teleconference),  testified  in   support  of  including  the                                                                   
Emmonak  port  project  in  SB 163  and  clarified  that  the                                                                   
project   was   included   in   earlier   versions   of   the                                                                   
legislation.  She explained  that  the Emmonak  port was  the                                                                   
hub for villages  along the Yukon River. The  port was relied                                                                   
on for  fuel deliveries and  utilized by the  fisheries plant                                                                   
that  provided jobs  for  residents.  She detailed  that  the                                                                   
project design  was complete and  it was "shovel  ready." The                                                                   
total  cost was  $16,500,000.  The cost  of Phase  1 was  $10                                                                   
million for construction  of the dock and wharf.  The landing                                                                   
ramp cost $6,400,000.  The project was supported  by Kwik'Pak                                                                   
Fisheries,   the   City   of    Emmonak,   Calista   Regional                                                                   
Corporation, and the Tribe of Emmonak.                                                                                          
                                                                                                                                
1:24:24 PM                                                                                                                    
                                                                                                                                
MARTIN B.  MOOR SR., CITY  MANAGER, CITY OF EMMONAK,  EMMONAK                                                                   
(via teleconference),  testified in support of  including the                                                                   
Emmonak port  and dock facility  project in SB 163.  He noted                                                                   
that the  city was  located 10  miles from  the mouth  of the                                                                   
Yukon River  and served  as the regional  hub. He  served the                                                                   
city  since  1963, which  included  some  time as  mayor.  He                                                                   
spoke  of interior  Alaska's increasing  costs  for fuel  and                                                                   
basic necessities,  which threatened rural  Alaska's physical                                                                   
survival.  Every  necessity must  be  shipped in.  He  shared                                                                   
that expanding the  Emmonak port benefited the  entire region                                                                   
and could potentially reduce the costs.                                                                                         
                                                                                                                                
BOSCO OLSON, SENIOR  CITY ADMINISTRATOR, CITY OF  HOOPER BAY,                                                                   
HOOPER  BAY (via  teleconference), expressed  his support  of                                                                   
the  inclusion  of the  road  extension  and the  small  boat                                                                   
harbor  in  SB 163.  He  explained  that the  road  extension                                                                   
would expand the  road over a slough and that  the small boat                                                                   
harbor protected  boats from  potentially destructive  storms                                                                   
in the fall.                                                                                                                    
                                                                                                                                
1:31:45 PM                                                                                                                    
                                                                                                                                
WILBUR  R. HOOTCH,  MAYOR, CITY  OF  EMMONAK, ANCHORAGE  (via                                                                   
teleconference),  testified  in   support  of  including  the                                                                   
Emmonak  port  and  dock  facility  project  in  SB  163.  He                                                                   
remarked  that  the  region  was   experiencing  a  crippling                                                                   
energy  crisis  and  listed  the   positive  effects  of  the                                                                   
project for the region.                                                                                                         
                                                                                                                                
GORDON   SEVERSEN,   MICHAEL   L.  FOSTER   AND   ASSOCIATES,                                                                   
ANCHORAGE (via  teleconference), testified in support  of the                                                                   
City of Emmonak's  port and dock facility project.  He voiced                                                                   
that  in 2009,  80  barges  off  loaded 1,500  containers  in                                                                   
Emmonak.  The  dock  area  was   too  small,  congested,  and                                                                   
inadequate. Barge offloading caused bank erosion.                                                                               
                                                                                                                                
JOMO   STEWART,   SELF,   FAIRBANKS   (via   teleconference),                                                                   
testified  in   support  of  expanding  the   legislation  to                                                                   
include funding  in SB  163 for  solutions to the  "crippling                                                                   
energy  needs" in  Fairbanks.  He  remarked that  the  actual                                                                   
definition  of "port" in  the statutes  was fairly  broad; "a                                                                   
facility of  transportation related  commerce located  within                                                                   
the state." He briefly shared his ideas for funding.                                                                            
                                                                                                                                
1:38:40 PM                                                                                                                    
                                                                                                                                
SB  163  was   HEARD  and  HELD  in  committee   for  further                                                                   
consideration.                                                                                                                  
                                                                                                                                
1:38:43 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
1:46:13 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                

Document Name Date/Time Subjects
SB 163 - CSSB 163(FIN) version D.pdf SFIN 4/9/2012 1:00:00 PM
SB 163
SB 192 April 9 PFC Energy Alaska Senate Finance.pdf SFIN 4/9/2012 1:00:00 PM
SB 192