Legislature(2011 - 2012)HOUSE FINANCE 519
04/05/2011 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB197 | |
| HCR9 | |
| HB173 | |
| HB30 || HB31 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 30 | TELECONFERENCED | |
| *+ | HB 31 | TELECONFERENCED | |
| + | HB 197 | TELECONFERENCED | |
| + | HB 173 | TELECONFERENCED | |
| + | HCR 9 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
April 5, 2011
1:40 p.m.
1:40:54 PM
CALL TO ORDER
Co-Chair Stoltze called the House Finance Committee meeting
to order at 1:40 p.m.
MEMBERS PRESENT
Representative Bill Stoltze, Co-Chair
Representative Bill Thomas Jr., Co-Chair
Representative Anna Fairclough, Vice-Chair
Representative Mia Costello
Representative Mike Doogan
Representative Bryce Edgmon
Representative Les Gara
Representative David Guttenberg
Representative Mike Hawker
Representative Reggie Joule
Representative Tammie Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Representative Alan Austerman; Representative Lance Pruitt,
Sponsor; Jeremiah Campbell, Staff, Representative Lance
Pruitt; Bob Brean, Director, Research and Rural
Development, Alaska Housing Finance Corporation, Department
of Revenue; Dirk Craft, Staff, Representative Lance Pruitt;
Representative Steve Thompson, Sponsor; Ben Mulligan,
Legislative Liaison, Department of Fish and Game; Charlie
Swanton, Director, Division of Sport Fish, Department of
Fish and Game; Representative Peggy Wilson, Sponsor;
Rebecca Rooney, Staff, Representative Peggy Wilson.
PRESENT VIA TELECONFERENCE
Ken Larson, Prince William Sound Charter Boat Association,
Fairbanks; Melvin Grove, Prince William Sound Charter Boat
Association, Mat-Su.
SUMMARY
HB 30 DEDICATED TRANSPORT FUND/PUB TRANSPORT
HB 30 was HEARD and HELD and referred to
subcommittee that consisted of Vice-chair
Fairclough, Co-Chair Thomas, Representative
Costello, Co-Chair Stoltze, and Representative
Doogan for further consideration.
HB 31 TRANSPORT. INFRASTRUCTURE FUND APPROP.
HB 30 was HEARD and HELD and referred to
subcommittee that consisted of Vice-chair
Fairclough, Co-Chair Thomas, Representative
Costello, Co-Chair Stoltze, and Representative
Doogan for further consideration.
HB 173 SPORT FISHING GUIDING SERVICES
HB 173 was REPORTED out of Committee with a "no
recommendation" and with attached previously
published fiscal note: FN2, DFG.
HB 197 HOME ENERGY RATING SYSTEM
CSHB 197(FIN) was REPORTED out of Committee with
a "do pass" recommendation and with previously
published fiscal note: FN1, REV.
HCR 9 STATE ENERGY PRODUCTION WORKING GROUP
HCR 9 was REPORTED out of Committee with a "do
pass" recommendation and with a new zero impact
note by the House Finance Committee for the
Legislature.
HOUSE BILL NO. 197
"An Act recognizing the Alaska Housing Finance
Corporation as the authorizing agency to approve home
energy rating systems for the state; and providing for
an effective date."
1:41:20 PM
Co-Chair Stoltze stated that after the initial
presentation, HB 30 and HB 31 would be further discussed in
subcommittee.
REPRESENTATIVE LANCE PRUITT, SPONSOR, introduced the
legislation.
Vice-chair Fairclough MOVED to ADOPT work draft CSHB
197(FIN) as a working document before the committee.
Co-Chair Stoltze OJBECTED for further discussion.
JEREMIAH CAMPBELL, STAFF, REPRESENTATIVE LANCE PRUITT,
explained that the bill recognized the Alaska Housing
Finance Corporation (AHFC) as the home energy rating system
authorizing agency for the purpose of approving energy home
rating systems used in the state. Currently, non-
governmental, third-party, for-profit party companies were
attempting to become federally recognized, which would
result in the parties controlling state policy on the issue
of energy home rating. The bill was crafted to protect the
investment of the state (via AHFC) in AkWarm; the software
used for energy design, retrofit, and in determining energy
ratings. The software was specifically designed for Alaska
and was recognized by the Alaska building, real estate, and
home loan industries. The software was directly tied to
AHFC's weatherization rebate programs, interest rate
reductions for home loans, and the Alaska Building Energy
Efficiency Standards. The bill would enable the AHFC to
insure that home energy rating systems utilized in the
state were appropriate for Alaska's climates.
Co-Chair Stoltze queried the technical changes in the CS.
Mr. Campbell replied that the CS changed "may" to "shall"
on page 1 line 9; this was to clearly define AHFC's scope
of responsibility. Secondly, the word "any" was removed
from page 1 line 9. There had been concern that having
"any" in the bill would put homebuilders, who used a system
that was not approved, in violation of the law. Thirdly,
"system" was changed to "systems" on page 1 line 10 to
imply that more than one system may be approved for use in
the state.
1:45:04 PM
Co-Chair Stoltze REMOVED his OBJECTION. There being NO
further OBJECTION CSHB 197(FIN) was ADOPTED as a working
document before the committee.
Mr. Campbell introduced his support staff available for
technical questions.
BOB BREAN, DIRECTOR, RESEARCH AND RURAL DEVELOPMENT, ALASKA
HOUSING FINANCE CORPORATION, DEPARTMENT OF REVENUE,
testified in support of the legislation. He shared that
AHFC had the authority by statute to ensure that any homes
that the corporation issued home loans on met a minimum
building and energy efficiency standard. The way to measure
the standard was through the home energy rating software
system, which the AHFC had developed, maintained, upgraded,
and trained approximately 100 energy raters to utilize. The
software was used for home loans, weatherization, and the
energy rebate program. There were approximately 50 thousand
home energy ratings in the system based on the software.
Mr. Brean stated that industry supported the legislation.
The software ensured that appropriate home energy rating
systems were utilized in the state. He relayed that the
software recognized five different climactic regions
statewide, which made the program unique to different
programs used in other parts of the country. He believed
that it was prudent to link AkWarm with the building
industry.
Representative Edgmon questioned whether there could be a
bill introduced in the future that would speak to the role
of AHFC in the commercial property aspect of the energy
efficiency revolving loan program.
Mr. Brean responded that the AkWarm rating system was used
primarily for residential properties. However, the platform
was used to build the additional libraries for the
revolving loan fund; this would include calculations more
relative to the commercial aspect of the system.
Representative Edgmon asked if there were any justifiable
reason to remove the word "home" from Home Energy Rating
System. Mr. Brean replied that he did not think that was
necessary at the present time. He added that commercial
tables and libraries were being developed for the software.
The corporation would clearly differentiate between the
two.
1:50:36 PM
Representative Edgmon thought that there could be
opportunity in the future to add clean-up language.
Representative Gara understood that the commercial
revolving loan program would be available to the public
regardless of which department ended up housing it. Mr.
Brean replied in the affirmative. He added that AHFC was
confident in the research that had gone into developing the
commercial system and that other agencies would benefit
from access to the system.
Representative Guttenberg understood that the AHFC rating
system was not recognized by the Internal Revenue Service
(IRS) for an energy efficient home tax credit.
Representative Pruitt responded that that was correct.
Representative Guttenberg asked whether people who took
advantage of the program the previous year would have to
apply for an updated rating to receive credits under the
program.
Mr. Brean said that to receive the tax credit the rating
would have to be performed by an approved agency that had
been vetted by a national organization. Home energy rebates
in the state were done using AkWarm; if a resident wanted
to go back retroactively a rating would need to be done by
nationally approved software.
Representative Guttenberg wondered if the legislation were
to pass giving federal recognition to the AHFC program
could residents who participated in the program in the past
receive tax credits retroactively. Mr. Brean believed that
the question would be referred to AHFC's legal tax counsel.
Representative Guttenberg hypothesized that if a person
wanted to sell their home using a past AHFC rating and the
bank required a current rating that the house would need to
be rated again.
Representative Pruitt responded that the resident should
not have to have their house rerated. He shared that one of
the most important reasons for the legislation was that
AHFC could not purchase homes that did not meet the home
energy rating standards. If the house was rated using the
AkWarm program the AHFC could purchase the home loan.
Representative Costello asked whether HB 197 would address
federal recognition of the AkWarm program.
1:56:37 PM
Representative Pruitt replied that it would not
automatically give recognition, but that it would begin the
process.
Representative Costello asked what steps would be taken
after passage of the bill to ensure that the AkWarm program
was federally recognized. Mr. Brean said that the next step
would be to approach the IRS and inform them that AHFC was
the authorized state agency for a state recognized rating
system. On the federal level there were two current methods
of approval: one was to approve a rating system that was
vetted by another organization in the Lower 48, or a state
acknowledged comparable system. The IRS had been approached
for the second status and had taken the software and sent
it to the third party in the Lower 48 for vetting. He
believed that once the legislation was passed Alaska would
have equal standing with other states in the country that
had in-state recognized systems. The passage of the
legislation would give the state firm standing on the
federal level to engage in conversations with the federal
government on certification of the home energy rating
software.
Co-Chair Stoltze OPENED public testimony.
Co-Chair Stoltze CLOSED public testimony.
Vice-chair Fairclough MOVED to report CSHB 197(FIN) out of
Committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CSHB 197(FIN) was REPORTED out of Committee with a "do
pass" recommendation and with previously published fiscal
note: FN1, REV.
2:00:05 PM
AT EASE
2:00:24 PM
RECONVENED
HOUSE CONCURRENT RESOLUTION NO. 9
Establishing in the Alaska State Legislature the
Alaska Working Group on Interstate Energy Production.
2:00:32 PM
REPRESENTATIVE LANCE PRUITT, SPONSOR, explained that the
resolution would establish a working group within the
legislature to discuss inter-state energy production.
DIRK CRAFT, STAFF, REPRESENTATIVE LANCE PRUITT, explained
that the resolution was crafted in response to legislation
proposed by other states that produce energy or energy
resources. Alaska along with other states continued to
experience negative consequences from the delay or
cancellation of economically viable energy related projects
because federal law too often overreached the federal
government's constitutional authority to make and enforce
laws. The working group would develop a proposal for an
inter-legislature agreement that would facilitate
collaboration between the Alaska State Legislature and
other state legislatures in an effort to influence federal
energy-related law and policy, and to discourage delay or
cancellation of economically viable energy related projects
in the state. He referred to the language on page 2:
FURTHER RESOLVED that the Alaska Working Group on
Interstate Energy Production shall consist of four
members, with two senators appointed by the President
of the Senate and two representatives appointed by the
Speaker of the House of Representatives; and be it
FURTHER RESOLVED that the Alaska Working Group on
Interstate Energy Production may meet during and
between regular sessions of the Alaska State
Legislature, and, subject to approval by the President
of the Senate or the Speaker of the House of
Representatives, as appropriate, a member of the
Alaska Working Group on Interstate Energy Production
may travel in the state or to other states as
necessary to accomplish the purposes of the Alaska
Working Group on Interstate Energy Production; and be
it
FURTHER RESOLVED that the Alaska Working Group on
Interstate Energy Production shall terminate January
18, 2013; and be it
FURTHER RESOLVED that the Alaska Working Group on
Interstate Energy Production shall submit a report of
its findings and proposed legislative changes to the
Alaska State Legislature on or before January 17,
2012, and may make additional reports that the Alaska
Working Group on Interstate Energy Production
considers advisable.
Vice-chair Fairclough asked if the working group would be
working with the National Conference of State Legislatures
(NCSL) or other organizations in order to draw on
expertise. Mr. Craft replied that collaboration could be
possible once the group was established. The purpose of HCR
9 was to establish the working group among energy producing
states.
2:04:18 PM
Vice-chair Fairclough encouraged the group to assess work
that had already been done around the country in regard to
the issue. She voiced support for the resolution.
Representative Costello spoke in support of the resolution.
She asked what specific results were expected from the
introduction of the legislation. Mr. Craft replied that the
main goal was to link up with other states to discuss
similar energy problems in order to create a more unified
voice when presenting the energy issues before Congress.
Representative Costello asked what other states had passed,
or were in the process of passing, similar legislation. Mr.
Craft said that Utah and Wyoming had passed legislation. He
understood that Texas had legislation in production.
Representative Wilson perceived that there would be no
fiscal impact to the operating budget because the funds
were expected to come from another revenue source. Mr.
Craft responded that the Legislative Affairs Agency would
be absorbing the travel cost.
Co-Chair Stoltze interjected that the differing
interpretations of the fiscal note would be discussed later
in the meeting.
Representative Guttenberg assumed that although Wyoming and
Utah had passed similar resolutions there was no
established organizational structure; the hope was to
simply get as many states involved as possible. Mr. Craft
specified that the intent was to lay the groundwork for
what would become and organization.
Representative Guttenberg asked whether a vote from an
interstate working group could bind the state to a losing
proposition that only benefitted other states. Mr. Craft
replied that the issue had been discussed with the
Legislative Legal Division. No binding language had been
written into the resolution.
2:08:33 PM
Representative Guttenberg queried the number of other
states with similar pending legislation. Mr. Craft
reiterated that Texas had similar pending legislation.
Representative Edgmon recalled and energy symposium in
Wyoming which had included all 13 of the Western states; it
had not taken long for the producer states (Alaska,
Montana, North Dakota) to cluster together, and the
consumer states (California, Oregon, Washington etc.) to
create another group. The producing states felt as if they
were being surpassed, particularly by California in terms
of resource development and extraction. He believed the
resolution was accurately worded but thought that most of
the interaction would occur between the Western states.
Co-Chair Stoltze OPENED public testimony.
Co-Chair Stoltze CLOSED public testimony.
Co-Chair Stoltze believed that the fiscal note should be
zeroed out.
Co-Chair Thomas MOVED to zero out the fiscal note for FY12
and FY13. There being no OBJECTION it was so ordered.
2:12:17 PM
Representative Gara ascertained that the states could unite
to influence energy-related federal law and policy.
Vice-chair Fairclough MOVED to REPORT HCR 9 out of
committee with individual recommendations and the amended
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
HCR 9 was REPORTED out of Committee with a "do pass"
recommendation and with a new zero impact note by the House
Finance Committee for the Legislature.
2:14:25 PM
AT EASE
2:15:33 PM
RECONVENED
HOUSE BILL NO. 173
"An Act amending the termination date of the licensing
of sport fishing operators and sport fishing guides;
and providing for an effective date."
REPRESENTATIVE STEVE THOMPSON, SPONSOR, introduced the
legislation. He explained that the bill had been crafted by
the House Special Committee on Fisheries and would extend
for one year the sport fishing guide and operator licensing
log book program. The program provided economic data on the
sport fish industry sector and harvest data for resource
managers. He stated that HB 173 was supported by the Alaska
Department of Fish and Game (ADF&G).
Co-Chair Thomas noted that similar legislation amending the
termination date of the licensing program had been
introduced every year over the past several years. He
wondered if the extension should be for more than one year.
Representative Thompson responded that the other body was
working to craft a more comprehensive bill that would
extend the program for four to six years.
Co-Chair Stoltze clarified that the passage of HB 173 was
not an endorsement of legislation crafted by the other
body.
Co-Chair Stoltze OPENED public testimony.
KEN LARSON, PRINCE WILLIAM SOUND CHARTER BOAT ASSOCIATION,
FAIRBANKS (via teleconference), testified that the guide
licensing bill had been worked on since 2004. He said that
historically 85 percent of the licensees had opposed the
legislation. He wondered why a more expensive and
unnecessary oversight program was again being considered by
the other body under SB 24. He stated that the existing
program worked well by all accounts. He encouraged and
extension of the sunset date under HB 173. He stressed that
the current program should be made permanent, and that SB
24 should be abandoned.
2:21:42 PM
MELVIN GROVE, PRESIDENT, PRINCE WILLIAM SOUND CHARTER BOAT
ASSOCIATION, MAT-SU (via teleconference), spoke in
opposition to the bill. He understood that the extension
under HB 173 was meant to help with the eventual passage of
SB 24. He did not believe a one year extension offered
enough time for all parties involved to craft comprehensive
legislation on the subject. He believed that the bill would
cost too much. He felt that the current log book program
was too expensive and did nothing but create state jobs in
data processing.
Co-Chair Stoltze pointed out that passage of HB 173 would
not stop the advancement of SB 24. He thought that a sunset
extension of one year would inspire more productive debate
on the issue than a permanent extension.
Co-Chair Stoltze CLOSED public testimony.
Representative Edgmon requested that the department provide
justification for the one year extension.
BEN MULLIGAN, LEGISLATIVE LIAISON, DEPARTMENT OF FISH AND
GAME, explained that the one year extension would allow for
additional work on the program over the interim.
CHARLIE SWANTON, DIRECTOR, DIVISION OF SPORT FISH,
DEPARTMENT OF FISH AND GAME, added that the program
provided a minimum professional standard and the ability
for the department to collect vital statistics with regard
to the recreational charter boat industry within the state.
2:27:15 PM
Mr. Swanton continued that the department's primary focus
had been with the guide log book program. Both fresh and
saltwater guides were issued a log book in order to record
the harvest and catch statistics for the anglers taken out
who had been charged a fee. The information was brought
back to the department. He explained that the department
had in the past taken a key-punch approach to the data. On
average the department logged 111 thousand trips (saltwater
and freshwater combined) and that there could be 112
thousand sheets containing data for four to six anglers
each. The department had instituted a scanning approach
that would scan each sheet and plug all the data into a
database. The automated system was still being perfected.
Representative Edgmon observed the issue was politically
charged. He voiced support for extending the program longer
than one year for the purpose of further discussion.
Representative Gara questioned the usefulness of log book
data that only counted the number of fish caught by guided
fishermen and not those without guides.
2:30:09 PM
Mr. Swanton replied that the log book was only one of three
data collection tools used throughout the state. He stated
that creel surveys were conducted but that the primary data
collection tool used by the department was the statewide
harvest survey, which had been used since 1977. All
licensed anglers were entered into a pool from which 40,000
licensees were selected to receive a survey. Different data
collection tools were used in different areas for deeper
comprehension.
Representative Gara asked if the creel survey was the one
that was sent out in the mail. Mr. Swanton replied that the
survey received in the mail was the statewide harvest
survey. The creel surveys involve technicians checking
various ports and recording the harvest, which provided
more timely information to biologists.
Representative Gara asked whether the log was applied to
both fresh and saltwater. Mr. Swanton replied that the log
book program recorded both fresh and saltwater.
Representative Gara questioned the accuracy of the survey.
He reported that he was rarely surveyed when fishing. He
thought that the log book might work for commercial
fishermen, but expressed concern with the accuracy of the
non-commercial numbers.
Mr. Swanton replied that the department had had all of the
survey instruments tested against one another with
independent estimates, and all had been found to be of high
statistical precision and scientific value. The statewide
harvest survey was now being looked at by other states as a
primary means by which to collect recreational harvest
data. He agreed that the survey was not a complete census,
but asserted that it was legitimate scientific data.
Representative Costello inquired whether it was possible
that the department could develop an iPhone application or
web-based system that guides could upload their information
to electronically.
Mr. Swanton stated that anything was possible, but that the
department needed to study which applications were
practical. He said that smaller states had applied similar
technology, but did not think Alaska was ready to move in
that direction.
Co-Chair Stoltze asked if optional electronic filing would
be a problem for the department. He pointed out that other
departments encouraged online activity.
Mr. Swanton felt that online filing should be a goal for
the department but he did not see it happening in the
immediate future.
2:35:38 PM
Vice-chair Fairclough requested clarification on the
updated fiscal note. Mr. Mulligan replied that the fiscal
note dated March 29, 2011 was the updated fiscal note. The
note had been updated to better reflect the sunset date.
The note illustrated a full year in FY 12, and the first
half of FY 13.
Vice-chair Fairclough MOVED to report HB 173 out of
Committee with individual recommendations and the
accompanying fiscal note: FN 2 ADF&G. There being NO
OBJECTION, it was so ordered.
HB 173 was REPORTED out of Committee with individual
recommendations and the previously published fiscal note:
FN 2 ADF&G
2:37:07 PM
AT EASE
2:40:49 PM
RECONVENED
HOUSE BILL NO. 30
"An Act relating to the transportation infrastructure
fund, to local public transportation, to the municipal
harbor facility grant fund, to motor fuel taxes, to
the motor vehicle registration fee, to driver's
license fees, to identification card fees, to the
studded tire tax, and to the vehicle rental tax; and
providing for an effective date."
HOUSE BILL NO. 31
"An Act making a special appropriation to the
transportation infrastructure fund; and providing for
an effective date."
2:40:52 PM
REPRESENTATIVE PEGGY WILSON, SPONSOR, addressed HB 30. She
offered her sponsor statement:
HB 30 will define the Alaska Transportation
Infrastructure Fund (ATIF), how it will be funded and
where the funds will be spent.
The roads, bridges, airports, ferries and other
transit systems that make up our state's
transportation system are essential to mobility,
commerce and economic development. These systems
increase safety, enhance economic competitiveness, and
lead to a better quality of life. To ensure Alaska has
the infrastructure necessary to develop our resources
as well as improve the living conditions for our
citizens we must commit to funding transportation.
Having a dependable revenue stream from year to year
will allow Alaska to manage current congestion and
maintenance projects as well as develop access to
needed resources and energy.
Additionally the use of state funds for construction
means we will have greater control and funding will go
towards completing projects as opposed to the
expensive and lengthy federal process. Anchorage has
benefited from the use of state funds and has seen
projects such as the McGraw Intersection and Dowling
Street Extension get done faster and cheaper than they
would have using the federal guidelines.
In FY10, 87 percent of our transportation budget came
from the federal government. There have been several
major deposits to the Federal Highway Fund to keep the
expired federal transportation reauthorization program
going. After 2 years we are still operating under the
old reauthorization guidelines. All indicators show
that the new reauthorization bill will be unfavorable
for states with small populations due to an emphasis
on mass transit and green transportation. It favors
toll roads and bridges and other transportation that
pays for itself or that can be supported with a public
private partnership. Our own DC delegation have told
the legislature that Alaska needs to rely less on the
federal government and start shouldering some of the
burden of improving our transportation infrastructure.
HJR 4 will put an initiative before the voters to
change the Alaska State Constitution to allow a
dedicated fund for Transportation Projects. With
passage of the initiative, HB 30 will define the fund.
It will outline how the fund will be managed, how the
earnings will be spent and who will decide which
projects will be funded each year.
The fund will be seeded with a $1B endowment. In
addition to the endowment ATIF will receive the
revenue generated from fuel taxes, vehicle
registrations, driver's license and identification
card fees, studded tire tax, and vehicle rental taxes.
One half of these revenues will be available each year
for appropriation. The other half will be deposited
into the fund to both grow the fund and inflation
proof it. In addition, six percent of the market value
(POMV) of the fund will be available for
appropriation. The Department of Revenue will be
charged with administering the fund. The Legislature
should be able to appropriate approximately ~$100M the
first year and then grow the appropriation about $1.5-
2M per year after that.
HB 30 will create an advisory council to evaluate the
project submissions. The council is comprised of 17
voting members, 1 Department of Transportation /Public
Facilities employee, 11 from transportation affiliated
associations and 1 from native organization and 4
public members and 2 non-voting members of the
legislature. The four members of the public will be
appointed by the governor. The members representing
organizations will be appointed by their respective
organizations.
Alaska DOT/PF will be required to create a set of
criteria to rank the projects. The panel will use
these criteria to give each project a numeric score to
be used in prioritizing the projects. These
prioritized projects will go through the normal
budgetary cycle each year for final authorization.
The bill defines how the funds shall be appropriated.
Not more than
1. 80 percent of the funds may be used for roads
and surface transportation both state and
municipal,
2. 25 percent may be used for aviation,
3. 25 percent may be used for the Alaska Marine
Highway,
4. 20 percent may be used for harbor facilities,
state owned marine facilities and for deposit
into the municipal harbor facility grant fund,
5. 20 percent may be used for local community
transportation and transit.
6. 15 percent may be used for trails and bike-
paths.
These percentages will provide the flexibility needed
to focus on one mode one year and switch to another
the following year as needs dictate.
Besides the above appropriations, the fund will pay
for all fund administration costs and for the
operations of the Department of Motor Vehicles.
Alaska is geographically the largest state in the
country, and the future of the economic and social
well being of its citizens is critically dependent on
a reliable transportation system. This fund is one of
the tools needed to create a modern, reliable
transportation system.
The CS from House Transportation reduced the size of
the Advisory Council by 5 members and removed the
revenue stream from airport leases and airspace
leases. It also made all the provisions of HB 30
contingent upon the voters passage of the initiative
to change the constitution to allow this dedicated
fund.
Representative Peggy Wilson offered to provide any further
details to the committee. She stated that public testimony
had not been solicited out the desire for brevity.
Vice-chair Fairclough asked if the October 1st report date
listed on page 3 of the bill was meant to coincide with the
end of the federal fiscal year.
REBECCA ROONEY, STAFF, REPRESENTATIVE PEGGY WILSON,
explained that October 1st had been selected to allow for
the governor to examine the report before it passed to the
legislature.
Vice-chair Fairclough pointed out that on October 1st local
municipalities had to obligate all funds for spending. She
expressed concern that the project line up could be
affected.
Vice-chair Fairclough thought that the 6 percent payout was
aggressive and that 5 percent was a more conservative
number. She wondered why 6 percent had been chosen. Ms.
Rooney replied that 6 percent had been chosen because it
was the going rate at the time. She shared that the payout
number was to be chosen by the finance committees and that
a payout table could be found in the committee member files
that evaluated the payout from 4.5 percent up to 6 percent.
2:51:48 PM
Representative Peggy Wilson added that the constitutional
budget amendment read "up to 6 percent." She explained that
the payout percentage could be adjusted by statute as
needed by the legislature.
Co-Chair Stoltze wondered if writing an assured payout into
the constitutional amendment could be helpful in persuading
the public.
Representative Doogan recalled that previous testifiers
from the financial community had expressed comfort in
calculating percent of market value at 4.5 percent. He
agreed that 6 percent was an aggressive number to try to
maintain year after year without diminishing the value of
the fund.
Vice-chair Fairclough added that a 6 percent payout could
be acceptable provided that it did not diminish from the
corpus of the fund.
Representative Gara noted that $1 billion was a lot of
money. He believed that there would be less money
appropriated for transportation at 4.5 percent. He
recommended deducing the average appropriation to
department over the last five years. He suggested that if
the state was going to invest in a transportation fund it
would be prudent to investigate the amount of political
will available to push for enough spending to meet the
desired infrastructure needs.
2:56:14 PM
Representative Peggy Wilson explained that the bill was not
meant to replace what transportation was currently doing.
The department had a back log of over $1 million in
maintenance projects across the state. She stressed that
the fund was meant to enhance current operations.
Representative Hawker shared that there was recorded
testimony of the discussion concerning the prohibition of
dedicated funds during the constitutional debates. He asked
how the legislature was expected to respond to testifiers
in the recording who referred to the dedication of funds as
an "inherent evil" and that each budget year every
competing need in the state should be able to compete on
equal standing for the scarce amount available revenue.
Representative Peggy Wilson responded that drafters of the
constitution had grandfathered in three different funds.
Two of the funds were dedicated transportation funds; one
for land and one for water. The legislation would be
reinstating a fund that had already existed during the time
that the Alaska State Constitution was put in place.
Co-Chair Stoltze queried why the dedicated funds should be
for transportation and not education.
Representative Peggy Wilson answered that the third
dedicated fund was related to education. She assumed that
through the years past legislators had decided the
dedicated funds were unnecessary. She stated that she chose
the issue of transportation because that was where she
believed the state had the greatest need.
Co-Chair Stoltze noted that the closest the legislature had
come to establishing a dedicated that fund for education
was in 1989; Governor Cowper had pushed for the
legislation, which failed in the Senate.
2:59:52 PM
Representative Peggy Wilson explained that the bill would
help with economic development in the state.
Representative Guttenberg though that the argument for
dedicated funds for education was still compelling. He
wondered whether the yearly analysis suggested by
Representative Gara would be beneficial. He understood that
a steady source of income for transportation projects was
necessary, but opined that the issue was perpetual.
Ms. Rooney responded that the department was currently
funded at 6 percent of market value, at $100 million per
year. She asserted that the numbers were close to what had
been seen historically.
Representative Guttenberg surmised that the legislature
should continue to fund the department just as it had been
doing. He thought that dedicating funds would be confusing
to the public.
Representative Peggy Wilson remarked that the state needed
to be looking at the future and not just the present. She
said that there was no guarantee that the oil pipeline was
not going to shut down next year. She stressed the
importance that the state determine what would be done in
the event of declining revenue.
3:03:35 PM
Representative Doogan believed that the legislation was
much more sophisticated than it had been in its past form.
He felt that the problem with the proposal was related to
the cost and had been compounded by the decisions of the
House of Representatives concerning taxes for oil
companies. He explained that the legislation was in a suite
of bills that had been introduced that would take a
significant amount of money from the state. He expressed
concern that state funding would be distributed on a first
come-first served basis. He wondered why the proposed
legislation should be the first choice in terms of
allocating funds for a single purpose.
Representative Peggy Wilson reiterated that the state
needed to plan for the future. She said that the state had
$8 billion in projects that were not being addresses. She
believed that because the state was currently experiencing
a time of a slight financial surplus; this would be the
best time to dedicate the funds.
Co-Chair Stoltze stated that the vetting of HB 30 and HB 31
would be done in a subcommittee consisting of Vice-Chair
Fairclough, Co-Chair Thomas, Representative Costello, Co-
Chair Stoltze, and Representative Doogan.
HB 30 was HEARD and HELD and referred to subcommittee that
consisted of Vice-chair Fairclough, Co-Chair Thomas,
Representative Costello, Co-Chair Stoltze, and
Representative Doogan for further consideration.
HB 31 was HEARD and HELD and referred to subcommittee that
consisted of Vice-chair Fairclough, Co-Chair Thomas,
Representative Costello, Co-Chair Stoltze, and
Representative Doogan for further consideration.
ADJOURNMENT
The meeting was adjourned at 3:09 PM.
3:08:10 PM