04/26/2007 01:30 PM House TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| HB80 | |
| HB106 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 80 | TELECONFERENCED | |
| *+ | HB 180 | TELECONFERENCED | |
| *+ | HB 106 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE TRANSPORTATION STANDING COMMITTEE
April 26, 2007
1:33 p.m.
MEMBERS PRESENT
Representative Kyle Johansen, Chair
Representative Mark Neuman, Vice Chair
Representative Anna Fairclough
Representative Craig Johnson
Representative Mike Doogan
Representative Woodie Salmon
MEMBERS ABSENT
Representative Vic Kohring
COMMITTEE CALENDAR
HOUSE BILL NO. 80
"An Act expanding the Alaska marine highway system to Yukon and
Kuskokwim River locations and relating to the duty of the
Department of Transportation and Public Facilities to construct,
purchase, or lease ferry terminal facilities."
- MOVED CSHB 80(TRA) OUT OF COMMITTEE
HOUSE BILL NO. 106
"An Act repealing fees imposed on the sale of new tires, the
sale of certain studded tires, and the installation of certain
metal studs on tires; and providing for an effective date."
- HEARD AND HELD
HOUSE BILL NO. 180
"An Act relating to the information provided on a certification
of registration for a vehicle and to display of a certificate of
registration for a vehicle."
- BILL HEARING CANCELED
PREVIOUS COMMITTEE ACTION
BILL: HB 80
SHORT TITLE: FERRY SERVICE, INCL. YUKON/KUSKOKWIM
SPONSOR(s): REPRESENTATIVE(s) SALMON, CISSNA
01/16/07 (H) PREFILE RELEASED 1/5/07
01/16/07 (H) READ THE FIRST TIME - REFERRALS
01/16/07 (H) TRA, FIN
04/26/07 (H) TRA AT 1:30 PM CAPITOL 17
BILL: HB 106
SHORT TITLE: REPEAL FEES FOR STUDDED TIRES
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
01/22/07 (H) READ THE FIRST TIME - REFERRALS
01/22/07 (H) TRA, FIN
04/26/07 (H) TRA AT 1:30 PM CAPITOL 17
WITNESS REGISTER
JEFF OTTESEN, Director
Division of Program Development
Department of Transportation & Public Facilities
Juneau, Alaska
POSITION STATEMENT: During the hearing of HB 80, provided a
historical perspective of transportation in the Yukon Kuskokwim
area.
DENNIS HARDY, Deputy Commissioner/Director of Marine Operations
Marine Highway System
Department of Transportation & Public Facilities
Juneau, Alaska
POSITION STATEMENT: During hearing of HB 80, mentioned the
difficulties related to the shore-based facilities.
DOUG WARD, Director
of Business Development
Alaska Ship and Drydock, Inc.
Ketchikan, Alaska
POSITION STATEMENT: During hearing of HB 80, discussed the E-
Craft.
RICHARD BURNHAM
(No address provided)
Kaltag, Alaska
POSITION STATEMENT: Testified in support of HB 80.
JACK SCHUTHLIS (PH)
Yukon Delta Fisheries Development Association
POSITION STATEMENT: Testified in support of HB 80.
JAN FLORA
Homer, Alaska
POSITION STATEMENT: Characterized the proposed river ferries
[in HB 80] as a great asset to the Interior.
GEORGE ADLOW
Huslia, Alaska
POSITION STATEMENT: During hearing of HB 80, expressed the need
to reduce the cost of living in the Yukon Kuskokwim River area.
MARTIN B. MOORE, SR., City Manager
City of Emmonak
Emmonak, Alaska
POSITION STATEMENT: Testified in support of HB 80.
JERRY BURNETT, Legislative Liaison;
Director, Administrative Services Division
Department of Revenue
Juneau, Alaska
POSITION STATEMENT: Presented HB 106 on behalf of the governor.
MARY SIROKY, Legislative Liaison
Office of the Commissioner
Department of Transportation & Public Facilities
Juneau, Alaska
POSITION STATEMENT: During hearing of HB 106, answered
questions.
ACTION NARRATIVE
CHAIR KYLE JOHANSEN called the House Transportation Standing
Committee meeting to order at 1:33:47 PM. Representatives
Johansen, Johnson, Salmon, Doogan, and Fairclough were present
at the call to order. Representative Neuman arrived as the
meeting was in progress.
HB 80-FERRY SERVICE, INCL. YUKON/KUSKOKWIM
1:33:52 PM
CHAIR JOHANSEN announced that the first order of business would
be HOUSE BILL NO. 80, "An Act expanding the Alaska marine
highway system to Yukon and Kuskokwim River locations and
relating to the duty of the Department of Transportation and
Public Facilities to construct, purchase, or lease ferry
terminal facilities."
1:34:13 PM
REPRESENTATIVE SALMON, Alaska State Legislature, speaking as a
joint prime sponsor, explained that HB 80 directs the Department
of Transportation & Public Facilities (DOT&PF) to study the
feasibility of a state ferry system on the Yukon and Kuskokwim
Rivers. He opined that on the Yukon and Kuskokwim Rivers there
is the need and demand for more transportation. The area would
benefit greatly from a seasonal ferry system. He estimated that
on the Yukon River the ferry would only run from May 15 -
September 15, but would run longer on the Kuskokwim River.
Currently, the summer barges on the Kuskokwim River are slow and
infrequent. In fact, there may be only one to two barges a
year, if any. Furthermore, it's more expensive to bring fuel to
the villages by barge than it is by airplane. Representative
Salmon acknowledged that many people don't understand that, and
added that he doesn't either. Regular ferry service will
provide villages another option for the shipment of groceries
and supplies, especially vehicles, he opined. He noted that
the U.S. Postal Service rates are increasing as well.
REPRESENTATIVE SALMON informed the committee that there are
about 12 communities in the Kuskokwim River area. From the
border to the mouth of the Yukon River there are about 30
villages that the proposed ferry system could serve. Although
there is a barge that operates between Eagle and Dawson, it
hauls little freight as it's mostly for tourists.
Representative Salmon highlighted that the proposed ferry system
would provide access for resource development. Also, under the
Alaska Gasline Initiative Act there are five takeoff points of
which he hoped one will be on the Yukon River. Representative
Salmon told the committee that this system isn't new as it was
used in the late 1800s to haul passengers and freight to
Whitehorse and Dawson.
1:39:55 PM
REPRESENTATIVE NEUMAN commended Representative Salmon, adding
that he liked the idea. Representative Neuman asked if DOT&PF
has ever given any indication that it will look to the Yukon
River as a transportation route.
REPRESENTATIVE SALMON mentioned that there is a proposed
committee substitute that doesn't include the five-year study
specified in the original legislation. However, there was a
study performed in 1973.
1:41:42 PM
REPRESENTATIVE NEUMAN moved to adopt CSHB 80, Version LS0360\K,
Kane, 4/26/07, as the working document. There being no
objection, Version K was before the committee.
1:42:10 PM
CHAIR JOHANSEN explained that Version K includes language that
specifies that if the Yukon Kuskokwim River feasibility study
isn't included in the department's normal study process, then a
separate study will be required and presented to the legislature
no later than February 1, 2008. He then informed the committee
that a [motor vessel] called the Susitna is being built in
Ketchikan to go across the Knik Arm. He opined that it's a
vessel that would work perfectly for the geographic conditions
in Representative Salmon's district. Therefore, Version K, on
page 1, lines 9-13, specify that the use of such a craft will be
considered for the Yukon and Kuskokwim Rivers. He noted that
prior to the meeting he spoke with DOT&PF, which expressed
interest in pursuing the aforementioned.
1:44:14 PM
REPRESENTATIVE NEUMAN mentioned that the Navy is purchasing the
Motor Vessel Susitna because it believes such a vessel could be
used in the state for strategic military defense purposes. He
expressed interest in whether the state could obtain funding for
part of such a vessel.
1:45:22 PM
REPRESENTATIVE NEUMAN then inquired as to the economic benefit
those on the Yukon River would receive from this proposed
expansion of the Alaska Marine Highway System to the area.
REPRESENTATIVE SALMON highlighted that the state has a river
that runs from east to west, dividing the state in half. The
access points are located in Eagle, Circle, the bridge, and
Manly. He then mentioned that Fairbanks could really benefit
from this proposal because it could be advertised as the travel
path of those during the gold rush days. On the Yukon River
side, vehicles and tourism could be brought to the villages. If
the fishing industry ever comes back, small amounts of fish
could be shipped via the ferry system. Furthermore, if any gas
or oil is discovered in the Yukon, [the ferry] would be the
first road through the area.
1:47:46 PM
REPRESENTATIVE NEUMAN highlighted that instead of building a
road to Nome, there's already a river that could be utilized.
He then reminded the committee that the federal government
recently implemented the changes to the mail route. He related
his assumption that the aforementioned would be part of this
proposal.
REPRESENTATIVE SALMON opined that DOT&PF will develop a plan
that will address the mail in a manner that will benefit Alaska.
1:48:27 PM
REPRESENTATIVE FAIRCLOUGH inquired as to Representative Salmon's
thoughts with regard to the route of this proposed ferry.
REPRESENTATIVE SALMON acknowledged that there are many routes.
However, he emphasized that the ferry would definitely have to
depart from Fairbanks or Nenana. The main route of the ferry
would lead to the highway system, he said.
1:49:44 PM
REPRESENTATIVE FAIRCLOUGH surmised then that Representative
Salmon is interested in the study of a ferry traveling up the
Kuskokwim River, back down and the loop around. She inquired as
to whether Representative Salmon wants two ferries or one.
REPRESENTATIVE SALMON opined that the study would probably be
for two ferries because there is no way to run the Yukon and
Kuskokwim Rivers together. He suggested that the Kuskokwim
River portion would depart from Bethel up towards McGrath.
During high waters, the ferry could travel up to Nicolai, he
noted. On the Yukon River there are five takeoff points that
will need to be studied.
1:50:43 PM
REPRESENTATIVE FAIRCLOUGH surmised then that Representative
Salmon wants a river ferry versus an ocean ferry.
REPRESENTATIVE SALMON responded yes.
1:51:15 PM
JEFF OTTESEN, Director, Division of Program Development,
Department of Transportation & Public Facilities, informed the
committee that in the 1960s an extensive river ferry study was
performed. Obviously, that study is outdated as many things
have changed. One of the changes is the development of the
river barge system and the aviation system. He reminded the
committee that a few years ago the area transportation plan for
the Yukon-Kuskokwim area reviewed bettering barge access to
communities. One of the shortcomings in almost every community
in the Yukon-Kuskokwim area was the lack of a place to secure
the barge. He noted that the Denali Commission is reviewing the
construction of a standard barge landing facility at many of
these villages. Mr. Ottesen then reminded the committee of the
attempt to use a hovercraft in the 1970s, but it wasn't
successful.
1:53:27 PM
REPRESENTATIVE FAIRCLOUGH inquired as to the cost of the
following: the initial capital investment for two river
ferries, additional employees and whether they would be full-
time or seasonal, capital expense for docks, and maintenance of
the ferries. She also inquired as to how many people would
receive service and the projected ticket price for a river
ferry. Representative Fairclough related her understanding that
for the current ferry system, even seasonal vessels that are dry
docked have year-round maintenance costs. She then inquired as
to the average cost of the subsidy on the current ferry system
for those vessels that are running. She specified that she's
trying to determine the return the state can expect on its
investment in such a system. She also inquired as to how many
state airports are maintained along this route in which the
state already invests capital funds for transportation. He
further questioned whether those airports are subsidized or paid
for in some other manner.
MR. OTTESEN said that those are all questions that would have to
be answered in the feasibility study. Therefore, it's premature
to answer those questions other than to say that state ferries
in Alaska aren't cost neutral on the operating side.
Furthermore, the capital needs add to the current ferry deficit.
The current ferry system deficit is, by some estimates,
approaching $100 million if all costs per year are considered.
Mr. Ottesen then related that the department is trying to build
a safe runway in every state, for which it's using federal
aviation dollars. Most of the communities in the state have a
good airport, that is one that meets the minimum state standard.
The communities remaining without an airport are those with
difficult terrain or water conditions that are costly.
1:56:49 PM
CHAIR JOHANSEN, in response to Representative Fairclough,
confirmed that he was planning on forwarding HB 80 from
committee today. He commented that much of Representative
Fairclough's line of questioning is what the feasibility study
would address.
1:56:58 PM
REPRESENTATIVE FAIRCLOUGH clarified that her concern is that it
will cost approximately $1 million to study the feasibility of
expanding the Alaska Marine Highway System (AMHS) to the Yukon
and Kuskokwim Rivers. She related her understanding of the
hardships and isolation that occur in the villages along the
rivers. However, she expressed concern with studying this when
the current ferry system serves 1 percent of the state's
population, but uses 99 percent of the state's maintenance
dollars. Furthermore, the state is having trouble maintaining
the road system. Representative Fairclough said, "I'm hard
pressed to ask the department to study something that they've
pretty much presented that we need to take a policy decision on
whether we're going to continue to maintain the current ferry
system."
1:59:09 PM
CHAIR JOHANSEN noted his agreement that there are problems with
the fiscal note, but those should be addressed by the House
Finance Committee. Drawing upon conversations with the governor
and director of the department, he related that both are
reviewing the fiscal challenges of AMHS that can dovetail into
creating something that works for everyone.
1:59:54 PM
REPRESENTATIVE FAIRCLOUGH commented that she is certainly
interested in looking to expand the current system to a new
region of the state, if it can be done for the same resource
amount.
2:00:07 PM
REPRESENTATIVE NEUMAN opined that DOT&PF should have enough
staff expertise to answer many of these questions.
2:00:46 PM
MR. OTTESEN said that there are a lot of differences between a
river ferry system and AMHS, which is a coastal system in marine
waters for which no icing consideration is really given.
Furthermore, the vessel is very different as is the mix of
traffic. He said that AMHS is a true substitute for a highway
and it carries vehicles as well as passengers. However, it's
not clear whether the proposed river system would be that same
kind of model. Although a river ferry may be able to carry
vehicles, he opined that it would likely be the exception rather
than the rule because many of these villages don't have a place
to drive off and drop containers.
2:01:49 PM
MR. OTTESEN then turned attention to Version K. He pointed out
that the money for the study will be available July 1 and if a
consultant is necessary, there will be a request for proposals
(RFP), which takes three months to process and negotiate.
Therefore, it would be in the final quarter of the 2007 calendar
year and a report would be due in four months. He characterized
the aforementioned as a very accelerated undertaking that would
have to be a broad brush view with little detail due to the
timeframe in which the study is to be delivered to the
legislature by February 1, 2008.
CHAIR JOHANSEN indicated that if the specified timeframe [is
unworkable], then the department could suggest a better
timeframe.
2:02:42 PM
REPRESENTATIVE NEUMAN expressed the need for at least a ballpark
figure.
MR. OTTESEN related that even AMHS's smallest vessels cost about
$10-12 million. For example, the current estimate for the
Ketchikan airport ferry, a small channel crossing ferry that
carries about 15 vehicles, is between $6-8 million.
2:03:37 PM
REPRESENTATIVE SALMON, regarding Representative Fairclough's
first question, informed the committee that the last time this
legislation was introduced the fiscal note was $250,000. The
current fiscal note from DOT&PF is at $400,000 for the first
year and $600,000 for the second year.
CHAIR JOHANSEN reiterated that the House Finance Committee would
address the fiscal note.
2:04:20 PM
REPRESENTATIVE DOOGAN highlighted, as Representative Salmon
testified, that this is not the first time a ferry has run on
these rivers. He opined that it doesn't seem that a $1 million
feasibility study is necessary to determine that what was done
105 years ago with lesser technology can be done now with better
technology.
2:05:31 PM
DENNIS HARDY, Deputy Commissioner/Director of Marine Operations,
Marine Highway System, Department of Transportation & Public
Facilities, suggested that the shore-based facilities on the
Yukon and Kuskokwim Rivers would be a challenge from an
engineering standpoint. Along those rivers erosion is a
tremendous problem and the construction and maintenance of the
shore-based facilities would be very costly.
MR. HARDY, in response to Representative Doogan's earlier
question, said that there would have to be some sort of a system
to bring the ferries, ramp them down, and bring the materials on
or off. He said he wasn't sure what type of material would be
used, but noted that any surface placed on the river banks are
subject to erosion. In further response to Representative
Doogan, Mr. Hardy confirmed that the type of material used would
be dictated by the type of vessel used.
2:07:40 PM
DOUG WARD, Director of Business Development, Alaska Ship and
Drydock, Inc., explained that Alaska Ship and Drydock is the
private sector operator of the state-owned shipyard in
Ketchikan. He related that three years ago Alaska Ship and
Drydock, Inc. began negotiations with Lockhead Martin and the
Office of Naval Research to build a vessel that would be capable
of very high speeds in very high sea states and able to carry
high payloads at high speeds. The purpose of such a vessel
would be to transport battle tanks and marines to hostile shores
from approximately 100 nautical miles offshore through the surf
and land on the beach and discharge vehicles and soldiers.
"They" had responded to a request for proposals (RFP) from the
Mat-Bu Borough for a ferry to cross the Knik Arm. However, the
Knik Arm is one of the most difficult marine navigation routes
in the world. He then noted that the Ketchikan Shipyard was
invested in by the state in the 1980s, with the specific purpose
of reducing the cost of operating ferries and ships in Alaska.
2:09:50 PM
MR. WARD noted that the latest version of the aforementioned
vessel is now under construction in Ketchikan; there are
approximately 56 different modules. Just last Thursday
construction of the third module began, he noted. Mr. Ward
related that the Office of Naval Research is the funding arm for
the vessel. This office is the science and technology arm of
the Navy that brings new products to the Navy and tests them for
suitability. Mr. Ward highlighted that Alaska is one of the
most difficult places in the world to operate a vessel and the
office is seeking real world costs for operation and maintenance
of such a vessel. The thought was that the Knik Arm would be a
good place to demonstrate the seaworthiness of a vessel designed
to be deployed in the War on Terrorism. The overall investment
philosophy of the Office of Naval Research is to look for
opportunities and regions that are ready for innovation and can
adapt it on a commercial basis. Therefore, the federal
government can obtain a fighting vessel for military
applications, and through commercialization there is the
possibility of providing better marine transit links to the
civilian population.
MR. WARD related his view that the river system of Alaska does
represent a unique transportation system and the "Exploration
Craft" (E-Craft) has an application for the [Yukon and Kuskokwim
River routes]. He informed the committee that the E-Craft [M/V
Susitna] will be the world's first ice-strengthened twin-hulled
vessel. Furthermore, it has variable geometry that allows it
variable draft, which could be very useful on such a river
system. Perhaps the most useful aspect of the vessel is its
ability to land passengers and vehicles on an unimproved beach
or boat ramp. The features of the E-Craft that have the most
direct application to Alaska are the ability to open up marine
transportation routes, avoid some of the high costs of shore-
side facilities, and have a vessel capable of high speeds in
high seas as well as capable of operating at a shallow draft
mode. In the military application of the E-Craft, the vessel
can operate in its high speed mode at 13 feet of draft and land
at a reduced draft of 3 feet. The individual technologies of
the vessel are proven and the hull of the vessel is known as the
small water plane area twin hull (SWATH), which provides the
high speed in high seas capability with a very smooth ride. The
variable geometry with the center barge descending provides the
shallow landing craft capability. Mr. Ward related his belief
that the E-Craft has application in Alaska.
2:15:18 PM
MR. WARD noted that this particular vessel was designed by an
Alaskan, a man who grew up along the Cook Inlet. He highlighted
that the vessel was designed for Alaska. He related that he is
looking forward to launching the ship in late 2008 and is
interested in other applications for it. In fact, mining
companies and other natural resource explorers have expressed
interest in such a vessel as the E-Craft.
2:16:19 PM
REPRESENTATIVE FAIRCLOUGH inquired as to the capital costs for
the M/V Susitna.
MR. WARD clarified that the capital costs for the M/V Susitna
isn't an apples-to-apples comparison [to a vessel to be used in
a river ferry system]. He specified that the cost of the M/V
Susitna is approximately $50 million. However, he noted that
the aforementioned estimate includes all kinds of research and
program costs. As far as trying to estimate a commercialized
version of the E-Craft, Mr. Ward said he hasn't reviewed that
yet. He did mention that he would be interested in
participating with DOT&PF to determine those costs.
2:17:31 PM
RICHARD BURNHAM related his support for HB 80. He then noted
his agreement with Representative Salmon's view. The present
systems of transportation in the Yukon and Kuskokwim Rivers area
are sporadic, at best, very expensive, and difficult to use.
2:18:37 PM
REPRESENTATIVE NEUMAN inquired as to how folks would react to a
reduction in the expenditures to airports to help cover the
costs of this proposed river ferry.
MR. BURNHAM noted that the airport in his area is facing its
last upgrade, after which only minor maintenance will take
place. Therefore, additional costs would be miniscule.
2:19:38 PM
JACK SCHUTHLIS (PH) characterized this as a very basic issue of
transportation for an area of Alaska that is limited to air
cargo transportation. He opined that every village having a
4,000 foot runway is basically a bare minimum for people to get
in and out. Such a runway does nothing for industry, he further
opined. Mr. Schuthlis said that what's lacking is any hope of
having any type of economy. He recalled that some legislators
have referred to the Yukon villages as food stamp economies,
which he attributed to the lack of transportation
infrastructure. These areas only have air freight, which is
cost prohibitive from nurturing industry. Although DOT&PF staff
claim that there are 5,000 foot runways throughout the Yukon, he
said he is only aware of such runways in St. Mary's and Galena.
In fact, in the Lower Yukon there is no paved runway that can
handle jet aircraft. He highlighted that in the Middle Yukon
fish plants are vacant mainly due to transportation issues.
"There's absolutely no infrastructure that can nurture an
economy; we've lost an economy due to the high cost of
transportation," he opined. This legislation will permit
economic growth and allow industries that could be based on
cost-efficient transportation that other parts of the state
enjoy. He concluded by relating support for HB 80.
2:22:21 PM
REPRESENTATIVE FAIRCLOUGH asked if any private industry is
transporting freight along the river.
MR. SCHUTHLIS replied yes. He pointed out that Crowley Maritime
is the only barge service that services the Lower Yukon. He
related that last year he shipped a pickup truck out on Crowley
Maritime and it cost $5,000 to take it less than 1,000 miles.
The same pickup truck could be placed on the ferry at
Bellingham, Washington to Valdez, Alaska for $450. Such
excessive cost prevents the establishment of any industry. He
stressed that there's one barge line that's unscheduled and the
rates are whatever they feel like charging. At one time there
were ocean barges that were loaded in Anchorage and the freight
could be sent into the Lower Yukon, however since the federal
government and U.S. Coast Guard have stopped maintaining South
Mouth Channel none of the ocean barges will enter the river.
Although many point out that Emmonak has a 4,600-foot runway, an
airplane of the size that can carry a full-size pickup truck
can't land at Emmonak. He reiterated that the area is limited
with regard to transportation. Furthermore, the options are
extremely costly.
2:24:25 PM
JAN FLORA informed the committee that she came to Alaska to be a
gold miner and has spent some time in the Upper Yukon area. She
said she would be the first to sign up for a ticket to ride
these proposed ferries as she would love to see the rivers.
However, to fly in to see these villages just isn't practical.
With regard to infrastructure, Ms. Flora pointed out that most
of the Bush airports she has seen have a front-end loader and
bulldozer to keep them snow free and graded for the dirt
airstrips. She opined that the infrastructure doesn't have to
be fancy as places like Dawson use a front-end loader and
bulldozer to keep a ramp pushed out to the ferry. As mentioned
earlier, the old-timers figured this out. Ms. Flora
characterized the proposed river ferries as a great asset to the
Interior.
2:26:38 PM
GEORGE ADLOW informed the committee that for the last four years
he has been working as a pilot on the Yukon, Tanana, and Koyukuk
rivers. He mentioned that he is now retired. He then opined
that many in the villages are more concerned with the price of
freight than anything else. For example, he recently received
100 pounds of rice parcel post. The postage cost $34 and the
rice itself cost $33. Furthermore, the cost of fuel in Huslia
is $5/gallon and the cost of electricity continues to rise. If
energy costs in the area could be reduced, he opined that the
state would save money. He noted his agreement with earlier
testimony that the area can't have any economy when the freight
costs continue to be as high as they are. There has to be some
way to reduce the cost of living in the area, he emphasized.
2:29:23 PM
REPRESENTATIVE NEUMAN inquired as to the Mr. Adlow's opinion
regarding how tourism would impact village residents.
MR. ADLOW said he is all for tourism or whatever it takes to get
a buck into the village. He expressed concern about the cost of
living in the area and the possibility that the villages are
going to die off or become food stamp economies.
2:31:36 PM
MARTIN B. MOORE, SR., City Manager, City of Emmonak, related his
support for HB 80 and the statements made by the Yukon Delta
Fisheries Development Association to Governor Palin on April 23,
2007. He informed the committee that communities in the area
have been approached by many different government agencies and
lawmakers to establish a borough government in the region.
Although he said he has no opposition to such, he stressed that
there is no tax base. The recommendation in HB 80 holds more
backbone than [the establishment of a borough]. He opined that
a marine highway is the first step and necessary to achieve the
reality of economic development and infrastructure. He echoed
earlier testimony regarding the need for cheaper transportation
and energy and related his belief that the marine highway system
in the Yukon is essential.
2:35:31 PM
CHAIR JOHANSEN, upon determining no one else wished to testify,
closed public testimony.
2:35:52 PM
CHAIR JOHANSEN [moved] that the committee adopt Conceptual
Amendment 1, as follows:
Page 1, line 11;
Delete "Exploration Craft"
Insert "M/V Susitna"
There being no objection, Conceptual Amendment 1 was adopted.
2:36:17 PM
CHAIR JOHANSEN invited Mr. Ottesen to speak regarding his
comment at an earlier hearing that the February 1, 2008, due
date for the study would be too soon.
MR. OTTESEN said that a deadline of August 31, 2008, would still
be an aggressive schedule but could be completed in order to
have a summer hearing.
2:36:44 PM
CHAIR JOHANSEN [moved] that the committee adopt Conceptual
Amendment 2, as follows:
Page 2, line 4;
Delete "February 1, 2008"
Insert "August 31, 2008"
There being no objection, Conceptual Amendment 2 was adopted.
2:37:07 PM
REPRESENTATIVE NEUMAN commented that he is trying to weigh the
economic development opportunities related to a river ferry in
this area and the inevitable costs in doing so. He said that he
likes the idea of the legislation.
2:38:12 PM
REPRESENTATIVE JOHNSON asked if DOT&PF is familiar with the air
cushion barges that Red Fern Resources will be using out of
Juneau to Skagway and up the river through to Red Fern's mine in
Canada. He indicated that these barges will traverse on land
and ice.
MR. OTTESEN answered that he only knows about these barges from
what he has read in the newspaper. He mentioned that the
department has reviewed the hover craft, which has some
similarities with the air cushion barges, for use on the Cold
Bay and the Kuskokwim [River]. He suggested that vessel types
should be explored. He highlighted that there is talk again of
a new low flight vessel for operation between Lynn Canal and
Juneau. He assured the committee that all the options would be
reviewed when a consultant is hired.
2:39:15 PM
REPRESENTATIVE JOHNSON clarified that his point is that there is
a vessel on the drawing board now that travels from Juneau to
Skagway and runs up a river and then over land year round. He
mentioned that this vessel has little impact on the ice and the
tundra. He encouraged the department to review the
aforementioned technology and others and a year round marine
highway.
MR. OTTESEN pointed out that the area plans over the last 10
years all included [review] of new technologies. He highlighted
that the department has reviewed the new dirigibles and tilt-
rotor crafts, hover crafts, and fast ferries.
2:41:36 PM
REPRESENTATIVE DOOGAN noted his support of the legislation, but
expressed his desire that the committee's concern with the size
of the fiscal note be related to the House Finance Committee.
2:42:08 PM
REPRESENTATIVE NEUMAN moved to report CSHB 80, Version 25-
LS0360\K, Kane, 4/26/07, as amended, out of committee with
individual recommendations and the accompanying fiscal notes.
There being no objection, CSHB 80(TRA) was reported from the
House Transportation Standing Committee.
The committee took an at-ease from 2:42 p.m. to 2:46 p.m.
HB 106-REPEAL FEES FOR STUDDED TIRES
2:46:19 PM
CHAIR JOHANSEN announced that the next order of business would
be HOUSE BILL NO. 106, "An Act repealing fees imposed on the
sale of new tires, the sale of certain studded tires, and the
installation of certain metal studs on tires; and providing for
an effective date."
2:46:37 PM
JERRY BURNETT, Legislative Liaison;, Director, Administrative
Services Division, Department of Revenue, explained that HB 106
repeals the $2.50 tax for new tires and the $5.00 tax on studded
tires. The administration doesn't believe the aforementioned
tax is an efficient way to raise money. He related his
understanding that it's the only tax that the state imposes at
the retail level. The administration believes that families who
install safer tires shouldn't be penalized.
2:48:09 PM
REPRESENTATIVE FAIRCLOUGH inquired as to the governor's plan to
replace the revenue generated by these taxes.
MR. BURNETT related his understanding that the revenue from
these taxes amount to about $1.6 million a year with operational
costs of about $55,000 a year. At this point, there is no plan
to replace the revenue as it's a very small revenue source and
the 2007 revenue projections are great enough [to cover the
loss]. If the desire is to replace these taxes, one would want
to do so with a tax that is more efficiently administered and
one that's not a retail-level tax.
2:49:10 PM
REPRESENTATIVE FAIRCLOUGH inquired as to the maintenance costs
on the roads.
MR. BURNETT said he couldn't answer that, but offered that it's
clearly in the tens of millions of dollars or more. He reminded
the committee that the revenue from the existing tax on tires
goes to the general fund and isn't tied to any specific program.
2:49:36 PM
REPRESENTATIVE FAIRCLOUGH asked whether the administration will
be recommending an increase in the fuel tax.
MR. BURNETT said that he isn't aware of any [proposal] for such
an increase. He informed the committee that to replace the tax
would require a .4 of a cent tax per gallon. Alaska has the
second lowest fuel tax in the nation, he noted.
2:50:18 PM
REPRESENTATIVE NEUMAN, continuing on the line of comments by
Representative Fairclough, opined that the state will be facing
a deficit situation in the next couple of years. He mentioned
his support for removing this tax, and then related his
understanding that tobacco and alcohol have a retail-level tax.
MR. BURNETT clarified that tobacco and alcohol taxes as well as
motor fuel taxes are collected by the distributors.
2:51:05 PM
CHAIR JOHANSEN related that he has anecdotally heard of the
effects of studs on the roads.
2:51:40 PM
MARY SIROKY, Legislative Liaison, Office of the Commissioner,
Department of Transportation & Public Facilities, confirmed that
there are different kinds of studs, which result in different
wear and tear on the pavement. She related her understanding
that the metal studs are the most abrasive. She highlighted
that many are using the new tires, which were developed for all
seasons and provide a more significant stopping ability, rather
than studs.
2:52:26 PM
REPRESENTATIVE NEUMAN inquired as to why the legislation would
refer to certain metal studs as opposed to just metal studs.
MS. SIROKY said she didn't know why that language was chosen.
2:52:50 PM
REPRESENTATIVE NEUMAN asked if the governor intends to remove
the tax on studded tires.
MR. BURNETT explained that current statute requires a $5 fee for
tires with a stud weight of more than 1.1 grams. Therefore, the
language referring to certain studs was used because there isn't
a $5 fee for those who use the very light weight studs. Mr.
Burnett recalled that passage of the tax was to encourage the
use of light weight studs.
2:53:31 PM
CHAIR JOHANSEN asked if there is any data regarding the impact
of the tax.
MS. SIROKY said she doesn't know if DOT&PF has any data that
speaks to a differential in the wear and tear associated with
the passage of the tax. She offered to see if such data exists.
MR. BURNETT said that there is no evidence in the trend that
fewer studded tires are being sold. However, the law has only
be in effect since 2004.
2:54:20 PM
REPRESENTATIVE NEUMAN asked if deletion of the term "certain"
would be problematic.
MR. BURNETT reminded the committee that the effect of this
legislation is to remove the taxes on tires, including all
studded tires. The reason for the language in the title is that
the existing statute taxes only certain studded tires at a
differential rate. The language is consistent with what the
legislation would actually do.
2:55:12 PM
REPRESENTATIVE NEUMAN surmised that if the title remains the
same, the intent is to remove the tax on studs and tires and all
taxes placed on tires.
MR. BURNETT replied yes.
2:55:43 PM
REPRESENTATIVE NEUMAN asked if the title of the legislation
should be changed to reflect [the intent].
2:56:01 PM
REPRESENTATIVE FAIRCLOUGH opined that it has been appropriately
handled. She then read the existing statute, which is specific
to metal studs.
2:56:44 PM
CHAIR JOHANSEN, upon determining there were no other questions
or persons wishing to testify, closed public testimony. He
related his understanding that there are a few outstanding
questions, and therefore he would hold over HB 106.
2:57:21 PM
ADJOURNMENT
There being no further business before the committee, the House
Transportation Standing Committee meeting was adjourned at 2:57
p.m.
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