03/27/2008 01:00 PM House TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| HB106 | |
| HB294 | |
| HB322 | |
| HB314 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | HB 294 | TELECONFERENCED | |
| += | HB 106 | TELECONFERENCED | |
| += | HB 314 | TELECONFERENCED | |
| += | HB 322 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE TRANSPORTATION STANDING COMMITTEE
March 27, 2008
1:06 p.m.
MEMBERS PRESENT
Representative Kyle Johansen, Chair
Representative Mark Neuman, Vice Chair
Representative Anna Fairclough
Representative Wes Keller
Representative Mike Doogan
Representative Woodie Salmon
MEMBERS ABSENT
Representative Craig Johnson
COMMITTEE CALENDAR
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."
- MOVED HB 106 OUT OF COMMITTEE
SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 294
"An Act establishing the division of marine transportation;
establishing the Alaska Marine Transportation Authority Board
and the position of director of the division of marine
transportation, and assigning the powers and duties of each;
making conforming amendments; and providing for an effective
date."
- MOVED CSSSHB 294 (TRA) OUT OF COMMITTEE
HOUSE BILL NO. 322
"An Act establishing the Alaska transportation fund and relating
to the fund; and providing for an effective date."
- HEARD AND HELD
HOUSE BILL NO. 314
"An Act providing for and relating to the issuance of general
obligation bonds for the purpose of paying the cost of state
transportation projects; and providing for an effective date."
- HEARD AND HELD
PREVIOUS COMMITTEE ACTION
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
04/26/07 (H) Heard & Held
04/26/07 (H) MINUTE(TRA)
03/25/08 (H) TRA AT 1:00 PM CAPITOL 17
03/25/08 (H) Heard & Held
03/25/08 (H) MINUTE(TRA)
03/27/08 (H) TRA AT 1:00 PM CAPITOL 17
BILL: HB 294
SHORT TITLE: MARINE TRANSPORTATION: BOARD & DIVISION
SPONSOR(S): REPRESENTATIVE(S) WILSON, LEDOUX, SEATON
01/04/08 (H) PREFILE RELEASED 1/4/08
01/15/08 (H) READ THE FIRST TIME - REFERRALS
01/15/08 (H) TRA, FIN
02/25/08 (H) SPONSOR SUBSTITUTE INTRODUCED
02/25/08 (H) READ THE FIRST TIME - REFERRALS
02/25/08 (H) TRA, FIN
03/11/08 (H) TRA AT 5:00 PM CAPITOL 17
03/11/08 (H) Heard & Held
03/11/08 (H) MINUTE(TRA)
03/18/08 (H) TRA AT 1:00 PM CAPITOL 17
03/18/08 (H) Heard & Held
03/18/08 (H) MINUTE(TRA)
03/27/08 (H) TRA AT 1:00 PM CAPITOL 17
BILL: HB 322
SHORT TITLE: TRANSPORTATION FUND
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
01/17/08 (H) READ THE FIRST TIME - REFERRALS
01/17/08 (H) TRA, FIN
03/25/08 (H) TRA AT 1:00 PM CAPITOL 17
03/25/08 (H) Heard & Held
03/25/08 (H) MINUTE(TRA)
03/27/08 (H) TRA AT 1:00 PM CAPITOL 17
BILL: HB 314
SHORT TITLE: G.O. BONDS FOR TRANSPORTATION PROJECTS
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
01/16/08 (H) READ THE FIRST TIME - REFERRALS
01/16/08 (H) TRA, FIN
03/25/08 (H) TRA AT 1:00 PM CAPITOL 17
03/25/08 (H) Scheduled But Not Heard
03/27/08 (H) TRA AT 1:00 PM CAPITOL 17
03/27/08 (H) FIN AT 1:30 PM HOUSE FINANCE 519
WITNESS REGISTER
JERRY BURNETT, Director
Administrative Services Division
Department of Revenue (DOR)
Juneau, Alaska
POSITION STATEMENT: Answered questions on HB 106.
REPRESENTATIVE PEGGY WILSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: During discussion of HB 294, answered
questions as the sponsor of the bill.
CLIFF STONE, Staff
to Representative Peggy Wilson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: During discussion of HB 294, answered
questions of behalf of the sponsor, Representative Wilson.
MARY SIROKY, Legislative Liaison
Office of the Commissioner
Department of Transportation & Public Facilities (DOT&PF)
Juneau, Alaska
POSITION STATEMENT: Answered questions on HB 294.
FRANK RICHARDS, Deputy Commissioner of Highways & Public
Facilities
Office of the Commissioner
Department of Transportation & Public Facilities (DOT&PF)
Juneau, Alaska
POSITION STATEMENT: Answered questions on HB 322.
NANCY SLAGLE, Director
Division of Administrative Services
Department of Transportation & Public Facilities (DOT&PF)
Juneau, Alaska
POSITION STATEMENT: Answered questions on HB 314.
FRANK RICHARDS, Deputy Commissioner of Highways & Public
Facilities
Office of the Commissioner
Department of Transportation & Public Facilities (DOT&PF)
Juneau, Alaska
POSITION STATEMENT: Answered questions on HB 314.
ACTION NARRATIVE
CHAIR KYLE JOHANSEN called the House Transportation Standing
Committee meeting to order at 1:06:32 PM. Representatives
Johansen, Fairclough, Doogan, Salmon, and Keller were present at
the call to order. Representative Neuman arrived as the meeting
was in progress.
HB 106-REPEAL FEES FOR STUDDED TIRES
1:06:55 PM
CHAIR JOHANSEN announced that the first 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."
1:07:07 PM
JERRY BURNETT, Director, Administrative Services Division,
Department of Revenue (DOR), said that the fiscal note reflects
a small loss of revenue. He observed that collection of this
tax is not a good use of the department's time and that it is
not fair to penalize the public for using safer tires.
REPRESENTATIVE FAIRCLOUGH offered her belief that the tax is
based on the increased road wear from the use of studded tires.
MR. BURNETT responded that this is correct. He reported that
the Alaska State Troopers continue to use the heavy studded
tires for safety. He noted that although there is tax revenue,
the tax has not resulted in a decrease of the use of the heavy
studded tires and the subsequent wear on the roads.
REPRESENTATIVE FAIRCLOUGH asked if the sale of studded tires is
decreasing.
MR. BURNETT replied that the tax does not reflect an increase in
the purchase of alternative tires. He offered that the
department's belief is this tax penalizes people for having
safer tires.
1:09:53 PM
REPRESENTATIVE FAIRCLOUGH asked how the department knows that
more of the alternative tires are not being sold.
MR. BURNETT explained that DOR does track the tax, so they know
how many of each type of tire is sold.
REPRESENTATIVE NEUMAN noted that the bill retracts the tax on
all studded tires, and asked if this precludes the sale of
studded tires.
MR. BURNETT pointed out that the bill eliminates this tax on all
the tires, and it will have no effect on the availability of the
tires.
1:11:40 PM
REPRESENTATIVE SALMON asked if the tax applies to all tires or
just studded tires.
MR. BURNETT replied that the tax on studded tires is $5 per tire
and $2.50 per tire on non-studded tires.
REPRESENTATIVE DOOGAN commented that there has been a lot of
testimony on the bad effects of studded tires on road surfaces.
He asked if the administration has decided that the $1.5 million
net profit on the tax is too insignificant an amount to use for
repair.
MR. BURNETT responded that the administration has decided that
$1.5 million is insignificant to the total revenue.
REPRESENTATIVE DOOGAN allowed that this is true only as long as
the price of oil stays high.
MR. BURNETT declared that this is an administratively
inefficient tax as it is the only tax paid directly at the
retail level.
REPRESENTATIVE DOOGAN posed that it is inefficient because the
sales people have to collect the taxes and pay this to the DOR.
He asked how gasoline is taxed.
MR. BURNETT responded that cigarette, alcohol, and fuel are all
taxed at the wholesale level.
CHAIR JOHANSEN closed public testimony.
1:14:35 PM
REPRESENTATIVE KELLER recounted that a constituent who owns a
tire store experimented with lightweight studs and found them to
be worthless.
REPRESENTATIVE NEUMAN analyzed and compared the cost of road
wear from studded tires to the costs of insurance, medical
bills, and lives. He allowed that passage of this bill would
put more money in the consumers' pockets.
REPRESENTATIVE DOOGAN testified that he is also a supporter of
studded tires, but that the larger issue is the administrative
arguing that the legislature spends too much money, while
simultaneously proposing to rescind a revenue source.
1:19:13 PM
REPRESENTATIVE FAIRCLOUGH voiced support to the earlier
comments, and asked what the administration is offering as
revenue sources should the oil prices drop.
CHAIR JOHANSEN summarized that he is not a fan of taxes,
especially safety taxes.
REPRESENTATIVE NEUMAN moved to report HB 106 out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, HB 106 moved out of committee.
The committee took an at-ease from 1:21 PM to 1:24 PM.
HB 294-MARINE TRANSPORTATION: BOARD & DIVISION
[Due to technical difficulties the recording is not available
from 1:24:54 PM to 1:27:21 PM.]
CHAIR JOHANSEN announced that the next order of business would
be SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 294 "An Act
establishing the division of marine transportation; establishing
the Alaska Marine Transportation Authority Board and the
position of director of the division of marine transportation,
and assigning the powers and duties of each; making conforming
amendments; and providing for an effective date." [Before the
committee was CSSSHB 294, Version 25-LS12220\O, Kane, 3/18/08,
the working document.]
REPRESENTATIVE PEGGY WILSON, Alaska State Legislature, referred
to her memorandum to Representative Johansen, dated March 25,
2008. She offered her objection to the proposed change to
Version O on page 1, line 9 as that language has been in the
statute since 1992.
1:27:21 PM
REPRESENTATIVE WILSON offered her objection to the proposed
changes on page 2, lines 4-31 and page 3, line 1. She allowed
that, as the sponsor, she is amenable to an amendment increasing
the board membership to include residents from the Railbelt.
REPRESENTATIVE NEUMAN related his understanding that page 2,
lines 4-31, and page 3, line 1, remain unchanged.
REPRESENTATIVE WILSON agreed, but allowed that one or two board
members could be residents of the Railbelt region.
REPRESENTATIVE NEUMAN asked if this is the current board
composition.
REPRESENTATIVE WILSON replied that it is not exactly the same,
but that there are people from that area.
REPRESENTATIVE NEUMAN said that similar language now exists for
the Marine Transportation Advisory Board (MTAB).
CLIFF STONE, Staff to Representative Peggy Wilson, Alaska State
Legislature, explained that there is still regional
representation and the intent is to have a broad representation
of the coastal communities.
1:29:27 PM
REPRESENTATIVE NEUMAN suggested that the board member
demographic include representation from many different
industries.
CHAIR JOHANSEN asked if the seats on the board have a term.
MR. STONE said that the bill language is broad enough to include
many business community members.
REPRESENTATIVE NEUMAN asked if the maximum service would be one
three-year term.
MR. STONE said that the board members could be reappointed at
the governor's prerogative.
REPRESENTATIVE DOOGAN asked to clarify that Version O designates
six members from coastal communities and five at-large
appointments, whereas the possible amendment would make two of
the at-large appointments be from the Railbelt.
1:33:42 PM
REPRESENTATIVE WILSON referred to page 2, lines 5-6, and said
that, as the sponsor, she is agreeable to an amendment to delete
"confirmed by a majority of the members of the legislature in
joint session."
MR. STONE mentioned that there are two legal opinions in the
members' packets that address this.
REPRESENTATIVE WILSON referred to page 3, lines 29-31 and said
that she will support an amendment to replace the existing
language with:
After one or more nominees for the position of
director or deputy commissioner of the Alaska Marine
Highway System have been considered by the
commissioner of transportation and public facilities,
the commissioner shall confer with the board on that
nominee before making an appointment to that position.
1:35:08 PM
REPRESENTATIVE FAIRCLOUGH asked for the legal definition of
"nominee."
REPRESENTATIVE WILSON said that she is agreeable to an amendment
to change page 4, lines 3-4, which would delete the following
after the word "affiliation": "and the nominees must have
experience in the field of marine engineering or maritime
operations."
1:36:48 PM
REPRESENTATIVE WILSON recommended the addition of a subsection
(d) on page 4, line 12, which would read:
After consultation with the Department of
Transportation & Public Facilities, the board may
issue a request for proposal to consider the design
and development of a two year ferry schedule.
REPRESENTATIVE NEUMAN asked how that proposal will affect the
fiscal notes. He offered his belief that it is the
responsibility of the board to develop a two-year schedule.
MR. STONE expressed his belief that the committee members want
Department of Transportation & Public Facilities (DOT&PF) to
consult with the board on a two year ferry schedule.
1:40:51 PM
REPRESENTATIVE NEUMAN stated that if the amendment is offered,
he will ask DOT&PF why there is not a two year schedule.
CHAIR JOHANSEN closed public testimony.
1:41:17 PM
REPRESENTATIVE FAIRCLOUGH moved that the committee adopt
Amendment 1, as follows:
Page 3, line 1, following "Borough":
Insert "and at least two members from non-coastal
communities in the Railbelt region of Alaska."
CHAIR JOHANSEN objected for discussion.
REPRESENTATIVE FAIRCLOUGH said that she is most interested in
changing the committee task force to operate for the betterment
of the system by providing affordable transportation to
communities that need it. This amendment will broaden the
representation to include communities other than coastal
communities. She expressed her belief that the non-coastal
communities are not always going to agree with the coastal
communities and they will add a voice to ensure that the
requests are cost effective and good investments. She allowed
that this will draw more communities into the request for
funding process and will help ensure success.
1:43:08 PM
REPRESENTATIVE NEUMAN noted his agreement with Representative
Fairclough and he suggested adding representation from those
communities off the road system.
1:44:03 PM
REPRESENTATIVE DOOGAN expressed concern that the amendment
language seems to remove some Railbelt communities, including
Anchorage, Seward, and Kenai, from consideration as they are not
"non-coastal."
REPRESENTATIVE WILSON suggested that Amendment 1 should read
"areas that are not served by the Alaska Marine Highway System
(AMHS)."
REPRESENTATIVE SALMON said that it would be better for diversity
if Amendment 1 didn't refer to the "Railbelt."
CHAIR JOHANSEN asked the amendment sponsor for an "elegant
solution."
REPRESENTATIVE FAIRCLOUGH clarified that her intent is to
include non-ferry users who have a statewide interest in
transportation. Therefore, she suggested amending Amendment 1
so that the board will look at a balanced transportation system.
REPRESENTATIVE FAIRCLOUGH amended her earlier motion such that
she moved that the committee adopt a conceptual amendment to
Amendment 1, such that it would read as follows:
Page 3, line 1, following "Borough":
Insert "and at least two members not served by
the ferry system who have statewide transportation
needs."
REPRESENTATIVE DOOGAN suggested that Conceptual Amendment 1
should use the following language: "not directly served by the
ferry system" because the ferry docks at places from which
patrons can drive to Anchorage.
REPRESENTATIVE FAIRCLOUGH related her acceptance of
Representative Doogan's suggested change.
1:48:42 PM
REPRESENTATIVE FAIRCLOUGH withdrew her conceptual amendment to
Amendment 1.
REPRESENTATIVE NEUMAN advised that Matanuska-Susitna will soon
have a ferry to Anchorage.
1:49:54 PM
CHAIR JOHANSEN related his understanding that the ferry running
across the Knik Arm will not be part of the AMHS.
CHAIR JOHANSEN then moved that the committee adopt an amendment
to Amendment 1, such that it would read as follows:
Page 3, line 1, following "Borough":
Insert "and at least two members from areas not
directly served by the Alaska marine highway system."
There being no objection, the amendment to Amendment 1 was
adopted.
REPRESENTATIVE KELLER asked if [the committee] has any desire to
include language regarding board members having an understanding
of the statewide system.
CHAIR JOHANSEN pointed out that page 2, lines [23-30], addresses
the experience and qualification of the members.
1:51:57 PM
REPRESENTATIVE DOOGAN, in further response to Representative
Keller, stated that the only people who don't need any specific
qualifications are the two at-large public members listed on
page 2, line 30, paragraph (6).
REPRESENTATIVE NEUMAN suggested that the governor will look at
the qualifications when the people are appointed. He then
pointed out that on page 2, line 4, the legislation specifies
that the board will consist of 11 members, but [New] Amendment 1
would add two more members.
1:53:55 PM
CHAIR JOHANSEN clarified that the amendment does not add two
more members, but rather specifies the area from they reside.
CHAIR JOHANSEN removed his objection to Amendment 1, as amended.
There being no objection, Amendment 1, as amended, was adopted.
1:54:29 PM
CHAIR JOHANSEN moved that the committee adopt Conceptual
Amendment 2, as follows:
Page 2, lines 5-6:
Delete "and confirmed by a majority of the
members of the legislature in joint session."
REPRESENTATIVE NEUMAN objected for discussion.
CHAIR JOHANSEN related his preference for the executive branch
to retain control of the appointments rather than have the
legislature get involved.
REPRESENTATIVE DOOGAN offered his belief that whether the
legislature actually had the authority to confirm the type of
appointee specified in the legislation was addressed by the
Division of Legal and Research Services in a March 19, 2008,
memorandum from Brian Kane, and also by a Department of Law
memorandum from Richard Walsh on March 20, 2008.
REPRESENTATIVE WILSON indicated that to be the case and said
that she didn't have a problem with [proposed Conceptual
Amendment 2].
REPRESENTATIVE NEUMAN asked if the current members of the Alaska
Marine Transportation Advisory Board are confirmed by the
legislature.
CHAIR JOHANSEN said that this is done by executive order.
1:57:32 PM
REPRESENTATIVE NEUMAN removed his objection to Conceptual
Amendment 2.
There being no objection, Conceptual Amendment 2 was adopted.
1:57:43 PM
CHAIR JOHANSEN moved that the committee adopt Conceptual
Amendment 3, as follows:
Page 4, lines 3-4:
Delete the language ", and the nominees must have
experience in the field of marine engineering or
maritime operations"
REPRESENTATIVE NEUMAN objected.
CHAIR JOHANSEN opined that the experience level for the position
should be left open.
REPRESENTATIVE NEUMAN removed his objection.
There being no objection, Conceptual Amendment 3 was adopted.
The committee took an at-ease from 1:59 p.m. to 2:00 p.m.
CHAIR JOHANSEN announced that he wouldn't offer Amendment 4 at
this time.
2:00:11 PM
REPRESENTATIVE FAIRCLOUGH moved that the committee adopt
Amendment 5, as follows:
Page 1, line 9:
Delete "and improvement"
REPRESENTATIVE FAIRCLOUGH stated that she supports the AMHS and
improved support to that system, but there should not be a
mandate to improve a system. Instead, there should be a mandate
to efficiently and effectively operate and provide good service.
She offered her belief that mandating improvement can be left
open to wide misinterpretation.
2:01:45 PM
REPRESENTATIVE DOOGAN objected, although he noted that he shared
many of the concerns of Representative Fairclough. He said that
the DOT&PF should have offered a better explanation as to how it
developed the last ferry schedule. He opined that [mandatory
improvements] doesn't seem to imply a commitment to purchase new
ferries as there are much simpler and less expensive solutions
to effectuate improved service.
REPRESENTATIVE NEUMAN related his support for Amendment 5. He
expressed his belief that without the amendment there needs to
be an evaluation of the existing system to verify improvement.
He noted that "improvement" is in the eye of the beholder.
REPRESENTATIVE KELLER offered to substitute the language
"efficient quality of service" for "improvement", as this will
allow a statement of quality.
2:04:59 PM
REPRESENTATIVE WILSON clarified that this language has been in
statute since 1992, and, as the sponsor, she has no intention to
change this language. She offered that her intention is to
improve the ferry system, not to change the existing statute.
She related her opposition to proposed Amendment 5.
CHAIR JOHANSEN expressed his belief that it would appear
unlikely that litigation will result since this language has
been in statute since 1992.
REPRESENTATIVE DOOGAN pointed out that the bill only commits
DOT&PF to consult with the Alaska Marine Transportation Advisory
Board on a long-range plan. There are no new duties or changes
to the system, with the exception of adding the advisory board
as a consultant. He offered his belief that the bill is not
committing to any new course of action.
CHAIR JOHANSEN agreed.
A roll call vote was taken. Representatives Salmon, Neuman, and
Fairclough voted in favor of Amendment 5. Representatives
Keller, Doogan, and Johansen voted against it. Therefore,
Amendment 5 failed by a vote of 3-3.
2:08:22 PM
REPRESENTATIVE FAIRCLOUGH moved to adopt Amendment 6, as
follows:
Page 3, lines 29-31 through page 4, lines 1-2:
Delete subsection (a)
Insert "After one or more candidates for the
position of director or deputy commissioner of the
Alaska Marine Highway System have been considered by
the commissioner of transportation and public
facilities, the commissioner shall confer with the
board on that candidate before making an appointment
to that position."
CHAIR JOHANSEN objected for discussion.
2:09:25 PM
REPRESENTATIVE WILSON asked for a clarification.
REPRESENTATIVE FAIRCLOUGH explained that this is the same
wording offered by Representative Wilson, with the substitution
of "candidate" for "nominee".
REPRESENTATIVE NEUMAN agreed with the use of "candidate" and
asked for a further clarification of the position described as
"director or deputy commissioner."
MR. STONE explained that both the director and deputy
commissioner titles are maintained in the wording to allow for
whichever of these positions an administration decides to
appoint.
REPRESENTATIVE NEUMAN asked who selects the candidates.
MR. STONE clarified that the commissioner will first consider
the candidates, who then forwards the qualified applicants to
the board for its suggestions. The commissioner will make the
final hiring decision.
REPRESENTATIVE NEUMAN offered his belief that it is good to have
public involvement.
2:14:08 PM
REPRESENTATIVE DOOGAN asked for clarification of the
substitution of "candidate" for "nominee" in Amendment 6.
REPRESENTATIVE FAIRCLOUGH explained that a nominee is introduced
by the administration, whereas a candidate is one who applies
for a position. The main distinction between the two terms, she
opined, is that the advisory board isn't being asked to find
individuals but rather there will be an in-take process by the
commissioner.
CHAIR JOHANSEN asked if the intent is to delete subsection (a)
in its entirety and replace it with the amendment language.
REPRESENTATIVE FAIRCLOUGH replied yes.
2:16:24 PM
[A discussion ensued about the amended wording of subsection
(a).]
The committee took an at-ease from 2:18 p.m. to 2:19 p.m.
2:19:05 PM
REPRESENTATIVE FAIRCLOUGH withdrew Amendment 6.
REPRESENTATIVE FAIRCLOUGH moved to adopt Amendment [7], as
follows:
Page 3, lines 29-31 through page 4, lines 1-2:
Delete subsection (a)
Insert "After one or more candidates for the
position of director or deputy commissioner of the
Alaska Marine Highway System have been considered by
the commissioner of transportation and public
facilities, the commissioner shall confer with the
board on that candidate before making an appointment
to that position. The selection of the candidate
shall be without regard to political affiliation."
There being no objection, Amendment [7] was adopted.
2:20:16 PM
REPRESENTATIVE WILSON said that she, as the sponsor, would still
like to see the development of a 2 year ferry schedule.
[A discussion ensued to determine that all the earlier concerns
with HB 294 had been addressed.]
CHAIR JOHANSEN said that the agreement on Amendment 1 to include
members outside the communities served by the AMHS has addressed
all the earlier concerns.
2:22:07 PM
REPRESENTATIVE NEUMAN asked if a representative from DOT&PF was
going to speak.
MARY SIROKY, Legislative Liaison, Office of the Commissioner,
Department of Transportation & Public Facilities, said that the
amendments and changes are acceptable to DOT&PF, and should
result in a zero fiscal note.
2:23:37 PM
REPRESENTATIVE KELLER asked Representative Wilson, the sponsor,
if a sunset clause should be added to HB 294.
REPRESENTATIVE WILSON replied that she did not think that would
be of any benefit.
CHAIR JOHANSEN asked DOT&PF if the zero fiscal note is prepared.
MS. SIROKY said that the zero fiscal note is forthcoming.
REPRESENTATIVE NEUMAN moved to report CSSSHB 294, Version 25-
LS12220\O, Kane, 3/18/08, as amended, out of committee with
individual recommendations and the accompanying zero fiscal
notes. There being no objection, CSSSHB 294(TRA) was reported
out of the House Transportation Standing Committee.
The committee took an at-ease from 2:26 p.m. to 2:31 p.m.
HB 322-TRANSPORTATION FUND
2:31:39 PM
CHAIR JOHANSEN announced that the next order of business would
be HOUSE BILL NO. 322, "An Act establishing the Alaska
transportation fund and relating to the fund; and providing for
an effective date."
REPRESENTATIVE FAIRCLOUGH said that she supports the governor's
$1 billion transportation plan as there are $1 billion worth of
transportation needs in Alaska, which include projects, deferred
maintenance, and future needs to address a gas pipeline. She
offered her belief that an endowment approach with an annuity
payout was worthy of discussion. She referred to a spread sheet
titled "The Transportation Fund with a 10 year Annuity Payout"
[included in members' packets] that shows an annuity payout that
would put $1.2 billion into projects over 10 years. She
remarked that the flip side to this spread sheet, "The
Transportation Fund with an endowment approach" reflects that a
5 percent annual payout will erode the buying power and allow
less opportunity to make a substantial inroad into the
shortcomings of deferred maintenance and projects. She offered
her belief that $50 million is too small an amount of money to
spend for maintenance that has been deferred for so long. She
expressed her belief that the annuity approach allows for a
larger annual appropriation.
2:36:06 PM
REPRESENTATIVE FAIRCLOUGH explained that the model can be
adjusted for stock market fluctuations, commodity prices, and
inflation. This allows the state the ability to more quickly
respond to any needs.
REPRESENTATIVE NEUMAN remarked that this is a totally different
funding plan than the administration's plan. He asked if it is
possible to do a side-by-side comparison of the two funding
plans. He declared that he wants to see a Department of
Transportation & Public Facilities (DOT&PF) project plan before
he will consider a fund.
2:39:34 PM
REPRESENTATIVE FAIRCLOUGH offered to do a side-by-side
comparison, and she explained more about the analysis that her
plan provides. She explained that after ten years the annuity
plan will have spent its entirety, putting $1.2 billion into
transportation projects; whereas, the administration plan will
still have $945 million in the fund, but it will only have
generated $507 million spent for projects. She expressed her
desire to contain the discussion to an annuity versus an
endowment approach, which she likened to the percent of market
value (POMV) and the permanent fund. She explained that the
POMV system will secure a fund and allow it to endure, whereas
an annuity will zero out but will put more money more quickly
into transportation projects. She offered her belief that the
primary concern is fiscal planning and sustainability, not
prioritization of projects.
CHAIR JOHANSEN asked that DOT&PF be prepared to compare and
contrast the two proposals during the next House Transportation
Standing Committee meeting on Tuesday, April 1, 2008.
REPRESENTATIVE DOOGAN requested DOT&PF prepare a statement of
the annual appropriations for transportation projects from the
general fund for the last few years to allow a comparison of the
appropriation funding style to the two other approaches.
2:43:33 PM
FRANK RICHARDS, Deputy Commissioner of Highways & Public
Facilities, Office of the Commissioner, Department of
Transportation & Public Facilities (DOT&PF), asked if
Representative Doogan would like a list of all the capital
appropriations from all the fund sources.
REPRESENTATIVE DOOGAN explained that he wanted to know the state
funds appropriated from the capital budget for each of the last
five years to allow a comparison with these other proposed
funding programs.
2:44:32 PM
MR. RICHARDS offered his belief that a comparison of the fund
appropriations is in Mr. Ottesen's presentation.
REPRESENTATIVE DOOGAN asked if it is possible to receive a copy.
MR. RICHARDS offered a copy to Representative Doogan.
[HB 322 was held over.]
HB 314-G.O. BONDS FOR TRANSPORTATION PROJECTS
2:45:18 PM
CHAIR JOHANSEN announced that the final order of business would
be HOUSE BILL NO. 314, "An Act providing for and relating to the
issuance of general obligation bonds for the purpose of paying
the cost of state transportation projects; and providing for an
effective date."
[Chair Johansen passed the gavel to Vice Chair Neuman.]
FRANK RICHARDS, Deputy Commissioner of Highways & Public
Facilities, Office of the Commissioner, Department of
Transportation & Public Facilities (DOT&PF), explained that the
primary goals of the general obligation bond projects are to
increase safety, promote economic development, reduce
congestion, and preserve existing assets. He directed attention
to the Powerpoint entitled "Alaska Department of Transportation
& Public Facilities-GO Bond Projects-". He described the first
project listed, slide 2, "Dowling Road: Old Seward Highway to
Minnesota Drive", which is a $22.1 million congestion relief
project. He explained that this project is part of the
Anchorage Municipality's long range transportation plan, the
Alaska State Transportation Improvement Plan (STIP), and the
Anchorage Metropolitan Area Transportation Solutions (AMATS)
transportation improvement plan. He reported that the funding
will come from federal, state, and local funds.
MR. RICHARDS referred to slide 3 which reflects the two phases
of the project. He allowed that the general obligation bond
will pay for Phase 1. He further explained the project and the
ways it will relieve congestion.
2:48:40 PM
REPRESENTATIVE DOOGAN mentioned that no one has discussed this
project with him even though it is in his district.
VICE CHAIR NEUMAN made the same observation.
MR. RICHARDS asked if the committee would prefer an overview of
HB 314, instead of a project specific review.
VICE CHAIR NEUMAN agreed.
2:49:55 PM
MR. RICHARDS said that this bill identifies $121.1 million for
DOT&PF transportation projects, $10 million for a Department of
Commerce, Community, and Economic Development (DCCED) project to
expand the Port of Anchorage, and $8.9 million to the Department
of Natural Resources (DNR) to fund the South Denali Access Road
Design and Construction project.
2:50:32 PM
[Vice Chair Neuman returned the gavel to Chair Johansen.]
MR. RICHARDS explained that this bill is a bond package that
will be presented to the voters this fall. He noted that the
goal of the bill is to allow the voters to approve the projects,
and that the capital budget will not be increased by the total
bill package request of $140 million.
REPRESENTATIVE DOOGAN posed that if a specific project is
removed from the bill and put into the capital budget, would the
bond request be reduced by that amount.
MR. RICHARDS replied that these projects are only on this bond
list, and not in the capital budget. He offered his belief that
the intent is to separate these projects into a bond proposal
and not to include them in the capital budget.
REPRESENTATIVE DOOGAN asked to clarify that if a specific
project in this bill is dropped, would the bond amount be
reduced by that amount.
MR. RICHARDS offered his belief that the bill is project
specific.
REPRESENTATIVE DOOGAN wanted to clarify how the money would be
allocated if the projects change.
MR. RICHARDS expressed his belief that the bill is project
specific.
2:53:59 PM
REPRESENTATIVE NEUMAN asked if the money would come from FY 2008
funds.
NANCY SLAGLE, Director, Division of Administrative Services,
Department of Transportation & Public Facilities (DOT&PF), said
that the bond proceeds would be put into a transportation fund
entitled "2008 transportation project fund." She clarified that
the fund is from the bond proceeds. She explained that the
process will be to ask the voters for approval, offer the bonds
for sale, place the proceeds into the "2008 transportation
project fund," and allocate the money for the specific projects.
CHAIR JOHANSEN clarified that the fund is titled "2008
transportation project fund."
MS. SLAGLE agreed.
2:57:07 PM
CHAIR JOHANSEN offered his belief that having a date in the fund
title creates confusion.
REPRESENTATIVE DOOGAN asked how these specific projects are
selected.
MR. RICHARDS explained that DOT&PF looks at the list of
statewide projects that reflect the four primary goals mentioned
earlier, and presents to the governor's office a list of
projects that can be accomplished with either bond or general
fund proceeds in a timely and cost effective manner.
2:58:04 PM
REPRESENTATIVE DOOGAN expressed his belief that some of the
projects are specific and some are very general, and that it is
unclear what is proposed for the general projects.
MR. RICHARDS said that there are specific projects for each of
those broad categories.
REPRESENTATIVE DOOGAN replied that this is not clear in the
information.
MR. RICHARDS responded that this information is not included in
the presentation, but that he will supply it.
3:00:07 PM
REPRESENTATIVE SALMON asked if it is possible to change these
projects.
MR. RICHARDS replied that the legislature has the authority to
present projects.
REPRESENTATIVE SALMON asked if there is another list.
MR. RICHARDS replied that there is a substantial list of needed
projects and he will make the list available.
REPRESENTATIVE SALMON expressed his belief that the list only
reflects a few select projects in a small area of the state.
3:01:37 PM
CHAIR JOHANSEN asked if there is a larger list that was
submitted to the governor.
MR. RICHARDS replied that there is a larger list.
CHAIR JOHANSEN said that the committee would like to see the
list.
REPRESENTATIVE NEUMAN asked if the projects can be changed after
the bond vote.
MR. RICHARDS said that the voters will be voting on a specific
list of projects, so there can not be a change after that vote.
3:03:09 PM
REPRESENTATIVE NEUMAN related his understanding that once the
voters have voted on a project, it cannot be changed.
MS. SLAGLE explained that once the legislature passes a bill for
general obligation bonds, the governor can only veto the entire
bill, but not any of the specific projects. She reported that
after the vote by the people, there is not any option for veto
or change.
REPRESENTATIVE NEUMAN asked for the road mile specifics of the
"Parks Highway: Weight Restriction Elimination" project. He
asked if DOT&PF has followed its list of goals for
prioritizations when making these project recommendations.
MR. RICHARDS said that the Parks Highway project includes miles
72-90.
3:06:42 PM
REPRESENTATIVE NEUMAN repeated his earlier question regarding
the prioritization for project recommendations.
MR. RICHARDS responded that these were followed.
REPRESENTATIVE NEUMAN asked how these are compared to each
other.
CHAIR JOHANSEN remarked that the "Southeast Alaska: Pavement
Rehabilitation" project seems to be an odd project for a general
obligation bond.
MR. RICHARDS replied that preservation is one of the primary
criteria for project selection. He explained that maintenance
is much cheaper than reconstruction.
3:09:16 PM
REPRESENTATIVE DOOGAN expressed his belief that the traditional
use of general obligation bonds is to build new projects, so
this project does not meet that criteria. He asked if there is
a problem with regional balancing in the bill, and that this
project helps to address that.
MR. RICHARDS replied that the department looks at the project
needs in SE Alaska and what can be accomplished with the
funding, while allowing for some geographical distribution.
REPRESENTATIVE DOOGAN asked if the bill project selections would
have been different without geographical distribution. He posed
that new projects might have been proposed for the bond funding,
while the maintenance projects could have been paid for through
another funding source.
MR. RICHARDS explained that the selection process factors in the
public-expressed needs, and includes projects that rely solely
on a STIP that is not available in the near term. He reported
that utilizing bond funds allows the department to accomplish a
lot of the work in a more expeditious manner than having to
follow the federal regulations. The department identifies a
list and the governor's office selects the projects to include
in the bill.
REPRESENTATIVE SALMON asked why these projects are not proposed
in the capital budget.
REPRESENTATIVE NEUMAN observed that the state will sell general
obligation bonds and pay for them through the general fund. He
commented that he has not had any representatives from the
DOT&PF ever come to his office to talk with him about any of
these bills.
[HB 314 was held over.]
ADJOURNMENT
There being no further business before the committee, the House
Transportation Standing Committee meeting was adjourned at
3:14:54 PM.
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