Legislature(1997 - 1998)

03/10/1997 01:30 PM House TRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
            HOUSE TRANSPORTATION STANDING COMMITTEE                            
                         March 10, 1997                                        
                           1:30 p.m.                                           
 MEMBERS PRESENT                                                               
 Representative Bill Williams, Chairman                                        
 Representative Beverly Masek, Vice Chairman                                   
 Representative John Cowdery                                                   
 Representative Bill Hudson                                                    
 Representative Jerry Sanders                                                  
 Representative Kim Elton                                                      
 Representative Al Kookesh                                                     
 MEMBERS ABSENT                                                                
 All members present                                                           
 COMMITTEE CALENDAR                                                            
 *HOUSE JOINT RESOLUTION NO. 27                                                
 Requesting the Federal Aviation Administration to grant exemptions            
 from the "commuter rule" in order to maintain a high level of air             
 safety and air transportation service in rural Alaska.                        
      - MOVED HJR 27 OUT OF COMMITTEE                                          
 *HOUSE BILL NO. 85                                                            
 "An Act giving notice of and approving a lease-purchase agreement             
 with the City of Soldotna for a maintenance facility of the                   
 Department of Transportation and Public Facilities."                          
      - MOVED CSHB 85(TRA) OUT OF COMMITTEE                                    
 (* First public hearing)                                                      
 PREVIOUS ACTION                                                               
 BILL:  HJR 27                                                               
 SHORT TITLE: FAA "COMMUTER RULE"                                              
 SPONSOR(S): REPRESENTATIVE(S) IVAN, Foster                                    
 JRN-DATE      JRN-PG             ACTION                                       
 03/05/97       539    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 03/05/97       539    (H)   TRANSPORTATION                                    
 03/10/97              (H)   TRA AT  1:00 PM CAPITOL 17                        
 03/10/97       616    (H)   COSPONSOR(S): FOSTER                              
 BILL:  HB  85                                                                
 SPONSOR(S): REPRESENTATIVE(S) DAVIS                                           
 JRN-DATE     JRN-PG             ACTION                                        
 01/24/97       136    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/24/97       137    (H)   TRANSPORTATION, FINANCE                           
 03/10/97              (H)   TRA AT  1:00 PM CAPITOL 17                        
 WITNESS REGISTER                                                              
 REPRESENTATIVE IVAN IVAN                                                      
 Alaska State Legislature                                                      
 Capitol Building, Room 418                                                    
 Juneau, Alaska  99801                                                         
 Telephone:  (907) 465-4952                                                    
 POSITION STATEMENT:  Provided sponsor statement on HJR 27.                    
 REPRESENTATIVE RICHARD FOSTER                                                 
 Alaska State Legislature                                                      
 Capitol Building, Room 410                                                    
 Juneau, Alaska  99801                                                         
 Telephone:  (907) 465-3789                                                    
 POSITION STATEMENT:  Testified in support of HJR 27.                          
 JOHN KRUSE                                                                    
 Cape Smythe Air Service                                                       
 P.O. Box 549                                                                  
 Barrow, Alaska  99723                                                         
 Telephone:  (907) 852-8333                                                    
 POSITION STATEMENT:  Testified on HJR 27.                                     
 JOHN HAJDUKOVICH, owner                                                       
 Frontier Flying Service                                                       
 3820 University Avenue                                                        
 Fairbanks, Alaska  99709                                                      
 Telephone:  (907) 474-0024                                                    
 POSITION STATEMENT:  Testified in support of HJR 27.                          
 KIM ROSS, Executive Director                                                  
 Alaska Aircraft Carriers Association                                          
 1117 East 55th Street, Suite 102                                              
 Anchorage, Alaska  99508                                                      
 Telephone:  (907) 277-0071                                                    
 POSITION STATEMENT:  Testified in support of HJR 27.                          
 JOSEPH SPRAGUE, Director of Marketing                                         
 ERA Aviation                                                                  
 6160 Carl Brady Drive                                                         
 Anchorage, Alaska  99502                                                      
 Telephone:  (907) 266-8393                                                    
 POSITION STATEMENT:  Testified on HJR 27.                                     
 REPRESENTATIVE GARY DAVIS                                                     
 Alaska State Legislature                                                      
 Capitol Building, Room 513                                                    
 Juneau, Alaska  99801                                                         
 Telephone:  (907) 465-2693                                                    
 POSITION STATEMENT:  Provided sponsor testimony on HB 85.                     
 LISA PARKER, Planning Director                                                
 Kenai Peninsular Borough                                                      
 144 North Binkley                                                             
 Soldotna, Alaska  99669                                                       
 Telephone:  (907) 262-4441                                                    
 POSITION STATEMENT:  Testified in support of HB 85.                           
 TOM BOEDEKER, City Manager                                                    
 City of Soldotna                                                              
 177 North Birch Street                                                        
 Soldotna, Alaska  99669                                                       
 Telephone:  (907) 262-9107                                                    
 POSITION STATEMENT:  Testified in support of HB 85                            
 ACTION NARRATIVE                                                              
 TAPE 97-14, SIDE A                                                            
 Number 001                                                                    
 CHAIRMAN BILL WILLIAMS called the House Transportation Standing               
 Committee to order at 1:30 p.m.  Members present at the call to               
 order were Representatives Williams, Masek, Cowdery, Hudson,                  
 Sanders, Elton and Kookesh.                                                   
 HJR 27 -  FAA "COMMUTER RULE"                                                
 Number 027                                                                    
 CHAIRMAN WILLIAMS stated that the first order of business is HOUSE            
 JOINT RESOLUTION NO. 27 "Requesting the Federal Aviation                      
 Administration to grant exemptions from the 'commuter rule' in                
 order to maintain a high level of air safety and air transportation           
 service in rural Alaska."  He stated that Representative Ivan will            
 provide sponsor testimony on HJR 27.                                          
 Number 130                                                                    
 REPRESENTATIVE IVAN IVAN stated that HJR 27 will have a great                 
 impact on the economy and the travel service provided by commercial           
 airlines.  He read the Sponsor Statement into the record:                     
 "House Joint Resolution 27 proposes that the Federal Aviation                 
 Administration (FAA) grant specific petitions for exemption from              
 individual operators affected by the 'Commuter Rule.'  An exemption           
 would ensure that safety is not diminished because the aircraft               
 currently utilized, the Twin Otter, has a good safety record based            
 on statistics on aircraft accidents in Alaska.                                
 "The Commuter Rule applies to any aircraft capable of carrying ten            
 or more passengers under Part 121 of the FAA rules which applies to           
 major operators as United Airlines, Alaska Airlines and any other             
 major operators in the nation.  Twin Otters currently operate under           
 Part 135 of the FAA rules which apply to small aircraft.  The                 
 Commuter Rule will come into effect, this month, March 20, 1997.              
 "Rural Alaska relies totally on air transportation for passenger              
 travel and moving goods and services.  The aircraft affected by the           
 Commuter Rule is the Twin Otter which carries 10 to 19 passengers             
 and has twin-engine with turbo-props.  This aircraft has a larger             
 load capacity than a Cessna 206 or 207 and has a comparable                   
 approach speed.  The Twin Otter also has a better safety record               
 than those of smaller aircraft.  There were a total of 67 accidents           
 in 1995/1996 and seven of those occurred in ten plus seat aircraft.           
 "The FAA has been given specific authority by Congress to provide             
 exemptions to small air carriers in Alaska from provisions of the             
 Commuter Rule.  This resolution is requesting just that."                     
 Number 324                                                                    
 REPRESENTATIVE IVAN stated that the Commuter Rule is prompted by              
 commuter aircraft accidents throughout the lower 48.                          
 Number 370                                                                    
 REPRESENTATIVE RICHARD FOSTER stated that he ran a commuter for 20            
 years and over the years Senator Stevens has been able to get                 
 various exemptions for Alaska because of the uniqueness and                   
 difficulty of maintaining business here.  He stated that the Twin             
 Otter is used on a lot of short runs in rural Alaska.  He stated              
 that one of the provisions of the Commuter Rule is that there needs           
 to be a stewardess on board any aircraft with more that nine                  
 passengers on it.  Having a stewardess on bush runs into the arctic           
 makes it very expensive.  He stated that ERA Aviation has indicated           
 that they would withdraw from the market and ERA Aviation is, in              
 some villages, the only aircraft that flies to certain villages.              
 He stated that it would be very difficult to comply to the new                
 ruling.  He stated that he is in support of HJR 27.                           
 Number 500                                                                    
 REPRESENTATIVE KIM ELTON stated that he supports the resolution but           
 he thought David Hinson was no longer the administrator for the               
 Number 527                                                                    
 REPRESENTATIVE IVAN stated that they were working with the latest             
 information and if updates are necessary, it will be changed on the           
 House Floor.                                                                  
 Number 536                                                                    
 REPRESENTATIVE BILL HUDSON asked what the timing is of the proposed           
 changeover by the FAA.                                                        
 Number 552                                                                    
 REPRESENTATIVE IVAN responded that they are eminent and he believed           
 the target date to be March 20, 1997.  He stated that some of the             
 airlines are already reacting to it.  The existing airlines that              
 are continuing to use the Twin Otters are going to take out some of           
 the seats and operate under the previous rule that has been in                
 Number 591                                                                    
 REPRESENTATIVE FOSTER stated that it is compounded by the fact that           
 there are not too many Twin Otters left, and they have got the                
 Medivac contract for Bethel, so by pulling out of the market, they            
 would have to be replaced by another aircraft which would result in           
 a costly process to convert them into air ambulances.                         
 Number 633                                                                    
 REPRESENTATIVE JOHN COWDERY asked what would be a typical run if              
 the aircraft was based in Bethel.                                             
 Number 661                                                                    
 REPRESENTATIVE IVAN replied the area is the size of the state of              
 Oklahoma, making milk run stops in 150 mile one-way routes.                   
 Number 742                                                                    
 REPRESENTATIVE COWDERY stated by eliminating one passenger it would           
 give the opportunity for more fuel on board and asked if                      
 Representative Foster could comment on that.                                  
 Number 770                                                                    
 REPRESENTATIVE FOSTER replied that the biggest problem is the                 
 change of record keeping for maintenance.  He would foresee that              
 the airlines would have to hire a complete new staff to conform               
 because the regulations of the large commuters all conform to major           
 airline maintenance and administrative record keeping.  He stated             
 that he could not see how an operator in a village could conform              
 financially.  It would force the bush operators to sell their                 
 equipment and go back to the single engine planes.  He stated this            
 would affect safety and the ability to get Medivac aircraft.  He              
 stated that he did not see how Alaska would have the financial                
 ability to conform.                                                           
 Number 855                                                                    
 REPRESENTATIVE COWDERY stated that the probable cost to fly would             
 Number 878                                                                    
 JOHN KRUSE, Cape Smythe Air Service, testified via teleconference             
 from Barrow, that their main base is located in Barrow.  He stated            
 that Mr. Hinson was replaced by Guy Gardner.  He stated that Cape             
 Smythe Air Service sold their Twin Otters in 1996 because they did            
 not feel, with the Commuter Rule, it would be worthwhile to equip             
 them with the necessary equipment.  He stated that they have for              
 sale their three beechcraft planes, which are 15 passenger                    
 aircraft, because this aircraft reduced to nine passengers will not           
 compete with other piston aircraft.  He stated that the Commuter              
 Rule is requiring better communications and dispatchers that would            
 cost around 50,000 a year, in addition to the $15,000 training                
 program for each dispatcher.  He stated that there are a lot of               
 requirements that are not going to be able to be met by the                   
 operator.  He said, "we also have better or more weather                      
 requirements which has been taken care of by less and less weather            
 reporting.  We have a lack of instrument approach which means, how            
 are we going to go to these places without instrument approaches.             
 This could be done by using GPS when approved by the FAA, the                 
 target date is the year 2005."  He stated that these are a lot of             
 things that almost can't be done by the operator, at least not                
 economically.  He stated that if this rule comes into being, they             
 are going to go back to the Cessna 206 and 207 aircraft.  He stated           
 that the Commuter Rule is prohibitive to most operators.                      
 Number 1130                                                                   
 REPRESENTATIVE BEVERLY MASEK asked if besides Cape Smythe how many            
 other airlines are in Barrow.                                                 
 Number 1146                                                                   
 MR. KRUSE replied that there are two other operators in Barrow.               
 Number 1155                                                                   
 REPRESENTATIVE MASEK asked if the Twin Otters are safer to fly in             
 the rural areas compared to the Cessna 206 or 207.                            
 Number 1180                                                                   
 MR. KRUSE replied that he has been around the Twin Otters since               
 1971 and has seen very few accidents and he knows they are a lot              
 Number 1214                                                                   
 JOHN HAJDUKOVICH, owner, Frontier Flying Service, testified via               
 teleconference from Fairbanks, that he has owned the service since            
 1974.  He stated that the resolution should be extended beyond the            
 Bethel market.  He stated that Alaska was focused on, when the                
 Lower 48 was having the accidents, to invoke one level of safety.             
 He stated that less then 1 percent of accidents have occurred on              
 the aircraft.  He stated that to comply with the Commuter Rule                
 would be very costly and the question is whether or not the                   
 passengers will be able to afford the airfare.  He stated that they           
 have requested an extension of the implementation of the Commuter             
 Rule until Alaska can address the commuter industry within Alaska.            
 He stated that Guy Gardner replaced Tony Broderick and the acting             
 administrator is Barry Valentine.  He stated that he supports HJR
 Number 1394                                                                   
 KIM ROSS, Executive Director, Alaska Aircraft Carriers Association,           
 testified via teleconference from Anchorage, that she is                      
 representing 190 air carrier companies and associated businesses in           
 Alaska.  She stated that with the additional economic pressures               
 that the Commuter Rule invokes, it has caused many of the carriers            
 to downsize the airplanes with less than ten seats.  Other                    
 operators are in a limbo position wondering if the obstacles                  
 created by the new rule will prohibit their ability to move into              
 the new generation of aircraft.  She stated that the Commuter Rule            
 is another instance of the federal government's inability to                  
 acknowledge Alaska's unique operating environment.  They are                  
 attempting to force Alaska to fit their mold at the expense of the            
 safety of Alaska.                                                             
 Number 1498                                                                   
 REPRESENTATIVE HUDSON asked what action the association is taking             
 to drive home the essence of HJR 27.                                          
 Number 1570                                                                   
 MS. ROSS replied that the association has spent a lot of effort and           
 time in putting together a 140 page document including a pictorial            
 of all of the aviation industry around the state.                             
 Number 1557                                                                   
 JOSEPH SPRAGUE, Director of Marketing, ERA Aviation, testified via            
 teleconference from Anchorage, that ERA is the largest regional               
 airline in the state of Alaska.  In 1996 Era carried just under               
 500,000 passengers, of which a large portion were Alaskan                     
 residents.  He stated that seven villages are served from an ERA              
 base in Bethel.  He stated that ERA aviation is facing the                    
 difficult decision of reducing service to Alaska's rural                      
 communities.  He stated that ERA's Twin Otters can accommodate up             
 to 18 passengers and are currently the only twin engine, turbo                
 prop, two pilot crew airplane, flown in village service from                  
 Bethel.  He stated that due to the Commuter Rule ERA will reduce              
 the seating capacity to a maximum of nine seats.  These rules will            
 require ERA to operate the Twin Otters under the same guidelines of           
 major airlines, operating jet aircraft.  He stated that these rules           
 are appropriate for jets flying between large cities, but are                 
 completely inappropriate for a Twin Otter in bush operation.  ERA             
 has requested that the FAA grant certain exemptions from the new              
 regulation.  He stated that in 1995 the National Transportation               
 Safety Board published recommendations on approving aviation safety           
 in Alaska.  Weather reporting, communications, and use of advanced            
 navigation, were all cited as ways to improve safety and placed the           
 burden to accomplish this on the FAA and the National Weather                 
 Service.  He stated that the report did not indicate that operators           
 should use certified aircraft dispatchers as the new rules require,           
 and it did not say that each operator should supply and train a               
 weather observer, nor did suggest that smaller aircraft carriers              
 should change to different rules in the name of safety.  He stated            
 that ERA did have the intention to operate under these new rules,             
 however, it was found that it would be impossible to comply with              
 these regulations and continue to have a viable operation.  The               
 Commuter Rule will negate the safety aspect by forcing passengers             
 onto smaller aircraft that have an inferior safety record.  He                
 stated that if the Twin Otter is no longer in service in western              
 Alaska, the overall level of air carrier safety will decline.  He             
 stated that according to the FAA's statistics in 1995 and 1996                
 there were a total of 67 accidents, seven of those in ten plus seat           
 aircraft. None of the seven would have been prevented had the new             
 rule been in effect.  The concern in the decrease of safety is now            
 being expressed by the passengers that would be affected and are              
 worried about the disappearance of the Twin Otter in rural Alaskan            
 air service.  He stated that the Commuter Rule does not apply a               
 higher level of safety rather it is a different level of safety,              
 one that was designed for larger aircraft operating between sizable           
 Number 1833                                                                   
 REPRESENTATIVE HUDSON made a motion to move HJR 27, with individual           
 recommendations and asked unanimous consent.                                  
 REPRESENTATIVE HUDSON stated that the name change of the                      
 administrator would be a technical amendment.                                 
 Number 1898                                                                   
 CHAIRMAN WILLIAMS asked if there was an objection.  Hearing none              
 HJR 27 was moved out of the House Transportation Standing                     
 HB 85 - DOT MAINTENANCE FACILITY AT SOLDOTNA                                 
 Number 1898                                                                  
 CHAIRMAN WILLIAMS stated that the next order of business is HOUSE             
 BILL NO. 85 "An Act giving notice of and approving a lease-purchase           
 agreement with the City of Soldotna for a maintenance facility of             
 the Department of Transportation and Public Facilities."                      
 REPRESENTATIVE GARY DAVIS stated that HB 85 addresses a problem in            
 Soldotna and is trying to relocate the Department of Transportation           
 and Public Facilities (DOT/PF) maintenance facility which has been            
 located on a seven and one-half acre site in downtown Soldotna                
 since the early 1950s.  There has been a lot of contamination on              
 the site and money expended in cleaning up the site.  He stated               
 that the seven and one-half acre site is Kenai riverfront property,           
 which is the rational for the high priority, because of the                   
 emphasis on trying to clean up the Kenai River and use it as a                
 pilot project for addressing these situations in other areas of the           
 state.  He stated that all avenues of financing the relocation of             
 this facility need to be considered.  It does need to be relocated            
 off the riverfront property, the current building is an eyesore and           
 there is a lot of traffic of large trucks into the site and onto              
 the highway.  He stated that they have worked with the city and the           
 borough to locate a site that will be conveyed to the state for the           
 new facility.  This legislation is approving lease purchase                   
 authority for the state to enter into a lease purchase authority              
 depending on the availability of funds to relocate the site.                  
 Number 2046                                                                   
 REPRESENTATIVE DAVIS stated that he does have an amendment.  The              
 bill specifically speaks to the lease purchase agreement with the             
 city of Soldotna, there are other opportunities and other options             
 available and he would like to not discount the opportunity to                
 address other lease purchase options.  He stated that the amendment           
 would not be specific to having the city sell the bonds, so that              
 then the state would enter into a lease purchase agreement with the           
 city of Soldotna to pay off the bonds and then ultimately own the             
 facility but there may be an option for the state to bond for the             
 facility and the project, eliminating the need for a middle man.              
 Number 2106                                                                   
 CHAIRMAN WILLIAMS asked if the move is because it is an eyesore or            
 if there are other reasons such as being environmentally unsafe.              
 Number 2119                                                                   
 REPRESENTATIVE DAVIS stated that yes, those reasons are the                   
 rationality for the bill.  He stated that it is an environmental              
 issue and they want to make sure that nothing affects the spawning            
 opportunities of the fish and that the river is kept as a vibrant             
 and viable sport fish river.  He stated that along the river is               
 this barren and vacant DOT/PF site.  It is largely an environmental           
 issue, the piles of calcium chloride salt runs down to the river              
 and could be a reason for the lack of vegetation down to the                  
 Number 2210                                                                   
 REPRESENTATIVE COWDERY asked if there are any other contaminants,             
 such as hydrocarbon contaminants.                                             
 Number 2217                                                                   
 REPRESENTATIVE DAVIS replied that there has been studies that have            
 shown there still needs be additional clean-up on the site.                   
 Number 2239                                                                   
 REPRESENTATIVE ELTON asked if we were bifurcating the options of              
 the original bill and the sponsor substitute.                                 
 Number 2254                                                                   
 REPRESENTATIVE DAVIS stated that this discussion is being separated           
 and that any testimony should be given on the original bill before            
 the amendment is offered.                                                     
 Number 2275                                                                   
 REPRESENTATIVE HUDSON stated that he was looking at the 4/12/95               
 draft letter concerning the relocation, it is the Soldotna                    
 Comprehensive Plan, pages 7-13 through 7-14.  He stated that unless           
 he is misreading this, it sounds like the suggestion from the city            
 is that the state legislature should secure capital appropriation             
 for about six million from the general fund.                                  
 REPRESENTATIVE DAVIS stated that the letter was the initial attempt           
 to try and establish a straight capital grant, but due to the                 
 finances at this time it was not really practical and we were                 
 hoping that the bonding opportunity is more acceptable and yet                
 there is still questions on the financial viability of that.                  
 Number 2332                                                                   
 REPRESENTATIVE HUDSON asked what the differences are between the              
 sponsor substitute and the original bill that is before this                  
 committee.  He stated that the original bill talked about the city            
 of Soldotna financing the building and then the state, in a period            
 of ten years, would pay for that bonded indebtiness and asked if              
 that was correct.                                                             
 Number 2346                                                                   
 REPRESENTATIVE DAVIS replied that was correct.                                
 Number 2350                                                                   
 REPRESENTATIVE HUDSON asked in the sponsor substitute who would               
 submit the bond.                                                              
 Number 2356                                                                   
 REPRESENTATIVE DAVIS replied that he wanted to make this perfectly            
 clear, that it is the intent that the city of Soldotna will have              
 the option to sell the bonds and for the state to lease from the              
 city.  The proposed amendment would offer an additional option and            
 leave it open as to who the state could bond with.  The state could           
 bond it themselves as a G.O. bond.  He stated that the only                   
 alternative that the amendment is offering, is that the state can             
 bond it or the city can bond it also.                                         
 Number 2388                                                                   
 REPRESENTATIVE HUDSON asked that you are looking for the option of            
 flexibility of either going with the city or perhaps the state G.O.           
 Number 2393                                                                   
 REPRESENTATIVE DAVIS replied that was correct.                                
 Number 2397                                                                   
 REPRESENTATIVE HUDSON asked if the remediation or the mitigation of           
 the existing site is state property and stated that it would                  
 require some mitigation before anything is done with it.                      
 Number 2425                                                                   
 REPRESENTATIVE DAVIS replied that was correct and that there has              
 been two appropriations to address that in 1995 and 1996 for a                
 total of $737,000 of which not all has been spent.  He stated that            
 there was an additional allocation of $100,000 in 1995 for design             
 and preliminary work on the new facility but could be converted to            
 cleanup dollars if needed.  He stated that there will be additional           
 remediation needed and the city of Soldotna will testify that it              
 would need to be in acceptable condition before they would accept             
 Number 2440                                                                   
 REPRESENTATIVE HUDSON asked if the state would have the option to             
 take the remediated site and sell it the public and could they                
 apply that to the bond.                                                       
 Number 2461                                                                   
 REPRESENTATIVE DAVIS replied that all those options are available             
 and that it is a consensus that the land would be conveyed to the             
 city, should it be acceptable to the city and then there are                  
 specific plans for that site.                                                 
 97-14, SIDE B                                                                 
 Number 008                                                                    
 REPRESENTATIVE HUDSON stated that it should be recognized that                
 fully remediated prime property in return for a bond, that we are             
 still going to pay for, ought to have some value to offset the cost           
 of the bond to the general public and through the state.  Perhaps             
 we would ask the city to let us know what it is worth to them.                
 Number 023                                                                    
 CHAIRMAN WILLIAMS asked how much the DOT/PF is paying for the                 
 facility now.                                                                 
 Number 030                                                                    
 REPRESENTATIVE DAVIS replied that they are paying for their annual            
 maintenance and fees and for the normal operation of a state                  
 Number 039                                                                    
 CHAIRMAN WILLIAMS stated that he liked where Representative Hudson            
 was coming from with the land and the new facility.                           
 REPRESENTATIVE DAVIS stated that it is an additional expense over             
 the period of the bond.                                                       
 Number 049                                                                    
 REPRESENTATIVE HUDSON stated that he has lived there and he fully             
 supports the need to get it off the riverbank and to get it where             
 it should be.                                                                 
 Number 058                                                                    
 REPRESENTATIVE ELTON stated that it was his understanding that a              
 portion of the $6 million is designed for remediation and about $1            
 million is for site remediation and if that is the case, since                
 $700,000 has already used, site remediation would be for the amount           
 of $1.7 million dollars.                                                      
 Number 089                                                                    
 REPRESENTATIVE DAVIS replied that is an option for bond dollars to            
 be spent on remediation and it is his understanding that it is a              
 legal option to utilize bond dollars.  He stated, "It is my intent            
 to keep the actual bond as minimal as possible.  If we could get it           
 down to $4 million and reduce annual payments that would be great."           
 He stated that would be utilizing an opportunity for dollars for              
 Number 116                                                                    
 REPRESENTATIVE ELTON stated that where he is getting confused is in           
 the 1/19/96 letter from Commissioner Perkins where it says,                   
 "current construction cost estimate for the facility is $4.5                  
 million and then site cleanup and rehabilitation would cost an                
 additional $1 million.  I guess I was thinking okay, that is $5.5             
 million and then another $500,000 of unanticipated costs.  But then           
 when you said there was already $700,000 available for site                   
 remediation."  He asked if $6 million is the needed figure or is it           
 $4.5 million.                                                                 
 Number 144                                                                    
 REPRESENTATIVE DAVIS replied that $6 million would be the needed              
 figure, if bond dollars were used for some of the remediation                 
 Number 150                                                                    
 REPRESENTATIVE ELTON stated that maybe the sponsor would want to              
 think about some additional language.  He stated that he does not             
 have a problem with a process which moves the building from one               
 site to another and keeps the existing site a public access site.             
 He stated that maybe the sponsor would consider amending this to              
 provide, that if the city of Soldotna once it is transferred, ever            
 decides to sell that land, the proceeds of the sale may go back to            
 the state.                                                                    
 Number 191                                                                    
 REPRESENTATIVE DAVIS stated that he would not have a problem with             
 that but he has found that most of the parties involved would like            
 to see it remain a public property.                                           
 Number 203                                                                    
 REPRESENTATIVE HUDSON stated that he believed that the land belongs           
 to the state so it should not get to the city without the state               
 taking some action.                                                           
 REPRESENTATIVE ELTON stated that it was his understanding that the            
 site would be transferred to the city.                                        
 REPRESENTATIVE HUDSON stated that is what they would desire but it            
 is not contained within the provisions of the bill.                           
 Number 226                                                                    
 REPRESENTATIVE AL KOOKESH stated that the way he understands it, is           
 that last year and the year before you tried to get money into the            
 capital budget and weren't able to do it, the state can't afford to           
 build it, Soldotna wants to issue some revenue bonds so they can              
 afford to build it themselves, the state will lease it back to                
 DOT/PF and at the end of the lease period the state will own the              
 facility and the only question is who will own the old site.                  
 Number 254                                                                    
 REPRESENTATIVE DAVIS stated that it is correct and like any prudent           
 business, no one would accept a contaminated site.  He stated that            
 it would probably take a couple of years for the state to get it              
 cleaned up, depending on the cost.  The city of Soldotna would like           
 to have the land cleaned up and conveyed to the city so that they             
 could extend an adjoining park and other additional facilities on             
 the site.                                                                     
 Number 293                                                                    
 REPRESENTATIVE KOOKESH stated that he does not have a problem with            
 the bill, except he has a question of who will own the site after             
 it is cleaned up because someone will have to clean it up.  He                
 stated, "I guess if we wanted to divorce something right now we               
 divorce that question and go on with the bill."                               
 REPRESENTATIVE DAVIS stated that is correct.  The bill is strictly            
 a finance bill to provide a financing mechanism for a new facility,           
 the rest of the questions are somewhat off the table.                         
 Number 328                                                                    
 LISA PARKER, Planning Director, Kenai Peninsular Borough, testified           
 via teleconference from Kenai, in support to relocate the                     
 maintenance facility on the Kenai river.  She stated that the                 
 borough has been working in cooperation with the DOT/PF to relocate           
 the facility.  She stated that in the near future the borough will            
 issue the DOT/PF a limited entry permit and begin to develop the 48           
 acre parcel.  Once we have finished the planning process, the                 
 borough will quit claim this parcel to the state of Alaska.  She              
 stated that the borough strongly supports the bill.                           
 Number 381                                                                    
 REPRESENTATIVE HUDSON asked if his understanding was correct that             
 the city would own the property that the new facility would be                
 built upon and it would be quit claimed to the state, so that it is           
 an asset from the city to the state.                                          
 Number 397                                                                    
 MS. PARKER stated that the 7.5 acre parcel is owned by the DOT/PF             
 and once the site is declared to be surplus by the DOT/PF it                  
 reverts to the Department of Natural Resources to determine the               
 further disposition of that land.                                             
 Number 453                                                                    
 TOM BOEDEKER, City Manager, City of Soldotna, stated that he is in            
 support of the legislation to authorize the lease purchase                    
 financing mechanism as an option to cause the relocation of the               
 existing maintenance facility for DOT/PF in Soldotna.  He stated              
 that there have been a number of activities involving hydrocarbons            
 on this site and there have been efforts to remediate those in the            
 last few years but it is difficult to clean-up an ongoing activity            
 site.  He stated that moving the facility will allow clean-up to              
 occur in a more orderly and efficient manner.  He stated that a               
 spill will cause contamination of the river.  He stated that there            
 is a large amount of chloride contamination on the site.  The new             
 site will move all of the activities out of the present site where            
 it created a risk of impact.  He stated that it is an eyesore.  The           
 city has been willing to bond this to get the move made.  He stated           
 that the existing site be conveyed to the city of Soldotna and                
 there are clean-up issues in which the city can't afford to take              
 the land without it being cleaned up.  He stated that the city's              
 desire to have land is to ensure that it is used to for a park or             
 similar activities that are consistent with the Kenai River.  He              
 stated that the city council feels they can do a better job of                
 managing the property than trusting the state to do it.  He stated            
 that the city wants the use of the land restricted and feels that             
 they could not control that if it was not theirs.  He stated that             
 as far as the amendment is concerned the city does not have a                 
 problem with allowing another financing option but wants to be sure           
 that the option for the city to issue revenue bonds is open and               
 does not want any kind of amendment that would delay financing and            
 moving this facility.  He stated the Kenai River is extremely                 
 important to the economy of Soldotna and anything that damages that           
 river is a serious threat to the lifestyle and well-being of                  
 Number 740                                                                    
 REPRESENTATIVE HUDSON asked if the city of Soldotna currently                 
 maintains its highway and road maintenance facility.                          
 Number 752                                                                    
 MR. BOEDEKER replied that it is out on Funny River Road.                      
 Number 759                                                                    
 REPRESENTATIVE HUDSON asked if that facility could be expanded to             
 have a multiple facility, if the state could join with the city to            
 have a combined facility in exchange for a remediated piece of                
 Number 780                                                                    
 MR. BOEDEKER replied that it could be managed.  He stated that                
 there are two issues dealing with the cities maintenance                      
 facilities.  It is located on airport property and a large part of            
 the maintenance equipment is used for the airport maintenance that            
 the city has.  He stated that because of the restrictions on that             
 property there has to be a rent paid that goes into the airport               
 fund and that site is as large as it can get.  It is back one                 
 hundred yards from the bank of the river, it is something that can            
 be looked at.                                                                 
 Number 843                                                                    
 REPRESENTATIVE ELTON asked when the city of Soldotna constructs               
 public facilities of other buildings or roads are they done under             
 the terms of a project labor agreement.                                       
 Number 856                                                                    
 MR. BOEDEKER replied that the city is subject in any project that             
 they do to the prevailing wage requirement.                                   
 REPRESENTATIVE ELTON stated that a project labor agreement would              
 assure that the project is built with union labor.                            
 Number 869                                                                    
 MR. BOEDEKER stated that we have not done projects guaranteeing               
 union labor, it is an option but we have always had them open to              
 bid and paid the prevailing wage schedule.                                    
 Number 893                                                                    
 CHAIRMAN WILLIAMS called a brief at ease at 2:33 p.m.                         
 Number 893                                                                    
 CHAIRMAN WILLIAMS called the House Transportation Standing                    
 Committee back to order at 2:45 p.m.                                          
 Number 933                                                                    
 REPRESENTATIVE DAVIS stated that he did not get the sponsor                   
 substitute finished in time, as it needs to go through a five day             
 process and he would appreciate if the sponsor substitute be                  
 considered as Amendment 1.                                                    
 Number 960                                                                    
 REPRESENTATIVE HUDSON moved to adopt Amendment 1, currently                   
 identified as sponsor substitute, 3/7/97, E Version.                          
 CHAIRMAN WILLIAMS asked if there was any objections.                          
 REPRESENTATIVE KOOKESH objected to ask a question.  He asked, "What           
 is the difference between this bill and the other bill, I                     
 understand in the first bill we have Soldotna doing the revenue               
 bonds, and the next bill we have the state doing the revenue                  
 Number 1053                                                                   
 REPRESENTATIVE DAVIS stated that the original bill did have the               
 city of Soldotna issuing the bonds and then the state leasing from            
 the city of Soldotna, with Amendment 1, it will allow the option              
 for the state to bond.  He said, "The reason for that is there are            
 other bills working their way through the hopper that could                   
 possibly get up to finance, as hopefully this one will too, and if            
 there is $30 million, $40 million, $50 million approved for the               
 state to bond, the state could make one heck of a savings on a $30            
 million bond compared to Soldotna's $5 million or $6 million bond.            
 So that's the rational, in hope of saving money and reducing                  
 substantially, the monthly payment on this project."                          
 Number 1035                                                                   
 REPRESENTATIVE KOOKESH withdrew his objection.                                
 Number 1049                                                                   
 REPRESENTATIVE ELTON stated that this would give the state the                
 ability to refinance if the rates go down even if you don't add               
 incrementally and the state could then refinance and get the                  
 savings rather than the city of Soldotna.                                     
 Number 1053                                                                   
 REPRESENTATIVE DAVIS stated that Representative Elton was correct             
 and that it was a big advantage of this amendment.                            
 Number 1060                                                                   
 CHAIRMAN WILLIAMS asked if there was any objections to Amendment 1.           
 Hearing none, Amendment 1 was adopted.                                        
 Number 1070                                                                   
 REPRESENTATIVE ELTON made a motion to move CSHB 85(TRA), as                   
 amended, with the attached fiscal note and individual                         
 Number 1077                                                                   
 CHAIRMAN WILLIAMS asked if there were any objections.  Hearing none           
 CSHB 85(TRA) was moved out of the House Transportation Standing               
 Number 1083                                                                   
 CHAIRMAN WILLIAMS adjourned the House Transportation Standing                 
 Committee at 2:50 p.m.                                                        

Document Name Date/Time Subjects