Legislature(2013 - 2014)BARNES 124

03/19/2013 01:00 PM TRANSPORTATION

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved CSHB 146(TRA) Out of Committee
Moved Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
            HOUSE TRANSPORTATION STANDING COMMITTEE                                                                           
                         March 19, 2013                                                                                         
                           1:02 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Representative Peggy Wilson, Chair                                                                                              
Representative Doug Isaacson, Vice Chair                                                                                        
Representative Eric Feige                                                                                                       
Representative Lynn Gattis                                                                                                      
Representative Craig Johnson                                                                                                    
Representative Bob Lynn                                                                                                         
Representative Jonathan Kreiss-Tomkins                                                                                          
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                            
HOUSE BILL NO. 146                                                                                                              
"An Act  relating to proof  of motor vehicle liability  insurance;                                                              
and providing for an effective date."                                                                                           
     - MOVED CSHB 146(TRA) OUT OF COMMITTEE                                                                                     
HOUSE BILL NO. 123                                                                                                              
"An Act  relating to  the transportation  infrastructure  fund, to                                                              
local  public transportation,  to  the municipal  harbor  facility                                                              
grant  fund,   to  motor   fuel  taxes,   to  the  motor   vehicle                                                              
registration  fee, to  driver's  license fees,  to  identification                                                              
card fees,  to the studded  tire tax, to  the vehicle  rental tax,                                                              
and to  other fees and taxes  related to motor  vehicles; creating                                                              
the Alaska  Transportation Panel;  and providing for  an effective                                                              
     - MOVED HB 123 OUT OF COMMITTEE                                                                                            
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: HB 146                                                                                                                  
SHORT TITLE: PROOF OF MOTOR VEHICLE INSURANCE                                                                                   
SPONSOR(s): REPRESENTATIVE(s) HIGGINS                                                                                           
02/27/13       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/27/13       (H)       TRA                                                                                                    
03/14/13       (H)       TRA AT 1:00 PM BARNES 124                                                                              
03/14/13       (H)       -- MEETING CANCELED --                                                                                 
03/19/13       (H)       TRA AT 1:00 PM BARNES 124                                                                              
BILL: HB 123                                                                                                                  
SHORT TITLE: DEDICATED TRANSPORT FUND/PUB TRANSPORT                                                                             
SPONSOR(s): REPRESENTATIVE(s) P.WILSON                                                                                          
02/15/13       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/15/13       (H)       TRA, FIN                                                                                               
02/26/13       (H)       TRA AT 1:00 PM BARNES 124                                                                              
02/26/13       (H)       Heard & Held                                                                                           
02/26/13       (H)       MINUTE(TRA)                                                                                            
03/14/13       (H)       TRA AT 1:00 PM BARNES 124                                                                              
03/14/13       (H)       -- MEETING CANCELED --                                                                                 
03/19/13       (H)       TRA AT 1:00 PM BARNES 124                                                                              
WITNESS REGISTER                                                                                                              
REPRESENTATIVE PETE HIGGINS                                                                                                     
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified as sponsor during the discussion                                                               
of HB 146.                                                                                                                      
THOMAS STUDLER, Staff                                                                                                           
Representative Pete Higgins                                                                                                     
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified during the discussion of HB 146.                                                               
RODNEY DIAL, Lieutenant                                                                                                         
Alaska State Troopers                                                                                                           
Department of Public Safety (DPS)                                                                                               
Ketchikan, Alaska                                                                                                               
POSITION STATEMENT:  Testified during the discussion of HB 146.                                                               
JEFF OTTESEN, Director                                                                                                          
Program Development                                                                                                             
Department of Transportation & Public Facilities (DOT&PF)                                                                       
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified during the discussion of HB 123.                                                               
COLLEEN GREENSHIELDS, Administrative Officer                                                                                    
Director's Office, Division of Motor Vehicles (DMV)                                                                             
Department of Administration (DOA)                                                                                              
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified during the discussion of HB 123.                                                               
LORENE PALMER, Director                                                                                                         
Division of Economic Development                                                                                                
Department of Commerce, Community & Economic Development (DCCED)                                                                
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified during the discussion of HB 123.                                                               
REBECCA ROONEY, Staff                                                                                                           
CHAIR P. WILSON                                                                                                                 
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified and answered questions on behalf                                                               
of CHAIR P. WILSON, the prime sponsor of HB 123.                                                                                
PAMELA LEARY                                                                                                                    
State Comptroller                                                                                                               
Treasury Division                                                                                                               
Department of Revenue (DOR)                                                                                                     
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified during the discussion of HB 123.                                                               
DON ETHERIDGE, Lobbyist                                                                                                         
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 123.                                                                          
DALE NELSON, Chair, Legislative Committee                                                                                       
Alaska Professional Design Council (APDC)                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified during the discussion of HB 123.                                                               
ACTION NARRATIVE                                                                                                              
1:02:56 PM                                                                                                                    
CHAIR  PEGGY  WILSON  called  the  House  Transportation  Standing                                                            
Committee meeting  to order at  1:02 p.m.  Representatives  Feige,                                                              
Lynn, Isaacson,  Kreiss-Tomkins,  and Wilson  were present  at the                                                              
call  to order.   Representatives  Johnson and  Gattis arrived  as                                                              
the meeting was in progress.                                                                                                    
            HB 146-PROOF OF MOTOR VEHICLE INSURANCE                                                                         
1:03:46 PM                                                                                                                    
CHAIR P. WILSON  announced that the first order  of business would                                                              
be  HOUSE  BILL NO.  146,  "An  Act  relating  to proof  of  motor                                                              
vehicle  liability  insurance;  and  providing  for  an  effective                                                              
1:04:14 PM                                                                                                                    
REPRESENTATIVE  ISAACSON  moved to  adopt  the proposed  committee                                                              
substitute  (CS) for  HB  146, labeled  [28-LS0436\N,  Strasbaugh,                                                              
3/11/13],  as the  working document.   There  being no  objection,                                                              
Version N was before the committee.                                                                                             
1:05:02 PM                                                                                                                    
REPRESENTATIVE  PETE  HIGGINS,   Alaska  State  Legislature,  said                                                              
Alaska is often  behind the power curve and HB 146  relates to the                                                              
proof  of insurance.    Sometimes a  vehicle's  insurance card  is                                                              
expired,  but   with  modern  technology  including   applications                                                              
(APPS), it is easy  for drivers to show proof of  insurance.  This                                                              
bill, HB 146,  will allow motorists to provide  proof of insurance                                                              
on a mobile electronic  device, such as on a  phone application or                                                              
electronic device such  as an IPad.  This bill  would bring Alaska                                                              
into the 21st Century and has no fiscal note impact.                                                                            
1:06:55 PM                                                                                                                    
THOMAS STUDLER,  Staff, Representative Pete Higgins,  Alaska State                                                              
Legislature, on  behalf of Representative  Higgins, sponsor  of HB                                                              
146, stated  that six  states have  already enacted  this  law and                                                              
another 20 other  states are considering similar  legislation.  He                                                              
said  the research  done  showed  that  two types  of  electronics                                                              
proof  of  insurance  exist,  including   the  American  Liability                                                              
Insurance Registry  (ALIR), which  is performed via  the insurance                                                              
companies and  the department of motor  vehicles at a cost  to the                                                              
state of  $4.7 million.   Second, the  driver could  provide proof                                                              
of  insurance by  using  an application  (APP)  process, which  is                                                              
free to the state, he said.                                                                                                     
1:08:36 PM                                                                                                                    
REPRESENTATIVE  JOHNSON   related  his  own  experience   with  an                                                              
outdated  insurance  card, but  indicated  the officer  would  not                                                              
take his  phone into  the police  vehicle.   He wanted  to clarify                                                              
and  ensure that  officers  would  be able  to  take the  driver's                                                              
phone to  verify the  insurance.   In his  own experience,  he had                                                              
shown the  officer his  paper insurance  card, which was  expired,                                                              
as well  as the online  version of his  proof of insurance,  which                                                              
had an  updated expiration  date.  He  indicated the  officer took                                                              
the expired card  to the vehicle, after verifying  the information                                                              
displayed on the phone [to ensure that it was the same policy.]                                                                 
1:09:52 PM                                                                                                                    
RODNEY  DIAL, Lieutenant,  Alaska  State Troopers,  Department  of                                                              
Public Safety (DPS), introduced himself.                                                                                        
1:10:33 PM                                                                                                                    
REPRESENTATIVE  JOHNSON  related a  scenario  about  his proof  of                                                              
insurance and use of the phone to verify the vehicle insurance.                                                                 
LT.  DIAL  understood  that  the   question  related  to  using  a                                                              
telephone during a  routine office stop.  He said  that the Alaska                                                              
State Troopers  (AST) do  not have any  restrictions.   He advised                                                              
that  the  AST   officers  typically  are  fairly   creative  when                                                              
verifying  the information,  but as  a last resort  would  issue a                                                              
correctable  citation.    He  explained  that  the  officers  will                                                              
sometimes   call  local   insurance  companies   in  the   smaller                                                              
communities,  such  as Ketchikan,  and  the insurance  agent  will                                                              
advise if  the driver has insurance.   He pointed out  that anyone                                                              
can get an insurance  card that shows they have  insurance for six                                                              
months or longer;  however, the person could stop  making payments                                                              
and simply  retain the card, but  the insurance coverage  would be                                                              
terminated.    He  reiterated  that  the AST  does  not  have  any                                                              
restrictions  and  tries  to verify  insurance  before  writing  a                                                              
1:12:17 PM                                                                                                                    
REPRESENTATIVE  JOHNSON  expressed  additional concern  about  the                                                              
Municipality of  Anchorage and whether  their officers  would have                                                              
any issues  with the  online insurance verification.   He  said he                                                              
does not want  to hold the bill  up, but wants to ensure  the bill                                                              
REPRESENTATIVE   GATTIS  commented   that  it   is  possible   the                                                              
Matanuska-Susitna valley  might have similar issues.   She pointed                                                              
out that  these devices  are not  just phones  but hold  calendars                                                              
and  other information.   She  acknowledged  that the  communities                                                              
are   all  grappling   with  how   to   handle  these   electronic                                                              
REPRESENTATIVE   ISAACSON  related  he   was  mayor  of   a  small                                                              
community.   He  suggested that  if the  person voluntarily  gives                                                              
the phone as  evidence to the officer,  it would not likely  be an                                                              
issue.  He further  suggested that this bill would  clarify and be                                                              
helpful to  officers since  it would  indicate the mobile  devices                                                              
could be used.                                                                                                                  
REPRESENTATIVE JOHNSON  said he supports  the bill, but  wanted to                                                              
be  sure  it  works  so  the  person   can  show  their  proof  of                                                              
1:15:53 PM                                                                                                                    
CHAIR P.  WILSON referred  to [page  2, lines  7-8], and  read, "A                                                              
person  may display  the  proof on  a mobile  electronic  device."                                                              
She thought it was straight forward as a statewide permission.                                                                  
REPRESENTATIVE  JOHNSON   said  he  was  unsure   the  ability  to                                                              
displace is  the same as the  police officer being able  to accept                                                              
CHAIR P. WILSON  asked whether Representative Johnson  could check                                                              
with the Municipality of Anchorage.                                                                                             
1:17:35 PM                                                                                                                    
MR. STUDLER  said the  Department  of Public  Safety was fully  in                                                              
support of the  bill as a policy  for the state and  that it would                                                              
allow local municipalities  to also use the policy.   He explained                                                              
that  people have  to show  evidence  of proof  of insurance  upon                                                              
demand  of a  peace officer  and  under the  bill  the person  may                                                              
display  it  on  an  electronic   device.    He  further  recalled                                                              
discussions   with  the   Department   of  Administration   (DOA),                                                              
specifically,  with  the  Division  of Motor  Vehicles  (DMV)  who                                                              
suggested  it  would reduce  confusion  on  what a  peace  officer                                                              
could accept as proof of insurance.                                                                                             
The committee took an at-ease from 1:18 p.m. to 1:37 p.m.                                                                       
1:37:47 PM                                                                                                                    
CHAIR  P.   WILSON  offered   that  Representatives   Johnson  and                                                              
Isaacson have briefly researched this matter.                                                                                   
REPRESENTATIVE  ISAACSON  said  he  spoke  to  the  Department  of                                                              
Public  Safety (DPS),  who stated  if the  legislature places  the                                                              
online  proof  of insurance  provision  in  statute that  the  AST                                                              
would comply.                                                                                                                   
REPRESENTATIVE  JOHNSON  said he  was  satisfied.   He  understood                                                              
that  the  police  officers  would  only need  to  take  proof  of                                                              
insurance  to their  vehicles in  instances in  which an  accident                                                              
occurs.  He further  understood that the officers  could write the                                                              
number  down if they  do not  feel comfortable  taking the  phone.                                                              
Thus he is comfortable with the bill.                                                                                           
1:39:03 PM                                                                                                                    
REPRESENTATIVE  ISAACSON moved  to report  the proposed  committee                                                              
substitute  (CS) for  HB  146, labeled  [28-LS0436\N,  Strasbaugh,                                                              
3/11/13]  out of  committee  with individual  recommendations  and                                                              
the  accompanying fiscal  note.   There  being  no objection,  the                                                              
CSHB  146(TRA)   was  reported   from  the  House   Transportation                                                              
Standing Committee.                                                                                                             
         HB 123-DEDICATED TRANSPORT FUND/PUB TRANSPORT                                                                      
1:39:35 PM                                                                                                                    
CHAIR P. WILSON  announced that the final order  of business would                                                              
be HOUSE  BILL NO.  123, "An  Act relating  to the  transportation                                                              
infrastructure  fund,  to  local  public  transportation,  to  the                                                              
municipal  harbor facility  grant fund,  to motor  fuel taxes,  to                                                              
the motor vehicle  registration fee, to driver's  license fees, to                                                              
identification  card  fees,  to  the  studded  tire  tax,  to  the                                                              
vehicle rental tax,  and to other fees and taxes  related to motor                                                              
vehicles;   creating   the  Alaska   Transportation   Panel;   and                                                              
providing for an effective date."                                                                                               
1:40:14 PM                                                                                                                    
CHAIR  P. WILSON  indicated she  does not  plan to  move the  bill                                                              
The committee took an at-ease from 1:40 p.m. to 1:44 p.m.                                                                       
1:44:08 PM                                                                                                                    
CHAIR P. WILSON turned the gavel over to Representative Feige.                                                                  
1:44:22 PM                                                                                                                    
CHAIR P. WILSON,  speaking as sponsor of HB 123,  said that Alaska                                                              
has    always   had    difficulties    financing    transportation                                                              
infrastructure.   With the Department  of Transportation  & Public                                                              
Facilities  (DOT&PF)'s  Federal   Highways  Administration  (FHWA)                                                              
MAP-21 presentation  the committee  heard, the  state will  have a                                                              
deep decline  in the amount  of funding available  for communities                                                              
and   local    roads.      Despite   the    aging   transportation                                                              
infrastructure  Alaska has  not  had any  new roads  built in  the                                                              
last  30-40 years,  which she  characterized  as being  atrocious.                                                              
In fact,  the state  has a $20  billion backlog in  transportation                                                              
projects and $700  million in deferred maintenance.   Further, the                                                              
state needs  open new  access to  natural resources  and to  do so                                                              
will require development  of Alaska's transportation  system.  The                                                              
state needs  to depend  less on the  federal government  and start                                                              
taking responsibility  for Alaska's roads, harbors,  airports, and                                                              
railroads.  She  said, "Plain and simple, we need  to plan for the                                                              
future [slide 2]."                                                                                                              
1:45:47 PM                                                                                                                    
CHAIR P. WILSON  recapped the work the committee has  taken in the                                                              
past  few years.    Three years  ago,  the committee  listened  to                                                              
DOT&PF's grassroots  organizations, transportation  organizations,                                                              
and   held  hearings   to   identify   the  challenges   in   this                                                              
geographically  diverse state.   The committee  traveled  to rural                                                              
communities to view  first-hand their airports; traveled  on rural                                                              
and urban  highways to observe  challenges these  communities face                                                              
with  regard  to safety,  congestion,  and  deferred  maintenance.                                                              
The committee  heard from  the Alaska  Municipal League  (AML) and                                                              
the  Matanuska-Susitna Borough  (MSB),  as well  as from  national                                                              
experts at the  National Conference of State  Legislatures (NCSL).                                                              
The committee  also heard from  state experts, including  a report                                                              
by  Larry  Persily  that  addressed  the  fiscal  shortfalls  with                                                              
respect  to  the  state's long-range  transportation  plan.    The                                                              
committee ultimately  rejected the options  to fix the  problem by                                                              
bonding,  which would  commit future  funds to  pay off the  debt.                                                              
She  offered the  solution she  proposes today  resulted from  all                                                              
the hours of committee meetings, travel, and research [slide 3].                                                                
1:46:50 PM                                                                                                                    
CHAIR  P.  WILSON   outlined  the  transportation   funding  plan.                                                              
First,  the   state  needs  to   reestablish  the   dedication  of                                                              
transportation  taxes and fees  as part  of a transportation  fund                                                              
that was in existence  at statehood.  The framers  of the Alaska's                                                              
Constitution  grandfathered  in  two dedicated  funds  related  to                                                              
transportation.   The  first one  was  known as  the highway  fund                                                              
whose   purpose   was   established    to   fund   highway-related                                                              
activities.  The  second fund was the water and  harbor facilities                                                              
fund, and proceeds  were designated for water and  harbor facility                                                              
expenditures.   The proposed Alaska Transportation  Infrastructure                                                              
Fund  (ATIF) would  combine  these  two funds  into  one fund  and                                                              
require  a  vote of  the  people  to change  the  constitution  to                                                              
ensure  that   all  fees   and  taxes   paid  for   transportation                                                              
activities  will be  spent only  on transportation.   Second,  she                                                              
highlighted that  the state must  continue to fund  transportation                                                              
as it  has been done  in the  past.  She  emphasized that  this is                                                              
key to  making progress  to improve transportation  infrastructure                                                              
in Alaska.  In  doing so, the state could slowly  chip away at the                                                              
$20 billion  backlog of  projects.  Third,  she outlined  that the                                                              
state  must engage  in  more  100 percent  state-funded  projects,                                                              
which  could mean  savings in  cost  and time  since the  projects                                                              
would not  be subject  to federal constraints.   For  example, the                                                              
Elmore Road Extension  project in Anchorage was  completed in less                                                              
than 3  years as compared  to the 7-10  years it would  have taken                                                              
if  the   federal  processes  would   have  been  followed.     In                                                              
conclusion,  her intention  and  goal is  to  provide a  dedicated                                                              
revenue  stream that  will  allow more  projects  to be  completed                                                              
faster and  with less  funding while the  state would  continue to                                                              
provide  funding for  ongoing federal  and  state projects  [slide                                                              
1:49:03 PM                                                                                                                    
CHAIR  P. WILSON  explained that  the  proposed legislation  would                                                              
fund  and implement  the ATIF.    She said  the legislature  would                                                              
need  to  pass  three  measures:    First,  HJR  10  would  put  a                                                              
constitutional change  on the ballot  to allow citizens  to decide                                                              
whether to implement  the ATIF.  Second, this bill,  HB 123, would                                                              
define the laws  related to the structure of the  fund.  Third, HB                                                              
122  would  appropriate $2  billion  into  the fund  for  start-up                                                              
funds.   She acknowledged the  sum of $2  billion to seed  ATIF is                                                              
considerable;  however,  it  is   necessary  to  make  significant                                                              
progress  in  the  transportation   backlog.    This  seed  money,                                                              
combined  with continued  funding from the  state's operating  and                                                              
capital  budgets,  would  provide  a steady  measure  of  progress                                                              
against the  backlog.   She has heard  anecdotally that  a federal                                                              
dollar  is  worth  $.75  as  compared   to  state  dollars.    She                                                              
emphasized   the  importance   of  all  three   elements   of  the                                                              
transportation proposal.   The annual  revenue would  be comprised                                                              
from  [motor  fuel tax,  tire  tax,  vehicle rental  tax,  vehicle                                                              
registrations  and driver's license  fees, and new  transportation                                                              
related fees  or taxes],  which would be  deposited into  the fund                                                              
and  is estimated  at approximately  $80  million per  year.   She                                                              
noted  any  special   use  fees  currently  in   place  have  been                                                              
preserved, including airport lease revenues [slide 5].                                                                          
1:51:04 PM                                                                                                                    
CHAIR  P. WILSON  referred to  a spreadsheet  in members'  packets                                                              
entitled,  "Alaska  Transportation  Infrastructure  Fund  (ATIF)."                                                              
She said  the department  will manage the  ATIF consistent  with 6                                                              
percent  of  market  value  (POMV),   although  the  rate  can  be                                                              
adjusted  depending  on  the  economy.     Currently,  the  DOT&PF                                                              
manages  multiple  funds  and  has experience  and  a  good  track                                                              
record.   All  the profits  will be  reinvested in  the fund  each                                                              
year.    Additionally,  each  year funds  will  be  available  for                                                              
appropriation  based on  5  percent POMV  over  the previous  five                                                              
years,  plus  half  of  the taxes  and  fees  collected  from  the                                                              
previous  year.  Further,  the fund  will cover  expenses  for the                                                              
DMV, the cost to  administer and manage the fund,  and the cost of                                                              
the advisory  council [slide 6].   Lastly, the fund will  be self-                                                              
sufficient and  not require any  general funds for  administration                                                              
and  the appropriations  from  the fund  will  follow the  regular                                                              
budget process  and will  be approved by  the legislature  and the                                                              
1:52:49 PM                                                                                                                    
CHAIR  P. WILSON  provided details  on  the Alaska  Transportation                                                              
Panel (ATP),  which is  a panel who  will prioritize  projects for                                                              
funding, and submit  them to the federalized  State Transportation                                                              
Improvement  Plan  (STIP)  or recommend  projects  be  constructed                                                              
with ATIF  funding, using  state standards  and procedures  [slide                                                              
7].   She  said the  ATP would  consist of  [four] public  members                                                              
appointed  by  the  governor,  the  commissioner  of  DOT&PF,  the                                                              
DOT&PF's  STIP  member  [also considered  the  project  evaluation                                                              
board  member],   and  a  member  of  the   Alaska  Infrastructure                                                              
Commission  (AIC).  The  public members  would include  one member                                                              
from  the Anchorage  area, including  the Matanuska-Susitna  area;                                                              
one member  from the  greater Fairbanks  area;  one member  from a                                                              
rural  coastal community;  and one  member from  a rural  interior                                                              
community.   The  governor must  ensure the  public members  bring                                                              
expertise  from  all modes  of  transportation,  including  roads,                                                              
ferries, and  aviation.   The ATP  would use DOT&PF's  established                                                              
guidelines  to analyze all  projects and  all modes and  determine                                                              
which would  be STIP projects or  AIC projects.  Finally,  the AIC                                                              
would  prioritize  the  projects  recommended  by  the  ATP  based                                                              
solely on statewide priorities and needs.                                                                                       
1:54:58 PM                                                                                                                    
CHAIR  P. WILSON  stated  that the  AIC would  consist  of a  nine                                                              
member  Alaska  Infrastructure   Commission,  as  follows:    four                                                              
public members  - one  from each judicial  district -  two members                                                              
at large; two  non-voting legislature members - the  Chairs of the                                                              
House and Senate  Transportation Committee - and  the commissioner                                                              
of DOT&PF.  The  DOT&PF will be charged with  writing the weighted                                                              
criteria  used for  project  evaluation.   The  AIC's  prioritized                                                              
list is due  to the governor  and the legislature by  October 15th                                                              
of each year for inclusion into the capital budget, she said.                                                                   
CHAIR P.  WILSON reviewed the ATIF  Projects [slide 9].   Projects                                                              
from all  modes of transportation  would be considered  every year                                                              
and anyone can  submit a project for consideration,  including the                                                              
state,  a  borough,  an unorganized  borough,  a  municipality,  a                                                              
community,  or   a  village.     She  envisioned   that  completed                                                              
submission forms  would provide the AIC sufficient  information to                                                              
prioritize  projects   statewide.    She  emphasized   that  every                                                              
project will  be considered.   She said  that a project  using the                                                              
federal  process is  constrained  and could  use no  more than  20                                                              
percent of the  available ATIF funds, which should  incentive more                                                              
state-funded  projects.    Additionally,  ATIF funding  cannot  be                                                              
used  for  federal  matching  funds  for  surface  transportation,                                                              
aviation,   or   the  Alaska   Marine   Highway   System   (AMHS).                                                              
Specifically,  the goal is  for major projects  in these  areas to                                                              
be completely funded using state funds.                                                                                         
1:56:47 PM                                                                                                                    
CHAIR  P. WILSON  turned  again  to  the spreadsheet  in  members'                                                              
packets,  entitled  "Alaska  Transportation   Infrastructure  Fund                                                              
(ATIF),"  which projects  and identifies  the total available  for                                                              
capital  appropriations  if the  state  initially  funds the  ATIF                                                              
with $2  billion and also  deposits transportation user  fees into                                                              
the fund.                                                                                                                       
1:57:15 PM                                                                                                                    
CHAIR P. WILSON  outlined the goals for the ATIF  [slide 10].  The                                                              
ATIF  can  help  Alaska  plan  for its  future,  she  said.    She                                                              
anticipated  the  ATIF  would decrease  the  current  $20  billion                                                              
transportation   infrastructure    backlog,   eliminate   deferred                                                              
maintenance,   and  decrease   Alaska's   dependence  on   federal                                                              
dollars,  although the  state will  still want  to leverage  every                                                              
federal dollar.   The  ATIF would provide  more direct  jobs, with                                                              
an indirect employment  boost, as well.  Alaska's  major roads are                                                              
not safe  due to congestion  and deterioration,  she stated.   The                                                              
ATIF  would  also  improve  safety  on  Alaska's  roads,  bridges,                                                              
airports,  and harbors.   She  referred to  numerous studies  that                                                              
show transportation  investment creates a competitive  environment                                                              
attracting   additional   economic    investment   that   includes                                                              
increased   output,   productivity,    income,   property   value,                                                              
employment,  and wages.   Additionally, the  ATIF will  assist the                                                              
state  in  reductions  in  project  costs,  non-commercial  travel                                                              
time, and improved  quality of live, as well as provide  a rate of                                                              
return  equal to  or greater  than  the social  costs of  capital.                                                              
The state's  economy is  highly dependent  on resource  extraction                                                              
and these industries  are transportation intensive.   She asserted                                                              
that Alaska  needs a  state-funded transportation  system  that is                                                              
sufficiently  and  predictably  funded.   This  reliable  flow  of                                                              
funds allows the  development of a sound transportation  plan that                                                              
does fluctuate with funding or the economy.                                                                                     
CHAIR P. WILSON  stressed that the state of the  economy in Alaska                                                              
doesn't matter in  terms of the ongoing necessity  to maintain its                                                              
roads, and the state  must continue to strive and  move forward to                                                              
diversify  its economy.   She  recapped  her presentation,  noting                                                              
she  has  identified  the transportation  issues,  the  method  of                                                              
implementing the  ATIF, and has addressed the  broader social good                                                              
and economic  process the  ATIF brings to  meet the  state's ever-                                                              
growing  transportation  needs.   She  emphasized  that the  state                                                              
needs to  implement the  ATIF.   She said,  "Alaska needs  to take                                                              
action now  while the price of oil  is still high.   The Permanent                                                              
Fund  recently  topped  $40  billion.    We've  fully  repaid  the                                                              
constitutional budget  reserve and  we've set aside  billions more                                                              
in the  statutory budget  reserve."   Even though  the ATIF  seems                                                              
like  a  huge expenditure,  it  is  really  an investment  in  the                                                              
state's  economic future.   In  conclusion, she  asked members  to                                                              
put the  constitutional amendment on  the ballot in  November 2014                                                              
and to move the  three measures forward, including  HB 123, to let                                                              
the people of the state decide.                                                                                                 
2:00:32 PM                                                                                                                    
CHAIR  P.  WILSON  referred  again  to  the  spreadsheet  entitled                                                              
"Alaska Transportation  Infrastructure  Fund (ATIF), pointing  out                                                              
the capital appropriations  would initially be $68  million in the                                                              
first year,  but as the fund  and principal grows the  state would                                                              
have  $300 million  each  year  to appropriate  to  transportation                                                              
projects throughout the state.                                                                                                  
2:01:38 PM                                                                                                                    
REPRESENTATIVE  JOHNSON said  he supports  HB 123.   He asked  for                                                              
clarification on  the make-up of seven-member ATP  and whether the                                                              
ATP's  composition could  actually exclude  a representative  from                                                              
Southeast Alaska.                                                                                                               
CHAIR P. WILSON  agreed.  She clarified that the  ATP's purpose is                                                              
to prioritize  projects for  the STIP or  the ATIP.   However, the                                                              
nine-member  AIC would prioritize  the projects  across the  state                                                              
in terms of importance and need.                                                                                                
REPRESENTATIVE  JOHNSON  said  if  she  is  comfortable  with  the                                                              
composition of the panel, then he is also.                                                                                      
2:02:35 PM                                                                                                                    
CHAIR P. WILSON asked the DOT&PF to describe the fiscal notes.                                                                  
2:03:01 PM                                                                                                                    
JEFF  OTTESEN,   Director,  Program  Development,   Department  of                                                              
Transportation  &  Public  Facilities (DOT&PF),  stated  that  the                                                              
department's  fiscal note  shows a  fiscal impact  of $490,000  in                                                              
the first  year, dropping  back  to $209,000  annually.  The  one-                                                              
time cost in  the first year would  cover the purchase  of a suite                                                              
of software to manage  the scoring process, as well  as $50,000 in                                                              
legal costs  to promulgate  regulations.   The remainder  would be                                                              
personal  services and  travel for  the  commissions and  expenses                                                              
for the one full-time staff serving both commissions.                                                                           
2:04:23 PM                                                                                                                    
CHAIR  P. WILSON  asked  for  clarification  on the  software  the                                                              
department uses for the STIP.                                                                                                   
MR. OTTESEN  assumed the department  would purchase  the software.                                                              
Currently,  the department  uses an Excel  spreadsheet, since  the                                                              
department  scores  approximately  40 projects,  which  takes  two                                                              
days.  He described  the process as a slow slog  since six members                                                              
must respond  to a  series of  questions and  votes are  recorded.                                                              
The  STIP also  has a  way to  separate or  pre-score the  highest                                                              
projects  and  a  sub-set  of  projects  come  before  the  panel.                                                              
Otherwise the  full panel  would need  to score 300-400  projects,                                                              
which  would likely  take 10  days.   He offered  his belief  that                                                              
members reach a saturation point after two days of scoring.                                                                     
CHAIR  P. WILSON  commented that  she sat  in on  one of the  STIP                                                              
process  meetings  and  found  the  scoring  process  interesting,                                                              
which she briefly described.                                                                                                    
MR. OTTESEN  interjected that  members can  hold four  percent for                                                              
specific projects,  but 96  percent of the  STIP process  is based                                                              
on  firm  criteria.    In  further  response  to  a  question,  he                                                              
explained  the DOT&PF  will need  to find  a way  to record  votes                                                              
simultaneously  if this  fiscal  note did  not get  approved.   He                                                              
briefly described  the voting  and weighing  process the  software                                                              
provides, which  consists of an analytical hierarchy  process used                                                              
to  arrive  at   the  collective  judgment  of  the   panel.    He                                                              
elaborated  this software  was developed  during the  Cold War  to                                                              
evaluate options.                                                                                                               
2:09:06 PM                                                                                                                    
COLLEEN GREENSHIELDS,  Administrative Officer,  Director's Office,                                                              
Division  of Motor  Vehicles (DMV),  Department of  Administration                                                              
(DOA), stated  that she  is filling in  for Tiffany  Thomas, DMV's                                                              
Driver Licensing  Manager.   She explained  that the DMV's  fiscal                                                              
note is  a zero fiscal  note.  The  division is receipt  supported                                                              
and the  change would  move the  funding from  general funds  into                                                              
the ATIF  fund.  She detailed  that the department  has identified                                                              
$15,725,800 in fees  that would not be available to  be moved.  In                                                              
response  to Representative  Wilson,  she agreed  those funds  are                                                              
dedicated to something else.                                                                                                    
CHAIR P. WILSON  pointed out these fees are for  boat registration                                                              
fees,  snowmobile  registration  fees,  the  emission  maintenance                                                              
fees, the donations  from the anatomical gift awareness  fund, and                                                              
fees for special plates, trust, and adjustments.                                                                                
MS. GREENSHIELDS colleen answered yes.                                                                                          
CHAIR  P.  WILSON   remarked  that  these  designated   fees  will                                                              
continue to be directed as is currently done.                                                                                   
2:11:26 PM                                                                                                                    
LORENE  PALMER,   Director,  Division  of   Economic  Development,                                                              
Department   of  Commerce,   Community   &  Economic   Development                                                              
(DCCED),  stated  that the  division's  fiscal note  reflects  the                                                              
impact if  the department would  develop the ATIF and  any changes                                                              
in  receipts  for  vehicle  rental tax.    Currently  the  vehicle                                                              
rental  tax funding  is helping  support  the tourism  development                                                              
activities  within  the division.    She  explained the  scope  of                                                              
activities  includes a  variety  of efforts  to support  workplace                                                              
development,  including  tourism, research  projects,  development                                                              
of  niche markets,  and  assisting  rural Alaska  develop  tourism                                                              
opportunities.   She  reported that  the three  staff assigned  to                                                              
providing some  level of  tourism activities  is also  detailed in                                                              
the fiscal note analysis.                                                                                                       
2:12:48 PM                                                                                                                    
CHAIR  P. WILSON asked  whether  a percentage  of funds the  DCCED                                                              
receives are from the rental taxes.                                                                                             
MS. PALMER  replied  that the total  amount is  $338,000,  but she                                                              
was unsure of the percentage of the vehicle rental taxes.                                                                       
2:13:30 PM                                                                                                                    
REBECCA   ROONEY,   Staff,   CHAIR   P.   WILSON,   Alaska   State                                                              
Legislature,  stated that in  the previous  bills the  sponsor has                                                              
had before  the legislature  asked for 50  percent of  the vehicle                                                              
rental fees,  but this bill is based  on 100 percent of  the fees.                                                              
She estimated  the figure at  $2 million; however,  the department                                                              
is  currently using  $338,000  for  tourism activities,  which  is                                                              
based  on  the  purposes  established  for  the  taxes,  including                                                              
tourism and roads.                                                                                                              
CHAIR P. WILSON  stated she is willing to consider  changing it to                                                              
50 percent.                                                                                                                     
2:14:45 PM                                                                                                                    
MS. PALMER  recalled that  the total vehicle  rental tax  would be                                                              
$9 million.   Thus the division  takes a small portion  to support                                                              
the  tourism  development activities.    She  stated that  if  the                                                              
funding  was not  replaced by  the general  fund or  the ATIF,  it                                                              
would  significantly  inhibit  the department  from  carrying  out                                                              
these activities.                                                                                                               
2:15:41 PM                                                                                                                    
PAMELA  LEARY, State  Comptroller,  Treasury Division,  Department                                                              
of  Revenue  (DOR), stated  that  the  fiscal note  addresses  the                                                              
management  service fees which  would be  incurred with  the fund.                                                              
The department assumptions  were based on $1 billion  in the ATIF,                                                              
but they  are scalable.  Thus  depending on the dollar  amount the                                                              
department   can  adjust   the   estimate.     Additionally,   the                                                              
department used  additional revenue  amounts based on  the revenue                                                              
forecast for the vehicle taxes, which is $8.9 million.                                                                          
REPRESENTATIVE  FEIGE asked whether  the amount  is based on  a $1                                                              
billion endowment.                                                                                                              
MS. LEARY answered  yes.  She stated the fiscal  note would double                                                              
with a  $2 billion  fund.  In  response to Representative  Wilson,                                                              
she answered  that it would depend  on the fund's  investments and                                                              
the fiscal note represents an estimate.                                                                                         
2:17:25 PM                                                                                                                    
REPRESENTATIVE JOHNSON  said that there  isn't a fiscal  note from                                                              
the  Department  of Law  (DOL)  in  members'  packets.   He  asked                                                              
whether  Mr.  Ottesen had  testified  that  the DOT&PF  has  legal                                                              
services [for promulgating regulations.]                                                                                        
MR. OTTESEN answered  yes; and explained that the  DOT&PF uses the                                                              
department's [DOL] attorney at $125 per hour.                                                                                   
2:18:48 PM                                                                                                                    
REPRESENTATIVE  JOHNSON  asked  whether the  department  hires  an                                                              
outside attorney.                                                                                                               
MR. OTTESEN  answered  that the  DOT&PF uses  a Department  of Law                                                              
attorney  assigned  to  the Transportation  Section;  however  any                                                              
consultation is charged to the department.                                                                                      
REPRESENTATIVE  JOHNSON  offered  his belief  that  the  committee                                                              
needs  a fiscal  note from  the Department  of Law  to reflect  an                                                              
inter-agency transfer.                                                                                                          
2:19:33 PM                                                                                                                    
DON ETHERIDGE,  Lobbyist, AFL-CIO, stated  that the AFL-CIO  is in                                                              
support  of HB  123.   He said  the state  has not  built any  new                                                              
roads   in    thirty   years.      The    state's   transportation                                                              
infrastructure needs  maintenance, including its  roads, airports,                                                              
docks  and  harbors.     In  conclusion,  the   AFL-CIO  is  fully                                                              
supportive  of all  three  transportation  bills  [related to  the                                                              
2:20:49 PM                                                                                                                    
DALE  NELSON, Chair,  Legislative  Committee, Alaska  Professional                                                              
Design  Council  (APDC), stated  that  the  APDC is  comprised  of                                                              
professional  society  organizations   for  engineers,  surveyors,                                                              
landscape architects  and architects.   He offered  APDC's support                                                              
for the bill.  He said he would like to see it to move forward.                                                                 
2:22:14 PM                                                                                                                    
The committee took an at-ease from 2:22 to 2:23 p.m.                                                                            
2:23:17 PM                                                                                                                    
REPRESENTATIVE  JOHNSON remarked  that the  ATIF is long  overdue.                                                              
He said that  he and CHAIR P.  WILSON have fought this  battle for                                                              
five or six years.   He also said he has never  seen anything with                                                              
so much public  support meet such  resistance.  He stated  that he                                                              
is a strong  advocate of HB  123, and strongly  encourages passage                                                              
of this bill.                                                                                                                   
REPRESENTATIVE  FEIGE  remarked  that  it is  incumbent  upon  the                                                              
state  to  take  responsibility   for  its  transportation  needs,                                                              
especially   during  declines   in  the   federal  funding.     He                                                              
characterized the  ATIF as a  prudent exercise to  ensure Alaska's                                                              
transportation  needs  are  met and  continue  to  be met  in  the                                                              
2:24:40 PM                                                                                                                    
REPRESENTATIVE FEIGE,  after first determining no  one else wished                                                              
to testify, closed public testimony on HB 123.                                                                                  
REPRESENTATIVE GATTIS  stated her district  is one of  the fastest                                                              
growing districts  in the state and the Matanuska-Susitna  area is                                                              
unable to keep  up with its roads.   She said she plans  on voting                                                              
for this bill.   She thinks this  bill is one way to  speed up the                                                              
process  for some of  the faster  growing communities  to  keep up                                                              
with transportation projects.                                                                                                   
2:25:17 PM                                                                                                                    
REPRESENTATIVE  JOHNSON moved to  report HB  123 out of  committee                                                              
with  individual  recommendations   and  the  accompanying  fiscal                                                              
notes.   There being no  objection, HB  123 was reported  from the                                                              
House Transportation Standing Committee.                                                                                        
2:27:21 PM                                                                                                                    
There being  no further business  before the committee,  the House                                                              
Transportation  Standing Committee meeting  was adjourned  at 2:27                                                              

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