Legislature(2015 - 2016)CAPITOL 17

01/29/2015 01:00 PM House TRANSPORTATION

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01:04:09 PM Start
01:04:24 PM Overview: Department of Transportation & Public Facilities (dot&pf) - Department-wide
01:24:58 PM Overview: Department of Transportation & Public Facilities (dot&pf) - Aviation
02:13:21 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
- DOT/PF Department-wide
- DOT/PF Aviation Program
                    ALASKA STATE LEGISLATURE                                                                                  
            HOUSE TRANSPORTATION STANDING COMMITTEE                                                                           
                        January 29, 2015                                                                                        
                           1:04 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Representative Neal Foster, Co-Chair                                                                                            
Representative Shelley Hughes, Co-Chair                                                                                         
Representative Benjamin Nageak                                                                                                  
Representative Louise Stutes                                                                                                    
Representative Matt Claman                                                                                                      
Representative Dan Ortiz                                                                                                        
MEMBERS ABSENT                                                                                                                
Representative Charisse Millett                                                                                                 
COMMITTEE CALENDAR                                                                                                            
OVERVIEW: DEPARTMENT OF TRANSPORTATION & PUBLIC FACILITIES                                                                      
(DOT&PF) - DEPARTMENT-WIDE                                                                                                      
     - HEARD                                                                                                                    
OVERVIEW: DEPARTMENT OF TRANSPORTATION & PUBLIC FACILITIES                                                                      
(DOT&PF) - AVIATION                                                                                                             
     - HEARD                                                                                                                    
PREVIOUS COMMITTEE ACTION                                                                                                     
No previous action to record                                                                                                    
WITNESS REGISTER                                                                                                              
JOHN BINDER, Acting Commissioner; Deputy Commissioner -                                                                         
Aviation, Department of Transportation & Public Facilities                                                                      
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Presented a PowerPoint overview of the                                                                   
Department of Transportation & Public Facilities (DOT&PF) and                                                                   
aviation program.                                                                                                               
CONNIE MACKENZIE, Legislative Liaison                                                                                           
Office of the Commissioner                                                                                                      
Department of Transportation & Public Facilities (DOT&PF)                                                                       
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:    Testified  during  the  overview  of  the                                                             
aviation program.                                                                                                               
ACTION NARRATIVE                                                                                                              
1:04:09 PM                                                                                                                    
CO-CHAIR  NEAL FOSTER  called the  House Transportation  Standing                                                             
Committee meeting to order at  1:04 p.m.  Representatives Stutes,                                                               
Claman, Ortiz,  Hughes, and  Foster were present  at the  call to                                                               
order.   Representative  Nageak  arrived as  the  meeting was  in                                                               
^OVERVIEW:  DEPARTMENT  OF  TRANSPORTATION  &  PUBLIC  FACILITIES                                                               
(DOT&PF) - DEPARTMENT-WIDE                                                                                                      
   OVERVIEW: DEPARTMENT OF TRANSPORTATION & PUBLIC FACILITIES                                                               
                   (DOT&PF) - DEPARTMENT-WIDE                                                                               
1:04:24 PM                                                                                                                    
CO-CHAIR FOSTER announced that the  first order of business would                                                               
be   a   department-wide   overview    of   the   Department   of                                                               
Transportation & Public Facilities (DOT&PF).                                                                                    
1:05:02 PM                                                                                                                    
JOHN   BINDER,  Acting   Commissioner;   Deputy  Commissioner   -                                                               
Aviation,  Department  of   Transportation  &  Public  Facilities                                                               
(DOT&PF), stated that he currently  serves as Acting Commissioner                                                               
and will  for a few  more days  until the new  commissioner, Marc                                                               
Luiken,  arrives.   In addition,  he  also serves  as the  Deputy                                                               
Commissioner -  Aviation and he  will continue in  that position.                                                               
Today's briefing  will be  a broad overview  of the  DOT&PF since                                                               
the  committee has  previously heard  overviews  on the  DOT&PF's                                                               
public  facilities, surface  transportation,  and marine  highway                                                               
system  programs.   He  would  like to  spend  most  of his  time                                                               
presenting a PowerPoint on the DOT&PF's aviation program.                                                                       
1:05:49 PM                                                                                                                    
ACTING  COMMISSIONER  BINDER said  that  during  times of  fiscal                                                               
constraint it is  very important to ensure  that the department's                                                               
day-to-day  activities feed  back to  the statutory  requirements                                                               
[under  AS  44.42.020] [slides  2-3].    Instead of  reading  the                                                               
entire  statute to  members,  he focused  on  and identified  key                                                               
words  in  the  DOT&PF's  statute  that  outline  its  authority,                                                               
including  to   plan,  design,  construct,  and   study  existing                                                               
transportation    modes;    develop   comprehensive    long-range                                                               
transportation plans, and cooperate  and coordinate with federal,                                                               
state, and  local government agencies.   He also  emphasized that                                                               
the department "shall" study  alternative means of transportation                                                               
in   the  state.      In  addition,   the   department  has   the                                                               
responsibility  to develop  and manage  facilities and  supervise                                                               
aeronautics, ensuring that air carriers  operate in accordance to                                                               
statute.   Further,  the DOT&PF  inspects  weights and  measures,                                                               
including monitoring commercial  vehicle enforcement by operating                                                               
weigh stations.                                                                                                                 
ACTING COMMISSIONER  BINDER highlighted the  department's mission                                                               
to  "Keep  Alaska  Moving  through  Service  and  Infrastructure"                                                               
[slide 4].   The department  accomplishes this by  providing day-                                                               
to-day  services, such  as maintenance  and  operations (M&O)  to                                                               
keep roads cleared,  airports open, and ferries  running to serve                                                               
Alaskans.  Alaska faces significant  challenges compared to other                                                               
states since  Alaska provides multi-modal access.   He emphasized                                                               
the  importance of  transportation  infrastructure  to assist  in                                                               
finding opportunities  for exploration  and development  of areas                                                               
in Alaska that have not yet been touched.                                                                                       
1:07:51 PM                                                                                                                    
ACTING COMMISSIONER  BINDER reviewed the  DOT&PF's organizational                                                               
structure,  commenting that  the new  commissioner, Marc  Luiken,                                                               
will begin work  next week [slide 5].  Currently,  the DOT&PF has                                                               
three deputy  commissioners, with  Kim Rice  overseeing highways,                                                               
the  equipment  fleet,  and  the   new  information  systems  and                                                               
services  division.   He  stated  that he  serves  as the  deputy                                                               
commissioner  overseeing  the   aviation  system,  including  the                                                               
international  airport system,  the  rural  aviation system,  and                                                               
measurement standards  and commercial  vehicle enforcement.   The                                                               
department  has  one  vacant deputy  commissioner  position  that                                                               
oversees  the  marine highway  system  and  special projects,  he                                                               
said.    Rob Campbell  currently  serves  as the  Central  Region                                                               
director and also as acting director  of the Northern Region.  He                                                               
stated that  the SouthCoast  Region director's  position recently                                                               
became  vacant, as  well.   He anticipated  that the  DOT&PF will                                                               
work  with the  new administration  to fill  the vacant  director                                                               
positions soon.                                                                                                                 
1:08:56 PM                                                                                                                    
ACTING   COMMISSIONER  BINDER   highlighted  that   the  Aviation                                                               
Advisory Board,  Marine Transportation  Advisory Board,  and Knik                                                               
Arm  Crossing,  formerly  KABATA,  all  fall  under  Commissioner                                                               
1:09:43 PM                                                                                                                    
ACTING COMMISSIONER  BINDER directed  attention to  the executive                                                               
organization  and   the  management   team,  consisting   of  the                                                               
commissioner,  the  three  deputy  commissioners  and  the  three                                                               
regional  directors  [slide 6].    In  the  past 18  months,  the                                                               
department  has been  working so  all  deputy commissioners  work                                                               
across modes  and avoid  silos, noting each  one will  still have                                                               
the technical responsibility of  overseeing their respective mode                                                               
of transportation.  First, management  has worked hard to improve                                                               
communications, attempting to avoid  using jargon and using plain                                                               
talk instead.   Second, despite  the fiscal  resource challenges,                                                               
the department  has a policy  of "no whining" and  management, in                                                               
particular, recognizing it  has sufficient assets to  do the job.                                                               
In  fact,  many  functions  the   department  provides  can't  be                                                               
predicted due  to the  influences of the  weather.   Finally, the                                                               
department tries to find ways  to achieve its goals without first                                                               
saying "no."   Ultimately,  "no" is  sometimes the  right answer,                                                               
but there's usually a better way to initially respond, he said.                                                                 
1:11:19 PM                                                                                                                    
ACTING   COMMISSIONER  BINDER   reviewed  the   DOT&PF's  assets,                                                               
including  highways,   airports,  harbors,  ferries,   and  weigh                                                               
stations [slide  7].   In response  to Representative  Stutes, he                                                               
offered  to provide  information on  how many  of the  11 ferries                                                               
operate 12 months per year.                                                                                                     
ACTING COMMISSIONER  BINDER directed attention to  the Governor's                                                               
Endorsed FY  16 Budget  totaling $628 million.   This  includes a                                                               
small sliver  of federal funds designated  for federally-mandated                                                               
programs, $286 million  in program receipts, and  $85 million for                                                               
the International Airport System  (AIAS), even though the airport                                                               
system  generates its  own revenue  through rates  and fees.   He                                                               
said the general fund [of  $339 million] is self-explanatory.  In                                                               
response  to a  question  by Representative  Claman, he  answered                                                               
that  the  Governor's  endorsed   capital  budget  figures  being                                                               
discussed today were submitted by Governor Walker [slide 9].                                                                    
1:13:30 PM                                                                                                                    
ACTING  COMMISSIONER  BINDER  reported on  the  proposed  capital                                                               
budget at  $1.2 billion,  with the  majority of  funding stemming                                                               
from federal  funding.  He pointed  out slivers on the  pie chart                                                               
that  represent  the  general fund  monies  that  cover  deferred                                                               
maintenance, harbor  grants to  municipalities, and  general fund                                                               
matching fund monies.   Other slivers show  the amount designated                                                               
for  international  airport funds,  which  are  not general  fund                                                               
funds, with  about $12  million for  statutory-designated program                                                               
receipts  for cooperative  reimbursable grants  to municipalities                                                               
for the  purpose of utility  relocations that will  be reimbursed                                                               
by municipalities.                                                                                                              
1:14:20 PM                                                                                                                    
REPRESENTATIVE NAGEAK  asked whether the  [International Airport]                                                               
construction bonds are state bonds.                                                                                             
ACTING COMMISSIONER BINDER answered  that those funds are derived                                                               
from airport-generated  rates and fees  to carriers.   In further                                                               
response, he  explained that the airport  has statutory authority                                                               
to issue construction bonds via the Department of Revenue.                                                                      
1:15:05 PM                                                                                                                    
ACTING  COMMISSIONER  BINDER  offered  that  the  department  has                                                               
reported on some  of its major capital projects  and is scheduled                                                               
to go into  a little more detail on the  Knik Arm Crossing (KAC),                                                               
formerly the Knik  Arm Bridge & Toll Authority  (KABATA), and the                                                               
Juneau Access  (JA) projects.  Although  the department currently                                                               
has contracts in place and  has performed some preliminary design                                                               
work on  these projects, any  discretional funding  or additional                                                               
funding   has   been   placed  on   hold   per   the   governor's                                                               
administrative  order,  AO  271.   Commissioner  Luiken  and  the                                                               
administration  will review  those projects  and the  DOT&PF will                                                               
keep the  committee informed  on updates  to the  projects [slide                                                               
1:15:52 PM                                                                                                                    
CO-CHAIR FOSTER asked the department  to provide expenditures and                                                               
budgets for the big transportation projects.                                                                                    
1:16:29 PM                                                                                                                    
CO-CHAIR HUGHES said she appreciated  the department referring to                                                               
the  projects as  "big projects"  instead of  megaprojects.   She                                                               
related her understanding that AO  271 directed the department to                                                               
halt discretionary  spending on the  Knik Arm Crossing  (KAC) and                                                               
the  Juneau   Access  (JA);  however,   she  asked   whether  the                                                               
administrative  order also  halted spending  on the  Alaska Class                                                               
Ferry  (ACF)  and  the  MV  Tustumena  replacement  or  if  these                                                               
projects were still on the "big projects" list.                                                                                 
ACTING  COMMISSIONER  BINDER  answered that  the  department  has                                                               
paused projects  but AO 271  only affected the Knik  Arm Crossing                                                               
(KAC) and the Juneau Access (JA) projects.                                                                                      
1:17:06 PM                                                                                                                    
REPRESENTATIVE STUTES  presumed that  the difference  between the                                                               
Alaska Class Ferry (ACF) and the  MV Tustumena is that the ACF is                                                               
essentially an inter-island  vessel and MV Tustumena  is an ocean                                                               
going vessel.                                                                                                                   
ACTING COMMISSIONER  BINDER answered that is  correct; the Alaska                                                               
Class Ferries will  be smaller fast vessels  designed for quicker                                                               
round trips  of shorter durations  whereas the MV Tustumena  is a                                                               
larger mainline vessel designed to carry larger payloads.                                                                       
1:17:58 PM                                                                                                                    
ACTING   COMMISSIONER  BINDER   highlighted  the   DOT&PF's  2014                                                               
accomplishments,  commenting that  much  of  what the  department                                                               
does goes unnoticed unless something  goes wrong [slide 11].  The                                                               
department  provides routine  services and  operations, including                                                               
maintenance  programs to  keep  roads  and airports  functioning.                                                               
The department's capital  program last year was  slightly over $1                                                               
billion and  that appropriation will provide  funding on projects                                                               
for  the next  couple  of  years.   In  addition, the  department                                                               
inspects several  hundred commercial  vehicles each day  at weigh                                                               
stations.  The department also  measures scales, fuel dispensers,                                                               
and natural  gas dispensers as  part of its weights  and measures                                                               
function.   In  response to  a  question by  Co-Chair Foster,  he                                                               
reported that  Dan Smith  is the  current division  director, but                                                               
the   function  also   falls   under   his  deputy   commissioner                                                               
responsibilities.    In  further  response, he  agreed  that  Dan                                                               
Breeden was the prior director.                                                                                                 
1:19:00 PM                                                                                                                    
ACTING COMMISSIONER BINDER directed  attention to the Information                                                               
Services and  Systems Division (ISSD)  previously mentioned.   He                                                               
offered  that the  department is  excited  about the  information                                                               
techy  consolidation.   He  characterized  the prior  information                                                               
technology function as  a group of little  groups performing well                                                               
in  their respective  functions  and divisions;  however, the  IT                                                               
functions were not being coordinated  department-wide.  Thus, the                                                               
department had  numerous versions of Adobe  Acrobat, AutoCAD, and                                                               
other computer  programs being  used.   The department  has since                                                               
consolidated its  IT functions into  a single division  in Juneau                                                               
and the  DOT&PF anticipates great advantages,  including planning                                                               
for future operations and infrastructure needs.                                                                                 
ACTING COMMISSIONER  BINDER offered that  the big driver  to make                                                               
regional boundary changes [and create  the SouthCoast Region] was                                                               
to even out  the workforce.  He reported that  the Central Region                                                               
has experienced rapid growth in  population in the Anchorage bowl                                                               
and  the  Matanuska-Susitna  valley  areas  thereby  dramatically                                                               
increasing  the  Central  Region's workload,  but  the  Southeast                                                               
Region remained constant.   The federal MAP 21  [Moving Ahead for                                                               
Progress  in the  21st  Century Act]  funding  focused on  larger                                                               
population  urban areas  and the  National Highway  System (NHS),                                                               
which has  shifted capital  project work  to the  Central Region.                                                               
He  anticipated  additional  efficiencies in  the  department  by                                                               
consolidating  the  harbors,  ferries, and  coastal  environment,                                                               
coastal  engineering  and  design  in the  SouthCoast  Region  in                                                               
1:21:12 PM                                                                                                                    
CO-CHAIR  FOSTER  asked  for  copy  of the  map  that  shows  the                                                               
previous boundaries and the current boundaries.                                                                                 
1:21:22 PM                                                                                                                    
CO-CHAIR  HUGHES  asked for  further  clarification  on what  was                                                               
combined or shaved off.                                                                                                         
ACTING COMMISSIONER BINDER asked members  to imagine a map of the                                                               
state,  noting that  the  area including  the  Aleutian Chain  to                                                               
Southwest Alaska was  moved to the Southeast Regions.   Thus, the                                                               
two big peninsulas  are now part of the  SouthCoast Region, along                                                               
with  Southeast  Alaska.   In  response  to Co-Chair  Hughes,  he                                                               
agreed  that  the  Aleutian  Chain was  previously  part  of  the                                                               
Southcentral Region.                                                                                                            
1:21:53 PM                                                                                                                    
ACTING  COMMISSIONER BINDER  reiterated that  the federal  MAP 21                                                               
creates  challenges since  it directs  federal  funding to  urban                                                               
areas.   Therefore,  the department  will have  considerably less                                                               
flexibility  in funding  projects  in smaller  communities or  to                                                               
more  evenly  distribute the  federal  highway  funds across  the                                                               
state.   He predicted  that more  state funds  will be  needed to                                                               
accomplish projects in smaller areas and communities.                                                                           
ACTING COMMISSIONER  BINDER advised  members that the  DOT&PF has                                                               
been  consolidating and  working to  find efficiencies  to reduce                                                               
its  overall   budget.    Besides   the  IT   consolidation,  the                                                               
department has recommended increased  use of deicing chemicals on                                                               
at intersections and  on roads in larger population  centers.  In                                                               
fact,  deicing chemical  use saves  time and  overtime needed  to                                                               
clear roads  during freezing rain  or heavy snow since  the roads                                                               
clear much  easier with  the deicing coating.   Next,  DOT&PF has                                                               
also been using tow plows in  several areas to allow for multiple                                                               
lane  clearing  using  one  vehicle.   Further,  the  DOT&PF  has                                                               
reclassified a maintenance and operations  foreman who can fly in                                                               
a state-leased  aircraft to rural  villages and  provide training                                                               
to rural  contractors who often lack  heavy equipment experience.                                                               
Since this  "flying foreman" also  has electrical  expertise, the                                                               
DOT&PF can  avoid contracting with Anchorage  electricians.  This                                                               
training  also helps  reduce damage  to  equipment, runways,  and                                                               
lighting systems.   The department hopes to expand  this model to                                                               
other parts of  the state, such as Fairbanks,  Kotzebue, and Nome                                                               
[slide 12].                                                                                                                     
1:24:03 PM                                                                                                                    
ACTING  COMMISSIONER BINDER  directed  attention  to impacts  the                                                               
fiscal constraints may have.   While the department will maintain                                                               
its priorities of  keeping the major roads  and airports cleared,                                                               
budget reductions  will likely result  in increased time  to plow                                                               
roads and depending on the weather  events, will likely add a few                                                               
extra hours or an extra day to clear side roads.                                                                                
^OVERVIEW:  DEPARTMENT  OF  TRANSPORTATION  &  PUBLIC  FACILITIES                                                               
(DOT&PF) - AVIATION                                                                                                             
   OVERVIEW: DEPARTMENT OF TRANSPORTATION & PUBLIC FACILITIES                                                               
                      (DOT&PF) - AVIATION                                                                                   
1:24:58 PM                                                                                                                    
CO-CHAIR FOSTER announced that the  final order of business would                                                               
be  an overview  of  the Department  of  Transportation &  Public                                                               
Facilities - Aviation.                                                                                                          
1:25:15 PM                                                                                                                    
ACTING COMMISSIONER BINDER said that  his passion is aviation and                                                               
Alaska is  an exciting place to  be since Alaska has  the largest                                                               
aviation system in the world.   The Alaska International Airports                                                               
System  (AIAS)  consists  of Anchorage  and  Fairbanks  airports.                                                               
Although the Juneau airport is  also an international airport, it                                                               
is  not a  state-owned facility.   He  directed attention  to the                                                               
AIAS  mission statement,  "To keep  Alaska flying  and thriving,"                                                               
which relates  to the  AIAS's focus of  generating its  own rates                                                               
and  fees.    The  rural  or  Statewide  Aviation  (SWA)  mission                                                               
statement,  "To   sustain  and   improve  the  quality   of  life                                                               
throughout  Alaska," relates  to  the importance  of aircraft  to                                                               
rural  villages and  with  82 percent  lacking  roads, the  rural                                                               
airports provide critical access to services and goods, he said.                                                                
1:26:25 PM                                                                                                                    
REPRESENTATIVE NAGEAK  expressed concern that the  state aviation                                                               
system in Bush Alaska lacks  competition.  Constituents regularly                                                               
report that the cost of  flying between the villages is extremely                                                               
costly  and places  hardships on  them  when they  want to  visit                                                               
family or friends  in other villages.  In fact,  the cost is very                                                               
high even if  the travel distance between villages  is only 75-90                                                               
miles, he said.   He asked what  can be done to  reduce costs and                                                               
increase competition.                                                                                                           
ACTING  COMMISSIONER BINDER  answered that  the message  is "loud                                                               
and clear."                                                                                                                     
REPRESENTATIVE NAGEAK interjected by  asking whether roads are an                                                               
ACTING  COMMISSIONER  BINDER  responded  that  it  would  be  one                                                               
option, but in the long run  roads are more expensive to maintain                                                               
than  airports.   In  terms  of competition,  a  large number  of                                                               
communities fall under the federal  essential air service.  Thus,                                                               
the US  Department of Transportation (US-DOT)  does subsidize the                                                               
air carriers  in villages to reduce  costs, but it is  still very                                                               
1:28:31 PM                                                                                                                    
REPRESENTATIVE  CLAMAN asked  how well  the Alaska  International                                                               
Airports  System (AIAS)  is  doing  to reach  its  goal of  self-                                                               
sufficiency, essentially self-funding through revenues.                                                                         
ACTING COMMISSIONER BINDER  answered that AIAS is  required to be                                                               
self-sufficient.   The AIAS  covers all  its costs  through rates                                                               
and  fees.   He  offered to  cover  this in  more  detail in  his                                                               
PowerPoint;  however, if  the AIAS  did not  collect enough,  the                                                               
carriers  would  be  charged  to  make up  the  difference.    He                                                               
reported  that  no  state  general  funds  are  directed  to  the                                                               
international airports.                                                                                                         
REPRESENTATIVE  CLAMAN  asked  for further  clarification  as  to                                                               
whether the funds are directed to the  AIAS or if the funds go to                                                               
the general fund and are reappropriated.                                                                                        
ACTING COMMISSIONER BINDER answered  that the funds are deposited                                                               
directly to  the International  Airport Revenue  Fund and  not to                                                               
the general fund.                                                                                                               
1:29:28 PM                                                                                                                    
CO-CHAIR HUGHES  asked for the  amount of the federal  subsidy to                                                               
rural  carriers and  if the  subsidy is  typical for  other rural                                                               
areas in the Lower 48.                                                                                                          
ACTING  COMMISSIONER  BINDER  answered  that it  varies  by  each                                                               
location.  The  US Department of Transportation  puts out request                                                               
for proposals  (RFPs) for contracts to  carriers, typically every                                                               
two  years and  the contracts  are awarded  to the  lowest offers                                                               
with carriers  subsidized to at  least break even to  operate the                                                               
1:30:26 PM                                                                                                                    
CO-CHAIR  HUGHES asked  whether  rural  carriers receive  greater                                                               
federal subsidies  than those in the  Lower 48 due to  the longer                                                               
distances and associated cost of travel in Alaska.                                                                              
ACTING COMMISSIONER  BINDER answered  that Alaska  is essentially                                                               
the  last  state  to  receive  an  essential  air  service  (EAS)                                                               
subsidy,  noting  the  rest  of  the  US  does  not  receive  any                                                               
essential air service funds.                                                                                                    
CO-CHAIR  HUGHES  asked whether  the  DOT&PF  is concerned  about                                                               
losing the  funds or  if the department  is confident  that these                                                               
funds will continue.                                                                                                            
ACTING  COMMISSIONER  BINDER  answered  that  the  essential  air                                                               
service (EAS) and  the bypass mail system funds  continue to come                                                               
under scrutiny  when the  budget comes up  in the  Congress every                                                               
few years.  The federal subsidy  for the bypass mail system helps                                                               
to greatly  reduce the cost of  moving goods in Alaska,  as well.                                                               
He  said the  DOT&PF  keeps engaged  with Alaska's  Congressional                                                               
Delegation  in Washington  D.C.,  noting that  the delegation  is                                                               
aware of these subsidies.                                                                                                       
1:31:38 PM                                                                                                                    
CO-CHAIR  FOSTER asked  whether many  communities or  just a  few                                                               
receive the essential air service (EAS).                                                                                        
ACTING COMMISSIONER  BINDER answered  that approximately  50 very                                                               
small  locations receive  the essential  air service  (EAS) since                                                               
carriers  would not  be able  to make  enough money  by providing                                                               
that level of service to the villages.                                                                                          
1:32:01 PM                                                                                                                    
CO-CHAIR  FOSTER  recalled there  was  an  issue related  to  why                                                               
Little Diomede was not included on the EAS list.                                                                                
ACTING  COMMISSIONER BINDER  answered that  the Federal  Aviation                                                               
Administration  (FAA) changed  its regulations  in the  late 70s,                                                               
with respect  to eligibility.   Any community that  was currently                                                               
receiving  air service  was eligible  for EAS,  but since  Little                                                               
Diomede did  not have a  runway at the  time, it did  not receive                                                               
service;  and  therefore,  Little  Diomede  was  technically  not                                                               
eligible for the  program.  He reported that the  DOT&PF has been                                                               
able  to get  Little  Diomede  into another  program  to help  to                                                               
subsidize about half of the air service.                                                                                        
CO-CHAIR  FOSTER  commented  that  Little Diomede  Island  has  a                                                               
runway a few months every year on  the ice.  He recalled that the                                                               
community  uses a  tractor  to create  a runway  on  the ice  and                                                               
pretty decent sized airplanes land on Little Diomede.                                                                           
1:33:11 PM                                                                                                                    
ACTING   COMMISSIONER   BINDER    directed   attention   to   the                                                               
organization and  leadership structure  for the  aviation system.                                                               
He  stated that  he  serves  as the  executive  director for  the                                                               
Alaska  International Airport  System (AIAS).   He  reported that                                                               
the  AIAS  was  created  by  statute  many  years  ago,  that  it                                                               
currently operates  as a  system although  there were  some years                                                               
when  the  Anchorage and  Fairbanks  airports  competed with  one                                                               
another  [slide4].     The  DOT&PF  has  combined   many  of  the                                                               
functions,  including the  combined airport  systems office  that                                                               
handles  administrative  functions, the  information  technology,                                                               
leasing, and  concessions.   The FAA requires  a master  plan for                                                               
each of the international airports every few years.                                                                             
ACTING  COMMISSIONER BINDER  AIAS reported  that the  majority of                                                               
the  revenue  for  the  AIAS system  stems  from  Asian  carriers                                                               
passing through  with cargo.   He  emphasized the  importance for                                                               
carriers to  know they have  an alternate airport to  use, noting                                                               
that  both airports  have never  been  closed at  the same  time,                                                               
despite volcano eruptions and storms.                                                                                           
1:34:41 PM                                                                                                                    
CO-CHAIR HUGHES asked  whether it was unusual for a  state to own                                                               
the two major airports in the state.                                                                                            
ACTING COMMISSIONER  BINDER answered  yes; that most  states have                                                               
an  aviation division,  but  that  typically entails  cooperating                                                               
with municipalities that own the airports.                                                                                      
1:35:08 PM                                                                                                                    
REPRESENTATIVE   ORTIZ  mentioned   that  Juneau   [International                                                               
Airport] is  not owned by  the state.   He asked whether  that is                                                               
also true for the Ketchikan airport.                                                                                            
ACTING COMMISSIONER  BINDER answered it  is true for  Juneau, but                                                               
not  for  Ketchikan.    The state  actually  owns  the  Ketchikan                                                               
airport and Ketchikan [Gateway Borough]  leases it from the state                                                               
and operates it.  They charge  their own rate structure to try to                                                               
generate as much revenue as possible.                                                                                           
REPRESENTATIVE  ORTIZ  asked  whether  Ketchikan  Gateway Borough                                                               
(KGB) has any financial commitment with the state.                                                                              
ACTING COMMISSIONER BINDER answered that  as of several years ago                                                               
the  Ketchikan  Gateway Borough has  not  been  able to  generate                                                               
sufficient revenue to cover its  costs; in particular, since they                                                               
must  operate the  ferry between  the mainland  and the  airport.                                                               
Thus, the  state has started  providing a  subsidy to the  KGB in                                                               
the past couple of years, he said.                                                                                              
1:36:18 PM                                                                                                                    
ACTING  COMMISSIONER  BINDER  directed attention  to  the  annual                                                               
revenues  and operations,  maintenance, and  debt costs,  stating                                                               
that   generally   the  operating   cost   for   the  AIAS   runs                                                               
approximately  $85 million,  with approximately  $450 million  in                                                               
debt in  bonds [slide  5].   As stated  earlier, this  revenue is                                                               
generated from  landing fees, fuel  flowage, and  terminal rates,                                                               
which typically  are generated  from the carriers.   The  rest of                                                               
the  items are  divided between  concessions and  public parking,                                                               
with passenger and facility charges  (PFCs) being the few dollars                                                               
charged to  each ticket that help  to cover terminal costs.   The                                                               
AIAS is required by debt service  and bond covenants to raise 125                                                               
percent of the debt service for  that year, which ends up driving                                                               
rates and fees, as well, he said.                                                                                               
1:37:35 PM                                                                                                                    
ACTING COMMISSIONER  BINDER pointed to  the graph that  shows the                                                               
cargo  activity  [slide   6].    He  indicated   that  the  chart                                                               
represents  cargo  activity,  color-coded, with  cargo  shown  in                                                               
light blue,  passenger traffic shown in  green, and international                                                               
passenger traffic  shown in purple.   The intrastate  cargo shown                                                               
in  very   dark  blue   is  significant   to  the   carriers  and                                                               
communities,  but  represents a  small  percentage  of the  cargo                                                               
moved through the airports.  He  pointed out that since 2007, the                                                               
airports are  down about 30 percent  in overall cargo.   In fact,                                                               
cargo is  just now beginning  to stabilize and  passenger service                                                               
is beginning to increase, he said.                                                                                              
1:39:18 PM                                                                                                                    
REPRESENTATIVE CLAMAN  said his  district has  continued interest                                                               
in  the Anchorage  International  Airport.   He  referred to  the                                                               
graph, on  side 6, and  said it was  not likely that  the airport                                                               
will stabilize  back to the 2007-2008  levels.  He asked  for his                                                               
perspective on expansion issues and  the length of time before it                                                               
will be necessary  for the airport to expand.   He suggested that                                                               
based on the chart, it might  be many years before expansion will                                                               
be necessary.                                                                                                                   
ACTING COMMISSIONER BINDER answered  that he is absolutely right.                                                               
The airport handled significantly  greater traffic many years ago                                                               
without  an issue.   He  predicted it  would be  quite some  time                                                               
before the  cargo activity  reaches those  levels.   In addition,                                                               
Anchorage  and Fairbanks  international  airports just  completed                                                               
their master  plans.  For the  first time ever, the  two airports                                                               
worked  together  to  designate  the other  as  alternates.    He                                                               
characterized the cohesiveness by  stating that Anchorage already                                                               
has a fourth runway,  but it just happens to be  150 miles to the                                                               
north.  Rather than using a  calendar, the department bases it on                                                               
trigger  events, such  that if  carriers start  complaining about                                                               
delays  per  flight,  it  will be  time  to  consider  expansion.                                                               
Further,  the   airports  have  other  options   such  as  flight                                                               
patterns, and  which runway to  use for departures.   While those                                                               
decisions can optimize operations, it  can create more of a noise                                                               
issue since it may mean aircraft  taking off over the city during                                                               
some of the peak periods during the day.                                                                                        
1:41:42 PM                                                                                                                    
REPRESENTATIVE  CLAMAN suggested  that  any  trigger events  that                                                               
could affect operations seems quite a long time away.                                                                           
ACTING  COMMISSIONER BINDER  answered that  is absolutely  right,                                                               
that part of it relates  to carriers using larger, more efficient                                                               
aircraft, which  has resulted in  the same amount of  cargo being                                                               
transported  with fewer  landings.   The  effect  is to  increase                                                               
cargo capacity without impacting  takeoff and landing times, even                                                               
though  revenue is  also reduced  since the  airport charges  per                                                               
1:42:19 PM                                                                                                                    
CO-CHAIR HUGHES said she hopes  for greater economic diversity in                                                               
the coming years,  as well as an earlier  trigger point resulting                                                               
perhaps from  China's middle income population  causing increased                                                               
demand for goods.  Referring to  the cargo depicted in light blue                                                               
on the  chart on slide,  she recalled hearing that  planes arrive                                                               
in Alaska full,  but do not return full so  open capacity exists.                                                               
She asked  for confirmation  on whether  open capacity  exists on                                                               
flights returning to Asia.                                                                                                      
ACTING COMMISSIONER  BINDER answered yes; however,  open capacity                                                               
is less due  to the aforementioned dynamic, in  which the growing                                                               
Asian  middle  class  can  now afford  the  higher  dollar  items                                                               
America tends  to produce.   This  means less  and less  space is                                                               
available on the  return travel, resulting in  large cargo volume                                                               
and  extra  landings  for refueling  due  to  transporting  extra                                                               
CO-CHAIR HUGHES remarked that this is good news.                                                                                
1:43:45 PM                                                                                                                    
ACTING  COMMISSIONER BINDER  directed  attention  to the  primary                                                               
revenue  drivers and  airfield activity  through September  2014,                                                               
although  he noted  he has  updated information  through December                                                               
31,  2014 not  shown on  the  graph [slide  7].   The green  line                                                               
currently tracks  slightly above the red  line.  He said  this is                                                               
encouraging and speaks to the  stabilization in the cargo market;                                                               
however,  these  trends  are  not   just  in  Anchorage  but  are                                                               
worldwide  trends.    He explained  that  all  airlines  suffered                                                               
during the recent depression in  2008-2009, as well as from fleet                                                               
1:44:32 PM                                                                                                                    
ACTING COMMISSIONER  BINDER turning  to passenger  activity, said                                                               
that  Alaska  has  seen  a  dramatic  increase  in  international                                                               
passenger  traffic charter  service  in the  winter.   The  Asian                                                               
market  has been  excited about  experiencing northern  lights in                                                               
the  winter.   He reported  that Changsha,  a city  of 7  million                                                             
people in the  Hunan province of China began its  first flight on                                                               
December   28,   2014,   and  will   have   regularly   scheduled                                                               
international service  in March  to several US  destinations, all                                                               
passing through Anchorage.                                                                                                      
ACTING COMMISSIONER  BINDER directed  attention to  the operating                                                               
agreement  with  carriers,  stating that  the  10-year  operating                                                               
agreement  was established  in July,  consisting of  30 signatory                                                               
airlines who have the agreement  with carriers.  He explained the                                                               
process,  noting  that the  agreement  is  a residual  agreement.                                                               
This means the AIAS sets  its fees based on projected operational                                                               
costs.  At  the end of the  year, if costs are not  met, the AIAS                                                               
will  send  out billings  to  charge  for  the difference.    The                                                               
advantage for  the airlines is  slightly reduced rates  over non-                                                               
signatory carriers, plus the carriers  have a much greater say in                                                               
the type of infrastructure upgrades  or terminal improvements, or                                                               
capital projects  the airport  will undertake  since they  have a                                                               
vested  interest in  the facility.   The  department has  greatly                                                               
improved communication with carriers.   He said the carriers love                                                               
the Anchorage and Fairbanks airports  and he is excited about the                                                               
1:46:37 PM                                                                                                                    
CO-CHAIR FOSTER  asked whether it  would be possible to  obtain a                                                               
list  of the  signatory airlines  and the  members of  the Alaska                                                               
Aviation Advisory Board (AAAB).                                                                                                 
ACTING  COMMISSIONER  BINDER  answered  yes;  noting  the  Alaska                                                               
Aviation  Advisory  Board  (AAAB)  consists of  11  members,  but                                                               
includes representatives of companies  such as Northern Air Cargo                                                               
and FedEx, as well as public members.                                                                                           
1:47:35 PM                                                                                                                    
CO-CHAIR HUGHES  asked for interaction  between the AIAS  and the                                                               
Alaska Aviation Advisory Board (AAAB) and the role of the AAAB.                                                                 
ACTING  COMMISSIONER   BINDER  replied   that  Lee   Ryan,  Vice-                                                               
President, Ryan  Air serves  as the AAAB's  Chair.   He indicated                                                               
that  he speaks  with him  regularly.   The  board holds  regular                                                               
teleconferences, as  well as several  board meetings per  year to                                                               
discuss  aviation, the  budget,  and  maintenance and  operations                                                               
issues.   Most  of  the  board members  are  heavily involved  in                                                               
carriers serving  rural communities so they  provide feedback and                                                               
suggested improvements.  As the  deputy commissioner of aviation,                                                               
the commissioner  has delegated  the primary interaction  to him,                                                               
he said.   Further,  the commissioner  often attends  these board                                                               
meetings, he said.                                                                                                              
CO-CHAIR HUGHES asked whether the  Alaska Aviation Advisory Board                                                               
(AAAB) considers  issues and challenges  on an ongoing  basis and                                                               
provides  annual recommendations  or if  the board  has statutory                                                               
guidelines.    She further  asked  whether  the board  must  make                                                               
annual  recommendations and  if  he could  expand  on the  AAAB's                                                               
1:49:14 PM                                                                                                                    
ACTING COMMISSIONER BINDER  answered that the AAAB  has a charter                                                               
signed  in  2003 or  2004,  with  specific guidelines,  including                                                               
providing   specific   recommendations  related   to   budgeting,                                                               
operations, maintenance,  and capital  projects.  Thus,  the AAAB                                                               
constantly reviews  those documents  and provides input  from the                                                               
board's perspective.   Members serve  three-year terms  and terms                                                               
are offset, he said.                                                                                                            
ACTING COMMISSIONER BINDER stated that  the airport works to keep                                                               
its business  base and  tries to  expand the  business [Strategic                                                               
Planning  and   Marketing,  slide   10].    From   the  airport's                                                               
perspective, he  characterized the  task as nearly  impossible to                                                               
accomplish; however, the airport works  to invest in the business                                                               
it  has, help  carriers  expand their  business  locally, and  to                                                               
retain its  customers.   The strategic plan  was just  updated in                                                               
December,  to figure  out some  of the  key initiatives  for this                                                               
next year.   The airport  has included  a business plan  that has                                                               
focused on  how to  add value  to the  cargo passing  through the                                                               
airport.   Currently, the AIAS  is just serving the  airports and                                                               
has  very little  input  in what  happens with  the  cargo.   For                                                               
example,  certainly  if  it  is   possible  to  receive  lots  of                                                               
different pieces for an assembly  or distribution center, such as                                                               
Amazon, value  could be added  to the cargo, which  could benefit                                                               
the community and the state.                                                                                                    
ACTING  COMMISSIONER BINDER,  in  terms of  the marketing  plans,                                                               
reported that 90-95  percent of the cargo that  comes through the                                                               
AIAS is via  Asian carriers.  As executive director  of the AIAS,                                                               
he helps carriers understand the  uniqueness of using Alaska; for                                                               
example,  the  DOT&PF's  laws  have  provisions  regarding  cargo                                                               
transfer  rights that  don't exist  in the  rest of  the country.                                                               
Most of the leadership changes  every few years so it's necessary                                                               
for the AIAS to provide ongoing information to these carriers.                                                                  
ACTING  COMMISSIONER BINDER  stated  that the  AIAS accounts  for                                                               
about 1 in 10 jobs in Anchorage [slide 10].                                                                                     
1:52:19 PM                                                                                                                    
CO-CHAIR  HUGHES,   in  addition  to  the   Economic  Development                                                               
Corporation,  said  she  hoped the  AIAS  communicates  with  the                                                               
Division  of Economic  Development  for statewide  opportunities,                                                               
especially with the open cargo.                                                                                                 
ACTING COMMISSIONER  BINDER, in terms of  seafood, explained that                                                               
Asian markets  have different preference,  such as they  want the                                                               
heads  on  fish  whereas  in Alaska,  fish  processing  typically                                                               
removes  the  heads.    The  department  has  been  working  with                                                               
fishermen on  issues such as these.   He offered his  belief this                                                               
could provide some opportunity for westbound cargo traffic.                                                                     
1:53:19 PM                                                                                                                    
CO-CHAIR HUGHES  also suggested  contacting Greg  Wolf, executive                                                               
director   for   the  World   Trade   Center,   to  discuss   the                                                               
aforementioned Asian market needs.                                                                                              
1:53:38 PM                                                                                                                    
ACTING  COMMISSIONER  BINDER  directed attention  to  the  master                                                               
plans, which are  updated every ten years.  He  reported that the                                                               
master plans are  finalized, the process went well,  and the AIAS                                                               
had lots of  community involvement.  The last update  in the 2005                                                               
was not very successful, in part,  by trying to set dates for new                                                               
airport infrastructure;  however, he  said he  is happy  with the                                                               
direction the AIAS took this time.                                                                                              
1:54:10 PM                                                                                                                    
ACTING COMMISSIONER  BINDER directed  attention to  the statewide                                                               
aviation scope and  scale [slide 13].  He stated  that of the 249                                                               
airports, DOT&PF  personnel staff  50 airports and  the remainder                                                               
are contract  personnel with the local  communities and villages.                                                               
Using local staff requires significant  training and oversight to                                                               
ensure   that  the   airports   receive   good  maintenance   and                                                               
operations.       He   related   that   the    Federal   Aviation                                                               
Administration's  Code of  Federal Regulations  (CFR), Part  139,                                                               
relates to certificated airports and is  based on the size of the                                                               
aircraft that  fly into  the airport.   For example,  any airport                                                               
that  Alaska Airlines  flies to  must be  certificated under  the                                                               
FAA, Part 139, which requires  increased maintenance and scrutiny                                                               
to ensure  that the  airport is operating  safely.   In addition,                                                               
these  airports  must  have  crash  and  fire  rescue  capability                                                               
ACTING COMMISSIONER  BINDER stated that  the rural system  is not                                                               
self-sustaining   and  incurs   approximately   $35  million   in                                                               
operating  costs, but  only  generates  approximately $5  million                                                               
through leasing revenue  from the tenants at those  airports.  He                                                               
characterized the  rural airports as being  heavily subsidized by                                                               
the general fund.                                                                                                               
1:55:42 PM                                                                                                                    
ACTING COMMISSIONER BINDER  highlighted some of the FY  15 and FY                                                               
16 projects.   He  said that  the FAA breaks  out the  funding by                                                               
runway   safety,  pavement   rehabilitation,  rural   access  and                                                               
buildings.     The   runway  safety   project  at   ADAK  was   a                                                               
congressional mandate [slide 14].                                                                                               
1:56:11 PM                                                                                                                    
CO-CHAIR FOSTER  asked whether communities seeking  to have their                                                               
airport  runway  lengthened,  which  is  federally  funded,  must                                                               
adhere to requirements  and criteria so it  largely determined by                                                               
the  FAA or  federal  government.   He  asked  if  the FAA  makes                                                               
decisions  on runway  lengthening or  whether the  state has  any                                                               
role in the determination.                                                                                                      
ACTING COMMISSIONER  BINDER answered that  the state has  a large                                                               
say since  the FAA requires states  to have some type  of scoring                                                               
system in  place to prioritize  projects.  The FAA  mandates that                                                               
it  somewhat follows  the national  scale,  although some  leeway                                                               
exists for  disparities or differences  in Alaska as  compared to                                                               
other states.  The FAA  has ascribed to the prioritization system                                                               
the state  uses.   He said  that if the  state decided  to select                                                               
something   with  a   lower  priority,   the   state  must   have                                                               
justification  to  do  so.    For  example,  it's  possible  that                                                               
flooding at  breakup might  occur or  some other  situation could                                                               
counteract  the funding.   With  respect to  the grant  assurance                                                               
process, the  FAA requires  "a whole bunch  of strings"  that the                                                               
state must do to maintain the airport for the future.                                                                           
1:57:35 PM                                                                                                                    
CO-CHAIR FOSTER asked  whether runway extensions are  part of the                                                               
Surface Transportation Improvement Plan (STIP).                                                                                 
ACTING  COMMISSIONER   BINDER  answered  that  the   Division  of                                                               
Statewide Aviation  has an Aviation Spending  Plan, which similar                                                               
to the STIP.                                                                                                                    
1:57:57 PM                                                                                                                    
REPRESENTATIVE NAGEAK,  with respect  to the Kotzebue  and Barrow                                                               
airports in  his district, reported  that the terminals  are very                                                               
small in  Barrow and the  parking is horrendous.   Although there                                                               
isn't any  room for expansion  on the  town side of  the runways,                                                               
especially in Kotzebue, there is some  space on the south side of                                                               
Barrow.   He asked whether there  are any plans to  expand on the                                                               
state-owned land and remedy the problems.                                                                                       
2:00:05 PM                                                                                                                    
ACTING  COMMISSIONER   BINDER  answered  that  the   Division  of                                                               
Statewide  Aviation just  completed  the master  plan in  Barrow,                                                               
which is  the starting point for  the FAA.  He  acknowledged that                                                               
depending  on the  decisions on  Shell offshore  development, the                                                               
need   for   expanded   infrastructure   will   be   significant.                                                               
Currently, the division  will determine the traffic  need with be                                                               
there.  He agreed that certainly  south of the Barrow airport and                                                               
around Kotzebue, due  to type of land,  upgrades are tremendously                                                               
expensive.   The  FAA requires  be a  demonstrated need  or valid                                                               
forecast  for the  air traffic  need if  the state  is to  pursue                                                               
upgrades;  however, the  FAA does  not get  involved in  economic                                                               
development  projects, which  fall more  on the  state, he  said.                                                               
Thus,  the division  must wait  to show  a demonstrated  need, he                                                               
REPRESENTATIVE NAGEAK maintained there is a need.                                                                               
2:01:31 PM                                                                                                                    
CO-CHAIR  HUGHES asked  for further  clarification  on the  rural                                                               
access category of FAA construction projects [slide 14].                                                                        
ACTING COMMISSIONER BINDER stated that  many rural areas have old                                                               
or  outdated lighting  systems, instrument  approach navigational                                                               
aids to allow  aircraft to use the facility  in inclement weather                                                               
or  at night  that impact  access.   In  addition, when  carriers                                                               
upgrade their fleet  to larger aircraft they  need longer runways                                                               
to  land  and take-off.    These  projects  are rolled  into  the                                                               
prioritization system  since there  would be a  demonstrated need                                                               
for the expanded infrastructure.                                                                                                
2:02:21 PM                                                                                                                    
CO-CHAIR FOSTER,  on a personal note,  said he has flown  into at                                                               
least 40  airports throughout  the state.   He  characterized the                                                               
program  as being  first rate  and commended  Acting Commissioner                                                               
ACTING COMMISSIONER  BINDER acknowledged  his staff does  a great                                                               
2:02:47 PM                                                                                                                    
ACTING COMMISSIONER  BINDER said the  FAA requires each  state to                                                               
have an  Alaska Aviation  System Plan (AASP)  [slide 15].   These                                                               
comprehensive  plans must  include the  airports for  that state.                                                               
Certainly,  the DOT&PF  owns so  many airports  that it  tends to                                                               
focus on the  state owned airports; however, he  has been working                                                               
hard to include  some of the rural  airstrips and municipal-owned                                                               
locations,  as well.   He  highlighted some  of the  projects and                                                               
plans  in   the  AASP,  including   the  Capital   Improvement  &                                                               
Maintenance  Program essentially  provides a  comprehensive needs                                                               
assessment,  including  future  forecast, an  assessment  of  the                                                               
current  status,  and  what  needs  to  be  upgraded  and  fixed.                                                               
Referring to the FAA Performance  Measure Scorecards, he said the                                                               
FAA is  required to provide personnel  classification numbers for                                                               
all  19 airports.   He  said  the FAA  requires fees  be at  fair                                                               
market value  and the state  prepares an Economic  Regions Report                                                               
that  breaks  up  the  state  into  economic  regions  to  better                                                               
calculate the fair market value,  which can be challenging due to                                                               
the subsistence in rural Alaska.                                                                                                
2:04:17 PM                                                                                                                    
ACTING  COMMISSIONER BINDER  directed attention  to the  aviation                                                               
challenges in  the future [slide 16].   He said that  the biggest                                                               
challenge in  Alaska is the distance  to Washington DC.   He said                                                               
that when  federal agency  staff fly  to Anchorage  or Fairbanks,                                                               
they think they have seen Alaska.   It doesn't begin to touch the                                                               
challenges Alaska faces  in rural Alaska aviation so  he works to                                                               
bring  staff to  fly  to  rural village  communities  to see  the                                                               
challenges that  these communities  face.   He reported  that the                                                               
current  FAA federal  funding authorization  bill will  expire on                                                               
September 30,  2015 so the  reauthorization process  is underway.                                                               
Typically, Alaska  has fared  pretty well,  usually approximately                                                               
$180-$200  million  in airport  funding.    He hoped  that  would                                                               
continue.   In terms  of winter maintenance,  the division  is in                                                               
its second year  for using chemicals the EPA  requires for runway                                                               
icing.  He expressed concern since  the new chemicals are half as                                                               
effective  and twice  as expensive;  however,  the state  doesn't                                                               
have  any choice.   Fortunately,  Alaska  has experienced  milder                                                               
winters, which  helps with  road clearing  and snow  removal, but                                                               
airports  hover  at  the freeze-thaw  temperatures,  which  cause                                                               
icing   and   freezing   rain  conditions   instead   of   colder                                                               
temperatures  that  allow  easy  snow  removal  at  airports.  In                                                               
response to  Co-Chair Foster, he indicated  the approximate costs                                                               
are $1 to  $2 million in Anchorage and Fairbanks.   He offered to                                                               
provide the statewide figures to the committee.                                                                                 
2:06:51 PM                                                                                                                    
CO-CHAIR  FOSTER recalled  that shipping  oxygen in  Nome was  an                                                               
issue.   He asked  whether it  was resolved  and if  the hospital                                                               
obtained a waiver.                                                                                                              
ACTING COMMISSIONER BINDER was unsure.   He surmised it is not an                                                               
issue, but he offered to track down the information.                                                                            
CO-CHAIR FOSTER recalled it was a federal issue.                                                                                
CONNIE  MACKENZIE,  Legislative  Liaison, interjected  [from  the                                                               
audience], that she recalled the issue  but did not recall how it                                                               
was resolved.                                                                                                                   
2:07:37 PM                                                                                                                    
REPRESENTATIVE  STUTES  referred  to the  earlier  discussion  on                                                               
essential   air  service   (EAS).     She   mentioned  that   she                                                               
participated at a  leadership conference on Kodiak  Island.  Some                                                               
village  elders participated  via teleconference.   She  recalled                                                               
they were asking about EMS,  and she wondered if the commissioner                                                               
was familiar with a federal subsidy on marine service.                                                                          
ACTING COMMISSIONER BINDER  replied that he is  not familiar with                                                               
the program, but he will check into it.                                                                                         
REPRESENTATIVE STUTES  said she  would appreciate  being notified                                                               
if there is a program.                                                                                                          
2:09:05 PM                                                                                                                    
REPRESENTATIVE CLAMAN complimented the  department on the Airport                                                               
Master Plan Process.   Judging by the number  of people attending                                                               
and  a   general  understanding  of  the   significant  community                                                               
involvement, he  noted that  the end  product reflected  a better                                                               
understanding in  the community  on the  role the  airport system                                                               
plays in the  state but also satisfaction in  the public process.                                                               
He said, "Nothing but compliments from me."                                                                                     
2:09:51 PM                                                                                                                    
CO-CHAIR  FOSTER recalled  that the  state general  fund for  the                                                               
aviation portion is  $35 million versus the $5  million offset by                                                               
the  revenue.   He  recalled  that the  amount  spent versus  the                                                               
amount  generated is  often mentioned  with the  AMHS.   He asked                                                               
whether the  department can make  a fair comparison of  the three                                                               
modes of  transportation.  For  example, he understood  that with                                                               
surface transportation,  there is a  $.08 fuel tax  and licensing                                                               
ACTING COMMISSIONER BINDER said that needs  to be looked at a bit                                                               
more.  He recalled hearing that  the AMHS serves 1 percent of the                                                               
state  population,  whereas the  aviation  system  serves a  much                                                               
larger percent  of the population.   He offered to try  to obtain                                                               
some figures.                                                                                                                   
CO-CHAIR  FOSTER hoped  the department  could provide  a one-page                                                               
comparison  of general  funding and  any offsetting  revenues for                                                               
all three modes of transportation.                                                                                              
2:13:21 PM                                                                                                                    
There being no  further business before the  committee, the House                                                               
Transportation Standing  Committee meeting was adjourned  at 2:13                                                               

Document Name Date/Time Subjects
Jan 29 House TRA - DOTPF Department Overview 2015.pdf HTRA 1/29/2015 1:00:00 PM
Jan 29 House TRA - DOTPF Department Overview 2015.pdf HTRA 1/29/2015 1:00:00 PM