Legislature(2015 - 2016)CAPITOL 17

03/17/2015 01:00 PM House TRANSPORTATION



Audio Topic
01:09:49 PM Start
01:10:13 PM Open Discussion with Prince Rupert Mayor, Lee Brain
01:45:42 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Open Discussion with Prince Rupert Mayor, TELECONFERENCED
Lee Brain
                    ALASKA STATE LEGISLATURE                                                                                  
            HOUSE TRANSPORTATION STANDING COMMITTEE                                                                           
                         March 17, 2015                                                                                         
                           1:09 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Neal Foster, Co-Chair                                                                                            
Representative Benjamin Nageak                                                                                                  
Representative Louise Stutes                                                                                                    
Representative Matt Claman                                                                                                      
Representative Dan Ortiz                                                                                                        
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Shelley Hughes, Co-Chair                                                                                         
Representative Charisse Millett                                                                                                 
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
OPEN DISCUSSION WITH PRINCE RUPERT MAYOR~ LEE BRAIN                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
LEE BRAIN, Mayor                                                                                                                
Prince Rupert, British Columbia                                                                                                 
Canada                                                                                                                          
POSITION STATEMENT:  Testified during an open discussion of                                                                   
proposed projects in Prince Rupert.                                                                                             
                                                                                                                                
MIKE NEUSSL, Deputy Commissioner                                                                                                
Department of Transportation & Public Facilities (DOT&PF)                                                                       
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified during an open discussion of                                                                   
projects in Prince Rupert.                                                                                                      
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:09:49 PM                                                                                                                    
                                                                                                                                
CO-CHAIR NEAL FOSTER called the House Transportation Standing                                                                 
Committee meeting to order at 1:09 p.m.  Representatives Claman,                                                                
Nageak,  Stutes and  Foster were  present at  the call  to order.                                                               
Representative Ortiz arrived as the meeting was in progress.                                                                    
                                                                                                                                
^Open Discussion with Prince Rupert Mayor, Lee Brain                                                                            
      Open Discussion with Prince Rupert Mayor, Lee Brain                                                                   
                                                                                                                              
1:10:13 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FOSTER announced  that the only order  of business would                                                               
be an Open Discussion with the Prince Rupert Mayor, Lee Brain.                                                                  
                                                                                                                                
1:11:34 PM                                                                                                                    
                                                                                                                                
LEE BRAIN, Mayor,  Prince Rupert, British Columbia,  stated he is                                                               
the new mayor of Prince Rupert.   He said the purpose today is to                                                               
discuss the  Alaska Marine Highway  System (AMHS) and  to present                                                               
an  opportunity  that  may  help with  the  fiscal  situation  in                                                               
Alaska.   Prince Rupert was  one of  the founding fathers  of the                                                               
marine highway system  in 1958, at a time when  the intention was                                                               
to have  British Columbia (BC)  ferries run to Prince  Rupert and                                                               
Alaska    ferries   run    to   Prince    Rupert,   creating    a                                                               
Canadian/American "gateway" system.                                                                                             
                                                                                                                                
1:13:50 PM                                                                                                                    
                                                                                                                                
MAYOR BRAIN  explained that British  Columbia lost its  pulp mill                                                               
just as Ketchikan  lost its mill, and  British Columbia's fishing                                                               
industry has  also declined  so Prince Rupert  is no  stranger to                                                               
hard times.   He  has joined  and is  part of  the legacy  of the                                                               
Alaska and Prince Rupert collaboration.   He asked to report some                                                               
happenings in  Prince Rupert,  such that it  has approved  a $250                                                               
million continuing  facility expansion  for Prince  Rupert, which                                                               
currently is  the fastest growing  port in all of  North America.                                                               
He highlighted that  Prince Rupert is working  on $60-100 billion                                                               
in liquefied natural gas facility  proposals.  Thus Prince Rupert                                                               
is poised  for an economic boom,  which makes it a  very exciting                                                               
time  to  be   in  Prince  Rupert,  especially   since  not  much                                                               
development has happened in the area in the past twenty years.                                                                  
                                                                                                                                
MAYOR  BRAIN  said that  Prince  Rupert  believes an  opportunity                                                               
exists  for  Alaska due  to  three  major liquefied  natural  gas                                                               
proponents:  ExxonMobil  Corporation,   Woodside,  an  Australian                                                               
liquefied natural gas company, and  Nexen Energy, a subsidiary of                                                               
CNOOC, China's oil company proposed project.                                                                                    
                                                                                                                                
MAYOR  BRAIN  briefly pointed  out  the  geography just  east  of                                                               
Prince  Rupert to  the First  Nations  reserve of  Lax-Kw'alaams/                                                               
Port Simpson and  Metlakatla, a First Nation  community that lies                                                               
just across the harbor from Prince  Rupert.  Prince Rupert has an                                                               
airport  and  a  BC  ferry   system,  but  each  of  these  three                                                               
communities  have  separate  ferries  to serve  them.    However,                                                               
Prince Rupert  has been working  on the Tsimshian  Access Project                                                               
for the  past twenty  years, a  project that  will create  a road                                                               
network to connect  the entire loop, which would  allow people to                                                               
drive to the airport and  connect the First Nation communities to                                                               
the Prince Rupert mainland to open up access.                                                                                   
                                                                                                                                
MAYOR BRAIN said that due  to the potential liquefied natural gas                                                               
project that  Exxon, Woodside,  and Nexen  propose, it  now seems                                                               
feasible to  create the road  system to connect  the communities.                                                               
These  major oil  and gas  companies have  initiated a  major LNG                                                               
"GO"  planning  central  logistical coordination  in  the  Prince                                                               
Rupert area  to get ready  for growth.   He anticipated  that the                                                               
potential  investment  by  Exxon,  Woodside, and  Nexen  will  be                                                               
significant.                                                                                                                    
                                                                                                                                
MAYOR  BRAIN  recalled that  years  ago,  Alaska once  considered                                                               
moving  the  Alaska  Marine Highway  System  (AMHS)  from  Prince                                                               
Rupert  to Port  Simpson.   He explained  that Ketchikan  to Port                                                               
Simpson  would be  about a  three-hour ferry  route, whereas  the                                                               
current AMHS  route is a six-hour  run, since it is  necessary to                                                               
go to Prince  Rupert.  By June  2015, a decision will  be made on                                                               
one of the  liquefied natural gas facilities and  if that happens                                                               
this road network could be built within the next year or two.                                                                   
                                                                                                                                
1:16:12 PM                                                                                                                    
                                                                                                                                
MAYOR BRAIN said  that this leads him to extend  an invitation to                                                               
consider moving the  Alaska ferry terminal from  Prince Rupert to                                                               
Port  Simpson/Lax-Kw'alaams.    He   said  that  doing  so  could                                                               
increase  trade,  commerce,  tourism,  and  create  new  economic                                                               
opportunities for Alaska and Canada.   For example, Prince Rupert                                                               
could  send its  ferry to  Ketchikan to  be refitted  in the  new                                                               
shipyard.   Further, shaving ferry  route times will  also reduce                                                               
costs.   He anticipated it is  possible to have a  plan available                                                               
for the legislature's review in May.                                                                                            
                                                                                                                                
1:17:14 PM                                                                                                                    
                                                                                                                                
MAYOR  BRAIN reported  that Prince  Rupert  does not  necessarily                                                               
agree with [Canada's] federal  government's decision with respect                                                               
to the "Buy America" provisions.   Finally, he directed attention                                                               
to  the Prince  Rupert delegates  from various  organizations who                                                               
also  wish  to advocate  for  a  potential opportunity  that  may                                                               
materialize between Prince Rupert and Alaska.                                                                                   
                                                                                                                                
1:18:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CLAMAN  asked  for   clarification  on  the  "Buy                                                               
America" issue.   He recalled the issue was related  to steel and                                                               
port construction issues.                                                                                                       
                                                                                                                                
MAYOR BRAIN  offered his belief  that a "little bit  of political                                                               
posturing" has been  happening, but once the  October election in                                                               
Canada  is  held, the  current  project  to renovate  the  Alaska                                                               
marine highway terminal in Prince Rupert [will move forward].                                                                   
                                                                                                                                
1:19:39 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CLAMAN interjected by asking for more detail.                                                                    
                                                                                                                                
1:19:43 PM                                                                                                                    
                                                                                                                                
MAYOR BRAIN related  his understanding that Alaska  wanted to use                                                               
the "Buy American"  provision in its contract  with Prince Rupert                                                               
for the  marine terminal renovation.   However, that  meant using                                                               
American  steel  and  contracting  to build  the  facility  since                                                               
Alaska is funding the project,  he said, but when Canada received                                                               
the notice,  the federal  government objected  to using  the "Buy                                                               
American" provision since it would  like to use local contractors                                                               
and  materials in  projects in  Canada.   The  dispute, which  he                                                               
believed related to  an America-wide policy that  requires use to                                                               
American steel,  goods, and services.   Again, since  the project                                                               
is on  Canadian soil and on  [Canadian] federally-regulated land,                                                               
the Canadian federal government didn't agree to the provision.                                                                  
                                                                                                                                
1:20:55 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CLAMAN recapped his  understanding, that Alaska is                                                               
trying  to  upgrade  its  port,   that  U.S.  federal  funds  are                                                               
involved, which requires U.S. American  made materials and labor,                                                               
but the Canadian  government at a local or federal  level did not                                                               
agree to  use foreign labor and  materials on a port  on Canadian                                                               
soil.                                                                                                                           
                                                                                                                                
MAYOR  BRAIN clarified  that it  is a  Canadian federal  decision                                                               
since  Prince  Rupert  doesn't have  any  jurisdiction  over  the                                                               
process.  He said Prince Rupert  is actually caught in the middle                                                               
of this  dispute, which is one  reason why Prince Rupert  came to                                                               
Juneau  to advocate  at  a  local level.    First, Prince  Rupert                                                               
values its  relationship with Alaska  and does not believe  it is                                                               
critical  that the  "Buy America"  provision is  used.   Instead,                                                               
Prince Rupert seeks a flourishing  local economy and an enhanced,                                                               
more  efficient relationship  with the  government in  Alaska, in                                                               
Ketchikan, and Southeast Alaska.                                                                                                
                                                                                                                                
MAYOR  BRAIN said  that Prince  Rupert  would like  to outline  a                                                               
potential solution to  the problem.  Prince  Rupert believes that                                                               
if its road network can  be constructed within the same timeframe                                                               
as  Alaska renovating  its marine  terminal  that relocating  the                                                               
facility  could  create  even  greater access  for  Alaska.    He                                                               
characterized  British  Columbia  as being  Canada's  gateway  to                                                               
Alaska.  He didn't view it  as being travel between Prince Rupert                                                               
and Ketchikan as it is  about improving access between Canada and                                                               
Alaska.   In fact, Prince Rupert  wants to be the  "on the ground                                                               
logistical coordinators" on Alaska's  behalf.  He reiterated that                                                               
Prince Rupert believes  it can have a plan that  will be ready by                                                               
May to present to Alaska for its consideration.                                                                                 
                                                                                                                                
1:22:56 PM                                                                                                                    
                                                                                                                                
MAYOR BRAIN  said that if  there is ever  a chance to  change the                                                               
paradigm  of  how  Alaska  and   Canada  coexist,  [it  is  now].                                                               
Ultimately, Prince  Rupert believes  that the proposal  will save                                                               
time and money  and open up new trade  and commerce opportunities                                                               
on  the  ground,  regardless  of   what  the  [Canadian]  federal                                                               
government  is   considering.    After  the   [Canadian]  federal                                                               
elections are held  in October, there will likely be  a change in                                                               
leadership. Thus Prince Rupert hopes to help find solutions.                                                                    
                                                                                                                                
MAYOR  BRAIN  reported  that  currently  thousands  of  travelers                                                               
travel  between  Prince  Rupert  and  Alaska  every  year,  which                                                               
increases the  economies of  both areas.   However,  beginning in                                                               
July there could  potentially be only one  {AMHS] weekly sailing,                                                               
which would  severely impact  Prince Rupert's  economy at  a time                                                               
when the  community is working  to grow  and expand.   He offered                                                               
his belief that  Alaska has an opportunity to  capitalize on that                                                               
growth and expansion,  as well as for trade  opportunities due to                                                               
the  strategic location  in  the Asia  Pacific  Rim, noting  that                                                               
Prince  Rupert  represents  a three-day  shorter  trip  to  Asia.                                                               
Given the potential  port authority project in  Prince Rupert, it                                                               
could result in a more robust regional economy.                                                                                 
                                                                                                                                
1:24:21 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CLAMAN said  it sounds like he  can't predict what                                                               
the [Canadian] federal  government will or won't  do with respect                                                               
to the US federal "Buy American" requirement.                                                                                   
                                                                                                                                
MAYOR BRAIN answered that is correct.                                                                                           
                                                                                                                                
1:24:38 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FOSTER understood  a plan will ready  for a presentation                                                               
in May 2015.   He asked whether  it is possible to  obtain a one-                                                               
page summary, a  white paper, next week.  He  further asked if he                                                               
has any  figures for  the number of  travelers going  from Prince                                                               
Rupert to  Alaska.   Finally, he asked  Mayor Brain  to introduce                                                               
his delegation to members.                                                                                                      
                                                                                                                                
1:25:34 PM                                                                                                                    
                                                                                                                                
MAYOR  BRAIN  introduced  his  delegation:    John  Farrell,  the                                                               
outgoing  president of  the Prince  Rupert  Chamber of  Commerce;                                                               
Scott  Farwell,  president of  Tourism  for  Prince Rupert;  Rosa                                                               
Miller, the  incoming president of  the Prince Rupert  Chamber of                                                               
Commerce; Herb  Pond, Prince Rupert  Chamber of Commerce  and the                                                               
previous mayor of Prince Rupert;  and Maynard Angus, representing                                                               
the Prince Rupert Port Authority.                                                                                               
                                                                                                                                
1:26:22 PM                                                                                                                    
                                                                                                                                
MAYOR  BRAIN stated  that the  Port Simpson  plan was  previously                                                               
proposed by Alaska so the  documents are available.  In addition,                                                               
the  Tsimshian  Access Project  is  part  of  a 20-year  plan  in                                                               
process so all of the engineering  and design for the project has                                                               
been completed, which he could  share.  Although the planning has                                                               
been ongoing  for many years,  the timing seems right  for Prince                                                               
Rupert right now.                                                                                                               
                                                                                                                                
MAYOR BRAIN  answered that  15,000 travelers  use the  ferry from                                                               
Prince  Rupert to  Alaska, which  could  significantly grow  with                                                               
faster access  and a  much more efficient  route.   Further, many                                                               
Canadians  don't  know that  travel  is  possible to  Alaska  via                                                               
Prince  Rupert, which  could change  with marketing  and branding                                                               
Prince Rupert as Canada's gateway to Alaska.                                                                                    
                                                                                                                                
1:27:33 PM                                                                                                                    
                                                                                                                                
MAYOR BRAIN reviewed a small  map distributed to members entitled                                                               
"Prince  Rupert."   He  pointed out  Prince  Rupert Harbor  where                                                               
Exxon Mobil's  proposed project and  facility will be built.   If                                                               
this occurs  it will be  the largest industrial project  in North                                                               
America,  estimated  to cost  $50  billion.   The  project  would                                                               
consist  of  a bridge,  the  beginning  of the  Tsimshian  Access                                                               
Project, with  a new road  constructed through the  Prince Rupert                                                               
Harbor.   He pointed out  Port Simpson  on the second  map, which                                                               
illustrated the road to Port Simpson  would be a 15 minute drive.                                                               
Currently  there a  road exists,  but it  requires a  five-minute                                                               
ferry ride.  In fact, Alaska  is visible from Port Simpson, which                                                               
is directly  across from  Ketchikan.   He characterized  the link                                                               
between Port  Simpson and  Ketchikan as  being a  quick back-and-                                                               
forth  trip.    He  directed  attention  to  the  small  map  and                                                               
highlighted  the proposed  Tsimshian Access  Project.   Under the                                                               
plan, the road would go to  Port Simpson and connect by bridge to                                                               
the airport on  Digby Island.  The bridge design  is finished and                                                               
would need a small deviation  to include ExxonMobil Corporation's                                                               
proposed port project.  With  respect to the logistical redesign,                                                               
the good  news for Prince  Rupert is the potential  investment of                                                               
hundreds of  millions in funding  by six different  companies who                                                               
all  need this  access, in  particular, the  three aforementioned                                                               
[oil and  gas/liquefied natural gas] companies.   These companies                                                               
are discussing  a potential investment of  $100-$200 million each                                                               
into  the Prince  Rupert area.   Further,  Prince Rupert  will be                                                               
presenting  this  plan  to  the   province  and  to  the  federal                                                               
government [Canada].                                                                                                            
                                                                                                                                
1:30:12 PM                                                                                                                    
                                                                                                                                
MAYOR BRAIN  characterized the economic climate  as accelerating,                                                               
with a  substantial focus on  Prince Rupert.  He  emphasized that                                                               
Prince Rupert wants to add  Alaska as promoters, too, since [Port                                                               
Simpson]  has the  potential  to save  Alaskans  money and  time.                                                               
This  potential  solution  could  work for  Alaska,  Canada,  and                                                               
Prince Rupert.   He said, "The  stars are kind of  aligning so to                                                               
speak  at the  moment for  this to  occur."   He reiterated  that                                                               
Prince  Rupert's  intention  is   to  present  an  opportunity  -                                                               
although nothing  is set  in stone  at the moment  - and  he will                                                               
prepare  documents for  the proposal  to be  considered.   In the                                                               
meantime, he  hoped that Prince  Rupert and Alaska  could operate                                                               
in "business as usual."   Certainly, Alaska must proceed with its                                                               
budget,  but  he hoped  the  Alaska  Marine Highway  System  will                                                               
continue with  its regular schedule  to allow Prince  Rupert time                                                               
to finalize its plans.                                                                                                          
                                                                                                                                
1:31:39 PM                                                                                                                    
                                                                                                                                
MAYOR  BRAIN recommended  forming a  small committee  to continue                                                               
this  conversation and  regularly  hold dialogue.   He  suggested                                                               
that this  proposal could  take [Prince Rupert  and Alaska]  to a                                                               
new  level regionally.    He emphasized  that  Prince Rupert  has                                                               
always  viewed   Alaska  as  a   partner,  having  had   a  great                                                               
relationship  since 1958.   He  acknowledged that  he is  a young                                                               
mayor,   but   he  is   very   interested   in  continuing   this                                                               
relationship.                                                                                                                   
                                                                                                                                
1:32:19 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  FOSTER asked  for further  clarification  on who  would                                                               
serve on the small committee.                                                                                                   
                                                                                                                                
MAYOR  BRAIN offered  to have  the House  Transportation Standing                                                               
Committee   participate.       Currently,   Prince   Rupert   has                                                               
commissioned  KPMG to  provide a  logistical  design and  report.                                                               
Once  finished,  he envisioned  the  committee  will be  able  to                                                               
identify time and  cost savings, new facility  costs, and leasing                                                               
of  the  existing facility.    He  predicted  that all  of  these                                                               
details could be worked out in  a short order and the entire plan                                                               
could be solidified in anticipation  of investment decisions that                                                               
will occur in  June 2015.  The  plan is called a  "GO" plan since                                                               
Prince Rupert hopes to  hit the "GO" button on July  1, 2015.  At                                                               
that point  all of the oil  and gas companies, the  province, the                                                               
[Canadian]  federal government,  and  Alaska  could consider  one                                                               
central  project,  including  engineering.    While  this  is  an                                                               
audacious  plan  with a  large  scope,  the types  of  investment                                                               
coming to the Prince Rupert area  could make it possible and that                                                               
time is now.                                                                                                                    
                                                                                                                                
1:34:09 PM                                                                                                                    
                                                                                                                                
CO-CHAIR   FOSTER  wondered   if  the   proposed  working   group                                                               
membership  would consist  of a  combination  of legislators  and                                                               
DOT&PF staff, but that can be further discussed.                                                                                
                                                                                                                                
1:34:24 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE ORTIZ  apologized for his late  arrival, noting he                                                               
was  attending  a Southeast  Conference  meeting.   He  said  the                                                               
proposed  Prince  Rupert  plan  sounds  interesting.    He  asked                                                               
whether  Mayor Brain  could summarize  time savings  if the  AMHS                                                               
marine facility were to move to Port Simpson.                                                                                   
                                                                                                                                
MAYOR  BRAIN answered  that it  would be  save approximately  3.5                                                               
hours in  time and  it will  consist of  a three-hour  sailing to                                                               
Ketchikan.   Currently  his delegation  couldn't take  ferry from                                                               
Prince  Rupert to  Juneau without  a one  week delay  due to  the                                                               
schedule.  Thus, the delegation  chartered a seaplane.  Otherwise                                                               
the delegation  would need  to fly  to Vancouver  with a  stop in                                                               
Seattle  before  arriving in  Juneau.    However, if  the  vessel                                                               
sailing was a  three hour run, travelers  could technically leave                                                               
on  a Friday  morning and  return on  Sunday night.   Of  course,                                                               
numerous  factors   must  be   considered  with   this  proposal,                                                               
including existing union contracts  for the Alaska Marine Highway                                                               
System.    Still,  with  a   potential  three-hour  sailing,  the                                                               
benefits can  be enormous  for both areas.   Further,  this could                                                               
foster improved commerce and economic  trade since the drive from                                                               
Port Simpson to  Prince Rupert would be a  short 15-minute drive.                                                               
Even   though  this   would  limit   his  tax   base,  it   would                                                               
significantly improve the regional transportation link, he said.                                                                
                                                                                                                                
1:36:37 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE ORTIZ  asked whether  the community  supports this                                                               
since it  may have a  negative impact on Prince  Rupert, although                                                               
he  noted  the road  will  create  the basic  infrastructure  for                                                               
Prince Rupert.                                                                                                                  
                                                                                                                                
MAYOR BRAIN  answered yes.   He characterized the  [proposed Port                                                               
Simpson facility]  as highly anticipated  and welcome by  all the                                                               
stakeholders, particularly First  Nations, who absolutely support                                                               
road access to  the mainland.  Further, Prince  Rupert wants road                                                               
access to its  airport.  He concluded that a  lot of pieces could                                                               
be  solved by  this project.   Further,  it could  set up  Prince                                                               
Rupert and Alaska for another 50 years of a great relationship.                                                                 
                                                                                                                                
REPRESENTATIVE  ORTIZ  said  that  growing  up  in  Ketchikan  he                                                               
frequently  traveled through  Prince  Rupert and  his family  has                                                               
always  valued  the  relationship between  Ketchikan  and  Prince                                                               
Rupert.                                                                                                                         
                                                                                                                                
1:38:20 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FOSTER asked whether there  would be a time savings from                                                               
Prince Rupert to Seattle if the port was moved.                                                                                 
                                                                                                                                
MAYOR  BRAIN  answered that  the  sailing  from Port  Simpson  to                                                               
Bellingham would be the same route.                                                                                             
                                                                                                                                
1:39:47 PM                                                                                                                    
                                                                                                                                
MIKE NEUSSL, Deputy Commissioner,  Department of Transportation &                                                               
Public  Facilities  (DOT&PF),  stated   that  the  Alaska  Marine                                                               
Highway  System (AMHS)  currently has  a 50-year  long-term lease                                                               
with the existing  ferry terminal building in the  town of Prince                                                               
Rupert.  He indicated that the  DOT&PF would need to review it in                                                               
terms of a move to Port Simpson.                                                                                                
                                                                                                                                
MR. NEUSSL  reviewed the  issue of the  "Buy America  Steel Act."                                                               
He related  his understanding that  the DOT&PF put a  project out                                                               
to  replace the  wooden  ferry terminal  structure  - the  marine                                                               
structure  not the  building -  in Prince  Rupert that  was being                                                               
funded by  Federal Highway Administration (FHWA)  as a cost-share                                                               
with the  state.   As part  of the  federal funding,  it required                                                               
"Buy America Steel Act" to be  included in the contract, which is                                                               
what the  Canadian federal government objected  to; however, that                                                               
act  requires  that all  the  steel  be purchased  and  processed                                                               
within the  U.S.   For example, for  things such  as galvanizing,                                                               
bending,  welding, and  drilling, but  it does  not require  U.S.                                                               
labor to  install it in  Canada.  In  fact, of the  bids received                                                               
but not  opened, three of  the four were from  Canadian companies                                                               
and  the  fourth  was  from   a  U.S.  company  with  a  Canadian                                                               
affiliate.    Essentially  the   Canadian  affiliate  would  have                                                               
handled the project.   However, the bids were not  opened and the                                                               
bid   was  canceled   when   the   Canadian  federal   government                                                               
implemented  the  Federal  Extraterritorial Measures  Act,  which                                                               
prohibited compliance with  the "Buy America" act.   He said this                                                               
temporarily halted the project and it is still a pending issue.                                                                 
                                                                                                                                
1:41:50 PM                                                                                                                    
                                                                                                                                
MR. NEUSSL, in  terms of Port Simpson instead  of [Prince Rupert]                                                               
to Ketchikan, agreed it would  shorten the running time; however,                                                               
he was not  certain of the mileage, but it  would eliminate going                                                               
around  Digby  Island.   He  clarified  that  the AMHS  does  not                                                               
currently run directly between Prince  Rupert and Bellingham.  He                                                               
explained  that the  runs are  from Ketchikan  to Bellingham  and                                                               
from Prince Rupert to Ketchikan.                                                                                                
                                                                                                                                
1:42:22 PM                                                                                                                    
                                                                                                                                
MAYOR BRAIN apologized that he  wasn't fully aware of the details                                                               
of the "Buy America" provision.   He asked to leave the committee                                                               
with  a final  message.    In his  experience,  when the  British                                                               
Columbia (BC) ferries cut sailings  mid-schedule, it impacted the                                                               
entire  tourism  economy,  in   particular,  for  those  who  had                                                               
prearranged  schedules,  as  well   as  adversely  affecting  its                                                               
reputation.  He  cautioned members to consider the  impact on the                                                               
system.  For example, if the sailings  for July 1 are cut, it may                                                               
result in unintended consequences.                                                                                              
                                                                                                                                
MAYOR BRAIN related his understanding  that some Alaskans may not                                                               
see the  full benefits of  this connection, but  he characterized                                                               
this  proposal  as a  major  economic  generator for  Alaska  and                                                               
Canada.  He encouraged members to  travel on the route to see the                                                               
vital link that  connects two economies.  At the  local level, it                                                               
is important  not only to  Ketchikan and Prince Rupert,  but also                                                               
to British Columbia, Canada, and  Alaska.  Currently the American                                                               
dollar  is very  strong so  it  is very  good time  to travel  to                                                               
Canada.   He  encouraged the  [Alaska Marine  Highway System}  to                                                               
continue  on  as  normal  while  Prince  Rupert  accelerates  its                                                               
proposal process.  He viewed  the proposed [Port Simpson] project                                                               
and the  economic acceleration in  Prince Rupert as  providing an                                                               
opportunity.   He said if  the "stars align" Prince  Rupert hopes                                                               
that there  can be a  collaborative effort  to move forward.   In                                                               
closing,  he  said  that  Prince  Rupert  adamantly  cares  about                                                               
Alaska, and he hopes that Alaska feels the same.                                                                                
                                                                                                                                
1:45:42 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  FOSTER looked  forward  to  receiving more  information                                                               
from Prince Rupert for the committee.                                                                                           
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Transportation Standing  Committee meeting was adjourned  at 1:45                                                               
p.m.                                                                                                                            

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