03/11/2008 05:00 PM House TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| SJR12 | |
| HB294 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 294 | TELECONFERENCED | |
| + | SJR 12 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE TRANSPORTATION STANDING COMMITTEE
March 11, 2008
5:08 p.m.
MEMBERS PRESENT
Representative Kyle Johansen, Chair
Representative Mark Neuman, Vice Chair
Representative Anna Fairclough
Representative Craig Johnson
Representative Wes Keller
Representative Mike Doogan
MEMBERS ABSENT
Representative Woodie Salmon
OTHER LEGISLATORS PRESENT
Representative Andrea Doll
COMMITTEE CALENDAR
CS FOR SENATE JOINT RESOLUTION NO. 12(STA)
Requesting that Alaska be exempt from changes to the
interpretation of the Passenger Vessel Services Act of June 19,
1886, proposed by the United States Department of Homeland
Security, Bureau of Customs and Border Protection, affecting
cruise itineraries of foreign-flagged vessels transporting
passengers to ports in Alaska; or, if Alaska is not exempted,
opposing the proposed changes to the interpretation of that Act.
- MOVED CSSJR 12(STA) OUT OF COMMITTEE
SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 294
"An Act establishing the division of marine transportation;
establishing the Alaska Marine Transportation Authority Board
and the position of director of the division of marine
transportation, and assigning the powers and duties of each;
making conforming amendments; and providing for an effective
date."
- HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: SJR 12
SHORT TITLE: CRUISE SHIP PORT TIMES: JONES ACT
SPONSOR(s): SENATOR(s) THERRIAULT
01/16/08 (S) READ THE FIRST TIME - REFERRALS
01/16/08 (S) STA
02/26/08 (S) STA AT 9:00 AM BELTZ 211
02/26/08 (S) Scheduled But Not Heard
02/28/08 (S) STA AT 9:00 AM BELTZ 211
02/28/08 (S) Moved CSSJR 12(STA) Out of Committee
02/28/08 (S) MINUTE(STA)
02/29/08 (S) STA RPT CS 4DP NEW TITLE
02/29/08 (S) DP: MCGUIRE, FRENCH, GREEN, BUNDE
03/04/08 (S) TRANSMITTED TO (H)
03/04/08 (S) VERSION: CSSJR 12(STA)
03/05/08 (H) READ THE FIRST TIME - REFERRALS
03/05/08 (H) TRA
03/11/08 (H) TRA AT 5:00 PM CAPITOL 17
BILL: HB 294
SHORT TITLE: MARINE TRANSPORTATION: BOARD & DIVISION
SPONSOR(s): REPRESENTATIVE(s) WILSON, LEDOUX, SEATON
01/04/08 (H) PREFILE RELEASED 1/4/08
01/15/08 (H) READ THE FIRST TIME - REFERRALS
01/15/08 (H) TRA, FIN
02/25/08 (H) SPONSOR SUBSTITUTE INTRODUCED
02/25/08 (H) READ THE FIRST TIME - REFERRALS
02/25/08 (H) TRA, FIN
03/11/08 (H) TRA AT 5:00 PM CAPITOL 17
WITNESS REGISTER
HEATHER BRAKES, Staff
to Senator Gene Therriault
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented the sponsor statement for SJR 12
on behalf of Senator Therriault.
JOHN BINKLEY, President
Alaska Cruise Association
Fairbanks, Alaska
POSITION STATEMENT: Supported CSSJR 12(STA).
RON PECK, President
Alaska Travel Industry Association (ATIA)
Anchorage, Alaska
POSITION STATEMENT: Supported SJR 12.
CHRIS POAG, Assistant Attorney General
Commercial/Fair Business Section
Civil Division (Juneau)
Department of Law (DOL)
Juneau, Alaska
POSITION STATEMENT: During hearing on CSSJR 12(STA), answered
questions.
REPRESENTATIVE PEGGY WILSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As co-prime sponsor, presented the sponsor
statement for SSHB 294.
REPRESENTATIVE PAUL SEATON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As co-prime sponsor, presented information
regarding SSHB 294.
CLIFF STONE, Staff
to Representative Peggy Wilson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented the sectional summary for HB 294.
FRED YATES
Juneau, Alaska
POSITION STATEMENT: During hearing on HB 294, suggested that
developing a strategic plan for the Alaska Marine Highway System
would be the way to fix the problems.
JERRY MCCUTCHEON
Anchorage, Alaska
POSITION STATEMENT: Testified that HB 294 is not a good bill.
ALBERT JUDSON
Juneau, Alaska
POSITION STATEMENT: Opposed HB 294.
ACTION NARRATIVE
CHAIR KYLE JOHANSEN called the House Transportation Standing
Committee meeting to order at 5:08:02 PM. Representatives
Fairclough, Johnson, Keller, Doogan, and Johansen were present
at the call to order. Representative Neuman arrived as the
meeting was in progress. Also present was Representative Doll.
SJR 12-CRUISE SHIP PORT TIMES: JONES ACT
5:08:02 PM
CHAIR JOHANSEN announced that the first order of business would
be CS FOR SENATE JOINT RESOLUTION NO. 12(STA), Requesting that
Alaska be exempt from changes to the interpretation of the
Passenger Vessel Services Act of June 19, 1886, proposed by the
United States Department of Homeland Security, Bureau of Customs
and Border Protection, affecting cruise itineraries of foreign-
flagged vessels transporting passengers to ports in Alaska; or,
if Alaska is not exempted, opposing the proposed changes to the
interpretation of that Act.
5:08:15 PM
HEATHER BRAKES, Staff to Senator Gene Therriault, Alaska State
Legislature, presented the sponsor statement for SJR 12 on
behalf of Senator Therriault. She stated that in November
[2007], the U.S. Department of Homeland Security, Bureau of
Customs and Border Protection, published a new interpretation of
the Passenger Vessel Services Act of 1886. This new
interpretation would require foreign-flagged cruise ships to
spend [at least] 48 hours in foreign ports and that the period
of time spent in foreign ports amount to more than 50 percent of
the total time spent in U.S. ports of call. The interpretation
would also [permit] cruise ship passengers to disembark at the
foreign port.
MS. BRAKES said the cruise industry brings more than one million
passengers to Alaska each year and provides over 40,000 jobs, a
significant contribution to the state's economy. This new
interpretation would have a devastating impact on many jobs and
Alaskan-owned businesses in both coastal and inland communities
throughout the state. According to the Department of Commerce,
Community, & Economic Development, the expected impact to Alaska
would be approximately 158 fewer voyages, approximately 349,000
fewer passengers, and an expected loss of $222 million in direct
spending. She said SJR 12 requests that Alaska be exempted from
this new interpretation, and that the state opposes the
interpretation if it is not exempted.
5:10:28 PM
REPRESENTATIVE FAIRCLOUGH inquired whether the ships currently
servicing communities in Alaska can qualify for the exemption
that is listed in the Federal Register, Volume 72, under III.
Current Law and Policy, which states:
(2) has been issued a certificate of documentation
with a coastwise endorsement or is exempt from
documentation but would otherwise be eligible for such
a certificate and endorsement.
MS. BRAKES deferred to Chris Poag with the Department of Law.
5:11:45 PM
JOHN BINKLEY, President, Alaska Cruise Association, stated that
the Alaska Cruise Association's membership is made up of cruise
lines that bring visitors to Alaska, as well as Alaska business
that rely on the cruise ship industry for their livelihood. He
said the association supports CSSJR 12(STA) and thanks the
committee for hearing the resolution and the sponsor for
bringing it forward. The resolution would put the State of
Alaska on record as opposing this proposed interpretation that
would bring significant harm to many communities and businesses
throughout the state. The economic impact from this rulemaking
would be devastating to some Southeast Alaska communities. He
urged the committee to support the resolution.
5:13:11 PM
REPRESENTATIVE FAIRCLOUGH reiterated her question about the
Federal Register exemption.
MR. BINKLEY said the cruise lines' legal departments have
studied this thoroughly and he has not heard any mention of an
exemption that could be applied for. He related that the cruise
lines are hopeful that one of the following actions will occur:
1) the rulemaking does not apply to Alaska and is only specific
to Hawaii, 2) the rule does not occur, or 3) there is
legislation clarifying that Alaska and other jurisdictions are
exempt from the interpretation.
5:14:51 PM
RON PECK, President, Alaska Travel Industry Association (ATIA),
informed the committee that ATIA is a trade association that
advocates on behalf of its more than 1000 member businesses
involved in the travel and visitor industry. He said ATIA
wholeheartedly endorses SJR 12. The proposed reinterpretation
would dramatically impact cruise itineraries in Alaska, the
visitor experience in the state, and severely impact a multitude
of independently-owned Alaska businesses throughout the state
that work with the cruise industry in offering land-based
experiences for cruise visitors. He read ATIA's unanimously-
passed resolution opposing the proposed federal rule change.
5:17:19 PM
CHRIS POAG, Assistant Attorney General, Commercial/Fair Business
Section, Civil Division (Juneau), Department of Law (DOL),
responded to Representative Fairclough's previous question about
the Federal Register. He explained that what she is reading is
the actual federal law. However, what is being reinterpreted,
or formally interpreted by the proposed regulation packet, is
the federal regulation. In the actual law the "or" being
referred to does not modify the "and" that comes after (1), the
first requirement.
5:18:10 PM
MR. POAG, in response to Representative Johnson, defined the
term coastwise as meaning that when a ship stops at a U.S. port
it is a coastwise stop. He said this is about foreign-flagged
vessels stopping in U.S. ports and when they are allowed to stop
under this federal law. This is a reinterpretation of a
regulation that currently allows for these vessels to stop in
Alaska because they return to the port they started from in
Seattle, but made a stop in a nearby foreign port which is
Vancouver [British Columbia, Canada]. However, the
reinterpretation for the Hawaii ports is implicating, or
arguably affecting, the Alaska vessels as well.
5:19:22 PM
CHAIR JOHANSEN closed public testimony.
REPRESENTATIVE NEUMAN moved to report CSSJR 12(STA) out of
committee with individual recommendations and the accompanying
fiscal notes. There being no objections, CSSJR 12(STA) was
reported from the House Transportation Standing Committee.
The committee took an at-ease from 5:20 p.m. to 5:22 p.m.
HB 294-MARINE TRANSPORTATION: BOARD & DIVISION
5:22:00 PM
CHAIR JOHANSEN announced that the next order of business would
be SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 294, "An Act
establishing the division of marine transportation; establishing
the Alaska Marine Transportation Authority Board and the
position of director of the division of marine transportation,
and assigning the powers and duties of each; making conforming
amendments; and providing for an effective date."
5:22:34 PM
REPRESENTATIVE PEGGY WILSON, Alaska State Legislature, a co-
prime sponsor of SSHB 294, paraphrased from the following
portions of the written sponsor statement [original punctuation
provided]:
The genesis of the Alaska Marine Highway System
occurred in the late 40's when Steve Homer of Haines
together with Robert Sommers and Associates started a
commercial ferry service on Lynn Canal. Mr. Homer and
Ray Gelotte, converted a surplus World War II, LCT-
Mark 6 landing craft which they christened the M/V
Chilkoot. The Chilkoot Motorship Lines operated from
Tee Harbor in Juneau to Haines-Port Chilkoot and
Skagway. Their business was purchased by the
Territorial Board of Road Commissioners in 1951.
The Chilkoot continued to operate for another 6 years
while the territorial government decided to build a
new, but smaller ferry. Named the M/V Chilkat, this
distinctive ferry was painted blue and gold and almost
instantly dubbed the "Blue Canoe." This vessel began
daily service between Juneau and the communities on
the Lynn Canal in June of 1957. After Alaska became a
state in 1959, voters approved bond issues totaling
$18 million to expand the ferry fleet. The first of
the new ships to go into service was the Malaspina in
January of 1963 when it sailed the Inside Passage to
Ketchikan. That community and the rest of Southeast
Alaska had been without regular passenger ship service
for nearly a decade when the Alaska Steamship Company
stopped such service in 1954. The Alaska Marine
Highway System (AMHS) became official in 1963. The
system is under the auspices of the Alaska Department
of Transportation and Public Facilities [DOT&PF].
Today there are a total of eleven vessels serving in
the Alaska's Marine Highway fleet. Over the years
this ferry system has expanded to include additional
routes between Whittier and Valdez, to Kodiak, Seward,
Homer, along the Aleutian chain, Prince Rupert in
British Columbia, and between otherwise isolated
Native villages.
The Alaska Marine Highway is part of the National
Highway System (NHS), an interconnected system of
routes that serve important national functions, e.g.,
security, commerce, and travel. The NHS is comprised
of Interstate and defense routes, other principal
arterial routes, and routes connecting to major
intermodal facilities such as airports, ports, and
ferry terminals. Our marine highway is an integral
component of the intermodal system here in Alaska.
The AMHS also falls under the mission and vision of
the Federal Highway Administration (FHWA), in that
this agency's goals include the protection and
enhancement of the natural environment, and the
communities affected by transportation which include
mobility, safety, productivity, and national security.
The AMHS has historical significance as the main
transportation link between many of Alaska's small,
isolated coastal communities. Some consider the
marine highway as their "life blood" to other areas of
the state. This is particularly significant for those
towns and villages that aren't connected by any
roadway to the mainland. A healthy marine highway
system has given every one of those communities the
opportunity to expand the commerce of their region and
provides a vital link for families, schools, and
cultures to flourish.
During the past few years there has been an almost
thoughtless erosion of service by the AMHS. This
steady deterioration would almost seem a selfish or
careless act if it wasn't so systematic in character.
One of the problems with trying to manage a system
like the marine highways is that typically every four
years a new management team is established at
[DOT&PF]. The appointed individuals have a varying
degree of experience when it comes to managing an
organization of this nature. They are typically very
enthusiastic and ask for indulgence while they learn
the diverse nuances of the department. Unfortunately
this evolution is sluggish and breeds mediocrity.
5:28:18 PM
In May of 2002, a study was released entitled:
Sustainability of the Alaska Marine Highway System,
which was prepared for the Southeast Conference by the
McDowell Group. Two of the conclusions reached, speak
volumes as to why AMHS is in trouble. One of the key
issues expressed was that "the current operating model
is outmoded and no longer adequately meets the needs
of the users." Another conclusion stated that "the
existing management structure may not be sufficient
for the future…" The study also asserted that the
AMHS had an economic impact statewide estimated at
$171 million in 1995. This lends credence to the
arguments surrounding how important the AMHS is to
local economies.
It is the intent of HB294 to solve this dilemma by
establishing an Alaska Marine Transportation Authority
Board. This Board will provide the steadfast command
and control over the AMHS, the continuity if you will,
that is essential throughout any transition of a new
governor or any changes in the hierarchy at [DOT&PF].
REPRESENTATIVE WILSON pointed out that in the time she has
been a legislator, four different people, and soon to be
five, have controlled the Alaska Marine Highway System
under three different governors. It is very difficult to
have continuity when the person in charge keeps changing
and this is one of the issues that HB 294 would change, she
said. Under the bill an 11-member board would be appointed
by the governor and one very unique duty of that board
would be to select nominees for the position of director of
the [Alaska Marine Highway System]. She quoted another
statement from the McDowell Group's study:
Success over the long-term will require a carefully
crafted combination of management, operations and
funding strategies (and execution).
5:29:17 PM
REPRESENTATIVE NEUMAN moved that the committee adopt the
proposed committee substitute (CS) for SSHB 294, labeled 25-
LS1220\L, Kane, 3/10/08 ("Version L"), as the working document.
There being no objection, Version L was before the committee.
5:29:37 PM
REPRESENTATIVE PAUL SEATON, Alaska State Legislature, co-prime
sponsor of SSHB 294, said the purpose of the bill is to ensure
there is an effective marine highway system because it is a very
integral part of all of coastal Alaska. He said the bill as
originally introduced would have established an independent
entity like the Alaska Railroad Corporation. However, because
of the difficulty involved in that, a sponsor substitute was
introduced to convert the Marine Transportation Advisory Board
(MTAB) into an authority board. This board would select
nominees for the marine highway director based on their
expertise. Their names would then be submitted to the governor
who would choose the new director. He said the hope is that
this will get a long-range planning structure and provide a
public advocate to the legislature for the Alaska Marine Highway
System, things that are currently lacking.
5:31:49 PM
REPRESENTATIVE DOOGAN estimated there are roughly 10 coastal
communities, of which 5 are included in the bill. He asked
whether the excluded communities agree with the legislation.
REPRESENTATIVE WILSON responded that all of them do, although
there may be a couple communities she has not yet talked to. By
far and large, she has met with communities and discussed what
should be put into the bill.
5:32:38 PM
REPRESENTATIVE DOOGAN drew attention to the legal opinion [from
Brian Kane, Legislative Counsel, dated 3/10/08] regarding the
bill's provision that board members "may only be removed by the
governor for cause". He related that the opinion states this
may constitute a usurpation of the executive power of
appointment. He inquired whether the co-prime sponsors agree
with the legal opinion and are agreeable to changing that
provision to a way that does not cause constitutional problems.
REPRESENTATIVE SEATON replied the co-prime sponsors have an
amendment to offer for resolving that problem, as well as a
second amendment to resolve problems in the section regarding
contractual services. The second amendment clarifies that it is
services, not goods, that are being talked about; this makes it
clear that the board cannot go out and buy a ferry, docks, or
buildings.
5:34:07 PM
REPRESENTATIVE JOHNSON asked whether SSHB 294 replaces an
existing board.
REPRESENTATIVE SEATON answered yes. It is currently the Marine
Transportation Advisory Board (MTAB) and the name would be
changed to the Marine Transportation Authority Board. The bill
gives this authority board the ability to select the nominees
for director and to also have a direct say in working with the
Department of Transportation & Public Facilities (DOT&PF) in
creating ongoing plans and structure.
5:35:01 PM
REPRESENTATIVE JOHNSON inquired whether the current advisory
board has funding and has the same meeting schedule as outlined
in the fiscal note for the new authority board.
REPRESENTATIVE SEATON responded yes.
REPRESENTATIVE JOHNSON questioned the fiscal note given that one
board is simply replacing another and the new board only has a
few more duties than the old board.
5:36:37 PM
REPRESENTATIVE FAIRCLOUGH drew attention to the last paragraph
of the aforementioned 3/10/08 legal opinion which states, "It
seems that the Alaska Marine Transportation Authority Board does
not fit into the category of being a regulatory or quasi-
judicial agency ...." She requested that someone speak to this
issue as she finds it concerning. She further asked whether a
conflict is being created by the requirements for the
composition of the authority board. In response to Chair
Johansen, Representative Fairclough clarified that she is
concerned the language on page 3 of Version L is too
prescriptive and will create loggerheads.
REPRESENTATIVE SEATON replied that the makeup of the authority
board would be somewhat similar to the makeup of the current
MTAB; for instance, a captain is presently serving on MTAB.
Scheduling is a major problem, he said, so the hope is to get
someone on the authority board with expertise in that regard.
There needs to be a buy-in from all the communities that the
Alaska Marine Highway System serves. He said he thinks all of
the authority's members would serve as advocates for making the
system work well and thus they would be working together and not
be at loggerheads with each other. It is not prescriptive in a
manner that will be detrimental to the system, he argued, rather
it will bring expertise to the table. Without representation
for both small and large communities, as well as western
communities, people will not trust that they are being
represented in the system. He said there is an amendment on the
table that would delete the provision that the governor can only
remove a board member for cause and replace it with the
provision that members of the board serve at the pleasure of the
governor.
CHAIR JOHANSEN informed the committee that the current MTAB was
established by executive order under Governor Murkowski and
initially had 11 members, but he believes Governor Palin pared
the board to 9. He said it would be helpful if the sponsors
would provide copies of the makeup of both of those boards so
the committee can see how it was done from the governor's
office.
5:42:27 PM
REPRESENTATIVE FAIRCLOUGH inquired what the intent is for the
authority board and what its powers would be in regard to
appropriations given that it would be neither a regulatory board
nor a quasi-judicial board. While the board is sort of set up
like an authority, it does not have the powers of an authority
because the legislature is the appropriation body. According to
a McDowell Group study, she related, authorities are based on
predictable income that makes them relatively independent of
annual appropriations. Thus, there is a conflict with the
authority concept in HB 294 because it will not have a
predictable revenue stream and is being asked to do something
that it cannot.
REPRESENTATIVE WILSON answered that what is wanted is a board
with the authority to search for [a director] that has the
expertise for the job. This [director] would still have to be
approved and appointed by the governor. The board would not
have authority as far as money, rather it would have authority
to make plans and ensure [the director] follows them. Thus, the
director would work with the board and the DOT&PF commissioner.
The current system is obviously not working, she said, and this
is an attempt to make it better by having continuity so that
each time there is a new governor the person running the ferry
system does not automatically change like what happens now. It
takes a year or two for a newly appointed person to learn how
everything works and frequent changes of the person in this
position is causing problems. Constant changes cause everything
to always be up in the air, said Representative Wilson. The
schedule did not get done on time this year and in turn this
created a scheduling mess for tourism businesses, plus the
schedule changed constantly over the past year. She advised
that a two-year schedule is needed.
REPRESENTATIVE FAIRCLOUGH noted that, for her, the issue for her
is how to balance statewide regional and local transportation
needs and how the ferry system integrates with other
transportation modes and state-provided infrastructure.
5:48:43 PM
REPRESENTATIVE NEUMAN drew attention to the provision in Section
1 that would require the preparation of a comprehensive long-
range plan. He assumed this would also involve a fiscal plan.
He asked how the long-range plan would be developed given there
is no fiscal plan for the state as a whole, and the
unpredictability of future legislative decisions and federal
funding.
REPRESENTATIVE WILSON responded that a plan must be made because
the ferries are old and breaking down. The bill does not
mandate how to do the planning, it just says to look at things
and come up with a schedule and a way to replace these vessels.
The unpredictability of federal funding is no different than for
Medicare and Medicaid or any other part of the state's budget.
Someone must look out for the ferry system as a whole, she said,
and establish a goal and how that goal can be reached.
REPRESENTATIVE SEATON added that currently there are regional
plans and the goal is to bring the board into the consultation
process instead of having only the department doing the
planning. It is not just money, it is also goals and visions
for providing services in the future based on the needs of the
communities.
CHAIR JOHANSEN interjected that a comprehensive long-range plan
is already in current statute, and the only change would be the
addition of input from the board.
5:53:44 PM
REPRESENTATIVE NEUMAN directed attention to page 5 [line 10]
which states, "The board has the express authority to enter into
contractual services." He said this provision causes him
concern in terms of the Public Employees' Retirement System
(PERS) and the Teachers' Retirement System (TRS).
REPRESENTATIVE SEATON replied that the committee should have a
proposed amendment labeled 25-LS1220\L.2, Kane, 3/11/08, which
would delete "contractual services" and insert "contracts for
services that are within the scope of the board's powers,
duties, and functions". This would allow the board to go out
with requests for proposals (RFPs) for scheduling.
5:55:09 PM
REPRESENTATIVE NEUMAN said, in his opinion, it should be only
the governor's choice for the selection of cabinet members and
people serving the commissioners, which includes the directors.
What would happen if the governor did not want to select any of
the three people nominated by the board, he asked.
REPRESENTATIVE WILSON said the bill does not need to address
this because the governor has the power not to choose one of the
board's nominees. The board would then have to look at it
again.
5:56:23 PM
REPRESENTATIVE NEUMAN asked whether Representative Wilson thinks
the current director, who was approved by the legislature, is
qualified.
REPRESENTATIVE WILSON said she did not know the current
director's qualifications and that this is not anything against
anyone in place now. It is to create continuity for the ferry
system from one administration to the next. There have been
four people in that position over the last eight years and this
makes it difficult to run things smoothly.
REPRESENTATIVE NEUMAN requested the co-prime sponsors to get
back to the committee regarding what would happen if the
governor rejects the board's nominees.
REPRESENTATIVE SEATON pointed out that the joint boards of
fisheries and game send nominees to the governor and the
governor can choose to reject them and the boards can then bring
forward other names. Another example is the Board of Education
and Early Development and the commissioner for that department.
There are a number of things like this that require expertise
and for which boards select and nominate qualified individuals
for submission to the governor.
CHAIR JOHANSEN said he is aware of situations where three names
were submitted to the governor and all three were rejected. So,
it is not a binding limit on those three because three more
nominees can be brought forward.
REPRESENTATIVE SEATON said that is also his understanding.
5:58:50 PM
REPRESENTATIVE NEUMAN commented that in regard to the
establishment of regional advisory committees [page 5, lines 2-
5] he has recently been troubled by the lack of communication
between advisory committees, the boards, and the departments,
particularly as it pertains to the Board of Fisheries.
CHAIR JOHANSEN interjected that this is exactly the problem that
HB 294 is trying to solve because right now the Marine
Transportation Advisory Board is being treated in the same way
that regional advisory committees are being treated by the
boards of game and fisheries.
REPRESENTATIVE SEATON agreed.
6:00:40 PM
REPRESENTATIVE SEATON, in response to Representative Neuman,
explained that the current MTAB is advisory and that the board
established under HB 294 would have more powers than an advisory
board. The new board would be able to nominate the individuals
and go out for RFPs for scheduling should there be trouble
getting the two-year scheduling done. Those RFPs would still
have to be accepted and funded through the legislature, he said.
So, there are more duties than an advisory board and those
duties are listed on page 4 of the bill.
REPRESENTATIVE NEUMAN noted the board duties [from pages 4-5 of
the bill] and asked whether that was the full extent of the
board's powers, duties, and functions.
REPRESENTATIVE SEATON responded yes. He cited subsections (c)
and (d) [page 5] and said the board's duties are broader than
just sending recommendations to the governor.
6:03:17 PM
REPRESENTATIVE DOOGAN inquired who the director of marine
transportation would work for.
REPRESENTATIVE WILSON replied the director would be paid by the
Department of Transportation & Public Facilities and would take
suggestions from the authority board.
REPRESENTATIVE SEATON said the director would be under the
DOT&PF commissioner.
REPRESENTATIVE WILSON added that the board will have its goals
for the [director] who would go to the Department of
Transportation & Public Facilities. The commissioner could
override the board because the board would not have full
authority.
6:04:46 PM
REPRESENTATIVE DOOGAN commented that, typically, the governor
appoints a commissioner and the commissioner hires everyone
else; thus, the chain of command goes pretty straight up. It
might be awkward to have the governor choose both the DOT&PF
commissioner and the marine transportation director, yet the
director would be working for the commissioner.
REPRESENTATIVE WILSON acknowledged it might be awkward, but said
things are not working now so something must be tried.
6:05:46 PM
REPRESENTATIVE FAIRCLOUGH stated she sees a conflict in
management ability when a board sets goals that are not approved
by the head of the department. She said she is perplexed
because there is other legislation moving that would eliminate
the deputy commissioner of marine transportation and HB 294
would, in essence, be bringing that position back.
REPRESENTATIVE DOOGAN said he believes that the position was put
back.
REPRESENTATIVE FAIRCLOUGH responded that this means there would
then be multiple layers: a commissioner, a deputy commissioner
of marine highways, and now a director.
6:06:51 PM
CHAIR JOHANSEN understood the position has not been put back,
but there is a fiscal note for that bill that would put the
position back in. He said he has voiced his opinion to the bill
sponsors that it would not leave this committee with that
position put back in. If it is the will of the committee, the
bill will not be brought back up again.
REPRESENTATIVE FAIRCLOUGH supported continuity in the Alaska
Marine Highway System and understood the issue of scheduling.
However, she expressed her concern that it is presently unknown
whether there will be a deputy commissioner of marine operations
and that HB 294 would create a position for a marine
transportation director who would not have a clear line of
authority under the commissioner because he or she would be
reporting to a board. She said she will need clarity as things
go along regarding this fragmentation in the organizational
chart.
6:08:21 PM
CLIFF STONE, Staff to Representative Peggy Wilson, Alaska State
Legislature, noted that HB 294 is a collaborative effort on the
parts of several legislators to find somebody who could advocate
on behalf of the Alaska Marine Highway System because these
legislators feel this is not being done in the Department of
Transportation & Public Facilities. Having more stakeholders
involved is a good thing and this is why HB 294 would create
regional advisory committees to provide input to the board and
subsequently to the director.
MR. STONE began a sectional summary of the bill. He said
Section 1 would require the Department of Transportation &
Public Facilities to consult with the Alaska Marine
Transportation Authority Board in preparing a comprehensive
long-range plan. The department is currently mandated by AS
19.65.011 to create and update a plan every five years and under
HB 294 the department would be required to this in consultation
with the authority board. This could be done through the
director because the authority board will have given the
director its vision and the director can present this vision to
the department. The board could also choose to present its
vision directly to the department.
6:12:09 PM
REPRESENTATIVE FAIRCLOUGH requested a definition of consult
because if consult just means suggesting ideas then there are no
teeth and this will not get to consistency in management. What
is the consequence if the department does not accept the board's
recommendation, she asked.
MR. STONE responded he cannot speak to the legal aspect. He did
not know what the consequences would be if the Department of
Transportation & Public Facilities chose not to listen to the
board, but said he thinks the department would pay attention to
the board because it is an authority board and it is the intent
of the bill sponsors.
REPRESENTATIVE FAIRCLOUGH disagreed. She said she thinks this
is re-creating the MTAB with no teeth to make the Department of
Transportation & Public Facilities do anything different. She
does not oppose making a change that would empower the board in
some way, but it is not a true authority board because there is
no control of the revenue stream for expenses that will be
incurred in the system.
6:15:01 PM
MR. STONE continued the sectional summary. He said Section 2
would add two new articles to AS 19.65 detailing the Alaska
Marine Highway Organization and Operations [Article 3] and
creating the Alaska Marine Transportation Authority Board
[Article 4]. Section 19.65.110 of Article 3 would establish the
division of marine transportation. This section is at the
advice of Legislative Legal and Research Services in order to be
consistent with all the statutes regarding directors and
divisions, he related. The Alaska Marine Highway System would
then just fit inside this division. He said the language might
need to be scrubbed a little bit to make this happen.
6:17:22 PM
REPRESENTATIVE NEUMAN inquired whether this means there would be
the Department of Transportation & Public Facilities, Division
of Marine Transportation.
MR. STONE replied yes, HB 294 would establish a separate
Division of Marine Transportation.
REPRESENTATIVE NEUMAN asked whether the Marine Transportation
Authority Board would advise that division.
MR. STONE answered yes. The division would have a director who
is in charge of the day-to-day operations of that division and
thus the Alaska Marine Highway System because it would fall
under that division.
REPRESENTATIVE NEUMAN inquired whether that director would be
the person whose name is forwarded by the authority board.
MR. STONE responded yes.
6:18:20 PM
REPRESENTATIVE FAIRCLOUGH understood that right now the Alaska
Marine Highway System is better than a division because it has a
deputy commissioner which is a higher level. She questioned
creating an additional layer of bureaucracy by establishing a
division within a division that already has a head that reports
more directly to the governor than does the Central Region of
the Department of Transportation & Public Facilities. She said
she would like to talk to the department in this regard.
CHAIR JOHANSEN requested both the Department of Transportation &
Public Facilities and the bill sponsors to provide a flow chart
of positions to clear up the confusion.
REPRESENTATIVE FAIRCLOUGH asked department staff in the audience
to nod whether the Alaska Marine Highway System is a separate
division. There not being a nod, she understood it to be a
unique definition.
6:20:30 PM
MR. STONE resumed his explanation of Article 3. He said Section
19.65.120 would create the Alaska marine transportation
director.
REPRESENTATIVE DOOGAN surmised that the director would have a
couple of different kinds of duties - one to run the division
and one to do planning through the Marine Transportation
Authority Board. Would the director be working for the board in
terms of planning, he asked.
MR. STONE related his own vision which he said is taken from
conversations with several legislators. The authority board
would meet at least four times a year and make recommendations
to the director. The board might need to meet eight times the
first year in order to get a handle on what is going on. The
director would then go to the commissioner and the commissioner
would take the recommendations under advisement as would any
commissioner in state government. The commissioner, with
guidance from the third floor, would then make either policy or
monetary decisions.
6:23:18 PM
REPRESENTATIVE DOOGAN said he is asking about the director's
responsibility to the board under Section 19.65.120 [page 2,
lines 15-23]. Is the director's responsibility to the board
discharged by the simple delivery of these planning documents
and is there some kind of process by which the board gets
involved in determining whether the plans are adequate, he
asked.
MR. STONE said it is envisioned that once that nexus has been
established between the board and the director, the director
takes that under advisement, works hand-in-hand with the board
to reach consensus, and then the director presents the plan to
the commissioner. The director's position is very political, he
allowed, so that director will advocate [the plan] as best as
possible on behalf of the board. The commissioner could decide
not to take the recommendations, but it would behoove the
commissioner to listen to these marine highway stakeholders.
REPRESENTATIVE SEATON added that the director will have
expertise in marine highways and will come forward with a draft
plan to the authority board. The board will have its own
expertise and a process to address the regional aspects and can
modify the plan where needed. As directed under Section 1 of HB
294, the transportation department - in consultation with the
authority board - shall prepare the comprehensive long-range
plan. The department will then bring that plan and its updates
to the legislature. Somebody has to start the planning process
somewhere, he said, and the director will have this expertise.
6:28:12 PM
REPRESENTATIVE NEUMAN submitted that the authority board will be
no different than the current advisory board because it still
will not have the authority to appropriate or make decisions; it
will only have the authority to offer advice to a director.
MR. STONE responded this was the best attempt at trying to
elevate the status of the advisory board. He allowed that
authority may be the wrong terminology and any number of names
could be chosen. The prime sponsors were trying to get a board
to advocate and be part of the process, to be another
stakeholder for the Alaska Marine Highway System. It is born
out of several years of frustration, he said, and he has
personally watched it for 30 years. It may not be a perfect
bill, but the sponsors are open to suggestions.
REPRESENTATIVE NEUMAN understood the frustration but said it is
similar to just about any transportation project within the
state. He said he was previously under the impression that HB
294 would be creating a separate department so that there would
be two departments - one for marine transportation and one for
road transportation.
6:31:26 PM
CHAIR JOHANSEN noted that the committee will be receiving
composition lists for the authority board, one list will be from
the Murkowski Administration's initial executive order and one
will be from the Palin Administration.
MR. STONE addressed Representative Fairclough's previous
question regarding page 3, lines 1-3, which states: (1) one
member who has a significant level of experience in the private
sector or local government, specializing in financing or
economic development or marketing, from each of the following
districts:". He noted that the districts are then described on
lines 4-23 of the same page. While it is not common, there are
some regulatory boards, such as the boards of fisheries, game,
and education, where the quasi-qualifications for board members
are spelled out in statute. Therefore, the language in HB 294
is not precedent setting, he said. The bill sponsors felt there
needed to be a focus on where the expertise comes from.
REPRESENTATIVE FAIRCLOUGH said she agrees with trying to find a
solution for the problem. However, she is concerned that being
prescriptive for who can be on the authority board makes it
exclusive. Thus, she warned, the board would be a chasm of one
interest that has no balance of other interests from the rest of
the state. Other interests need to be engaged in the process in
order to buy into the proposals that are brought forward, she
advised. It sounds like what is being created is a paid
lobbyist to advocate for the marine transportation system and it
might be cheaper to hire a lobbyist than to develop a new
system. Under HB 294, a voice is being created that will
challenge what the administration might want to do, but the
administration can fire the director because there is no teeth
in the legislation. If a plan only has input from coastal
communities it will be set aside when it is put before the rest
of the state.
MR. STONE said the exclusive argument is valid.
6:37:15 PM
MR. STONE, in response to Chair Johansen, said the portion of
the bill regarding terms, vacancies, officers, quorums,
meetings, per diem, records, and legal assistance is mostly
boilerplate from Legislative Research and Legal Services.
CHAIR JOHANSEN pointed out that page 4, lines 6-9, needed to be
cleared up.
MR. STONE said yes.
6:37:45 PM
REPRESENTATIVE FAIRCLOUGH understood that the Alaska Marine
Highway System has had too many changes and inconsistent
schedules. However, she challenged the requirement on page 4,
Section 19.65.270, that the director must have experience in
marine engineering or maritime operations. She submitted that a
better person would be someone with high communication skills
that understands budgets, the legislative and administrative
processes, and who can talk circles in front of committees.
This person must be able to speak to the issues and legal
challenges more than he or she needs to know how to operate a
ship because the authority board will already have the maritime
expertise.
MR. STONE explained that the sponsors did look at this and did
have more language in the bill to clarify, but it was decided to
take that additional language out and leave it up to the board,
through the interview process, to determine a candidate's
communication skills and past experience.
6:40:18 PM
REPRESENTATIVE DOOGAN drew attention to page 4, line 6, and
noted that the sponsors have a suggested amendment in terms of
how the governor can remove members, which he said is okay. He
asked whether the next provision on lines 7-9 where a board
member can be removed for missing more than two meetings in a
calendar year without being previously excused is currently
applied to other boards and commissions. He noted he does not
have a problem with the provision provided it is the common
practice.
MR. STONE stated this is boilerplate language, but it is unique
that the director would be appointed by the governor.
REPRESENTATIVE FAIRCLOUGH said she believes there are places in
statute where people can be removed for lack of attendance.
REPRESENTATIVE DOOGAN commented he has heard of removal for
misfeasance and other reasons, but not for failure to show up at
meetings, which is a good reason.
MR. STONE said he got confused on the previous question when he
referred to the director, and it is correct that there is
language throughout statute that speaks to malfeasance and so
forth.
6:42:43 PM
MR. STONE continued with the sectional summary. He read the
route study language in Section 4, page 6, and noted that this
language was previously in a different section of the bill and
that it was revised to make it a little more innocuous. He said
Section 5 is the effective date clause.
REPRESENTATIVE FAIRCLOUGH asked whether there is a fiscal note
for the route study, but said she does not need it right now.
REPRESENTATIVE NEUMAN asked whether the Department of
Transportation & Public Facilities conducts a route study now.
MR. STONE responded, "Not to our knowledge."
6:44:16 PM
CHAIR JOHANSEN opened public testimony.
6:44:32 PM
FRED YATES stated he has worked for the Alaska Marine Highway
System since 1981 and is currently the Auke Bay ferry terminal
manager. He said he is testifying on behalf of himself only and
does not know the department's position on HB 294. He noted
that the Alaska Marine Highway System has had three
contradictory purposes for the entire time he has worked for the
system. The primary purpose is to provide service for the
roadless communities, but there are not too many travelers on
that so it needs to be heavily subsidized. The other purpose is
to bring independent travelers to Alaska and this is where the
marine highway benefits the landlocked communities such as
Anchorage and Fairbanks. Then there is the issue of revenues,
he said. Depending on which way the wind is blowing, the goal
is sometimes to make enough revenues for the entire system and
sometimes it is not that strict. Always there is the political
aspect or squeaky wheel theory, and adding a board of 11 people
will make it even more political, not less.
MR. YATES submitted that the first goal of providing service to
the roadless communities may work all right under HB 294, but
the other goals will suffer and there will not be much revenue.
The way this [authority] board is structured, each member will
be trying to get more service to his or her communities and if
this does not happen the communities will wonder why. This will
put the board in a bad position, he cautioned, and does not
allow for the other goal of bringing in independent travelers.
An 11-member board seems unwieldy and it will be difficult to
bring everyone together at one time. Contracting out seems
vague, but the [sponsor's suggested] amendment seems to tighten
that up so it might be okay, he said. The best thing in HB 294
is the strategic plan, which the marine highway has always
seemed to be lacking. If something is to be fixed, the right
approach would be developing a strategic plan that defines the
minimum service to communities and then allows the system to
earn more revenues once that minimum service is met. The two
year scheduling cannot be done without knowing the funding
situation for both years, he advised.
6:49:53 PM
REPRESENTATIVE FAIRCLOUGH asked whether Mr. Yates would support
a biennial budget.
MR. YATES replied absolutely, this would be the way to do a two
year schedule. However, he understood that this is
unconstitutional in Alaska.
REPRESENTATIVE NEUMAN noted that the authority board makeup does
not include a marine highway employee. He inquired whether
having an employee on the board would be a good idea.
MR. YATES answered that could be beneficial, but he has issues
with how the board is structured and is unsure how to make it
better. For example, landlocked communities should be on the
board so their interests in regard to bringing independent
travelers to Alaska can be represented. It is hard to put
something together without leaving someone out because the
marine highway has so many constituencies.
REPRESENTATIVE NEUMAN asked whether Mr. Yates likes HB 294.
MR. YATES said when he first looked at the bill, he thought it
had possibilities. But, other than the strategic plan, the rest
is still like the current MTAB. He said he does not hate the
bill, but he does not like it, and it needs improvement.
6:52:49 PM
JERRY MCCUTCHEON asked the rhetorical question of whether
Representative Wilson would be willing to move the headquarters
back to Juneau if it was in the best interest of the ferry
system. He said he started out thinking HB 294 was a good bill,
but not after listening to the testimony. The same people will
be appointed to run the ferry system and all that is being done
is blindly giving more authority and responsibility to those who
cannot manage the ferries, he said. Building the road out of
Juneau will cost $1 billion and take two mainline ferries out of
the ferry system. In this case, one might as well just forget
the ferry system. The ferries break down not because they are
old but because they are run too hard, he contended. What is
being said is that five senators and eight representatives
cannot go to Governor Palin and explain what is needed. He
backs the statements made by Representatives Doogan and
Fairclough, he said.
6:55:44 PM
ALBERT JUDSON testified that the issue today is lopsided because
the offerers of the bill are not taking some things into
consideration. The Alaska Marine Highway System is broken. The
Southeast Alaska Conservation Council (SEACC) is often blamed,
he said. But they cannot be blamed because in the year 2000
people voted for improved services to Alaska. State officials
cannot be blamed because they have been allocated only pennies
to operate the system. Who had the duty to allocate that money?
Only the legislature can come up with the money, not the people,
he said. He suggested there be a McDowell Group study based on
the 2000 vote as that vote for improved services should have
meant more money for the Alaska Marine Highway System's budget.
A $1 million project cannot be managed on two cents, he
submitted, and that is basically what is being asked of the
marine highway. He said he empathized with the people running
the ferry system and would not want to be in their shoes.
MR. JUDSON noted that not long ago the town of Homer received a
$44 million catamaran as the result of a [congressional]
appropriation through U.S. Senator Lisa Murkowski. How did
Homer get this while the Alaska Marine Highway System gets
nothing and continues to go downhill? He said he would like to
see three catamarans like this for the Alaska Marine Highway
System - one to run between Cordova, Yakutat, and Haines; one to
go between Haines, Juneau, Sitka, and Ketchikan; and one to go
between Ketchikan and Bellingham. Why could a grant not be
received by the marine highway to do this just as was done for
Homer, he asked. Why was it not done? The state legislature
has not made best efforts to ensure that the Alaska Marine
Highway System works, he contended. While the ferry system went
downhill there were no task forces and no community meetings,
and this is why he disagrees with the bill's sponsors.
7:01:56 PM
MR. JUDSON stated that during the last few years there has been
almost thoughtless erosion of service by the marine highway and
this goes back to having two cents to operate a $2 million
project. How and why did this happen? The McDowell Group
should be contracted to study the budget between the years 2000-
2008 and see how that compares to the breakdowns, fires, and
neglect of the marine highway. He said he opposes HB 294
because it does not match the will of the people which is
improved service, service that was never received. The budget
was cut in half after the people voted for better service and
then it was cut again by Governor Murkowski. He disagrees with
the board being appointed by the governor because the governor
already has too much power, he said.
REPRESENTATIVE FAIRCLOUGH asked whether the 2000 vote was just
in Southeast Alaska or statewide.
MR. JUDSON responded it was statewide.
REPRESENTATIVE FAIRCLOUGH said she does not remember that vote.
[SSHB 294 was held over.]
ADJOURNMENT
There being no further business before the committee, the House
Transportation Standing Committee meeting was adjourned at
7:05:25 PM.
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