02/15/2011 01:00 PM House TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| SJR6 | |
| HJR4 | |
| HB30 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | SJR 6 | TELECONFERENCED | |
| *+ | HJR 4 | TELECONFERENCED | |
| *+ | HB 30 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE TRANSPORTATION STANDING COMMITTEE
February 15, 2011
1:06 p.m.
MEMBERS PRESENT
Representative Peggy Wilson, Chair
Representative Lance Pruitt, Vice Chair
Representative Eric Feige
Representative Craig Johnson
Representative Cathy Engstrom Munoz
Representative Max Gruenberg
Representative Pete Petersen
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
CS FOR SENATE JOINT RESOLUTION NO. 6(TRA)
Urging the United States Army and United States Air Force to
extend the public comment period for the Joint Pacific Alaska
Range Complex Modernization and Enhancement Environmental Impact
Statement, which is set to end February 18, 2011, for a minimum
of 30 days to allow for effective communication and full state
and user involvement during the comment period.
- MOVED OUT OF COMMITTEE
HOUSE JOINT RESOLUTION NO. 4
Proposing amendments to the Constitution of the State of Alaska
creating a transportation infrastructure fund.
- HEARD & HELD
HOUSE BILL NO. 30
"An Act relating to the transportation infrastructure fund, to
local public transportation, to the municipal harbor facility
grant fund, to motor fuel taxes, to the motor vehicle
registration fee, to driver's license fees, to identification
card fees, to the studded tire tax, and to the vehicle rental
tax; and providing for an effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SJR 6
SHORT TITLE: JT. PACIFIC ALASKA RANGE COMPLEX CHANGES
SPONSOR(s): SENATOR(s) OLSON
02/04/11 (S) READ THE FIRST TIME - REFERRALS
02/04/11 (S) TRA
02/08/11 (S) TRA AT 2:30 PM BARNES 124
02/08/11 (S) Moved CSSJR 6(TRA) Out of Committee
02/08/11 (S) MINUTE(TRA)
02/09/11 (S) TRA RPT CS 3DP NEW TITLE
02/09/11 (S) DP: KOOKESH, THOMAS, HUGGINS
02/09/11 (S) TRANSMITTED TO (H)
02/09/11 (S) VERSION: CSSJR 6(TRA)
02/11/11 (H) READ THE FIRST TIME - REFERRALS
02/11/11 (H) TRA
02/15/11 (H) TRA AT 1:00 PM CAPITOL 17
BILL: HJR 4
SHORT TITLE: CONST. AM: TRANSPORTATION FUND
SPONSOR(s): REPRESENTATIVE(s) P.WILSON, THOMPSON
01/18/11 (H) PREFILE RELEASED 1/7/11
01/18/11 (H) READ THE FIRST TIME - REFERRALS
01/18/11 (H) TRA, JUD, FIN
02/15/11 (H) TRA AT 1:00 PM CAPITOL 17
BILL: HB 30
SHORT TITLE: DEDICATED TRANSPORT FUND/PUB TRANSPORT
SPONSOR(s): REPRESENTATIVE(s) P.WILSON, THOMPSON
01/18/11 (H) PREFILE RELEASED 1/7/11
01/18/11 (H) READ THE FIRST TIME - REFERRALS
01/18/11 (H) TRA, FIN
02/15/11 (H) TRA AT 1:00 PM CAPITOL 17
WITNESS REGISTER
DAVID SCOTT, Staff
Senator Donny Olson, Chair
Senate Transportation Committee
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented SJR 6 on behalf of the Senate
Transportation Committee, sponsor of SJR 6, chaired by Senator
Olson.
MIKE MORGAN, Board Member
Alaska Air Carriers Association
Director of Operations; Warbelows Air Ventures
Fairbanks, Alaska
POSITION STATEMENT: Testified during the discussion of SJR 6.
REX GOOLSBY
Tok, Alaska
POSITION STATEMENT: Testified during the discussion of SJR 6.
REBECCA ROONEY, Staff
Representative Peggy Wilson
Juneau, Alaska
POSITION STATEMENT: Presented change to HJR 4, on behalf of the
House Transportation Committee.
REBECCA ROONEY, Staff
Representative Peggy Wilson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented the sectional for HB 30 on behalf
of one of the joint prime sponsors.
PAT KEMP, Deputy Commissioner
Department of Transportation & Public Facilities (DOT&PF)
Juneau, Alaska
POSITION STATEMENT: Testified and answered questions during the
discussion of HB 30.
WHITNEY BREWSTER, Director
Division of Motor Vehicles (DMV)
Department of Administration (DOA)
Anchorage, Alaska
POSITION STATEMENT: Testified and answered questions on HB 30.
JERRY BURNETT, Deputy Commissioner
Department of Revenue (DOR)
Juneau, Alaska
POSITION STATEMENT: Testified and answered questions during the
discussion of HB 30.
ACTION NARRATIVE
1:06:18 PM
CHAIR PEGGY WILSON called the House Transportation Standing
Committee meeting to order at 1:06 p.m. Representatives Wilson,
Munoz, Feige, and Petersen were present at the call to order.
Representatives Johnson, Pruitt, and Gruenberg arrived as the
meeting was in progress.
SJR 6-JT. PACIFIC ALASKA RANGE COMPLEX CHANGES
1:07:28 PM
CHAIR P. WILSON announced that the first order of business would
be SENATE JOINT RESOLUTION NO. 6, Urging the United States Army
and United States Air Force to extend the public comment period
for the Joint Pacific Alaska Range Complex Modernization and
Enhancement Environmental Impact Statement that ends February
18, 2011, for a minimum of 90 days to allow for effective
communication and full state and user involvement during the
comment period.
1:07:49 PM
DAVID SCOTT, Staff, Senator Donny Olson, Chair, Senate
Transportation Committee, Alaska State Legislature, ,on behalf
of the Senate Transportation Committee, sponsor, chaired by
Senator Olson, related that this resolution urges the U.S. Army
and the U.S. Air Force (USAF) to extend the comment period for
the Joint Pacific Alaska Range Complex (JPARC) modernization and
enhancement environmental impact statement (EIS). He explained
that JPARC reduces the standard flight "floor" of 5,000 to as
low as 500 feet. Military training typically takes place above
5,000 feet but this training is for low flight training. The
Air Carriers Association and the Alaska Aviation Advisory Board
approached Senator Olson because of his long standing
involvement in the aviation industry. Originally the resolution
asked for a 90 day extension to the public comment period, but
this resolution reduces that extension to 30 days. In response
to Chair P. Wilson, he affirmed the two branches of service are
the USAF and U.S. Army.
1:10:44 PM
CHAIR P. WILSON related her understanding the military needs
additional air space, that Alaska's airspace is less occupied,
plus the military in interested in low flying flights for
training purposes.
MR. SCOTT related that the sponsor recognizes the military's
needs, the training is vitally important, and the sponsor
supports aviation. This resolution would allow citizens in the
affected area to have an expanded comment period. The original
comment period began on December 10, 2010 but the Air Carrier's
Association representative indicated the first JPARC meeting was
held on January 6, 2011, just prior to session.
1:12:13 PM
REPRESENTATIVE MUNOZ asked whether any alternate sites are under
consideration.
MR. SCOTT answered several sites are under consideration, with
most of the sites located south of Fairbanks and in the
Matanuska-Susitna valley. He did not believe any training would
occur in Southeast Alaska.
1:12:50 PM
REPRESENTATIVE GRUENBERG asked whether the military would be
testifying.
MR. SCOTT indicated the military did not respond during the
Senate Transportation hearings. He offered that he spoke with
General Atkins and his subordinates, but they made a decision
hot to not testify.
REPRESENTATIVE GRUENBERG asked if notified of this hearing.
MR. SCOTT answered no.
CHAIR P. WILSON related if the military is following the issue
that staff would be aware of today's hearing.
1:13:58 PM
REPRESENTATIVE PETERSEN recalled hearing testimony on this issue
in another hearing. He related his understanding that the
military would like to be able to train some pilots to fly at
lower level altitudes which is not feasible in the Lower 48
since the population density is much higher in the Lower 48.
Thus, Alaska is considered a good location for the low altitude
flight training due to its low density population.
1:14:56 PM
MIKE MORGAN, Board Member, Alaska Air Carriers Association,
Director of Operations; Warbelows Air Ventures, stated that the
main issue for the air carriers is a concern over access to
several villages within the military operations area (MOA) and
the effect of the proposed scoping changes on air
transportation. Several significant safety issues have created
conflicts with airline traffic. Therefore, the parties would
like a 30-day extension to allow the Native community and others
to comment on the planned scoping phase by the JPARC since the
comment period ends on Friday, February 18, 2011. He stated
that U.S. Senator Begich is meeting with the Alaska Air Carriers
Association Board on this subject. He offered his belief it is
possible to accommodate the military but that the parties simply
need more time to discuss the issues. He attended the January
6, 2011 JPARC meeting at Eielson AFB, but he recalled the public
was basically told, "This is the way it's going to be and
comments are welcome but they're not going to change their
mind." He reported he held conversations with the newly
appointed Deputy Commissioner of Department of Transportation &
Public Facilities (DOT&PF) and it seems that the air carriers
and DOT&PF are "not on the same page." He stressed that the air
carriers would like an additional 30 days in order to get the
communities involved, including the hunters, and private pilots
who fly in these areas. He expressed concern for their safety
and economic impact as the pilots need to fly out of their way
and use additional fuel to avoid the restricted area. He
concluded by reiterating his belief that the military can be
accommodated if the issue is discussed "with the right people in
the room in the planning stages."
1:17:43 PM
REPRESENTATIVE FEIGE asked what kind of changes would be
necessary on the north end of the Yukon MOA.
MR. MORGAN responded that three villages: Chalkyitsik, Circle,
and Central have restricted access for air transportation when
the MOAs are active. Currently, the air carriers can fly to
anytime using visual flight rules (VFR) but during inclement
weather instrument flight rules (IFR) rules are used and the
carriers cannot obtain clearance through MOA. Technology now
allows for global positioning system (GPS) approaches and GPS
enroute for point-to-point flights. Several villages would have
safer and more reliable transportation services if the MOA
borders were rearranged 15 to 20 miles. He pointed out that
once MOAs are in place they tend to stay in place forever so
this is an ideal time to work with the military to accommodate
them and address the changing transportation infrastructure. He
related his understanding that if the military needs to bring in
pilots from the Lower 48, they will need additional training
room. Currently, MOAs exist that encompass large areas of land
suitable for low flights. He personally recalled that on one
occasion about seven years ago an aircraft was in a flight
pattern in Central when two jets came screaming in below the
airliner at about 400 feet altitude.
MR. MORGAN said he would like to address incidents like this
one, and still keep corridors for civil transportation open. He
offered his belief that if he could discuss matters with the
USAF planning staff "we could make this work." He reiterated
that once rules are in place they seem to stay forever.
1:20:16 PM
REPRESENTATIVE FEIGE asked whether the three villages currently
have GPS approaches.
MR. MORGAN answered that Chalkyitsik does have GPS approaches.
He recalled that Chalkyitsik is located only two miles inside
the MOA. He predicted that before long all villages with
airports will have GPS approaches.
REPRESENTATIVE FEIGE wondered what altitude is necessary to
raise the floor to allow for IFR traffic to pass below it.
MR. MORGAN answered in Chalkyitsik the ceiling could be lowered
3,000 to 4,000 feet, but that Circle and Central have mountains
surrounding them so the minimum altitude would need to be about
8,000 to 9,000 feet. He also expressed concern for access to
another village, the village of Eagle using IFR except by
passing through the MOA. He proposed that an IFR corridor from
8,000 to 10,000 thousand feet be established, which would also
solve Eagle's problem, he said.
1:21:43 PM
MR. MORGAN, in response to Chair Wilson, answered that one
problem is airline schedules are posted in advance, but the
military needs the flexibility to adjust its practice sessions
and may not want to commit to certain times. He said he thought
this point could be negotiated. He advised that this MOA plan
is an entirely new proposal. He remarked he was unaware of any
place in the country where an IFR corridor is approved for a
MOA. He also said that "we're kind of thinking outside of the
box trying to solve both problems."
1:22:28 PM
REPRESENTATIVE GRUENBERG related that both testifiers have
helped put the issue in perspective for him. He recalled the
Council of State Governments (CSG) has considered a new law in
Kansas to encourage the military to work with local government
and to have a continuing open line of communication. He
expressed concern that Alaska does not have something similar in
place. He summarized his understand is that the military hasn't
engaged in any real dialogue or expressed a willingness to do
so. Additionally, the military has not participated in today's
hearing. He suggested that the sponsor consider adding an
additional whereas and an additional resolved clause to address
the legislature's concern about a need for improved dialogue.
He said he hopes that something could be done.
CHAIR P. WILSON pointed out the time limit for public comment
will close on Friday so the committee will not have time to
address this issue in this body and also obtain concurrence.
1:24:53 PM
REX GOOLSBY related that he works for the University of Alaska
but is testifying today as a private pilot. He agreed that the
extension is necessary to allow for more time to consider the
MOAs. He also echoed earlier testimony that once the MOAs are
in place little can be done to change or modify them. He wanted
to round up other people interested in this issue to attend this
hearing, but many of the people who also wanted to weigh in on
this issue are out flying today. He stressed that this issue is
very important. He recollected five or six instances of near
misses in air traffic with the military training. He related a
scenario in which last August during red flag exercises several
incidents occurred with tourism flights. Although complaints
were lodged in those instances nothing seemed to change. He
offered his belief that the issues need to be aired and the
matter needs extra time to allow for open discussions. He liked
the suggestion of "opening the channel of dialogue" along with
obtaining responses to concerns to resolve the matter.
1:27:33 PM
CHAIR P. WILSON, after first determining no one else wished to
testify, closed public testimony on SJR 6.
REPRESENTATIVE GRUENBERG suggested a separate measure be
considered to address ongoing communications with the military.
REPRESENTATIVE MUNOZ moved to report SJR 6 out of committee with
individual recommendations and the attached zero fiscal notes.
There being no objection, SJR 6 was reported from the House
Transportation Standing Committee.
1:29:13 PM
The committee took an at-ease from 1:29 p.m. to 1:31 p.m.
HJR 4-CONST. AM: TRANSPORTATION FUND
1:31:01 PM
CHAIR P. WILSON announced that the next order of business would
be HOUSE JOINT RESOLUTION NO. 4, Proposing amendments to the
Constitution of the State of Alaska creating a transportation
infrastructure fund.
1:32:36 PM
CHAIR P. WILSON provided the background for the new committee
members on previous work the House Transportation Standing
Committee conducted last year that provided members with the
breadth and depth of problems related to funding transportation
projects in Alaska. She explained that this work resulted in
the concept of reinstating the dedicated transportation
infrastructure. When Alaska became a state, the state
constitution specifically stated that dedicated funds are
prohibited. However, at the time three dedicated funds were
grandfathered in, two of which were dedicated transportation
funds: one for land and one for water, she said. She stated
and the committee considered suggestions and introduced three
bills.
1:34:02 PM
CHAIR P. WILSON reported that reinstating a dedicated
transportation fund has been attempted four times since the
original dedicated transportation fund was eliminated.
Currently, the state is significantly behind on its road,
facility and harbor maintenance while each year Alaska's oil
production is also diminishing. Last year oil production was
reduced by seven percent which means less oil revenue to the
state. Alaska's revenue sources are not diversified with over
90 percent of its revenue derived from oil, she stated. She
explained that the bills currently before the committee
represent an effort to plan for Alaska's future.
1:35:31 PM
REPRESENTATIVE PRUITT moved to adopt the proposed committee
substitute (CS) for HJR 4, labeled 27-LS0197\I, Kane, 2/11/11,
as the working document. There being no objection, Version I
was before the committee.
REPRESENTATIVE GRUENBERG objected for the purpose of discussion.
He then removed his objection.
1:36:31 PM
REBECCA ROONEY, Staff, Representative Peggy Wilson, on behalf of
the sponsor of HJR 4, the House Transportation Committee,
presented the changes to the original resolution. She first
explained that HJR 4 would place a constitutional amendment
before the voters to change Alaska's Constitution to allow for a
dedicated fund for capital transportation projects. The
proposed committee substitute (CS), Version I, would change the
revenue stream to reflect that the federal transportation grant
requires any revenue realized from airport leases to be directed
to the respective airport in which fees were collected. In FY
10, 87 percent of the state's transportation budget was derived
from the federal government. The federal reauthorization has
since expired and is current being extended month by month until
a new reauthorization is passed by the Congress. She predicted
the Federal Highway Trust Fund will be depleted by March 1. She
anticipated the new federal transportation funding will
emphasize mass transit and "green" transportation. These
changes would not favor small population states and overall
funding is also likely to be reduced. Alaska will need to
shoulder more of its transportation infrastructure, she said.
1:38:09 PM
MS. ROONEY explained that the proposed CS for HJR 4 is designed
to meet ever growing transportation needs in Alaska.
Transportation investment could create a competitive environment
designed to attract additional economic development. Last
legislature and during the legislative interim, the House
Transportation Standing Committee listened to the Department of
Transportation & Public Facilities (DOT&PF), grass roots
organizations, and transportation companies identify challenges
to transportation in our geographically diverse state. The
committee flew to villages to view airports, and rode on
Alaska's urban highways to view needs for safety, congestion,
and deferred maintenance. The committee heard from the Alaska
Municipal League (AML), and the Matanuska-Susitna Borough (MSB)
also provided an independent study to help identify the fiscal
challenges to transportation in Alaska. She offered to provide
a copy of the MSB study to members. The National Conference of
State Legislatures (NCSL) reported measures other states are
taking to address transportation infrastructure budget gaps.
She referred to a report in members' packets by Larry Persily,
former legislative aide to House Finance Committee Co-Chair
Representative Mike Hawker, who prepared an analysis of funding
options for the committee's consideration.
1:39:21 PM
MS. ROONEY concluded that the proposed CS is a culmination of
the committee's work and research on transportation funding.
She explained that the initiative would allow the state to enjoy
cost savings and reduced project time frames by using a state
funded mechanism for funding. The proposed fund would move
projects from inception to completion more quickly since use of
the federal highway fund imposes highly prescriptive and lengthy
procedures that must be adhered to for projects. She offered an
example, noting state funds were used in building the Elmore
Road Extension in Anchorage. Using state funds allowed the
project to be completed in less than three years while it would
have taken seven to ten years to complete the project using the
federal process, she said. She cautioned members that the
proposed resolution is not intended to diminish the partnership
with the federal government but is designed to complement it.
The proposed resolution would provide a dedicated revenue stream
to allow for completion of more projects in a shorter time
frame. Under the resolution, the Alaska Transportation
Infrastructure Fund (ATIF) would grow as the investment returns
compounded. The endowment would initially be seeded with $1
billion dollars. In addition to the investment returns of the
endowment, taxes, including the motor fuel tax, vehicle
regulation fees, studded tire tax, and vehicle rental tax would
be deposited into the proposed ATIF. She predicted that the
ATIF would initially generate approximately $103 million in the
first year and thereafter would increase by $3 million to 3.5
million annually. She referred to a spreadsheet in members'
packets, which was developed by the Department of Revenue (DOR)
to estimate the potential fund balance that would be available
each year for transportation infrastructure. She stated
historians previously reported Alaska's constitutional drafters
were concerned that dedicated funds could impair future
legislatures from responding to evolving public needs. The
public need for dependable and efficient transportation hasn't
changed since Alaska's Constitution was drafted but the need has
grown, she said.
1:41:54 PM
MS. ROONEY read an excerpt from a speech Governor Wally Hickel
gave nearly 20 years ago, in reference to a dedicated
transportation fund:
This is not as radical a proposal as it might sound.
Over half the states already have the same type of
financing arrangement. In fact, Alaska's founding
fathers supported this exact mechanism and provided
for it at statehood. With a dedicated fund Alaskans
will receive more stable service levels. And if new
revenues are needed to preserve or improve service,
Alaskans will be assured that any new fee will go
directly into their transportation system.
MS. ROONEY remarked that this excerpt could be presented today
just as it was 20 years ago. She read:
Alaska needs to take action now. The future of the
economic and social well being of Alaska's citizens is
critically dependent on a reliable transportation
system. This change to the constitution, allowing a
dedicated transportation fund is needed to create and
maintain a modern reliable transportation system for
Alaska.
1:43:06 PM
REPRESENTATIVE GRUENBERG, in response to Representative Johnson,
indicated that he previously removed his objection to adopting
the proposed committee substitute.
REPRESENTATIVE GRUENBERG referred to the legal question of
whether a dedicated fund could be reinstated once repealed. He
recalled an attorney general's opinion addressed that issue by
stating it could not be resurrected. He asked whether the
attorney general's opinion could be made available.
CHAIR P. WILSON agreed to provide the attorney general's
opinion.
1:45:29 PM
CHAIR P. WILSON, in response to Representative Johnson, noted a
disagreement at the time the state increased the motor fuel tax
to $.08. She related her understanding the issue at the time
the motor fuel tax was increased, that the discussion surrounded
whether the dedicated fund could stay in place if the motor fuel
tax was increased and subsequently the state deleted the fund.
1:46:22 PM
REPRESENTATIVE MUNOZ asked for the proposed annual state
contribution that could be used for state DOT&PF projects.
MS. ROONEY answered that while she did not have a specific
figure the state contributed 13 percent in FY 10.
1:47:00 PM
REPRESENTATIVE MUNOZ asked for the rationale for the "up to 50
percent" of the state taxes that would supply the revenue
stream.
MS. ROONEY responded that the sponsor wanted to grow the fund
and allow for expending funds immediately on projects. This
mechanism also allows the state to inflation proof the fund.
REPRESENTATIVE MUNOZ said it would be helpful to know if 50
percent is sufficient to reach the state's goal.
CHAIR P. WILSON commented that the proposed resolution is not
designed to replace current transportation funding, but rather
to put in place transportation infrastructure to use for
deferred maintenance and other projects. She reiterated the
proposed ATIF is not meant to replace the state's transportation
funding but to recognize that the state is not currently doing
enough.
[HJR 4 was held over.]
HB 30-DEDICATED TRANSPORT FUND/PUB TRANSPORT
1:48:04 PM
CHAIR P. WILSON announced that the next order of business would
be HOUSE BILL NO. 30, "An Act relating to the transportation
infrastructure fund, to local public transportation, to the
municipal harbor facility grant fund, to motor fuel taxes, to
the motor vehicle registration fee, to driver's license fees, to
identification card fees, to the studded tire tax, and to the
vehicle rental tax; and providing for an effective date."
1:48:36 PM
REPRESENTATIVE PRUITT moved to adopt a proposed committee
substitute (CS) for HB 30, labeled 27-LS0193\D, Kane, 2/15/11,
as the working document. There being no objection, Version D was
before the committee.
1:49:54 PM
REBECCA ROONEY, Staff, Representative Peggy Wilson, Alaska State
Legislature, on behalf of one of the joint prime sponsor's of HB
30, explained that the proposed committee substitute (CS) would
remove all references to airport and space leases. She
explained that several dates still will need to be corrected,
but those dates will be addressed in subsequent versions of the
bill. She offered to provide a section-by-section analysis of
the bill. Section 1 would provide fees from identification
cards would be deposited into the proposed transportation fund.
The bill would add a new section to identify fees that would be
deposited to the proposed Alaska Transportation Infrastructure
Fund (ATIF), including certain motor vehicle registration fees,
and motor fuel taxes. Special registration fees, including fees
for license plates would be deposited into the general fund.
She noted that three percent of the funds destined for the
proposed ATIF would also be deposited into the general fund to
administer the Alaska Mandatory Insurance Act, which provides
the same requirement as current statute.
1:51:12 PM
MS. ROONEY stated that proposed Section 3 would provide that
vehicle registration fees for licenses and permits, commercial
fees and tests, and all other fees including revocation of
license fees shall be deposited into the proposed ATIF.
Proposed Section 4 would make a conforming amendment by removing
a reference to the watercraft fuel tax, which is deleted in this
bill. It also removes the references to the Fisheries Business
Tax in relation to the Municipal Harbor Facility Grant Fund
(MHFGF). She explained since the marine fuel tax revenue is
used for the dedicated fund, this language is being deleted
since a mechanism will remain to address the MHFGF. Proposed
Section 5 of HB 30 would amend the list of program receipts so
that only special registration fees will be accounted for
separately and deposited into the general fund.
1:52:22 PM
MS. ROONEY stated that proposed Section 6 describes the sources
of appropriations to the fund. Revenue from motor fuel taxes,
vehicle registration, driver's license fees, studded tire taxes
and other revenue designated by the legislature would be
deposited to the proposed ATIF, as well as future funds such as
toll road fees. The DOR would manage the fund as an endowment.
This proposed section would require the DOR's commissioner to
manage the account to yield a six percent real rate of return
over time. It provides that appropriations to the proposed ATIF
do not lapse. She pointed out that the first five years the
return rate is set at five percent. The DOR is required to
report to the legislature on the condition and investment
performance of the fund. She related that 50 percent of the
revenue will be deposited into the ATIF to improve the fund and
allow the fund to grow at a modest rate. The appropriation
would be available for capital projects and major maintenance
for transportation and related facilities. The legislature
would also have flexibility to change the statute, and not be
required to ask for voter approval to change the constitution,
for catastrophic events in which the legislature needs to use
the proposed ATIF for operations. She explained that
appropriations cannot be used for federal matching funds unless
the total matching funds do not exceed 20 percent for that year.
She commented that this provision was added to avoid supplanting
the funds already used for federal matching funds.
1:54:58 PM
MS. ROONEY explained that proposed Section 6 also would outline
the maximum percentage of the proposed ATIF that can be
appropriated to certain categories of projects, including up to
80 percent could be directed to roads and surface
transportation, 25 percent could be used for aviation, and 25
percent could be used for the Alaska Marine Highway System
(AMHS). She elaborated that the total adds up to more than 100
percent, but would also provide built-in flexibility for the
legislature to fluctuate the amount appropriated for each
category.
1:55:48 PM
REPRESENTATIVE PRUITT asked for an explanation on how the
percentages were derived.
MS. ROONEY explained the original percentages added up to 100
percent, which were taken from the DOT&PF's long range
transportation plan. Those percentages were "bumped up" and
represent a "ball park" figure.
1:56:35 PM
MS. ROONEY continued. She explained that proposed AS 37.40.870
establishes June 30 of each year as the date the DOR will use to
determine the market value of fund. The commissioner will
report to the legislature 10 days after the start of the regular
legislative session. This section would also create the ATIF
Advisory Council to make recommendations to the legislature for
projects to fund. She explained that the ATIF's Advisory
Council was expanded to 24 members to allow stakeholders a
voice. She detailed the ATIF's advisory council members. The
advisory council will use criteria developed by the DOT&PF to
make recommendations to the governor and the legislature not
later than October 15 of each year on which capital projects for
transportation and related facilities should be funded from the
fund, she said. Proposed Section 6 also provides definitions,
including "fund" to mean the ATIF's fund as it would be set out
in the state's constitution.
1:59:32 PM
MS. ROONEY stated that proposed Section 7 outlines which
proceeds from taxes on aviation fuel will be deposited and
aviation taxes to be returned to municipalities that own or
operate an airport.
MS. ROONEY explained that proposed Section 8 requires all
revenue from the motor fuel tax to be deposited into ATIP and
all refunds to be paid from the ATIP.
MS. ROONEY related that proposed Section 9 makes a conforming
amendment due to the repeal of AS 43.40.010(j) since this
subsection is repealed in proposed Section 12 of HB 30.
2:00:14 PM
MS. ROONEY stated that proposed Section 10 allows refund
warrants to be made from the proposed ATIF instead of the
highway fuel tax account. Proposed Section 11 provides for 50
percent of vehicle rental taxes to be deposited into the
proposed ATIF. This tax was designed not only to help maintain
roads but for tourism. This would leave the remaining 50
percent in the general fund for tourism purposes.
MS. ROONEY explained that proposed Section 12 provides the
mechanism for studded tire taxes to be deposited into the ATIF.
Proposed Section 13 would amend the list of responsibilities for
DOT&PF by adding the requirement for promotion and support of
local public transportation, and to develop criteria for the
ATIF's advisory council. Proposed Section 14 HB 30 also makes a
conforming amendment to remove AS 43.40.010 from the list of
notices of state agency requests for proposals (RFPs). Proposed
Section 15 would repeal the no longer needed general fund
reference for the watercraft fuel tax account, the special
highway fuel tax account, and the non-public highway use
account.
2:01:24 PM
MS. ROONEY explained that proposed Section 16 describes the
transition during the first five years, referring to her earlier
comment on the use of the 5 percent instead of six percent
return. Proposed Section 17 would stagger the terms of the
proposed ATIF advisory council. Proposed Section 19 would
provide a contingency requirement that the amendment to the
state's constitution must be passed by voters before HB 30 will
become effective. Proposed Section 20 would provide an
immediate effective date for the DOT&PF's responsibility for
promotion and indicates that the support of local public
transportation will apply even if the initiative does not pass.
In response to Representative Munoz, she reiterated that
DOT&PF's responsibility to promote and support local public
transportation will apply even if the initiative does not pass.
MS. ROONEY stated proposed Section 21 would direct that the fuel
taxes and vehicle registration revenue will be deposited into
ATIP once the election is certified. She elaborated the bill
drafter brought this to the sponsor's attention since the
constitutional amendment will take effect once the election is
certified that the language in HB 30 must also conform.
2:03:20 PM
REPRESENTATIVE FEIGE referred to proposed Section 7 of HB 30.
He stated that 60 percent of the proceeds of the revenue from
taxes on aviation fuel would be returned to the respective
municipality that owns the airport. He related his
understanding that currently proceeds are deposited into the
general fund. He asked if this bill would guarantee a minimum
level of funding for those municipalities who own airports.
MS. ROONEY answered that the provision to return 60 percent of
the proceeds of the revenue from taxes on aviation fuel is also
in current statute.
2:04:05 PM
REPRESENTATIVE MUNOZ asked whether HB 30 limits the proposed
ATIF for state-funded projects only.
MS. ROONEY responded the specific language states that not more
than 20 percent of the proposed ATIF could be used for federal
matching funds, which implies the projects would be state-funded
projects.
2:04:50 PM
REPRESENTATIVE MUNOZ said she was under the impression that one
of the benefits of the fund was to fund state-funded projects as
a means to reduce red tape.
CHAIR P. WILSON explained that this language would help to
address uncertainty since it is not possible to predict the
future. At times, the state would appropriate matching funds
and receive quite a bit more in federal funds. She clarified
that she did not want to prohibit this practice so she limited
federal funds to 20 percent in the bill.
MS. ROONEY clarified that the amount could also be zero as the
language reads: "...and the amount of all appropriations from
the fund to match federal money does not exceed 20 percent of
the total amount available for appropriation from the fund."
CHAIR P. WILSON added that the proposed ATIF's advisory
committee would work to stretch funds so unless it was
absolutely necessary the committee would not otherwise do so.
2:06:30 PM
PAT KEMP, Deputy Commissioner, Department of Transportation &
Public Facilities (DOT&PF), referred to page 4 of the original
version of HB 30, which read, "An appropriation from the fund
may not be made to a project for which federal money has been
allocated..." He suggested this language may be a little too
restrictive. He apologized to the committee for not having a
copy of the committee substitute before him.
2:08:24 PM
CHAIR P. WILSON said that the issue may have been brought up and
addressed.
MR. KEMP said he thought his comment may be moot.
2:08:56 PM
WHITNEY BREWSTER, Director, Division of Motor Vehicles (DMV),
Department of Administration (DOA), stated that the DMV has not
taken a position on the bill. She explained that the DMV has
submitted a fiscal note which identifies a concern. She
explained that if the ATIF was currently in effect, the DMV
would have deposited all of its $45 million in registration fees
into the fund. She highlighted that these funds would have been
deposited in FY 10 to the ATIF if it were in place.
CHAIR P. WILSON asked if the $45 million is everything the DMV
collects.
MS. BREWSTER answered no. She explained that the DMV also
collects fees for titles and specialty license plates. The DMV
would still use those funds to operate. She further explained
that the DMV is funded via program receipts, meaning that it
operates from the revenue it collects. The remaining fees that
would be available to the DMV under HB 30 would not be
sufficient enough to cover its operating or capital budget, she
said.
2:11:09 PM
MS. BREWSTER explained that the DMV's revenue is deposited to
the general fund but the DMV's current FY 12 operating budget
request is for approximately $15,473,700, or about $15.5
million. The way the process is structured via program receipts
is that the DMV operates from revenue it generates. She offered
that for the DMV to continue to operate the structure would need
to be changed to allow the DMV to be entirely funded from the
general fund. In further response to Chair P. Wilson, Ms.
Brewster explained that the DMV spends a lot less than the
revenue it generates. The DMV generated approximately $54
million in FY 10 without the motor vehicle registration tax that
is directed to local government. The DMV uses the regular
appropriation process to obtain its funding, she said.
2:12:45 PM
MS. BREWSTER, in response to Chair Wilson, agreed that instead
of being funded from its receipts, which would be directed to
the ATIF under HB 30, the DMV would need to supplant those fees
with something else. She referred to the roughly, $6.467
million reflected in the fiscal note. Since the budget request
is approximately $15.5 million, the DMV would need an additional
$6.5 million in order to operate. In further response to Chair
P. Wilson, Ms. Brewster answered that the DMV would be funded by
the general fund if it is the will of the legislature for it to
do so.
CHAIR P. WILSON asked if that is the current process.
MS. BREWSTER answered the DMV would use a slightly different
process since the DMV is funded from program receipts and not
directly from the general fund.
2:14:30 PM
CHAIR P. WILSON referred to the accompanying resolution, HJR 4,
which allows the legislature to fund "...up to six percent of
the average market value of the fund over the previous five
fiscal years for transportation and related facilities that are
designated by law, for costs related to motor vehicle licensing
and registration that are designated by law, and for the costs
to administer the fund as designated by law." She asked whether
that would be sufficient for the DMV operations.
MS. BREWSTER answered that language might be sufficient funding
for the DMV. In further response to Chair P. Wilson, she agreed
to review the specific language and report back to the
committee.
2:15:32 PM
MR. KEMP referred to page 3, lines 24-26, to Version D of HB 30.
He expressed concern with the language which read: "An
appropriation from the fund may not be made to a project for
which federal money has been allocated..." He explained that
this language may be too restrictive and reviewed the federal
funding process for roads. He further explained that federal
projects are funded through a series of notices to proceed
(NTP). He related that in a typical project the department
obtains NTP approval through the environmental process, followed
by NTP approval through the design phase, then NTP approval for
the right-of-way acquisition, and finally NTP approval to
construct the project. The project is considered "federalized"
the minute the DOT&PF begins design work, he said. Thus, the
DOT&PF would not be able to use the proposed ATIF funds, based
on the current language in the bill, due to the federal
allocation process, he said.
2:18:31 PM
CHAIR P. WILSON referred to environmental impact statement (EIS)
and asked whether the DOT&PF would generally use federal funds
for the EIS.
MR. KEMP answered yes and explained that the DOT&PF uses federal
funds for highways, but not for aviation and harbors. In
further response to Chair P. Wilson, Mr. Kemp answered that the
DOT&PF currently has over 50 projects waiting for construction
funding.
CHAIR P. WILSON offered to review the language. She asked for
further clarification that the DOT&PF cannot use the proposed
ATIF on projects in which federal funds were allocated.
MR. KEMP agreed that the DOT&PF cannot use the proposed ATIF,
under the current restrictive language in HB 30 since some
federal allocations have already been made.
CHAIR P. WILSON asked whether the federal government would
prohibit the state from using state funds on the projects.
MR. KEMP answered that the state could finish the project with
state funds.
2:20:17 PM
MR. KEMP offered some examples to illustrate his point. He
related an instance in which an important project is included in
the Surface Transportation Improvement Project (STIP). When the
STIP is fiscally constrained the project could slip a few years,
which might happen if the project experiences an overrun or a
claim is made. If that happened another project from the STIP
would be substituted, but under HB 30 the DOT&PF could not fund
the substitute project for construction due to the restrictive
language in the bill. In further response to Chair P. Wilson,
Mr. Kemp suggested if projects were reevaluated under another
project evaluation board process that a project may fall in one
fiscal year. A subsequent project could come in with a higher
priority, such as the Knik-Goose Bay Road, which would displace
the earlier project to the outer years. Under the restriction
in HB 30, the DOT&PF would not be able to fund the displaced
project until federal FY 14, he said. The proposed ATIP fund
could not be used to fund the displaced project since the
project had already been "federalized" by the federal allocation
process. He reiterated that the DOT&PF would like more
flexibility to access the proposed ATIF for its projects.
CHAIR P. WILSON recalled the DOT&PF's funding process for
highway projects. She related her understanding that by
starting the project with federal funds meant the DOT&PF would
have to continue with federal funds.
MR. KEMP referred to the restrictive language. He read: "An
appropriation from the fund may not be made to a project for
which federal money has been allocated..." He reiterated that
the federal money would already have been allocated through the
design phase. He offered a scenario in which the design phase
for a project had been completed, the right-of-way properties
had been purchased, and a project was awaiting construction. In
that scenario, federal funds would have been allocated to the
project. With the current restrictive language in HB 30, the
DOT&PF would not be able to use the proposed ATIF funds for the
construction phase of this project.
2:23:28 PM
CHAIR P. WILSON referred to additional language on page 3, lines
26, of Version D of HB 30 that added an exception. She read,
"...unless the appropriation is for matching money for the
project and the amount of all appropriations from the fund to
match federal money does not exceed 20 percent of the amount
available for appropriation from the fund."
MR. KEMP responded that the exception she read pertains and is
limited to matching funds. He related the DOT&PF already has a
matching "pot" for federal matching funds.
CHAIR P. WILSON offered to work on the language.
2:23:53 PM
MR. KEMP provided another scenario in which early right-of-way
acquisition is deemed necessary for a complex project that is
underway and a house came up for sale. The DOT&PF would not be
able to purchase the house under the federal process unless the
DOT&PF had already received a NTP to appraise and acquire
property. This would be a good use for the proposed ATIF, he
stated.
REPRESENTATIVE MUNOZ asked whether the DOT&PF could purchase the
house using the proposed ATIF even if federal funds had been
spent on the project.
MR. KEMP answered yes. The federal process is done through a
series of notices to proceed (NTP) and the DOT&PF cannot
purchase right-of-way until the final design is complete, and
the final design cannot proceed until the EIS is complete, he
said.
2:25:34 PM
REBECCA ROONEY related her understanding that one of the designs
of the proposed ATIF is to allow for state only developed
projects. She recalled that once a project is federalized the
DOT&PF must follow the federal rules.
MR. KEMP agreed. He stressed that the examples he gave were
ones in which the DOT&PF would have already followed the federal
process. Once the design, EIS, ROW processes are completed,
these projects are ready for construction and essentially are
"sitting on the shelf" awaiting funding. The Federal Highway
Administration (FHWA) doesn't have an issue with states funding
the construction phase of their projects with state funds for
projects developed under the federal process.
MS. ROONEY confirmed the sponsor's goal for the proposed ATIF is
to provide a means to provide transportation infrastructure to
Alaskans without constraints imposed by the federal process.
2:27:10 PM
MS. ROONEY pointed out the previous draft of HB 30 limited the
fund to capital projects and deferred maintenance. The ideal
situation would be for the federal funding stream to continue
and for the proposed ATIF to provide additional funds. She
predicted if that were to happen the state could actually
achieve overall improvement in its transportation
infrastructure.
MR. KEMP offered his belief that will happen with this bill, but
he suggested the language is a little restrictive. He
highlighted that some features within a project may not be
eligible for federal funding, including an instance in which a
highway contains a driveway structure which consists of a pad
built on pilings and beams. The federal funds could not be used
and the state would need to fund replacement. So the proposed
ATIF would be a good source of funds to do so. He related
another scenario in Valdez, in which a park road was paved with
federal funds. However, the pullouts were not eligible for
federal funds so the state funded the pullouts, he said. He
asked the committee to consider building in more flexibility to
allow the DOT&PF to better use its Capital Improvement Program
(CIP).
2:28:51 PM
CHAIR P. WILSON related her understanding that Version D of HB
30 would not allow more than "80 percent of the appropriations
from the fund may be used for projects related to roads and
surface transportation" in proposed AS 37.14.860. She read an
excerpt from proposed AS 37.14.860 (b): "...unless the
appropriation is for matching money for the project and the
amount of all appropriations from the fund to match federal
money does not exceed 20 percent of the amount available for
appropriation from the fund." She asked whether "matching"
should be changed.
MR. KEMP offered one approach would be to set aside a percentage
of the proposed ATIF fund to perform these types of projects.
He anticipated that during the first few years of the proposed
ATIF, a large number of federal projects would be available for
construction. This bill could provide a means to access state
funds on projects developed under the federal process, he said.
He then acknowledged that the proposed ATIF Advisory Board would
first need to develop the project list.
CHAIR P. WILSON, in response to Mr. Kemp, related the committee
could consider the DOT&PF's request for more flexibility.
2:31:09 PM
REPRESENTATIVE JOHNSON asked whether any federal allocation was
used in the Elmore Road Extension in Anchorage.
MR. KEMP said he thought so. He elaborated by saying that most
of the recent state-funded projects have been developed using
federal funds.
REPRESENTATIVE JOHNSON asked whether the DOT&PF could have used
the proposed ATIF on the project.
MR. KEMP agreed it could have given his interpretation of the
language in proposed AS 37.14.860 (b), which read, "...An
appropriation from the fund may not be made to a project for
which federal money has been allocated..." Not only has the
money been allocated to a certain project but it's been spent,
he said.
REPRESENTATIVE JOHNSON related his understanding of the
argument, but he also indicated he also did not want to provide
too much flexibility. He expressed interest in finding the
balance.
2:32:40 PM
REPRESENTATIVE PRUITT asked whether federal funds could be used
up to a certain stage of a project.
MR. KEMP responded that each project would be a little
different. He stated that the DOT&PF would work to figure out
how to accommodate the majority of projects.
CHAIR P. WILSON acknowledged that staging would move the project
further along.
2:33:27 PM
REPRESENTATIVE MUNOZ related her understanding from the examples
given that if federal funds were spent on a project the DOT&PF
might find an opportunity to expedite a project by using the
ATIP. She agreed it could be helpful to reduce the barriers and
provide flexibility since the goal is to finish projects. She
offered her belief that HB 30 could help accomplish the goal.
2:34:13 PM
CHAIR P. WILSON related a scenario in which federal funds were
used on a project. She asked whether the DOT&PF must continue
to follow the more cumbersome federal process. She related that
the state doesn't want to sacrifice any quality but would like
to avoid any unnecessary steps, just as the DOT&PF did in the
Dowling Extension project. She asked whether the state could
expedite projects that were initially started with federal
funds. She emphasized her goal, which is to construct projects
faster for less cost with the same quality.
MR. KEMP answered absolutely. He related if a project was built
using the proposed ATIF that it would be considerably faster to
get a project finished. He said if the project was partially
funded with federal funding, that it would depend on stage of
the process as to whether the proposed ATIF could be used.
Theoretically, if state funds became available during the time
the DOT&PF had an NTP authorization through the design process,
the state could start commence the right-of-way process
immediately, instead of waiting for the design process
completion date. It could potentially shave months or a year
from a typical project, he said.
2:36:11 PM
CHAIR P. WILSON asked for a list of the various stages of the
projects that would be ATIP eligible and indicate at which point
the federal requirement would need to be followed.
MR. KEMP agreed to do so.
2:36:42 PM
JERRY BURNETT, Deputy Commissioner, Department of Revenue (DOR),
explained the Department of Revenue (DOR's staff prepared a
spread sheet that shows a straight line six percent return
payout which would be deposited into the proposed ATIF. The DOR
referred to the fiscal note. He said he thought a six percent
payout seemed a bit aggressive and could result in a volatility
that potentially might lose money in the fund for one out of
four or five years depending on the timing. He suggested equity
or some other types of investment have a more volatile payment
stream than fixed income. Instead, he recommended the committee
consider a payout in the 4.5 to 5 percent range to preserve the
value of the fund and not risk "a serious blowup" in an early
year. He pointed out that the DOR has experienced this over the
past several years. Otherwise, the model works well and the
percent of market value payout is the proper method payout, he
stated. He also said it is just matter of growing the fund and
the lower payout in first few years would help, but he was
unsure of the crossover point. He thought the expected returns
may do better at a slightly lower payout. He suggested the
committee may wish to consider that aspect and offered to
provide a model using the lower rates if the committee would
like him to do so.
2:39:12 PM
MR. BURNETT, in response to Chair Wilson, responded that the
latest capital market assumptions indicate a real rate of return
at five percent as pretty aggressive. He said in reviewing
equities from 2000-2010, that "it wasn't pretty" since the
return was not a good return. He suggested that somewhere
between 4.5 to 5 percent rate is recommended. He recalled that
the retirement board changed actuarial from 8.25 to 8 percent.
He also suggested that the committee may wish to consider the
rate periodically.
2:40:48 PM
MR. BURNETT explained the fiscal note is based on allocation of
expenditures between funds and in particular, to this fund. He
stated that the DOR manages about $38 billion in the DOR's
Treasury Division, including retirement funds, the general fund,
and trust funds. The DOR must allocate cost. Depending on the
source of the funds, it may not represent an incremental cost
but may be a new allocation to this fund, he said. He
anticipated that some cost would likely be incremental since it
would require some outside management.
2:41:34 PM
CHAIR P. WILSON recalled hearing that the state may consolidate
its funds under the same department.
MR. BURNETT stated that the Alaska Permanent Fund has its own
board as does the retirement fund, but the rest of the funds are
managed under the fiduciary responsibly of the DOR's
commissioner. He remarked that the DOR manages everything
except for the permanent fund. In response to Chair Wilson, he
agreed to provide a spreadsheet using a percent of market value
using 4.5 percent, 4.75 percent and 5 percent rates.
CHAIR P. WILSON recalled Sitka has a permanent fund using a
percent of market value at 6 percent.
MR. BURNETT remarked that if the proposed ATIF had been started
in 2008 it would look "pretty bad." If the fund was initiated
in April 2009 it would look "really good." He was unsure of
what the condition would look like today.
[HB 30 was held over.]
2:44:54 PM
ADJOURNMENT
There being no further business before the committee, the House
Transportation Standing Committee meeting was adjourned at 2:44
p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| ATIF Fact Sheet 2011.pdf |
HTRA 2/15/2011 1:00:00 PM |
HB 30 |
| HB 30 -ATIF Sponsor Stmt ver B.pdf |
HTRA 2/15/2011 1:00:00 PM |
HB 30 |
| HB 30 ver B.pdf |
HTRA 2/15/2011 1:00:00 PM |
HB 30 |
| HB 30 Persily Report.pdf |
HTRA 2/15/2011 1:00:00 PM |
HB 30 |
| HB 30 statutes.pdf |
HTRA 2/15/2011 1:00:00 PM |
HB 30 |
| HB 30 support documents.pdf |
HTRA 2/15/2011 1:00:00 PM |
HB 30 |
| HB 30 Support Miners 1-2011.pdf |
HTRA 2/15/2011 1:00:00 PM |
HB 30 |
| HJR4 -Constitutional Change Sponsor Stmt.pdf |
HTRA 2/15/2011 1:00:00 PM |
HJR 4 HJR $ |
| HJR004-OOG-DOE-2-11-11.pdf |
HTRA 2/15/2011 1:00:00 PM |
HJR 4 |
| HJR 4 Ver B.pdf |
HTRA 2/15/2011 1:00:00 PM |
HJR 4 |
| CS HJR 4 Ver I.pdf |
HTRA 2/15/2011 1:00:00 PM |
HJR 4 |
| HB 30 support Harbormasters.pdf |
HTRA 2/15/2011 1:00:00 PM |
HB 30 |
| CS SJR6 Ver I.pdf |
HTRA 2/15/2011 1:00:00 PM |
SJR 6 |
| SJR 6 - sponsor statement.pdf |
HTRA 2/15/2011 1:00:00 PM |
SJR 6 |
| SJR 6 Alaska Aviation Support.pdf |
HTRA 2/15/2011 1:00:00 PM |
SJR 6 |
| HB030-DOA-DMV-02-11-11.pdf |
HTRA 2/15/2011 1:00:00 PM |
HB 30 |
| HB030-DOT-CO-2-11-11.pdf |
HTRA 2/15/2011 1:00:00 PM |
HB 30 |
| HB30 appropriations spreadsheet (2).pdf |
HTRA 2/15/2011 1:00:00 PM |
HB 30 |
| SJR 6 letters of support.pdf |
HTRA 2/15/2011 1:00:00 PM |