Legislature(2015 - 2016)CAPITOL 17
03/31/2016 01:00 PM House TRANSPORTATION
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| Audio | Topic |
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| Start | |
| HB292 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 292 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE TRANSPORTATION STANDING COMMITTEE
March 31, 2016
1:06 p.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Shelley Hughes, Co-Chair
Representative Benjamin Nageak
Representative Dan Ortiz
MEMBERS ABSENT
Representative Charisse Millett
Representative Louise Stutes
Representative Matt Claman
COMMITTEE CALENDAR
HOUSE BILL NO. 292
"An Act relating to the Alaska marine highway system fund."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 292
SHORT TITLE: MUNI CONTRIBUTIONS TO AK MARINE HWY
SPONSOR(s): REPRESENTATIVE(s) KITO
02/03/16 (H) READ THE FIRST TIME - REFERRALS
02/03/16 (H) TRA, FIN
03/31/16 (H) TRA AT 1:00 PM CAPITOL 17
WITNESS REGISTER
REPRESENTATIVE KITO
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As prime sponsor, presented HB 292.
MIKE LESSMAN, Legislative Liaison
Office of the Commissioner
Department of Transportation & Public Facilities (DOTPF)
Juneau, Alaska
POSITION STATEMENT: Testified during the hearing on HB 292.
MIKE NEUSSL, Deputy Commissioner
Office of the Commissioner
Department of Transportation & Public Facilities (DOTPF)
POSITION STATEMENT: Testified during the hearing on HB 292.
ROBERT VENABLES, Chair
Marine Transportation Advisory Board
Department of Transportation & Public Facilities (DOTPF)
POSITION STATEMENT: Testified during the hearing on HB 292.
JAN WRENTMORE, Chair
Skagway Borough Ad-Hoc Marine Highway Committee
Skagway, Alaska
POSITION STATEMENT: Testified during the hearing on HB 292.
ACTION NARRATIVE
1:06:07 PM
CO-CHAIR NEAL FOSTER called the House Transportation Standing
Committee meeting to order at 1:06 p.m. Representatives Ortiz,
Nageak, Hughes and Foster were present at the call to order.
HB 292-MUNI CONTRIBUTIONS TO AK MARINE HWY
1:06:28 PM
CO-CHAIR FOSTER announced that the only order of business would
be HOUSE BILL NO. 292, "An Act relating to the Alaska marine
highway system fund."
1:004 PM
REPRESENTATIVE KITO, Alaska State Legislature, as prime sponsor
of HB 292, explained that the proposed legislation would provide
statutory authority for municipalities to voluntarily contribute
to a fund that would go towards support for the Alaska Marine
Highway System (AMHS). In its one-line simplicity, he said the
bill seeks, via Section 1, to add a line to the AMHS fund (fund)
to include money contributed to the fund by a municipality. The
Department of Transportation & Public Facilities (DOTPF) has
expressed concern that there would not be an expectation that a
community would provide revenue in order to guarantee certain
levels of transit service, he reported and said that any
community could provide contributions in acknowledgement of the
importance for state ferry service; not only those being served
by AMHS. He opined that this was an opportunity for DOTPF to go
out and work with communities. He explained that a specific
project or role for the funding is not anticipated; however,
DOTPF will relied on to identify areas of need.
1:08:40 PM
REPRESENTATIVE KITO shared that the Southeast Conference [formed
in 1958 with a mission to undertake and support activities that
promote strong economies, healthy communities and a quality
environment in Southeast Alaska] could tap the funding to
identify sources of revenue for a management study of AMHS. He
opined that the proposed legislation may serve as a tool to
bring Alaskan communities together to consult with DOTPF; akin
to being a shareholder. The department could utilize the
interaction to bring those communities to the table when they
were considering schedule changes, levels of service, or rate
changes. A committee could be engaged to create a sounding
board for communities to voice ideas and concerns in the AMHS
planning process. He said such a relationship may get
contributors and the department conversing over issues which
could be formalized through a memorandum of agreement (MOA) or a
memorandum of understanding (MOU); thus ensuring
contributor/shareholder engagement in AMHS activities and DOTPF
decisions.
REPRESENTATIVE KITO said that although the state and AMHS are
facing financial hardships, there may be opportunities in the
future to work through an MOU to identify, and transition to,
alternative funding sources. Currently the state is in flux
trying to stabilize AMHS, identify efficiencies and decrease
reliance on state subsidies while increasing revenues recovered
through fares.
1:11:53 PM
CO-CHAIR HUGHES asked whether there had been any interest
expressed by communities to contribute to an AMHS fund.
1:12:20 PM
REPRESENTATIVE KITO responded that conversations have been held
with the Alaska Municipal League (AML) and representatives from
various communities. At this point, he reported, all have shown
an interest and noted possible benefits that HB 292 could
affect. Concerns have also been expressed regarding the
possibility of decreased state funding to contributing
communities. He indicated that no community has specifically
requested this legislation and stressed his intent to use it as
a means for engaging/uniting communities and AMHS. He noted
that Lieutenant Governor Byron Mallot had talked about having a
summit to bring together representatives from different areas
for a potential discussion about the future of AMHS. Thus arose
the idea for this bill: a mechanisms for municipalities to have
a more formal role in AMHS planning, and agency engagement.
1:13:36 PM
CO-CHAIR HUGHES reported having recently attended a meeting of
the Southeast Conference. She stated her understanding that
under the proposed legislation Southeast Conference would have
to "put money in the bucket" in order to have a seat at the
table. She opined that the department should have the benefit
of hearing from a community regardless of whether or not a
locale has the means to contribute funding. She asked for
clarification of the sponsor's intent to create a special group
of AMHS fund contributors.
REPRESENTATIVE KITO replied that it would be up to the
department to determine community involvement. He explained
that DOTPF receives input from the Marine Transportation
Advisory Board (MTAB) and conducts public meetings in
communities. He explained that contributors to the fund should
have the opportunity to be in direct communication with the
department, and that the opportunity could also provide openings
for other communities to be engaged in the process. It is not
anticipated that the proposed legislation will create an
exclusionary process.
CO-CHAIR HUGHES said it would seem optimal for DOTPF to have
open communications with all of the communities.
1:15:52 PM
REPRESENTATIVE ORTIZ asked whether the sponsor envisions the
funds to be used in any way which the department considers
reasonable. He asked whether potential donations could go
directly into the operations fund.
REPRESENTATIVE KITO answered that HB 292 allows DOTPF the
latitude to create its own structure for the benefit of AMHS.
He offered his assumption that it would be very difficult for
the department to utilize contributions to replace existing
operating funds; however, if special ferry service was needed
during certain times of year, or other services not identified
in the annual budget, the department could approach the
shareholders regarding support of such events. He noted that
the described relationship reminds him of the Juneau community
foundation in which individuals propose ideas to the board, when
seeking funding. He surmised that DOTPF could set up a panel to
generate ideas, make proposals to the shareholders, and request
authorization to utilize the available funds contributed to
benefit AMHS.
1:18:29 PM
REPRESENTATIVE KITO said that upon a recent constituent visit he
was presented with an idea of marketing for AMHS. He pointed
out that marketing would direct attention to AMHS but funded is
not available due to the state's declining revenue. He offered
his presumption that specific, promotional ideas could be
brought to the proposed, such as purchasing a stateroom to
support the presence of a United States Forest Service (USFS)
interpreter aboard a ferry.
1:19:46 PM
CO-CHAIR HUGHES questioned whether a community that gives a
sizable amount in any given year might expect an increase in
service, and asked whether DOTPF would be obligated under such a
situation.
REPRESENTATIVE KITO explained that the intent of the proposed
legislation is not to give community preference, but rather
generate funding to be used for the betterment of AMHS. He said
DOTPF has prepared language to clarify the intent and
descriptive application, to avoid any confusion.
CO-CHAIR HUGHES expressed interest in the level of community
response and whether letters of support have been received.
Further, she questioned whether previously mentioned, clarifying
language set forth by DOTPF, has been generally disseminated.
REPRESENTATIVE KITO answered that support letters have not been
received and that the necessity for inclusion of the DOTPF,
additional language is being discussed.
CO-CHAIR HUGHES described a previously testified to situation of
a school district that covers the costs of additional services
received from ferry permanently stationed in its community. She
asked to know how that community funding is handled with DOTPF.
Additionally, she asked how the department would view large
contributions from communities and possible expectations.
1:24:27 PM
MIKE LESSMAN, Legislative Liaison, Office of the Commissioner,
Department of Transportation & Public Facilities (DOTPF),
answered that the department has interpreted HB 292 as a means
for municipalities to make voluntary contributions to the
aforementioned fund. He said the agency recognizes the
potential for a community to invoke expectations based on
contribution levels and, thus, the department submitted the
clarifying language to the sponsor for possible inclusion in a
committee substitute (CS).
CO-CHAIR HUGHES inquired about the unique situation described,
which the community/school district pays for extra services.
1:25:18 PM
MIKE NEUSSL, Deputy Commissioner, Office of the Commissioner,
answered that the community in question is Metlakatla, which
typically receives service from the Motor Vessel (MV) Lituya
five days a week. Occasionally, service is desired on the two
off days. He explained that rather than put that expense on the
state or decline the request, the department entered into an
arrangement with Annette Island School District (AISD), which
guarantees district reimbursement of costs including fuel and
crew overtime. He explained that he has approved three of these
requested runs and that the unique arrangement has worked well
for Metlakatla, as the MV Lituya is regularly docked in the
community, during its two off days. The revenue receipt
structure is through standard channels for ticket sales and
other funding to the marine highway fund.
CO-CHAIR HUGHES asked whether the department thought additional
language was necessary, since Metlakatla is already paying into
a similar fund.
MR. NEUSSL replied that the payment from AISD went in to an
existing fund, as a fee for a service. He offered his
understanding that HB 292 proposes a contribution fund without
attachment for direct services; simply a means to contribute
support for the AHMS.
CO-CHAIR HUGHES clarified that currently, statute allows for fee
based contributions, but unless the proposed language is added,
donation based contributions are not allowed.
MR. NEUSSL concurred. He said AMHS currently receives funds
based on the provision of direct services.
1:28:56 PM
CO-CHAIR HUGHES conjectured on contributing communities
responding with expectations for additional service, and she
requested departmental assurance that the Metlakatla scenario
would not be considered a precedent, as such.
MR. NEUSSL answered that the department does not view the
Metlakatla scenario as a precedent. He said the department
talked with Representative Kito about amending HB 292 to include
language stating there would be no service guarantee associated
with the contribution of funds. Any funding source directed
towards AMHS, with the potential to supplement the reduced
general funds, will be helpful in operating the ferry system.
He opined that the proposed legislation appears to be a good
means for generating funds outside of the general fund.
1:30:46 PM
CO-CHAIR HUGHES emphasized the importance of considering
unintended consequences when creating legislation. She pondered
whether a community giving money to an AMHS fund, set up under
HB 292, might hear about (Metlakatla) paying a fee for a service
and request a service in return for its donation. She asked
whether that might happen and surmised that it could already
happen.
1:31:45 PM
MR. NEUSSL agreed that the possibility to purchase services
exists and concurred with the potential outfall of HB 292 to
generate competition among communities, which he said the
department would have to manage. Currently, when a special
service request is received, the department conducts an
evaluation which includes: the number of people the change will
serve, impacts on the published schedule, and other
considerations for an alteration. He said a number of
communities would like to have special runs for various events,
but the Metlakatla situation is entirely unique. He explained
that the weekly, two day lay-up in Metlakatla allows for changes
in service to be made more easily than in the communities where
service is provided by vessels operating on a twenty-four hour,
seven days a week basis. Further, he said the MV Lituya has the
lowest fuel burn rate with the smallest crew, making it the
department's least expensive vessel to operate. He explained
that all the other vessels are larger and more expensive to
operate, which are important factors when considering a change
request.
1:33:59 PM
REPRESENTATIVE ORTIZ asked about the nature of the extra runs
conducted for Metlakatla.
1:34:34 PM
MR. NEUSSL responded that the runs are to transport students for
school events. Students require access to Ketchikan for airline
flights, which may fall outside of the regularly scheduled ferry
service.
1:35:11 PM
REPRESENTATIVE ORTIZ stated that he was aware of the need for
special runs for school events, and provided an example of the
Alaska School Activities Association (ASAA), Region V Basketball
Tournament. In the past, AMHS had been able to accommodate its
schedule for special events, and predicted that it would no
longer be able to do so given a decline in funding. He asked
whether the passage of HB 292 would offer relief in this regard.
1:36:17 PM
CO-CHAIR FOSTER passed the gavel to Co-Chair Hughes.
1:36:25 PM
MR. NEUSSL responded that, with funding constraints and
downsizing, AMHS will find it increasingly difficult to
accommodate special event requests. He said that the department
would like to support special events, such as the Southeast
Alaska State Fair in Haines, but that he was uncertain how many
communities would willingly contribute. The proposition to pull
a vessel out of lay-up and schedule a run is expensive. He
surmised that not many communities would be willing and able to
cover the cost of gathering a crew, stocking the boat with
provisions, and getting it to the right location.
1:38:55 PM
CO-CHAIR HUGHES opened public testimony.
1:39:15 PM
ROBERT VENABLES, Chair, Marine Transportation Advisory Board
(MTAB), said that the proposed legislation had not been
thoroughly vetted by MTAB, and opined that HB 292 speaks to the
heart of what is being seen throughout communities, in regards
to the sponsor's intent for increasing community engagement. He
said that finding mechanisms to facilitate that level of
engagement is a worthy consideration. He stated that MTAB is
dedicated to the development of a strategic plan to take
discussions to the next level. The board has been considering
all revenue streams - federal, state, and local - to discover
ways to engage communities. He referred to the USFS onboard
interpreters that previously provided talks en route, and
speculated it could be something communities would want to
support and bring back to AMHS. He surmised that there are ways
to explore the means for utilizing opportunities.
CO-CHAIR HUGHES asked about the MTAB meeting schedule and
whether HB 292 has been, or will be, an agenda topic.
MR. VENABLES replied that MTAB is tentatively scheduled to meet
following the legislative session and HB 292 will, for the first
time, be on the agenda for discussion.
CO-CHAIR HUGHES asked about the effectiveness and ability for
MTAB to enact solutions to the funding shortage while
maintaining ferry services.
1:43:09 PM
MR. VENABLES explained that prior to being adopted into statute,
MTAB's mission was to collaboratively provide oversight and
integration with development and operations; that oversight did
not happen. Currently, the primary role of MTAB is to act as a
liaison to the department. He explained that, statutorily, MTAB
is only allowed to conduct two primary tasks: advising on the
hire of the marine transportation operations manager/deputy
commissioner, and aiding the department with the integration of
the development of long-range plans. He described the past few
years as frustrating because DOTPF's Southeast transportation
plan has not been updated in years. He continued, as follows:
We have provided some input but it's such a political
arena that ... it's really hard to get any traction
when you're going from one session to the next or one
administration to the next. Which again brings us
full circle to why Southeast Conference really thinks
there needs to be a process and a product and a plan
that is kind of an arm's length from that political
atmosphere.
1:45:00 PM
CO-CHAIR HUGHES offered her understanding that the Southeast
Conference might make some recommendations for improvements.
She asked whether MTAB would also be making suggestions.
MR. VENABLES answered yes, and reported that the Southeast
Conference was represented at the last MTAB meeting [November
2015], and made a presentation showing its intent, and the need
for improvements. He shared his expectation that MTAB will
become involved with any advancement intentions. He explained
that the Southeast Conference expects to lead the initial ground
effort, with hopes for extending beyond its purview of
Yakutat/Cordova south to Metlakatla, to reach out across the
state and ensure all stakeholders and user groups of AMHS are
helping to shape the ferry system's future.
1:45:56 PM
REPRESENTATIVE ORTIZ offered his understanding that the MTAB
board consists of members from across Alaska and asked whether
it deals with issues outside of the AMHS.
MR. VENABLES answered that MTAB's reach does not extend beyond
AHMS, and the MTAB is a diverse group of community and business
leaders from across the state.
REPRESENTATIVE ORTIZ rephrased to ask whether there is regular
cooperation and communication between the Southeast Conference
and MTAB other than through the involvement of Mr. Venables.
MR. VENABLES replied that his position facilitates cooperation
between the two agencies, such that it provides a forum for
marine transportation organizations to be heard and present
information, in a public and formal manner, to DOTPF. He
explained that anyone is free to work directly with DOTPF, and
the department has been receptive to hearing from communities
and individuals. He said that there are times when communities,
individuals, and organizations, desire a formalized
communication method with the department.
1:48:49 PM
JAN WRENTMORE, Chair, Skagway Borough Ad-Hoc Marine Highway
Committee, shared her understanding that communities making
contributions could not expect to receive extra services. She
asked, hypothetically, whether a community choosing to support
the AMHS public marketing program, could make a contribution
directed to that specific request.
1:50:27 PM
MR. NEUSSL agreed to provide that information to the committee
following the next meeting of the MTAB.
CO-CHAIR HUGHES announced that public testimony would remain
open.
[HB 292 was held over.]
1:52:22 PM
ADJOURNMENT
There being no further business before the committee, the House
Transportation Standing Committee meeting was adjourned at 1:52
p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB292 Sponsor Statement.pdf |
HTRA 3/31/2016 1:00:00 PM |
HB 292 |
| HB0292 ver A.PDF |
HTRA 3/31/2016 1:00:00 PM |
HB 292 |
| HB292 Fiscal note - DOT&PF.pdf |
HTRA 3/31/2016 1:00:00 PM |
HB 292 |
| HB292 Supporting Documents - Study AMHS Economic Impact 02-04-2016.pdf |
HTRA 3/31/2016 1:00:00 PM |
HB 292 |