02/21/2017 01:30 PM House TRANSPORTATION
| Audio | Topic | 
|---|---|
| Start | |
| HB60 | |
| HB131 | |
| HB117 | |
| Adjourn | 
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 60 | TELECONFERENCED | |
| *+ | HB 131 | TELECONFERENCED | |
| *+ | HB 117 | TELECONFERENCED | |
| + | TELECONFERENCED | 
                    ALASKA STATE LEGISLATURE                                                                                  
            HOUSE TRANSPORTATION STANDING COMMITTEE                                                                           
                       February 21, 2017                                                                                        
                           1:33 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Louise Stutes, Co-Chair                                                                                          
Representative Adam Wool, Co-Chair                                                                                              
Representative Matt Claman                                                                                                      
Representative Harriet Drummond                                                                                                 
Representative Chuck Kopp                                                                                                       
Representative Mark Neuman                                                                                                      
Representative Colleen Sullivan-Leonard                                                                                         
Representative David Eastman (alternate)                                                                                        
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Gabrielle LeDoux (alternate)                                                                                     
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 60                                                                                                               
"An  Act  relating  to  the  motor  fuel  tax;  relating  to  the                                                               
disposition of  revenue from  the motor fuel  tax; relating  to a                                                               
transportation maintenance  fund; and providing for  an effective                                                               
date."                                                                                                                          
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
HOUSE BILL NO. 131                                                                                                              
"An Act relating to relocation assistance for federally assisted                                                                
public construction and improvement projects and programs; and                                                                  
providing for an effective date."                                                                                               
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
HOUSE BILL NO. 117                                                                                                              
"An Act relating to the art requirements for certain state                                                                      
ferries; and providing for an effective date."                                                                                  
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 60                                                                                                                   
SHORT TITLE: MOTOR FUEL TAX; TRANSPORTATION MAINT. FUND                                                                         
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
01/18/17       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/18/17       (H)       TRA, FIN                                                                                               
01/31/17       (H)       TRA AT 1:30 PM BARNES 124                                                                              
01/31/17       (H)       Heard & Held                                                                                           
01/31/17       (H)       MINUTE(TRA)                                                                                            
02/07/17       (H)       TRA AT 1:30 PM BARNES 124                                                                              
02/07/17       (H)       Heard & Held                                                                                           
02/07/17       (H)       MINUTE(TRA)                                                                                            
02/09/17       (H)       TRA AT 1:30 PM BARNES 124                                                                              
02/09/17       (H)       Heard & Held                                                                                           
02/09/17       (H)       MINUTE(TRA)                                                                                            
02/14/17       (H)       TRA AT 1:30 PM BARNES 124                                                                              
02/14/17       (H)       Heard & Held                                                                                           
02/14/17       (H)       MINUTE(TRA)                                                                                            
02/16/17       (H)       TRA AT 1:30 PM BARNES 124                                                                              
02/16/17       (H)       -- MEETING CANCELED --                                                                                 
02/21/17       (H)       TRA AT 1:30 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB 131                                                                                                                  
SHORT TITLE: RELOCATION ASSISTANCE FOR FED. PROJ/PROG                                                                           
SPONSOR(s): TRANSPORTATION                                                                                                      
                                                                                                                                
02/15/17       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/15/17       (H)       TRA, FIN                                                                                               
02/21/17       (H)       TRA AT 1:30 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB 117                                                                                                                  
SHORT TITLE: ART PUBLIC FACILITIES: EXEMPT ST. FERRIES                                                                          
SPONSOR(s): TRANSPORTATION                                                                                                      
                                                                                                                                
02/13/17       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/13/17       (H)       TRA, FIN                                                                                               
02/21/17       (H)       TRA AT 1:30 PM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
LAURA STIDOLPH, Staff                                                                                                           
Representative Adam Wool                                                                                                        
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Discussed a proposed committee substitute                                                                 
during the hearing on HB 60.                                                                                                    
                                                                                                                                
MATT GRUENING, Staff                                                                                                            
Representative Louise Stutes                                                                                                    
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Outlined a proposed committee  substitute on                                                             
HB 60.                                                                                                                          
                                                                                                                                
LAURA STIDOLPH, Staff                                                                                                           
Representative Adam Wool                                                                                                        
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT: Presented  HB  131 on  behalf  of the  House                                                             
Transportation    Standing   Committee,    sponsor,   on    which                                                               
Representative Wool is a member.                                                                                                
                                                                                                                                
MATT GRUENING, Staff                                                                                                            
Representative Louise Stutes                                                                                                    
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:  Presented  HB   117  on  behalf  the  House                                                             
Transportation  Standing Committee  sponsor,  by  request of  the                                                               
governor, of which Representative Stutes is a member.                                                                           
                                                                                                                                
MICHAEL NEUSSL, Deputy Commissioner                                                                                             
Department of Transportation & Public Facilities (DOT&PF)                                                                       
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions during the  hearing on HB
117.                                                                                                                            
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:33:30 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  ADAM  WOOL  called the  House  Transportation  Standing                                                             
Committee  meeting to  order at  1:33 p.m.  Representatives Kopp,                                                               
Sullivan-Leonard,   Drummond,  Wool,   Stutes,  Neuman,   Eastman                                                               
(alternate), and Claman were present at the call to order.                                                                      
                                                                                                                                
        HB 60-MOTOR FUEL TAX;TRANSPORTATION MAINT. FUND                                                                     
                                                                                                                                
1:34:05 PM                                                                                                                    
                                                                                                                                
CO-CHAIR WOOL  announced that the  first order of  business would                                                               
be HOUSE  BILL NO. 60,  "An Act relating  to the motor  fuel tax;                                                               
relating to the  disposition of revenue from the  motor fuel tax;                                                               
relating to a transportation maintenance  fund; and providing for                                                               
an effective date."                                                                                                             
                                                                                                                                
1:34:30 PM                                                                                                                    
                                                                                                                                
CO-CHAIR STUTES moved to adopt  the proposed committee substitute                                                               
(CS)  for  HB 60,  Version  30-GH1794\D,  Nauman, 2/20/17,  as  a                                                               
working  document.   There  being  no  objection, Version  D  was                                                               
before the committee.                                                                                                           
                                                                                                                                
1:35:07 PM                                                                                                                    
                                                                                                                                
LAURA STIDOLPH,  Staff to Representative Adam  Wool, Alaska State                                                               
Legislature, discussed  changes to  HB 60 proposed  under Version                                                               
D.   She said that the  first change is  in the title on  page 1,                                                               
line  2, and  it inserts  "establishing" after  "fuel tax".   She                                                               
explained that  the change in the  title makes it clear  that the                                                               
Transportation   Maintenance   Fund   ("the   fund")   is   being                                                               
established under HB  60.  Ms. Stidolph continued  that Section 1                                                               
is new and it is  legislative intent language that clarifies that                                                               
each subaccount of  the fund (motor fuel,  aviation/jet fuel, and                                                               
marine  fuel)   be  used  specifically  for   infrastructure  and                                                               
expenses  related to  each user  group.   She explained  that Co-                                                               
Chairs  Wool and  Stutes wanted  the intent  of this  bill to  be                                                               
clear  to ensure  that all  revenue  generated would  be used  to                                                               
improve roads, highways, harbors, ports, airports, and ferries.                                                                 
                                                                                                                                
MS. STIDOLPH  explained that the  next five changes were  made to                                                               
Sections 7, 8, 9,  10, and 11 to ensure funds  cannot be used for                                                               
anything other than that which  they are specified.  She declared                                                               
that funds do not lapse and  remain available for the next fiscal                                                               
year.   She explained the intent  for this was so  the Department                                                               
of  Transportation &  Public Facilities  (DOT&PF)  would have  to                                                               
build  and  maintain infrastructure  for  each  user group  being                                                               
taxed.                                                                                                                          
                                                                                                                                
1:37:09 PM                                                                                                                    
                                                                                                                                
MATT GRUENING, Staff, Representative  Louise Stutes, Alaska State                                                               
Legislature,  stated that  the language  in Section  12, page  6,                                                               
lines 26-27,  of Version D  was added  to allow an  exemption for                                                               
commercial  fishing  watercraft.   He  noted  that a  mistake  in                                                               
drafting Version  D resulted in  the use of the  term "commercial                                                               
watercraft"; the  correct term should be  ["watercraft engaged in                                                               
commercial fishing"].  He explained  the reason for the exemption                                                               
was because a  fisheries tax would be forthcoming  next year, and                                                               
commercial fishermen  are a user  group that would be  double hit                                                               
by both  the fuel  tax increase and  the upcoming  fisheries tax.                                                               
Mr.  Gruening  explained  the  reason  for  specifying  that  the                                                               
watercraft are  engaged in commercial  fishing is so  that barges                                                               
and cruise  ships would  not be  included in  the exemption.   He                                                               
said that although  commercial fisherman would be  eligible for a                                                               
three-cent  rebate, they  would still  have an  overall increase.                                                               
He clarified  that the user  group currently pays five  cents per                                                               
gallon,  under  the proposed  legislation  that  amount would  be                                                               
doubled  to  [10 cents],  and  then  with the  rebate  commercial                                                               
fisherman would be paying seven cents per gallon in fuel tax.                                                                   
                                                                                                                                
1:38:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NEUMAN  offered his  understanding that it  is the                                                               
intent to  carve out a  special reduction for  commercial fishing                                                               
watercraft.                                                                                                                     
                                                                                                                                
MR. GRUENING answered that is correct.                                                                                          
                                                                                                                                
REPRESENTATIVE NEUMAN inquired whether  a licensed and registered                                                               
sport guide who used their  boat professionally would qualify for                                                               
the exemption.                                                                                                                  
                                                                                                                                
MR.  GRUENING  explained  that  currently  the  term  "commercial                                                               
watercraft" or  "commercial fishing  watercraft" are  not defined                                                               
in  HB  60 or  in  statute.    He  indicated that  a  forthcoming                                                               
amendment to Version D would clarify the terminology.                                                                           
                                                                                                                                
1:39:46 PM                                                                                                                    
                                                                                                                                
MR.  GRUENING continued  with the  sectional analysis.   He  said                                                               
that Section  13, page 7, lines  6-8 is another reference  to the                                                               
three-cent rebate for  what is supposed to  be commercial fishing                                                               
marine fuel.  Mr. Gruening  pointed out that the most substantive                                                               
change is in Section 19, on page  8, line 16, of Version D, which                                                               
would change  the effective  date from  2018 to  2019.   He noted                                                               
that  Co-Chairs  Wool  and  Stutes  feel that  a  year  break  in                                                               
administering the tax  increase is necessary to  provide a little                                                               
relief to allow industry time to adapt.                                                                                         
                                                                                                                                
REPRESENTATIVE  NEUMAN mentioned  that  the  committee had  heard                                                               
from the  department about motor  fuel tax revenue going  back to                                                               
different  user groups.   He  inquired how  the state  would keep                                                               
track of the taxes generated by  each user group.  He also wanted                                                               
to  know  how  the  state would  ensure  revenues  are  equitably                                                               
allocated to  maintain infrastructure for the  proper user group.                                                               
Representative  Neuman asked  specifically  about "snow  machine"                                                               
operators in  the Matanuska-Susitna (Mat-Su) Borough  and how the                                                               
state  would  ensure the  revenue  generated  from off-road  fuel                                                               
purchases would be used on trail maintenance.                                                                                   
                                                                                                                                
MR. GRUENING  shared that under Alaska  State Constitution, funds                                                               
cannot really be  dedicated.  He clarified that there  is no real                                                               
mechanism   to   ensure   funds   are  allocated   for   use   on                                                               
infrastructure for the  proper user group.  He noted  that one of                                                               
the reasons for  the inclusion of the intent  language in Version                                                               
D is  to show the  sponsor's attempt to  do the most  possible to                                                               
suggest  that funds  be used  for their  intended purposes.   Mr.                                                               
Gruening  added  that  the bill  sponsors  did  not  specifically                                                               
address  the off-road  [vehicle]  use in  the  tightening of  the                                                               
sections in Version D.                                                                                                          
                                                                                                                                
REPRESENTATIVE  NEUMAN offered  his understanding  that there  is                                                               
already language in statute suggesting  that the money go back to                                                               
where it is  collected.  He asked whether there  is currently any                                                               
money that goes back into trails  from what is collected from all                                                               
of the people that buy fuel for all-terrain vehicles (ATVs).                                                                    
                                                                                                                                
CO-CHAIR  WOOL  stated  that  right  now  off-road  vehicles  are                                                               
eligible  for  a  rebate.   He  explained  that  currently  users                                                               
purchasing  fuel  for heavy  equipment,  four  wheelers, or  snow                                                               
machines have  to fill  out the  paperwork and  turn it  into the                                                               
state.   Co-Chair  Wool noted  that  under the  current fuel  tax                                                               
structure,  as well  as the  proposed legislation,  there are  no                                                               
funds allocated  for trails.   He offered his  understanding that                                                               
there is a current suggested  designation for licensing fees from                                                               
snow machines to go  back into trails.  He added  that there is a                                                               
rumor the funds were not used for trails.                                                                                       
                                                                                                                                
REPRESENTATIVE NEUMAN suggested that  the committee could work on                                                               
something  to help  designate funds  from  off-road vehicle  fuel                                                               
purchases to  go toward maintenance.   He shared his  belief that                                                               
Governor Walker  vetoed $250 thousand from  the Snowmobile Trails                                                               
Advisory Council (SnowTRAC) fund  in 2016.  Representative Neuman                                                               
shared that  he would like  the bill  to ensure the  various user                                                               
groups feel  comfortable knowing  the taxes paid  go back  to the                                                               
reason why  the taxes  were propagated  in the  first place.   He                                                               
provided his  recollection that the federal  government gives the                                                               
state  money   back  from   federal  gasoline   taxes  collected.                                                               
Representative Neuman  questioned whether any of  that money went                                                               
back toward trails.                                                                                                             
                                                                                                                                
1:44:52 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SULLIVAN-LEONARD  stated that she  had Legislative                                                               
Legal Services  draft an opinion  in regard to  designated funds.                                                               
She  shared her  opinion  that  as much  as  Version  D looks  to                                                               
tighten the allocation  of funds, "the true  nature of designated                                                               
funds  still   are  not  truly  designated   for  any  particular                                                               
purpose."  She  asked how it could be ensured  that, for example,                                                               
the Alaska  Marine Highway System  (AMHS) wouldn't be  allowed to                                                               
pull  funds  over  from motor  fuel.    Representative  Sullivan-                                                               
Leonard offered that  she still had concerns because  there is no                                                               
true mechanism to allow funds to stay in one particular area.                                                                   
                                                                                                                                
MR.  GRUENING  described  that  there  are  dedicated  funds  and                                                               
designated funds.   He  noted that  there is  no way  to dedicate                                                               
funds for a  specific purpose, but future legislators  do look at                                                               
legislative  intent as  a guide  to follow.   Mr.  Gruening added                                                               
that commitments  from the department and  the administration can                                                               
be secured  to help bolster  intent language.   He said  that the                                                               
more intent  that can be  put into  legislation the easier  it is                                                               
for future committees  to look at and see what  the committee was                                                               
thinking.                                                                                                                       
                                                                                                                                
CO-CHAIR  WOOL  stated that  amendments  to  Version D  would  be                                                               
accepted [until] tomorrow at 3 p.m.                                                                                             
                                                                                                                                
[HB 60 was held over.]                                                                                                          
                                                                                                                                
        HB 131-RELOCATION ASSISTANCE FOR FED. PROJ/PROG                                                                     
                                                                                                                                
1:46:54 PM                                                                                                                    
                                                                                                                                
CO-CHAIR WOOL announced that the  next order of business would be                                                               
HOUSE BILL  NO. 131,  "An Act  relating to  relocation assistance                                                               
for  federally  assisted   public  construction  and  improvement                                                               
projects and programs; and providing for an effective date."                                                                    
                                                                                                                                
1:47:17 PM                                                                                                                    
                                                                                                                                
LAURA  STIDOLPH, Staff,  Representative Adam  Wool, Alaska  State                                                               
Legislature,   presented  HB   131,  on   behalf  of   the  House                                                               
Transportation Standing  Committee, on which  Representative Wool                                                               
serves as  co-chair.  She stated  that HB 131 would  bring Alaska                                                               
into  compliance with  federal law  concerning reimbursement  for                                                               
relocation expenses  incurred by  individuals or  businesses that                                                               
were  displaced due  to federally  funded  highways, bridges,  or                                                               
facilities  projects.   She  said  that  Alaskans deserve  to  be                                                               
fairly  compensated in  the  aforementioned  circumstances.   Ms.                                                               
Stidolph explained that  HB 131 would also  protect Alaska's more                                                               
than   $500  million   annual  allocation   of  federal   highway                                                               
administration funding, by bringing the state into compliance.                                                                  
                                                                                                                                
MS. STIDOLPH said  that in 2012 Congress  relaxed the eligibility                                                               
criteria and increased the maximum  reimbursement limits, for the                                                               
state's  relocation assistance  payment programs  when it  passed                                                               
the transportation  authorization and  funding bill that  is more                                                               
commonly  referred to  as the  Moving Ahead  for Progress  in the                                                               
21st  century Project  Act  (MAP-21).   Ms.  Stidolph noted  that                                                               
prior to  MAP-21 the  payment rates  had not  changed in  over 30                                                               
years.   She  said that  although  the changes  went into  effect                                                               
October  1,  2014,  unfortunately  Alaska  Statute  continues  to                                                               
reflect  the  more  stringent eligibility  requirements  and  the                                                               
smaller maximum reimbursement limits.                                                                                           
                                                                                                                                
MS. STIDOLPH  shared that during  the second half of  the Twenty-                                                               
Ninth Alaska  State Legislature, the inconsistency  between state                                                               
and federal  law was almost  fixed.  She explained  that language                                                               
similar to  HB 131  was proposed  and passed  unanimously through                                                               
the House,  but after being  passed through Senate  State Affairs                                                               
Standing  Committee  and  Senate   Finance  Committee  was  never                                                               
calendared for a Senate floor  vote.  Ms. Stidolph concluded that                                                               
HB 131  would assure Alaskans  that their legislature  wants them                                                               
to be compensated the same as residents of other states.                                                                        
                                                                                                                                
REPRESENTATIVE NEUMAN asked what the  number of the bill was that                                                               
stalled.                                                                                                                        
                                                                                                                                
MS. STIDOLPH answered House Bill 252.                                                                                           
                                                                                                                                
CO-CHAIR WOOL  extended his  perception that HB  131 is  just for                                                               
relocation funds and not for buying property.                                                                                   
                                                                                                                                
MS. STIDOLPH confirmed that is correct.                                                                                         
                                                                                                                                
1:49:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KOPP  offered his understanding that  HB 131 would                                                               
raise  Alaska's   statutory  authority  to   reimburse  displaced                                                               
Alaskans at the same rate they would be in other states.                                                                        
                                                                                                                                
MS. STIDOLPH  affirmed that to  be correct.   She added  that the                                                               
funding is comprised of 91  percent federal funding and 9 percent                                                               
funding from the state.                                                                                                         
                                                                                                                                
[HB 131 was held over.]                                                                                                         
                                                                                                                                
1:50:40 PM                                                                                                                    
                                                                                                                                
        HB 117-ART PUBLIC FACILITIES: EXEMPT ST. FERRIES                                                                    
                                                                                                                                
1:50:44 PM                                                                                                                    
                                                                                                                                
CO-CHAIR WOOL  announced that the  final order of  business would                                                               
be HOUSE BILL  NO. 117, "An Act relating to  the art requirements                                                               
for certain state ferries; and providing for an effective date."                                                                
                                                                                                                                
1:51:08 PM                                                                                                                    
                                                                                                                                
MATT GRUENING, Staff, Representative  Louise Stutes, Alaska State                                                               
Legislature,   presented  HB   117   on  behalf   of  the   House                                                               
Transportation  Standing   Committee,  on   which  Representative                                                               
Stutes is  co-chair.  He stated  that the intention of  HB 117 is                                                               
to  create a  specific exemption  for  the two  new Alaska  Class                                                               
Ferries  (ACFs) and  the replacement  vessel, Motor  Vessel (M/V)                                                               
Tustumena.  He  explained that there is a  requirement in statute                                                               
that 1 percent  of the construction cost of  public facilities be                                                               
used  for the  purchasing,  administration, and  hanging of  art.                                                               
Mr. Gruening  noted that currently the  state has the M/V  Taku -                                                               
which is in unmanned layup status  because the state is trying to                                                               
sell  it -  and all  the art  has been  removed and  placed in  a                                                               
climate-controlled facility in Ketchikan.   He explained that the                                                               
aforementioned art  is available  for reuse and  refurbishment on                                                               
the two new ACFs.   He added that the two  new ACFs are scheduled                                                               
to be  delivered for upper  Lynn Cannel  operation in 2018.   Mr.                                                               
Gruening mentioned  that there  is art on  the old  M/V Tustumena                                                               
that  is going  to be  removed then  put on  the new  replacement                                                               
vessel.  He stated that there  is a zero fiscal note accompanying                                                               
HB 117.                                                                                                                         
                                                                                                                                
MR. GRUENING noted  that the analysis section on  the second page                                                               
discusses  the  savings  to  the  state  by  seeking  a  one-time                                                               
exemption for the reuse of art.   He pointed out that the bill is                                                               
not opposed  by the Alaska State  Council on the Arts.   He added                                                               
that HB  117 is not  an attack on the  program but is  a one-time                                                               
exemption   in  recognition   of  the   state's  current   fiscal                                                               
challenges.   Mr. Gruening  reiterated the  idea to  use existing                                                               
art for refurbishment instead of purchasing new art.                                                                            
                                                                                                                                
1:53:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NEUMAN offered his  understanding that HB 117 only                                                               
exempts the two new AMHS vessels.                                                                                               
                                                                                                                                
MR. GRUENING answered  that HB 117 would exempt the  two new ACFs                                                               
currently being constructed and  the replacement Tustumena, which                                                               
is funded in "this year's budget."                                                                                              
                                                                                                                                
REPRESENTATIVE  NEUMAN   offered  that  since  sometime   in  the                                                               
foreseeable future AMHS would need  new vessels, the state should                                                               
consider  doing  away with  the  "one  percent  for art"  on  the                                                               
ferries, which he added would eliminate  the need to come back to                                                               
the legislature for another exemption.                                                                                          
                                                                                                                                
CO-CHAIR WOOL explained that one  of the reasons the Alaska State                                                               
Council  of the  Arts is  not opposed  to HB  117 is  because the                                                               
proposed  legislation  is  not   an  open-ended  exemption.    He                                                               
expressed  uncertainty in  knowing  when the  next vessels  would                                                               
need to be  replaced in AMHS's fleet, but said  he hoped it would                                                               
not  be any  time soon.   Co-Chair  Wool asked  for clarification                                                               
that the  exemption in  the proposed legislation  is for  the two                                                               
new  vessels currently  under  construction  and the  replacement                                                               
vessel for the M/V Tustumena.                                                                                                   
                                                                                                                                
MR.  GRUENING  responded that  is  correct.    He said  that  the                                                               
exemption  for the  three aforementioned  vessels would  save the                                                               
state over $5 million in construction cost.                                                                                     
                                                                                                                                
CO-CHAIR  WOOL asked  the Department  of Transportation  & Public                                                               
Facilities (DOT&PF) to  address the question of when,  if at all,                                                               
the next round of vessel replacements would take place.                                                                         
                                                                                                                                
1:55:03 PM                                                                                                                    
                                                                                                                                
MICHAEL    NEUSSL,    Deputy    Commissioner,    Department    of                                                               
Transportation  & Public  Facilities  (DOT&PF),  stated that  the                                                               
department does  not have  an exact  timeline for  further vessel                                                               
replacement,  beyond  the  M/V  Tustumena.   He  added  that  the                                                               
Tustumena replacement  vessel has  already been designed  and, as                                                               
Mr. Gruening  previously mentioned,  its construction  funding is                                                               
requested  in  the  2017  budget.   Mr.  Neussl  noted  that  the                                                               
department's vessel replacement plan is very fluid.                                                                             
                                                                                                                                
1:55:30 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  STUTES asked  how  much  the state  would  save if  the                                                               
proposed  legislation  passes.   She  rephrased  her question  by                                                               
asking  whether the  one percent  for  art is  reflective of  the                                                               
total construction cost  or if it is based solely  on the state's                                                               
portion of the cost.                                                                                                            
                                                                                                                                
1:56:05 PM                                                                                                                    
                                                                                                                                
MR. NEUSSL stated that the "one  percent for art" is based on the                                                               
construction cost  of the facility.   He noted that  AMHS vessels                                                               
are specifically  listed in  the statute  regarding 1  percent of                                                               
vessel construction  cost be set  aside for the purchase  of art.                                                               
Mr. Neussl stated that the two  new ACFs are under a $101 million                                                               
construction contract  and 1 percent  would have to be  set aside                                                               
for  art.   He  added  that  the  replacement  cost for  the  M/V                                                               
Tustumena is $237  million, which would mean  $2.37 million would                                                               
need to be  set aside for art.   He noted that  the M/V Tustumena                                                               
replacement  vessel  is a  federally  funded  project that  would                                                               
allow the $2.37 million to be a 90:10 split.                                                                                    
                                                                                                                                
CO-CHAIR STUTES  asked Mr.  Neussl to  clarify the  M/V Tustumena                                                               
federal/state split.                                                                                                            
                                                                                                                                
MR. NEUSSL explained  that typically federal aid  projects are 90                                                               
percent federally funded  and 10 percent state funded.   He noted                                                               
that the amount varies between projects.                                                                                        
                                                                                                                                
CO-CHAIR STUTES  offered her understanding that  specifically for                                                               
the M/V Tustumena replacement project,  the state would be saving                                                               
1 percent of the 10 percent.                                                                                                    
                                                                                                                                
MR. NEUSSL  stated that specifically  regarding state  funds, Co-                                                               
Chair Stutes is correct.                                                                                                        
                                                                                                                                
CO-CHAIR WOOL  inquired whether the  federal funds could  be used                                                               
for the "one percent for art."   He also asked whether that would                                                               
mean the federal funds would cover 90 percent of the 1 percent.                                                                 
                                                                                                                                
MR.  NEUSSL answered  that the  "one percent  for art"  set aside                                                               
would be the same 90:10 split as the total construction cost.                                                                   
                                                                                                                                
1:58:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SULLIVAN-LEONARD  mentioned that the  question and                                                               
answer handout,  included in the committee  packet, details state                                                               
savings.   She  said that  the handout  notes a  savings of  $3.5                                                               
million  to  the  state  from the  construction  budget  on  that                                                               
particular art.                                                                                                                 
                                                                                                                                
CO-CHAIR WOOL said that the $2.37 million from the M/V Tustumena                                                                
would  be 90  percent paid  by the  federal match,  so the  state                                                               
obligation would be one-tenth of that amount.                                                                                   
                                                                                                                                
1:59:05 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CLAMAN asked whether  there is a companion federal                                                               
"one percent for art" match that is required.                                                                                   
                                                                                                                                
MR. NEUSSL answered no, not to his knowledge.                                                                                   
                                                                                                                                
REPRESENTATIVE  NEUMAN  offered  clarification that  the  sponsor                                                               
statement said the two ACFs are  100 percent state funded and the                                                               
M/V Tustumena is only 90 percent [federally] funded.                                                                            
                                                                                                                                
MR. NEUSSL  answered that  is correct.   He  added that  the "one                                                               
percent  for  art" set  aside  is  not  a  cost savings  and  the                                                               
department does not pocket the  saved funds back into the general                                                               
fund (GF).   Mr. Neussl  explained that  in order to  stay within                                                               
the  funding available  to award  the  contract for  the two  new                                                               
ACFs, a lot  of the critical equipment on board  had to be listed                                                               
as  state furnished  equipment.   He noted  that the  state would                                                               
have  to come  up with  the aforementioned  equipment, either  by                                                               
other funding  sources or by salvaging  it from a vessel  that is                                                               
leaving service, in order to fully  outfit the two new ACFs.  Mr.                                                               
Neussl stated  that instead  of 1 percent  being applied  to art,                                                               
the money  would go  for things  such as  radars and  ridged hull                                                               
inflatable  boats,  which  are outfitting  requirements  for  the                                                               
vessels.                                                                                                                        
                                                                                                                                
CO-CHAIR  WOOL  offered  his understanding  that  some  of  those                                                               
things  are  not  included  in  the price  when  listed  and  are                                                               
essentially add-ons.                                                                                                            
                                                                                                                                
MR. NEUSSL  answered that  is correct.   He  added that  when the                                                               
construction  contract  was  negotiated   and  awarded  for  $101                                                               
million  dollars, there  were  many items  listed  that would  be                                                               
state  furnished equipment.   He  said  that the  state-furnished                                                               
equipment  would need  to be  provided outside  of the  contract.                                                               
Mr.  Neussl offered  to provide  the committee  with the  list of                                                               
state funded equipment.                                                                                                         
                                                                                                                                
CO-CHAIR WOOL offered his understanding  that the $101 million is                                                               
the  1 percent  state obligation  and  "the other  items are  ...                                                               
extras ..."                                                                                                                     
                                                                                                                                
MR. NEUSSL  explained that  Alaska Statue  requires 1  percent on                                                               
top  of the  $101  million awarded  for  the vessel  construction                                                               
cost.    He  added  that   the  contract  was  awarded  to  Vigor                                                               
Industrial LLC. at the shipyard in  Ketchikan.  He said that some                                                               
of the  equipment he  mentioned earlier, such  as the  boats, the                                                               
radars,   and  some   of  the   heating,  ventilation,   and  air                                                               
conditioning (HVAC) equipment, is  not funded in the construction                                                               
contract.     He  noted   that  technically   the  aforementioned                                                               
equipment is not under the "one percent for art" requirement.                                                                   
                                                                                                                                
2:01:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DRUMMOND  shared her understanding that  the items                                                               
in  discussion are  mostly movable  items,  like furniture,  that                                                               
would  not  normally  be  included in  construction  cost.    She                                                               
inquired why the ACFs are totally  state funded and why the state                                                               
did not ask for the federal share.                                                                                              
                                                                                                                                
MR.  NEUSSL replied  that there  is  a long  history behind  that                                                               
reasoning.   He explained that there  was a desire to  direct the                                                               
project to  Ketchikan, and  with a  federally aided  project, the                                                               
department  would have  no discretion  of where  the ACF  project                                                               
would be  steered.  Mr. Neussl  noted that the department  did an                                                               
innovative  procurement  for  the   ACFs  called  a  construction                                                               
manager/general  contractor  (CM/GC)   process  where  the  state                                                               
competed for a shipyard to be  that CM/GC, then negotiated a best                                                               
price with that firm directly, instead  of bidding it out like on                                                               
normal projects.                                                                                                                
                                                                                                                                
2:03:19 PM                                                                                                                    
                                                                                                                                
CO-CHAIR WOOL announced that HB 117 was held over.                                                                              
                                                                                                                                
                                                                                                                                
2:03:29 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Transportation Standing  Committee meeting was adjourned  at 2:03                                                               
p.m.                                                                                                                            
| Document Name | Date/Time | Subjects | 
|---|---|---|
| HB60 OMB Response 2.15.17.pdf | 
                    
HTRA       2/21/2017 1:30:00 PM | 
                
                    
HB  60 | 
            
| HB131 ver D.PDF | 
                    
HTRA       2/21/2017 1:30:00 PM | 
                
                    
HB 131 | 
            
| HB131 Sponsor Statement.pdf | 
                    
HTRA       2/21/2017 1:30:00 PM | 
                
                    
HB 131 | 
            
| HB131 Fiscal Note DOT-DES 2.17.17.pdf | 
                    
HTRA       2/21/2017 1:30:00 PM | 
                
                    
HB 131 | 
            
| HB117 v D 2.13.17.pdf | 
                    
HTRA       2/21/2017 1:30:00 PM | 
                
                    
HB 117 | 
            
| HB117 Sponsor Statement 02.20.17.pdf | 
                    
HTRA       2/21/2017 1:30:00 PM | 
                
                    
HB 117 | 
            
| HB117 Fiscal Note DOT 02.19.17.pdf | 
                    
HTRA       2/21/2017 1:30:00 PM | 
                
                    
HB 117 | 
            
| HB117 1% for Art Q&A.pdf | 
                    
HTRA       2/21/2017 1:30:00 PM | 
                
                    
HB 117 | 
            
| SB3 Supporting Document - ASCA Letter 2.6.17.pdf | 
                    
HTRA       2/21/2017 1:30:00 PM | 
                
                    
SB   3 | 
            
| CSHB60 (TRA) ver D Work Draft.pdf | 
                    
HTRA       2/21/2017 1:30:00 PM | 
                
                    
HB  60 |