Legislature(1997 - 1998)

02/18/1997 01:40 PM Senate TRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                SENATE TRANSPORTATION COMMITTEE                                
                       February 18, 1997                                       
                           1:40 p.m.                                           
                                                                               
  MEMBERS PRESENT                                                              
                                                                               
 Senator Jerry Ward, Chairman                                                  
 Senator Gary Wilken, Vice Chairman                                            
 Senator Lyda Green                                                            
                                                                               
  MEMBERS ABSENT                                                               
                                                                               
 Senator Rick Halford                                                          
 Senator Georgianna Lincoln                                                    
                                                                               
  COMMITTEE CALENDAR                                                           
                                                                               
 Presentation of Findings:  Senate Task Force of the Alaska Marine             
 Highway System                                                                
                                                                               
 SENATE BILL NO. 21                                                            
 "An Act relating to ferries and ferry terminals, establishing the             
 Alaska Marine Highway Authority, and relating to maintenance of               
 state marine vessels; and providing for an effective date."                   
                                                                               
  - HEARD AND HELD                                                             
                                                                               
 SENATE JOINT RESOLUTION NO. 12                                                
 Relating to reconstruction and paving of the Alaska Highway.                  
                                                                               
  - HEARD AND HELD                                                             
                                                                               
  PREVIOUS SENATE ACTION                                                       
                                                                               
 No previous Senate action to record.                                          
                                                                               
  WITNESS REGISTER                                                             
                                                                               
 Senator Taylor, Chairman                                                      
 Task Force on the AMHS                                                        
 State Capitol                                                                 
 Juneau, Alaska 99801-1182                                                     
  POSITION STATEMENT:   Presented findings of AMHS Senate Task Force.          
                                                                               
 John Hunnewell, Chief Engineer                                                
 Matanuska                                                                     
 Alaska Marine Highway System                                                  
 Seattle, Washington                                                           
  POSITION STATEMENT:   Discussed concerns with the AMHS management.           
                                                                               
 Tom Moore, Second Mate                                                        
 Taku                                                                          
 Alaska Marine Highway System                                                  
 PO Box 9317                                                                   
 Ketchikan, Alaska 99901                                                       
  POSITION STATEMENT:   Discussed concerns with the AMHS management.           
                                                                               
 Leif Jenkinson, Deckhand                                                      
 Alaska Marine Highway System                                                  
 Patrolman, Inland Boatman's Union                                             
 PO Box 6300                                                                   
 Ketchikan, Alaska 99901                                                       
  POSITION STATEMENT:   Stated that the IBU was neutral on SB 21, but          
                      discussed concerns with the AMHS.                        
                                                                               
 Ed Marksheffel, Chief Purser                                                  
 Taku                                                                          
 Alaska Marine Highway System                                                  
 PO Box 9324                                                                   
 Ketchikan, Alaska 99901                                                       
  POSITION STATEMENT:   Discussed zoning scheduling problems.                  
                                                                               
 Lew Williams, Retired Journalist                                              
 755 Grant                                                                     
 Ketchikan, Alaska 99901                                                       
  POSITION STATEMENT:   Discussed the need for new AMHS management.            
                                                                               
 Stephanie Rainwater, Second Steward                                           
 Alaska Marine Highway System                                                  
 926 Jackson                                                                   
 Ketchikan, Alaska 99901                                                       
  POSITION STATEMENT:   Discussed the IBU Labor Management Advisory            
                      Board recommendations and rejections.                    
                                                                               
 Andrea Barkley                                                                
 Alaska Marine Highway System                                                  
 PO Box 1037                                                                   
 Ward Cove, Alaska 99928                                                       
  POSITION STATEMENT:   Discussed the closure of the bars.                     
                                                                               
 John Ritterbach, Senior Assistant Purser                                      
 Alaska Marine Highway System                                                  
 PO Box 9420                                                                   
 Ketchikan, Alaska 99901                                                       
  POSITION STATEMENT:   Discussed problems with the AMHS.                      
                                                                               
 Will Petrich, Relief Mate                                                     
 Alaska Marine Highway System                                                  
 280 Bunchberry Lane                                                           
 Ketchikan, Alaska 99901                                                       
  POSITION STATEMENT:   Discussed the reservations system.                     
                                                                               
 Eric Gucker, Steward                                                          
 Alaska Marine Highway System                                                  
 PO Box 8073                                                                   
 Ketchikan, Alaska 99901                                                       
  POSITION STATEMENT:   Discussed concerns with the current AMHS.              
                                                                               
 Bob Pickrell                                                                  
 8339 Snug Harbor Lane                                                         
 Ketchikan, Alaska 99901                                                       
  POSITION STATEMENT:   Discussed the Hickel Administration's attempts         
                     with the Marine Highway Authority.                        
                                                                               
 Mayor Jack Shay                                                               
 Ketchikan Gateway Borough                                                     
 344 Front Street                                                              
 Ketchikan, Alaska 99901                                                       
  POSITION STATEMENT:   Discussed the AMHS.                                    
                                                                               
 Stan Hjort                                                                    
 Petersburg Transportation Committee                                           
 PO Box 828                                                                    
 Petersburg, Alaska 99833                                                      
  POSITION STATEMENT:   Agreed with previous testimony.                        
                                                                               
 Senator Randy Phillips                                                        
 State Capitol                                                                 
 Juneau, Alaska 99801-1182                                                     
  POSITION STATEMENT:   Discussed SJR 12.                                      
                                                                               
 John Cormie, Deputy Minister                                                  
 Community and Transportation Services                                         
 Yukon Government                                                              
 Canada                                                                        
  POSITION STATEMENT:   Reviewed the history of the Shakwak agreement.         
                                                                               
 Robin Walsh, Director                                                         
 Transportation Engineering                                                    
 Yukon Government                                                              
 Canada                                                                        
  POSITION STATEMENT:   Answered questions.                                    
                                                                               
  ACTION NARRATIVE                                                             
                                                                               
  TAPE 97-4, SIDE A                                                            
                                                                               
             SB  21 ALASKA MARINE HIGHWAY AUTHORITY                           
                                                                              
 Number 001                                                                    
                                                                               
  CHAIRMAN WARD  called the Senate Transportation Committee meeting to         
 order at 1:40 p.m. and introduced  SB 21  as the first order of               
 business before the committee and invited Senator Taylor to come              
 forward and report the findings of the Senate Task Force on the               
 Alaska Marine Highway System.                                                 
                                                                               
  SENATOR TAYLOR , Chairman of the Senate Task Force on the Alaska             
 Marine Highway (AMHS), informed the committee that the task force             
 held hearings in Ketchikan, Seward, and Sitka.  He noted that the             
 report includes testimony, letters, and other documents forwarded             
 to the task force.  Senator Taylor read the report into the record:           
                                                                               
 Based upon the written and oral testimony, the Senate Task Force on           
 the Alaska Marine Highway System, has identified several key                  
 management policies and decisions the Task Force feels are                    
 representative of the type of policies that bring the current                 
 management of the AMHS into question.                                         
                                                                               
 Current management practices have resulted in a growing lack of               
 confidence in the Alaska Marine Highway System on the part of                 
 elected officials and the general public they represent.                      
                                                                               
 It is the recommendation of the Senate Task Force on the Alaska               
 Marine Highway System that the Twentieth Alaska State Legislature             
 consider moving AMHS management from DOT/PF to a semi-autonomous              
 Marine Highway Authority.                                                     
                                                                               
 The key issues examined by the Task Force include:                            
                                                                               
  *Arbitrary and repeated changes in the days crew rotate on the               
      fleet.  The decisions are estimated to have cost the system              
  more than $250,000 in unnecessary overtime and other expenses.               
                                                                               
  *Scheduling and passenger fare policies that discourage                      
  ridership, despite constant recommendations from the                         
  communities served by the system and from the crews and line                 
  officers who are responsible for the actual operation of the                 
  fleet.                                                                       
                                                                               
  *A reservations system that has been an abject failure and                   
  what appear to be a wasted attempt to computerize vessel                     
  maintenance.                                                                 
                                                                               
  *The decision to close the cocktail bars and eliminate a                     
  revenue source.  This came despite recommendations from the                  
  employee/management committee which would have led to the same               
  cost savings without elimination of the revenue generating                   
  positions and the passenger service connected with operation                 
  of the bars.                                                                 
                                                                               
  *Continued additions to the staff at the Juneau Central                      
  Office, despite a strong and critical public perception that                 
  AMHS management is already top heavy.                                        
                                                                               
 As a side note, Senator Taylor stated that the bar closure also               
 impacts the revenue of food and other beverages.  When the bars are           
 open more food, snacks, and other items are sold.  Further Senator            
 Taylor informed the committee that in comparison to now in 1977,              
 one more vessel was running with more trips per boat per year and             
 several more employees on the system.  In 1977, AMHS operated with            
 17 people and Bill Hudson.  Currently, there are about 155 full-              
 time employees in Juneau.  Senator Taylor believed that the AMHS is           
 in trouble.  By moving the AMHS management to a more professional             
 group of managers with some tenure within the system, with                    
 continuity and historic perspective, the AMHS management should               
 stabilize.                                                                    
                                                                               
 Number 125                                                                    
                                                                               
  JOHN HUNNEWELL , Chief Engineer of the Matanuska, reiterated the             
 growth of the shoreside management of the AMHS.  Mr. Hunnewell                
 cited the lack of maritime background in the senior management as             
 a major concern.  He did not understand why input from the senior             
 officers from the vessels seem to be ignored.  For example, the               
 marine engineering department solicits crew input which is then               
 ignored and then there is a problem.  Mr. Hunnewell pointed out               
 that most projects can utilize federal funds, but if the input is             
 ignored and future problems arise - state funds must be used for              
 the upgrade or improvement.                                                   
                                                                               
  SENATOR WILKEN  inquired as to what a Chief Engineer does on AMHS.           
  JOHN HUNNEWELL  clarified that he was the engineer out of the engine         
 department and is responsible for all the mechanical equipment                
 aboard the vessel.  The Chief Engineer is the second most senior              
 officer and he reports to the Master directly.                                
                                                                               
  SENATOR GREEN  asked if anyone testifying would be in harms way.             
  CHAIRMAN WARD  replied, no.                                                  
                                                                               
 Number 200                                                                    
                                                                               
  TOM MOORE , Second Mate on the Taku, addressed the changes in the            
 days crew rotate.  It costs the state $25,000 per ship per day                
 every day that the crew rotation is changed.  These changes reflect           
 that the management has no consideration for passengers and crew.             
 Such changes in the crew rotation result in overtime pay for the              
 crew working and regular pay for the crew that is being short                 
 changed in their work day.  This change in crew rotation also                 
 effects the credibility of the state.  Mr. Moore stated that the              
 AMHS has lacked stability in the last few years.   Since Director             
 Ayers left the AMHS, the system has been in "a death spiral."  The            
 system directly reflects upper management, the commissioner and               
 director.  He said that the department heads' hands are tied most             
 of the time.  Mr. Moore echoed comments regarding the increase in             
 shoreside management staff over the years.  Since the zone system             
 has been implemented there has been a decrease in travelling paying           
 customers and services, while costs have increased.  It is an                 
 inconvenience for passengers to have to change ships as well as the           
 schedule which stops in major towns in Southeast Alaska after                 
 business hours.  Local economies are effected by such scheduling.             
                                                                               
 The closure of the bars on the ferries was a slap in the face to              
 the public.  The IBU was told by the director that the bars could             
 remain open if a cost effective alternative was presented, however            
 the bars were closed.  Mr. Moore cited other examples of problems             
 with the system such as the ferries following each other around               
 Southeast Alaska and the lack of service to Petersburg.  Further,             
 elder hostel groups are given a reduced rate for passage, state               
 rooms, and food while Alaskans are not given such.  Mr. Moore                 
 believed that those in Southeast Alaska have valid grounds for a              
 lawsuit against the Administration, DOT/PF, and AMHS for the                  
 misappropriation of public funds and fraud.  These people are doing           
 the exact opposite of the purpose of their positions: to serve the            
 people and make transportation easier for people travelling in                
 Alaska.  Mr. Moore indicated that the Malaspina - Goldbelt                    
 connection should be reviewed in depth.                                       
                                                                               
 Number 309                                                                    
                                                                               
  LEIF JENKINSON  informed the committee that he was a 13 year                 
 Deckhand with the AMHS and three and one-half years as Patrolman              
 with the IBU.  The IBU remains neutral on SB 21.  However, Mr.                
 Jenkinson pointed out that the present problems with the AMHS are             
 so long standing and severe that extraordinary efforts would be               
 required to solve them.  This does not seem possible under the                
 present organization.  Further, the IBU believes that the Marine              
 Highway Authority would not create another layer of bureaucracy.              
 Mr. Jenkinson informed the committee that Commissioner Perkins had            
 stated that it would be counter productive for the AMHS to compete            
 for funds with other statewide transportation needs.  Currently,              
 AMHS cannot compete because those who make the ultimate decisions             
 are all road and airport engineers and builders.  Perhaps, an                 
 authority would create equity for marine transportation.  Mr.                 
 Jenkinson acknowledged that there are good people working for the             
 AMHS in Juneau, however they must not be making the decisions.  The           
 IBU believes that the AMHS fleet could run at or beyond capacity              
 for a full year, bringing in a much higher percentage of its                  
 operating cost while providing better service.                                
                                                                               
  ED MARKSHEFFEL , Chief Purser aboard the Taku, addressed zoning              
 scheduling which has been a problem for the Taku.  Mr. Marksheffel            
 said that his traffic reports would support that assertion.  For              
 example, one day last June only 38 people and 12 vehicles came into           
 Juneau by the ferry; this is the busy season.  The proposed                   
 authority may solve the scheduling problems.  In response to                  
 Chairman Ward, Mr. Marksheffel said that he had been with the                 
 system for 30 years.                                                          
                                                                               
  SENATOR TAYLOR  asked Mr. Marksheffel if he had any information              
 regarding the cost of crew shift change days.   ED MARKSHEFFEL  said          
 that he had forwarded that information to Mr. Moore, but offered to           
 forward it to the committee.                                                  
                                                                               
 Number 373                                                                    
                                                                               
  LEW WILLIAMS , Retired Journalist, informed the committee that he            
 was one of the founders of the Southeast Conference in the 1950s              
 which promoted a bond issue to begin the ferries.  Mr. Williams               
 said that he had listened to the crew's complaints over the years.            
 Mr. Williams noted that he had written a letter to Mr. Hayden and             
 had spoken with him regarding some of the complaints.  Mr. Williams           
 emphasized the need for better management which SB 21 offers.                 
                                                                               
 Mr. Williams informed the committee that he had served on the Board           
 of Governors for the Alaska Bar Association, the Alaska Judicial              
 Council, and currently serves on the Board of Regents for the                 
 University of Alaska.  All those organizations are operated by                
 boards and the board members have overlapping terms which allows              
 continuity.  Usually, the president or executive director is hired            
 based on experience.  Those organizations, albeit not perfect, are            
 better organized than the AMHS.  Mr. Williams pointed out that the            
 need for better management is critical due to the upcoming                    
 negotiations in 1999, for many of the labor contracts.  During that           
 time, there will be another election which may result in much                 
 change in the AMHS management who will be facing these employee               
 negotiations.  Mr. Williams believed that the Advisory Committee of           
 Mayors with whom Mr. Hayden serves does not provide any continuity.           
 In conclusion, Mr. Williams said that he would forward a copy of              
 his letter to Mr. Hayden and his responses.                                   
                                                                               
    SENATOR TAYLOR  noted that the crew rotation costs were in the             
 report and he requested that if Mr. Marksheffel and Mr. Moore had             
 any supplemental information to forward it to the committee.                  
                                                                               
 Number 433                                                                    
                                                                               
  STEPHANIE RAINWATER , Second Steward, informed the committee that            
 she has been an employee of the AMHS since 1987.  The IBU Labor               
 Management Advisory Board was formed in the summer of 1996 in order           
 to open lines of communication between the AMHS administration and            
 ferry employees.  The intent was to work together to find solutions           
 to the revenue problem.  The ensuing meetings of the advisory board           
 discussed the procurement cost savings of the purchase of food,               
 paper products, janitorial supplies, laundry service, soda pop and            
 candy.  The suggestions would result in a savings of $100,000 in              
 food in the first year alone.  Increasing the hours of the                    
 cafeteria and the gift ship were suggested.  A shadow training                
 program for upper management was suggested in order to eliminate              
 overstocking of the storeroom.  Ms. Rainwater reviewed other                  
 suggestions from the advisory board which would have resulted in no           
 cost to the state for implementation and offered an immediate                 
 increase in revenue.  All the cost savings measures were found to             
 be unacceptable and that positions must be cut.  Reluctantly, the             
 labor committee worked out a job sharing concept, but the proposal            
 was rejected and the bars were closed.                                        
                                                                               
 Ms. Rainwater pointed out that the management crew meeting on the             
 Columbia in November of 1996 revealed the depth of the deception.             
 At that meeting, Mr. Hayden stated to the crew that the bar closure           
 was a nonnegotiable item long before the labor management meetings.           
 Further, Mr. Hayden stated that the suggestions for job elimination           
 would be used to offset the coming year's budget cuts.  Why would             
 labor ever cooperate with this management after this?  Ms.                    
 Rainwater recommended that a major restructuring of the                       
 administration and management of the AMHS is necessary this                   
 legislative session.  Ms. Rainwater submitted a resolution of                 
 support, 9709, for SB 21 from the Ketchikan Indian Corporation.               
 She urged support and passage of SB 21.  In response to Senator               
 Ward, Ms. Rainwater agreed to forward the resolution.                         
                                                                               
  ANDREA BARKLEY , employee of the AMHS, said that she would be                
 addressing the closure of the bars.  She was a bartender for the              
 AMHS for 18 years until the closure of the bars.  The closure of              
 the bars was never about the loss of revenue which the following              
 points will indicate.  First, the employee position savings did not           
 occur because that employee was placed elsewhere on the same ship             
 and crew.  No employee cost was saved, only revenue was lost.                 
 Further, Mr. Hayden told the IBU that if solutions resulting in the           
 same cost saving could be presented the decision to close the bars            
 would be reconsidered.  Second, the IBU held extensive labor                  
 management meetings which offered many suggestions to increase bar            
 revenue.  All suggestions were ignored.  The Matanuska implemented            
 the suggestions without management direction and experienced an               
 increase in revenue in the bar.  The Juneau office was not                    
 interested in this.  Third, the state announced that the Columbia             
 bar did make money and would remain open.  However as soon as the             
 bars on the other vessels were closed, the hours on the Columbia              
 bar were decreased to six hours a day.  What businessman worried              
 about losing money, would close down the only profitable business             
 venture for half the hours?  Alaskans and visitors want the                   
 cocktail services on the AMHS open.  Ms. Barkley informed the                 
 committee of the 658 comment cards requesting that the bars reopen.           
 Only nine comment cards have been received in support of the                  
 closure of the bars.  The AMHS management is refusing a mandate of            
 the people.  If SB 21 does not pass this legislative session, the             
 AMHS will not survive.  Ms. Barkley urged support of SB 21 and                
 thanked the task force for their work.                                        
                                                                               
 Number 532                                                                    
                                                                               
  JOHN RITTERBACH , Senior Assistant Purser on the Matanuska, did not          
 foresee a future for the AMHS under the present administration.  He           
 supported SB 21 and stressed the need to act now.  The management             
 of AMHS is inept with little or no maritime experience.  Leaders              
 with experience are needed.  In order to grow and prosper in times            
 of economic shortage, more must be done with less; more reasons for           
 the public to use AMHS should be offered not increased prices with            
 reduced service.  Mr. Ritterbach emphasized that more revenue could           
 be generated with reduced appropriations by providing the public              
 with a reliable service at a reasonable price.  In comparison to              
 the AMHS, the Canadian system has lower prices with better onboard            
 services and a user-friendly schedule.  Mr. Ritterbach said that              
 price, poor scheduling and lack of service have resulted in the               
 lack of revenue.  Management is top heavy.  For example, during the           
 winter reduction the number of employees at the Juneau central                
 office almost equal the number of employees working on all three              
 ships in use.  About 60 percent of ship employees lose their jobs             
 in the winter months.  It takes an new employee hired in the IBU              
 about six years to become a year round full-time employee, however            
 the employees of the Juneau central office are year round full-time           
 employees from the beginning.  He believed the Juneau central                 
 office staff should be reduced by 30 percent or more.  Mr.                    
 Ritterbach recommended that people look at the nice offices and               
 terminals that support the shabby ships.  Mr. Ritterbach discussed            
 the Malaspina and its lack of maintenance that has resulted in its            
 current situation.  The Malaspina could be used and produce revenue           
 while SOLAS upgrades are being made.  In closing, Mr. Ritterbach              
 urged the support of SB 21 in order to abide by the AMHS motto, "A            
 proud tradition."                                                             
                                                                               
  WILL PETRICH , Relief Second and Third Mate, said that the                   
 reservations system has been a failure.                                       
                                                                               
  TAPE 97-4, SIDE B                                                            
                                                                               
 An inhouse reservation system is by its very nature, limiting.  No            
 public carriers rely on an inhouse reservation system.  The $1.5              
 million on this inept inhouse reservations system could be used to            
 keep the vessels running.  This is merely another example of cause            
 and effect of the lack of professional maritime competence of the             
 administration.  Mr. Petrich believed the only solution at this               
 time is a ferry authority.  He mentioned that issues of                       
 reservations, scheduling, and yard layup are intertwined.  The                
 issue is the present dysfunction of the management of the AMHS;               
 there is no accountability in the present administration.  Mr.                
 Petrich believed that the present AMHS administration is unwilling            
 and incapable of change and therefore, he urged support of SB 21.             
                                                                               
 Number 566                                                                    
                                                                               
  ERIC GUCKER  informed the committee that he was a third generation           
 Alaskan and Steward on the AMHS for over nine years.  He said that            
 the reservations system is a problem.  As far as Mr. Gucker knew,             
 every other transportation business in Southeast Alaska has                   
 increased revenues.  It makes no sense that the AMHS is                       
 experiencing a loss in revenues.  With regard to the computers,               
 less efficiency and increases in the Juneau staff have resulted.              
 Mr. Gucker discussed the ill communication between the employees              
 and management as well as the lack of administrative support.                 
 There should be a positive forum for the exchange of ideas.  As a             
 steward, Mr. Gucker pointed out that many beer bottles and liquor             
 bottles are gathered from staterooms at every port.  This                     
 exemplifies the loss of revenue from the closure of the bars.                 
 Further, other staff is left to deal with the drinking instead of             
 a bartender with experience regulating problem drinkers.  He                  
 mentioned that scheduling is a problem and has resulted in the                
 Prince of Wales ferry concept.                                                
                                                                               
 Mr. Gucker emphasized that the AMHS brings in approximately 65                
 percent of its operating revenue.  No hard link road in Alaska                
 brings in any money for its operation.  There have been numerous              
 studies that all report that the administration of the AMHS is top            
 heavy.  He identified the bureaucratic nature of the AMHS as the              
 main problem.  Mr. Gucker supported any effort to bring management            
 and workers together.                                                         
                                                                               
  BOB   PICKRELL  informed the committee that his first involvement wit        
 the AMHS was during the first Hickel Administration when he was               
 contracted to do a survey.  He was on Governor Hickel's MHS Task              
 Force in 1991 whose primary mission was to gain support for the               
 Marine Highway Authority.  Mr. Pickrell forewarned the committee              
 that the biggest opposition would come from the bureaucrats, the              
 commissioners.  Mr. Pickrell was in support of SB 21.  The present            
 system will not take care of the problems.  Mr. Pickrell emphasized           
 that the AMHS is a highway which should be subsidized as any other            
 highway in the state.                                                         
                                                                               
 Number 489                                                                    
                                                                               
  MAYOR JACK SHAY , Mayor of the Ketchikan Gateway Borough, reviewed           
 the proposals and resolutions of the Ketchikan Gateway Borough over           
 the past years.  Most recently, the Ketchikan Borough Assembly will           
 be considering SB 21.  Mayor Shay had no doubt that the measure               
 before the borough would pass.  Mayor Shay pointed out that when              
 the Wickersham was running, it was operated under a separate                  
 authority.  That system worked well and could be analogous to this            
 situation.                                                                    
                                                                               
  CHAIRMAN WARD  requested that Mayor Shay forward the resolution that         
 would be before the Ketchikan Borough Assembly.                               
                                                                               
  STAN HJORT , Petersburg Transportation Committee, informed the               
 committee that he had been a marine engineer for the AMHS for 15              
 years and an unlicensed oiler the 12 years prior.  All the                    
 employees that spoke today have identified the problems.  Mr. Hjort           
 proposed that a certain amount of crude oil be swapped for finished           
 diesel oil at a reduced price for any state diesel vehicle.                   
                                                                               
  SENATOR TAYLOR  said that Mr. Hjort's proposal would be reviewed.            
                                                                               
  CHAIRMAN WARD  said that he intended to hold SB 21 and take                  
 testimony from the Administration at the next hearing of the bill.            
 A fiscal note has not been received.  He noted Commissioner Perkins           
 and Director Haydens presence.                                                
                                                                               
                                                                               
             SJR 12 CONSTRUCTION OF ALASKA HIGHWAY                            
                                                                              
 Number 425                                                                    
                                                                               
  CHAIRMAN WARD  introduced  SJR 12  as the next order of business             
 before the committee.                                                         
                                                                               
  SENATOR RANDY PHILLIPS  thanked the committee for SJR 12 which               
 requests $94 million for the completion of the                                
 reconstruction/repavement to the Shakwak project.  Senator Phillips           
 pointed out that the Shakwak project is highlighted in the blue on            
 the map in the committee packet.                                              
                                                                               
  JOHN CORMIE , Deputy Minister for Community and Transportation               
 Services with the Yukon Government, referred the committee to the             
 1977 agreement signed by Canada and the U.S. which resulted in the            
 Shakwak agreement.  That agreement provided for the reconstruction            
 of the Haines Road from Haines, Alaska to Haines Junction, Yukon              
 and the Alaska Highway from Haines Junction north to the border               
 near Beaver Creek.  The provision of that agreement was that the              
 right-of-way and the materials for construction would be provided             
 by the federal government of Canada while the construction funds              
 would come from the U.S.  Over the past 20 years, much of the work            
 has been done; however, the center portion has not been completed.            
 Mr. Cormie said that the U.S. government would be encouraged to               
 provide the funding for the completion if the project is to be                
 continued.  There are safety benefits with this construction                  
 project.  Mr. Cormie noted that tourists are the main source of               
 traffic and Alaska and the Yukon jointly market tourism.                      
 Therefore, any improvement to that highway would be an asset to the           
 Yukon as well as Alaska.  Mr. Cormie also mentioned that Alaska               
 does utilize this highway for commercial traffic as well.                     
                                                                               
  CHAIRMAN WARD  asked how many bridges were part of this section.             
                                                                               
  ROBIN WALSH , Director of Transportation Engineering, said that              
 there are five major bridges in this section.  The White River                
 bridge is under construction and will be completed next year.  The            
 remaining four bridges are a future phase of the project.  The main           
 intent is to get the road surface reconstructed to a modern                   
 standard.                                                                     
                                                                               
  SENATOR RANDY PHILLIPS  commented that the intent is to pass SJR 12          
 before the annual legislative exchange.                                       
                                                                               
  CHAIRMAN WARD  thanked everyone for their testimony and announced            
 that SJR 12 would be held until the next committee meeting when it            
 would be forward to the next committee of referral.                           
                                                                               
 There being no further business before the committee, the meeting             
 was adjourned at 2:55 p.m.                                                    
                                                                               

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