Legislature(2013 - 2014)BUTROVICH 205

03/27/2014 01:30 PM TRANSPORTATION


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Bills Previously Heard/Scheduled: TELECONFERENCED
+= SB 94 RIGHTS-OF-WAY TELECONFERENCED
Heard & Held
+= SB 197 NATURALLY OCCURRING ASBESTOS TELECONFERENCED
Moved SB 197 Out of Committee
+= HJR 10 CONST. AM: TRANSPORTATION FUND TELECONFERENCED
Heard & Held
                    ALASKA STATE LEGISLATURE                                                                                  
            SENATE TRANSPORTATION STANDING COMMITTEE                                                                          
                         March 27, 2014                                                                                         
                           1:36 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Dennis Egan, Chair                                                                                                      
Senator Anna Fairclough                                                                                                         
Senator Click Bishop                                                                                                            
Senator Hollis French                                                                                                           
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Fred Dyson, Vice Chair                                                                                                  
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 197                                                                                                             
"An  Act extending  the  termination date  of  the Department  of                                                               
Transportation   and    Public   Facilities'    interim   project                                                               
authorization   regarding  naturally   occurring  asbestos;   and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
     - MOVED SB 197 OUT OF COMMITTEE                                                                                            
                                                                                                                                
SPONSOR SUBSTITUTE FOR SENATE BILL NO. 94                                                                                       
"An Act vacating a portion of the Copper Center - Valdez right-                                                                 
of-way; relating to rights-of-way acquired under former 43                                                                      
U.S.C. 932 that cross land owned by a private landowner; and                                                                    
relating to the use of eminent domain to realign a right-of-                                                                    
way."                                                                                                                           
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
CS FOR HOUSE JOINT RESOLUTION NO. 10(FIN)                                                                                       
Proposing amendments to the Constitution of the State of Alaska                                                                 
creating a transportation infrastructure fund.                                                                                  
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 197                                                                                                                  
SHORT TITLE: NATURALLY OCCURRING ASBESTOS                                                                                       
SPONSOR(s): SENATOR(s) OLSON                                                                                                    
                                                                                                                                
02/24/14       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/24/14       (S)       TRA                                                                                                    
03/13/14       (S)       TRA AT 1:30 PM BUTROVICH 205                                                                           
03/13/14       (S)       Scheduled But Not Heard                                                                                
03/20/14       (S)       TRA AT 1:30 PM BUTROVICH 205                                                                           
03/20/14       (S)       <Bill Hearing Canceled>                                                                                
03/25/14       (S)       TRA AT 1:30 PM BUTROVICH 205                                                                           
03/25/14       (S)       Scheduled But Not Heard                                                                                
03/27/14       (S)       TRA AT 1:30 PM BUTROVICH 205                                                                           
                                                                                                                                
BILL: SB  94                                                                                                                  
SHORT TITLE: RIGHTS-OF-WAY                                                                                                      
SPONSOR(s): SENATOR(s) OLSON                                                                                                    
                                                                                                                                
03/29/13       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/29/13       (S)       TRA, JUD                                                                                               
02/26/14       (S)       SPONSOR SUBSTITUTE INTRODUCED-REFERRALS                                                                
02/26/14       (S)       TRA, JUD                                                                                               
03/13/14       (S)       TRA AT 1:30 PM BUTROVICH 205                                                                           
03/13/14       (S)       Heard & Held                                                                                           
03/13/14       (S)       MINUTE(TRA)                                                                                            
03/20/14       (S)       TRA AT 1:30 PM BUTROVICH 205                                                                           
03/20/14       (S)       <Bill Hearing Canceled>                                                                                
03/25/14       (S)       TRA AT 1:30 PM BUTROVICH 205                                                                           
03/25/14       (S)       Scheduled But Not Heard                                                                                
03/27/14       (S)       TRA AT 1:30 PM BUTROVICH 205                                                                           
                                                                                                                                
BILL: HJR 10                                                                                                                  
SHORT TITLE: CONST. AM: TRANSPORTATION FUND                                                                                     
SPONSOR(s): REPRESENTATIVE(s) P.WILSON                                                                                          
                                                                                                                                
02/15/13       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/15/13       (H)       TRA, JUD, FIN                                                                                          
02/26/13       (H)       TRA AT 1:00 PM BARNES 124                                                                              
02/26/13       (H)       Moved Out of Committee                                                                                 
02/26/13       (H)       MINUTE(TRA)                                                                                            
02/27/13       (H)       TRA RPT 6DP                                                                                            
02/27/13       (H)       DP: LYNN, FEIGE, ISAACSON, GATTIS,                                                                     
                         KREISS-TOMKINS, P.WILSON                                                                               
04/03/13       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
04/03/13       (H)       Heard & Held                                                                                           
04/03/13       (H)       MINUTE(JUD)                                                                                            
04/05/13       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
04/05/13       (H)       Moved CSHJR 10(JUD) Out of Committee                                                                   
04/05/13       (H)       MINUTE(JUD)                                                                                            
04/06/13       (H)       JUD RPT CS(JUD) 5DP 1DNP                                                                               
04/06/13       (H)       DP: FOSTER, LEDOUX, LYNN, PRUITT,                                                                      
                         KELLER                                                                                                 
04/06/13       (H)       DNP: GRUENBERG                                                                                         
02/04/14       (H)       FIN AT 8:30 AM HOUSE FINANCE 519                                                                       
02/04/14       (H)       Heard & Held                                                                                           
02/04/14       (H)       MINUTE(FIN)                                                                                            
02/28/14       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
02/28/14       (H)       Moved CSHJR 10(FIN) Out of Committee                                                                   
02/28/14       (H)       MINUTE(FIN)                                                                                            
03/03/14       (H)       FIN RPT CS(FIN) 2DP 7NR                                                                                
03/03/14       (H)       DP: T.WILSON, MUNOZ                                                                                    
03/03/14       (H)       NR: GUTTENBERG, GARA, NEUMAN, EDGMON,                                                                  
                         HOLMES, COSTELLO, AUSTERMAN                                                                            
03/13/14       (H)       TRANSMITTED TO (S)                                                                                     
03/13/14       (H)       VERSION: CSHJR 10(FIN)                                                                                 
03/14/14       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/14/14       (S)       TRA, FIN                                                                                               
03/20/14       (S)       TRA AT 1:30 PM BUTROVICH 205                                                                           
03/20/14       (S)       <Bill Hearing Canceled>                                                                                
03/25/14       (S)       TRA AT 1:30 PM BUTROVICH 205                                                                           
03/25/14       (S)       Scheduled But Not Heard                                                                                
03/27/14       (S)       TRA AT 1:30 PM BUTROVICH 205                                                                           
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
DAVID SCOTT, staff to Senator Donald Olson                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Commented on SB 197 for the sponsor.                                                                      
                                                                                                                                
ROGER HEALY, Chief Engineer                                                                                                     
Department of Transportation and Public Facilities (DOTPF)                                                                      
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Explained why  regulations allowing  for the                                                             
use of  gravel aggregate containing naturally  occurring asbestos                                                               
had not been written yet.                                                                                                       
                                                                                                                                
POKE HAFFNER, Assistant Attorney General representing DOTPF                                                                     
Civil Division                                                                                                                  
Transportation Section                                                                                                          
Department of Law (DOL)                                                                                                         
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:  Testified  that  under  AS  01.10.100,  the                                                             
authorizations  DOTPF has  provided under  its interim  authority                                                               
are effective  even though the  interim authority expired  at the                                                               
end of December.                                                                                                                
                                                                                                                                
KENT SULLIVAN, Attorney                                                                                                         
Civil Division                                                                                                                  
Natural Resources Section                                                                                                       
Department of Law (DOL)                                                                                                         
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Explained concerns the DOL had with SB 94.                                                                
                                                                                                                                
GEORGE HELMS, representing himself                                                                                              
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:  Said  he  is   a  private  land  owner  who                                                             
supported SB 94.                                                                                                                
                                                                                                                                
REPRESENTATIVE PEGGY WILSON,                                                                                                    
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Introduced HJR 10, speaking as sponsor.                                                                   
                                                                                                                                
TOM BRICE, lobbyist                                                                                                             
Alaska Laborers                                                                                                                 
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Supported HJR 10.                                                                                         
                                                                                                                                
SARAH GEARY, Legislative Coordinator                                                                                            
Alaska Municipal League                                                                                                         
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Supported HJR 10.                                                                                         
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:36:45 PM                                                                                                                    
CHAIR  DENNIS  EGAN  called the  Senate  Transportation  Standing                                                             
Committee meeting  to order at 1:36  p.m. Present at the  call to                                                               
order were Senators Bishop, French, Fairclough and Chair Egan.                                                                  
                                                                                                                                
              SB 197-NATURALLY OCCURRING ASBESTOS                                                                           
                                                                                                                                
1:38:01 PM                                                                                                                    
CHAIR EGAN announced SB 197 to be up for consideration.                                                                         
                                                                                                                                
1:38:12 PM                                                                                                                    
DAVID SCOTT,  staff to Senator  Donald Olson, sponsor of  SB 197,                                                               
said this bill provides a  one-year extension to the deadline for                                                               
the Department  of Transportation  and Public  Facilities (DOTPF)                                                               
to adopt  or prescribe  a method  of bulk  testing for  gravel or                                                               
other aggregate material  containing naturally occurring asbestos                                                               
under  AS 44.42.420(a).  He explained  that  the underlying  bill                                                               
(House Bill 258), which passed  in the 27th legislature, required                                                               
DOTPF  to put  into  place  a system  and  requirements for  this                                                               
testing, but  DOTPF has  been unable  to quickly  establish those                                                               
regulations.                                                                                                                    
                                                                                                                                
Section  1  of  SB  197  is the  extension  for  interim  project                                                               
authorization and  Section 2 extends  the immunity clause  in the                                                               
underlying legislation.                                                                                                         
                                                                                                                                
1:40:24 PM                                                                                                                    
ROGER  HEALY, Chief  Engineer, Department  of Transportation  and                                                               
Public Facilities (DOTPF), Juneau, Alaska, introduced himself.                                                                  
                                                                                                                                
SENATOR FAIRCLOUGH asked why the regulations are not written.                                                                   
                                                                                                                                
MR. HEALY answered  that the program is unique  within the nation                                                               
and  state,  and  the department  ran  into  hiring  difficulties                                                               
originally, but someone has been  hired and the draft regulations                                                               
were issued last week. The department  is are on schedule to hold                                                               
the  public  hearings  in  the   week  of  April  14  in  Juneau,                                                               
Fairbanks, and Ambler.                                                                                                          
                                                                                                                                
SENATOR FAIRCLOUGH  stated that Representative Joule,  who passed                                                               
the original legislation, was trying  to make aggregate available                                                               
in his  community, but it, unfortunately,  contains asbestos. She                                                               
asked  if DOTPF  had  done  everything it  could  to protect  the                                                               
health of  the individuals as  well as  the state and  the region                                                               
where the aggregate is being used.                                                                                              
                                                                                                                                
MR. HEALY explained that the  original bill provided a period for                                                               
implementation of  interim regulations, which served  the purpose                                                               
of  identifying  designated areas  within  the  state where  this                                                               
immunity  would   apply.  Ambler  is   the  one  area   that  was                                                               
designated.  Under  those   interim  procedures,  the  department                                                               
received and approved a number  of applications for projects from                                                               
the  Housing  Authority  and a  few  smaller  projects  including                                                               
smaller DOTPF  projects, namely  the airport  reconstruction. The                                                               
interim provision allowed those  applications and that project to                                                               
go forward.                                                                                                                     
                                                                                                                                
1:43:48 PM                                                                                                                    
Regarding  the overall  health of  the community  as a  result of                                                               
these projects, the interim  procedures and application approvals                                                               
identified  the provisions  within the  bill requiring  the final                                                               
product  to  have  some  type  of  coverage  over  the  naturally                                                               
occurring asbestos material that is identified.                                                                                 
                                                                                                                                
1:44:37 PM                                                                                                                    
POKE  HAFFNER,  Assistant  Attorney General  representing  DOTPF,                                                               
Civil Division, Transportation Section,  Department of Law (DOL),                                                               
Anchorage,  Alaska, testified  that  under  AS 01.10.100(a),  the                                                               
authorizations  DOTPF provided  under its  interim authority  are                                                               
effective even  though the interim  authority expired at  the end                                                               
of December.  The point  of having the  extension of  the interim                                                               
authority is in the event  that there are additional requests for                                                               
approval of either naturally occurring  asbestos areas or a site-                                                               
specific plan  that comes  in before  the regulations  can become                                                               
final.                                                                                                                          
                                                                                                                                
SENATOR FRENCH commented  that he wasn't a fan of  this bill, but                                                               
wouldn't stop it from going forward.                                                                                            
                                                                                                                                
SENATOR FAIRCLOUGH  moved to report SB  194, labeled 28-LS1513\A,                                                               
from  committee  with  attached  fiscal  note(s)  and  individual                                                               
recommendations. There were no objections  and SB 197 passed from                                                               
the Senate Transportation Standing Committee.                                                                                   
                                                                                                                                
1:47:03 PM                                                                                                                    
At ease from 1:47 to 1:48 p.m.                                                                                                  
                                                                                                                                
                      SB  94-RIGHTS-OF-WAY                                                                                  
                                                                                                                                
1:48:31 PM                                                                                                                    
CHAIR  EGAN announced  SB  94  to be  up  for consideration;  the                                                               
sponsor is Senator Olson. [SSSB 94 was before the committee.]                                                                   
                                                                                                                                
KENT  SULLIVAN,  Attorney,   Civil  Division,  Natural  Resources                                                               
Section, Department  of Law (DOL),  Juneau, Alaska, said  the DOL                                                               
had concerns with  SB 94. A major concern is  that it would cause                                                               
the  state  to  relinquish,  on  a  massive  scale,  the  RS-2477                                                               
property  interests that  it currently  possesses.  From a  legal                                                               
perspective, this would make the  RS-2477 a far less valuable and                                                               
effective tool to the state of Alaska.                                                                                          
                                                                                                                                
1:51:24 PM                                                                                                                    
This  bill would  cause  the  typical width  of  a state  RS-2477                                                               
rights-of-way (ROW) to  be narrowed from 100 feet to  60 feet. It                                                               
would  also greatly  limit the  allowed  scope of  uses that  can                                                               
occur within an  RS-2477 ROW, and it would freeze  RS-2477 ROW to                                                               
the condition, mode,  and method of use that existed  at the time                                                               
of  its  repeal in  1976.  Finally,  it would  effectively  grant                                                               
private  property   owners  veto   authority  over   the  state's                                                               
maintenance and  improvement activities on  RS-2477 rights-of-way                                                               
across  private  property. All  of  these  things would  have  an                                                               
impact to the state's RS-2477 property rights.                                                                                  
                                                                                                                                
MR. SULLIVAN explained  that the state's interest  in RS-2477 can                                                               
be  viewed as  a bundle  of  sticks, with  each stick  considered                                                               
separately. The width of the ROW,  the right to access streams or                                                               
park or camp within the ROW, and  the right to pull over and take                                                               
pictures are all different sticks.  The state's right to maintain                                                               
and improve  the ROW  and the  different modes  of transportation                                                               
that can be used are also different sticks.                                                                                     
                                                                                                                                
He said  the state's  current RS-2477 rights  are very  broad and                                                               
encompassing  and  include many,  many  sticks.  This bill  would                                                               
effectively strip many of those  sticks away, thereby diminishing                                                               
the state's  property interest. Each  of those sticks  has value,                                                               
many  of which  are  hard  to determine.  However,  one that  can                                                               
easily be  determined is the  reduction in  the width of  the ROW                                                               
from 100 feet to 60 feet.                                                                                                       
                                                                                                                                
He  explained that  currently there  is more  than 20,000  linear                                                               
miles of RS-2477 rights-of-way in  the state, about half of which                                                               
occur across  private property. DNR  estimates that  reducing the                                                               
ROW  width would  have  a fiscal  impact to  the  state of  $48.5                                                               
million. He  emphasized that that  is just  one of the  many ways                                                               
that SB  94 would  reduce the state's  property interests  in RS-                                                               
2477 rights-of-way.                                                                                                             
                                                                                                                                
1:53:13 PM                                                                                                                    
MR. SULLIVAN said  that another reason for concern  is whether or                                                               
not the  bill would cause  a problem  with regard to  the state's                                                               
obligation  to  preserve  the  public  trust  and  constitutional                                                               
requirements to protect  access to state land  and resources. RS-                                                               
2477 is  a valuable tool  in achieving  access to state  land and                                                               
resources  and this  bill  would  effectively give  up  a lot  of                                                               
rights that the state possesses in that regard.                                                                                 
                                                                                                                                
1:53:33 PM                                                                                                                    
SB  94  would  also  create a  disparate  patchwork  of  property                                                               
interests. RS-2477s  frequently cross state, private  and federal                                                               
land, and this  would create a different set of  rules that apply                                                               
to private  land from the  rules that  apply to federal  land and                                                               
state   land.  There   would  be   different  widths,   different                                                               
management rights  and responsibilities,  and different  scope of                                                               
uses that would apply to  each of the underlying land ownerships.                                                               
That is  extremely problematic from a  management perspective and                                                               
from a public use perspective.                                                                                                  
                                                                                                                                
He said that  SB 94 arguably would promote  litigation because it                                                               
creates a  mechanism whereby  if a  private landowner  objects to                                                               
maintenance  or  improvement activities  by  the  state it  would                                                               
first have  to go to mediation  and if it didn't  go to mediation                                                               
it would  have to  go to  court. The concern  is that  this would                                                               
hold up the  state's ability to do those things  until that legal                                                               
action took place.                                                                                                              
                                                                                                                                
1:54:54 PM                                                                                                                    
MR.  SULLIVAN  noted that  the  state  is currently  involved  in                                                               
litigation  with Ahtna  Corporation over  the Klutina  Lake Road.                                                               
Under  SB 94  anywhere that  the  Klutina Lake  road RS-2477  ROW                                                               
overlaps a  17(b) easement, the  state would give up  its RS-2477                                                               
ROW and  accept a 17(b) easement.  The problem is that  there are                                                               
many distinctions between 17(b)  easements and RS-2477 rights-of-                                                               
way. In that  situation the bill would create a  ROW that's a mix                                                               
of the two.                                                                                                                     
                                                                                                                                
He explained that one of the  problems with the 17(b) easement is                                                               
that they  are much more  restrictive; they are  owned, possessed                                                               
and managed by the federal government  as opposed to the State of                                                               
Alaska.  The   state  doesn't  have  control,   and  the  federal                                                               
government can  unilaterally terminate  a 17(b)  easement without                                                               
the state's  say-so. Another concern  is that the  17(b) easement                                                               
can only  be used for  travel. You can't  stop along it  and take                                                               
pictures or have day-use sites or  camp or launch boats or any of                                                               
the typical things  that you can sometimes do on  an RS-2477 ROW.                                                               
Mr. Sullivan  emphasized that it  would basically  circumvent all                                                               
of the state's  defenses and assertions that it has  made in that                                                               
case.                                                                                                                           
                                                                                                                                
1:56:51 PM                                                                                                                    
GEORGE HELMS,  representing himself,  Anchorage, Alaska,  said he                                                               
is  a private  landowner  who  would be  affected  by  SB 94.  It                                                               
appears that  the state can  unilaterally add arterials  to these                                                               
RS-2477s, meaning  if additional  trails had been  created across                                                               
private property  that connect to  an existing RS-2477  the state                                                               
has asserted that  it can unilaterally collect those  as well. In                                                               
many  cases,  the  state's  routing goes  on  what  are  actually                                                               
privately funded  improvements and  the state would  basically be                                                               
taking these  free of  charge for public  use. This  includes the                                                               
cabins and outhouses on private land.                                                                                           
                                                                                                                                
SB 94  would help to curb  some of that behavior  and protect the                                                               
private property interests on the  adjacent properties. For those                                                               
reasons he said he supports the bill.                                                                                           
                                                                                                                                
CHAIR  EGAN,  finding   no  further  comments,  held   SB  94  in                                                               
committee.                                                                                                                      
                                                                                                                                
1:59:53 PM                                                                                                                    
At ease from 1:59 to 2:01 p.m.                                                                                                  
                                                                                                                                
             HJR 10-CONST. AM: TRANSPORTATION FUND                                                                          
                                                                                                                                
2:01:30 PM                                                                                                                    
CHAIR EGAN  announced HJR  10 to be  up for  consideration [CSHJR
10(FIN) was before the committee].                                                                                              
                                                                                                                                
REPRESENTATIVE  PEGGY WILSON,  sponsor  of HJR  10, Alaska  State                                                               
Legislature, Juneau,  Alaska, said two  other bills in  the other                                                               
body make  up the  concept behind  HJR 10.  She noted  that those                                                               
bills  are sitting  in House  Finance. She  asked to  be able  to                                                               
present the entire package concept  before drilling down into HJR
10. It would  give the committee an idea how  the fund could come                                                               
together  if  the Constitution  were  changed  to allow  it.  All                                                               
methods  of  transportation  in  Alaska  are  very  important  to                                                               
everyone in Alaska she started.                                                                                                 
                                                                                                                                
2:04:09 PM                                                                                                                    
REPRESENTATIVE P.  WILSON said Alaska's transportation  system is                                                               
aging; no  major road has been  built in this state  in 30 years.                                                               
With population  growth comes  congestion, especially  since that                                                               
growth  is primarily  in the  Railbelt where  the population  has                                                               
tripled, she said.                                                                                                              
                                                                                                                                
She highlighted  that the state  ferries are  well-maintained but                                                               
cost a lot  to operate and are aging. Alaska  has over 250 state-                                                               
owned airports  that need upgrades and  major maintenance. Barges                                                               
can  only travel  up the  rivers during  the few  warm months  to                                                               
bring the  necessary gravel to maintain  those unpaved airstrips.                                                               
The state owns  25 harbors and is in the  process of transferring                                                               
them  to municipalities,  but the  harbors are  deteriorating and                                                               
the municipalities often don't have the money for maintenance.                                                                  
                                                                                                                                
2:06:35 PM                                                                                                                    
REPRESENTATIVE  P.  WILSON said  our  natural  resources are  not                                                               
normally on  the transportation grid  or close to  railroads, and                                                               
access to  them is needed  in order  to diversify the  sources of                                                               
revenue the state receives.                                                                                                     
                                                                                                                                
2:06:56 PM                                                                                                                    
She said  the state has  a backlog of  projects in excess  of $20                                                               
billion,  and  over $700  million  in  deferred maintenance.  The                                                               
funding  from  both  the  state and  federal  government  is  not                                                               
keeping  up with  the demand.  Rural highway  traffic across  the                                                               
U.S.  is up  23  percent  and continues  to  grow; vehicle  miles                                                               
traveled is  up 35 percent  and still  growing, too. There  is an                                                               
estimated $65 billion  loss due to traffic  congestion every year                                                               
and that loss is passed on to consumers.                                                                                        
                                                                                                                                
REPRESENTATIVE P. WILSON said federal  fuel taxes are not keeping                                                               
up  with inflation.  In Alaska  and nationally  fuel taxes  can't                                                               
keep up with demand. Revenues for  fuel taxes aren't going as far                                                               
because advances in technology result  in cars going further on a                                                               
gallon  of gas.  Alaska has  not had  an increase  in motor  fuel                                                               
taxes since  1961, and at 8  cents/gallon it's the lowest  in the                                                               
nation. The next closest is Wyoming at 14 cents/gallon.                                                                         
                                                                                                                                
2:08:24 PM                                                                                                                    
The new  federal transportation funding program,  MAP-21, focuses                                                               
on  national  highways and  safety  which  are great  goals,  but                                                               
Alaska only  has four national  highways. The state used  to have                                                               
greater flexibility with regard to  safety dollars, but now it is                                                               
limited to roads  with notable crash histories,  and the national                                                               
highway system  funds are  now driven  by performance.  Since the                                                               
penalties for non-performance are  painful, the state match could                                                               
have to double or triple.                                                                                                       
                                                                                                                                
The state  may be forced  to focus more  on just keeping  up than                                                               
modernization and  there are a  lot of maintenance  projects that                                                               
don't provide new lanes or access, which is what Alaska needs.                                                                  
                                                                                                                                
She said the Council of  State Governments said states can expect                                                               
to  see a  slowdown in  payments from  the Federal  Highway Trust                                                               
Fund as early as this summer and  by next summer the fund will be                                                               
empty.                                                                                                                          
                                                                                                                                
REPRESENTATIVE   P.  WILSON   said  the   dwindling  pre-MAP   22                                                               
allocations to Alaska make it  difficult for DOTPF to fund Alaska                                                               
highways  and  communities.  To further  complicate  matters,  14                                                               
percent of the 28 percent  that is allocated for the non-national                                                               
highways is divided depending on  population: 4.4 percent goes to                                                               
cities that have more than  200,000 in population (only Anchorage                                                               
qualifies); 5.4 percent  is directed to cities  with a population                                                               
less than 200,000  but more than 5,000. That  only reaches Sitka,                                                               
Ketchikan,  Juneau, Fairbanks,  Wasilla,  Kodiak  and Kenai.  The                                                               
remaining 4.2 percent is for all  the other roads in the state. A                                                               
portion  is  flexible,  but  unfortunately   it  is  consumed  by                                                               
increased  mandatory  requirements  from the  federal  government                                                               
like data collection,  bridge inspections, geographic information                                                               
mapping  and other  necessities leaving  very little  for project                                                               
purposes.                                                                                                                       
                                                                                                                                
REPRESENTATIVE P.  WILSON said  Alaska has  always had  a serious                                                               
problem with financing transportation  infrastructure; there is a                                                               
new  transportation funding  program  in the  works,  but no  one                                                               
knows what  that will mean.  There will be  no more money  in the                                                               
highway trust  fund in 2015 and  Alaska needs to bring  its aging                                                               
infrastructure into the 21 Century.                                                                                             
                                                                                                                                
2:13:03 PM                                                                                                                    
She  emphasized that  to access  Alaska's  natural resources  the                                                               
state   needs   to   take   responsibility   for   developing   a                                                               
transportation   system  that   depends  less   on  the   federal                                                               
government for Alaska's roads,  harbors, airports, and railroads.                                                               
Alaska needs  to start planning  for the  future and that  is not                                                               
happening  now.  These  problems  are  not  new;  they  are  just                                                               
compounding, she said.                                                                                                          
                                                                                                                                
She  related  that  the House  Transportation  Committee  started                                                               
investigating these funding  issues five years ago  and for three                                                               
years  they listened  to DOTPF,  grass  roots organizations,  and                                                               
transportation  organizations identifying  the challenges  of all                                                               
the  transportation in  this  geographically  diverse state.  The                                                               
committee flew to remote villages  to view transportation systems                                                               
and subsequently started its quest  for a solution. The committee                                                               
heard from the  Alaska Municipal League (AML),  the MatSu Borough                                                               
that contracted an independent  study on statewide transportation                                                               
fiscal issues, and from national  experts. The committee rejected                                                               
fixing  the   problem  by  bonding,   which  would   make  future                                                               
generations pay the debt.                                                                                                       
                                                                                                                                
REPRESENTATIVE P.  WILSON explained that  the proposal in  HJR 10                                                               
has  three  parts: the  first  establishes  the dedicated  Alaska                                                               
transportation taxes  and fees  as a  part of  the Transportation                                                               
Fund  that was  in existence  at  statehood. She  noted that  the                                                               
Alaska  Constitution contained  two  dedicated  funds related  to                                                               
transportation:  the  Highway  Fund  and  the  Water  and  Harbor                                                               
Facilities Fund.                                                                                                                
                                                                                                                                
She  said the  Alaska Transportation  Infrastructure Fund  (ATIF)                                                               
will combine  these two funds. It  requires a vote of  the people                                                               
to change  the Constitution  to reinstate the  fund, but  it will                                                               
ensure   that  all   taxes  and   fees  pay   for  transportation                                                               
activities.                                                                                                                     
                                                                                                                                
The  second  part   of  the  proposal  is   to  continue  funding                                                               
transportation as  in the past.  This is  the key to  making real                                                               
progress  and improving  the transportation  infrastructure. This                                                               
is the  one way to slowly  chink away at the  $20 billion backlog                                                               
of projects and to have more 100 percent state funded projects.                                                                 
                                                                                                                                
The third solution is to take  advantage of both the cost savings                                                               
and the time savings for  state funded projects (projects without                                                               
federal  strings)  while  providing  for  growing  transportation                                                               
needs. This fund  will move projects from  planning to completion                                                               
much faster  and cost less.  With state funded  projects Alaskans                                                               
will see the  impact of state dollars in  communities much sooner                                                               
and they will cost less.                                                                                                        
                                                                                                                                
For example,  state funds  were used in  the construction  of the                                                               
Elmore Road Extension in Anchorage,  which was completed in three                                                               
years as  opposed to  the 7-10  years it  would have  taken going                                                               
through  the  federal  process.  She said  the  intention  is  to                                                               
provide a dedicated revenue stream  that will allow more projects                                                               
to be  completed faster  and cheaper in  addition to  the ongoing                                                               
state and federal funds.                                                                                                        
                                                                                                                                
2:18:36 PM                                                                                                                    
REPRESENTATIVE P. WILSON  said the concept of funding  ATIF is to                                                               
endow it with a large  initial investment. It will progress while                                                               
maximizing federal  dollars the  state gets.  She noted  that she                                                               
heard  that a  federal dollar  is worth  75 cents  compared to  a                                                               
state  dollar.  This  endowment  will  be  determined  after  the                                                               
Constitution  has   been  changed  to  reinstate   the  dedicated                                                               
Transportation  Fund. She  highlighted  that special  use fees  -                                                               
vanity  license  plates,  airport  lease  revenues  -  have  been                                                               
preserved.                                                                                                                      
                                                                                                                                
She said  the plan  would be  to have  the Department  of Revenue                                                               
(DOR)  manage ATIF  and appropriate  it like  the Permanent  Fund                                                               
(each  year 5  percent  of  the market  value  averaged over  the                                                               
previous  5  years)  and  5  percent  of  the  profits  would  be                                                               
reinvested  into the  fund and  each  year there  would be  funds                                                               
available for  appropriation -  plus half of  the taxes  and fees                                                               
collected from  the previous year).  Also coming out of  the fund                                                               
would be  the expenses  for the Division  of Motor  Vehicles, the                                                               
expenses to  administer and  manage the fund,  and costs  for the                                                               
Advisory  Council.  The fund  would  be  self-sufficient and  not                                                               
require  general  funds  for administration.  The  appropriations                                                               
will follow the  regular budgetary process and  would be approved                                                               
by both the governor and the legislature.                                                                                       
                                                                                                                                
She said  the fund  needs to  be set  up and  then next  year the                                                               
projects  can  be prioritized.  Her  idea  is  that it  could  be                                                               
handled by  a two-panel,  two-set process. The  first step  is to                                                               
prove  and  decide   if  the  projects  are   better  suited  for                                                               
development using state  funds or going through  the regular STIP                                                               
process,  effectively  deciding  if  it  will  be  a  federalized                                                               
project or a 100 percent state funding project.                                                                                 
                                                                                                                                
The  Alaska  Transportation Panel  (ATP)  could  be comprised  of                                                               
seven members: four public, the  DOTPF commissioner, a STIP board                                                               
member, and  a member from  the Alaska  Infrastructure Commission                                                               
(AIC). Members will serve four-year  staggered terms; DOTPF would                                                               
develop a set of guidelines to  decide if a project would be best                                                               
to be federalized or funded through ATIF.                                                                                       
                                                                                                                                
2:22:21 PM                                                                                                                    
REPRESENTATIVE P. WILSON said the  intent is to take the politics                                                               
out of  the decision  making process  for funding  projects. When                                                               
the project has  been selected for using ATIF funds  it must then                                                               
be reviewed  by the AIC,  which would prioritize  ATIF selections                                                               
using DOTPF criteria. This list will  need to be completed by the                                                               
Advisory  Commission by  October 15  each year  and submitted  to                                                               
both the  governor and  the legislature to  make sure  the ranked                                                               
projects get into the capital budget.                                                                                           
                                                                                                                                
She  explained   that  ATIF  projects  are   limited  to  capital                                                               
transportation  and  major  maintenance  projects.  The  proposed                                                               
constitutional amendment states that  the appropriations from the                                                               
fund must be used for  transportation and related facilities that                                                               
are designated by  law. In the enabling statutes  she proposed to                                                               
constrain the fund to only be  used on capital projects and major                                                               
maintenance. This  keeps the funds  functioning as  an additional                                                               
revenue stream to  what gets appropriated. The  difference in the                                                               
language  from  the  constitutional  amendment  to  the  enabling                                                               
statutes  will give  future legislators  the ability  to use  the                                                               
money  from this  fund for  operations  only in  times of  fiscal                                                               
shortfalls.  All the  legislature  would  have to  do  is make  a                                                               
statute  change,  which would  allow  the  fund  to be  used  for                                                               
operations.                                                                                                                     
                                                                                                                                
Further, she  explained that  anyone could  submit a  project for                                                               
consideration: the  state, a borough, the  unorganized borough, a                                                               
municipality, a  community or a  village. She said  she envisions                                                               
submission forms  with enough information  for the  commission to                                                               
rank the projects.  Every project would be  considered. The funds                                                               
available for federalized projects,  which are constrained to use                                                               
the federal  processes, could be no  more than 20 percent  of the                                                               
fund. This is to incentivize more state-funded projects.                                                                        
                                                                                                                                
REPRESENTATIVE P. WILSON showed a  graph of examples and repeated                                                               
that a statute  change could allow the fund to  be used for other                                                               
things. The  payout starts  at about $83  million the  first year                                                               
and then  $131 million  the second  year and rises  to a  rate of                                                               
about  $3.3  million  in  the   early  years.  She  reminded  the                                                               
committee that this  is $103 million in addition  to the existing                                                               
operating and capital budgets.                                                                                                  
                                                                                                                                
2:25:19 PM                                                                                                                    
She projected  that putting  in $2  billion now  will grow  to $5                                                               
billion  in 20  years. That  includes 50  percent of  the revenue                                                               
that had  been deposited over the  20 years. This is  what can be                                                               
expected  if the  other two  pieces of  legislation in  the other                                                               
body pass, she said.                                                                                                            
                                                                                                                                
2:26:35 PM                                                                                                                    
REPRESENTATIVE  P. WILSON  summarized that  the ATIF  would allow                                                               
Alaska  to plan  for  its  future and  get  rid  of the  deferred                                                               
maintenance  list;  it  would leverage  more  federal  funds  and                                                               
encourage more state  projects to be done; and  it would decrease                                                               
dependence on the federal dollars.                                                                                              
                                                                                                                                
It  would  increase  property values,  employment,  and  Alaskans                                                               
would see an increase in real  wages. It would reduce the cost of                                                               
production  and noncommercial  travel  time.  ATIF would  improve                                                               
access  to  the   state's  resources  and  reduce   the  cost  of                                                               
production  resulting   in  an  improved  quality   of  life  for                                                               
Alaskans. Alaska has a majority  of the nation's coast lines, but                                                               
has  significant   challenges  developing  and   maintaining  the                                                               
state's docks  and harbors for  access to fishing  resources. The                                                               
state  has world  class mineral  deposits but  few transportation                                                               
corridors to get  to those resources. ATF will  improve access to                                                               
those resources which will decrease the cost of production.                                                                     
                                                                                                                                
She  summarized  the  two major  issues:  declining  funds,  both                                                               
federal  and  state, and  an  aging  transportation system.  This                                                               
constitutional  amendment   needs  to  be  on   the  ballot  this                                                               
November; let the people decide, she concluded.                                                                                 
                                                                                                                                
2:30:14 PM                                                                                                                    
TOM  BRICE, lobbyist,  Alaska  Laborers,  Juneau, Alaska,  stated                                                               
that HJR  10 will  break down  some constitutional  barriers that                                                               
exist in terms of long term transportation projects for the                                                                     
state.                                                                                                                          
                                                                                                                                
2:31:31 PM                                                                                                                    
SARAH GEARY, Legislative Coordinator, Alaska Municipal League                                                                   
(AML), stated that HJR 10 will help the state be ready to                                                                       
maintain and build new infrastructure to meet future needs.                                                                     
                                                                                                                                
CHAIR EGAN found no further comments and held HJR 10 in                                                                         
committee.                                                                                                                      
                                                                                                                                
2:33:32 PM                                                                                                                    
CHAIR EGAN adjourned the Senate Transportation Standing                                                                         
Committee meeting at 2:33 p.m.                                                                                                  
                                                                                                                                

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