Legislature(2009 - 2010)
04/13/2010 02:42 PM Senate TRA
| Audio | Topic |
|---|---|
| Start | |
| HB357 | |
| HJR42 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
SENATE TRANSPORTATION STANDING COMMITTEE
April 13, 2010
2:42 p.m.
MEMBERS PRESENT
Senator Albert Kookesh, Chair
Senator Linda Menard, Vice Chair
Senator Bettye Davis
Senator Kevin Meyer
Senator Joe Paskvan
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 357(FIN)
"An Act relating to the sale of land owned by the Alaska
Railroad that is not necessary for railroad purposes."
- MOVED CSHB 357(FIN) OUT OF COMMITTEE
CS FOR HOUSE JOINT RESOLUTION NO. 42(JUD)
Proposing amendments to the Constitution of the State of Alaska
creating a transportation infrastructure fund.
- MOVED SCS CSHJR 42(TRA) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 357
SHORT TITLE: AK RAILROAD CORP. LAND SALES
SPONSOR(s): REPRESENTATIVE(s) STOLTZE
02/19/10 (H) READ THE FIRST TIME - REFERRALS
02/19/10 (H) TRA
03/16/10 (H) TRA AT 1:00 PM CAPITOL 17
03/16/10 (H) Heard & Held
03/16/10 (H) MINUTE(TRA)
03/23/10 (H) TRA AT 1:00 PM CAPITOL 17
03/23/10 (H) Moved CSHB 357(TRA) Out of Committee
03/23/10 (H) MINUTE(TRA)
03/24/10 (H) TRA RPT CS(TRA) NT 5DP
03/24/10 (H) DP: MUNOZ, T.WILSON, GRUENBERG,
PETERSEN, P.WILSON
03/24/10 (H) FIN REFERRAL ADDED AFTER TRA
04/01/10 (H) FIN AT 1:30 PM HOUSE FINANCE 519
04/01/10 (H) Heard & Held
04/01/10 (H) MINUTE(FIN)
04/02/10 (H) FIN AT 1:30 PM HOUSE FINANCE 519
04/02/10 (H) Moved CSHB 357(FIN) Out of Committee
04/02/10 (H) MINUTE(FIN)
04/05/10 (H) FIN RPT CS(FIN) NT 4DP 4NR
04/05/10 (H) DP: THOMAS, AUSTERMAN, FAIRCLOUGH,
STOLTZE
04/05/10 (H) NR: GARA, DOOGAN, KELLY, N.FOSTER
04/05/10 (H) LETTER OF INTENT WITH FIN REPORT
04/07/10 (H) TRANSMITTED TO (S)
04/07/10 (H) VERSION: CSHB 357(FIN)
04/08/10 (S) READ THE FIRST TIME - REFERRALS
04/08/10 (S) TRA, FIN
04/13/10 (S) TRA AT 1:00 PM BUTROVICH 205
BILL: HJR 42
SHORT TITLE: CONST. AM: TRANSPORTATION FUND
SPONSOR(s): TRANSPORTATION
02/05/10 (H) READ THE FIRST TIME - REFERRALS
02/05/10 (H) TRA, JUD, FIN
02/09/10 (H) TRA AT 1:00 PM CAPITOL 17
02/09/10 (H) Moved Out of Committee
02/09/10 (H) MINUTE(TRA)
02/10/10 (H) TRA RPT 6DP 1NR
02/10/10 (H) DP: JOHANSEN, MUNOZ, JOHNSON, T.WILSON,
PETERSEN, P.WILSON
02/10/10 (H) NR: GRUENBERG
02/17/10 (H) JUD AT 1:00 PM CAPITOL 120
02/17/10 (H) Heard & Held
02/17/10 (H) MINUTE(JUD)
02/22/10 (H) JUD AT 1:00 PM CAPITOL 120
02/22/10 (H) -- MEETING CANCELED --
03/01/10 (H) JUD AT 1:00 PM CAPITOL 120
03/01/10 (H) Moved CSHJR 42(JUD) Out of Committee
03/01/10 (H) MINUTE(JUD)
03/04/10 (H) JUD RPT CS(JUD) 1DP 4NR
03/04/10 (H) DP: LYNN
03/04/10 (H) NR: GRUENBERG, HERRON, DAHLSTROM,
RAMRAS
04/10/10 (H) FIN AT 9:00 AM HOUSE FINANCE 519
04/10/10 (H) Moved CSHJR 42(JUD) Out of Committee
04/10/10 (H) MINUTE(FIN)
04/11/10 (H) FIN RPT CS(JUD) 3DP 7NR
04/11/10 (H) DP: FAIRCLOUGH, AUSTERMAN, KELLY
04/11/10 (H) NR: THOMAS, GARA, DOOGAN, JOULE,
N.FOSTER, STOLTZE, HAWKER
04/12/10 (H) TRANSMITTED TO (S)
04/12/10 (H) VERSION: CSHJR 42(JUD)
04/13/10 (S) TRA AT 1:00 PM BUTROVICH 205
WITNESS REGISTER
REPRESENTATIVE BILL STOLTZE
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Sponsor of HB 357.
WENDY LINDSKOOG, Vice President of Corporate Affairs
Alaska Railroad Corporation
POSITION STATEMENT: Testified that HB 357 highlighted concerns
that customers have with ARRC, but that the model is worth
protecting.
JEFFREY DAVIES, President
American Federation of Government Employees
Alaska Railroad Workers Local 183
POSITION STATEMENT: Testified in opposition to HB 357.
JOHN COOK, Board of Directors
Alaska Railroad Corporation
POSITION STATEMENT: Highlighted potential problems associated
with HB 357.
PETER MACKSEY, Customer Relations
Steelfab
Anchorage, AK
POSITION STATEMENT: Testified in support of HB 357.
CARL ANDERSON, Owner
Cook Inlet Tug and Barge
Anchorage, AK
POSITION STATEMENT: Testified in support of HB 357.
MARK STEARNS
Alaskan Wood Molding
Anchorage, AK
POSITION STATEMENT: Testified in support of HB 357.
MARK HICKEY, representing himself
Juneau, AK
POSITION STATEMENT: Testified in strong support of HJR 42.
SHIRLEY MARQUARDT, Mayor
City of Unalaska and
2nd Vice President, Alaska Municipal league and
Board of Directors, Southwest Alaska Municipal Conference
POSITION STATEMENT: Testified in strong support of HJR 42.
KATHY WASSERMAN, Executive Director
Alaska Municipal League
Juneau, AK
POSITION STATEMENT: Provided supporting information to HJR 42.
LOIS EPSTIEN, Director
Alaska Transportation Priorities Project and
Alaska Licensed Engineer
POSITION STATEMENT: Testified in support of HJR 42.
DAVID LEVY, Executive Director
Alaska Mobility
POSITION STATEMENT: Testified in support of HJR 42.
JOHN MACKINNON, Executive Director
Associated General Contractors of Alaska
POSITION STATEMENT: Testified in support of HJR 42.
DAVE CRUZ, President
Associated General Contractors of Alaska
POSITION STATEMENT: Testified in support of HJR 42.
FRANK RICHARDS, Deputy Commissioner
Department of Transportation and Public Facilities (DOTPF)
POSITION STATEMENT: Provided information related to HJR 42.
ACTION NARRATIVE
2:42:07 PM
CHAIR ALBERT KOOKESH called the Senate Transportation Standing
Committee meeting to order at 2:42 p.m. Present at the call to
order were Senators Meyer, Davis, and Kookesh. Senators Menard
and Paskvan arrived soon thereafter.
HB 357-AK RAILROAD CORP. LAND SALES
CHAIR KOOKESH announced the consideration of HB 357. [CSHB
357(FIN) was before the committee.]
2:42:59 PM
REPRESENTATIVE BILL STOLTZ, sponsor of HB 357, presented the
bill speaking to the sponsor statement:
To spur economic development throughout the state,
House Bill 357 adds a fourth clause to the existing
language governing how the Alaska Railroad Corporation
(ARRC) may dispose of land. House Bill 357 will enable
the railroad to sell land that is not needed for
essential railroad purposes. This bill does not ask
for any irresponsible disposal of land, as the sale
must be initiated by the board of directors on two
conditions. The first condition is that the land is
not essential to railroad operations, and the second
condition is that the sale is in the best interest of
the state of Alaska.
As support has shown, current leaseholders are very
unhappy with the inability to purchase their leased
properties from the railroad. In general real estate
dealings, private purchases are made in mutually
beneficial sales. House Bill 357 encourages these
sales after determination by the board of directors of
the railroad looks at each sale with the overall
benefit to the state of Alaska as the key driver. Not
only will the private sector benefit from this
addition to state law, the railroad will also have
increased ability to make decisions regarding their
overall real estate portfolio.
The sale and relationship of private and public lands
are vital to the economic growth of the state of
Alaska. I ask for your consideration and support of
House Bill 357 to promote Alaskan growth through the
diversification of land ownership, increasing the tax
base of the state, and encouraging responsible
development of Alaskan land.
REPRESENTATIVE STOLTZE clarified that any leasehold sales would
be permissive and considered on a case-by-case basis.
2:46:23 PM
SENATOR PASKVAN joined the meeting.
REPRESENTATIVE STOLTZE told the committee that ARRC Board Chair,
John Binkley, has taken a leadership role in acknowledging that
there have been problems in the way the railroad has dealt with
communities and lessees. HB 357 would help to keep the
conversation going, he said. In conclusion he restated that the
bill is permissive and provides opportunities that don't
currently exist.
2:49:34 PM
SENATOR MENARD asked if the current leaseholders would receive
priority if the railroad decided to sell its land.
REPRESENTATIVE STOLTZE replied the bill specifies that current
leaseholders would have first right of refusal, but it's a
policy issue that is debatable.
SENATOR MENARD said she is torn because, although the lessees
have a stake, it makes good business sense for the land to go to
the highest bidder.
REPRESENTATIVE STOLTZE replied it's debatable, but he opted to
protect leaseholder's time and money investments, some of which
go back over 50 to 60 years.
CHAIR KOOKESH asked if this simply adds a fourth option
governing how the railroad may dispose of its land.
REPRESENTATIVE STOLTZE confirmed that the bill was written to
reflect that intent.
2:52:06 PM
SENATOR PASKVAN said he understands that the bill was written to
give current leaseholders the right to match the highest bid.
REPRESENTATIVE STOLTZE responded that he believes it was written
that way.
SENATOR PASKVAN expressed concern about unduly delaying the
transaction and asked if there would be a limit on the time the
leaseholder would have to meet the high bid.
REPRESENTATIVE STOLTZE said he believes that would be up to the
railroad, but he believes ARRC would act in good faith.
SENATOR PASKVAN said he tends to agree with the sponsor. It
would be in ARRC's best economic interest to act in good faith
in these transactions.
2:55:18 PM
SENATOR MENARD asked if the railroad would argue for the status
quo since it gets eight percent annual return from its leased
land.
REPRESENTATIVE STOLTZE clarified that the proceeds would stay
with the railroad and he believes ARRC could make an eight
percent return on its money. The agency is unencumbered and
outside the Executive Act, and in some instances it should lower
interest rates to help certain small communities. It's not
always about making the most on every dollar, he said.
SENATOR MENARD complemented Representative Stoltze for his due
diligence.
2:58:15 PM
SENATOR MEYER asked him to elaborate on what would happen to the
proceeds from the sale of the land.
REPRESENTATIVE STOLTZE said this legislation clarifies that the
proceeds stay with the railroad and could only be spent in
increments as interest accrues.
SENATOR MEYER asked if he's heard that the passage of this bill
could impact the railroad's bond rating.
REPRESENTATIVE STOLTZE said he hasn't heard that and isn't sure
how a permissive activity that may not happen could affect the
rating. It begs the question of why some people are working so
hard to kill the bill, he added.
3:01:09 PM
CHAIR KOOKESH asked if this bill could force the railroad to
sell land.
REPRESENTATIVE STOLTZE said no; it's a gentle nudge.
CHAIR KOOKESH observed that the railroad's concern seems to
hinge on the language that says the money in the account may be
appropriated.
REPRESENTATIVE STOLTZE explained that an amendment in the House
Transportation Committee substituted the word "use" for
"appropriated" but legislative legal said that to comply with 45
U.S.C. 1207(a)(5)Alaska Railroad Transfer Act of 1982),
"appropriated" was the right language.
CHAIR KOOKESH asked for clarification that the language was
changed on the advice of legislative legal counsel; there was no
intention to do harm.
REPRESENTATIVE STOLTZE said that's correct.
3:03:12 PM
WENDY LINDSKOOG, Vice President of Corporate Affairs, Alaska
Railroad Corporation, thanked the sponsor for introducing HB 357
and bringing to light some of the frustrations that leaseholders
have had with ARRC. She assured the committee that ARRC is
discussing ways to address those concerns and is working to
improve customer relations with its leaseholders. Real estate
revenues are the bread and butter of the railroad and a vital
part of what has made ARRC a successful operating entity. The
model that allows ARRC to lease land is excellent and worth
protecting, she said.
MS. LINDSKOOG said that it has never been the railroad's
practice to sell land and there is concern that this bill will
create an expectation that that practice may change. This may
further frustrate customers, she said. Ms. Lindskoog referenced
a letter to legislators from John Binkley articulating those
concerns. She said she appreciates that Representative Stoltze
clarified that his intent is not to mandate land sales because
the board wouldn't necessarily take that path if this bill were
to pass.
MS. LINDSKOOG informed the committee that the concern that was
raised by ARRC's bond counsel centered on the word
"appropriate." She noted that Bill O'Leary, acting CEO and CFO,
could answer questions in regard to that potential problem. In
conclusion she said, "We do understand this doesn't require the
railroad to sell land, it is permissive at this point."
3:07:59 PM
CHAIR KOOKESH asked if she would greatly object if the committee
passed the bill as currently drafted. There is no requirement;
the bill simply provides the railroad a fourth option for
disposing of land.
MS. LINDSKOOG replied they could live with it because the bill
is permissive and does not require action.
SENATOR PASKVAN noted that the last sentence of the bill
contains the word "appropriated" and a reference to federal law
and asked if compliance to that federal law is compulsory for
ARRC.
MS. LINDSKOOG declined to answer a legal question and referenced
a legal memo from the ARRC's general counsel that strongly
recommended substituting another term for "appropriated" in the
legislation. The terms "retained and managed" [and "used"] were
suggested as viable alternatives. "Maybe it's just one of those
instances where our legal team at the railroad has a little bit
different take on the issue than the legislative legal team,"
she added.
SENATOR PASKVAN pointed out that any language the state might
use would be preempted if 45 U.S.C. 1207(a)(5)is compulsory on
the railroad.
3:10:31 PM
JEFFREY DAVIES, President, American Federation of Government
Employees, Alaska Railroad Workers Local 183, said he represents
350 employees who are concerned about the effect that HB 357
might have on the railroad's ability to continue as a self-
sufficient operation. In 2009 ARRC had to lay off many needed
positions in response to rising operational costs and without
real estate revenue to offset operational shortfalls the impact
could have been greater, he said. The employees he represents
believe these are necessary assets that continue to serve as
intended. The model works; changing it could create uncertainty
or lessen job stability and reduce the benefits that Alaskan
jobs provide, he said.
3:13:07 PM
JOHN COOK, Board of Directors, Alaska Railroad Corporation, said
he has a background in real estate development. He thanked the
sponsor for introducing the bill and said it's brought to light
some communication problems that ARRC has with the leaseholders.
He's new to the board and welcomes discussion, but he does have
certain concerns about the unintended consequences of this bill.
The first relates to the right of first refusal because it will
have the overall affect of depressing market rates.
The second concern is that developers would potentially lease
pieces of property and then attempt to purchase and subdivide
that property. That may be the property's highest and best use,
but just that one person would garner the profit instead of all
Alaska residents. He said he can also see situations where the
lessee would ask to purchase the property under the right of
first refusal and have a preexisting agreement to sell to the
developer for a profit when the title vests.
3:16:56 PM
PETER MACKSEY, Customer Relations, Steelfab, stated support for
HB 357. He related that this family-owned business has been on
the same ten-acre site for about 60 years. They pay taxes on the
property, which would be tax free if the railroad didn't lease
it. He noted that less than one percent of the land in Alaska is
in private hands and he thinks that this is a chance to allow a
viable business to expand. He expressed the view that the
railroad seems to act like a state agency when it suits them and
a private company when it doesn't. HB 357 doesn't push the
railroad into selling its leasehold land, it offers the option.
3:19:57 PM
CARL ANDERSON, Owner, Cook Inlet Tug and Barge, said the company
has been in the family since 1938. He is concerned that the
railroad is in the transportation business, but when times are
tough it can apply for subsidies or stimulus funds or raise
rates. These options aren't available to other transportation
companies, he said.
3:21:28 PM
MARK STEARNS, Alaskan Wood Molding, said he has been a
leaseholder since 2001 and in that time his effective costs have
increased from about $10,000 per year to $42,000 per year.
Leaseholders have no recourse when the railroad decides to levy
increases. HB 357 would provide some certainty and make it
reasonable to make further investments in their buildings. Until
recently his company was told that extending the lease wasn't
possible, which hindered any desire to make improvements and the
ability to get bank loans. He described the bill as a win-win
for the railroad and its leaseholders.
3:25:01 PM
REPRESENTATIVE STOLTZE reiterated that the bill is permissive.
It's spurred by a desire to be responsive to the majority of
Alaskans who aren't involved with the railroad.
CHAIR KOOKESH closed public testimony and asked the will of the
committee.
SENATOR MENARD moved to report HB 357 from committee with
individual recommendations and attached fiscal note(s).
REPRESENTATIVE STOLTZE commented that it's puzzling that the
railroad submitted an indeterminate fiscal note given that it
isn't under the Executive Budget Act. The result is that it has
a finance committee referral.
3:27:58 PM
SENATOR MEYER objected to state that he too is puzzled by the
fiscal note. He suggested that to avoid a finance referral the
committee could zero out the indeterminate part of the fiscal
note.
CHAIR KOOKESH opposed the suggestion.
SENATOR MEYER removed his objection.
CHAIR KOOKESH announced that without further objection, CSHB
357(FIN) moved from the Senate Transportation Standing
Committee.
HJR 42-CONST. AM: TRANSPORTATION FUND
CHAIR KOOKESH announced consideration of HJR 42. [CSHJR 42(JUD)
was before the committee.]
3:30:54 PM
REPRESENTATIVE PEGGY WILSON, sponsor of HJR 42, said the Alaska
Transportation Infrastructure Fund (ATIF) requires three pieces
of legislation to put it into practice. HJR 42 is the first
piece. It will put a constitutional amendment before the voters
to allow a dedicated transportation fund. The enabling
legislation, which will be taken up later, defines how the fund
will be used and how the appropriations will be disbursed. The
third piece is to appropriate seed money into the fund.
In FY10 Alaska received 87 percent of its transportation funding
from the federal government, which is more per capita than any
other state. This is not likely to continue under the new
federal highway authorization bill, she said. In any event,
state-funded projects that meet the same construction standards
can be done faster and cheaper because state requirements are
less stringent.
REPRESENTATIVE PEGGY WILSON told the committee that during the
interim the House transportation committee met and looked at
ways to improve the transportation infrastructure in this
geographically diverse state. This involved travel to villages
and urban areas to look at transportation challenges, safety
corridors, congested areas, and roads in need of repair. The
committee also heard from the Alaska Municipal League and the
Mat-Su Borough about jointly contracting an independent study on
the fiscal challenges associated with transportation. She noted
that Larry Persily also completed a study on the fiscal options
for funding infrastructure upgrades. Day-long hearings were held
to highlight issues and pose potential solutions.
3:34:09 PM
REPRESENTATIVE WILSON reminded the committee that the
constitution grandfathered in two transportation funds: one for
roads and one for water and harbors. She said she believes that
it's time to reinstate a dedicated transportation fund to
address the state's transportation needs. With a dedicated fund
it will be clear exactly what funds are available from year-to-
year for capital projects and major maintenance. For these
reasons I think the voters will vote to reinstate a dedicated
fund for transportation, she said.
CHAIR KOOKESH asked for a motion to adopt the proposed committee
substitute (CS).
SENATOR MEYER moved to adopt the work draft Senate CS for CS for
HJR 42, labeled 26-LS1411\T, as the working document. There
being no objection, version T was before the committee.
REBECCA ROONEY, staff to Representative Peggy Wilson, explained
three changes between the bill versions, one of which is
substantive. The current version T has a small language change
beginning on page 1, line 15, to clarify that the revenue would
go into the fund after July 1, 2011 even though the enabling
legislation isn't as yet following.
On page 2, line 1, the phrase "provided by law" is in a
different position in the sentence to clarify that it applies
just to the special registration fees provided by law and not
all registration fees provided by law.
The substantive change occurs on page 2, lines 4-5 and relates
to the annual appropriation to the fund. The version that passed
the House said, "…the legislature may appropriate a percentage
of the average market value of the fund" each year. The Senate
CS says, "…the legislature may appropriate a percentage of the
state fuel taxes and registration fees received by the fund in
that year and a percentage of the average market value of the
fund…".
MS. ROONEY directed attention to a spreadsheet in the packet
showing two scenarios. Scenario 1 shows a $1 billion initial
appropriation, the annual appropriations, and the revenues
realized from the vehicle registration fees and the motor fuel
tax. Scenario 2 shows what happens if you allow for expenditures
of 50 percent of those fuel taxes and vehicle registration fees
each year. This demonstrates the importance of appropriating
more up front, she said.
3:40:23 PM
SENATOR PASKVAN expressed a desire to see a table showing just
the revenue coming from the fees. He said he wonders what policy
concerns might arise out of allocating $1 billion that can't be
touched.
MS. RAINEY said she would provide that information.
3:41:48 PM
SENATOR MEYER asked what would happen to the appropriation if
the fuel tax was repealed as it was two years ago.
REPRESENTATIVE WILSON said in that event just the vehicle
registration fees would be appropriated. But for this to really
work, it's important to seed the fund initially, she added.
SENATOR MEYER said he supports the bill, but he worries that
that there might be pressure on the Legislature to increase the
fuel tax in order to get more money into the fund.
REPRESENTATIVE WILSON said a future Legislature may look at
that, but the federal government will be providing less revenue
for transportation in the future so it's important to start
planning for that. This is the best way we could think of to
start that process, she said.
3:45:31 PM
MARK HICKEY, representing himself, stated that he is a former
commissioner of transportation and he strongly supports HJR 42.
He related that he has worked on this measure in one form or
another since the mid '80s. He agreed with the sponsor that
Alaska had this dedicated fund at statehood; but when the fuel
tax was raised in the '60s the Department of Law (DOL) advised
that changing the rate of taxation did away with the dedication.
Based on that advice, the accompanying statute that said that
these funds shall be used for highway and harbor purposes was
amended to say that the funds may be used for those purposes.
MR. HICKEY said that since that time DOL's advice has been shown
to be incorrect. In fact, in the mid 90s the tobacco tax was
increased in the dedicated school fund and that has never been
challenged. It's clear that the constitution framers did not
intend for there to be a need for this measure and it's also
clear that the Legislature in 1960 didn't intend as a policy to
eliminate the dedication, he said. That Legislature thought it
had no choice.
MR. HICKEY said changing the constitution to allow a dedicated
fund isn't done lightly. To his knowledge the permanent fund is
the only one that's been established since statehood. He said
that it's been shown that for transportation there are strong
arguments in favor of doing this. There is a strong
understanding in the public that these are user fees and that as
needs increase there may be a need to do something different
with user fees. In the '90s there was a proposal to increase the
fuel tax and the polling showed that over 70 percent of Alaskans
supported an increase if the funds were dedicated. They did not
support the increase without an assurance that the funds would
be used for transportation purposes.
MR. HICKEY noted that Alaska is the only state that doesn't have
a state-funded transportation program. HJR 42 provides that
ability. This would be most helpful to small rural projects and
would keep federal dollars for larger projects.
Responding to questions raised earlier, he said it's important
to understand that the fuel tax was suspended and not
eliminated. The record from the Constitutional Convention
indicates that if this measure passes and then the Legislature
eliminated the tax, the dedication would be lost. "I think it's
clear from the record that a suspension probably wouldn't do
that," he said. Referring to Senator Meyer's question he said he
believes that the public would support a fuel tax increase if
the funds were dedicated.
3:51:57 PM
SHIRLEY MARQUARDT, Mayor, City of Unalaska; Second Vice
President, Alaska Municipal league (AML); and board of
directors, Southwest Alaska Municipal Conference, said the
conference passed a resolution in support of this type of stable
funding for the infrastructure needs across the state. AML has
made this a top priority for several years. She related that the
City of Unalaska has a five-year capital budget plan and if
funding opportunities for projects are up in the air, it is
extremely risky and potentially expensive to go through the
permitting and design process. In the past the city have spent
over $1 million on design for roads and then not received
funding, she said.
3:53:43 PM
KATHY WASSERMAN, Alaska Municipal League (AML), informed the
committee about of the caliber of persons who were involved in
the study that the sponsor mentioned. They had two prior
commissioners of transportation on the study, which was funded
by AML, the Municipality of Anchorage, Mat-Su Borough, the
Alaska Truckers Association, and the Alaska General Contractors,
she said. This is an issue that has been under work for many
years and the people who conducted the study were knowledgeable.
Everyone who has been involved with these organizations has
spent time in Washington D.C. and could see the writing on the
wall a couple of years ago that Alaska is in deep trouble and
will be one of the states that suffers mightily.
3:55:04 PM
LOIS EPSTIEN, Alaska licensed engineer and Director, Alaska
Transportation Priorities Project (ATPP), said ATPP works with a
wide variety of organizations to promote sensible transportation
policies in Alaska. ATTP supports addressing the upcoming
decline in federal transportation money by creating a
transportation infrastructure fund. However, the language in HJR
42 could mislead the public into thinking that only capital
projects would be covered by the fund. ATPP supports this
legislation if the language is amended to clarify that money
from the fund could be used for major maintenance projects, she
concluded.
3:56:53 PM
DAVID LEVY, Executive Director, Alaska Mobility Coalition,
stated support for HJR 42. He said the mobility coalition is a
private nonprofit that advocates for public and community
transportation statewide. He echoed the comments of Mark Hickey
and described HJR 42 as a creative way to deal with capital and
maintenance transportation challenges statewide.
3:58:27 PM
JOHN MACKINNON, Executive Director, Associated General
Contractors of Alaska (AGCA), said AGCA, which represents over
650 Alaska businesses, supports HJR 42. This would put a
constitutional amendment question before the voters to provide
dedicated revenue for a transportation infrastructure fund. This
has been a priority of the AGCA for many years, he said. The
proposed fund would encompass all modes of transportation
infrastructure, including maintenance. The collection of fuel
taxes and vehicle registration fees directed into the fund is
commensurate to a user-fee concept. The public understands and
can support user fees as opposed to general taxation going into
a general fund. He restated support for the legislation as well
as the amended language in the committee substitute.
3:59:54 PM
DAVE CRUZ, President, Associated General Contractors of Alaska,
stated full support for HJR 42 as a step in the right direction
for Alaska to take control of its destiny.
4:00:27 PM
SENATOR PASKVAN asked his thoughts on the suggestion to amend
the language to include maintenance as opposed to just capital
projects.
MR. CRUZ expressed the view that maintenance should be included
as opposed to building a road with state funds and then trying
to get federal funds to maintain it.
SENATOR MENARD noted that the suggestion was for "major
maintenance" and asked if there is a specific dollar amount over
which a maintenance project becomes a major maintenance project.
4:01:34 PM
MR. CRUZ declined to state a threshold without consulting with
members.
4:02:13 PM
FRANK RICHARDS, Deputy Commissioner, Department of
Transportation and Public Facilities (DOTPF) explained that
DOTPF is routinely funded for major maintenance activities under
the capital program. This includes deferred maintenance and
major bridge maintenance. Regular maintenance efforts are
undertaken under annual operating costs. He stated the belief
that it was the intent of the sponsor that HJR 42 would
establish an infrastructure fund for capital projects that would
include major reconstructions, major rehabilitation, and other
major maintenance efforts.
SENATOR MENARD asked what would be included in a minor
maintenance project.
MR. RICHARDS replied those would be the things that are done on
an annual basis including sweeping streets, sealing cracks, and
changing streetlight bulbs.
4:03:47 PM
SENATOR PASKVAN said if he would support amending the language
to specifically include major maintenance.
MR. RICHARDS said he believes that it's a policy call by the
Legislature that in the regular annual appropriations DOTPF
normally receives capital project funds for major maintenance.
The current language is sufficient.
CHAIR KOOKESH summarized that Mr. Richards believes that the
phrase "capital projects" on page 2, line 6, would include major
maintenance. He asked Representative Peggy Wilson to comment.
REPRESENTATIVE PEGGY WILSON stated her belief that the current
language is sufficient to include major maintenance, but she
wouldn't object to inserting "major maintenance" on page 2, line
6, following "transportation". If it would reassure the voters
it might be a good idea, she said.
CHAIR KOOKESH said, based on the testimony from DOTPF, he is
satisfied with the current language.
SENATOR PASKVAN concurred.
CHAIR KOOKESH closed public testimony and asked the will of the
committee.
4:07:26 PM
SENATOR PASKVAN moved to report Senate CS for CS for HJR 42,
version T, from committee with individual recommendations and
attached fiscal note(s). There being no objection, SCS CSHJR
42(TRA) moved from the Senate Transportation Standing Committee.
There being no further business to come before the committee,
Chair Kookesh adjourned the meeting at 4:07 p.m.
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