Legislature(2013 - 2014)HOUSE FINANCE 519
03/28/2013 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB23 | |
| HB4 | |
| HB112 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 23 | TELECONFERENCED | |
| += | HB 112 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 4 | TELECONFERENCED | |
HOUSE BILL NO. 23
"An Act relating to bonds of the Knik Arm Bridge and
Toll Authority; relating to reserve funds of the
authority; relating to taxes and assessments on a
person that is a party to an agreement with the
authority; and establishing the Knik Arm Crossing
fund."
1:54:28 PM
REPRESENTATIVE MARK NEUMAN, SPONSOR, communicated that HB
23 primarily worked on the Knik Arm Bridge and Toll
Authority (KABATA) and the effort to build a bridge across
Cook Inlet. The bill would allow a public-private
partnership to move forward.
Co-Chair Stoltze clarified that the bridge would cross Knik
Arm.
Vice-Chair Neuman confirmed that the bridge would cross
Knik Arm. He detailed that the bill would allow KABATA to
form a partnership with a private investor. The legislation
would also increase the authority of pass-through federal
bonds from $500 million to $600 million. He relayed that
his staff would provide a sectional analysis.
Co-Chair Stoltze noted that an extensive committee
conversation on HB 23 would occur at a subsequent meeting.
Vice-Chair Neuman discussed that the goal was to reduce
costs in safety corridors. He spoke to the danger of the
current highway systems and to the importance of reducing
traffic. He shared that the Mat-Su Borough had provided
information on future expansions into Point MacKenzie; the
information showed a prospective town-site plan in
anticipation of the bridge. The area was located north of
the 14 square mile industrial port where a potential
pipeline could run. He expounded that a rail spur would be
located in the area and modules for Prudhoe Bay were built
there as well. He pointed to new information from the
Department of Revenue (DOR) related to moral obligations.
He looked at the last page of a DOR letter and observed
that the commissioner had tremendous confidence in KABATA's
revenue projections and financial analysis. He discussed
earlier testimony by Representative Mike Hawker related to
the benefits of moving a project forward with private
sector help. He stated that the public-private partnership
was a new model being used across the United States to
provide increased funds for transportation projects; users
also paid for the projects.
1:58:57 PM
Vice-Chair Neuman emphasized the importance of the
legislation to his community and further west into the Mat-
Su region. He relayed that one of the goals was to turn
state resources into jobs for Alaskans.
Co-Chair Stoltze noted that a slideshow would not be
presented during the meeting.
REX SHATTUCK, STAFF, REPRESENTATIVE MARK NEUMAN, provided a
sectional analysis:
Section 1 repeals and reenacts AS 19.75.211(a).
Authorizes the authority to borrow money and issue
refund bonds on which the principal and interest are
paid out of and secured by (1) the gross revenue
derived from fees, rents, tolls, rates, charges, and
other revenue; (2) revenue received by a private
person or enterprise that has entered into a public-
private partnership agreement with the authority; or
(3) any revenue or money appropriated to the authority
for that purpose, except a state tax or license.
Section 2 raises the limit on the amount of aggregated
bonds the authority may issue to $600,000,000.
Section 3 adds a new subsection to AS 19.75.211 that
requires the authority to submit to the state bond
committee a description of the bond issue before
issuing bonds. The bonds may not be issued unless the
state bond committee finds that the revenue can
reasonably be expected to be adequate for payment of
principle and interest on the bonds.
Section 4 amends AS 19.75.221(h) to specify what must
be deposited in the reserve fund, which includes
revenue derived by the authority from fees, rents,
tolls, rates, charges, or other revenue appropriated
for that purpose; and other revenue available to the
authority.
Section 5 adds new subsections to AS 19.75.221.
Subsection (i) specifies the specific purposes for
which the money in the reserve fund can be used.
Subsection (j) allows the authority to transfer income
or interest earned by the reserve fund to other funds
or accounts of the authority as long as the transfer
does not reduce the reserve fund to less than the
reserve fund requirement. Subsection (k) specifies how
to value securities the fund is invested in to compute
the amount of the reserve fund. Subsection (1)
requires the chair of the board to notify the governor
annually of the amount required to restore the reserve
fund to the reserve fund requirement. Subsection (m)
defines "reserve fund requirement."
Section 6 amends AS 19.75.261 to exempt any real and
personal property, assets, income, or other interests
held by a private person or enterprise under a public-
private partnership from all ad valorem taxes on real
or personal property and special tax assessments of
the state or a political subdivision of the state.
Section 7 adds a new section, AS 19.75.345, that
establishes the Knik Arm Crossing fund.
Representative Gara asked whether there was a cap on the
reserve fund.
2:03:38 PM
Vice-Chair Neuman replied that the fund would be capped at
$150 million. He detailed that the governor's proposed
transportation plan included $10 million for the current
year and $35 million for the next four years.
Representative Gara asked whether the fund could go beyond
$150 million. He asked for the location in the bill.
Vice-Chair Neuman replied that it was not expected to reach
$150 million. He did not know whether there was a cap. He
noted that the KABATA board chair was available for
technical questions.
Co-Chair Stoltze noted there was not an effort to exceed
the $10 million appropriation [for the current year].
Vice-Chair Neuman agreed. He added that if the bill moved
forward, but the governor did not sign the contract, the
money would be returned to the general fund.
Representative Gara surmised that there was no cap [on the
reserve fund], but that people would be careful about the
amount. He pointed to past testimony by some stating that
the project could be short by $1.5 billion due to a lack in
toll revenue; he understood that KABATA disagreed with the
statement. He asked whether the state would be responsible
for making up the difference if tolls were not adequate to
cover the cost of bridge operation and construction in the
long-term.
MICHAEL FOSTER, CHAIR, BOARD OF DIRECTORS, KNIK ARM BRIDGE
AND TOLL AUTHORITY, replied in the affirmative. He added
that the funding would be subject to appropriation.
Representative Gara noted that the bill did not contain
language specifying that the state could owe the money. He
wondered if the moral obligation was related to how the
bonds worked.
Mr. Foster answered that the public-private partnership
financial plan model specified that KABATA was responsible
for making the availability payments. He explained that the
reserve fund would cover payments to the private developer
in the initial years when a shortfall in revenue would
occur. He expounded that the financial market was reliant
on the "subject to appropriation" language, specifying that
the state would secure any payments that KABATA could not
make.
2:06:53 PM
LARRY DEVILBISS, MAYOR, MAT-SU BOROUGH (via
teleconference), testified in strong support of the
legislation. He stated that every mayor in the Mat-Su
Borough supported the project. He discussed that the
community was in the process of laying out two town-sites
that would be located at the northern end of the project;
the location included new high school and middle school
projects. He stated that without the infrastructure from
KABATA the community was paying a price in blood. He
stressed that current transportation infrastructure needed
to be taken in a different direction because the fastest
growing areas were on the west side of the region. He was
shocked to see that the fatal injury rate per 100,000 miles
was 22.48 on the Knik Goose Bay Road compared to 17.3 on
the Parks Highway, 13.1 on the Turnagain Arm Highway, and
13.2 on the Seward Highway. He emphasized that the
infrastructure was needed for residents' safety. He
reminded the committee that the importance of the issue
went much further than the borough; the Alaska Municipal
League Conference of Mayors had voted in support of the
project the prior year.
Co-Chair Stoltze commented on the tragic [highway]
statistics from the Mat-Su Valley.
2:11:46 PM
DAN SULLIVAN, MAYOR, CITY OF ANCHORAGE (via
teleconference), spoke in support of the legislation. He
stated that the project would create over 1,000 jobs during
its construction phase. He discussed that people were
stranded when Glenn Highway closures occurred; the bridge
would provide an important alternate route. He communicated
that the Port of Anchorage was the primary state port,
which generated significant truck traffic through the
downtown area; the bridge would divert the traffic away
from downtown. He believed the reduction in truck traffic
would improve the quality of life in the city. He stated
that over 98 percent of Anchorage's developable land had
been developed; he believed the bridge would provide access
to new undeveloped land for commercial and residential use
in Mat-Su. He opined that a bridge with access to
developable land was a great economic development concept
in light of population growth in Mat-Su. He communicated
that with population growth in Anchorage and Mat-Su, the
Glenn and Parks Highways would be expanded; the projects
would cost billions of dollars. He believed accommodating
an alternate route that would provide toll revenue and
would not require highway expansions was a "win-win."
Representative Gara referred to Department of
Transportation and Public Facilities testimony that the
highway expansions would take place with or without the
bridge. Mr. Sullivan replied that a near-term expansion in
conjunction with the bridge may preclude another expansion
later on.
2:15:35 PM
VERNE RUPRIGHT, MAYOR, CITY OF WASILLA (via
teleconference), vocalized strong support for the
legislation. He spoke to population growth in the Mat-Su
region. He stated that the project would provide a second
route to and from Anchorage and would provide a shorter
trucking route from the Anchorage port to Fairbanks. He
mentioned the potential for heavier cargo and freight from
Point MacKenzie. He remarked that if the project had been
done over 30 years earlier it would have been significantly
less expensive. He opined that population growth in Alaska
would not let up. He believed that the expansion of the
Parks Highway corridor in tandem with the bridge would be
helpful. He stressed that wider and faster multilane
highways were not the answer as discovered in the Lower 48.
He stated that a bridge would save truckers time and would
open a better connectivity at a lower rate. He was unsure
how the financing would all work, but he believed the
project was needed for the state's economic health and
growth. He emphasized that the project would be a strategic
piece of infrastructure on an American national defense
level. The bill would tie Port of Anchorage and Mat-Su into
the Fairbanks area. He shared that the project would have
been stalled for an undetermined period if Wasilla had not
brought actions against the Anchorage Metropolitan Area
Transportation System (AMATS) in 2009.
Co-Chair Stoltze thanked Mr. Rupright for standing his
ground.
2:19:12 PM
SUSANNE DIPIETRO, SELF, ANCHORAGE (via teleconference),
spoke in opposition to the legislation. She suggested that
the bill was not about building the bridge, given that the
legislature had previously passed enabling legislation for
KABATA; the bill related to the financing mechanism for the
project. She believed Sections 4 and 5 of the bill took an
unprecedented and needless approach that would obligate the
state to cover unlimited shortfalls in the project
expenses. She detailed that the bill would create a reserve
fund to be funded by legislative appropriation and KABATA
would use the money to pay its debts and obligations to a
private partner. She referenced language in Section 5(l)
detailing that KABATA would tell the governor and
legislature the amount needed in the reserve fund on an
annual basis to cover debts. She noted that the language
may seem innocuous; however, it provided a pledge to
ratings agencies that the legislature would be responsible
for covering any debt due to insufficient revenues. The
markets would understand that the debts would be backed by
the state.
Ms. Dipietro acknowledged that the legislation did not
require the legislature to appropriate money annually;
however, a failure by the state to honor the moral
obligation would be treated as a default. Subsequently,
markets would downgrade the state's credit rating. She
cited a DOR letter to former Senator Joe Thomas warning
about the hazard (dated March 30, 2011, copy on file). She
believed passing the bill would set the state up for a
"Hobson's choice"; the legislature could refuse to
appropriate funds, which would result in damage to the
state's credit rating or it could continue to spend money
that the state may not be able to afford. She emphasized
that using a moral obligation reserve fund to cover
operating expenses had never been allowed in Alaska and
should not be allowed for the [KABATA] project. She
expounded that the project would greatly expand the
existing financial risk the state would be exposed to by
the project. She stressed that passing the bill could
create financial exposure that could cause rating agencies
to negatively respond when reviewing the state's credit
rating for future bonds. She pointed to existing statute
that currently allowed KABATA to create a reserve fund
without committing the legislature to continuous
appropriations for the life of the project. She urged the
committee to delete Sections 4, 5, and 7 of the
legislation.
2:23:39 PM
Representative Kawasaki noted that the letter mentioned by
Ms. DiPietro did not appear to be included in members'
packets. Ms. DiPietro believed the information had been
provided to committee members, but could follow up with the
letter.
Co-Chair Stoltze noted that the [DOR] letter would be
provided to the committee.
2:24:19 PM
AVES THOMPSON, EXECUTIVE DIRECTOR, ALASKA TRUCKING
ASSOCIATION, ANCHORAGE (via teleconference), testified in
support of the legislation on behalf of the association.
The organization believed the bridge would provide a needed
link to the Mat-Su area, that it would establish an
efficient freight corridor to Interior and northern Alaska,
and would offer a new route to the Port of Anchorage, which
would alleviate truck traffic in downtown Anchorage.
Additionally, the association hoped that the project would
provide congestion relief on the Glenn and Parks Highways.
Co-Chair Stoltze asked Mr. Thompson if he liked both SB 23
and HB 23. Mr. Thompson replied in the affirmative.
2:26:26 PM
PAUL GROSSI, LOBBYIST, IRON WORKERS OF ALASKA, spoke in
support of the legislation. The organization believed the
bill would provide jobs for Alaskans and would establish a
corridor towards development that would increase future
jobs. Additionally, the organization believed the project
was vital for [highway] safety. He told an anecdotal story
related to the highway; the organization's manager had been
stuck on the highway as a result of a closure due to a
police chase for over 8 hours. He urged the committee's
support for the bill.
Co-Chair Stoltze recalled the specific highway closure.
2:29:00 PM
TOM BRICE, ALASKA DISTRICT COUNCIL OF LABORERS, ANCHORAGE,
testified in support of the legislation on behalf of the
council. He cited safety concerns, the need for additional
access, and the opportunity for further economic
development as reasons for the council's support.
Representative Gara asked for verification that safety
concerns on Knik Goose Bay Road and other areas could be
alleviated by widening roads. Mr. Brice replied that
laborers generally appreciated expanding access throughout
Alaska including Lynn Canal Highway and Knik Arm.
Co-Chair Stoltze remarked that a right-of-way acquisition
related to the Palmer Wasilla Highway corridor had been
estimated to cost over $150 million.
2:31:31 PM
BOB FRENCH, SELF, ANCHORAGE (via teleconference), spoke in
opposition to the legislation. He stated that it was
important to keep in mind that the bill related to KABATA's
current financial plan that would require a moral
obligation of the state. He stated that the lack of a low
interest federal TIFIA [Transportation Infrastructure
Finance and Innovation Act] loan would result in higher
financing costs. He stated that the key missing piece of
information was how the factors and the accuracy of
KABATA's toll revenue predictions would result in some
unknown cost to the state. He remarked that a legislative
audit intended to provide guidance on the issue had not
been released to the public. He referred to a DOR letter
addressed to Senator Joe Thomas stating that the
authorization used in the legislation should be further
defined to eliminate the ability of a private party to
securitize the monetary obligations of KABATA. He noted
that DOR had come out with a Request for Proposal (RFP) in
January that was supposed to:
...review, verify, and confirm recommended financing
structures for the state's participation in the Knik
Arm crossing. The selected consultant will be
providing assistance to the state in comparative
financial analysis of certain aspects of the project's
financing proposals. It will advise on the impact of
the state finances by participating in the project and
advise on the most advantageous terms for the state's
participation.
Mr. French stated that unfortunately there had been a
protest of the bid award, which meant that the finance
committee would not receive the information unless the RFP
was reissued. He recommended waiting to hear the
legislation until KABATA had submitted a current financial
plan and independent, expert reviews were available.
2:34:37 PM
Representative Gara asked why the current financial plan
was different than the prior plan. Mr. French responded
that the current plan relied on $500 million in TIFIA
financing, which represented roughly half of the project
financing. He continued that when KABATA had been denied
the federal funding the prior year, the authority had been
told that if any federal money was provided that it would
be no more than 33 percent of the project's costs. He
furthered that as a result, at least $200 million in
funding would be missing. He stated that any other
financing option for the $200 million would result in
higher costs. He communicated that KABATA had testified in
prior meetings that the reserve fund could exceed the $150
million by $100 million or more due to the higher financing
costs. He believed the cost could be approximately $2.6
billion more.
2:36:15 PM
LOIS EPSTEIN, SELF, ANCHORAGE, testified in opposition to
the legislation. She stated that the proposed Knik Arm
bridge was not ready for construction and was not a
financially sound investment using the so-called innovative
financing mechanism. She relayed that it was not reasonable
to assume that the bridge would improve safety on
Southcentral roads; there were many ways to improve road
safety and building an additional road was not one of the
strongest solutions. She stated that the bridge's financial
plan showed KABATA receiving a $500 million low-cost
federal loan; however, it had not been approved for the
loan during its five prior attempts. She communicated that
the proposed toll was among the highest in the country;
therefore, many drivers would likely take the free Glenn
Highway alternative. She furthered that KABATA's toll
revenue forecasts were based on its consultant's projection
of Mat-Su population growth, which was far greater than
projections from other sources including DOR and the UAA
Institute of Social and Economic Research.
Ms. Epstein continued that its bridge revenue projections
were inconsistent with all other experts including AMATS.
She noted that KABATA's consultant put most future growth
in the western region of the borough, not in the
Wasilla/Palmer areas where most experts believed the most
growth would occur. She was disappointed that the state's
plan to conduct an independent audit of bridge toll revenue
was recently canceled. She relayed that any needed Glenn
Highway expansion could be toll-funded including levying
tolls only at peak times in order to spread out traffic;
electronic tolling could be used, which would prevent the
need for drivers to slow down.
Ms. Epstein pointed to a project cost of $2.6 billion and
noted there were substantial costs to the state that had
been unaccounted for by KABATA. She urged committee members
to spend time analyzing the project to ascertain how much
the project would cost the state on an annual basis. She
stressed that inaccurate traffic projections had resulted
in an annual subsidy of more than $2 million for the
Whittier tunnel, which was a much smaller toll project;
traffic had peaked in 2007. She emphasized that a subsidy
could reach $4 million per month. She accentuated that the
bridge was not a wise fiscally conservative investment and
that it would harm the state's transportation
infrastructure as a whole by syphoning away money that
would otherwise be spent on maintenance and upgrades to
existing roads and bridges.
2:39:52 PM
JAMES KENWORTHY, SELF, ANCHORAGE (via teleconference),
testified in opposition to the bill. He addressed the
state's liability in the project and pointed to Section 5
of the bill. He relayed that the state would have a moral
obligation and KABATA would annually certify how much
working capital it needed the legislature to appropriate to
the reserve fund; the state's credit rating would be
adversely impacted if the legislature did not appropriate
the money. He expected that the contingent liability would
cut the state's credit rating if the bill passed and a
contract was signed in the fall. He recommended obtaining a
DOR opinion in writing related to the effect of the
provision on the state's credit rating. He suggested
looking to other reserve fund legislation that included
language specifying that it did not include an obligation
of the state. He emphasized that HB 23 included the most
open-ended blank check of all reserve funds considered by
the state.
Mr. Kenworthy addressed the size of the cost related to the
project. He referenced a memorandum he had provided to
committee members (dated March 27, 2013, copy on file) that
documented a minimum cost of $2.6 billion. He stressed that
Wilbur Smith (the traffic consultant used by KABATA) had a
record on all of its national projects of overestimating
toll revenue by 118 percent; two projects in South Carolina
and California had gone bankrupt and others were having
their finances restructured. He believed the $600 million
extra to finance the bridge through a private party made no
sense; KABATA's August 2012 financial sheet showed that the
private partner would put in $72 million in equity and
would take out $737 million in cash flow. He stated that
the difference between the State of Alaska (which could
borrow long at less than 4 percent) and KABATA's estimate
(that they would finance at a 12 percent annual payment)
was $600 million sent outside the state.
Mr. Kenworthy continued that KABATA had 17,000 fewer jobs
than the Mat-Su Borough's current forecast. He relayed that
KABATA's forecasts assumed over 4 people per household,
while the actual number had been between 2.6 and 2.8. He
stated that KABATA's projection of 36,000 bridge trips per
day in 2035 was a result of inflated numbers including
larger families and more people. He noted that KABATA's
number was twice the amount projected by CH2MHill. He
concluded that the tolls would be off by a factor of 2. He
believed the legislature should wait to review the audit;
KABATA had a copy and comments were due on April 4, 2013.
Mr. Kenworthy spoke to how the project's liability compared
to other projects under consideration including a dam, the
pipeline, and other. He cautioned that the credit rating
hit would raise the price of other projects before the
upcoming year. He estimated that deficits were
approximately $55 million per year until 2035 and would
increase to $90 million per year due to substantial balloon
payments included in the availability payment. He stressed
that the deficits were more than the state was providing to
AMATS in Anchorage or to Mat-Su; therefore, the bridge
deficits would be more than the state aid. He wondered how
the issue would be sorted out. He wondered if the cost
would be put on the state debt service for allocation to
pay $3,500 over a 35-year period. He stressed the
importance of obtaining financial plan if the state was
considering financial guarantee. He relayed that the August
2012 plan contained four lanes of revenue and only two
lanes of cost. He believed the Legislative Finance Division
should review the information or the legislature should
wait for the release of a recent audit. He emphasized the
need for a financial plan that did not factor in TIFIA as a
loan source and that only included traffic from four lanes
of revenue when the cost of a four lane bridge was
included. He stated that showing four lanes of traffic on a
two lane bridge equated to an extra $1.9 billion.
Mr. Kenworthy concluded that the plan should be for a 9,200
foot bridge; estimates in 2007 had been conducted for an
8,200 foot bridge. He discussed a settlement with the
Municipality of Anchorage that would add costs to the east
approach road. He relayed that KABATA had not followed its
geotechnical consultant's advice to conduct more drilling
on the east side of the inlet; there was clay in the area
and it was not known how deep the pilings would need to be.
2:46:16 PM
Representative Gara was concerned about the potential state
liability related to toll revenue and the cost of
construction and operation. He wondered if Mr. Kenworthy
had an estimate and asked about his qualifications.
Mr. Kenworthy replied that KABATA's estimate for toll
revenue was $4.2 billion over 35 years. He pointed to his
memo and relayed that the figures had been volatile since
2007; the projection had been as high as $6 billion; it was
$4.8 billion in 2011. He stated that all other estimates
were half of the estimate. The second issue related to the
four lane/two lane financial calculations. He explained
that it was necessary to get the balance sheets to a
minimum bond-cover ratio of approximately 1.3 (i.e. $1.20
to $1.40 of revenue to cover $1.00 of cost); KABATA's
traffic studies showed over 22,000 trips per day. He stated
the number was much higher than capacity on a restricted
highway by 2026; there were four lanes of traffic with only
two lanes paid for through 2051.
Representative Gara asked for an estimate of the state's
moral obligation. Mr. Kenworthy estimated the figure to be
$2.6 billion, which he had provided in a paper titled "The
Real Cost of the Knik Arm Bridge." He pointed to $2.1
billion in KABATA's projected toll revenue that he did not
believe would come to fruition. He reiterated an issue
related to the projection for a four lane bridge. He
addressed the lack of a TIFIA loan that had been included
in KABATA's financial plan. He stated that TIFIA loans were
currently 3.2 percent; however, private market revenue
bonds were approximately 7 percent. He believed the bottom
line did not relate to the traffic or the TIFIA loan, but
to the fact that the bill would provide a complete state
guarantee to pay whatever KABATA communicates is necessary
to fund the availability payments under a 35-year contract.
He emphasized that the cost of the contract with the
consortium was not known; the current estimate was $2.7
billion and previous estimates on KABATA's balance sheets
had been up to $4 billion. He added that the state would
suffer a credit downgrade if it did not make up the
difference to the availability payments.
2:51:11 PM
DARCY SOLOMON, MEMBER, MAT-SU BOROUGH ASSEMBLY (via
teleconference), spoke in support of the legislation. He
believed that testimony against the bill contained
fallacies. He had been one of the original KABATA members.
He discussed vision that had been responsible for
developing infrastructure in the United States and in
Alaska. He recalled the vision to create a 360-degree
intermodal transportation corridor that would bring the
economies of Anchorage and Mat-Su together; the plan had
begun with Port MacKenzie. He stated that there was a
three-legged stool including the port, the rail spur to the
Interior, and the Knik Arm Bridge. He believed that numbers
presented by opposition did not take into consideration the
value of what the vision brought to Alaskan residents. He
emphasized that the people of Alaska overwhelmingly favored
the bridge. He discussed that former Senator Ted Stevens
had stated that the bridge could be built if Port MacKenzie
was constructed. He addressed transporting natural
resources from the Interior and bringing the workforce over
from Anchorage. He pointed to a 1,500 bed prison in the
area that was one-third full and employed 400 individuals.
He stressed that it was necessary to focus on the benefit
that the vision would bring and not the cost. He did not
believe prior testifiers had been in support of other
infrastructure projects including the rail spur. He opined
that the bridge would be explosive and worthy for Mat-Su,
Anchorage, and the North Star Borough. He emphasized that
the project would benefit the state. He stressed that the
project was one of the Mat-Su Borough's top priorities. He
believed the project would move the economy forward
exponentially.
2:56:36 PM
Co-Chair Stoltze CLOSED public testimony.
Representative Gara noted he had a question related to the
moral obligation. Co-Chair Stoltze communicated his
preference to have the discussion when there was more time.
Vice-Chair Neuman stated that none of the testifiers in
opposition to the bill were experts in traffic analysis. He
read from a DOR letter written by Commissioner Butcher
dated March 30, 2011 (copy on file):
Finally, you asked about by confidence in the revenue
projections and financial analysis provided by KABATA
in its March 1 TIFIA letter of interest. KABATA has
retained CITI, one of the largest and most successful
financial services firms in the world, especially as
it relates to government financing of infrastructure
projects, to develop its financial models. KABATA
retained Wilbur Smith, a firm that has advised on many
successful projects to do its traffic and toll models.
I am confident that the revenue projections and
financial analysis are objective and done to the
highest of professional standards. This is the type of
work that will be accepted and relied upon by the
institutional investors that may be interested in
financing this project.
Vice-Chair Neuman expressed emotion over misstatements that
he believed had been made. He discussed current financial
restraints and the search for ways to supplement and
diversify revenue. He stressed that the bridge development
would provide over $1 billion in private industry
investment and 1,500 jobs for the state. He remarked that
the state was close to $1 billion in deficit and pointed to
the increased number of people on food stamps. He stressed
that the number would continue to increase. He believed it
was important to do everything the state could to partner
with private industry to create jobs. He mentioned safety
issues.
Co-Chair Stoltze noted that the date on the DOR letter from
Commissioner Butcher should be changed from March 30, 2010
to March 30, 2011.
3:01:09 PM
Vice-Chair Neuman noted that the bill moved the project
forward to a final design and contractual agreements that
would be reviewed by the Departments of Revenue,
Transportation, and Law. He stated that road projects were
not typically brought back before the legislature for
approval; he believed that doing so would be time
consuming. He noted that the bill allowed the chief
executive under the Department of Law to ensure that the
state's interests were protected.
Co-Chair Stoltze stated that the bill would be revisited in
the near future.
HB 23 was HEARD and HELD in committee for further
consideration.
3:02:41 PM
AT EASE
3:22:06 PM
RECONVENED
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 23 2012 Gov TIFIA Letter of Interest (2).pdf |
HFIN 3/28/2013 1:30:00 PM |
HB 23 |
| HB 23 Common Myths of Knik Arm Crossing.pdf |
HFIN 3/28/2013 1:30:00 PM |
HB 23 |
| HB 23 Importance of Legislation for TIFIA Loan.pdf |
HFIN 3/28/2013 1:30:00 PM |
HB 23 |
| HB 23 KABATA Fact Slides.pdf |
HFIN 3/28/2013 1:30:00 PM |
HB 23 |
| HB 23 KABATA Summary of Legislation.pdf |
HFIN 3/28/2013 1:30:00 PM |
HB 23 |
| HB 23 Sponsor Statement.pdf |
HFIN 3/28/2013 1:30:00 PM |
HB 23 |
| HB 23 Testimony Opposition.pdf |
HFIN 3/28/2013 1:30:00 PM |
HB 23 |
| HB 23 Memo to House Finance Kenworthy.pdf |
HFIN 3/28/2013 1:30:00 PM |
HB 23 |
| HB23-KABATA House Finance Presentation (PDF).pdf |
HFIN 3/28/2013 1:30:00 PM |
HB 23 |
| HB23 Traffic Safety Corridors.pdf |
HFIN 3/28/2013 1:30:00 PM |
HB 23 |
| HB23 Pt. MacKenzie Townsite.pdf |
HFIN 3/28/2013 1:30:00 PM |
HB 23 |
| HB23 Answers to Recents Comments.pdf |
HFIN 3/28/2013 1:30:00 PM |
HB 23 |
| CS WORKDRAFT HB 4 FIN R.pdf |
HFIN 3/28/2013 1:30:00 PM |
HB 4 |
| HB 23 DOR Letter SB 80 dated 3-30-11.pdf |
HFIN 3/28/2013 1:30:00 PM |
HB 23 SB 80 |
| HB4-RCAbackground.pdf |
HFIN 3/28/2013 1:30:00 PM |
HB 4 |
| HB 112 Support.pdf |
HFIN 3/28/2013 1:30:00 PM |
HB 112 |
| HB 112 Letters-Opposition Pkt 1.pdf |
HFIN 3/28/2013 1:30:00 PM |
HB 112 |