Legislature(2011 - 2012)HOUSE FINANCE 519
04/05/2011 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB197 | |
| HCR9 | |
| HB173 | |
| HB30 || HB31 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 30 | TELECONFERENCED | |
| *+ | HB 31 | TELECONFERENCED | |
| + | HB 197 | TELECONFERENCED | |
| + | HB 173 | TELECONFERENCED | |
| + | HCR 9 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 30
"An Act relating to the transportation infrastructure
fund, to local public transportation, to the municipal
harbor facility grant fund, to motor fuel taxes, to
the motor vehicle registration fee, to driver's
license fees, to identification card fees, to the
studded tire tax, and to the vehicle rental tax; and
providing for an effective date."
HOUSE BILL NO. 31
"An Act making a special appropriation to the
transportation infrastructure fund; and providing for
an effective date."
2:40:52 PM
REPRESENTATIVE PEGGY WILSON, SPONSOR, addressed HB 30. She
offered her sponsor statement:
HB 30 will define the Alaska Transportation
Infrastructure Fund (ATIF), how it will be funded and
where the funds will be spent.
The roads, bridges, airports, ferries and other
transit systems that make up our state's
transportation system are essential to mobility,
commerce and economic development. These systems
increase safety, enhance economic competitiveness, and
lead to a better quality of life. To ensure Alaska has
the infrastructure necessary to develop our resources
as well as improve the living conditions for our
citizens we must commit to funding transportation.
Having a dependable revenue stream from year to year
will allow Alaska to manage current congestion and
maintenance projects as well as develop access to
needed resources and energy.
Additionally the use of state funds for construction
means we will have greater control and funding will go
towards completing projects as opposed to the
expensive and lengthy federal process. Anchorage has
benefited from the use of state funds and has seen
projects such as the McGraw Intersection and Dowling
Street Extension get done faster and cheaper than they
would have using the federal guidelines.
In FY10, 87 percent of our transportation budget came
from the federal government. There have been several
major deposits to the Federal Highway Fund to keep the
expired federal transportation reauthorization program
going. After 2 years we are still operating under the
old reauthorization guidelines. All indicators show
that the new reauthorization bill will be unfavorable
for states with small populations due to an emphasis
on mass transit and green transportation. It favors
toll roads and bridges and other transportation that
pays for itself or that can be supported with a public
private partnership. Our own DC delegation have told
the legislature that Alaska needs to rely less on the
federal government and start shouldering some of the
burden of improving our transportation infrastructure.
HJR 4 will put an initiative before the voters to
change the Alaska State Constitution to allow a
dedicated fund for Transportation Projects. With
passage of the initiative, HB 30 will define the fund.
It will outline how the fund will be managed, how the
earnings will be spent and who will decide which
projects will be funded each year.
The fund will be seeded with a $1B endowment. In
addition to the endowment ATIF will receive the
revenue generated from fuel taxes, vehicle
registrations, driver's license and identification
card fees, studded tire tax, and vehicle rental taxes.
One half of these revenues will be available each year
for appropriation. The other half will be deposited
into the fund to both grow the fund and inflation
proof it. In addition, six percent of the market value
(POMV) of the fund will be available for
appropriation. The Department of Revenue will be
charged with administering the fund. The Legislature
should be able to appropriate approximately ~$100M the
first year and then grow the appropriation about $1.5-
2M per year after that.
HB 30 will create an advisory council to evaluate the
project submissions. The council is comprised of 17
voting members, 1 Department of Transportation /Public
Facilities employee, 11 from transportation affiliated
associations and 1 from native organization and 4
public members and 2 non-voting members of the
legislature. The four members of the public will be
appointed by the governor. The members representing
organizations will be appointed by their respective
organizations.
Alaska DOT/PF will be required to create a set of
criteria to rank the projects. The panel will use
these criteria to give each project a numeric score to
be used in prioritizing the projects. These
prioritized projects will go through the normal
budgetary cycle each year for final authorization.
The bill defines how the funds shall be appropriated.
Not more than
1. 80 percent of the funds may be used for roads
and surface transportation both state and
municipal,
2. 25 percent may be used for aviation,
3. 25 percent may be used for the Alaska Marine
Highway,
4. 20 percent may be used for harbor facilities,
state owned marine facilities and for deposit
into the municipal harbor facility grant fund,
5. 20 percent may be used for local community
transportation and transit.
6. 15 percent may be used for trails and bike-
paths.
These percentages will provide the flexibility needed
to focus on one mode one year and switch to another
the following year as needs dictate.
Besides the above appropriations, the fund will pay
for all fund administration costs and for the
operations of the Department of Motor Vehicles.
Alaska is geographically the largest state in the
country, and the future of the economic and social
well being of its citizens is critically dependent on
a reliable transportation system. This fund is one of
the tools needed to create a modern, reliable
transportation system.
The CS from House Transportation reduced the size of
the Advisory Council by 5 members and removed the
revenue stream from airport leases and airspace
leases. It also made all the provisions of HB 30
contingent upon the voters passage of the initiative
to change the constitution to allow this dedicated
fund.
Representative Peggy Wilson offered to provide any further
details to the committee. She stated that public testimony
had not been solicited out the desire for brevity.
Vice-chair Fairclough asked if the October 1st report date
listed on page 3 of the bill was meant to coincide with the
end of the federal fiscal year.
REBECCA ROONEY, STAFF, REPRESENTATIVE PEGGY WILSON,
explained that October 1st had been selected to allow for
the governor to examine the report before it passed to the
legislature.
Vice-chair Fairclough pointed out that on October 1st local
municipalities had to obligate all funds for spending. She
expressed concern that the project line up could be
affected.
Vice-chair Fairclough thought that the 6 percent payout was
aggressive and that 5 percent was a more conservative
number. She wondered why 6 percent had been chosen. Ms.
Rooney replied that 6 percent had been chosen because it
was the going rate at the time. She shared that the payout
number was to be chosen by the finance committees and that
a payout table could be found in the committee member files
that evaluated the payout from 4.5 percent up to 6 percent.
2:51:48 PM
Representative Peggy Wilson added that the constitutional
budget amendment read "up to 6 percent." She explained that
the payout percentage could be adjusted by statute as
needed by the legislature.
Co-Chair Stoltze wondered if writing an assured payout into
the constitutional amendment could be helpful in persuading
the public.
Representative Doogan recalled that previous testifiers
from the financial community had expressed comfort in
calculating percent of market value at 4.5 percent. He
agreed that 6 percent was an aggressive number to try to
maintain year after year without diminishing the value of
the fund.
Vice-chair Fairclough added that a 6 percent payout could
be acceptable provided that it did not diminish from the
corpus of the fund.
Representative Gara noted that $1 billion was a lot of
money. He believed that there would be less money
appropriated for transportation at 4.5 percent. He
recommended deducing the average appropriation to
department over the last five years. He suggested that if
the state was going to invest in a transportation fund it
would be prudent to investigate the amount of political
will available to push for enough spending to meet the
desired infrastructure needs.
2:56:14 PM
Representative Peggy Wilson explained that the bill was not
meant to replace what transportation was currently doing.
The department had a back log of over $1 million in
maintenance projects across the state. She stressed that
the fund was meant to enhance current operations.
Representative Hawker shared that there was recorded
testimony of the discussion concerning the prohibition of
dedicated funds during the constitutional debates. He asked
how the legislature was expected to respond to testifiers
in the recording who referred to the dedication of funds as
an "inherent evil" and that each budget year every
competing need in the state should be able to compete on
equal standing for the scarce amount available revenue.
Representative Peggy Wilson responded that drafters of the
constitution had grandfathered in three different funds.
Two of the funds were dedicated transportation funds; one
for land and one for water. The legislation would be
reinstating a fund that had already existed during the time
that the Alaska State Constitution was put in place.
Co-Chair Stoltze queried why the dedicated funds should be
for transportation and not education.
Representative Peggy Wilson answered that the third
dedicated fund was related to education. She assumed that
through the years past legislators had decided the
dedicated funds were unnecessary. She stated that she chose
the issue of transportation because that was where she
believed the state had the greatest need.
Co-Chair Stoltze noted that the closest the legislature had
come to establishing a dedicated that fund for education
was in 1989; Governor Cowper had pushed for the
legislation, which failed in the Senate.
2:59:52 PM
Representative Peggy Wilson explained that the bill would
help with economic development in the state.
Representative Guttenberg though that the argument for
dedicated funds for education was still compelling. He
wondered whether the yearly analysis suggested by
Representative Gara would be beneficial. He understood that
a steady source of income for transportation projects was
necessary, but opined that the issue was perpetual.
Ms. Rooney responded that the department was currently
funded at 6 percent of market value, at $100 million per
year. She asserted that the numbers were close to what had
been seen historically.
Representative Guttenberg surmised that the legislature
should continue to fund the department just as it had been
doing. He thought that dedicating funds would be confusing
to the public.
Representative Peggy Wilson remarked that the state needed
to be looking at the future and not just the present. She
said that there was no guarantee that the oil pipeline was
not going to shut down next year. She stressed the
importance that the state determine what would be done in
the event of declining revenue.
3:03:35 PM
Representative Doogan believed that the legislation was
much more sophisticated than it had been in its past form.
He felt that the problem with the proposal was related to
the cost and had been compounded by the decisions of the
House of Representatives concerning taxes for oil
companies. He explained that the legislation was in a suite
of bills that had been introduced that would take a
significant amount of money from the state. He expressed
concern that state funding would be distributed on a first
come-first served basis. He wondered why the proposed
legislation should be the first choice in terms of
allocating funds for a single purpose.
Representative Peggy Wilson reiterated that the state
needed to plan for the future. She said that the state had
$8 billion in projects that were not being addresses. She
believed that because the state was currently experiencing
a time of a slight financial surplus; this would be the
best time to dedicate the funds.
Co-Chair Stoltze stated that the vetting of HB 30 and HB 31
would be done in a subcommittee consisting of Vice-Chair
Fairclough, Co-Chair Thomas, Representative Costello, Co-
Chair Stoltze, and Representative Doogan.
HB 30 was HEARD and HELD and referred to subcommittee that
consisted of Vice-chair Fairclough, Co-Chair Thomas,
Representative Costello, Co-Chair Stoltze, and
Representative Doogan for further consideration.
HB 31 was HEARD and HELD and referred to subcommittee that
consisted of Vice-chair Fairclough, Co-Chair Thomas,
Representative Costello, Co-Chair Stoltze, and
Representative Doogan for further consideration.