Legislature(2009 - 2010)CAPITOL 17

02/09/2010 01:00 PM House TRANSPORTATION


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HJR 42 CONST. AM: TRANSPORTATION FUND TELECONFERENCED
Moved Out of Committee
*+ HB 329 TRANSPORTATION FUND/PUBLIC TRANSPORTATION TELECONFERENCED
Heard & Held
                                                                                                                                
         HB 329-DEDICATED TRANSPORT FUND/PUB TRANSPORT                                                                      
                                                                                                                                
CHAIR P. WILSON announced that  the final order of business would                                                               
be HOUSE  BILL NO.  329, "An Act  relating to  the transportation                                                               
infrastructure  fund, to  local public  transportation, to  motor                                                               
fuel  taxes,  and to  the  motor  vehicle registration  fee;  and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
REBECCA ROONEY, Staff, Representative  Peggy Wilson, Alaska State                                                               
Legislature, stated  that she would  not discuss reasons  for the                                                               
dedicated  transportation  fund  since  she  previously  outlined                                                               
them.  She  offered to provide a  section-by-section analysis, on                                                               
behalf  of the  prime  sponsor of  HB  329, Representative  Peggy                                                               
Wilson.    She  stated  that  HB  329  would  define  the  Alaska                                                               
Transportation Infrastructure  Fund (ATIF),  including management                                                               
of the  fund and  expenditures from  the fund.   Section  1 would                                                               
provide  legislative intent  to  appropriate $1  billion in  seed                                                               
money.   She  referred to  two  graphs in  members' packets  that                                                               
depict  what the  proposed  Dedicated  Transportation Fund  would                                                               
look like over time.  The  first graph shows the potential growth                                                               
for the  fund with a  $1 billion appropriation, the  second graph                                                               
also  includes anticipated  revenue from  the state's  motor fuel                                                               
tax.                                                                                                                            
                                                                                                                                
MS. ROONEY  stated that Section  2 would amend AS  28.10.421 (g),                                                               
and would  deposit motor  fuel fees  collected by  the department                                                               
into  the  proposed  dedicated transportation  fund,  the  Alaska                                                               
Transportation  Infrastructure  Fund  (ATIF).     Fees  from  the                                                               
special license  plates, as previously discussed,  would continue                                                               
to be deposited  to the general fund.  Three  percent of the fees                                                               
destined for the  ATIF will be deposited to the  general fund for                                                               
administration of the  Alaska Mandatory Insurance Act.   The goal                                                               
of this section is not  to divert funding from programs currently                                                               
funded  by  vehicle registration  fees.    Under Section  3,  the                                                               
Watercraft Fuel Tax Account reference  was removed since this tax                                                               
is  being used  to  help  fund the  proposed  ATIF.   However,  a                                                               
mechanism  that  makes  appropriations to  the  Municipal  Harbor                                                               
Grant   Fund  still   exists,  but   the  legislature   may  also                                                               
appropriate money  to the fund  from the fisheries  business tax.                                                               
The ATIF can  appropriate 8 percent of the ATIF  to the Municipal                                                               
Harbor Grant Fund, which is  detailed in a provision contained in                                                               
Section 4.                                                                                                                      
                                                                                                                                
2:01:01 PM                                                                                                                    
                                                                                                                                
MS.  ROONEY  stated  that  Section   4  would  provide  technical                                                               
corrections to the  statutes.  Section 5  details the description                                                               
of the proposed  ATIF, which will consist  of appropriations made                                                               
to the fund.   Secondly, any revenue derived from  the motor fuel                                                               
tax  after April  1,  2011, and  from  vehicle registration  fees                                                               
collected  after April  1, 2011  will be  deposited to  the fund.                                                               
The Alaska  Department of Revenue  (DOR) will manage the  fund as                                                               
an  endowment, and  will  invest  funds to  yield  at  least a  6                                                               
percent return on  investment over time.  Funds  remaining in the                                                               
account at  the end of the  fiscal year will remain  in the ATIF.                                                               
The DOR  will report  on the  health of the  fund and  the amount                                                               
available for  appropriation, which is  6 percent of  the average                                                               
of the percentage  of market value over the  previous five years.                                                               
The  appropriation   will  be  used  for   capital  projects  for                                                               
transportation.   Appropriations  will  not be  made for  federal                                                               
match unless  the total match does  not exceed 10 percent  of the                                                               
amount available for appropriation.   This provision was inserted                                                               
to help  insure that  the funds  would not  be used  for projects                                                               
using the  arduous federal construction  processes.  The  goal is                                                               
to fund  projects using  state guidelines,  which are  faster and                                                               
less costly to construct.                                                                                                       
                                                                                                                                
2:02:25 PM                                                                                                                    
                                                                                                                                
MS.  ROONEY outlined  the guidance  for  appropriations from  the                                                               
fund  detailed in  Section 4,  including that  60 percent  of the                                                               
appropriations  from   the  fund   are  designated   for  highway                                                               
projects, 13  percent for aviation  projects, 12 percent  for the                                                               
Alaska Marine  Highway System (AMHS),  as previously  mentioned 8                                                               
percent  can be  appropriated  for harbor  facilities and  state-                                                               
owned marine  facilities, 5  percent for  transit, and  2 percent                                                               
for projects related to roads and trails.                                                                                       
                                                                                                                                
MS. ROONEY  explained that  a Transportation  Infrastructure Fund                                                               
Advisory  Council  (TIFAC)  is  established  and  consists  of  8                                                               
members:   the  chairs  of the  House  and Senate  Transportation                                                               
Committee; one  legislator appointed by the  House Transportation                                                               
Committee; one legislator appointed  by the Senate Transportation                                                               
Committee,  the  Commissioner  of   DOT&PF,  and  three  regional                                                               
directors of  the DOT&PF.   Of the  legislators appointed  to the                                                               
TIFAC, two legislators must represent  a rural area, and two must                                                               
represent an  urban area.   The DOT&PF will develop  criteria and                                                               
report its recommendations  to the legislature by  December 31 of                                                               
each year  listing transportation projects that  should be funded                                                               
by the ATIF.                                                                                                                    
                                                                                                                                
2:04:05 PM                                                                                                                    
                                                                                                                                
MS. ROONEY  explained that  Section 6 refunds  60 percent  of the                                                               
aviation  fuel back  to municipalities  owning  and operating  an                                                               
airport in  proportion to the  revenue collected at  the airport.                                                               
All other proceeds  collected on aviation fuel  will be deposited                                                               
to the  ATIF.  Section  7 would provide  that all motor  fuel tax                                                               
receipts shall  be paid into  the ATIF.   Section 8  would remove                                                               
the  exception  in AS  43.40.010  (j)  since  it is  repealed  in                                                               
Section 12  of the bill.   Section 9 refers to  motor fuel refund                                                               
checks, which will  be made from the ATIF instead  of the highway                                                               
fuel  tax  account.    Section  10  amends  the  list  of  DOT&PF                                                               
responsibilities, including that the  department will promote and                                                               
support  methods  or modes  of  local  public transportation  and                                                               
transit,  and  develop  criteria   to  determine  eligibility  of                                                               
projects for use  by the advisory committee.   Section 11 removes                                                               
a reference to  a deleted statute, and Section 12  is a technical                                                               
amendment to repeal the Watercraft  Fuel Tax Account, the Special                                                               
Highway Fuel Tax  Account and the Non-Public  Highway Use Account                                                               
since those  accounts would  not be necessary  as the  fuel taxes                                                               
will be deposited to the ATIF.                                                                                                  
                                                                                                                                
MS. ROONEY stated that Section  13 would establish the transition                                                               
language for calculating  the amount of the ATIF  values.  During                                                               
the first  five years  since the  DOR will  not have  a five-year                                                               
average to  use for its calculations,  the transition calculation                                                               
will be to use five percent of the  POMV in the first year, as of                                                               
July  1, 2011.    Subsequently, the  appropriation  will be  five                                                               
percent of the  average market value of the ATIF  fund as of each                                                               
year  through June  30, 2015.    The DOR  will file  a report  on                                                               
October 1  of each of the  first five years to  provide the funds                                                               
available  for  appropriation.     Section  14  would  provide  a                                                               
contingency,  that the  change to  Alaska's constitution  must be                                                               
approved by the voters before April  1, 2011 before this bill can                                                               
take effect.  Section 15 would  direct the DOT&PF to initiate its                                                               
work  to  develop the  criteria  for  prioritization of  proposed                                                               
DOT&PF projects.   Section 16  would direct the motor  fuel taxes                                                               
into the ATIP commencing April 1, 2011.                                                                                         
                                                                                                                                
2:06:39 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  PETERSEN referred  to Section  5 and  to revenues                                                               
received after April  1, 2011.  He asked whether  July 1 would be                                                               
a better date to use.                                                                                                           
                                                                                                                                
MS. ROONEY  offered that the  end of  the first quarter  date was                                                               
selected to allow  the DOR to work out any  issues before the end                                                               
of the fiscal year.                                                                                                             
                                                                                                                                
REPRESENTATIVE  PETERSEN  asked  whether this  would  create  any                                                               
problems to budget  three-fourths of a year of  revenue since the                                                               
DOR would likely need to make adjustments.                                                                                      
                                                                                                                                
2:07:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PETERSEN, in  response to Representative Johansen,                                                               
provided the reference as page 2, line 22 of HB 329.                                                                            
                                                                                                                                
CHAIR P. WILSON  related that she would research  the matter with                                                               
DOR.                                                                                                                            
                                                                                                                                
REPRESENTATIVE  JOHANSEN  asked for  the  effective  date of  the                                                               
bill.                                                                                                                           
                                                                                                                                
CHAIR  P. WILSON  related that  HB 329  is contingent  upon HJR42                                                               
passing,  and the  ballot  proposition requiring  a  vote of  the                                                               
people for passage so she was unsure of the effective date.                                                                     
                                                                                                                                
2:09:29 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG  related  that   he  has  held  a  long                                                               
standing  interest in  the legal  aspects of  a cruise  ship head                                                               
tax, which is  currently under litigation.  He related  a line of                                                               
cases of constitutional  issues help define what  the cruise ship                                                               
head tax can be used to fund.   He said the funds can be used for                                                               
projects directly  related to  cruise ships.   He  suggested that                                                               
funding can be spent on  piers, or dredging harbors, but probably                                                               
not for  projects in  Interior Alaska.   He suggested  that since                                                               
this bill  considers transportation  funding, that  the committee                                                               
might  also  consider the  head  tax  itself, including  specific                                                               
permissible uses of  the taxes in HB 329 that  could help bolster                                                               
it against future challenges.  He  offered that it would not need                                                               
to  amend the  constitution but  could provide  a dedicated  fund                                                               
that is  allowable under  federal law.   This approach  would not                                                               
require  a   constitutional  amendment,   but  could   provide  a                                                               
perpetual source of constitutionally  permissible projects in the                                                               
coastal communities.   He  envisioned such a  fund could  also be                                                               
used by future coastal communities  for projects as the Northwest                                                               
Passage  opens up,  noting that  coastal  communities would  also                                                               
include the Aleutians and Anchorage.                                                                                            
                                                                                                                                
2:11:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON  offered that  funds need  to be  used for                                                               
tourist-related activities.   He said, "I think we're  way down a                                                               
rabbit hole on that one."                                                                                                       
                                                                                                                                
REPRESENTATIVE  GRUENBERG  understood.     However,  he  said  he                                                               
thought  the  proposed  dedicated transportation  fund  could  be                                                               
sequestered until  that happens.   By that  time the  state would                                                               
have time to build up a real endowment, he surmised.                                                                            
                                                                                                                                
REPRESENTATIVE JOHNSON  remarked that  would assume  that members                                                               
support the imposition of a head tax in the first place.                                                                        
                                                                                                                                
2:12:45 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MUNOZ  referred to page 4,  lines 12 - 28,  to the                                                               
composition   of  the   Transportation  Infrastructure   Advisory                                                               
Council.   She  asked  whether  it would  be  better  to use  the                                                               
current team  of DOT&PF  members to  determine which  projects to                                                               
fund to avoid political decisions.                                                                                              
                                                                                                                                
MR. RICHARDS related  that the composition of  the proposed board                                                               
closely mirrors  the DOT&PF's internal  team.  He  also mentioned                                                               
that  the ATIFAC  would  develop the  criteria  and the  projects                                                               
would be ranked in a consistent and fair manner.                                                                                
                                                                                                                                
2:14:33 PM                                                                                                                    
                                                                                                                                
MR.  RICHARDS, in  response  to  Representative Munoz,  responded                                                               
that  legislators do  not serve  on the  current DOT&PF  criteria                                                               
team,  just DOT&PF  employees.   He listed  the group,  including                                                               
regional directors.                                                                                                             
                                                                                                                                
CHAIR P. WILSON stated that  legislators were added to assist the                                                               
perception of  neutrality and to  shift away from the  sense that                                                               
the  DOT&PF  makes the  decisions  to  one  that is  more  evenly                                                               
balanced.                                                                                                                       
                                                                                                                                
2:15:39 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MUNOZ  expressed  concern to  politicize  in  the                                                               
decision-making process for projects.                                                                                           
                                                                                                                                
2:15:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG asked  for the  reason that  the ATIFAC                                                               
does  not  include a  public  member  or  industry to  bring  the                                                               
consumer perspective.                                                                                                           
                                                                                                                                
CHAIR P.  WILSON agreed.  She  stated it is similar  to the State                                                               
Transportation Improvement Plan (STIP) process.                                                                                 
                                                                                                                                
REPRESENTATIVE GRUENBERG  asked for the department's  position on                                                               
the ATIFAC composition.                                                                                                         
                                                                                                                                
MR.  RICHARDS related  his  initial reaction  would  be that  the                                                               
legislator represents the  public.  The criteria will  be set and                                                               
the scoring will  determine which projects will  be selected, and                                                               
the   projects  will   be  approved   by   the  legislature   for                                                               
appropriation.   He related  this ad hoc  council could  be large                                                               
and  unwieldy to  obtain  transparency.   He  mentioned that  the                                                               
current  DOT&PF's structure  is open  and in  fact, Chair  Wilson                                                               
attended the scoring  process last spring.  He  remarked that the                                                               
DOT&PF  provides  the  technical expertise  and  the  legislative                                                               
branch can provide the public process.                                                                                          
                                                                                                                                
2:17:59 PM                                                                                                                    
                                                                                                                                
MR.  RICHARDS, in  response to  Representative Gruenberg,  stated                                                               
that he was  not certain if the DOT&PF's meetings  are subject to                                                               
the Open  Meetings Act.   However, the DOT&PF does  public notice                                                               
their processes.   He  deferred to  the Department  of Law  for a                                                               
more definitive answer.                                                                                                         
                                                                                                                                
2:18:19 PM                                                                                                                    
                                                                                                                                
MR. KANE, in response to  Representative Gruenberg, answered that                                                               
he was  not certain if  the ATIFAC would  be subject to  the Open                                                               
Meetings Act.   He  offered to  research and  report back  to the                                                               
committee.                                                                                                                      
                                                                                                                                
CHAIR P. WILSON asked Mr. Kane  to provide the committee with the                                                               
results.                                                                                                                        
                                                                                                                                
2:19:11 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHANSEN  asked   whether  the  current  DOT&PF's                                                               
Project Evaluation Board (PEB) process is in Open Meetings Act.                                                                 
                                                                                                                                
MR. RICHARDS deferred to the Department of Law.                                                                                 
                                                                                                                                
REPRESENTATIVE JOHANSEN  asked if Mr.  Kane could also  report on                                                               
whether the  current PEB  process falls  under the  Open Meetings                                                               
Act.                                                                                                                            
                                                                                                                                
2:19:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHANSEN asked  about the  current PEB  board and                                                               
whether the AMHS has been part of the process.                                                                                  
                                                                                                                                
MR.  RICHARDS  explained  that   the  AMHS  projects  are  funded                                                               
primarily  from  the  FHWA  funds, which  would  fall  under  the                                                               
purview of  the DOT&PF Commissioner.   The needs of the  AMHS are                                                               
met  through planning  and are  driven  by the  U.S. Coast  Guard                                                               
regulations.    Thus,  the DOT&PF  has  statutory  or  regulatory                                                               
requirements that it must meet.                                                                                                 
                                                                                                                                
2:21:26 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHANSEN  referred to page  4, line 25 of  HB 329,                                                               
and asked whether urban and rural terms are defined.                                                                            
                                                                                                                                
MS. ROONEY answered that the  terms are not specifically defined,                                                               
but surmised the bill drafters used standard definitions.                                                                       
                                                                                                                                
2:22:33 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG asked  for time to ask  questions at the                                                               
next meeting.                                                                                                                   
                                                                                                                                
CHAIR P. WILSON agreed.                                                                                                         
                                                                                                                                
2:23:11 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  T.  WILSON asked  for  the  scoring process  that                                                               
DOT&PF uses in determining projects.                                                                                            
                                                                                                                                
CHAIR WILSON offered to provide the information.                                                                                
                                                                                                                                
2:23:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHANSEN referred  to page 5, line 20,  of HB 329,                                                               
and  explained  his  understanding  that an  endowment  would  be                                                               
created and would be managed  by the Department of Revenue (DOR).                                                               
He  asked whether  the fund  will be  structured to  allow enough                                                               
liquidity to  refund claims.   He recalled  that funds  are often                                                               
invested and not available for use.                                                                                             
                                                                                                                                
MS. ROONEY  related that  the bill addresses  that since  the DOR                                                               
must  manage the  fund  with  the knowledge  it  must  pay out  6                                                               
percent of the percentage of  market value (POMV).  She explained                                                               
that she has not held a specific conversation, but will do so.                                                                  
                                                                                                                                
2:25:20 PM                                                                                                                    
                                                                                                                                
CHAIR WILSON  stated that  she would  leave the  public testimony                                                               
open on HB 329 to allow for further public comments.                                                                            
                                                                                                                                
2:25:28 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG referred  to  page 2,  lines  22 -  26,                                                               
which  read,  "..."from  any  state  tax on  fuel  used  for  the                                                               
propulsion of motor vehicles,  aircraft, and watercraft..." would                                                               
be  deposited to  the fund,  as well  as registration  fees.   He                                                               
asked  whether  any taxes  relating  to  transportation would  be                                                               
excluded by the previously mentioned phrases.                                                                                   
                                                                                                                                
2:26:31 PM                                                                                                                    
                                                                                                                                
CHAIR P.  WILSON commented that the  goal is to use  state funds,                                                               
although some funds may be used  on federal projects.  She stated                                                               
that she  did not  want to  deplete the  general funds  since the                                                               
DOT&PF  will still  want to  fund  some projects  outside of  the                                                               
dedicated transportation fund.                                                                                                  
                                                                                                                                
MR.  RICHARDS, in  response to  Representative Gruenberg,  stated                                                               
that the DOT&PF  would like to review the various  funds and will                                                               
work with the DOR to provide a response.                                                                                        
                                                                                                                                
CHAIR  P.   WILSON  projected  that  revenues   for  the  vehicle                                                               
registration  fees  would generate  about  $40  million, and  the                                                               
Motor Fuel  Tax would  raise about $40  million annually.   Thus,                                                               
the  ATIF would  receive $80  million each  year.   She suggested                                                               
taking a cautious approach since  it is important not to supplant                                                               
federal funding.                                                                                                                
                                                                                                                                
2:28:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG referred  to page 1, line 8,  of HB 329,                                                               
and read, "on establishment of the  fund."  He asked whether this                                                               
sum would be a lump sum from the  general fund or if a ceiling of                                                               
$80  million per  year would  fund  the dedicated  transportation                                                               
fund.                                                                                                                           
                                                                                                                                
CHAIR P.  WILSON related that  $1 billion  in seed money  will be                                                               
included in  an appropriation bill  as the mechanism to  fund the                                                               
endowment.                                                                                                                      
                                                                                                                                
REPRESENTATIVE  GRUENBERG asked  whether  the seed  money was  in                                                               
addition to the $80 million from taxes.                                                                                         
                                                                                                                                
CHAIR  P.   WILSON  answered  yes.     In  further   response  to                                                               
Representative Gruenberg,  she answered that a  provision was not                                                               
made for any repayment plan.                                                                                                    
                                                                                                                                
2:29:38 PM                                                                                                                    
                                                                                                                                
JOHN   MCKINNON,    Executive   Director,    Associated   General                                                               
Contractors (AGC),  said he spoke  previously on  encouraging the                                                               
use of state  funds for construction projects.   He remarked that                                                               
it does  not get  any better  than this.   This proposed  ATIF is                                                               
multi-modal  and while  he  was unsure  about  the percentage  of                                                               
allocation in  the bill,  he understood the  methods used.   This                                                               
bill will  create jobs,  but more  importantly, will  also create                                                               
transportation improvements.   He  reviewed bond  issues approved                                                               
by voters between  1960 - 1982 and  as many as four  or five bond                                                               
issues, with  at least  one each  year related  to transportation                                                               
issues, and they  all passed.  During 1982 -  2002, the state had                                                               
ample general  funds and  did not  need bonds.   In  2002, GARVEE                                                               
bonds and road  improvement bonds passed with  good solid support                                                               
of the voters.   In 2008, $315 million  transportation bond issue                                                               
passed with 63  percent of the vote, without  any organized group                                                               
advertising   its   passage.     He   said   that  Alaska   loves                                                               
transportation projects.  This bill can  do a lot for citizens to                                                               
reduce  congestion.   He recalled  an  informal calculation  done                                                               
during his  time with the  DOT&PF that congestion caused  a daily                                                               
sum total of $60 million per year.                                                                                              
                                                                                                                                
2:33:16 PM                                                                                                                    
                                                                                                                                
MR. MCKINNON  further recalled the  calculation was based  on the                                                               
cost of people and businesses  waiting due to traffic congestion.                                                               
The  rate  used  was an  hourly  rate  of  $100  per hour  for  a                                                               
commercial  truck, and  $15 per  hour for  citizens, but  the sum                                                               
total  added up  to $60  million.   This  can  go a  long way  to                                                               
improve the safety  improvements.  He recalled during  a six year                                                               
period, from  1996 -  2002, the  highway authorization  bill that                                                               
the federal  government required  the DOT&PF  to spend  a certain                                                               
amount  for  non-highway  transportation  projects  like  trails.                                                               
Thus, the DOT&PF was required to  spend $40 million over 6 years.                                                               
The politics at  the time resulted in over $160  million on those                                                               
projects.   He  stated that  the $120  million diverted  to those                                                               
non-highway   projects   could   have  been   spent   on   safety                                                               
improvements  and lives  could have  been saved.   He  stated the                                                               
proposed ATIF could  be used for safety  improvements, new routes                                                               
and  connectivity, which  could result  in some  spin off.   Some                                                               
rural villages  could be connected  to share airports  and reduce                                                               
the necessity  of having to  build airports and clinics  to serve                                                               
small communities.  The proposed  fund could add ferries, similar                                                               
the M/V Lituya which serves  Metlakatla.  This could help improve                                                               
access to transportation and could lower transportation costs.                                                                  
                                                                                                                                
2:35:35 PM                                                                                                                    
                                                                                                                                
LOIS   EPSTEIN,    Professional   Engineer;    Director,   Alaska                                                               
Transportation  Priority Project  (ATPP),  stated  that the  ATTP                                                               
works   with  conservation   organizations,  transit   advocates,                                                               
community and  governmental leaders,  neighborhood organizations,                                                               
engineers,  and the  public  to  promote sensible  transportation                                                               
systems and  policies in Alaska.   She stated that  ATPP believes                                                               
it is  a good  idea to  address the  upcoming decline  in federal                                                               
transportation funds.   However,  some problems  exist and  it is                                                               
limited in overall effect.  This  bill does not include money for                                                               
maintenance and  preservation, which is roughly  $500 million per                                                               
year for  highways and bridges,  and $100 million  for preserving                                                               
and operating ferries.  She  cautioned the state should not build                                                               
projects  it cannot  maintain and  this dedicated  transportation                                                               
fund approach does not address maintenance issues.                                                                              
                                                                                                                                
MS.  EPSTEIN discussed  the allocation  between modes,  including                                                               
that 60  percent is  designated to major  roads and  bridges, and                                                               
only 5  percent for  community roads and  public transit.   These                                                               
allocations may not  be the right allocations.   She related that                                                               
since HB 329  provides for an advisory council, that  it does not                                                               
need  to  bind the  decision  making  process  so tightly.    She                                                               
offered that she  would not be opposed to a  maximum amount to be                                                               
spent on  roads between  40 to  60 percent  to ensure  that other                                                               
modes  are  appropriately funded.    She  related that  she  also                                                               
serves   on  the   Anchorage  Metropolitan   Area  Transportation                                                               
Solutions  (AMATS)  Advisory  Committee, which  uses  ranges  for                                                               
funding.  Today's  approach does not address the  high amounts on                                                               
questionable projects  like the  road to Juneau  or Nome  road or                                                               
Gravina Bridge.   There is  not enough money for  these projects;                                                               
but the state  continues to fund studies on them  at the level of                                                               
millions of  dollars each year,  regardless of the  overall cost.                                                               
The  FHWA  and Federal  Transit  Administration  recently sent  a                                                               
letter dated  November 2009  to the  DOT&PF, which  read, "Alaska                                                               
will be  over-programmed in  the long  term and  sufficient funds                                                               
are not  available from current recognizable  sources to complete                                                               
a number of large projects  contemplated by the state's program."                                                               
The projects  she just  identified cost  between $400  million to                                                               
$2.5  billion and  would  not be  affected by  HB  329 since  the                                                               
projects  would   require  federal   dollars.    She   urged  the                                                               
legislature  and  the  Governor  to show  fiscal  leadership  and                                                               
cancel one or more of  the projects rather than spending millions                                                               
of  the state's  transportation  dollars each  year pursing  them                                                               
without any  financial plan.   None  of those  projects mentioned                                                               
have a  financial plan in  place.  She suggested  holding another                                                               
hearing.                                                                                                                        
                                                                                                                                
2:39:56 PM                                                                                                                    
                                                                                                                                
CHAIR P. WILSON  offered to contact her to  obtain information on                                                               
using ranges  between modes.   She  expressed her  willingness to                                                               
work   on  establishing   ranges   rather   than  have   specific                                                               
percentages  between  modes.     In  response  to  Representative                                                               
Gruenberg, she related that it may  work out to hold a conference                                                               
call.                                                                                                                           
                                                                                                                                
2:40:51 PM                                                                                                                    
                                                                                                                                
KATHIE  WASSERMAN, Executive  Director,  Alaska Municipal  League                                                               
(AML),  stated that  she  is  very thankful  to  the sponsor  for                                                               
introducing the resolution  and the bill.  She  stated that while                                                               
she  has not  analyzed the  specifics of  the proposed  dedicated                                                               
transportation  fund, she  believed  that  conceptually the  bill                                                               
addresses  the AML's  questions  on how  the  state will  address                                                               
decreasing federal  funds.   During the  AML trips  to Washington                                                               
D.C.,  Alaska's Congressional  delegation has  often acknowledged                                                               
the  difficulties  in  obtaining  federal  highway  funds.    She                                                               
explained   that  the   AML  prepared   a  report,   the  "Alaska                                                               
Transportation  Finance  Study,"  which  members  have  in  their                                                               
packets.   She related that  SAFETEA-LU has been  extended month-                                                               
by-month and  is not any  way to approach  transportation funding                                                               
planning.  She attended a  transportation discussion at the White                                                               
House,  and every  time transportation  was mentioned  it was  in                                                               
conjunction  with  transit.   She  asked  how this  would  affect                                                               
Alaska, and  the answered was  that even small  communities could                                                               
benefit  from  mass  transit.     Thus,  she  surmised  that  the                                                               
administration may not understand Alaska's transportation needs.                                                                
                                                                                                                                
MS. WASSERMAN  referred to a  table that provides the  per capita                                                               
to transit,  stating that Wyoming  receives $8.32 per  capita for                                                               
mass transit,  while Alaska  receives $54.74  per person.   Since                                                               
Alaska  receives so  much and  pays  in so  little, other  states                                                               
object.  She  stated that she serves on  the National Association                                                               
of Counties Transportation Committee,  and other members complain                                                               
that their potholes could be filled  if Alaska did not receive so                                                               
much  money.   Thus, AML  supports the  concept that  Alaska must                                                               
find ways  to fill the funding  gap due to reductions  in federal                                                               
transportation  funding.   She  said  the  AMLS realizes  that  a                                                               
billion dollars  is a lot  of money,  but Alaska has  many needs.                                                               
Transportation is  one of the  basic tenets that  government does                                                               
and should provide.                                                                                                             
                                                                                                                                
2:45:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG  asked what  the  committee  can do  to                                                               
maximize  the  capture  of  federal  funds  for  urban  areas  in                                                               
Anchorage and Fairbanks.                                                                                                        
                                                                                                                                
MS. WASSERMAN said she did not know.                                                                                            
                                                                                                                                
REPRESENTATIVE GRUENBERG  acknowledged Ms.  Wasserman's expertise                                                               
and experience  in Washington,  D.C. and  asked her  consider how                                                               
Alaska  could  obtain maximum  federal  dollars  since Alaska  is                                                               
clearly eligible to receive, noting  that it is also important to                                                               
consider rural needs.                                                                                                           
                                                                                                                                
REPRESENTATIVE JOHNSON remarked that the  purpose of HB 329 is to                                                               
avoid  using   federal  dollars.     He   thought  it   would  be                                                               
counterproductive  to work  to obtain  federal  dollars for  mass                                                               
transit in  HB 329.   This  bill is  intended to  provide general                                                               
fund dollars  for transportation  projects that can  be completed                                                               
much  more quickly  than using  federal funding,  he stated.   He                                                               
suggested  that attempting  to leverage  federal funding  in this                                                               
bill would be ill advised.                                                                                                      
                                                                                                                                
CHAIR  P. WILSON  offered her  goal  is to  maintain the  current                                                               
DOT&PF  budget, including  obtaining FHWA  funding for  projects,                                                               
but  to  use  the  dedicated   transportation  fund  to  complete                                                               
additional  projects more  quickly, to  create jobs,  and enhance                                                               
access to  Alaska's natural resources.   It is not  the intention                                                               
of this  bill to  supplant transportation  funding in  the state.                                                               
She  recalled   other  states  established  specific   funds  for                                                               
education,  only to  discover that  their dedicated  funds became                                                               
the only  source of  funding for education.   She  maintained she                                                               
did   not  want   that  to   happen  in   Alaska,  in   terms  of                                                               
transportation funding.                                                                                                         
                                                                                                                                
2:48:40 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE T.  WILSON remarked that completing  projects more                                                               
timely will  also save money  in long  run since the  roads would                                                               
not deteriorate as quickly.                                                                                                     
                                                                                                                                
MS. WASSERMAN agreed.   However, she said she  thought the DOT&PF                                                               
and  municipalities work  as  fast as  possible  to complete  the                                                               
permitting process, but money is the driving factor.                                                                            
                                                                                                                                
REPRESENTATIVE T. WILSON offered  her belief that all communities                                                               
in Alaska  are affected  by delays.   She  asked whether  AML has                                                               
obtained  similar feedback  from  communities on  problems.   She                                                               
stated that Alaska must collectively  work to obtain and complete                                                               
projects.                                                                                                                       
                                                                                                                                
MS. WASSERMAN  stated that the  AML is comprised of  members from                                                               
every  single community  in Alaska.   She  suggested she  is well                                                               
aware  of  problems  statewide,   especially  the  importance  of                                                               
transportation to small communities.                                                                                            
                                                                                                                                
2:50:11 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG conveyed that  he also supports needs in                                                               
rural  areas.   He acknowledged  that members  are also  aware of                                                               
transportation problems  in his  district in  Mountain View.   He                                                               
stated that many  of his constituents do not own  cars, must push                                                               
shopping  carts   on  sidewalks,   and  cannot   easily  navigate                                                               
Anchorage without buses.   He expressed concern  with language in                                                               
HB  329.    He  referred  to   page  3,  lines  10,  which  read:                                                               
"...capital projects for  transportation and related facilities."                                                               
He noted that  phrase also appears on  page 3, lines 15  -16.  He                                                               
suggested that  the phrase  should be  defined to  include public                                                               
transportation  and  facility  maintenance, as  well  as  general                                                               
maintenance.  He  recalled the Governor stating  that Alaska must                                                               
maintain what it owns or  the state will continually be replacing                                                               
its infrastructure.  He asked if Ms. Wasserman disagreed.                                                                       
                                                                                                                                
MS. WASSERMAN stated no, she did not disagree.                                                                                  
                                                                                                                                
[HB 329 was held over.]                                                                                                         
                                                                                                                                
2:53:40 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Transportation Standing  Committee meeting was adjourned  at 2:53                                                               
p.m.                                                                                                                            

Document Name Date/Time Subjects
HB 329 Sponsor Stmt.pdf HTRA 2/9/2010 1:00:00 PM
HTRA 2/11/2010 1:00:00 PM
HB 329
HB 329 AK Trans Finance Study.pdf HTRA 2/9/2010 1:00:00 PM
HTRA 2/11/2010 1:00:00 PM
HB 329
HJR 42 Sponsor Stmt.pdf HTRA 2/9/2010 1:00:00 PM
HJR 42
HJR 42 Resolution ATIF.pdf HTRA 2/9/2010 1:00:00 PM
HJR 42
HJR 42 Exec Summary AK Trans Finance Study.pdf HTRA 2/9/2010 1:00:00 PM
ATIF values w-out taxes.pdf HTRA 2/9/2010 1:00:00 PM
HB 329
fund values with taxes.pdf HTRA 2/9/2010 1:00:00 PM
HB 329