Legislature(2009 - 2010)CAPITOL 120
02/17/2010 01:00 PM House JUDICIARY
| Audio | Topic |
|---|---|
| Start | |
| Select Committee on Legislative Ethics | |
| Board of Governors of the Alaska Bar | |
| Public Defender | |
| Violent Crimes Compensation Board | |
| HJR42 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | HJR 42 | TELECONFERENCED | |
| + | TELECONFERENCED |
HJR 42 - CONST. AM: TRANSPORTATION FUND
2:25:02 PM
CHAIR RAMRAS announced that the final order of business would be
HOUSE JOINT RESOLUTION NO. 42, Proposing amendments to the
Constitution of the State of Alaska creating a transportation
infrastructure fund.
2:25:33 PM
REPRESENTATIVE HERRON moved to adopt the proposed committee
substitute (CS) for HJR 42, Version 26-LS1411/S, Kane, 2/17/10,
as the work draft. There being no objection, Version S was
before the committee.
2:26:37 PM
REPRESENTATIVE PEGGY WILSON, Alaska State Legislature, speaking
as chair of the House Transportation Standing Committee,
sponsor, explained that passage of HJR 42 would place before the
voters a proposed change to Article IX, Section 7, of the Alaska
State Constitution in order to allow for a dedicated fund for
capital transportation projects. She noted that for fiscal year
2010 (FY 10), 87 percent of Alaska's transportation budget comes
from the federal government, and that the current federal
reauthorization bill has expired and is only being extended on a
month-to-month basis until new federal legislation can be
passed. She relayed that she's heard, however, that that new
federal reauthorization bill is going to be very unfavorable to
those with small populations - like Alaska - because it's going
to emphasize mass transit and green transportation.
REPRESENTATIVE P. WILSON remarked that with federal funding
diminishing, Alaska is going to have to shoulder more
responsibility for its transportation infrastructure. Although
passage of HJR 42's proposed change to the Alaska State
Constitution might impact the Department of Transportation &
Public Facilities (DOT&PF), the proposed change is more about
meeting all of Alaska's growing transportation needs.
Transportation investment creates a competitive environment,
attracting additional economic development. She noted that the
House Transportation Standing Committee has researched the
issues surrounding Alaska's transportation needs and challenges,
and has received input from interested parties from across the
state as well as information from the National Conference of
State Legislatures (NCSL) regarding what other states are doing
to address their transportation infrastructure budget gaps.
Furthermore, a House Finance Committee member's staff has
compiled a list of the many different funding options available
to address the fiscal shortfalls resulting from Alaska's long-
range transportation plan.
2:28:59 PM
REPRESENTATIVE P. WILSON explained that HJR 42 is a culmination
of all that research and input, and, if its proposed dedicated
fund is added to the Alaska State Constitution by the voters, it
would allow Alaska more opportunity to take advantage of the
cost- and time-savings of State-funded projects while also
addressing the state's growing transportation needs. The
proposed dedicated fund would allow Alaska's transportation
projects to be completed much faster because, as State-funded
projects, they wouldn't have to follow lengthy, expensive, and
time-consuming federal procedures; such projects would, however,
still have to comply with federal construction standards. House
Joint Resolution 42's proposed constitutional change is not
intended to diminish the State's partnership with the federal
government; instead, it is intended to provide a dedicated
revenue stream that will allow more transportation projects to
be completed faster and at less cost.
REPRESENTATIVE P. WILSON said that the resolution's proposed
transportation infrastructure fund would grow as investment
returns compound. The goal is to seed the endowment with $1
billion, and it is anticipated that it will then grow by another
$65 million the first year as the result of investment returns
and motor fuel tax and registration fees, and by another $5
million to $6 million each year thereafter. She noted that
members' packets contain graphs created by the Legislative
Finance Division illustrating the proposed dedicated fund's
balance and the amounts that would be available for
appropriations from it each year - from FY 11 through FY 30.
REPRESENTATIVE P. WILSON offered her understanding that in one
of his speeches, former Governor Hickel indicated support for
the Alaska State Constitution being changed to provide for a
dedicated transportation fund. She remarked that Alaska needs
to take action now; that the future of the economic and social
wellbeing of Alaska's citizens is critically dependant on a
reliable transportation system; and that HJR 42's proposed
change to the Alaska State Constitution, allowing for a
dedicated transportation fund, is needed to create and maintain
a reliable transportation system for Alaska. She then explained
that under Version S, the proposed transportation infrastructure
fund would begin receiving revenue from the motor fuel tax and
registration fees after of July 1, 2011 - the beginning of FY 12
- and appropriations from that fund would be limited to only
those capital projects for transportation and related facilities
that are designated by law - in other words, those approved by
the legislature.
2:34:11 PM
REPRESENTATIVE GRUENBERG, in response to comments, mentioned
that although he won't hold the resolution up, he doesn't
support it for constitutional reasons, and pointed out that it's
difficult to address the resolution's constitutional issues
separate from its fiscal issues because the prohibition on
dedicated funds outlined in Article IX, Section 7, of the Alaska
State Constitution is based on the fiscal policy that the
framers imbedded in the Alaska State Constitution. His feeling,
he relayed, is summarized in a handout he's provided from the
publication, Alaska's Constitution; A Citizen's Guide, as it
pertained to Article IX, Section 7.
REPRESENTATIVE HERRON asked whether HJR 42 would prevent the
governor from suspending Alaska's motor fuel tax.
REPRESENTATIVE P. WILSON offered her belief that it would not;
instead, the proposed dedicated transportation fund would simply
grow more slowly when it wasn't receiving revenue from that tax.
REPRESENTATIVE HOLMES said she doesn't see any constitutional
problems with HJR 42, expressed favor with Version S's
stipulation that appropriations from the proposed dedicated fund
could only be for capital projects for transportation and
related facilities that are designated by law, but questioned
whether the legislature could appropriate monies from the fund
for transportation infrastructure maintenance and operational
costs.
REPRESENTATIVE P. WILSON indicated that the language of the
proposed constitutional change might be broad enough to allow
for that, though not for the normal operating costs of the
DOT&PF. In response to another question, she indicated that
several organizations have expressed favor with HJR 42 and its
proposed dedicated transportation infrastructure fund. In
response to other questions, she explained that any
appropriations from the proposed dedicated fund would be limited
to State-funded transportation projects.
2:43:31 PM
BECKY ROONEY, Staff, Representative Peggy Wilson, Alaska State
Legislature, in response to questions and comments, explained on
behalf of the sponsor, the House Transportation Standing
Committee, which is chaired by Representative P. Wilson, that
HJR 42 doesn't address any of the other suggestions outlined in
the handout titled "Alaska Transportation Finance Study; Final
Report", and would not be instituting any new taxes.
REPRESENTATIVE P. WILSON again relayed that several
organizations have expressed favor with HJR 42 and its proposed
dedicated transportation infrastructure fund, and surmised that
it's because they know that Alaska's economic development cannot
happen without an adequate transportation infrastructure.
REPRESENTATIVE HERRON questioned whether anyone has expressed
opposition to HJR 42.
REPRESENTATIVE P. WILSON said no. In response to another
question, she acknowledged that because the language on page 2,
lines 3-5, says, "Each year, the legislature may appropriate a
percentage of the average market value of the fund as
established by law for capital projects for transportation and
related facilities that are designated by law", that that
percentage, once it's established in statute, could be as high
as 50 percent. However, she pointed out, language in another
piece of legislation pertaining to this proposed constitutional
dedicated fund currently stipulates that it would be 6 percent
of a five-year average.
REPRESENTATIVE GRUENBERG surmised, then, that the legislature
could pass legislation in the future allowing it to empty out
this proposed dedicated fund if it felt it needed to.
REPRESENTATIVE P. WILSON acknowledged that that is a
possibility.
REPRESENTATIVE GRUENBERG - with regard to the term
"transportation infrastructure fund" - questioned whether under
the proposed constitutional change, some of the monies in that
fund could be appropriated to "a specialized type of revenue
sharing that's used only for municipal roads."
REPRESENTATIVE P. WILSON acknowledged that that, too, is a
possibility.
2:50:06 PM
FRANK RICHARDS, Deputy Commissioner of Highways & Public
Facilities, Office of the Commissioner, Department of
Transportation & Public Facilities (DOT&PF), in response to a
question, indicated that the DOT&PF has no position on HJR 42.
REPRESENTATIVE GRUENBERG questioned whether HJR 42's proposed
change to the Alaska State Constitution really does provide for
a true dedicated fund.
2:53:15 PM
BRIAN KANE, Attorney, Legislative Legal Counsel, Legislative
Legal and Research Services, Legislative Affairs Agency (LAA),
speaking as the drafter, offered that it does in that the
proposed constitutional change provides that all of the monies
from the fees listed therein and the State's motor fuel tax
would go into the proposed transportation infrastructure fund
and could then only be spent on a limited number of projects.
REPRESENTATIVE P. WILSON added that the funds that could be
appropriated under HJR 42 in any given year would be limited.
2:55:13 PM
KATHIE WASSERMAN, Executive Director, Alaska Municipal League
(AML), noted that the aforementioned handout titled "Alaska
Transportation Finance Study; Final Report" was prepared for the
AML and illustrates that among other things, the State needs to
identify some way to fill the financial gap that will be left as
a result of the anticipated decrease in federal funding. She
indicated that the AML would be happy to support HJR 42,
surmising that other interested organizations would be as well.
In conclusion, she relayed that the AML is in full support of
HJR 42.
REPRESENTATIVE GATTO surmised that the monies from the proposed
dedicated fund could be appropriated for Alaska's railroads.
REPRESENTATIVE GRUENBERG, referring to the sponsor's statement
that the goal is to seed the proposed dedicated fund with $1
billion and add Alaska's motor fuel tax and registration fees to
it, questioned whether taking that much in GF funding off the
table initially is supported by the AML, given that taking those
funds off the table could affect such things as revenue sharing,
education funding, and other things for which funding is needed
now.
MS. WASSERMAN relayed that the AML is aware that there will be
some tradeoffs with HJR 42's approach, but is still in favor of
it.
REPRESENTATIVE GRUENBERG asked Ms. Wasserman what she would
propose in order to address any [initial] budget shortfall that
results from so seeding the proposed dedicated fund.
MS. WASSERMAN relayed that she is unable to answer that
question.
2:59:21 PM
REPRESENTATIVE GRUENBERG opined that before HJR 42 is passed by
the legislature, it will be essential for the legislature to
know how local governments intend to make up for any budget
shortfall that could result from the proposed constitutional
change. He said he could envision that ratification of the
proposed constitutional change by the voters could result in
there being less money for the capital budget, less money for
municipal revenue sharing, and less money for education funding,
particularly because $1 billion is a lot of money. Furthermore,
he predicted, the proposed constitutional transportation
infrastructure fund could be just the first of many dedicated
funds to be proposed.
REPRESENTATIVE GATTO said, "You might consider that we could
bond for infrastructure, and use the dedicated fuel tax funds to
pay the bonds?"
MS. WASSERMAN acknowledged that the legislature could take such
an approach.
REPRESENTATIVE GRUENBERG offered his belief that there are
various other ways of paying for the state's transportation
needs besides adopting HJR 42.
CHAIR RAMRAS, after ascertaining that no one else wished to
testify, closed public testimony on HJR 42. In response to
comments, he relayed that HJR 42 [Version S] would be held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 01 HJR42 Sponsor Stmt.pdf |
HJUD 2/17/2010 1:00:00 PM |
|
| 02 HJR42 Bill v.E.pdf |
HJUD 2/17/2010 1:00:00 PM |
|
| 03 HJR42-OOG-DOE-2-9-10.pdf |
HJUD 2/17/2010 1:00:00 PM |
|
| 04 HJR42 Support - fund values with taxes.pdf |
HJUD 2/17/2010 1:00:00 PM |
|
| 05 HJR42 Support - Graph.pdf |
HJUD 2/17/2010 1:00:00 PM |
|
| 06 HJR42 Exec Summary AK Trans Finance Study.pdf |
HJUD 2/17/2010 1:00:00 PM |
|
| 07 HJR42 CS v. S.pdf |
HJUD 2/17/2010 1:00:00 PM |