Legislature(2009 - 2010)
04/13/2010 02:42 PM Senate TRA
| Audio | Topic |
|---|---|
| Start | |
| HB357 | |
| HJR42 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HJR 42-CONST. AM: TRANSPORTATION FUND
CHAIR KOOKESH announced consideration of HJR 42. [CSHJR 42(JUD)
was before the committee.]
3:30:54 PM
REPRESENTATIVE PEGGY WILSON, sponsor of HJR 42, said the Alaska
Transportation Infrastructure Fund (ATIF) requires three pieces
of legislation to put it into practice. HJR 42 is the first
piece. It will put a constitutional amendment before the voters
to allow a dedicated transportation fund. The enabling
legislation, which will be taken up later, defines how the fund
will be used and how the appropriations will be disbursed. The
third piece is to appropriate seed money into the fund.
In FY10 Alaska received 87 percent of its transportation funding
from the federal government, which is more per capita than any
other state. This is not likely to continue under the new
federal highway authorization bill, she said. In any event,
state-funded projects that meet the same construction standards
can be done faster and cheaper because state requirements are
less stringent.
REPRESENTATIVE PEGGY WILSON told the committee that during the
interim the House transportation committee met and looked at
ways to improve the transportation infrastructure in this
geographically diverse state. This involved travel to villages
and urban areas to look at transportation challenges, safety
corridors, congested areas, and roads in need of repair. The
committee also heard from the Alaska Municipal League and the
Mat-Su Borough about jointly contracting an independent study on
the fiscal challenges associated with transportation. She noted
that Larry Persily also completed a study on the fiscal options
for funding infrastructure upgrades. Day-long hearings were held
to highlight issues and pose potential solutions.
3:34:09 PM
REPRESENTATIVE WILSON reminded the committee that the
constitution grandfathered in two transportation funds: one for
roads and one for water and harbors. She said she believes that
it's time to reinstate a dedicated transportation fund to
address the state's transportation needs. With a dedicated fund
it will be clear exactly what funds are available from year-to-
year for capital projects and major maintenance. For these
reasons I think the voters will vote to reinstate a dedicated
fund for transportation, she said.
CHAIR KOOKESH asked for a motion to adopt the proposed committee
substitute (CS).
SENATOR MEYER moved to adopt the work draft Senate CS for CS for
HJR 42, labeled 26-LS1411\T, as the working document. There
being no objection, version T was before the committee.
REBECCA ROONEY, staff to Representative Peggy Wilson, explained
three changes between the bill versions, one of which is
substantive. The current version T has a small language change
beginning on page 1, line 15, to clarify that the revenue would
go into the fund after July 1, 2011 even though the enabling
legislation isn't as yet following.
On page 2, line 1, the phrase "provided by law" is in a
different position in the sentence to clarify that it applies
just to the special registration fees provided by law and not
all registration fees provided by law.
The substantive change occurs on page 2, lines 4-5 and relates
to the annual appropriation to the fund. The version that passed
the House said, "…the legislature may appropriate a percentage
of the average market value of the fund" each year. The Senate
CS says, "…the legislature may appropriate a percentage of the
state fuel taxes and registration fees received by the fund in
that year and a percentage of the average market value of the
fund…".
MS. ROONEY directed attention to a spreadsheet in the packet
showing two scenarios. Scenario 1 shows a $1 billion initial
appropriation, the annual appropriations, and the revenues
realized from the vehicle registration fees and the motor fuel
tax. Scenario 2 shows what happens if you allow for expenditures
of 50 percent of those fuel taxes and vehicle registration fees
each year. This demonstrates the importance of appropriating
more up front, she said.
3:40:23 PM
SENATOR PASKVAN expressed a desire to see a table showing just
the revenue coming from the fees. He said he wonders what policy
concerns might arise out of allocating $1 billion that can't be
touched.
MS. RAINEY said she would provide that information.
3:41:48 PM
SENATOR MEYER asked what would happen to the appropriation if
the fuel tax was repealed as it was two years ago.
REPRESENTATIVE WILSON said in that event just the vehicle
registration fees would be appropriated. But for this to really
work, it's important to seed the fund initially, she added.
SENATOR MEYER said he supports the bill, but he worries that
that there might be pressure on the Legislature to increase the
fuel tax in order to get more money into the fund.
REPRESENTATIVE WILSON said a future Legislature may look at
that, but the federal government will be providing less revenue
for transportation in the future so it's important to start
planning for that. This is the best way we could think of to
start that process, she said.
3:45:31 PM
MARK HICKEY, representing himself, stated that he is a former
commissioner of transportation and he strongly supports HJR 42.
He related that he has worked on this measure in one form or
another since the mid '80s. He agreed with the sponsor that
Alaska had this dedicated fund at statehood; but when the fuel
tax was raised in the '60s the Department of Law (DOL) advised
that changing the rate of taxation did away with the dedication.
Based on that advice, the accompanying statute that said that
these funds shall be used for highway and harbor purposes was
amended to say that the funds may be used for those purposes.
MR. HICKEY said that since that time DOL's advice has been shown
to be incorrect. In fact, in the mid 90s the tobacco tax was
increased in the dedicated school fund and that has never been
challenged. It's clear that the constitution framers did not
intend for there to be a need for this measure and it's also
clear that the Legislature in 1960 didn't intend as a policy to
eliminate the dedication, he said. That Legislature thought it
had no choice.
MR. HICKEY said changing the constitution to allow a dedicated
fund isn't done lightly. To his knowledge the permanent fund is
the only one that's been established since statehood. He said
that it's been shown that for transportation there are strong
arguments in favor of doing this. There is a strong
understanding in the public that these are user fees and that as
needs increase there may be a need to do something different
with user fees. In the '90s there was a proposal to increase the
fuel tax and the polling showed that over 70 percent of Alaskans
supported an increase if the funds were dedicated. They did not
support the increase without an assurance that the funds would
be used for transportation purposes.
MR. HICKEY noted that Alaska is the only state that doesn't have
a state-funded transportation program. HJR 42 provides that
ability. This would be most helpful to small rural projects and
would keep federal dollars for larger projects.
Responding to questions raised earlier, he said it's important
to understand that the fuel tax was suspended and not
eliminated. The record from the Constitutional Convention
indicates that if this measure passes and then the Legislature
eliminated the tax, the dedication would be lost. "I think it's
clear from the record that a suspension probably wouldn't do
that," he said. Referring to Senator Meyer's question he said he
believes that the public would support a fuel tax increase if
the funds were dedicated.
3:51:57 PM
SHIRLEY MARQUARDT, Mayor, City of Unalaska; Second Vice
President, Alaska Municipal league (AML); and board of
directors, Southwest Alaska Municipal Conference, said the
conference passed a resolution in support of this type of stable
funding for the infrastructure needs across the state. AML has
made this a top priority for several years. She related that the
City of Unalaska has a five-year capital budget plan and if
funding opportunities for projects are up in the air, it is
extremely risky and potentially expensive to go through the
permitting and design process. In the past the city have spent
over $1 million on design for roads and then not received
funding, she said.
3:53:43 PM
KATHY WASSERMAN, Alaska Municipal League (AML), informed the
committee about of the caliber of persons who were involved in
the study that the sponsor mentioned. They had two prior
commissioners of transportation on the study, which was funded
by AML, the Municipality of Anchorage, Mat-Su Borough, the
Alaska Truckers Association, and the Alaska General Contractors,
she said. This is an issue that has been under work for many
years and the people who conducted the study were knowledgeable.
Everyone who has been involved with these organizations has
spent time in Washington D.C. and could see the writing on the
wall a couple of years ago that Alaska is in deep trouble and
will be one of the states that suffers mightily.
3:55:04 PM
LOIS EPSTIEN, Alaska licensed engineer and Director, Alaska
Transportation Priorities Project (ATPP), said ATPP works with a
wide variety of organizations to promote sensible transportation
policies in Alaska. ATTP supports addressing the upcoming
decline in federal transportation money by creating a
transportation infrastructure fund. However, the language in HJR
42 could mislead the public into thinking that only capital
projects would be covered by the fund. ATPP supports this
legislation if the language is amended to clarify that money
from the fund could be used for major maintenance projects, she
concluded.
3:56:53 PM
DAVID LEVY, Executive Director, Alaska Mobility Coalition,
stated support for HJR 42. He said the mobility coalition is a
private nonprofit that advocates for public and community
transportation statewide. He echoed the comments of Mark Hickey
and described HJR 42 as a creative way to deal with capital and
maintenance transportation challenges statewide.
3:58:27 PM
JOHN MACKINNON, Executive Director, Associated General
Contractors of Alaska (AGCA), said AGCA, which represents over
650 Alaska businesses, supports HJR 42. This would put a
constitutional amendment question before the voters to provide
dedicated revenue for a transportation infrastructure fund. This
has been a priority of the AGCA for many years, he said. The
proposed fund would encompass all modes of transportation
infrastructure, including maintenance. The collection of fuel
taxes and vehicle registration fees directed into the fund is
commensurate to a user-fee concept. The public understands and
can support user fees as opposed to general taxation going into
a general fund. He restated support for the legislation as well
as the amended language in the committee substitute.
3:59:54 PM
DAVE CRUZ, President, Associated General Contractors of Alaska,
stated full support for HJR 42 as a step in the right direction
for Alaska to take control of its destiny.
4:00:27 PM
SENATOR PASKVAN asked his thoughts on the suggestion to amend
the language to include maintenance as opposed to just capital
projects.
MR. CRUZ expressed the view that maintenance should be included
as opposed to building a road with state funds and then trying
to get federal funds to maintain it.
SENATOR MENARD noted that the suggestion was for "major
maintenance" and asked if there is a specific dollar amount over
which a maintenance project becomes a major maintenance project.
4:01:34 PM
MR. CRUZ declined to state a threshold without consulting with
members.
4:02:13 PM
FRANK RICHARDS, Deputy Commissioner, Department of
Transportation and Public Facilities (DOTPF) explained that
DOTPF is routinely funded for major maintenance activities under
the capital program. This includes deferred maintenance and
major bridge maintenance. Regular maintenance efforts are
undertaken under annual operating costs. He stated the belief
that it was the intent of the sponsor that HJR 42 would
establish an infrastructure fund for capital projects that would
include major reconstructions, major rehabilitation, and other
major maintenance efforts.
SENATOR MENARD asked what would be included in a minor
maintenance project.
MR. RICHARDS replied those would be the things that are done on
an annual basis including sweeping streets, sealing cracks, and
changing streetlight bulbs.
4:03:47 PM
SENATOR PASKVAN said if he would support amending the language
to specifically include major maintenance.
MR. RICHARDS said he believes that it's a policy call by the
Legislature that in the regular annual appropriations DOTPF
normally receives capital project funds for major maintenance.
The current language is sufficient.
CHAIR KOOKESH summarized that Mr. Richards believes that the
phrase "capital projects" on page 2, line 6, would include major
maintenance. He asked Representative Peggy Wilson to comment.
REPRESENTATIVE PEGGY WILSON stated her belief that the current
language is sufficient to include major maintenance, but she
wouldn't object to inserting "major maintenance" on page 2, line
6, following "transportation". If it would reassure the voters
it might be a good idea, she said.
CHAIR KOOKESH said, based on the testimony from DOTPF, he is
satisfied with the current language.
SENATOR PASKVAN concurred.
CHAIR KOOKESH closed public testimony and asked the will of the
committee.
4:07:26 PM
SENATOR PASKVAN moved to report Senate CS for CS for HJR 42,
version T, from committee with individual recommendations and
attached fiscal note(s). There being no objection, SCS CSHJR
42(TRA) moved from the Senate Transportation Standing Committee.
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