04/08/1999 01:40 PM Senate TRA

                                                                                                                                
                  SB 129-M/V MALASPINA ACCOUNT                                                                                  
                                                                                                                                
CHAIRMAN WARD called the Senate Transportation Committee meeting to                                                             
order at 1:40 p.m. and brought up SB 129.                                                                                       
                                                                                                                                
Number 013                                                                                                                      
                                                                                                                                
MS. LLEWELLYN LUTCHANSKY, Staff to Senator Torgerson, presented the                                                             
sponsor statement for SB 129. Sponsored by the Senate Finance                                                                   
Committee, SB 129 would create a sub-account in the Alaska marine                                                               
highway system to separately track revenues and expenditures                                                                    
related to the day boat operation of the M/V Malaspina.                                                                         
Expenditures for its operation, maintenance and capital                                                                         
improvements would be limited to the gross revenues generated by                                                                
the vessel, and to any other funds the Legislature may appropriate                                                              
to the account.                                                                                                                 
                                                                                                                                
This will be its second year of operation as a day boat in the                                                                  
Northern Lynn Canal during the summer months. Last session the                                                                  
Legislature allowed the department an initial subsidy and directed                                                              
DOTPF to limit operation costs to the program receipts the                                                                      
Malaspina generates by seeking union concessions and targeting high                                                             
volume seasonal runs.                                                                                                           
                                                                                                                                
The Southeast Alaska Transportation Plan is premised on the                                                                     
development of sub-area or regional transportation services and                                                                 
facilities.  As more high-speed "day boats" are put into operation                                                              
in the region's four zones over the next five years, substantial                                                                
savings are expected to be realized in operations and maintenance                                                               
costs.                                                                                                                          
                                                                                                                                
SENATOR LINCOLN asked if the department would comment on the bill.                                                              
                                                                                                                                
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MR. BOB DOLL, General Manager of Alaska Marine Highway System,                                                                  
stated the department has worked with Senator Torgerson's office to                                                             
determine  the effect of the bill, and he doesn't foresee any                                                                   
significant difficulties ahead.  The Malaspina has been more                                                                    
closely observed than any other ship, and it operates in one of the                                                             
high revenue links.  There are two or three links in the system                                                                 
offering comparable revenues: Bellingham - Ketchikan and Prince                                                                 
Rupert - Ketchikan.  The Malaspina is not a typical operation and                                                               
he admitted apprehensiion about lessons being drawn from it, but as                                                             
far as the bill is concerned, he was sure it can be worked out.                                                                 
                                                                                                                                
SENATOR LINCOLN mentioned the zero fiscal note. She quoted in the                                                               
last paragraph in the sponsor statement, "...the Legislature does                                                               
not intend to subsidize the operation of day boats," and asked Mr.                                                              
Doll for his reaction to that statement.                                                                                        
                                                                                                                                
MR. DOLL replied the Southeast Alaska Transportation Plan addresses                                                             
two kinds of operation.  One operation involves the construction of                                                             
new high-speed ships that would provide "shuttle service." The                                                                  
other operation involves conversion of existing vessels that would                                                              
be called "day boats."                                                                                                          
                                                                                                                                
A new "shuttle" ship would have a much smaller crew and much                                                                    
smaller operating cost. The question of tariffs for that operation                                                              
has not been approached.  Regarding the zero fiscal note, tracking                                                              
the cost of operation and revenue of a ship on a weekly basis is an                                                             
intensive process that will require some additional labor, but                                                                  
nothing the department can put a cost to.  He concluded they will                                                               
need to establish the cost of operating the shuttle ships and an                                                                
initial estimate of tariffs, and adjust the two after a couple of                                                               
seasons of operation.                                                                                                           
                                                                                                                                
Number 149                                                                                                                      
                                                                                                                                
CHAIRMAN WARD asked the wish of the committee.                                                                                  
                                                                                                                                
SENATOR MILLER moved SB 129 out of committee with individual                                                                    
recommendations and attached zero fiscal note.  Without objection,                                                              
it was so ordered.  The committee adjourned at 1:48 p.m.