03/31/1998 09:10 AM Senate FIN

                                                                               
SENATE BILL NO. 314                                                            
"An Act relating to the Alaska marine highway system                           
and to municipal feeder vessel authorities."                                   
                                                                               
Senator Torgerson spoke to this bill, saying:                                  
                                                                               
"What this bill is attempting to do is to recognize if some                    
municipalities, especially here in Southeast Alaska might                      
want to own, construct, operate their own ferry vessels.                       
Mr. Chairman, in fact several communities - I believe eight                    
of them have voted to form a port authority mainly made up                     
of Prince of Whales Island communities, Petersburg and                         
Wrangell to establish their own authorities and to come to                     
the State Of Alaska or to the federal government and ask for                   
funding for these ferries as far to built them.  Mr.                           
Chairman, it is my belief this group has met with a lot of                     
opposition from the administration on whether - on how to                      
crank these things up and how to operate them.  They                           
basically went directly to Senator Stevens for some of the                     
funding and Senator Stevens actually gave appropriation,                       
which up until the budget came out this year they thought                      
was going to come direct to them.  But it does run through                     
the STIP.  We'll be taking that up as a capital                                
appropriation a little later on."                                              
                                                                               
"Mr. Chairman, also all of the Southeast plans that I've                       
reviewed starting from 1971, and there's been about six of                     
them, have established the need for feeder vessels to give                     
better service to the communities.  This has been rejected                     
by not only this administration but also every                                 
administration until now as far as starting these vessels.                     
We know that if these vessels are operating that they would                    
reduce the subsidy required through the Marine Highway                         
System."                                                                       
                                                                               
"So it's my hope that these communities, when they come                        
forward to establish the feeder vessels will be able to                        
participate in the federal funding programs that are                           
currently available for the rest of the state and the                          
National Highway System.  This bill sets that up."                             
                                                                               
"So just to go through it, Section 4 is kind of the meat of                    
the bill. It provides a mechanism for establishing the                         
authority in Subsection A.  Subsection B provides a                            
mechanism for disolving authority in case the local                            
government decides they don't want it.  Subsection C                           
describes the power of the authority; D, the liability of                      
the authority; E, provides administration of the authority                     
and F, establishes that feeder vessels can be a grant                          
authority for the grant fund."                                                 
                                                                               
"Basically, Mr. Chairman, we all know that Senator Stevens,                    
Senator Murkowski and Representative Young were successful                     
in getting more money that was going to be directly                            
allocated to the State Of Alaska for the ferry system.  It                     
is my hope that by passing this bill we'll use that money to                   
help build, construct and maintain vessels that are owned                      
and operated by the municipal governments."                                    
                                                                               
Senator Torgerson then indicated that he had an amendment to                   
offer.                                                                         
                                                                               
Senator Pearce assumed that although he referred to                            
Southeast Alaska that the bill would in no way be limited to                   
that area of the state.  Senator Torgerson said any                            
interested municipality would be able to participate, but                      
that communities in Southeast were the most likely.  He                        
mentioned that Homer, Kodiak and Anchorage were others that                    
may wish to establish feeder vessels.                                          
                                                                               
Senator Pearce questioned the insertion of the word                            
"feeder".  She felt it implied that the ferries would need                     
to link up to the main Marine Highway System.  She wondered                    
if communities that weren't served by the main ferry system                    
would be able to take advantage of this program if they                        
chose to establish a ferry system.  Because they were not                      
strictly feeding into something that already existed, could                    
they participate in the program, she asked.  She wanted to                     
ensure as much flexibility as possible.                                        
                                                                               
Senator Torgerson responded by saying the bill didn't really                   
define feeder vessels.  He said the other common term was                      
"day boat" and he was told the correct terminology would be                    
"feeder vessel".  He felt the bill spoke to Senator Pearce's                   
concerns, and referred to Section 1, which said the State Of                   
Alaska was to operate the mainline ferries north and south                     
and the feeder vessels would feed that mainline service.                       
Therefore, Homer and Anchorage would qualify.  Other                           
communities might be precluded if their vessels wouldn't be                    
feeding into the established routes.  The Ketchikan Airport                    
ferry wouldn't qualify, he noted, but he couldn't think of                     
any others who wouldn't.  He admitted someone could make                       
that stretch.  Senator Pearce said she didn't want the                         
department to be able to make that stretch.                                    
                                                                               
Senator Adams pointed out that the language in Section 1 did                   
not make it mandatory for municipal feeder authority.  He                      
had a question about page 3 line 31, the feeder vessel                         
authority grant fund set-up.  Could the Legislature still                      
place the $30 million to subsidize the ferry system through                    
the operating budget, he asked.  Senator Torgerson said that                   
was correct, this had nothing to do with the Marine Highway                    
fund itself.  This was just for feasibility studies and                        
grants for construction, acquisition, and maintenance and so                   
forth.                                                                         
                                                                               
Senator Torgerson moved for adoption of Amendment #1.                          
Senator Adams objected.  Senator Torgerson spoke to his                        
amendment, saying the senator from Craig approached him and                    
had concerns about the community of Craig being left out                       
because of language in the bill relating to port                               
authorities.  Senator Torgerson said it was not his                            
intention to exclude Craig, and he offered this amendment to                   
correct that.  He spoke more about the formation of the port                   
authorities.  Senator Adams removed his objection.                             
                                                                               
Co-Chair Sharp ordered Amendment #1 adopted there being no                     
objection.                                                                     
                                                                               
There was no further discussion on the legislation and Co-                     
Chair Sharp noted there was no one signed up to testify.                       
Senator Phillips offered a motion to move CS SB 314 (FIN)                      
from committee with amended fiscal notes.  The amount of the                   
fiscal note would be lowered to $12,000, reducing the                          
advertising costs to $8,000, which Co-Chair Sharp felt would                   
be adequate.  Senator Adams noted the Department of Law's                      
expenses to ensure that the advertising be done properly.                      
Co-Chair Sharp said he would leave that amount.  There was                     
no objection to the motion and the bill was reported out of                    
committee.