04/12/2011 08:30 AM House FINANCE

HOUSE JOINT RESOLUTION NO. 4                                                                                                  
                                                                                                                                
     Proposing amendments to the Constitution of the State                                                                      
     of Alaska creating a transportation infrastructure                                                                         
     fund.                                                                                                                      
                                                                                                                                
8:35:35 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE    PEGGY   WILSON,    SPONSOR,   provided    a                                                                   
comprehensive   overview   of   the   Alaska   Transportation                                                                   
Infrastructure  Fund (ATIF). She  explained that HJR  4 would                                                                   
place a  constitutional  amendment before  the voters  to re-                                                                   
establish    a    dedicated     fund    for    transportation                                                                   
infrastructure.  She reported  that HB 30(DEDICATED TRANSPORT                                                                   
FUND/PUB TRANSPORT)  and HB 31(TRANSPORT  INFRASTRUCTURE FUND                                                                   
APPROP) were the enabling and  appropriating pieces of HJR 4.                                                                   
Together,   the   trio   of    bills   created   the   Alaska                                                                   
Transportation  Infrastructure Fund. The  fund created  by an                                                                   
endowment   and  seeded   with  $1   billion  [general   fund                                                                   
appropriation]  would grow  through  investment earnings.  In                                                                   
addition,   revenue  from   the  motor   fuel  tax,   vehicle                                                                   
registration fees,  studded tire tax,  and 50 percent  of the                                                                   
vehicle  rental tax  compensated  the fund.  The  legislature                                                                   
could direct other  transportation fees and taxes  into ATIF.                                                                   
The legislature  would appropriate up  to six percent  of the                                                                   
market value  of ATIF averaged  over the previous  five years                                                                   
and 50  percent of the revenue  deposited the  previous year.                                                                   
The  fund was  expected to  generate $100  million the  first                                                                   
year and increase  over $3 million each subsequent  year. She                                                                   
referred  to a spreadsheet  handout "ATIF  Payout Rate  6.0%"                                                                   
(copy  on  file)  developed  by  the  Department  of  Revenue                                                                   
depicting  estimated  payout  rates.  The  legislature  would                                                                   
appropriate  ATIF  funds  and  its  administrative  costs  in                                                                   
tandem with the  budget cycle. Administrative  costs would be                                                                   
deducted from  by the fund.  She envisioned ATIF  exclusively                                                                   
funding  transportation  capital   and  deferred  maintenance                                                                   
projects.  The   provision  was  included  in   the  enabling                                                                   
statute  (HB  30).  She  assured  that  in  times  of  budget                                                                   
shortfalls  legislative   flexibility  was  built   into  the                                                                   
legislation.  The legislature  could  appropriate ATIF  funds                                                                   
for any  Department of  Transportation and Public  Facilities                                                                   
(DOT)  operations  or  transportation  related  project.  The                                                                   
appropriation  would require  a  change in  the statute  that                                                                   
defined   ATIF  use   but   not  require   a   constitutional                                                                   
amendment.                                                                                                                      
                                                                                                                                
8:39:39 AM                                                                                                                    
                                                                                                                                
Representative  Peggy  Wilson  announced  that  she  did  not                                                                   
commit  any transportation  taxes  to ATIF's  revenue  stream                                                                   
that were dedicated for other uses.                                                                                             
                                                                                                                                
Co-Chair  Thomas asked  whether the ATIF  funds would  solely                                                                   
cover  all   transportation  capital   expenses  or   require                                                                   
additional  general  funds  as   well.  Representative  Peggy                                                                   
Wilson expected  that initially,  general fund  appropriation                                                                   
was necessary  to preserve  the ATIF funds  for the  back log                                                                   
of  deferred maintenance.  She  anticipated  that ATIF  would                                                                   
primarily  cover transportation  deferred maintenance,  large                                                                   
high priority projects and projects related to safety.                                                                          
                                                                                                                                
Representative  Neuman   noted  that  much  of   the  revenue                                                                   
allocated to ATIF  was used to operate the  Division of Motor                                                                   
Vehicles (DMV). He  wondered how DMV would operate  with lost                                                                   
revenue.  Representative  Peggy  Wilson responded  that  ATIF                                                                   
funds would pay for DMV operations.                                                                                             
                                                                                                                                
Representative  Neuman  asked if  the legislation  created  a                                                                   
board to oversee  distribution of ATIF funds. He  did not see                                                                   
that  in   the  current  legislation.  Representative   Peggy                                                                   
Wilson explained  that HB 30 created  a 17 member  board with                                                                   
two  non-voting  legislative members.  The  board  supervised                                                                   
the fund. She  furthered that the board acted  in an advisory                                                                   
capacity, forwarding  recommendations on to the  governor and                                                                   
legislature.                                                                                                                    
                                                                                                                                
8:45:16 AM                                                                                                                    
                                                                                                                                
Representative Neuman  asked whether the legislature  had the                                                                   
final  say.  Representative  Peggy   Wilson  replied  in  the                                                                   
affirmative.                                                                                                                    
                                                                                                                                
Representative Gara  stated that the sponsor had  done a good                                                                   
job drafting the bill.                                                                                                          
                                                                                                                                
Co-Chair Stoltze  announced that  HJR 4  was referred  to the                                                                   
same subcommittee  established for HB  30 and HB  31, chaired                                                                   
by   Vice-chair   Fairclough,   for  interim   hearings   and                                                                   
activities.                                                                                                                     
                                                                                                                                
HJR  4  was  HEARD and  HELD  and  referred  to  subcommittee                                                                   
consisting   of  Vice-chair   Fairclough,  Co-Chair   Thomas,                                                                   
Representative      Costello,     Representative      Doogan,                                                                   
Representative  Peggy  Wilson  (adjunct member)  for  further                                                                   
consideration.