Legislature(2011 - 2012)HOUSE FINANCE 519
03/02/2012 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB307 | |
| HJR4 | |
| HB78 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HJR 4 | TELECONFERENCED | |
| += | HB 78 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 307 | TELECONFERENCED | |
HOUSE JOINT RESOLUTION NO. 4
Proposing amendments to the Constitution of the State
of Alaska creating a transportation infrastructure
fund.
2:23:20 PM
Co-Chair Stoltze discussed that Vice-chair Fairclough
chaired the subcommittee on HJR 4.
Vice-chair Fairclough explained that the committee sent
three bills to subcommittee in the prior year. The members
held hearings throughout Alaska. The bill received support
from residents for the dedication of transportation funds.
She explained that subcommittee suggestions were
incorporated into a CS that was labeled "finance."
Vice-chair Fairclough MOVED to ADOPT a proposed committee
substitute for HJR 4, Work Draft 27-LS0197\T (Martin,
3/1/12).
Co-Chair Stoltze OBJECTED for discussion.
2:24:57 PM
REPRESENTATIVE PEGGY WILSON, SPONSOR, asked her staff to
review changes in the CS.
REBECCA ROONEY, STAFF, REPRESENTATIVE PEGGY WILSON,
explained that the changes to remove details from the
constitutional amendment; the removed provisions would be
added to the enabling legislation. She noted that the CS
updated specific dates within the legislation and changed
the pay-out rate. She pointed to page 1, line 14, where the
date was changed and updated for the current year. The CS
deleted the following language from page 1, lines 14
through 16 and page 2 lines 1 through 2 after the word
"from":
"any state on fuel used for the propulsion of motor
vehicles, aircraft and water craft, less those
refunds, credits and collection costs that are
provided by law from a registration fee levied for a
motor vehicle, not including special registration fees
as provided by law. She noted that page 2, line 3
after "funds" deleted "designated by the legislature."
Ms. Rooney relayed that on page 2, line 6 after the words
"50 percent of the," the following language was removed
"state fuel tax, registration and driver's license fees,
identification card fees, studded tire taxes and other
designated." She continued with page 2, line 2 and line 8
where "6" was replaced with "7." She added that the
following language was deleted on page 2, line 10 the
following language "designated by law":
"For costs related to motor vehicle licensing and
registration that are designated by law" was deleted.
She noted that page 2, line 5 added a new sentence,
"the legislature shall by law determine which fees and
funds are transportation related under this section."
Co-Chair Stoltze surmised that the changes allowed a
dedicated fund similar to the permanent fund and the change
would allow direct appropriations or a dedication. The
legislature would make the appropriation decisions on how
the fund was implemented.
Representative Peggy Wilson replied in the affirmative.
Vice-chair Fairclough clarified that the 7 percent was an
"up-to" amount that would allow flexibility for the
legislature to set statute without revisiting the
constitution. The change would allow the legislature to set
a 4 or 5 percent pay-out rate depending on concurrence of
the body. The constitutional amendment allowed the
dedication of funds and permitted the legislature the
greatest flexibility in management of the fund.
2:29:50 PM
Representative Peggy Wilson read a statement that she
believed would help answer any questions related to the CS:
Like the rest of the country, Alaska is challenged
with maintaining, upgrading and creating new
transportation infrastructure. I think we all can
agree that we have a serious shortfall in funding
which could be exacerbated by the new federal
reauthorization bill. It is rumored to cut Alaska's
federal funding by at least 30%. In 2005 the United
States was ranked as number one in the world for our
transportation system. Now, just 7 short years later,
we are not even in the top 10. As federal funding is
diminishing and our infrastructure is aging Alaska
needs to shoulder more of the responsibility for its
transportation infrastructure.
HJR 4 will put a constitutional amendment to the
Alaska constitution before voters to re-instate a
dedicated fund for Transportation Projects.
Historians write that the drafters of the constitution
were concerned that dedicated funds would impair
future legislatures from responding to evolving public
needs. However, the drafters of our Alaska
Constitution grandfathered in two dedicated
transportation funds. The first was for highways and
the second was for water and harbor facilities. They
recognized the public need for dependable and
efficient transportation and that need has only grown.
Testifiers for this bill have agreed that the state
needs a reliable revenue stream that doesn't fluctuate
from year to year. With a dedicated fund Alaska can
implement a transportation plan that is independent of
the federal government.
In order to implement the Alaska Transportation
Infrastructure Fund (ATIF) there are 3 pieces of
legislation that need to pass. The first, the bill
before you today, is to put this constitutional
amendment on the ballot, second is to set up the
enabling statutes that direct how the fund will be
administered, what revenues will be deposited in the
fund, how those revenues may be spent, and what the
payout rate will be from the fund. It will also define
an entity that will evaluate projects for funding. The
third part will be the bill that will fund the corpus
of the Alaska Transportation Infrastructure Fund with
1 billion dollars.
Today we are hearing HJR 4 the constitutional
amendment to re-instate a dedicated transportation
fund. There is a CS before the committee today that
has 2 substantive changes made. 1) The language has
been modified to make the constitutional amendment
broad enough so that it will be useful 10 years, 20
years and 100 years from today. We have removed all
the details about which funds will be deposited in
ATIF, and what projects can be funded with ATIF. These
detailed provisions will be in the enabling statutes.
In addition to making the constitutional amendment
broader so that it will serve into the future, these
deletions have made the amendment more clear and
concise.
2:33:50 PM
Representative Peggy Wilson continued to read from a
statement:
The second substantive change is the increase in the
maximum payout rate. I believe that the payout rate
for today should be in the neighborhood of 4 to 4.5%
not 7 %. We do not want to chip away at the corpus of
the fund. However, what we don't know is what the
payout rate should be in 20 or 30 years. I think it is
prudent to give the legislature the flexibility to use
the fund and still maintain a small growth rate. 10
years ago it would have not been a bad idea to have
the payout rate at 6 or 7%. We had seen the growth
rate of investments up around the 10% range
consistently. Today's market is not as favorable.
Setting the payout rate in statute with a ceiling in
the constitution will give the legislature the
latitude to manage the fund in future years based on
the market of the day while preserving the corpus of
the fund.
In you packet you have a list of organization who have
voiced their support for the Alaska Transportation
Infrastructure Fund. It is quite a list and they are
the people we can depend on the get this amendment
passed by the voters in November of 2012.
Alaska needs to take action now. The future of the
economic and social well-being of Alaska's citizens is
critically dependent on a reliable transportation
system. This change to the state constitution,
allowing a dedicated transportation fund is needed to
create and maintain a modern, reliable transportation
system for Alaska.
Co-Chair Stoltze WITHDREW his OBJECTION. There being NO
further OBJECTION, Work Draft 27-LS0197\T was ADOPTED.
Representative Neuman asked who would decide which projects
were funded.
Representative Peggy Wilson replied that the enabling
legislation would determine the body responsible for the
decision regarding the funding of projects.
Co-Chair Stoltze understood that the default was the
legislature and its delineation of responsibility.
2:36:19 PM
Representative Gara complimented Representative Wilson on
the drafting of a dedicated fund provision. He believed the
dedicated funds provision in the Alaska Constitution was a
wise decision made initially by the state founders. He
recommended prioritized spending in the future.
Representative Peggy Wilson commented that the fund did
have user fees connected to transportation.
Co-Chair Stoltze acknowledged the gravity of constitutional
amendments.
2:40:18 PM
Representative Doogan agreed that a constitutional
amendment was a large step. He believed that Representative
Peggy Wilson had done the best job possible. He added that
the work of the subcommittee improved the legislation
further. He supported the legislation despite his dislike
for the permanence of dedicated funds.
Co-Chair Thomas referred to the fisherman's fund that was a
dedicated fund; it had been amended from $2500 to $10,000.
He stated that he would vote to move the bill out of the
finance committee.
2:43:42 PM
Representative Tammie Wilson appreciated the subcommittee
for its work over the prior interim. She imagined that
Alaskans might be unaware of the source of transportation
funds. She supposed that constituents might be surprised to
learn that money gained from gas tax and from the Division
of Motor Vehicles went into the general fund, as opposed to
being used directly on road construction. She opined that
the fund would not be necessary if the funding for
infrastructure occurred in the past. She pointed out that
state funding was simpler than federal funding to utilize.
Representative Guttenberg discussed a constitutional
committee called "draft and styling." The committee would
use an approved idea and rewrite it in a succinct manner.
He explained that HJR 4 was well vetted. He expressed
concern that subsequent laws would be written to implement
the process established by HJR 4. He supported the passing
of the bill from the finance committee. He applauded the
sponsor for her work.
2:47:26 PM
Vice-chair Fairclough pointed out that the federal
government was working on a reauthorization bill. She noted
that the new figures appeared to be rising, possibly
leading to the elimination of all metropolitan planning
organizations in Alaska. She clarified that the current
federal legislation retained Alaska's transportation
funding formula.
Co-Chair Stoltze believed that the federal legislation was
a continuing resolution.
Vice-chair Fairclough agreed. She commented that an
additional piece of federal legislation addressed Alaska's
funding formula for transportation.
Co-Chair Stoltze pointed out the uncertainty related to
federal funding.
Representative Edgmon echoed the compliments for
Representative Peggy Wilson and her work on the very
important legislation.
Vice-chair Fairclough clarified that the structure for a
dedicated fund was the sole issue in the committee
discussion. She did not want the issue to be confused with
the figure $1 billion, which was included in a separate
piece of legislation.
Co-Chair Stoltze explained that HJR 4 would establish a
structure that would ensure gradual spending.
2:51:58 PM
Representative Joule pointed out that the Constitutional
Budget Reserve (CBR) required a three-quarter vote. He
wondered whether the bill allowed a mechanism for
expenditures on items other than transportation.
Representative Peggy Wilson replied that the constitutional
amendment did not allow a mechanism for expenditures on
items other than transportation.
Representative Joule understood and compared the process to
that of accessing the Permanent Fund. He pointed out that
potential delays might arise due to the stipulations of
spending.
Representative Gara asked about other dedicated funds.
Representative Peggy Wilson replied that other dedicated
funds dissolved when the fuel gas tax was raised.
Vice-chair Fairclough pointed to fiscal notes and mentioned
the first fiscal note from the Office of the Governor for
elections in FY 13 for $1,500 to add the resolution to the
ballot. She MOVED to strike years FY 14 through FY 18 of
the Department of Revenue fiscal note.
Co-Chair Stoltze concurred as there had not yet been debate
regarding the dedication of funds along with the costs of
administering the funds. The fiscal note for DOR was
"zeroed out."
Vice-chair Fairclough clarified that the fiscal note could
be addressed when an appropriation bill was before the
committee.
Vice-chair Fairclough MOVED to report CSHJR 4(FIN) out of
committee with individual recommendations and the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
Co-Chair Stoltze CLOSED public testimony on HJR 4.
Representative Joule reminded the committee about public
testimony for HJR heard in the prior year.
Co-Chair Stoltze agreed.
CSHJR 4(FIN) was REPORTED out of committee with a "no
recommendation" and with one new fiscal impact note from
the Office of the Governor and one new zero note from the
House Finance Committee for the Department of Revenue.
3:00:28 PM
AT EASE
3:03:38 PM
RECONVENED
| Document Name | Date/Time | Subjects |
|---|---|---|
| Support Letter HJR4.doc |
HFIN 3/2/2012 1:30:00 PM |
HJR 4 |
| CS HJR4 WORKDRAFT FIN 27-LS0197-T-3.1.12.pdf |
HFIN 3/2/2012 1:30:00 PM |
HJR 4 |
| HJR004CS(TRA)-NEW FN-DOR-TRS-02-28-12.pdf |
HFIN 3/2/2012 1:30:00 PM |
HJR 4 |
| HB307 CS WORKDRAFT B version SUPPLEMENTAL.pdf |
HFIN 3/2/2012 1:30:00 PM |
HB 307 |
| HB307 Repot 3.2.12 Statewide Totals.pdf |
HFIN 3/2/2012 1:30:00 PM |
HB 307 |
| HB 307 SUPPLEMENTAL CS Backup.pdf |
HFIN 3/2/2012 1:30:00 PM |
HB 307 |
| Supplemental_Spreadsheet_1-31-12.pdf |
HFIN 3/2/2012 1:30:00 PM |
HB 307 |
| HB78 CS WORKDRAFT 27-LS0147-O.pdf |
HFIN 3/2/2012 1:30:00 PM |
HB 78 |