Legislature(2021 - 2022)BARNES 124
04/28/2021 03:15 PM House LABOR & COMMERCE
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Audio | Topic |
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Start | |
HJR19 | |
HB149 | |
HB146 | |
Occupational Safety and Health Review Board | |
Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
*+ | HJR 19 | TELECONFERENCED | |
+= | HB 149 | TELECONFERENCED | |
+= | HB 146 | TELECONFERENCED | |
+ | TELECONFERENCED | ||
+ | TELECONFERENCED | ||
HJR 19-SUPPORTING INVESTMENT IN INFRASTRUCTURE 3:26:44 PM CO-CHAIR FIELDS announced that the first order of business would be HOUSE JOINT RESOLUTION NO. 19, "Supporting widespread infrastructure investment in the state." 3:26:52 PM CO-CHAIR SPOHNHOLZ introduced HJR 19 on behalf of the House Labor and Commerce Standing Committee, prime sponsor. She said that Alaska's infrastructure has been neither built nor maintained due to low capital budgets over the past six years. She pointed out that the average state unrestricted general fund capital budget between fiscal year 2016 (FY 16) and FY 21 was $123 million; the modest investments, she pointed out, have largely existed for the sake of federal highway matching. She said that the Alaska Municipal League (AML) testified during the April 14, 2021, meeting of the House Labor and Commerce Standing Committee that Alaska has a $22 billion infrastructure deficit, with deferred maintenance for state facilities totaling $2 billion for the University of Alaska totaling $1.3 billion. She said that Alaska's infrastructure has received a rating of "C-" from the American Society for Civil Engineers, Alaska Chapter, with marine highways, ports and harbors, water, and wastewater all receiving a "D" rating due to lack of maintenance and construction. The marine highway system needs a massive infusion of capital, she said, and rural airports across the state have identified hundreds of capital project needs. The Port of Alaska at Anchorage, which supports $14 billion in commercial activity, needs significant investment to ensure that it will be safe in the future. She noted that this issue is of particular importance because Alaska has only three days' worth of food at any given time. CO-CHAIR SPOHNHOLZ said more than 16,000 affordable homes are needed at a cost of $7 billion, and in 2019 the Alaska Broadband Task Force identified broadband infrastructure as critical to meeting the need for innovation, commerce, education, and health care. Renewable energy in Alaska is critical to reducing energy costs, she said, particularly for rural Alaskans; proven technologies such as hydropower and wind power already power several areas of Alaska. She pointed out that the governor understands the need for more renewable energy and has introduced HB 170, which would establish a "green bank." She said he also understands the need to address infrastructure and has proposed a general obligation bond to pay for capital needs. Congress is currently considering a bill that could bring "massive" capital infusion into Alaska's economy at a critical time, she said; HJR 19 would encourage Alaska's congressional delegation to aggressively pursue funding for Alaska's capital infrastructure needs. She noted the population loss due to net outmigration and the existence of 24,000 jobs in the construction industry, which deliver a middle class wage and are critical to the economy. 3:31:25 PM CO-CHAIR FIELDS opened invited testimony on HJR 19. 3:31:34 PM CHRISTINE O'CONNOR, Executive Director, Alaska Telecom Association, provided testimony and a PowerPoint presentation in support of HJR 19 [hardcopy included in the committee packet]. She explained that it's useful to think of broadband networks in two sections: "last mile" and "middle mile." The last mile network, she said, connects a house or school to the broadband provider; this piece can connect houses or businesses together but needs the middle mile section to connect to the Internet. Alaska's middle mile is a combination of technologies, she said, with thousands of miles of fiber allowing huge capacity and fast speeds. She said that when fiber can be built the system can provide nearly "future-proof" capabilities. Where building fiber isn't possible, she said, microwave networks enable delivery of high-speed broadband; where fiber or microwave isn't available, multiple geosynchronous satellites provide the connection to the world. MS. O'CONNOR pointed out Alaska's uniqueness in the middle mile situation compared to the Lower 48, where people have nearly ubiquitous access to fiber-backed connections. She presented slide 7, "Middle Mile is Key - 2010," which displayed a map of the middle mile network in 2010 showing undersea cables connecting Alaska to the Lower 48, along with a few microwave links; numerous black dots represent schools that were served solely by satellite. Slide 8, "Middle Mile is Key - 2020," showed the result of massive investment in middle mile connectivity including new infrastructure along the northern coast; expansion of microwave networks in Southwest, Northwest, and Southeast Alaska; new fiber running up the Dalton Highway; and new terrestrial and subsea links into Canada. She presented slide 9, "Last Mile Expansion," which read as follows [original punctuation provided]: braceright Over 50,000 locations upgraded/new broadband by ATA members since 2015 braceright Projects: braceright Alaska Communications braceright Alaska Power & Telephone braceright Copper Valley Telecom braceright GCI 3:35:24 PM MS. O'CONNOR presented slide 10, "New Middle Mile," which read as follows [original punctuation provided]: braceright Alaska Power & Telephone braceright Cordova Telecom braceright GCI braceright KPU Telecom braceright Matanuska Telephone Association braceright Nushagak Cooperative MS. O'CONNOR shared further detail regarding slide 10. She said that Alaska Power & Telephone (AP&T) has constructed an undersea cable between Juneau, Haines, and Skagway, and is doubling the capacity of its microwave network between Juneau and Ketchikan; Cordova Telecom expanded its microwave network in Prince William Sound; GCI completed a multi-year upgrade at 42 microwave sites in Western Alaska to add more capacity; KPU Telecom completed Ketchikan One, the first undersea connection to Canada and connecting to their fiber; Matanuska Telephone Association (MTA) constructed the Al-Can One project, the first terrestrial connection from Alaska into Canada; and Nushagak Cooperative completed a major expansion of their microwave network in Dillingham. She noted that the MTA and KPU projects are providing new routes from Alaska to the Lower 48 which would expand both the capacity coming into the state and provide geographic diversity in case of emergency or disaster. MS. O'CONNOR said that every time there's an opportunity to deploy more resources to improve networks, Alaska's broadband providers are doing so. She then presented slide 11, "ReConnect Round 1," which displayed the Cordova Telecom Cooperative logo and read as follows [original punctuation provided]: braceright Dec. 3, 2019 USDA awards Cordova Telecom $18.9M grant to connect Yakutat MS. O'CONNOR presented slide 12, "ReConnect Round 2," which displayed the AP&T logo and read as follows [original punctuation provided]: braceright October 12, 2020 USDA awards $21.5M grant to Alaska Power & Telephone to connect Coffman Cove and Kasaan on Prince of Wales Island. MR. O'CONNOR presented slide 13, "Reconnect Round 2," which displayed a GCI logo and read as follows [original punctuation provided]: braceright October 12, 2020 USDA awards $25M grant to GCI to build an undersea fiber connecting Unalaska, Akutan, King Cove, Sand Point, Chignik, & Larsen Bay MS. O'CONNOR presented slide 14, "Reconnect Round 2," which displayed the Arctic Slope Telephone Association Cooperative (ASTAC) logo and read as follows [original punctuation provided]: braceright November 12, 2020 USDA awards $5.3M grant to ASTAC to connect Kaktovik. MR. O'CONNOR presented slide 15, "ReConnect Round 2," which displayed the TelAlaska and MTA logos and read as follows [original punctuation provided]: braceright November 12, 2020, USDA awards $4.1M grant to TelAlaska & $1.9M to MTA. braceright Brevig Mission braceright Teller braceright Caswell MS. O'CONNOR characterized the projects as "transformational" and noted that the program has a rigorous and expensive application process and requires significant matching funds from each awardee. She then presented slide 16, "Low Earth Orbit Satellites - LEOS," which read as follows [original punctuation provided]: braceright Starlink braceright One Web braceright Project Kuiper braceright Telesat MS. O'CONNOR said that the questions of expense, timeline, and availability still exist. She then presented slide 17, "What's next?" Slide 17 read as follows [original punctuation provided]: braceright Private investment - $1.2B braceright Federal braceright State braceright Congress MS. O'CONNOR pointed out that it's critical to have stable programs at the federal and state levels. President Joe Biden's American Jobs Act, she said, proposed $100 billion for broadband and states the ambitious goal to bring affordable, reliable broadband to every American. 3:42:00 PM CHRIS KOLEROK, Director of Policy and Government Affairs, Cook Inlet Housing Authority (CIHA), testified in support of HJR 19. He stated that Alaska's infrastructure is inadequate; cities and boroughs have relied on new housing developments in order to upgrade existing roads, water and sewer lines, and stormwater systems. The upgrades are often needed prior to the building of new housing, he said, and will benefit other new housing in the future, which is one of the reasons why housing is so expensive to build and why expensive housing is the only profitable housing to develop. He described some of the housing structures in Anchorage managed by CIHA and noted the Association of Alaska Housing Authorities, a membership organization of the 14 regional housing authorities that deliver affordable housing. MR. KOLEROK said that Alaska's housing needs are diverse but that there aren't enough homes for everyone or for those who earn a low income. The Alaska Housing Finance Corporation's 2019 housing assessment said that Alaska needs over 16,000 housing units to address overcrowding, he said, which present challenges to students who study at home and those who need rest for work. When one person has a substance abuse problem but lives in an overcrowded home, he said, 10 or 15 other people in the home may have their lives adversely impacted. Nearly 35 percent of homes in the Yukon-Kuskokwim region and 20 percent of homes in the Bering Strait region have incomplete plumbing, he said; families are left more susceptible to sickness because of the inability to wash their hands or clothes. He said that in Southeast Alaska 16 percent of homes are rated with a single star for energy efficiency, along with 13 percent of homes in the Interior and 11 percent in the Bering Strait region; this means families spend more of their income on heating fuel. Preserving and retrofitting homes for energy efficiency is essential for families on limited incomes, he said. 3:47:51 PM MR. KOLEROK stated that infrastructure is necessary for housing, and he pointed out that Anchorage's infrastructure is outdated and was not designed for the current population. He said that some of the storm sewer infrastructure is a century old and made of wood, and there are requirements that builders must upgrade roads before they can start constructing housing; in some instances, he said, the roads are already slated for improvement. He said, "We have a dearth of vertical construction in urban Alaska, and that leads into a skills gap. As capital projects have slowed, skilled tradespeople have left the state because there's not enough projects to keep them continuously busy." Mr. Kolerok said that there is a constant need to train new people, and projects are needed to take skilled tradespeople from apprenticeship to journey status. He said that several years' worth of capital projects are needed to begin a self-sustaining cycle of construction and to support a workforce, and that housing is infrastructure when speaking in in terms of workforce, society, and economy; it is not possible to have a well-functioning workforce that's homeless or overcrowded. President Joe Biden's infrastructure initiative, he said, is a "once-in-a-generation" chance for investment in housing and infrastructure. He pointed out that infrastructure is an eligible spending item in the Supplemental Housing Development Grant program through the Alaska Housing Finance Corporation (AHFC). He then talked about gap funding for low- income housing tax credit projects; at a leverage of $20,000 per-unit, he said, would mean $10 million to pay for 500 housing units and close the gap around housing developers needing to upgrade infrastructure. 3:51:53 PM REPRESENTATIVE MCCARTY asked how the increased cost of materials affects housing projects. He then asked for alternative ways of meeting the housing need. MR. KOLEROK replied that there is no doubt that materials costs have greatly increased. The large influx of federal dollars is one of the few tools CIHA has to directly address the cost increases, he said, with the hope that improved infrastructure would lead to improvements in logistics. 3:54:13 PM CRYSTAL ENKVIST, Executive Director, Alaska Power Association (APA), testified in support of HJR 19. She said that roads, airports, and ports won't work without electricity, and that Alaska's electricity utilities have innovated while working in harsh conditions. She explained that power marketing administrations such as the Bonneville Power Administration facilitate lower electricity costs in many areas; Alaska, however, lacks the federal investment enjoyed by many regions in the Lower 48. Alaska's lawmakers now have the opportunity, due to the American Rescue Plan Act and President Joe Biden's infrastructure bill, to plan a future that includes affordable energy. She described the effort to transition from diesel fuel generation to hydropower and said that infrastructure reliability would help that effort, especially in areas not connected to the larger grid. She said there is a need for investment in battery energy storage systems, wind turbines, solar and hydropower projects, and transmission lines to connect communities. She noted the success experienced by rural communities in their efforts to integrate wind and solar power with battery storage backups and said federal funding gives companies the opportunity to continue innovating. 3:58:38 PM MS. ENKVIST said that as battery storage technology has improved, prices have decreased, and battery systems serve to help regulate renewable power and provide an important backup in case a power plant goes offline. The technology has statewide applications in communities of all sizes, she said, especially during the winter when consistent power is critical. The Roadbelt Intertie project would increase Alaska's electric system reliability, she said, allowing for the integration of more renewable energy, enhance power reliability to military installations, provide redundancy for the Anchorage-Fairbanks intertie, and enable economic development opportunities in the Copper Valley region. The proposed run-of-river project in Southwest Alaska, she said, could generate power year-round and generate up to 20 megawatts of power, depending on seasonality and river flow; electricity and optical fiber could be provided to Dillingham and other area communities to support the electricity and broadband needs in the Bristol Bay region. In South Central Alaska, she said, the railbelt utilities and the Alaska Energy Authority have identified more than $1 billion in transmission upgrades, removing constraints, and allowing for better use of the Bradley Lake hydropower project that serves more than half of Alaska's population. MS. ENKVIST said that renewable energy generation requires a grid that can accommodate the full potential of such energy, as well as for safety and reliability. "There is no doubt that Alaska can be a leader in renewable energy," she said, "but it will take additional funding from the renewable energy fund and other sources to get us there." Alaska's energy utilities are integrating renewable energy sources into their portfolios, she said, and the Renewable Energy Fund (REF) program is an effective way to continue investment and development to benefit communities. Electric vehicle charging stations continue to be installed by communities and businesses, and as more of the barriers to electric vehicle usage are addressed, more Alaskans will consider electric vehicle purchases. Since the vehicles are commonly charged at night, she said, electricity loads are occurring during off-peak hours. She pointed out that electric vehicles are popular in small communities with limited road miles and that the development of electric vehicle charging infrastructure would resolve a barrier to market expansion and inform future utility planning. "Alaska's future relies on an electric system that can fully employ the technological advances of tomorrow," she said, "but the time to move us in that direction is now." She said that the economy relies on electricity and the state must invest in strategic and necessary upgrades statewide. 4:03:43 PM CO-CHAIR FIELDS noted that Ms. Enkvist referenced a number of projects that were sent to members of the House Special Committee on Energy and asked her to send the same information to members of the House Labor and Commerce Standing Committee. 4:04:26 PM JIM JAGER, Director, Business Continuity and External Affairs, Port of Alaska at Anchorage, Municipality of Anchorage, presented a PowerPoint as part of his testimony in support of HJR 19. He presented slide 2, which read as follows [original punctuation provided]: 4.7 MILLION TONS OF FUEL AND CARGO IN 2020 14.3 BILLION IN STATEWIDE COMMERCIAL ACTVITY IN 2019 HANDLES GOODS CONSUNSUMED BY 90% OF ALL ALASKA RESIDENTS STATEWIDE HALF OF ALL ALASKA INBOUND FREIGHT CROSSES ANCHORAGE'S DOCK HALF OF ALL THE FREIGHT THAT CROSSES ANCHORAGE'S DOCK IS DELIVERED TO FINAL DESTINATION OUTSIDE OF ANCHORAGE 75% OF ALL NON-PETROLEUM MARINE CARGO SHIPPED INTO ALASKA MR. JAGER said that cargo handling, logistics, and efficiency are driven by proximity to markets, infrastructure for handling the cargo, and transportation connections. He pointed out that 54 percent of Alaska's population lives within an hour's drive of the Port of Alaska at Anchorage. He said the port handles hundreds of millions of dollars' worth of mostly private infrastructure as detailed on slide 3, which read as follows [original punctuation provided]: 125+ ACRES OF CARGO-HANDLING INFRASTRUCTURE 3.1 MILLION BARRELS OF LIQUID FUEL STORAGE 60,000 TONS OF CEMENT STORAGE DOCK CRANES, RO-RO TRESTLES, RAIL, PIPLINES, ETC. SKILLED WORKFORCE MR. JAGER presented slide 4, which displayed a graphic of different modes of transportation, and explained that the marine transportation system meets the road system, which meets the air transportation system, railroad, and pipeline. He then presented slide 5, which listed commerce, national defense, and disaster response as the three functions of the Port of Alaska at Anchorage. He presented slide 6, which displayed pictures of corroded materials and read, "Docks have exceeded economic and design life and are failing from age-related corrosion and obsolescence." He said that a 2020 engineering study concluded that load limits would need to be reduced and docks would need to be closed within the next five years. He then presented slide 7, "Port of Alaska Modernization Program," which read as follows [original punctuation provided]: ? Replace aging docks and related infrastructure ? Improve operational safety and efficiency ? Accommodate modern shipping operations ? Improve resiliency to survive extreme seismic events and Cook Inlet's harsh marine environment MR. JAGER presented slide 8, which showed a picture from 2020 of construction of a new dock, and slide 9, which showed a recent picture of the finished dock. MR. JAGER presented slide 10, "Petroleum & Cement Terminal Funding," which read as follows [original punctuation provided]: Remaining PIEP funds State Capital Grant (2012) $28 Million SB160 State Grant (2013) $48 Million State GO Bond (2013) $50 Million State Grant (2019) $20 Million Federal Grants MARAD BUILD II Grant (2019) $25 Million MARAD PIDP Grant (2019) $20 Million Port Cash/Equity $2 Million Bond Proceeds (repaid w/ PoA tariffs) $60 Million MR. JAGER noted that federal funds are critical to infrastructure. He then presented slide 11, "North Extension Stabilization," which displayed an aerial picture of the area slated for construction and which read as follows [original punctuation provided]: Phase 1 north extension stabilization $121 M On-shore facilities replacement $15 M Phase 2 north extension stabilization $128 M MR. JAGER presented slide 12, "2022 construction: $121 million," and slide 13, "Balance of North Extension: $128 million," which displayed the same picture as slide 11. He then presented slide 14, "What's next?", which read as follows [original punctuation provided]: $1 Billion+ General Cargo Terminal Replacement ? Cargo Terminal Design and Permitting (2021-24) ? Phase 1 North Extension Stabilization (2022) ? Administration Building (2022-23) ? Phase 2 North Extension Stabilization (>2022) ? Cargo Terminal 1 Replacement (2025) ? Cargo Terminal 2 Replacement (2028) ? Fuels Terminal Incorporation (>2028) ? Terminal 3 Demolition (>2030) MR. JAGER pointed out that bonds can be repaid using tariffs, but several large projects can't be funded by bonds, which is why federal funding is so important. 4:12:09 PM REPRESENTATIVE MCCARTY asked for clarification about the numbers in slide 1. MR. JAGER replied that 90 percent of Alaska residents routinely use items that have come through the Port of Alaska at Anchorage. REPRESENTATIVE MCCARTY asked about imports. MR. JAGER responded that 90 percent of all goods arriving in Alaska arrive by ship or barge; the Port of Alaska at Anchorage handles half of all types of cargo, and half of that cargo is transferred to a different mode of transportation and sent to other parts of the state. REPRESENTATIVE MCCARTY talked about taking mud out of the port area and asked for alternatives in case something happens to the port. MR. JAGER replied that redundancies are in place in other parts of the country; if something happens at the Port of Tacoma there are six other nearby seaports that can handle the cargo. Alaska's population is too small for redundant ports, he said, pointing out that the ports at Whittier and Seward don't have the deep water or necessary infrastructure. 4:16:08 PM ALICE SIIRA, Executive Director, Associated General Contractors (AGC), presented a PowerPoint as part of her testimony in support of HJR 19. She said AGC is looking forward to providing input as legislators develop strategic, long-term plans to maximize funding and prioritize critical infrastructure needs to provide immediate economic relief and employment opportunities. She presented slide 2, "HOW MONEY FLOWS THROUGH OUR ECONOMY," which displayed a graphic showing that spending by construction companies creates indirect impacts, including vendor spending on jobs and payroll. She then presented slide 3, "IN 2019, ALASKA'S CONSTRUCTION INDUSTRY..." Slide 3 read as follows [original punctuation provided]: Employed Alaskans ? Employed 24,000 workers, including wage & salary, and self-employed workers 81% Alaska Residents making 86% of Alaska wages 1 in 20 Alaska jobs (5%) was in construction Paid Alaskans ? Paid $2.3 billion in labor income, or 7% of all earnings in Alaska Generated Multiplier Effects ? Total impacts of 42,000 jobs and $3.4 billion in wages ? 9% of total employment in Alaska ? 10% of total labor income in Alaska MS. SIIRA presented slide 4, "2,507 CONSTRUCTION INDUSTRY EMPLOYERS," which displayed a table showing 2019 statistics of 2,507 total employers, 16,396 jobs, and over $1 billion in wages. 4:19:41 PM MS. SIIRA noted that she skipped slide 5 and moved to slide 6, "CONSTRUCTION WAGES," which showed that wages for specialty trade contractors total $515 million; for heavy construction, $449 million; and for building construction, $368 million. She pointed out that the average annual construction worker wage is $81,258, which is 43 percent above the average Alaska wage of $56,983. She then presented slide 7, "TOTAL ECONOMIC IMPACT," which read as follows [original punctuation provided]: ? Statewide construction industry-related jobs represent 9% of all Alaska jobs (42,000 of 453,788) ? Construction industry-related activity accounted for $3.4B in labor income, 10% of Alaska's total labor income ($32.7B) MS. SIIRA presented slide 8, "STATE/FEDERAL FUNDING FOR STATE OF ALASKA CONSTRUCTION PROJECTS," which showed the portion of the capital budget related to construction. She said that the federal government has been the dominant source of construction funding since 2014, as the state's capital budget has declined. She then discussed the impacts of COVID-19 and presented slide 9, "CONSTRUCTION ACTIVITY IMPACTS," which read as follows [original punctuation provided]: ? As essential workers, the construction industry continued work on projects across Alaska throughout the pandemic. ? However, due to revenue constraints, supply chain challenges, and complicated logistics, construction activity was significantly impacted in 2020; these impacts are expected to continue in 2021 MR. SIIRA said that contracts worth $50 million were cancelled, with another $50 million in deferred spending. Slide 10, "CONSTRUCTION COMPANY IMPACTS," displayed a chart showing the number of initial unemployment claims by construction workers; like other industries, construction saw a notable spike in unemployment claims in April 2020, then the number of claims trended downward. She said construction companies spent hundreds of millions of dollars on overtime pay, testing, and extra housing at work sites; many construction companies were assisted by federal stimulus funds and about 12,000 total employees were retained. She then presented slide 11, "THE BIG TAKEAWAYS," which read as follows [original punctuation provided]: 24,000 construction jobs, earning $2.3 B (81% Alaska Resident Hire and 86% Alaska Resident Wages Paid) Total Economic Impact of Industry: 42,000 jobs (9% of Alaska's jobs) $3.4 B (10% of Alaska earnings) Oil prices and COVID-19 have significantly impacted Alaska's construction activity and construction companies 4:25:15 PM CO-CHAIR FIELDS opined that the construction industry did an "extraordinary" job managing COVID-19. 4:25:54 PM REPRESENTATIVE MCCARTY asked about the supply and demand of materials in Alaska. MS. SIIRA replied that AGC has noticed supply chain issues that are driving up the cost of materials. She said that employers are getting creative and hoping that the issue levels out. REPRESENTATIVE MCCARTY asked whether losing the rail barge out of Prince Rupert, British Columbia, was one of the reasons for the supply chain issues. MS. SIIRA replied that she would find out. [HJR 19 was held over.]