05/05/2005 07:30 AM House TRANSPORTATION

HB 237-INTERNATIONAL AIRPORTS REVENUE BONDS                                                                                   
                                                                                                                                
CO-CHAIR ELKINS announced  that the only order  of business would                                                               
be HOUSE BILL NO. 237  "An Act relating to international airports                                                               
revenue bonds; and providing for an effective date."                                                                            
                                                                                                                                
REPRESENTATIVE KOHRING  moved to report  HB 237 out  of committee                                                               
with individual recommendations and accompanying fiscal notes.                                                                  
                                                                                                                                
CO-CHAIR  GATTO objected.   He  asked if  any of  the funds  were                                                               
federal monies.                                                                                                                 
                                                                                                                                
MIKE BARTON, Commissioner, Department  of Transportation & Public                                                               
Facilities (DOT&PF), said  it would all be paid by  the rates and                                                               
fees charged at the two airports.                                                                                               
                                                                                                                                
CO-CHAIR  GATTO  noted  that  the  fees  are  passed  on  to  the                                                               
consumer, and asked how much it will raise ticket prices.                                                                       
                                                                                                                                
7:34:59 AM                                                                                                                    
                                                                                                                                
COMMISSIONER  BARTON said  he doesn't  know the  formula that  an                                                               
airline  might use,  but  he  said he  can  approximate  it.   By                                                               
looking at the landing fees,  a 737-400 landing in Anchorage will                                                               
pay a total of $235, which  is an increase of $.72 per passenger.                                                               
He said  the airlines  approved the  projects, and  obviously ran                                                               
the necessary calculations.                                                                                                     
                                                                                                                                
CO-CHAIR GATTO said the original "C" terminal was over budget.                                                                  
                                                                                                                                
COMMISSIONER  BARTON agreed  that it  was very  much over  budget                                                               
because   of  additional   security  requirements,   added  space                                                               
requested  by  the  airlines,  and  permitting  issues  with  the                                                               
municipality of  Anchorage.   He said DOT&PF  has a  new contract                                                               
structure to avoid a cost overrun.                                                                                              
                                                                                                                                
CO-CHAIR  GATTO said  there is  already a  ticket price  increase                                                               
because of  the cost  of the  "C" terminal and  there will  be an                                                               
additional increase to renovate the "A" and "B" terminals.                                                                      
                                                                                                                                
COMMISSIONER  BARTON said  80  percent of  the  landing fees  are                                                               
picked up by  cargo carriers, and that sthe  shippers support the                                                               
plan.                                                                                                                           
                                                                                                                                
CO-CHAIR GATTO noted that rent space tripled recently.                                                                          
                                                                                                                                
COMMISSIONER BARTON  said "they" knew  that when "they"  voted on                                                               
the project.   He  said the  landing fees are  the lowest  of the                                                               
major airports.                                                                                                                 
                                                                                                                                
7:40:14 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  NEUMAN asked  what  DOT&PF will  do  if the  bill                                                               
fails.                                                                                                                          
                                                                                                                                
COMMISSIONER BARTON  said the project  would not  proceed, adding                                                               
that  there   would  be  liability   to  the  state   because  of                                                               
deficiencies in the seismic code.                                                                                               
                                                                                                                                
REPRESENTATIVE NEUMAN asked what amount  of the money would go to                                                               
Fairbanks.                                                                                                                      
                                                                                                                                
MICHAEL   MARTING,  Controller,   Alaska  International   Airport                                                               
System,   Department  of   Transportation  &   Public  Facilities                                                               
(DOT&PF), said  there is $105  million for the  Fairbanks airport                                                               
and the balance would go to Anchorage.                                                                                          
                                                                                                                                
COMMISSIONER BARTON said,  "What we're doing is  raising the bond                                                               
cap so that we can accommodate this $288 million sale."                                                                         
                                                                                                                                
REPRESENTATIVE NEUMAN asked if the money has been spent.                                                                        
                                                                                                                                
COMMISSIONER BARTON  said it is  used and  some are paid  off and                                                               
some are being paid, but it is all invested in capital projects.                                                                
                                                                                                                                
7:43:05 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NEUMAN asked  if any of this work  was included in                                                               
prior plans so that the bill covers previous cost overruns.                                                                     
                                                                                                                                
MR.  MARTING said  there  is  $17 million  for  the A/B  retrofit                                                               
already in the  budget, and the balance is all  new money and new                                                               
projects.                                                                                                                       
                                                                                                                                
CO-CHAIR GATTO asked what the "C" terminal cost overrun was.                                                                    
                                                                                                                                
MR. MARTING said he thought it was $100 million.                                                                                
                                                                                                                                
CO-CHAIR GATTO said  every major project has a cost  overrun.  He                                                               
asked if a 30 percent cost overrun is typical.                                                                                  
                                                                                                                                
COMMISSIONER BARTON said  he can't say it is typical,  but in the                                                               
course of developing projects, unknowns  are encountered, such as                                                               
terrorist attacks or environmental hazards.                                                                                     
                                                                                                                                
7:45:39 AM                                                                                                                    
                                                                                                                                
CO-CHAIR GATTO said there is never an under-run.                                                                                
                                                                                                                                
COMMISSIONER  BARTON said  it is  rare but  there have  been some                                                               
cases, like the Bradley Lake project.                                                                                           
                                                                                                                                
CO-CHAIR GATTO maintained his objection.                                                                                        
                                                                                                                                
A  roll call  vote was  taken.   Representatives Salmon,  Elkins,                                                               
Neuman, Thomas,  and Kohring voted  in favor of reporting  HB 237                                                               
from  committee.     Representative   Gatto  voted   against  it.                                                               
Therefore,  HB 237  was reported  from  the House  Transportation                                                               
Standing Committee by a vote of 5-1.