Legislature(2009 - 2010)CAPITOL 17
02/09/2010 01:00 PM House TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| HJR42 | |
| HB329 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HJR 42 | TELECONFERENCED | |
| *+ | HB 329 | TELECONFERENCED | |
1:07:12 PM CHAIR P. WILSON announced that the first order of business would be HOUSE JOINT RESOLUTION NO. 42, Proposing amendments to the Constitution of the State of Alaska creating a transportation infrastructure fund. 1:08:12 PM REBECCA ROONEY, Staff, Representative Peggy Wilson, Alaska State Legislature, on behalf of the sponsor, Representative Peggy Wilson, stated that HJR 42 would propose an amendment to Alaska's constitution to create a transportation infrastructure fund. This resolution would place before the voters whether to change the Alaska Constitution to allow a dedicated fund for capital transportation projects. MS. ROONEY explained that last session and through the interim, the committee has had many presentations from DOT&PF and other organizations identifying challenges of transportation in our geographically challenged and diverse state. The committee held hearings throughout the state, including flying to villages to view rural airports, which provide the basic transportation into and out of the communities. The committee traveled on the urban highways to view the challenges on Alaska's highways, including safety, congestion, and deferred maintenance. The committee heard testimony from the Alaska Municipal League (AML) and the Matanuska-Susitna Borough, who teamed together to contract an independent study on the fiscal challenges of transportation in Alaska. The National Conference of State Legislatures (NCSL) provided information on what other states are doing to address transportation needs, and Larry Persily, staff, Representative Hawker, compiled funding options to address the fiscal shortfalls of Alaska's transportation needs. This resolution is the culmination of all of the work performed by the DOT&PF, the committee, and research. Alaska needs to shoulder some of the responsibility for its transportation costs. Last year, the state received 87 percent of its transportation funding from the federal government, more than any other state, per capita. The new pending federal reauthorization bill for transportation points to less funding for states with low populations, like Alaska. State-funded projects can be performed more quickly as they do not have the same constraints and stringent requirements that the federal government imposes. Thus, more state projects could be built if the state had access to a transportation fund. MS. ROONEY stated that the time is right to put this in place to plan a smart, long-range solution to our transportation problems. Alaska will know the level of funds available from year-to-year to provide for a long-term plan that can be implemented. The proposed Alaska Transportation Infrastructure Fund (ATIF) will grow as the investment returns compound. Additionally, the motor fuel tax and the vehicle registration fees will generate funds. The ATIF could generate an anticipated $65 million the first year, which would increase by approximately $6 to $7 million per year. 1:11:30 PM MS. ROONEY referred to a colored graph in the committee packets detailing the funding that would be available for appropriation each year. One of the reasons that the constitutional drafters gave for disallowing dedicated funds was to avoid losing the ability to respond to public need. An excerpt in members' green packets contains an excerpt from Governor Hickel's State of the State address in the early 1990s, relating to a dedicated transportation fund. She read: This is not as radical a proposal as it might sound. Over half the states already have the same type of financing arrangement. In fact, Alaska's founding fathers supported this exact mechanism and provided for it at statehood. With a dedicated fund Alaskans will receive more stable service levels. And if new revenues are needed to preserve or improve service, Alaskans will be assured that any new fee will go directly to their transportation system. MS. ROONEY remarked that Governor Hickel's comments are as relevant now as they were nearly 20 years ago. The state needs to take action now as the future and well-being of Alaska's citizens is critically dependent upon a reliable transportation system. The change to Alaska's constitution proposed in HJR 42, which allows for a dedicated transportation fund, is needed to create and maintain a modern and reliable transportation system for Alaska. 1:13:44 PM REPRESENTATIVE GRUENBERG referred to the term "special registration fee" and asked whether it was a term of art. BRIAN KANE, Attorney, Legislative Legal Counsel, Legislative Legal and Research Services, Legislative Affairs Agency, identified two subsections in the vehicle registration fee section identify certain license plates special fees that are accounted for separately. The special registration fees collected in those subsections would still be accounted for separately, while the generic fee would be deposited in the dedicated transportation fund. 1:15:29 PM CHAIR P. WILSON recalled her prior discussions with legal counsel, identifying one of the special plates as the veterans' license plates. She further recalled that she did not want to change the way those fees were handled, or interfere with the special designation in any way. She understood that the standard vehicle registration fees would be directed to the dedicated transportation fund. MR. KANE agreed. He related that the specific military plate fee accounting structure and purpose would still be in place. 1:16:03 PM REPRESENTATIVE GRUENBERG asked for the amount of the fees. MR. KANE referred to AS 28.10.421 (d) and (f). He explained that those subsections would be exempted from the proposed dedicated transportation fund. He explained that the subsection relates to fees for vehicles, including vehicles whose primary purpose is for historical exhibition, Alaska National Guard personnel, Iditarod, recipients of the purple heart, Iditarod race finishers, and other similar categories. Typically, these funds are deposited to a special account to support a certain goal or purpose. 1:17:49 PM CHAIR P. WILSON asked for clarification that these groups would be exempted under the resolution. MR. KANE answered yes. 1:18:12 PM REPRESENTATIVE GRUENBERG referred to page 1, line 14 of HJR 42, which identifies the revenue source as any state tax on fuel. He asked whether the tire tax is exempted from the resolution. MR. KANE responded that it is not explicitly exempted. He explained that the taxes identified are taxes on fuel used for the propulsion of motor vehicles, so fuel is limited to fuel used for motor vehicles. He said he does not believe the tax on tires is involved. REPRESENTATIVE GRUENBERG wondered whether it was the intent of the sponsor to exclude taxes on tires or if the sponsor wanted to include other taxes. CHAIR P. WILSON answered that it was her intent to limit the revenue to the state tax on fuel as identified in HJR 42. 1:19:41 PM MS. ROONEY, in response to Representative Munoz, answered that she does not have the specific figure for the 87 percent of the state's transportation budget funded by the Federal Highway Administration (FHWA). REPRESENTATIVE MUNOZ asked for examples of other states that have implemented dedicated transportation funds, and the ratio of state to federal funding. CHAIR P. WILSON related that Alaska receives more federal funding than any other state. The Alaska delegation has advised legislators that other states are upset since Alaska does not pay in as much as it receives in transportation funding. Under the new federal transportation reauthorization bill under consideration, as currently crafted, states with lower populations will not fare as well as more densely populated states. She affirmed the state's need to plan and take action to assure the state's transportation needs can be met. This resolution will help with this process. 1:22:13 PM REPRESENTATIVE MUNOZ said she thought this resolution is a great direction to take. She expressed interest in knowing how other states are leveraging their state support with federal support to better assess the anticipated return and whether the fund will meet the transportation needs. MS. ROONEY offered to provide some information from the National Conference of State Legislatures on other states. 1:22:54 PM REPRESENTATIVE JOHNSON remarked that this resolution is a great start. The state could put tons of money in the proposed dedicated transportation fund and it would still not be enough. He said that the legislature needs to start somewhere and that is the reason that he is supportive of this resolution. CHAIR P. WILSON commented that that most of the states with dedicated transportation fund have taxes as revenue sources for the fund. Additionally, almost all other states have implemented a state sales tax or state income tax, or both. 1:23:36 PM BRIAN HORSCHEL, Member, Associated General Contractors (AGC); and Acme Fence Company, stated he has been interested in a dedicated transportation fund for over five years. He recalled advertising that depicted potholes. The Lower 48 roads are better roads and he is willing to pay for transportation that provides a safer experience for his family. He applauded the committee's efforts to create the dedicated transportation fund. He stated that AGC is behind this resolution and he is also. MR. HORSCHEL, in response to Representative Johnson, stated that he is speaking on behalf of the AGC and that the AGC's official position is in support of HJR 42. KEVIN WELKER, Alaska Manager, Key Corporation, stated that his company works throughout the U.S. He stated that many other states have a dedicated transportation fund in place and this approach works well. He stated that a dedicated transportation fund will provide the opportunity for Alaska to plan projects for five to ten years out. This will also bridge the gap from one administration to the next and give Alaska the ability to direct funding for specific purposes. He stated that when he is fueling his vehicle he will know that a certain amount of the motor fuel tax will help fix the roads. He said he was raised in Alaska and would like to see roads maintained and new ones built. 1:26:58 PM JOHN MCKINNON, Executive Director, Associated General Contractors (AGC), stated that the AGC is in Juneau for its annual fly-in so many contractors are in town. He stated that a dedicated transportation fund is long overdue and has been an AGC priority for years. He acknowledged the transportation needs in Alaska. This is a good time to start. This dedicated transportation fund would spin off state dollars for new construction projects. He recalled the majority of the transportation projects are federally funded. Speaking from his prior experience as a Deputy Commissioner of the DOT&PF, he related that a federally-funded project is more difficult to build. The rule of thumb is that a federal dollar is worth about $.75. A state dollar will stretch further and better meet Alaska's needs than federal funding. 1:28:36 PM REPRESENTATIVE JOHNSON asked for examples of state-built roads that demonstrate efficiencies. MR. MCKINNON recalled the Glenn/Bragaw Interchange in Anchorage. That project timeframe from the funding appropriation to contract spanned about 22 months. He speculated that it would probably have taken at least twice as long to go through the EIS phase using the federal process. He related that the environmental permits are still required at the state level but the National Energy Policy Act (NEPA) process is avoided, which results in considerable time savings. MR. MCKINNON stated that the average time to conduct an Environmental Impact Statement (EIS) takes about 36 months, which takes the project into the design phase, not the construction phase. REPRESENTATIVE JOHNSON recalled that the project was designed and built in about the same time as it would have taken to perform an EIS. 1:30:40 PM JEFF OTTESEN, Director, Division of Program Development, Department of Transportation & Public Facilities (DOT&PF), in response to Representative Johnson, answered that the EIS process takes approximately 5 to 7 years to complete if the project has any complexity at all. However, he recalled that nationally it is approaching an average of 12 to 13 years to complete the process. He recalled that the Cooper Landing project was initiated in 1975 and is the oldest active EIS in the country, and the project is still several years away from construction. He stated that using state funds provides significant advantages. The Elmore Road Extension Project in Anchorage provides an example of a project that he was unsure would have ever been built due to the substantial environmental considerations. 1:32:05 PM REPRESENTATIVE T. WILSON asked whether an EIS is required for all projects in Alaska. MR. OTTESEN responded that some type of environmental document must be done if a federal permit is involved, which is typically the case. However, the EIS is processed through the agency issuing the permit, which is often issued by the U.S. Corps of Engineers. Although technically the environmental document is still considered a federal EIS document, the U.S. Corps of Engineers process is simpler and faster process. He speculated that since the FHWA deals with so many highway projects and has been subject to so much litigation, that the agency is very protective and wants to insure that it will not lose in court. 1:33:13 PM REPRESENTATIVE MUNOZ asked for instances in which the project is already undergoing an EIS process and is under litigation, whether the state could take a larger role. MR. OTTESEN surmised which project she might be referring to and offered to report back. He recalled a project under litigation, that the permits and right-of-way have been rescinded. He offered that the state would likely have to start over and none of the previous work would be valid. He further recalled the case he was referring to is currently under appeal so it is technically still active. 1:34:10 PM REPRESENTATIVE JOHANSEN asked how many projects that are currently being worked on would qualify as state projects. MR. OTTESEN answered that typically the decision on whether to fund a project with state or federal funds is made at the time of appropriation of the Capital Improvement Budget (CIB). He said that essentially determines the funding type in the CIB; and the decision is not as much a department decision as it is a budgetary decision made through the budget process, including that the CIB is submitted to the legislature for funding approval. In further response to Representative Johansen, he related that the DOT&PF's currently has a list of active projects by funding type for the CIB. REPRESENTATIVE JOHANSEN understood him to say that the decision for funding projects strictly from general fund dollars is made entirely by the legislature and that the DOT&PF does not make any internal decisions. He related that he is frustrated by the perception that the DOT&PF has magical powers after legislative appropriation that differs from the legislature's decisions on projects. He asked whether it is the legislature's specific role to determine which projects that will qualify as general fund projects instead of using federal funding. MR. OTTESEN related that some circumstances exist in which a community might be pursuing a project, but not enough general fund funding is available to complete the project so the DOT&PF cannot award the bid. The option is to wait for another budget cycle, but in those instances, the DOT&PF would use federal funds to fund the project. The decision would be made by the DOT&PF design team, within the three regions. REPRESENTATIVE JOHANSEN asked whether, in fact, some of the decisions can be made by the DOT&PF to take the project out of the general fund category. MR. OTTESEN answered yes. The DOT&PF could make the choice. However, while the DOT&PF can make the choice, the department cannot spend federal funds without the legislature's approval. He related a scenario in 2002 using GO bonds. Many of the projects were underfunded at the time of the appropriation request. Thus, a $10 million project may have been budgeted as a $5 million project, but due to inflation the project becomes a $20 million project. In that scenario the department can either attempt to find a way to make up the difference using $15 million in federal funds or let the funds lapse since not enough funds are available to complete the project. He agreed that the instance left complicated choices, and the department lost the flexibility offered when using general funds. He asked if the reverse could happen, if a federal funded project could be funded with general fund dollars. He answered no, that the DOT&PF does not have the ability to do so. In further response to Representative Johansen, he answered he did not recall the specific matching funds for this year, but that the general fund match is typically $40 to $45 million per year for the FHWA, and other funds are requested for aviation and transit. CHAIR WILSON offered to have the DOT&PF come before the committee to provide the detailed process, if needed. 1:41:56 PM REPRESENTATIVE GRUENBERG related that HJR 42 requires the dedicated transportation fund to be managed as an endowment. He asked if he was correct that in order for an endowment to work that the state would provide funding and use the interest from the dedicated transportation fund for projects. MR. OTTESEN advised that he was not involved in drafting the resolution, but agreed conceptually. REPRESENTATIVE GRUENBERG surmised the state would initially need 15 to 20 times the annual budget amount of $15 to $20 million anticipated. MR. OTTESEN related his understanding on a similar measure under consideration a few years ago that it was anticipated that on average the fund would receive an 8 percent return on the investment, would spend 5 percent and use the remaining 3 percent to inflation-proof the fund. 1:43:24 PM CHAIR P. WILSON remarked that HJR 42 is limited to placing the matter on the ballot for voters to decide if they want a dedicated transportation fund. She stated that a separate bill would determine sources of revenue for the proposed dedicated transportation fund and questions concerning that could be addressed at the time the bill is being considered by the committee. 1:43:57 PM REPRESENTATIVE GRUENBERG agreed. He referred to page 2, lines 4 5 of HJR 42, relating to capital projects for transportation and related facilities. He asked whether that would include rolling stock, such as buses. CHAIR P. WILSON related that matter would better be addressed during the discussion of HB 329. 1:44:46 PM REPRESENTATIVE GRUENBERG asked whether it would be possible for the legislature to fund the endowment and then reduce the transportation funding from the general fund. MR. OTTESEN responded that the legislature is the appropriating body and could choose to make decisions about funds outside of the endowment for the proposed dedicated transportation fund. CHAIR P. WILSON, after first determining no one else wished to testify, closed public testimony on HJR 42. REPRESENTATIVE JOHANSEN stated that HJR 42 would establish a fund to accomplish a specific goal. He expressed interest in understanding the rules that would apply for DOT&PF's use of the proposed dedicated fund. He said that he supports the concept of the dedicated transportation fund, but at the same time he wants the legislature retains the decision-making authority for projects. REPRESENTATIVE JOHNSON inquired as to whether DOT&PF has taken a position on HJR 42 and the concept of a dedicated transportation fund. FRANK RICHARDS, Deputy Commissioner, Office of the Commissioner, Department of Transportation & Public Facilities (DOT&PF) responded that the DOT&PF supports the concept of a transportation fund, but does not have an opinion on the funding mechanism. He acknowledged that the state has many transportation needs across the modes and would appreciate and support the funds to address the needs. 1:49:16 PM REPRESENTATIVE JOHNSON moved to report HJR 42 out of committee with individual recommendations and the accompanying fiscal notes. REPRESENTATIVE GRUENBERG objected for the purposed of making a statement. REPRESENTATIVE GRUENBERG asked whether the DOT&PF supports a constitutional amendment for dedicated transportation fund. He remarked that he is aware of only two exceptions, the Permanent Fund and the Constitutional Budget Reserve Fund. Otherwise, the legislature has not adopted a dedicated fund. He related that Mr. Richards will be speaking on behalf of the DOT&PF and administration, noting that this will set precedent to authorize other dedicated funds in the state's constitution. He clarified his query, asking whether the DOT&PF supports the proposed dedicated transportation fund rather placing it in statute. 1:50:10 PM MR. RICHARDS answered that the concept of whether to create a dedicated fund is in the purview of the voters of the state. REPRESENTATIVE GRUENBERG understood that to mean that the administration does not have a position. MR. RICHARDS agreed. He stated that the DOT&PF and the administration would wait for the outcome of the resolution to create a dedicated transportation fund, as to whether it will be approved by the legislature and the general public vote. 1:50:49 PM REPRESENTATIVE GRUENBERG said that he supports the concept of a dedicated transportation fund, but has grave problems with dedicating a transportation fund in the constitution. He remarked that he has not supported dedicated funds in the constitution in the past since it will open the door for other dedicated funds. The constitutional convention provided a specific provision that there shall be no dedicated funds unless established by a constitutional amendment. He said he does not want his position misinterpreted. He stated that the concept of prohibiting dedicated funds was good enough for the constitutional framers. He remarked that he was interested whether the administration had taken a position on that issue. REPRESENTATIVE PETERSEN agreed that this would set a precedent. He agreed that the constitutional framers did not want dedicated funds, which has worked well so far. However, he thinks the people of Alaska should be allowed to express their opinion on this. Thus, he offered his support for HJR 42. 1:53:02 PM REPRESENTATIVE T. WILSON asked for any other reliable mechanisms to obtain transportation funding. MR. RICHARDS clarified that if she was asking for revenue streams specifically for capital investments used by other states that a variety of means exists, ranging from special tax, motor fuel tax, and bonding capacities. He related that most other states have specific responsibilities for highway systems. In Alaska, the state has the ability to spend the federal dollars on all road systems. The National Conference of State Legislatures provided a range of funding options for states to consider. 1:54:20 PM CHAIR P. WILSON remarked that during the interim the committee spent a full day discussed transportation funding options. 1:54:40 PM MR. RICHARDS, in response to Representative T. Wilson, related that the current federal transportation reauthorization bill that has passed out the U.S. House of Representatives Infrastructure Committee does not provide a rosy future for Alaska since it favors high density urban areas with populations over 500,000. Over 20 percent of the funding would be prohibited from coming to Alaska since it does not have population centers over 500,000. Funding for other major modes, including high-speed rail, freight rail, or intercity transit reduces the amount of funding for highways from the motor fuel taxes. 1:55:40 PM REPRESENTATIVE T. WILSON explained that Fairbanks was not eligible for the federal stimulus funding, since it was one of the communities disallowed by federal rules. She thanked the sponsor for bringing this issue forward. She characterized this resolution as a step in right direction. REPRESENTATIVE JOHANSEN remarked that Fairbanks joined the rest of the state in having to compete for transportation dollars. 1:56:27 PM REPRESENTATIVE JOHNSON moved to report HJR42 out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, HJR 42 was reported from the House Transportation Standing Committee. CHAIR P. WILSON stated that she was very proud of the committee for its work on this issue. 1:57:47 PM
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 329 Sponsor Stmt.pdf |
HTRA 2/9/2010 1:00:00 PM HTRA 2/11/2010 1:00:00 PM |
HB 329 |
| HB 329 AK Trans Finance Study.pdf |
HTRA 2/9/2010 1:00:00 PM HTRA 2/11/2010 1:00:00 PM |
HB 329 |
| HJR 42 Sponsor Stmt.pdf |
HTRA 2/9/2010 1:00:00 PM |
HJR 42 |
| HJR 42 Resolution ATIF.pdf |
HTRA 2/9/2010 1:00:00 PM |
HJR 42 |
| HJR 42 Exec Summary AK Trans Finance Study.pdf |
HTRA 2/9/2010 1:00:00 PM |
|
| ATIF values w-out taxes.pdf |
HTRA 2/9/2010 1:00:00 PM |
HB 329 |
| fund values with taxes.pdf |
HTRA 2/9/2010 1:00:00 PM |
HB 329 |