Legislature(2003 - 2004)
05/13/2003 04:41 PM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE BILL NO. 213 "An Act establishing the Knik Arm Bridge and Toll Authority and relating to that authority; and providing for an effective date." This was the second hearing for this bill in the Senate Finance Committee. Co-Chair Wilken stated that this legislation would establish an independent authority to build and operate a toll bridge over the Knik Arm. He clarified that SB 213, 23-GS1149\A, is the version before the Committee, and he reminded the Committee that previous questions on the bill included the composition of the Bridge Authority's members. Amendment #4: This amendment provides for the appointment of two additional members to the Knik Arm Bridge Authority. In addition, the amendment provides for staggered member terms and defines initial term timelines. Co-Chair Wilken moved to adopt Amendment #4 on behalf of its sponsor, Co-chair Green. He noted that Amendment #4 is similar to Amendment #1, sponsored by Senator Hoffman, that has yet to be offered for adoption. TRACI CARPENTER, Staff to Senator Lyda Green, explained that Amendment #4 would add two members to the Bridge Authority; one to represent the Matanuska Susitna Borough and the other to represent the Municipality of Anchorage. Additionally, she noted that the amendment clarifies the initial length of Board service for the three public members who are specified to serve five-year staggered terms. Ms. Carpenter noted that Amendment #4 differs from Amendment #1 in that Amendment #4 does not address the Board vacancy appointment process. Senator Taylor questioned the need to define the areas the two members would represent, as he attested, individuals from other regions could be assets to the Board. Senator B. Stevens asked the Department of Transportation and Public Facilities' position on the amendment. JOHN MACKINNON, Deputy Commissioner of Highways & Public Facilities, Department of Transportation and Public Facilities, commented that the amendment is acceptable to the Department. Senator Olson asked whether the amendment would affect the fiscal note. Mr. MacKinnon responded that the fiscal note should be increased approximately $14,400 to provide stipend funds for the two additional members. Co-Chair Wilken shared that Co-Chair Green is concerned about the amount of the fiscal note, and that she is negotiating with the Department to reduce it. He surmised that the final fiscal note would be "significantly less" than the original $523,700 fiscal note. There being no objection, Amendment #4 was ADOPTED. Amendment #3: This amendment deletes subsection (f) of Sec. 44.90.221 of the bill, on page 8, lines 16 - 20 that reads as follows. (f) The chair of the board shall annually, not later than January 2, deliver to the governor and the legislature a certificate stating the sum, if any, required to restore any capital reserve fund to the capital reserve fund requirement. Money appropriated during that fiscal year for capital reserve fund restoration shall be deposited by the authority in the proper capital reserve fund. On behalf of Co-chair Green, Co-Chair Wilken moved for the adoption of Amendment #3. He then objected for sake of explanation. Ms. Carpenter informed the Committee that the Department of Law recommends that Section (f) be deleted from the bill as it might negatively impact the State's bond rating. KATHLEEN STRASBAUGH, Assistant Attorney General, Governmental Affairs Section, Civil Division (Juneau), Department of Law, explained that subsection (f) would create "a moral obligation on the part of the State to back the bonds of this agency." She stated that this action is inconsistent with other sections of the bill that are designed "to assure the financial independence" of the Board. She voiced that the Treasury Division of the Department strongly recommends that the section, whose inclusion is "an oversight" be deleted. Co-Chair Wilken removed his objection. There being no further objection, Amendment #3 was ADOPTED. Senator Hoffman asked whether the Knik Arm Authority would be subject to the requirements of the Executive Budget Act. Ms. Strasbaugh explained that the Executive Budget Act requires that, with the exception of debt retirement funds, any funds generated from the State must be reported. She noted that the information in question is located on page five line nine of the committee substitute that reads as follows. (2) comply with the provisions of AS 37.07 (Executive Budget Act), except that AS 37.07 does not apply to the activities of the authority that relate to the authority's borrowing of money as provided in this chapter, including the issuing of its obligations or evidence of that borrowing and the repayment of the debt obligation. Ms. Strasbaugh continued that this section does not relieve the Authority from certain reporting requirements as outlined in other sections of the bill. Senator Taylor asked about provisions that provide immunity to the Authority. Ms. Strasbaugh responded that provisions that relieve Board members from personal liability are included in Sec. 44.90.241 on page nine, lines 17 - 19 that reads as follows. Sec 44.90.241. Nonliability on bonds. (a) Neither the members of the board nor a person executing the bonds of the authority is liable personally on the bonds or is subject to personal liability or accountability by reason of issuance of the bonds. Senator Taylor voiced support for these provisions. Amendment #2: This amendment inserts new subsections into Section 44.90.031 of the bill on page 2, line 13, following the word "citizen" to read as follows. (4) one nonvoting member who is a member of the state house of representatives appointed by the speaker of the house and who serves at the pleasure of the speaker of the house; the speaker of the house shall consider the appointment of a legislator elected from a house district that lies entirely or partially within the Municipality of Anchorage or the Matanuska-Susitna Borough for appointment under this paragraph; and (5) one nonvoting member who is a member of the state senate appointed by the president of the senate and who serves at the pleasure of the president of the senate; the president of the senate shall consider the appointment of a legislator elected from a house district that lies entirely or partially within the Municipality of Anchorage or the Matanuska-Susitna Borough for appointment under this paragraph In addition, Amendment #2 contains conforming language and inserts the word "voting" in language on page 2, lines 22, 23, 26 when referring to members of the board. Senator Hoffman moved for the adoption of Amendment #2. Co-Chair Wilken objected for discussion. Senator Hoffman stated that Amendment #2 specifies that a member of the House of Representatives and the Senate would be non-voting members on the Board. He stated that in addition to providing an opportunity for other regions of the State to be represented on the Board, the inclusion of Legislators would allow the Legislature to be "better informed" regarding the Authority. Amendment #1: This amendment inserts a new subsection into Sec. 44.90.031 on page 2, line 13 of the bill that reads as follows. (4) one public member, appointed by the governor from a list of 5 names submitted by the mayor of the Municipality of Anchorage, who is a state resident, resident of the Municipality of Anchorage, and United States citizen; (5) one public, appointed by the governor from a list of 5 names submitted by the mayor of the Matanuska- Susitna Borough, who is a state resident, resident of the Matanuska-Susitna Borough, and United States citizen; Additionally the amendment inserts new language to subsection (c) of Sec. 44.90.031 on page 2, line 18, following "appointment" to read as follows. (c) If a vacancy occurs in the public member seat on the board, the governor shall make an appointment to fill the vacancy in the same manner as the previous appointment to that seat, effective immediately, for the unexpired portion of that member's term. Furthermore, in addition to technical changes, the amendment inserts a new bill section on page 12, following line 30 to read as follows. Sec. 4. The uncodified law of the State of Alaska is amended by adding a new section to read: APPOINTMENT OF THE INITIAL PUBLIC MEMBERS OF THE KNIK ARM BRIDGE AND TOLL AUTHORITY. Notwithstanding AS 39.05.055 and AS 44.90.031(b), added by sec. 1 of this Act, the governor shall appoint the initial public members of the board of directors of the Knik Arm Bridge and Toll Authority to terms as follows: (1) one public member to a term of five years; (2) one public member to a term of three years; and (3) one public member to a term of one year. Senator Hoffman informed the Committee that he would not be offering Amendment #1 for consideration because of its similarity to Amendment #4. Senator Bunde shared that there is a "parallel experience" with Legislative representation on a Postsecondary Education Commission. He noted that, "there is an on-going legal discussion as to whether" this representation is appropriate because of Legislative funding authority. Nonetheless, he voiced support for the concept. Mr. MacKinnon stated that the reporting concern might be addressed by language on page five, lines one through eight, that requires the Authority to submit various reports to the Legislature and the Governor on an annual basis. Co-Chair Wilken asked the Department's position regarding Legislative representation on the Board. Mr. MacKinnon responded that the Department does not support the amendment. Senator Bunde commented that Legislative representation on the Board might be beneficial in that it could provide the Board with immediate Legislative reaction to a situation before rather than after an event occurred. Co-Chair Wilken removed his objection. Without further objection, Amendment #2 was ADOPTED. Senator Taylor moved to report the bill, as amended, from Committee with individual recommendations and accompanying fiscal note; however, he objected to state that while "this might be the most expeditious way to get that bridge built," the citizens of the area would be burdened with its administrative expense. He stated that were the Department of Transportation and Public Facilities rather than a bridge authority to build the bridge, the users would not have a burden. He noted his repeated efforts to instill toll roads and a Road Toll Authority in addition to a Marine Toll Authority to replace the current Marine Advisory Board. Senator Taylor voiced support for building the Knik Arm Bridge, as he expressed that the citizens of the area, who might be required to pay approximately twenty dollars to transit the Bridge, would then be able to understand how the citizens of Southeast Alaska are affected by having to pay for transportation on the Marine Highway System. Senator Taylor removed his objection. Senator Bunde objected to the motion. He stated that, in consideration of the State's fiscal dilemma, all expenses should be questioned. He asked whether the State expenses associated with this legislation would be factored into the operating expenses of the bridge and into the toll amount charged for bridge transit. Co-chair Wilken clarified that the question is whether State funds and other expenses that establish the Authority would be reimbursed via the toll system. Mr. MacKinnon voiced the expectation that they would. Senator Bunde repeated Mr. MacKinnon's comment, for the record, that the State would be reimbursed. He removed his objection. Senator Olson asked whether the toll amount has been established. Mr. MacKinnon responded that the amount is unknown as the project is in the conceptual stage. Without further objection, CS SB 213(FIN) was REPORTED from Committee with previous fiscal note #1 in the amount of $523,700 from the Department of Transportation and Public Facilities.