Legislature(2003 - 2004)

05/13/2003 04:41 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= 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.                                                                    
                                                                                                                                

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