Legislature(2003 - 2004)

05/06/2003 01:25 PM TRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
            SB 213-KNIK ARM BRIDGE AND TOLL AUTHORITY                                                                       
MIKE BARTON, Commissioner of the  Department of Transportation and                                                              
Public Facilities  (DOTPF), said  SB 213 establishes  an authority                                                              
for the Knik Arm  Bridge and Toll Authority. It would  be a public                                                              
corporation  and similar in  structure to  the Alaska Housing  and                                                              
Financing  Corporation.  It  would   have  a  three  person  board                                                              
consisting of the commissioners of  revenue and transportation and                                                              
a public member appointed by the governor to a five year term.                                                                  
The bill  primarily relates  to the  authority's ability  to issue                                                              
revenue bonds  and establish tolls  to finance and build  the toll                                                              
bridge. The  Knik Arm  Bridge is  an investment  in the  future of                                                              
Alaska  and  will   open  residential  and  industrial   land  for                                                              
development and provide for economic opportunity.                                                                               
CHAIR JOHN  COWDERY advised  he hadn't had  much time to  read and                                                              
absorb the  bill. He then asked  if the public board  member would                                                              
be confirmed by the Legislature.                                                                                                
COMMISSIONER   BARTON    advised   the   bill    doesn't   require                                                              
CHAIR COWDERY  asked if  there was  a requirement for  legislative                                                              
approval of bonds.  He referred to page 10, lines  5-8 and said it                                                              
appears that the bonds would have to stand on their own.                                                                        
COMMISSIONER  BARTON  said  that's  correct. The  bonds  would  be                                                              
revenue bonds,  not general  obligation bonds.  The toll  from the                                                              
bridge would be pledged as collateral.                                                                                          
CHAIR COWDERY read from page 9, line  20, "The bonds issued by the                                                              
authority do not constitute an indebtedness  or other liability of                                                              
the state  or of a political  subdivision of the state  other than                                                              
the authority," and from line 24  then asked if the Alaska Housing                                                              
Authority representative would comment.                                                                                         
SENATOR  GENE THERRIAULT  asked  whether  the Legislature  had  to                                                              
grant authorization.                                                                                                            
COMMISSIONER BARTON  said he didn't  believe so, but he  needed to                                                              
get additional explanation.                                                                                                     
SENATOR  THERRIAULT said  the Legislature  periodically  increases                                                              
the authorization  for the Alaska Industrial Development  & Export                                                              
Authority (AIDEA)  and he  wasn't sure whether  that was  the case                                                              
for Alaska  Housing Finance  Corporation (AHFC),  but both  are an                                                              
entity of the state.                                                                                                            
COMMISSIONER  BARTON said AIDEA  needed authorization  for certain                                                              
types of bonds.                                                                                                                 
JOHN BITNEY,  AHFC liaison, explained  the statutes  identify AHFC                                                              
as a separate legal authority, which  is the same as that proposed                                                              
in SB  213. The  corporation's operating  and capital budgets  are                                                              
subject to  legislative approval  in the  budget process,  but the                                                              
bonds are issued at the discretion  of the board of directors with                                                              
the key provision that they are a  debt of the corporation and not                                                              
of the state.                                                                                                                   
He noted the  bill has a provision that no other  authorities have                                                              
that he  is aware  of; the bonds  would be  subject to  review and                                                              
approval by the state bond committee.  He didn't know whether that                                                              
provided a state link or not.                                                                                                   
CHAIR  COWDERY  said  the  bonds must  be  scrutinized  to  ensure                                                              
they're a prudent investment whether  the state stands behind them                                                              
or not.  Although he  hadn't had  time to  thoroughly analyze  the                                                              
bill,  he didn't  believe there  was  any intent  to obligate  the                                                              
COMMISSIONER  BARTON  said the  intent  was  not to  obligate  the                                                              
SENATOR  DONNY OLSON  asked  Mr. Bitney  if  he saw  any need  for                                                              
increased legislative oversight.                                                                                                
MR. BITNEY replied  care should be taken so it  is understood that                                                              
the  authority is  selling bonds  on  its behalf.  It's a  balance                                                              
between oversight and  separation and the purpose is  to make sure                                                              
the authority  isn't pledging any  debt or obligation on  the part                                                              
of  the state  when the  bonds are  issued. They  must be  clearly                                                              
structured  and represented  to the  bond buyer  that they  aren't                                                              
state obligations.                                                                                                              
SENATOR  OLSON asked  if  he meant  there wasn't  a  need for  the                                                              
Legislature to be overly involved.                                                                                              
MR. BITNEY said, "Not on the approval of the bonds."                                                                            
COMMISSIONER  BARTON said bonds  are usually  insured so  if there                                                              
were  a  default,  the bondholders  would  have  recourse  to  the                                                              
insurance company rather than the state.                                                                                        
CHAIR  COWDERY  asked  what  other   state  entities  had  bonding                                                              
SENATOR  THERRIAULT named  the Aerospace  Development  Corporation                                                              
and  the Alaska  Railroad  and  said  some entities  have  limited                                                              
bonding authority.                                                                                                              
CHAIR COWDERY noted  the bill hadn't had a lot  of background work                                                              
done, but would move to the Finance Committee.                                                                                  
SENATOR  GEORGIANNA  LINCOLN  expressed  the hope  that  the  bill                                                              
wouldn't move from committee that day.                                                                                          
CHAIR COWDERY advised he did intend to move the bill that day.                                                                  
SENATOR LINCOLN said  she received the twelve page  bill even more                                                              
recently than the  Chair and because this was  the only committee,                                                              
other than  finance, in which it  would be heard, she  didn't feel                                                              
it was  in the  public's best  interest to  move the bill  without                                                              
taking adequate  time to review  the provisions and  implications.                                                              
At this  point, she wasn't  even sure  that all her  questions had                                                              
been formulated.                                                                                                                
With regard to the DOT fiscal note,  she asked where the money for                                                              
the more than $.5 million 2004 expenditure would come from.                                                                     
CHAIR COWDERY  replied, "Whatever it  costs, the seed money  is to                                                              
try to get the federal money. That's behind all this...."                                                                       
COMMISSIONER BARTON  added this is  one of the  governor's highest                                                              
priorities for Congressman Young  to earmark federal funds for and                                                              
he feels confidant federal funds will be forthcoming.                                                                           
CHAIR COWDERY  said he has been  working on the Knik  Arm Crossing                                                              
project for several years and is very enthusiastic.                                                                             
SENATOR  THERRIAULT noted  the fund  source for  the $523,700  was                                                              
listed as "Other (CIP Receipts)"  and he questioned why that is if                                                              
federal money is anticipated.                                                                                                   
COMMISSIONER  BARTON  replied  "Other   (CIP  Receipts)"  includes                                                              
federal monies, but he would get clarification for that.                                                                        
SENATOR THERRIAULT asked if it was  correct that he did not expect                                                              
any general fund dollars being used for operation of the bridge.                                                                
COMMISSIONER BARTON  explained that Congressman Young  was working                                                              
to earmark the funds in the reauthorization of the highway bill.                                                                
CHAIR  COWDERY opined  the  Transportation  Committee was  charged                                                              
with  approving  the concept  of  establishing the  authority  and                                                              
financial questions were not their purview.                                                                                     
SENATOR THERRIAULT asked if the bridge  would start at the Port of                                                              
Anchorage as indicated by a photo in his packet.                                                                                
COMMISSIONER BARTON  said they were  a long way from  deciding the                                                              
specifics, but the  concept they have been working  with shows the                                                              
crossing to be farther up the arm  where the water is not as deep.                                                              
A long  span bridge  going from shore  to shore  and a  short span                                                              
bridge   with  a   causeway  on   each  shore   were  both   under                                                              
consideration.  There is  a large  cost  differential between  the                                                              
13,000  foot  long-span  concept  and the  9,500  foot  short-span                                                              
CHAIR  COWDERY  advised   he  included  the  photo   and  map  for                                                              
conceptual purposes only; they weren't intended to be specific.                                                                 
COMMISSIONER BARTON advised they  were a long way from identifying                                                              
the  crossing site  or  the  structure itself.  Considerable  geo-                                                              
technical work would  be done before deciding on  the location and                                                              
type of foundation.                                                                                                             
CHAIR  COWDERY  said  they  are   currently  modeling  a  Corp  of                                                              
Engineers project  in Mississippi  to check  on tides and  current                                                              
and determine  what affect a causeway  to Fire Island  might have.                                                              
SB  213  simply   establishes  the  authority  to   work  out  the                                                              
COMMISSIONER BARTON agreed.                                                                                                     
SENATOR LINCOLN  said she had a  number of questions and  asked if                                                              
it  was  correct that  SB  213  asked  for  the authority  to  put                                                              
together a board of three members and staff.                                                                                    
COMMISSIONER  BARTON said  it authorizes  the  staffing and  gives                                                              
power to the authority to bond and collect tolls and revenues.                                                                  
SENATOR LINCOLN  whether an  EIS [Environmental Impact  Statement]                                                              
had been completed.                                                                                                             
COMMISSIONER  BARTON  advised  it  is  ongoing  and  part  of  the                                                              
CHAIR COWDERY  remarked an  EIS was  completed in  1984 and  it is                                                              
being updated.                                                                                                                  
COMMISSIONER  BARTON  stated  an  EIS from  1984  has  credibility                                                              
difficulties and a full EIS would be completed on the project.                                                                  
SENATOR  LINCOLN commented  it  appeared as  though  the cart  was                                                              
before  the  horse. Prior  to  completion  of  the EIS,  the  bill                                                              
allocates  over  $500,000 to  establish  a  board to  oversee  the                                                              
project. She questioned  the point at which the  Legislature would                                                              
receive a status report.                                                                                                        
COMMISSIONER BARTON  said the bill  provides for an  annual report                                                              
from the authority and there would  certainly be a report when the                                                              
EIS was completed.                                                                                                              
SENATOR LINCOLN referred  to a November 27, 2002  article in which                                                              
a Mat-Su  planner expressed skepticism  for the project  and asked                                                              
for the  Commissioner's  response and whether  the Mat-Su  Borough                                                              
had taken a position on the project.                                                                                            
COMMISSIONER  BARTON understood  the Mat-Su  Borough had  passed a                                                              
resolution in support of the project.  Not knowing the root of the                                                              
planer's skepticism  he was unable  to respond to  that. Certainly                                                              
there were challenges associated  with the project, but he thought                                                              
it would was a long-term investment in Alaska's future.                                                                         
SENATOR LINCOLN asked whether the  Anchorage Assembly added a Knik                                                              
Arm Crossing study to their long-range transportation plans.                                                                    
COMMISSIONER  BARTON replied  he  didn't know,  but the  authority                                                              
would  be expected  to gather  various independent  studies in  an                                                              
effort  to  cut down  on  duplication  and provide  a  coordinated                                                              
SENATOR  LINCOLN asked  whether the  Anchorage Assembly  supported                                                              
the project.                                                                                                                    
CHAIR COWDERY said they were in strong support.                                                                                 
SENATOR  LINCOLN  asked if  she  could  get copies  of  supporting                                                              
SENATOR   OLSON  asked   when  construction   might  begin   since                                                              
approximately $500,000  was budgeted for planning for  each of the                                                              
next six years.                                                                                                                 
COMMISSIONER BARTON  said the design  work would be  extensive due                                                              
to the  size of  the project,  but possibly  as early  as 2006  or                                                              
CHAIR COWDERY said Senator Jerry  Ward wanted to give testimony as                                                              
an interested party.                                                                                                            
SENATOR JERRY WARD  testified via teleconference in  support of SB
213.  He said  the  first  meeting he  attended  on  the Knik  Arm                                                              
Crossing  was in  1956  and he  applauded  Governor Murkowski  and                                                              
Congressman Young  on their  efforts. He gave  a brief  history of                                                              
the concept and  expressed the view that the climate  for starting                                                              
the project was the best he had seen to date.                                                                                   
CHAIR  COWDERY  advised  he  would get  the  resolution  from  the                                                              
Anchorage  Assembly  as Senator  Lincoln  requested.  He said  the                                                              
military had expressed  concern for an arch bridge  to accommodate                                                              
their  height needs  and that  the  bridge not  conflict with  the                                                              
runway  and   create  lighting  confusion  for   both  operations.                                                              
Ultimately he envisions a twin city  concept and that tax revenues                                                              
from across Knik Arm might be shared with Anchorage.                                                                            
SENATOR THOMAS WAGONER  asked if there was a cost  analysis on the                                                              
entire project and  how long it might take to pay  off the revenue                                                              
bonds by running a toll bridge.                                                                                                 
COMMISSIONER BARTON said no such  analysis had been done; it would                                                              
be a function of the proposed authority  to do so.  He agreed that                                                              
it would  take a  long time  to pay  off the  bonds, but there  is                                                              
renewed interest in toll roads and  it is understood that they are                                                              
large expenditures  that  take a  long time to  pay off.  However,                                                              
once they are paid off they tend to be quite lucrative.                                                                         
SENATOR  THERRIAULT referred  to page  12, lines  1 through  5 and                                                              
noted  the activity  would  be exempt  from  local regulation.  He                                                              
asked what interaction would be required with local government.                                                                 
COMMISSIONER BARTON  said he asked that the legislation  include a                                                              
provision that consultation with  the mayors of both Anchorage and                                                              
the Mat-Su Borough be incorporated.                                                                                             
CHAIR COWDERY  advised both  mayors have  been very supportive  of                                                              
the concept.                                                                                                                    
COMMISSIONER BARTON  added the crossing  would benefit  the Alaska                                                              
Railroad assuming the bridge was built to include rails.                                                                        
SENATOR  THERRIAULT  noted  page  5,  lines 18  to  20  refers  to                                                              
coordination with the mayors of the  Municipality of Anchorage and                                                              
the  Matanuska-Susitna  Borough,  but  the  last  page  says  they                                                              
wouldn't be able to use their local  planning and zoning powers to                                                              
obstruct the project.                                                                                                           
SENATOR LINCOLN  said there were  recent [February  2003] articles                                                              
in which  Senator Ted  Stevens spoke about  operating a  ferry and                                                              
that  he would  secure  funding.  She asked  where  that idea  lay                                                              
within the overall concept of a bridge.                                                                                         
COMMISSIONER BARTON replied Senator  Stevens is very supportive of                                                              
the Knik Arm  Crossing. He wasn't sure what happened  to the ferry                                                              
2:20 pm                                                                                                                       
SENATOR LINCOLN  said she  recalled discussion regarding  commuter                                                              
rail service  to the  Mat-Su and  wondered if  the railroad  saw a                                                              
downside to having the bridge or was this part of their plan.                                                                   
COMMISSIONER BARTON replied the crossing  concept did not begin at                                                              
the railroad  level and the bridge  could be built to  support the                                                              
railroad or strictly  as a highway structure. He  couldn't say how                                                              
the crossing would  impact their operation even though  he sits on                                                              
their board and knows they want to  make the most efficient use of                                                              
their staff and be able to deliver  goods to and from Anchorage as                                                              
quickly  as  possible.  He  thought  the  railroad  was  generally                                                              
supportive of the bridge and didn't  believe it would affect their                                                              
commuter service from the Mat-Su area.                                                                                          
SENATOR LINCOLN  asked if it was  unusual that the board  would be                                                              
comprised of governor appointees  in the form of two commissioners                                                              
and one public member.                                                                                                          
COMMISSIONER BARTON  replied the Alaska Railroad  and AIDEA Boards                                                              
are appointed.                                                                                                                  
SENATOR LINCOLN pointed out those  commissioners didn't comprise a                                                              
controlling interest as they would in the proposed board.                                                                       
CHAIR COWDERY said the board was  not a fulltime board and once it                                                              
was established, an  executive director would be added  to run the                                                              
SENATOR LINCOLN stated for the record  a board sets policy and the                                                              
executive director works for the board.                                                                                         
SENATOR  OLSON  asked  if  there  was any  plan  to  redirect  the                                                              
railroad in that direction once the bridge is built.                                                                            
CHAIR COWDERY  said there is  a study of  the area from  Palmer to                                                              
Fort Mackenzie.                                                                                                                 
WENDY  LINDSKOOG,  director of  external  affairs  for the  Alaska                                                              
Railroad Corporation,  stated there are several  studies she could                                                              
cite: the City  of Wasilla studied relocating  the railroad around                                                              
the  city  and the  Mat-Su  Borough  is  looking at  bringing  the                                                              
railroad  from the  Houston area  and tying  into Port  Mackenzie.                                                              
Neither study  was sponsored by the  railroad, but they  have been                                                              
lending technical support.                                                                                                      
If they were to tie into the Knik  Arm Crossing they still believe                                                              
there would  be a need  for the current  line. Much of  the gravel                                                              
they haul  comes from Palmer and  they would continue to  use that                                                              
line. If the  communities of Mat-Su Borough and  Anchorage decided                                                              
they wanted  commuter rail service  that would be another  use for                                                              
the current line.                                                                                                               
She addressed  Senator Lincoln's question  to say they  do support                                                              
the crossing,  but feel that if  the bridge is built  without rail                                                              
the vision  is short sighted in  terms of making a  most efficient                                                              
railroad. Tying  the railroad  in with  the crossing would  enable                                                              
them to  get to Fairbanks  in twelve  hours meaning no  crew shift                                                              
would be required. The current practice  of trading crews in Healy                                                              
is a huge expense.                                                                                                              
CHAIR COWDERY  noted Mr.  Gamble had been  to all meetings  on the                                                              
subject and  was very  supportive. He  asked for  the name  of the                                                              
commission on which he served.                                                                                                  
MS. LINDSKOOG  said it  was the  Regional Transportation  Planning                                                              
Organization  and was  a combination  of members  from the  Mat-Su                                                              
Borough and  the municipality of  Anchorage. She thought  the Knik                                                              
Arm Crossing was one of its highest priority projects.                                                                          
2:30 pm                                                                                                                       
SENATOR LINCOLN  asked how  the infrastructure  would be  paid for                                                              
and how that would impact general fund dollars.                                                                                 
COMMISSIONER BARTON  said they anticipate  most of the  project to                                                              
be financed with federal highway monies.                                                                                        
SENATOR LINCOLN asked about remarks  made about opening up an area                                                              
for  an expanded  community. Because  this  would entail  building                                                              
roads  and water  and  sewer systems  and  schools  and an  entire                                                              
infrastructure, she  asked what that general fund  impact would be                                                              
and when the expenditures might start.                                                                                          
COMMISSIONER BARTON replied that  sort of infrastructure expansion                                                              
would evolve just  as it has elsewhere. There  would be additional                                                              
demands, but  the increased  tax base would  likely help  meet the                                                              
CHAIR COWDERY stated  Anchorage developers put in  sewer and water                                                              
systems,  pave  the  streets,  and hope  for  reimbursement  as  a                                                              
development goes forward.                                                                                                       
SENATOR  WAGONER noted  the bill mentioned  revenue bonds  several                                                              
times and he wondered  whether they would be sold  to come up with                                                              
the  state  match for  the  federal  funds Congressman  Young  was                                                              
COMMISSIONER BARTON replied they could be used for that purpose.                                                                
SENATOR WAGONER asked what kind of  impact this project would have                                                              
on the statewide highway program.                                                                                               
COMMISSIONER BARTON  anticipated the crossing itself  would result                                                              
from earmarked  federal funds.  The approach  roads may  have some                                                              
impact  on the highway  program,  but they  hope to  keep it  to a                                                              
minimum. He  added there is $8  billion in identified need  in the                                                              
state and progress is slow.                                                                                                     
SENATOR  THERRIAULT made  a motion  to  move SB  213 and  attached                                                              
fiscal note to the Finance Committee.                                                                                           
SENATOR LINCOLN objected to the motion.  She restated her position                                                              
that this is a major piece of legislation  and she objected to the                                                              
committee  pushing it through  so quickly.  There wasn't  adequate                                                              
time taken  to evaluate  the impacts  and the  public didn't  have                                                              
enough opportunity to comment.                                                                                                  
CHAIR  COWDERY called  for a  roll  call. The  motion passed  with                                                              
Senators Wagoner,  Therriault, Olson and Chair Cowdery  voting aye                                                              
and Senator Lincoln voting nay.                                                                                                 

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