Legislature(2021 - 2022)BELTZ 105 (TSBldg)

03/23/2021 01:30 PM TRANSPORTATION

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Audio Topic
01:41:45 PM Start
01:42:20 PM SB74
02:07:15 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 74 G.O. BONDS: STATE INFRASTRUCTURE PROJECTS TELECONFERENCED
Moved CSSB 74(TRA) Out of Committee
**Streamed live on AKL.tv**
        SB 74-G.O. BONDS: STATE INFRASTRUCTURE PROJECTS                                                                     
                                                                                                                                
1:42:20 PM                                                                                                                    
CHAIR MYERS  announced the  consideration of  SB 74,  SENATE BILL                                                               
NO. 74,  "An Act providing  for and  relating to the  issuance of                                                               
general obligation  bonds for the  purpose of paying the  cost of                                                               
state    infrastructure    projects,   including    construction,                                                               
communications,   major    maintenance,   public    safety,   and                                                               
transportation projects; and providing for an effective date."                                                                  
                                                                                                                                
CHAIR MYERS solicited a motion.                                                                                                 
                                                                                                                                
1:42:50 PM                                                                                                                    
SENATOR SHOWER moved  to adopt the committee  substitute (CS) for                                                               
SB  74,  [work  order  32-GS1716\B]. There  being  no  objection,                                                               
Version B was adopted as the working document.                                                                                  
                                                                                                                                
1:43:16 PM                                                                                                                    
SENATOR KIEHL  moved to adopt  Amendment 1  to SB 74,  Version B,                                                               
[work order 32-GS1716\B.1].                                                                                                     
                                                    32-GS1716\B.1                                                               
                                                            Marx                                                                
                                                         3/20/21                                                                
                                                                                                                                
                          AMENDMENT 1                                                                                       
                                                                                                                                
                                                                                                                                
OFFERED IN THE SENATE                          BY SENATOR KIEHL                                                                 
     TO:  CSSB 74(TRA), Draft Version "B"                                                                                       
                                                                                                                                
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1:43:20 PM                                                                                                                    
CHAIR MYERS objected for discussion purposes.                                                                                   
                                                                                                                                
1:43:22 PM                                                                                                                    
SENATOR  KIEHL  explained  that  Amendment  1  would  delete  the                                                               
remaining projects  in the GO [General  Obligation] bond proposal                                                               
with federal  match for  [Federal Highway  Administration (FHWA)]                                                               
transportation projects  and [Airport Improvement  Program (AIP)]                                                               
airport formula funding.                                                                                                        
                                                                                                                                
SENATOR KIEHL stated that the committee previously discussed                                                                    
whether using GO bonding for projects with federal match was the                                                                
best way  to fund projects since  these projects are in  the STIP                                                               
or AIP  and will be  constructed using those processes.  In fact,                                                               
he  could not  recall  any  instance where  the  state failed  to                                                               
appropriate  the   match.  Further,  using  GO   bonds  will  not                                                               
accelerate the  projects. He preferred to  replace these projects                                                               
with  ones that  will move  Alaska's economy  forward or  address                                                               
major challenges the state faces.  He argued against using the GO                                                               
bonds in this way.                                                                                                              
                                                                                                                                
1:44:56 PM                                                                                                                    
SENATOR MICCICHE stated that he  could support Amendment 1 if the                                                               
projects  had a  very  high rate  of match  and  were limited  to                                                               
highways. He  predicted that if  this bond package were  to pass,                                                               
it will  accelerate projects  over and  above the  normal capital                                                               
budget  process. While  he said  he  struggles with  the GO  Bond                                                               
concept,  some  of the  projects  in  SB  74 are  critical  ones,                                                               
including  the Dalton  Highway,  bridges at  Montana, Sheep,  and                                                               
Gooses  Creeks, Seward  Highway  and Sterling  Highway, he  said.                                                               
Some  of these  highways  are  severely damaged  and  need to  be                                                               
repaired  for public  safety improvements.  When  people seek  to                                                               
reduce  the state's  budget, they  don't envision  reducing funds                                                               
for  transportation or  public safety  but rather  for peripheral                                                               
things  the  state  can  no  longer afford.  He  said  he  wished                                                               
Amendment  1 only  pertained to  [highway] projects  but it  does                                                               
not. Therefore, he said he cannot support Amendment 1, he said.                                                                 
                                                                                                                                
1:46:28 PM                                                                                                                    
SENATOR  SHOWER said  he echoes  Senator Micciche's  comments. He                                                               
stated that  he considered  offering a  number of  amendments but                                                               
did not do so due to the GO Bond source of funding.                                                                             
                                                                                                                                
CHAIR MYERS removed his objection.                                                                                              
                                                                                                                                
1:48:06 PM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
1:48:17 PM                                                                                                                    
SENATOR KIEHL withdrew Amendment 1.                                                                                             
                                                                                                                                
1:48:49 PM                                                                                                                    
SENATOR MICCICHE  asked if the  committee substitute (CS)  for SB
74, Version  B incorporated the amendments  the committee adopted                                                               
but it did not make any additional changes.                                                                                     
                                                                                                                                
CHAIR  MYERS agreed  Version B  incorporated only  the amendments                                                               
the committee previously adopted.                                                                                               
                                                                                                                                
1:49:30 PM                                                                                                                    
SENATOR  SHOWER  asked  the  record  to  reflect  that  while  he                                                               
supports many of the projects in  SB 74, he has concern about the                                                               
GO Bond funding  mechanism. Many of his  constituents have called                                                               
him about the West Susitna  Access Road, which he acknowledged is                                                               
an important  project that  will help  Alaska's economy  grow and                                                               
provide  high-paying, sustainable  jobs.  However, as  previously                                                               
mentioned, the  state has substantial  infrastructure in  need of                                                               
repairs. The cost  to bond will run about $100  million at a time                                                               
when the state  currently faces a deficit.  Last week's testimony                                                               
demonstrated  that  many of  these  projects  were already  fully                                                               
funded by  other funding  sources, including  forthcoming federal                                                               
funds, yet they were included in SB 74.                                                                                         
                                                                                                                                
1:52:24 PM                                                                                                                    
SENATOR MICCICHE emphasized  that he did not support  many of the                                                               
amendments  offered  on SB  74,  based  on  the GO  Bond  funding                                                               
source.  He acknowledged  that the  state's infrastructure  needs                                                               
are critical.  He reiterated  that his  constituents travel  on a                                                               
highway  with  safety issues.  He  surmised  that when  the  bond                                                               
package was initially considered,  the administration was unaware                                                               
of   forthcoming  federal   COVID-19  funding   or  the   federal                                                               
infrastructure  that  Congress  will likely  pass.  This  federal                                                               
funding puts  the state in  a very different position.  While the                                                               
GO  Bond proposal  would accelerate  some regular  capital budget                                                               
projects, it's very likely that  savings would not materialize by                                                               
using bonds,  he said. He offered  his preference to only  use GO                                                               
Bonds  on projects  after  thoroughly  considering the  financing                                                               
process. He maintained  his view that the  projects are important                                                               
ones  that will  enhance  public safety.  However, the  committee                                                               
decided forthcoming federal funding will  allow the state to fund                                                               
these projects without the burden of using GO bonds.                                                                            
                                                                                                                                
1:55:39 PM                                                                                                                    
CHAIR  MYERS  remarked  that  the legislature  uses  a  slow  and                                                               
deliberative process.                                                                                                           
                                                                                                                                
1:56:00 PM                                                                                                                    
SENATOR  SHOWER offered  to forward  the report  that highlighted                                                               
the  cost  of  bonding  to   the  committee.  He  echoed  Senator                                                               
Micciche's comments that federal funding  was not likely known at                                                               
the time the administration prepared  the bill. He maintained his                                                               
concerns  were not  based on  the merits  of projects  but rather                                                               
that other funding sources were preferable.                                                                                     
                                                                                                                                
1:57:22 PM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
1:57:45 PM                                                                                                                    
CHAIR MYERS reconvened the committee and solicited a motion.                                                                    
                                                                                                                                
1:58:10 PM                                                                                                                    
SENATOR SHOWER moved to report  the committee substitute (CS) for                                                               
SB 74,  work order 32-GS1716\B,  as amended, from  committee with                                                               
individual recommendations and forthcoming fiscal note(s).                                                                      
                                                                                                                                
CHAIR  MYERS said  Legislative Legal  is authorized  to make  any                                                               
necessary technical and conforming changes.                                                                                     
                                                                                                                                
1:58:55 PM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
2:05:07 PM                                                                                                                    
CHAIR MYERS reconvened the meeting.                                                                                             
                                                                                                                                
[The  committee  treated  it  as   though  the  motion  had  been                                                               
rescinded.]                                                                                                                     
                                                                                                                                
2:05:18 PM                                                                                                                    
SENATOR SHOWER  stated a revised  motion. He moved to  report the                                                               
committee  substitute (CS)  for  SB 74,  work order  32-GS1716\B,                                                               
from  committee with  individual recommendations  and forthcoming                                                               
revised fiscal  note(s). There being  no objection,  CSSB 74(TRA)                                                               
was reported from the Senate Transportation Standing Committee.                                                                 

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