Legislature(2005 - 2006)CAPITOL 106

03/20/2006 05:00 PM House ECONOMIC DEV., TRADE, AND TOURISM


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05:09:01 PM Start
05:09:09 PM Presentation: Knik Arm Bridge and Toll Authority (kabata)
06:01:05 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
KABATA (Knik Arm Bridge and Toll
Authority) re: Knik Arm Bridge
                    ALASKA STATE LEGISLATURE                                                                                  
 HOUSE SPECIAL COMMITTEE ON ECONOMIC DEVELOPMENT, INTERNATIONAL                                                               
                       TRADE AND TOURISM                                                                                      
                         March 20, 2006                                                                                         
                           5:09 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Mark Neuman, Co-Chair                                                                                            
Representative John Coghill                                                                                                     
Representative Bob Lynn                                                                                                         
Representative Nancy Dahlstrom (via teleconference)                                                                             
Representative Harry Crawford                                                                                                   
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Jay Ramras, Co-Chair                                                                                             
Representative Beth Kerttula                                                                                                    
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                                
Representative Bill Stoltze                                                                                                     
Representative Berta Gardner                                                                                                    
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
PRESENTATION:  KNIK ARM BRIDGE AND TOLL AUTHORITY (KABATA)                                                                      
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
GEORGE WUERCH, Chair                                                                                                            
Knik Arm Bridge and Toll Authority (KABATA)                                                                                     
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Provided a presentation on KABATA.                                                                         
                                                                                                                                
HENRY SPRINGER, Executive Director                                                                                              
Knik Arm Bridge and Toll Authority (KABATA)                                                                                     
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Provided a presentation on KABATA                                                                          
                                                                                                                              
ACTION NARRATIVE                                                                                                              
                                                                                                                                
CO-CHAIR  MARK  NEUMAN  called the  House  Special  Committee  on                                                             
Economic Development, International Trade  and Tourism meeting to                                                               
order  at 5:09:01  PM.   Representatives  Neuman, Coghill,  Lynn,                                                             
Dahlstrom (via teleconference), and  Crawford were present at the                                                               
call to order.  Representatives  Stoltze and Gardner were also in                                                               
attendance.                                                                                                                     
                                                                                                                                
^PRESENTATION:  KNIK ARM BRIDGE AND TOLL AUTHORITY (KABATA)                                                                   
                                                                                                                                
5:09:09 PM                                                                                                                    
                                                                                                                                
CO-CHAIR NEUMAN announced  that the only order  of business would                                                               
be a  presentation from  the Knik Arm  Bridge and  Toll Authority                                                               
(KABATA).                                                                                                                       
                                                                                                                                
5:10:23 PM                                                                                                                    
                                                                                                                                
GEORGE  WUERCH,  Chair,  Knik   Arm  Bridge  and  Toll  Authority                                                               
(KABATA), referred to Alaska Statute  19.75, which specifies that                                                               
the purpose of KABATA is as follows:                                                                                            
                                                                                                                                
     ...  to develop,  stimulate, and  advance the  economic                                                                    
     welfare  of the  state and  further the  development of                                                                    
     public transportation  systems in  the vicinity  of the                                                                    
     Upper Cook Inlet with construction  of a bridge to span                                                                    
     Knik Arm and connect  the Municipality of Anchorage and                                                                    
     the Matanuska-Susitna Borough.                                                                                             
                                                                                                                                
MR. WUERCH  directed the  committee's attention to  a map  of the                                                               
vicinity  of  the  Knik  Arm   Crossing  as  illustrated  in  the                                                               
PowerPoint  presentation.   He  also  presented  a photo  of  the                                                               
congestion on the Glenn Highway  during a recent morning commute.                                                               
The  Knik Arm  Crossing would  provide  the ability  to handle  a                                                               
substantial  amount  of traffic  via  an  alternative route  that                                                               
would lighten the  impacts of the future population  on the Glenn                                                               
Highway.   The aforementioned may  reduce the demand  for highway                                                               
funds for public infrastructure.                                                                                                
                                                                                                                                
5:13:39 PM                                                                                                                    
                                                                                                                                
MR.  WUERCH, in  response to  Co-Chair Neuman,  related that  the                                                               
Glenn Highway  currently handles  about 50,000 vehicles  per day,                                                               
which is  increasing annually.   The Glenn Highway will  be maxed                                                               
out within 10 years and the  prospect of adding lanes will arise.                                                               
However,  the problem  is that  additional  lanes would  traverse                                                               
from Anchorage  to the  intersection of the  Parks and  the Glenn                                                               
Highway to  Palmer, which  is about 40  miles in  each direction.                                                               
Estimates for such are about  $300 million, which would be public                                                               
money,  and  the  result  is  the same  corridor  with  no  other                                                               
alternatives.    He  mentioned the  possibility  of  tolling  new                                                               
lanes.                                                                                                                          
                                                                                                                                
5:15:21 PM                                                                                                                    
                                                                                                                                
MR. WUERCH continued  with a slide of two graphs  that relate the                                                               
historic growth from 1980-2003 and  the projected population from                                                               
2004-2050.   The  graphs  illustrate  that the  Matanuska-Susitna                                                               
Valley  is growing  much more  rapidly than  Anchorage.   He then                                                               
directed attention  to the slide  entitled "2030  ISER [Institute                                                               
of Social  and Economic Research]  Population & Employment."   He                                                               
explained  that the  Federal  Highway  Administration requires  a                                                               
capacity that  would be sufficient  for 20-25 years and  thus the                                                               
[proposal] is  to open the  bridge by 2010  and have 20  years in                                                               
use  by 2030.    The graph  illustrates that  with  or without  a                                                               
bridge, the population of Anchorage  grows.  However, without the                                                               
bridge Anchorage  grows a  little less  because more  people will                                                               
choose to live in the Mat-Su  Valley.  Therefore, the question is                                                               
in regard  to the  quality of  life in  Anchorage and  the Mat-Su                                                               
Valley by not building the bridge.                                                                                              
                                                                                                                                
5:17:07 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  NEUMAN asked  if Mr.  Wuerch,  as the  former mayor  of                                                               
Anchorage,  could inform  the committee  as to  how much  area is                                                               
available for further expansion.                                                                                                
                                                                                                                                
MR.  WUERCH informed  the committee  that in  Anchorage there  is                                                               
about 7,000  acres of undeveloped  land, although 6,000  of those                                                               
acres are  located on the  Hillside where  there is no  water and                                                               
sewer.   Therefore, Anchorage really  doesn't have  much building                                                               
capacity  land left.   However,  in  the Mat-Su  Valley there  is                                                               
77,000 acres of privately-held land,  most of which is buildable.                                                               
He specified that  there are 9,000 private owners  of this 77,000                                                               
acres.  Additionally, the Mat-Su  Borough has 10,000 acres in the                                                               
port  district  and there's  a  substantial  amount of  land  for                                                               
various uses.   He  then turned attention  to the  slide relating                                                               
that about 2,500 new single family  houses per year are built [in                                                               
the  Anchorage,  Eagle River,  and  Mat-Su  Valley areas].    The                                                               
expectation  is  that  the  construction  is  going  to  continue                                                               
because the population will continue  to grow.  He predicted that                                                               
the opening of  the bridge would result in more  new homes in the                                                               
Point MacKenzie area.                                                                                                           
                                                                                                                                
5:19:06 PM                                                                                                                    
                                                                                                                                
MR. WUERCH then  turned to the conceptual designs  of the bridge.                                                               
Due to  the air traffic  in the area,  the bridge design  isn't a                                                               
suspension bridge but rather the  design discussions are focusing                                                               
on  a  traditional  pilling-supported  bridge.    He  noted  that                                                               
borings have been  done in the bridge area and  have proven to be                                                               
of substantial material, although not bedrock.                                                                                  
                                                                                                                                
5:20:31 PM                                                                                                                    
                                                                                                                                
HENRY  SPRINGER, Executive  Director,  Knik Arm  Bridge and  Toll                                                               
Authority  (KABATA),  reiterated that  the  bridge  isn't in  the                                                               
design stage.   However, the perimeter had to  be specified under                                                               
the  environmental impact  statement  (EIS) process  in order  to                                                               
determine  the real  challenges.   By far,  the most  influential                                                               
factor of  this bridge is  seismic design and  fortunately, there                                                               
is lots  of data on  the earthquakes in  the area.   He explained                                                               
that the  earthquakes in the  Anchorage Bowl are  quite different                                                               
than those elsewhere as the fault  plates are somewhat skewed.  A                                                               
symposium has  been put  together of most  of the  North American                                                               
experts in  order to  provide guidance.   The  aforementioned has                                                               
resulted in  a formula  that will be  incorporated in  the design                                                               
standards, no  matter the  design of the  bridge.   [The experts]                                                               
agreed  that the  seismic aspect  can be  addressed, although  it                                                               
will cost because more steel will be required.                                                                                  
                                                                                                                                
5:22:25 PM                                                                                                                    
                                                                                                                                
MR.  WUERCH then  presented a  rendition of  what the  bridge may                                                               
look like.                                                                                                                      
                                                                                                                                
REPRESENTATIVE LYNN  inquired as  to the  difference in  cost and                                                               
ease of building between concrete and steel.                                                                                    
                                                                                                                                
MR. SPRINGER  noted that  one unknown  is in  regard to  what the                                                               
Chinese  are going  to  do  with steel  in  the  next few  years.                                                               
However, he  said that the  cost of the bridge,  whether concrete                                                               
or  steel,  is  similar  because  in order  to  make  the  bridge                                                               
earthquake  proof, steel  has  to be  put in  the  concrete.   He                                                               
opined that the  difference will come from the  location at which                                                               
it will be manufactured and  the shipping costs that will result.                                                               
In  further   response  to  Representative  Lynn,   Mr.  Springer                                                               
informed the committee that construction  of the bridge will take                                                               
about  three   to  three-and-a-half  years.     If  the  concrete                                                               
components are  made locally, then a  bit more lead time  will be                                                               
required.                                                                                                                       
                                                                                                                                
5:24:23 PM                                                                                                                    
                                                                                                                                
MR. WUERCH continued his presentation  by addressing the issue of                                                               
travel time and distance.   He presented a computerized rendering                                                               
of  the  area that  has  to  be  driven  without the  bridge  and                                                               
informed the committee  that with the bridge a  commuter saves 80                                                               
minutes  and 68  miles, which  is substantial.   Furthermore,  at                                                               
today's gas prices if the  miles traveled without the bridge were                                                               
rounded  to 60  miles,  the bridge  would  save commuters  $7.50,                                                               
which is  the upper limit  of the toll.   The lower limit  of the                                                               
toll  is about  $3.00.    He explained  that  since more  private                                                               
funding than public  funding is being sought for  the bridge, the                                                               
toll will  likely be  more than  $3.00.   Mr. Wuerch  pointed out                                                               
that a price higher than the alternative can't be charged.                                                                      
                                                                                                                                
CO-CHAIR NEUMAN requested an outline  of a situation in which the                                                               
road would  be extended to mile  73, just north of  Willow, and a                                                               
new north-south  corridor that traverses around  Wasilla would be                                                               
constructed.                                                                                                                    
                                                                                                                                
5:27:01 PM                                                                                                                    
                                                                                                                                
MR. WUERCH  clarified that  the route  presented on  the computer                                                               
rendering is that  road.  Such a corridor would  be excellent for                                                               
the Alaska Railroad  so that cargo could be  loaded directly from                                                               
the ship.   If a  rail corridor is  built there is  the potential                                                               
for a highway  corridor along side it as well  as power, gas, and                                                               
utility lines.   However, he mentioned that  the implications for                                                               
freight service to the Interior are measurable.                                                                                 
                                                                                                                                
5:28:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GARDNER  expressed  her interest  in  the  Alaska                                                               
Railroad and  related her understanding that  there are technical                                                               
reasons  to  not  have  the   bridge  also  accommodate  railroad                                                               
traffic.  She  posed a situation in which the  highway bridge was                                                               
built first  and the  railroad bridge  second, and  asked whether                                                               
there would  be a cost savings  to the railroad in  that scenario                                                               
because KABATA has performed all the studies.                                                                                   
                                                                                                                                
MR.  WUERCH said  there would  be a  cost savings  because KABATA                                                               
would've  processed  the EIS  and  the  permits and  [a  railroad                                                               
bridge] would merely  be an amendment.  Mr.  Wuerch then informed                                                               
the  committee that  KABATA is  committed to  building a  highway                                                               
bridge that's  railroad compatible  and thus the  road approaches                                                               
and  elevation  changes  will  be   designed  to  railroad  grade                                                               
standards.   Furthermore,  KABATA  is actively  talking with  the                                                               
Alaska Railroad  leadership regarding whether the  gravel for the                                                               
roadbed  and the  railroad can  be laid  at the  same time.   Mr.                                                               
Wuerch  said  that  the  biggest   hurtle  for  the  railroad  is                                                               
acquiring  and clearing  the right-of-way  for permits,  which he                                                               
estimated will take probably five years or so.                                                                                  
                                                                                                                                
5:31:14 PM                                                                                                                    
                                                                                                                                
CO-CHAIR   NEUMAN  highlighted   that   the   railroad  is   also                                                               
considering upgrades  on the road from  Anchorage through Wasilla                                                               
at a cost of $150-$200 million.   The railroad is also looking at                                                               
another way around Wasilla.                                                                                                     
                                                                                                                                
5:32:16 PM                                                                                                                    
                                                                                                                                
MR.  WUERCH  directed  attention  to the  Burma  Road  connection                                                               
that's just a bit higher  grade than an all-terrain vehicle (ATV)                                                               
trail.   The governor's budget  includes funds to start  the EIS,                                                               
which  will   probably  take   a  couple  of   years.     If  the                                                               
aforementioned  occurred,  northbound  traffic could  move  in  a                                                               
different direction such  that traffic follows the  Big Lake Road                                                               
to the  Big Lake intersection  and head  north, which would  be a                                                               
savings of 30 miles or so.                                                                                                      
                                                                                                                                
5:33:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CRAWFORD  recalled  two-three years  ago  hearing                                                               
about an interim  ferry in order to get people  accustomed to the                                                               
location of the crossing and living  in the area.  He inquired as                                                               
to what has happened with that idea.                                                                                            
                                                                                                                                
MR. WUERCH said that the Mat-Su  Borough has worked with the U.S.                                                               
Navy  Research and  Development  Center, which  is designing  and                                                               
building a  ferry with attributes  that are good for  water [such                                                               
as found in  the Knik Arm] as an experiment  to determine whether                                                               
it  can  be  used  for landing  military  troops  across  hostile                                                               
shores.    That  ferry is  due  to  be  in  service in  2007,  he                                                               
surmised.   Mr. Wuerch opined that  such a ferry is  a good thing                                                               
because it  will help  people become  accustom to  commuting that                                                               
direction and will transport those working on the bridge.                                                                       
                                                                                                                                
CO-CHAIR  NEUMAN added  that industry  is already  moving to  the                                                               
Point MacKenize side.                                                                                                           
                                                                                                                                
5:34:56 PM                                                                                                                    
                                                                                                                                
MR. WUERCH informed the committee  that during the development of                                                               
the  EIS, KABATA  has  performed a  land  use and  transportation                                                               
forecast.   The forecast reviews  the development  suitability of                                                               
land using  a variety of sources.   In fact, an  economic working                                                               
group  convened   and  interviewed  no  less   than  50  business                                                               
executives  and  government officials  in  the  North Cook  Inlet                                                               
area.  It was  determined that there is quite a  bit of land with                                                               
little development opportunity  because it's a game  refuge.  The                                                               
triangular area  from Wasilla  past Big Lake  to the  Nancy Lakes                                                               
area is the growth area for economic development.                                                                               
                                                                                                                                
5:36:51 PM                                                                                                                    
                                                                                                                                
MR. WUERCH  then moved  on to the  highway called  Port MacKenzie                                                               
Road,  which needs  to  be  a four-lane  road  in  order to  meet                                                               
capacity.   The  computer  program that  reviews the  improvement                                                               
tests was  financed by  KABATA and  is now in  use by  the Mat-Su                                                               
Borough,  the  Municipality  of   Anchorage,  the  Department  of                                                               
Transportation  &  Public  Facilities, and  the  Federal  Highway                                                               
Administration for regional transportation planning.                                                                            
                                                                                                                                
5:38:42 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  LYNN  asked  if  it has  been  settled  that  the                                                               
Anchorage connection will be through  Government Hill or is there                                                               
the possibility of going through the military base.                                                                             
                                                                                                                                
MR.  WUERCH specified  that the  approach on  the Anchorage  side                                                               
hasn't  been decided  as the  Federal Highway  Administration has                                                               
yet  to issue  that  draft  EIS.   However,  the Federal  Highway                                                               
Administration  did issue  its  scoping  report, which  specifies                                                               
that there  are two  feasible [approaches],  both of  which would                                                               
tunnel  under  Government Hill  and  would  initially use  the  C                                                               
Street viaduct  since it has capacity  to do so.   Still, between                                                               
2020-2025, it appears that another  crossing of Ship Creek with a                                                               
viaduct/bridge will  have to  built if the  City of  Anchorage is                                                               
successful in  building the highway-to-highway  connection, which                                                               
connects  the  Glenn  Highway  to   the  new  Seward  Highway  by                                                               
separating it from  street traffic, which is  a $600-$800 million                                                               
project.  In further response  to Representative Lynn, Mr. Wuerch                                                               
predicted that in late summer  or early fall, the Federal Highway                                                               
Administration will issue  the final decision.   In the meantime,                                                               
KABATA is hopeful  that within the next two weeks,  the draft EIS                                                               
will be  released for  public comment and  agency review.   There                                                               
will be  more public hearings.   Mr. Wuerch noted  that currently                                                               
there are  no proposals on the  table to go through  the military                                                               
base.                                                                                                                           
                                                                                                                                
5:42:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DAHLSTROM  confirmed that  currently there  are no                                                               
proposals to  go through either  of the bases, although  the base                                                               
personnel  and those  in Washington,  D.C., continue  to be  very                                                               
involved because  they will need  to transport their  vehicles to                                                               
the port.                                                                                                                       
                                                                                                                                
5:43:39 PM                                                                                                                    
                                                                                                                                
MR.  WUERCH  continued  his  presentation   with  regard  to  the                                                               
reasonably  foreseeable events  between now  and 2030:   railroad                                                               
spur  to  Port  MacKenzie;  industrial development  in  both  the                                                               
Anchorage and MacKenzie  ports and cruise ship  traffic into Cook                                                               
Inlet; 200 megawatts  gas fired generator, gas  liquids spur line                                                               
and a  water line to  the Mat-Su Valley.   He noted that  when he                                                               
was  mayor  [the Municipality  of  Anchorage]  had a  40  million                                                               
gallon a  day surplus  of water  that could  be piped  across the                                                               
bridge to  serve the new  housing areas  in the Mat-Su  and Point                                                               
MacKenzie  area.   In  response  to  Representative Gardner,  Mr.                                                               
Wuerch clarified that there's no  water system in Point MacKenzie                                                               
and thus everyone must have wells.                                                                                              
                                                                                                                                
5:45:39 PM                                                                                                                    
                                                                                                                                
MR.  WUERCH continued  with  the  reasonably foreseeable  events,                                                               
which include the  ferry to Kenai, the commuter  rail, the Willow                                                               
connector, the  Wasilla bypass; Hatcher Pass  ski area, increased                                                               
military  presence,  small  plane base;  and  more  connectivity.                                                               
However, an airport in Point  MacKenzie isn't envisioned nor is a                                                               
capitol  move,  or  construction  of any  new  bridges  over  the                                                               
Susitna River.                                                                                                                  
                                                                                                                                
5:46:58 PM                                                                                                                    
                                                                                                                                
MR. WUERCH  moved on to  the slide entitled  "Community Impacts."                                                               
He highlighted the following impacts  of the bridge:  the linkage                                                               
of  critical  port  facilities, infrastructure  to  meet  growth,                                                               
emergency  access   and  egress,  commuter   convenience,  reduce                                                               
transit  pollution,  save  popular greenbelts,  sustain  business                                                               
base, and provide access to recreational areas.                                                                                 
                                                                                                                                
5:49:15 PM                                                                                                                    
                                                                                                                                
MR. WUERCH  then turned attention  to the slide  highlighting the                                                               
March 16,  2006, Anchorage Daily News  article entitled, "Fastest                                                             
growing  counties are  rural,  suburban."   In  fact, the  Mat-Su                                                               
Borough  ranks  31st nationally  adding  3,800  residents or  5.3                                                               
percent  of its  population  from  July 2004  -  July  2005.   He                                                               
indicated  that  when the  long  distances  cause new  population                                                               
centers, good  things happen in the  way of new businesses.   The                                                               
slide   entitled   "Commercial  Sector   Population   Thresholds"                                                               
prepared by Northern Economics  relates the population thresholds                                                               
required  to be  profitable, which  for  a gas  station is  about                                                               
3,827.  To be profitable with a  grocery store, there has to be a                                                               
population of  about 6,949.   With  the increasing  population in                                                               
the Mat-Su Valley,  an estimated 73,000 more people  will live in                                                               
the Mat-Su  Valley over the next  20 years.  Such  an increase in                                                               
population will provide the opportunity  for many new businesses.                                                               
Therefore, the  population thresholds  for the  businesses listed                                                               
on the slide will easily be met, he opined.                                                                                     
                                                                                                                                
5:51:31 PM                                                                                                                    
                                                                                                                                
MR.  WUERCH  continued  the  presentation   by  focusing  on  the                                                               
preliminary cost  estimate of  the bridge  and financing  for it.                                                               
The  preliminary cost  estimate  of the  bridge  project is  $600                                                               
million.   He explained that  the governor's budget  includes $94                                                               
million in  federal dollars  that are backed  with a  small state                                                               
match and ultimately  provides $100 million for  the $600 million                                                               
project.    The $100  million  should  allow KABATA  to  complete                                                               
permitting, develop  a financing plan,  and provide a  package of                                                               
work to be  done in 2007.  He specified  that construction of the                                                               
bridge will occur from 2007-2010.   The remaining $500 million in                                                               
private sector  investment will be  paid back  by the tolls.   In                                                               
January  a  group  of  bankers,  investment  counselors,  Federal                                                               
Highway  Administration staff,  state employees,  and contractors                                                               
who  said that  with $100  million down  payment, a  $500 million                                                               
mortgage could be financed.                                                                                                     
                                                                                                                                
5:53:39 PM                                                                                                                    
                                                                                                                                
CO-CHAIR NEUMAN requested that Mr.  Wuerch discuss how the bridge                                                               
financing  might ultimately  facilitate other  transportation and                                                               
infrastructure projects.                                                                                                        
                                                                                                                                
MR.  WUERCH,  in  regard  to  federal  funds  for  transportation                                                               
projects, informed  the committee that Alaska  will receive about                                                               
$2.5  billion   over  the  five   years  of   the  transportation                                                               
legislation in Congress.   The aforementioned is  more money than                                                               
Alaska has  ever had in  any transportation legislation.   If the                                                               
legislature  approves HB  471/SB 303,  KABATA is  requesting some                                                               
language changes to  the statute that created KABATA  in order to                                                               
clear up  some ambiguities and  establish a debt ceiling  at $500                                                               
billion.   Therefore, there is  $2.5 billion in federal  funds of                                                               
which  KABATA is  asking for  $100 million  and will  borrow $500                                                               
million.   The  result of  the aforementioned  would be  that the                                                               
entire state's  transportation infrastructure, as  an investment,                                                               
would  increase  from  $2.5  billion to  $3  billion  without  an                                                               
additional drain on the general fund.                                                                                           
                                                                                                                                
CO-CHAIR NEUMAN recalled  that there are concerns  with regard to                                                               
the  STIP  and  whether  the  federal funds  have  to  go  toward                                                               
federally funded state highways.                                                                                                
                                                                                                                                
5:56:12 PM                                                                                                                    
                                                                                                                                
MR.  WUERCH agreed,  and explained  that the  federal money  once                                                               
earmarked for bridges has had  the earmarks removed, although the                                                               
intended  purpose hasn't  been removed.   The  federal funds  are                                                               
intended to be used for the  high priority projects listed by the                                                               
state  that   fall  under  the  National   Highway  System  (NHS)                                                               
category.  Therefore,  those federal funds for  the bridges can't                                                               
be applied  to patching  potholes on a  neighborhood street.   He                                                               
explained that there  are five categories for  funding in Alaska,                                                               
including the  NHS.  The  NHS includes all the  numbered highways                                                               
in the state,  some of the main arterials in  Anchorage that were                                                               
built  prior   to  the  consolidation  of   the  Municipality  of                                                               
Anchorage, and roads to ports.                                                                                                  
                                                                                                                                
REPRESENTATIVE  STOLTZE  commented  that  he has  seen  very  few                                                               
projects that have  this opportunity to have  federal funds match                                                               
private sector  funds.  He  informed the  committee that he  is a                                                               
non-voting member of KABATA.   In regard to the economic benefits                                                               
of this project,  he highlighted that this  project would benefit                                                               
those in the Interior.                                                                                                          
                                                                                                                                
5:58:40 PM                                                                                                                    
                                                                                                                                
CO-CHAIR NEUMAN  mentioned that the  toll authority will  pay for                                                               
the potholes on its road.                                                                                                       
                                                                                                                                
MR.  WUERCH confirmed  that  tolls  have to  pay  for the  entire                                                               
operation, maintenance, and debt  retirement.  He emphasized that                                                               
the   analysis   specifies   that   KABATA   will   achieve   the                                                               
aforementioned  and create  a reserve  for  future expansions  in                                                               
order   to   add  capacity   for   future   populations.     Such                                                               
public/private partnerships are happening all over the world.                                                                   
                                                                                                                                
6:00:31 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STOLTZE opined that he would want the bridge to                                                                  
be built with as much steel and iron as possible.                                                                               
                                                                                                                                
CO-CHAIR NEUMAN noted that he is impressed with the economic                                                                    
development opportunities that can occur due to this project.                                                                   
                                                                                                                                
6:01:05 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
Special Committee on Economic Development, International Trade                                                                  
and Tourism meeting was adjourned at 6:01 p.m.                                                                                  

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