Legislature(2007 - 2008)CAPITOL 120

02/07/2008 01:00 PM House TRANSPORTATION


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01:11:01 PM Start
01:11:11 PM Overview: State Aviation
03:08:16 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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+ State Aviation Overview TELECONFERENCED
-- Testimony <Invitation Only> --
                    ALASKA STATE LEGISLATURE                                                                                  
            HOUSE TRANSPORTATION STANDING COMMITTEE                                                                           
                        February 7, 2008                                                                                        
                           1:11 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Kyle Johansen, Chair                                                                                             
Representative Mark Neuman, Vice Chair                                                                                          
Representative Anna Fairclough                                                                                                  
Representative Craig Johnson                                                                                                    
Representative Wes Keller                                                                                                       
Representative Mike Doogan                                                                                                      
Representative Woodie Salmon                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                              
OVERVIEW:  STATE AVIATION                                                                                                       
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to report                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
FRANK RICHARDS, Deputy Commissioner                                                                                             
of Highways & Public Facilities                                                                                                 
Office of the Commissioner                                                                                                      
Department of Transportation & Public Facilities (DOT&PF)                                                                       
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Provided an overview of statewide aviation.                                                              
                                                                                                                                
JESSE VANDERZANDEN, Manager                                                                                                     
Fairbanks International Airport (FIA)                                                                                           
Department of Transportation & Public Facilities                                                                                
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Provided a PowerPoint presentation titled                                                                
"FAIRBANKS INTERNATIONAL AIRPORT."                                                                                              
                                                                                                                                
JOHN PARROTT, Deputy Director                                                                                                   
Ted Stevens Anchorage International Airport (TSAIA)                                                                             
Department of Transportation & Public Facilities                                                                                
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:   Provided a  PowerPoint presentation  titled                                                            
"Ted Stevens Anchorage International Airport."                                                                                  
                                                                                                                                
CHRISTINE KLEIN, Deputy Commissioner of Aviation                                                                                
Office of the Commissioner                                                                                                      
Department of Transportation & Public Facilities                                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions.                                                                                      
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
CHAIR  KYLE  JOHANSEN called  the  House  Transportation  Standing                                                            
Committee  meeting  to  order  at  1:11:01  PM.    Representatives                                                            
Neuman,  Johnson,  Keller,  Salmon,   Doogan,  and  Johansen  were                                                              
present at the  call to order.  Representative  Fairclough arrived                                                              
as the meeting was in progress.                                                                                                 
                                                                                                                                
^Overview:  State Aviation                                                                                                    
                                                                                                                                
1:11:11 PM                                                                                                                    
                                                                                                                                
CHAIR JOHANSEN  announced that  the only  order of business  would                                                              
be an overview of state aviation.                                                                                               
                                                                                                                                
1:11:21 PM                                                                                                                    
                                                                                                                                
FRANK  RICHARDS,   Deputy  Commissioner   of  Highways   &  Public                                                              
Facilities,   Office   of   the    Commissioner,   Department   of                                                              
Transportation   &  Public  Facilities   (DOT&PF),  directed   the                                                              
committee's  attention to  the  PowerPoint  titled "Department  of                                                              
Transportation  & Public  Facilities Rural  Airports Update."   He                                                              
began  by informing  the  committee  that  DOT&PF is  the  largest                                                              
owner  of publicly  owned airports  within the  state.  There  are                                                              
approximately  30 airports  owned by cities,  villages, and  other                                                              
agencies,  such  as the  Department  of Natural  Resources  (DNR).                                                              
Practically every  village in the  state has an airport,  although                                                              
many have  substandard runway length.   Therefore,  the department                                                              
is  trying  to address  those  airports  with  substandard  runway                                                              
lengths  by lengthening  them  to the  minimum  standard of  3,300                                                              
feet.    The  department's  annual   operating  budget  for  rural                                                              
airports is  $28 million and its  capital budget is  $173 million.                                                              
The primary  source of the capital  funds is the  Federal Aviation                                                              
Administration (FAA).   Referring to  page 4 of  the presentation,                                                              
Mr. Richards  highlighted that Alaska's  rural airports  have very                                                              
unique  operations.    The  department   is  the  largest  airport                                                              
operator  in  the U.S.    Furthermore,  there are  sometimes  very                                                              
challenging wildlife  conditions as depicted  by the photo  of the                                                              
polar bear on  the tarmac in Barrow.   In a rural system,  most of                                                              
the  communities  are  maintained  under  contract  with  a  local                                                              
individual.   Those contracts  are for  the individual  to utilize                                                              
state equipment  to keep the  runway free of  snow and ice  and to                                                              
grade  the runway in  the summer.   Those  contracts, on  average,                                                              
amount to about $12,000 per year per individual.                                                                                
                                                                                                                                
1:15:11 PM                                                                                                                    
                                                                                                                                
CHAIR JOHANSEN asked  if those individuals make  their own capital                                                              
investments in equipment.                                                                                                       
                                                                                                                                
MR. RICHARDS  clarified that the  state, utilizing the  FAA funds,                                                              
purchases  the  equipment  and  the  equipment  storage  building.                                                              
Therefore,  the individual  is hired  just to  operate the  state-                                                              
owned  equipment.   Furthermore,  the state  provides the  lights,                                                              
the lighting parts, and the electricity to operate the lights.                                                                  
                                                                                                                                
1:15:48 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NEUMAN  asked if maintenance and plowing  for these                                                              
rural airports is subcontracted out to an individual or company.                                                                
                                                                                                                                
MR. RICHARDS  specified that it's  a one-year bid with  four years                                                              
of annual  renewal.  He referred  to them as low-bid  contracts to                                                              
private  contractors for  most of  the rural  airports.  In  total                                                              
there are  about 170  private contracts.   He  related that  if no                                                              
individual  comes forward,  then DOT&PF works  with the  community                                                              
to maintain the local airport.                                                                                                  
                                                                                                                                
1:16:51 PM                                                                                                                    
                                                                                                                                
MR.  RICHARDS,   returning  to  his  presentation,   informed  the                                                              
committee that  in the  rural system  there are also  certificated                                                              
airports.   Those  are airports  that receive  aircraft with  more                                                              
than  30 passenger  seats, which  is  essentially Alaska  Airlines                                                              
and  ERA Aviation.    Mr. Richards  related  that since  Southwest                                                              
Airlines went  long at Midway Airport  in Chicago due  to breaking                                                              
action, the  FAA has  required that  turbine-driven aircraft  only                                                              
land when  there is  fair breaking  conditions on paved  surfaces.                                                              
Therefore,  it requires more  effort at  the state-owned  airports                                                              
receiving  jet  traffic to  clear  snow  and  ice advance  of  the                                                              
landing.    The  aforementioned   is  proving  to  be  more  of  a                                                              
challenge as  it just went  into play in  the last year.   He then                                                              
noted  that [the  department]  is  providing increased  levels  of                                                              
service  at some of  the busier  airports, such  as Nome,  Bethel,                                                              
Dillingham,  Petersburg,  and Wrangell.    With  the help  of  the                                                              
legislature,  the   department  was  able  to   obtain  additional                                                              
operating  funds  for  those  airports  over the  last  couple  of                                                              
years.                                                                                                                          
                                                                                                                                
1:18:08 PM                                                                                                                    
                                                                                                                                
MR. RICHARDS, referring  to page 5 of the  PowerPoint, highlighted                                                              
the  regional  boundaries  of  the  airports  in the  state.    As                                                              
related  on  page   6  of  the  presentation,   DOT&PF  faces  the                                                              
following    operational   challenges:       increasing    federal                                                              
regulations   and   requirements,  escalating   construction   and                                                              
operating  costs, and  environmental issues.   Page  6 includes  a                                                              
photo  of  the  Sitka  Airport,  for  which  DOT&PF  is  currently                                                              
working through  an environmental  impact statement (EIS)  so that                                                              
Sitka can  build out a  runway safety area.   He explained  that a                                                              
runway safety area  is an area about 250 feet off  the center line                                                              
[of the runway] and  about 1,000 feet off each end.   To build out                                                              
1,000 feet  of material is going  to cost hundreds of  millions of                                                              
dollars.   The  aforementioned  won't occur  because  the FAA  has                                                              
capped   [what   it  will   provide]   for  runway   safety   area                                                              
improvements to about $35 million.                                                                                              
                                                                                                                                
1:19:36 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  NEUMAN inquired  as  to how  DOT&PF determines  to                                                              
which airports the federal funds will go.                                                                                       
                                                                                                                                
MR. RICHARDS  informed the  committee that the  FAA has  said that                                                              
all certificated  airports will meet runway safety  area standards                                                              
by 2013.   The FAA  has made efforts  to provide additional  funds                                                              
to   Alaska   to  cover   additional   expenses,   and   therefore                                                              
discretionary  funds  beyond  the annual  entitlement  funds  have                                                              
been  provided.   He noted  that  the state  has to  go through  a                                                              
practicability   analysis    utilizing   FAA    standards,   which                                                              
determines whether  the full-blown safety requirement  is expended                                                              
or not.                                                                                                                         
                                                                                                                                
1:20:40 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON  inquired  as  to  the  repercussions  for                                                              
airports  that don't  meet  the 2013  deadline  for runway  safety                                                              
area standards.                                                                                                                 
                                                                                                                                
MR. RICHARDS  stated that the  state is on  track to meet  the FAA                                                              
guidelines by  2013.  However, DOT&PF  is in discussions  with the                                                              
FAA regarding  two airports  on the Dalton  highway for  which the                                                              
traffic   doesn't  seem   to  warrant  the   runway  safety   area                                                              
standards.   He related  his belief  that the  FAA would  be hard-                                                              
pressed to pull the certificate from the state.                                                                                 
                                                                                                                                
1:21:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON  asked  then  if the  department  will  be                                                              
dumping 800 feet of rock 1,000 feet in the water at Sitka.                                                                      
                                                                                                                                
MR.  RICHARDS   replied  no.     He   explained  that   after  the                                                              
practicability study,  the [FAA funds]  for the Sitka  Airport was                                                              
capped at  about $35 million.   He related his  understanding that                                                              
there will  be a 200-300  feet extension  of the runway  at Sitka.                                                              
In  further  response  to  Representative  Johnson,  Mr.  Richards                                                              
confirmed  that  Sitka  will  be   exempted  from  the  1,000-foot                                                              
requirement.  So  long as the practicability study  has shown what                                                              
can be  reasonably  done for the  money provided,  the [FAA]  will                                                              
accept that as meeting the standard even if it's less.                                                                          
                                                                                                                                
1:22:40 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SALMON informed  the  committee that  many of  the                                                              
communities that  aren't on a  river system have  problems related                                                              
to bringing  fuel.   In fact, it's  problematic when  fuel barrels                                                              
or  tanks can't  be  left on  the  airport [property]  when  there                                                              
aren't  fuel  tankers.   He  emphasized  the  need for  DOT&PF  to                                                              
address the aforementioned.                                                                                                     
                                                                                                                                
MR.   RICHARDS  acknowledged   the  challenges   related  to   the                                                              
inability  of barges  transporting  fuel to  reach certain  areas.                                                              
However, the  challenge with  folks leaving  fuel tanks  and drums                                                              
at  the airports  is  that sometimes  they  start  leaking and  it                                                              
becomes   the   state's  responsibility.      Furthermore,   those                                                              
situations  become safety  issues for  which the  FAA, during  its                                                              
inspections, comes  down on the  airport operator, DOT&PF,  to not                                                              
have unregulated tanks stored on airport property.                                                                              
                                                                                                                                
1:26:24 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SALMON  suggested creating a pit area  in which the                                                              
fuel  can be  stored  so that  the  leaks can  be  contained.   He                                                              
opined that  this is a  fairly simple problem  to resolve,  yet no                                                              
attempt has been made to solve it.                                                                                              
                                                                                                                                
MR. RICHARDS recalled  that the Red Devil Airport  had a situation                                                              
in which there  was a header pipe  [at the airport].   The problem                                                              
at that  particular airport was  the flooding and erosion  as well                                                              
as  the  potential  fuel  contamination  from the  pipeline.    He                                                              
offered  to  speak  with  Representative   Salmon  regarding  this                                                              
matter.   However,  he  pointed  out  that currently  the  capital                                                              
improvements spent  on Alaska's  rural airports are  predominately                                                              
FAA funds.  He  said that to his knowledge the  state hasn't built                                                              
fuel systems and tanks utilizing FAA funds.                                                                                     
                                                                                                                                
REPRESENTATIVE  SALMON remarked  then  that  [communities in  such                                                              
situations] are faced with breaking the law.                                                                                    
                                                                                                                                
1:28:09 PM                                                                                                                    
                                                                                                                                
CHAIR JOHANSEN related  his observation that the  operating budget                                                              
includes  a couple  hundred thousand  in general  fund dollars  to                                                              
cleanup some  of "this stuff."   He then  inquired as  to DOT&PF's                                                              
interaction  with  the Department  of  Environmental  Conservation                                                              
(DEC) and its charge to keep the environment clean.                                                                             
                                                                                                                                
MR.  RICHARDS said  that DOT&PF  has a  good working  relationship                                                              
with DEC, especially  with regard to contamination  found on state                                                              
lands  where   there  is   no  known   entity  that  created   the                                                              
contamination.      The   aforementioned   becomes   the   state's                                                              
responsibility  to clean it  up.  He  informed the committee  that                                                              
DOT&PF has  access to some of those  DEC funds to address  some of                                                              
those situations.   However, as  outlined in DOT&PF's  budget, the                                                              
cleanup  needs  far  exceed  what DEC  has  available  to  provide                                                              
DOT&PF.   He noted  that abandoned  cars and  fuel tanks  are left                                                              
[on airport  property] from parties  long gone and  the department                                                              
is left responsible.                                                                                                            
                                                                                                                                
1:29:39 PM                                                                                                                    
                                                                                                                                
CHAIR JOHANSEN  asked if the  Wrangell and Ketchikan  projects are                                                              
similar to the earlier-described Sitka project.                                                                                 
                                                                                                                                
MR.  RICHARDS  replied   yes.    In  further  response   to  Chair                                                              
Johansen,  Mr.  Richards  confirmed that  those  projects  weren't                                                              
requested  from the  communities  or DOT&PF.    He explained  that                                                              
DOT&PF has  always said  that it would  rather buildup  an airport                                                              
with a runway  less than 2,000 to  3,000 feet in order  to provide                                                              
safer  access to  those communities  rather than  building to  the                                                              
safety  area requirements  of the  FAA.  The  FAA understood  that                                                              
argument and  acquired additional funding  in order for  the state                                                              
to build  to the  new standards.   Mr.  Richards pointed  out that                                                              
the  aforementioned is  additional funds  that came  to the  state                                                              
that may not have otherwise.                                                                                                    
                                                                                                                                
1:30:47 PM                                                                                                                    
                                                                                                                                
MR. RICHARDS, in  response to Chair Johansen, explained  that when                                                              
DOT&PF  judges  its projects,  they  are  based  on need  and  the                                                              
safety  improvements that  would  be achieved.    "So, there's  no                                                              
identification  of  previous  monies  put forward  to  an  airport                                                              
project  that  would  sway  the  decision whether  or  not  to  go                                                              
forward with the project," he said.                                                                                             
                                                                                                                                
1:33:12 PM                                                                                                                    
                                                                                                                                
MR. RICHARDS, continuing  his presentation, related  that with the                                                              
federal  reauthorization   of  the  airport   improvement  program                                                              
DOT&PF  is   seeking  oversight   of  the   EIS  for   the  state.                                                              
Currently, the FAA  has that responsibility and  thus FAA provides                                                              
funds to the  state to make an  improvement on a state  asset, but                                                              
the oversight  of the EIS  is directed by  the FAA not  the state,                                                              
as  the airport  owner.   Therefore,  the  state  is seeking  that                                                              
oversight  authority  through  the  reauthorization  so  that  the                                                              
state will control its own destiny.                                                                                             
                                                                                                                                
CHAIR JOHANSEN  asked if that will  be reflected in  the operating                                                              
budget.   He recalled that  when the state  did primacy  with DEC,                                                              
it cost a fair amount of money while providing more flexibility.                                                                
                                                                                                                                
MR. RICHARDS  said  that it'll be  similar to  what occurred  with                                                              
the Federal  Highway Administration  (FHWA),  for which one  staff                                                              
position was added.   He noted that Alaska was one  of five states                                                              
with  that  ability due  to  the  reauthorization of  the  highway                                                              
bill.  Therefore,  the department is moving forward  with that one                                                              
additional staff  member.  In further response  to Chair Johansen,                                                              
Mr. Richards confirmed  that the aforementioned staff  position is                                                              
a [position control number] PCN within DOT&PF.                                                                                  
                                                                                                                                
1:34:40 PM                                                                                                                    
                                                                                                                                
CHAIR  JOHANSEN asked  if the  aforementioned position  will  be a                                                              
permanent  full-time  position once  the  state has  received  EIS                                                              
oversight.                                                                                                                      
                                                                                                                                
MR. RICHARDS said  that his goal would be that  the existing staff                                                              
at DOT&PF  who had gone  through the process  with the  FHWA would                                                              
essentially be able to do the same thing with the FAA.                                                                          
                                                                                                                                
1:35:20 PM                                                                                                                    
                                                                                                                                
MR.  RICHARDS   then  informed   the  committee  that   the  other                                                              
regulator   DOT&PF  deals   with   on  a   daily   basis  is   the                                                              
Transportation  Security   Administration  (TSA).     One  of  the                                                              
challenges with  TSA is that it  doesn't bring money to  the table                                                              
when  it  imposes   security  requirements   through  regulations.                                                              
Another difficulty  with regard  to airport  security is  that the                                                              
state  has  three   federal  security  directors,   and  therefore                                                              
there's  the potential  for three  different  perspectives on  the                                                              
security  regulations  that  must  be  followed.    Moreover,  the                                                              
requirements  continue  to  expand.   Referring  to  page  8,  Mr.                                                              
Richards  highlighted  the  increased   cost  of  construction  in                                                              
Alaska.                                                                                                                         
                                                                                                                                
MR. RICHARDS  then turned  to page  9 regarding  rural dust.   The                                                              
problem is  that the  airports and roads  in villages  are sources                                                              
of dust  so severely that several  villages in the  Northwest have                                                              
complained about  the dust levels to the Environmental  Protection                                                              
Agency (EPA)  and DEC.   There  have been  instances in  which air                                                              
quality standards  have been  exceeded due  to dust.   If  the EPA                                                              
identifies  that the  dust levels  and air  quality standards  are                                                              
continually being  exceeded, rural  Alaska could be  designated as                                                              
a  non-attainment area.   The  aforementioned  means that  federal                                                              
transportation   funds  could   ultimately  result   in  the   EPA                                                              
directing how those  funds are spent.  Therefore,  the state would                                                              
have  to take  care  of dust  control  in the  rural  communities,                                                              
which would  require the paving  of the airports, roads,  and even                                                              
four-wheeler  trails.  He  characterized  the aforementioned  as a                                                              
looming threat.   Therefore, DOT&PF is working with  DEC.  In this                                                              
year's  capital  budget  DOT&PF  has  a  request  for  some  small                                                              
equipment and dust  palliative to apply to the  rural airports and                                                              
roads  in   the  communities  in   the  Northwest.     This  could                                                              
potentially  avoid federal  oversight  and retain  the ability  to                                                              
spread the money where [DOT&PF] feels it's most needed.                                                                         
                                                                                                                                
1:38:48 PM                                                                                                                    
                                                                                                                                
CHAIR JOHANSEN  remarked that  he was glad  to hear that  when the                                                              
department takes  care of the  airports it  does so for  the roads                                                              
as well.   He then inquired as  to the cost of  bringing equipment                                                              
to perform these tasks in rural Alaska.                                                                                         
                                                                                                                                
MR.  RICHARDS  answered  that  DOT&PF  intends  to  model  a  Nome                                                              
nonprofit  organization,   Kawerak,  Inc.    That   nonprofit  has                                                              
received  money  over the  years  through the  Safe,  Accountable,                                                              
Flexible, Efficient Transportation  Equity  Act:   A  Legacy   for                                                              
Users (SAFETEA-LU)  to address  issues of  road transportation  in                                                              
the  villages.     The  nonprofit  purchased  a   six-wheeler  and                                                              
constructed a trailer  with an applicator bar that  is 10 feet [in                                                              
length].    The aforementioned  is  air  transportable  in a  CASA                                                              
aircraft  and thus  it  as  well as  the  dust palliative  can  be                                                              
shipped  to communities.   [The  dust palliative]  was applied  in                                                              
approximately  19  communities  in  the  region.    If  funds  are                                                              
received, the  department would give  funds to [Kawerak,  Inc.] to                                                              
[apply  the  dust   palliative  with  the  six-wheeler]   to  more                                                              
communities  and have  more of the  same equipment  to utilize  in                                                              
more communities.                                                                                                               
                                                                                                                                
1:40:41 PM                                                                                                                    
                                                                                                                                
CHAIR  JOHANSEN asked  if this six-wheeler  can  be placed  in any                                                              
plane that can land at these airports.                                                                                          
                                                                                                                                
MR. RICHARDS explained  that a CASA aircraft has a  rear tail that                                                              
opens and on  which the six-wheeler  can be driven.  He  said that                                                              
it's  similar to  the  aircraft  being used  by  the Air  National                                                              
Guard.  In further  response to Chair Johansen,  Mr. Richards said                                                              
that the  CASA aircraft  can be utilized  at airports  with 2,500-                                                              
2,800 foot  runways.  Therefore, there  will be a small  number of                                                              
communities in  which the  CASA aircraft can't  land.   He related                                                              
his  understanding  that those  runways  in the  Northwest  Arctic                                                              
Borough are large enough to handle a CASA aircraft.                                                                             
                                                                                                                                
1:41:36 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SALMON  inquired  as  to  how long  the  new  dust                                                              
application lasts.                                                                                                              
                                                                                                                                
MR.  RICHARDS  answered  that  Kawerak,  Inc.,  started  its  dust                                                              
applications two  years ago and hopes  it will last three  to four                                                              
years.                                                                                                                          
                                                                                                                                
1:42:13 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SALMON recalled  the product  that was used  10-15                                                              
years  ago.  When  it was  applied to  the runway,  dust from  the                                                              
surrounding area  would settle  on it and  dust would  continue to                                                              
be a problem.                                                                                                                   
                                                                                                                                
MR.  RICHARDS  informed  the committee  that  the  product  called                                                              
EnviroClean   is  being   used  now.     Several  different   dust                                                              
palliatives  are   being  tried  as  the  makeup   of  the  gravel                                                              
determines how the dust palliative works.                                                                                       
                                                                                                                                
1:43:00 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KELLER  surmised  that  the  department  has  done                                                              
comparisons regarding  the cost of  asphalt as opposed to  the use                                                              
of EnviroClean.   He then asked if there are  any FAA requirements                                                              
for a  hard surface  in a particular  sized runway.   He  asked if                                                              
[dust  palliative] could  be used  on some of  the state's  larger                                                              
runways instead of asphalt.                                                                                                     
                                                                                                                                
MR. RICHARDS  confirmed that DOT&PF  does a lifecycle cost  on the                                                              
dust  palliative compared  to pavement.   The  dust palliative  is                                                              
very beneficial.   The FAA doesn't  have a preference for  the use                                                              
of dust palliative  or asphalt, and the department  has left it up                                                              
to the airport operator to make that decision.                                                                                  
                                                                                                                                
1:44:30 PM                                                                                                                    
                                                                                                                                
MR. RICHARDS,  returning to his  presentation, explained  that the                                                              
chart  on  page  10  illustrates  the  department's  general  fund                                                              
operating  budget.   The white  line shows  the operating  budgets                                                              
for  both  highways  and  airports.    The  budget  stayed  fairly                                                              
constant  in the  1980s  and 1990s,  but  started  to increase  in                                                              
2004.   The  legislature  provided  funds for  [those  increases],                                                              
which  he  attributed primarily  to  the  high  cost of  fuel  and                                                              
materials.   Mr. Richards  said that  this chart also  illustrates                                                              
that  even with  the  loss of  buying  power  since 1983,  larger,                                                              
brighter,  and wider  airports have  been constructed  as well  as                                                              
more  amenities  and facilities  with  the highways.    Therefore,                                                              
DOT&PF is doing more with less, he opined.                                                                                      
                                                                                                                                
MR. RICHARDS,  referring to page  11 titled "DOT&PF  Rural Airport                                                              
Challenges," highlighted  that DOT&PF faces challenges  related to                                                              
coastal  storms and  the impacts  of  flooding and  erosion.   The                                                              
communities  of   Shishmaref,  Kivalina,  and  Newtok   are  being                                                              
severely  impacted  by  coastal  erosion.    In  fact,  Newtok  is                                                              
looking to  relocate to  a new  village site.   The department  is                                                              
working with the  Denali Commission and DCCED to  help Newtok with                                                              
that relocation effort.                                                                                                         
                                                                                                                                
1:46:18 PM                                                                                                                    
                                                                                                                                
MR. RICHARDS  moved on  to page 12  titled "DOT&PF Rural  Airports                                                              
Needs for  Future Funding."   He informed  the committee  that the                                                              
needs list for  rural airports, primary and  non-primary airports,                                                              
totals  $955 million.    He explained  that  primary airports  are                                                              
those  with   10,000  or   more  enplanements  while   non-primary                                                              
airports are  those airports with  less than 10,000  enplanements.                                                              
The needs include  runway improvements, buildings,  and equipment.                                                              
The  total amount  of $995  million is  staggering, he  said.   As                                                              
mentioned earlier,  the funding predominantly comes  from the FAA,                                                              
which  provides  approximately  95  percent  for  eligible  public                                                              
airport  development  costs.   The  airport  sponsor,  the  state,                                                              
contributes  the 5  percent  match.   However,  all the  operating                                                              
costs  are borne  by the  general  fund.   As related  by page  14                                                              
titled  "FFY'07 & '08  AIP Allocation,"  the  State of Alaska  has                                                              
received in  total about $210 million  of which $173  million went                                                              
to DOT&PF  airports,  including the  Alaska International  Airport                                                              
System.    Approximately  $123  million  went  to  DOT&PF's  Rural                                                              
Airport System  and $50 million  to DOT&PF's Alaska  International                                                              
Airport System.   Although the fiscal year (FY)  2008 numbers will                                                              
be  very  similar to  the  2007  allocation,  page 15  provides  a                                                              
comparison  between  the Anchorage  International  Airport  System                                                              
(AIAS)  and DOT&PF's  Rural System.   Mr.  Richards then  directed                                                              
attention  to  pages 16  and  17  titled "Recent  Primary  Airport                                                              
Projects," which  provides examples of  where the funds  are being                                                              
spent.  For  example, $34.6 million  has been spent on  the runway                                                              
safety area and  overlay.  He then moved on to  pages 18-21 titled                                                              
"Recent Non-Primary  Airport  Projects" and  noted that what  were                                                              
normally $3-$5  million relocation or reconstruction  projects are                                                              
now ranging $10-$15 million.                                                                                                    
                                                                                                                                
1:49:17 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SALMON  drew  attention   to  the  Angoon  Airport                                                              
construction  budget  of  $30  million,  and inquired  as  to  the                                                              
status of that project.                                                                                                         
                                                                                                                                
MR.  RICHARDS  responded  that  DOT&PF is  starting  the  EIS  for                                                              
Angoon.   The challenge  is that Angoon  Airport is  surrounded by                                                              
federal wilderness.   Therefore, the department will  have to work                                                              
with the  federal government  to carve out  space for  the airport                                                              
and  construct   connecting  roads  from  the  community   to  the                                                              
airport.   He  said he  anticipated  that the  EIS  will take  the                                                              
normal  three to four  years to  complete.   Mr. Richards  pointed                                                              
out that the costs  are quite large for the Yukon  Kuskokwim Delta                                                              
airports  because everything  must be  imported.   As the  project                                                              
list  indicates,  DOT&PF  is  accomplishing  a  lot  in  terms  of                                                              
upgrading airports to be safer facilities.                                                                                      
                                                                                                                                
1:51:11 PM                                                                                                                    
                                                                                                                                
MR. RICHARDS, returning  to his presentation, continued  with page                                                              
22 titled  "The Future."  In  the future, Alaska's  aircraft fleet                                                              
will  likely  change   and  thus  the  department   is  trying  to                                                              
anticipate  those  changes  in  order  to  provide  the  necessary                                                              
airports in the  future.  Currently, DOT&PF has  a proposal before                                                              
it  from the  U.S.  Postal Service  to  create  more by-pass  mail                                                              
hubs.  Therefore,  additional hubs would be put  into place, which                                                              
would  allow  the  mainline  air carriers  to  fly  directly  from                                                              
Anchorage  to those  new  hubs to  distribute  the  mail to  those                                                              
communities  as well  as surrounding  communities.   However,  the                                                              
challenge  is that  many  of those  airports  are insufficient  to                                                              
accommodate those aircraft.   The goal of the  U.S. Postal Service                                                              
to  save several  millions by  creating these  hubs would  require                                                              
the  airport  operator, DOT&PF,  to  expend  tens of  millions  of                                                              
dollars to  upgrade the facilities  to accommodate the  airport as                                                              
well   as   the   cost  to   individual   private   carriers   for                                                              
infrastructure  necessary to take  the mail from  the new  hubs to                                                              
other locations.                                                                                                                
                                                                                                                                
1:52:36 PM                                                                                                                    
                                                                                                                                
MR.  RICHARDS, in  response  to Representative  Neuman,  confirmed                                                              
that the  [cost] of by-pass  mail could  be shifted to  the state.                                                              
Therefore,  DOT&PF   has  identified  the  cost   to  upgrade  the                                                              
specific airports to  meet the needs of by-pass mail.   The DOT&PF                                                              
has  also identified  [to  the  federal  government] that  it  has                                                              
began  a  statewide  aviation  plan  update,  and  thus  it  would                                                              
behoove the  U.S. Postal Service  to talk to the  airport operator                                                              
in order  to determine what  funding mechanisms would  be required                                                              
to accomplish  the goals  of the  U.S. Postal  Service.   He noted                                                              
that there  is great opposition  by the  air carriers to  this by-                                                              
pass hub system.                                                                                                                
                                                                                                                                
1:53:45 PM                                                                                                                    
                                                                                                                                
MR. RICHARDS,  concluding his presentation,  pointed out  that the                                                              
air cargo  security regulations  are ever  expanding, and  thus in                                                              
the  rural systems  there  have to  be designated  security  areas                                                              
specific  to each air  carrier.   The aforementioned  is mainly  a                                                              
burden  on  the  air  carriers   due  to  the  special  provisions                                                              
required for those who handle freight.                                                                                          
                                                                                                                                
1:54:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DOOGAN  inquired as to  what types of  aircraft can                                                              
utilize rural airports with runways 3,300 feet in length.                                                                       
                                                                                                                                
MR.  RICHARDS  answered  that the  following  aircraft:    Navajo,                                                              
Cherokee, 207s,  208s, new Caravans,  and small twins  can utilize                                                              
such  airports.   He characterized  them  as small  six- to  nine-                                                              
passenger seat  aircraft.  In  further response to  Representative                                                              
Doogan,  Mr.  Richards  confirmed  that  with the  addition  of  a                                                              
runway,  taxiway,   and  apron,   DOT&PF  provides   equipment  to                                                              
maintain that infrastructure  and constructs an  equipment storage                                                              
building.   Primarily, a small grader,  loader with a  bucket, and                                                              
a push plow are provided.                                                                                                       
                                                                                                                                
1:56:28 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DOOGAN  surmised then that there  won't necessarily                                                              
be  any other  building or  general use  fuel storage  facilities.                                                              
Representative  Doogan  questioned  what  makes  this  an  airport                                                              
rather than a runway.                                                                                                           
                                                                                                                                
MR.  RICHARDS  clarified  that  although  terminals  aren't  being                                                              
created,  there will  be runway  lights.   Furthermore,  depending                                                              
upon the traffic  loads there will possibly be visual  aides.  Mr.                                                              
Richards  informed the  committee that  a large  number of  global                                                              
positioning  system  (GPS)  approaches  have been  put  in  place.                                                              
Therefore,  there  isn't  the  same   ground-based  infrastructure                                                              
necessary as in the past.                                                                                                       
                                                                                                                                
1:57:32 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DOOGAN  related  his understanding  then  that  an                                                              
individual landing  at one of these  airports wouldn't be  able to                                                              
refuel  because there  is no  facility to  do so.   Therefore,  he                                                              
surmised that  in such  cases, the individual  would have  to land                                                              
at a regional hub airport that has fueling capabilities.                                                                        
                                                                                                                                
MR. RICHARDS  replied yes.  He then  pointed out that  many of the                                                              
rural airports  don't have  any aircraft that  reside there.   The                                                              
rural  airports are  primarily the  access and  egress points  for                                                              
community   members  to   receive  food   stuffs,  reach   medical                                                              
facilities, and commute between the villages.                                                                                   
                                                                                                                                
REPRESENTATIVE  DOOGAN  surmised   then  that  some  sort  of  air                                                              
service  will be  using these  runways,  and thus  the ability  to                                                              
refuel  isn't as  important as  a situation  in which  there is  a                                                              
fleet of private aircraft.                                                                                                      
                                                                                                                                
MR.   RICHARDS   replied   yes,    adding   that   he   understood                                                              
Representative Salmon  to be referring  to the ability  to receive                                                              
fuel  for  heating   oil  as  well  as  for   snow  machines,  not                                                              
necessarily aviation fuel.                                                                                                      
                                                                                                                                
REPRESENTATIVE SALMON confirmed that to be the case.                                                                            
                                                                                                                                
1:59:36 PM                                                                                                                    
                                                                                                                                
MR.  RICHARDS,  in  further  response  to  Representative  Doogan,                                                              
reiterated   that   reconstruction/relocation   to   bring   these                                                              
airports up to  the standard desired by DOT&PF  would cost $10-$15                                                              
million.     However,   some  airports   cost   less  and   others                                                              
considerably more.   For example,  the airport in Lime  Village is                                                              
estimated to cost in excess of $24 million.                                                                                     
                                                                                                                                
The committee took an at-ease from 2:00:28 PM to 2:04:11 PM                                                                 
                                                                                                                                
2:04:15 PM                                                                                                                    
                                                                                                                                
JESSE  VANDERZANDEN,  Manager,   Fairbanks  International  Airport                                                              
(FIA),   Department  of   Transportation   &  Public   Facilities,                                                              
directed   attention  to   the   PowerPoint  presentation   titled                                                              
"FAIRBANKS INTERNATIONAL  AIRPORT."  He  then turned to  the slide                                                              
titled "Capital  Improvements," which  relates what has  been done                                                              
at the  Fairbanks International  Airport (FIA)  over the  past six                                                              
years.   On the general  aviation side  of the airport  the runway                                                              
was extended  to 6,500 feet,  a ski strip  was installed,  and the                                                              
float  pond was  expanded.   In fact,  the gravel  taken from  the                                                              
float pond was used  to build the aforementioned two  runways.  In                                                              
2004-2006,  the  taxiway  was rebuilt  and  it  included  de-icing                                                              
pads.   The  de-icing  pads provide  the  ability  to isolate  the                                                              
glycol  use to either  end  of the runway  and in  doing so  cause                                                              
remediation to  be much less expensive.   The cargo  apron project                                                              
should be completed  this summer, and as with the  old cargo apron                                                              
it will  have four positions.   With regard  to the  airfield, the                                                              
last project  this summer  is the  main runway.   This  summer the                                                              
existing taxiway  will be  readied to  become an alternate  runway                                                              
on which planes  can land in 2009.  The aforementioned  allows the                                                              
rebuilding of the main runway.                                                                                                  
                                                                                                                                
2:07:07 PM                                                                                                                    
                                                                                                                                
MR.  VANDERZANDEN then  addressed  the terminal  referring to  the                                                              
page  titled  "Terminal:     Summary."    The   old  terminal  was                                                              
approximately  143,000  square  feet  and  the  new  one  will  be                                                              
152,000  feet.  Furthermore,  the  new terminal  will have  a much                                                              
better  layout  so   there  will  be  much  more   useable  space.                                                              
Although  the  initial  budget  was  $99.2  million,  the  current                                                              
forecast  is  a  budget  of  approximately   $93  million  with  a                                                              
completion date  of October 1, 2009.   He then announced  that the                                                              
terminal  rebuild is  ahead  of schedule.    The official  opening                                                              
date of the  new terminal is May  7, 2008.  The  existing terminal                                                              
will  remain open  as  the baggage  claim  area  is scheduled  for                                                              
demolition  in  the  summer  of   2008.    The  terminal  will  be                                                              
completed in  the spring of  2009 and then  in the summer  of 2009                                                              
the 1952 portion of the building will be demolished.                                                                            
                                                                                                                                
2:08:58 PM                                                                                                                    
                                                                                                                                
MR. VANDERZANDEN,  in response to  Chair Johansen,  confirmed that                                                              
the FIA project  is under budget  and ahead of schedule.   He then                                                              
continued  with his  presentation,  and directed  the  committee's                                                              
attention to pages  31-32, which are renderings of  the front view                                                              
of  the  existing  terminal  and  what  it  will  look  like  upon                                                              
completion of the rebuild.                                                                                                      
                                                                                                                                
2:09:34 PM                                                                                                                    
                                                                                                                                
MR. VANDERZANDEN  moved on to  the page titled "Passenger  Service                                                              
- Domestic"  and informed  the committee  that domestic  passenger                                                              
service  has  experienced  steady  growth over  the  past  several                                                              
years.  He  attributed the small  dip in growth to  [the terrorist                                                              
attacks of  September 11, 2001].   With regard to new  service, he                                                              
related  that Delta  Airlines  came  to the  FIA  in  2004 and  is                                                              
slated  to expand  service this  year.   Alaska Airlines  expanded                                                              
its  service  in  2007  when  it  added  a  couple  of  additional                                                              
flights.   In 2007 ERA Aviation,  Inc., is new and  provides three                                                              
flights per  day to Anchorage.   In total, FIA has 15  flights per                                                              
day to  Anchorage.  He  then informed the  committee that  FIA was                                                              
fortunate  to obtain  a small  community  air service  development                                                              
grant (SCASD)  for approximately $.5  million in order  to attract                                                              
additional  airline service.   In this  case, it's direct  service                                                              
to Denver, Colorado.                                                                                                            
                                                                                                                                
MR.  VANDERZANDEN,   referring  to  the  page   titled  "Passenger                                                              
Service  - International,"  said  that international  service  has                                                              
been  successful   for  FIA,  both  in  frequency   and  passenger                                                              
numbers.   He related  that a  [Japan Airlines]  747 deplaned  the                                                              
most passengers  at once at  Fairbanks, 392 passengers.   Although                                                              
the direct  service to Frankfurt,  Germany, by Condor/Thomas  Cook                                                              
hasn't experienced  the meteoric  growth  of [Japan Airlines],  it                                                              
has provided steady growth.                                                                                                     
                                                                                                                                
2:11:31 PM                                                                                                                    
                                                                                                                                
MR. VANDERZANDEN moved  on to the page titled  "Cargo," and opined                                                              
that from the cargo  standpoint it's not as good  news.  Fairbanks                                                              
International   Airport   lost  its   Europe   to  Asia   traffic,                                                              
predominantly  because of  the opening  of  the Russian  airspace.                                                              
From  an  economic  standpoint it's  difficult  to  impossible  to                                                              
compete  with that.   However,  he noted  that FIA  serves as  the                                                              
primary  diversion   for  Ted   Stevens  Anchorage   International                                                              
Airport  (TSAIA).   Mr.  VanderZanden  further  opined  that as  a                                                              
result of  some of the  cargo leaving FIA  and the opening  of the                                                              
Russian  airspace, there  is room  for growth  as the airfield  is                                                              
currently underutilized.   He  likened FIA to  TSAIA in  that both                                                              
have  cargo transfer  authority.   Furthermore,  Fairbanks is  9.5                                                              
hours from 90  percent of the northern industrialized  hemisphere.                                                              
Although as  mentioned earlier  FIA lost  Europe to Asia  traffic,                                                              
some was  picked up in  2006 with Volga-Dnepr  Charters.   He then                                                              
informed the committee  that two non-airfield revenue  sources for                                                              
airports are  land revenue and  concession revenue, both  of which                                                              
have increased.                                                                                                                 
                                                                                                                                
2:13:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SALMON  inquired as  to why restaurants  are placed                                                              
inside the secure area.                                                                                                         
                                                                                                                                
MR.  VANDERZANDEN explained  that in  the new  terminal that  will                                                              
change.                                                                                                                         
                                                                                                                                
2:13:35 PM                                                                                                                    
                                                                                                                                
MR. VANDERZANDEN  moved on to the page titled  "General Aviation."                                                              
He informed  the committee that FIA  has 2 runways, 185  spaces in                                                              
the float  pond, and 365 tie  downs of which 150  are electrified.                                                              
There is also a pilots lounge and an airpark.                                                                                   
                                                                                                                                
2:14:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FAIRCLOUGH  inquired as  to whether the  revenue of                                                              
FIA meets its expenses.                                                                                                         
                                                                                                                                
MR.   VANDERZANDEN   replied  no.      In  further   response   to                                                              
Representative  Fairclough, Mr. VanderZanden  stated that  for FIA                                                              
the  current   deficit  with  depreciation  is   approximately  $9                                                              
million and without deprecation it's approximately $4 million.                                                                  
                                                                                                                                
REPRESENTATIVE  FAIRCLOUGH asked  if  the aforementioned  includes                                                              
the contribution from TSAIA.                                                                                                    
                                                                                                                                
MR. VANDERZANDEN  explained that all  of the revenue from  FIA and                                                              
TSAIA  go  into  the  same  pot,  which  he  referred  to  as  the                                                              
enterprise  fund, and all  of the  expenses come  out of  the same                                                              
pot.   No  general funds  are received  from  the legislature,  he                                                              
noted.   Mr. VanderZanden  specified that FIA  puts more  into the                                                              
[enterprise  fund] than  it takes  out  and TSAIA  takes out  more                                                              
than it puts into the [enterprise fund].                                                                                        
                                                                                                                                
2:15:37 PM                                                                                                                    
                                                                                                                                
CHAIR  JOHANSEN  inquired as  to  any  ideas being  considered  to                                                              
address  the reduced  cargo  due  to the  opening  of the  Russian                                                              
airspace.                                                                                                                       
                                                                                                                                
MR.  VANDERZANDEN  explained  that  there are  the  following  two                                                              
distinct markets:   U.S. to Asia  and vice versa, Europe  to Asia.                                                              
Much of the Europe  to Asia market has left  Alaska, predominately                                                              
because Asia  can be reached  quicker using the  Russian airspace.                                                              
The  economics  of  Europe  to  Asia  [via  Russian  airspace]  is                                                              
difficult  with which  to  compete.   However,  the  U.S. to  Asia                                                              
traffic  is the  predominant  market share  [in  terms of  cargo].                                                              
Absent some  geopolitical  event, the economics  are superior  for                                                              
the existing routes [utilizing Russian airspace].                                                                               
                                                                                                                                
2:17:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SALMON  referred to the east ramp  and related that                                                              
there is  a bottleneck  where Arctic Aviation  is located.   There                                                              
was an  incident there  after a  heavy snow.   He opined  that the                                                              
hangar is too  close to the ramp  way, which is the  only area for                                                              
[Arctic Aviation]  to pull planes  in and out  of the hangar.   He                                                              
suggested reviewing  the police  report and the airport  manager's                                                              
report of that incident.                                                                                                        
                                                                                                                                
MR. VANDERZANDEN said that he could look into it.                                                                               
                                                                                                                                
The committee took an at-ease from 2:20:46 PM to 2:21:20 PM.                                                                
                                                                                                                                
2:21:20 PM                                                                                                                    
                                                                                                                                
JOHN   PARROTT,    Deputy   Director,   Ted    Stevens   Anchorage                                                              
International  Airport,  Department  of  Transportation  &  Public                                                              
Facilities, referring  to the first few pages  of the presentation                                                              
titled "Ted Stevens  Anchorage International Airport,"  noted that                                                              
although the Ted  Stevens Anchorage International  Airport (TSAIA)                                                              
had  rather humble  beginnings,  over  the last  50  years it  has                                                              
developed into a  world class facility.  Mr.  Parrott informed the                                                              
committee that  the goals of  TSAIA are  to provide more  value to                                                              
its  customers and  reduce  costs while  increasing  productivity.                                                              
He  noted   that  there   are  also   sub  goals,  which   include                                                              
safety/security, customer  satisfaction, management of  the funds,                                                              
quality service, and environmental stewardship.                                                                                 
                                                                                                                                
MR.   PARROTT   echoed  Mr.   VanderZanden's   earlier   testimony                                                              
regarding  the  fact that  cargo  is  a  primary function  of  the                                                              
airport.   In fact, TSAIA  is the number  one airport in  the U.S.                                                              
for  landed cargo  weight  and the  number  three  airport in  the                                                              
world  for cargo throughput.   By  virtue of  TSAIA's location  in                                                              
the state's largest  city, TSAIA is a busy passenger  airport that                                                              
serves  as a  gateway  for those  traveling  into and  out of  the                                                              
state.   The passenger  traffic at TSAIA  is rather  seasonal with                                                              
approximately  50 percent  of the  traffic occurring  in the  four                                                              
months of  summer.   Moreover, TSAIA has  the busiest  float plane                                                              
base in the world.                                                                                                              
                                                                                                                                
2:23:16 PM                                                                                                                    
                                                                                                                                
MR. PARROTT reiterated  that TSAIA considers itself  a world class                                                              
international  cargo airport.    He highlighted  that TSAIA,  like                                                              
FIA, is  9.5 hours  from 90 percent  of the industrialized  world.                                                              
On the  page titled "Strategic Location,"  the list of  cities and                                                              
their  distance  from  Anchorage  includes many  cities  that  are                                                              
market  centers,  shipping  centers,  and  manufacturing  centers.                                                              
The TSAIA is  beneficially located between those.   With regard to                                                              
economics, Mr.  Parrott pointed out  that there are  aircraft that                                                              
can fly  directly from  Asia to  the Lower 48.   For example,  the                                                              
MD-11  can do the  aforementioned.   In  fact, it  has a range  of                                                              
6,000 miles  and can  carry 65,000  kilograms of  cargo.   If that                                                              
same  aircraft  stops in  Anchorage,  it  flies an  extra  hundred                                                              
miles and  spends two hours  on the ground  to be refueled  and it                                                              
can carry  an additional 45,000  kilos of cargo, which  amounts to                                                              
an extra  $90,000 at  a nominal rate  of $2 per  kilo.   Doing the                                                              
aforementioned  with  up  to  five  airplanes  a  day  amounts  to                                                              
$450,000 a  day, $2.25 million a  week or $117 million  in a year.                                                              
Those economics  and the ability  to carry that  additional cargo,                                                              
he  opined, is  what  drives the  traffic  through Alaska  between                                                              
Asia and  the U.S.   Therefore, the 15  landings per  week serving                                                              
the China-U.S. market  in 2000 have increased to  260 landings per                                                              
week  in 2007.    Nearly 35  percent  of the  total  international                                                              
cargo traffic  going through  Anchorage serves  the China  market.                                                              
He  then directed  attention to  the page  titled "China  Carriers                                                              
serving  ANC," adding  that every  carrier that  serves the  Asia-                                                              
U.S. market lands  at least some of their flights  in Anchorage in                                                              
order  to  take  advantage of  the  aforementioned  payload  range                                                              
equation.  He informed  the committee that from 1995  to 2005, the                                                              
cargo  aircraft  landed weight  has  doubled.   Mr.  Parrott  then                                                              
highlighted  the  pages  titled  "2005 Cargo  Landed  Weight"  and                                                              
"2006  ACI Cargo  Traffic  Stats" both  of  which illustrate  that                                                              
TSAIA is a significant cargo airport.                                                                                           
                                                                                                                                
2:26:09 PM                                                                                                                    
                                                                                                                                
MR.  PARROTT  pointed  out  that  according  to  the  most  recent                                                              
Institute  of Social  and Economic  Research  (ISER) study,  TSAIA                                                              
directly  and  indirectly  provides  one  in  eight  jobs  in  the                                                              
Anchorage area.   Furthermore, those amount to  about $562 million                                                              
in  direct annual  payroll  with another  $288  million in  annual                                                              
payroll for  community jobs.  He  then related that  TSAIA's total                                                              
annual  economic impact  to [Anchorage]  is  about $2.36  billion.                                                              
The bulk  of that  is the  $1.4 billion  in fuel,  $83 million  in                                                              
construction,  $30  million  in  hotels  for air  crews,  and  the                                                              
already mentioned $850  million in payroll.  In  order to continue                                                              
meeting the needs  of the airport passengers,  more infrastructure                                                              
development is  required.  Mr.  Parrott echoed Mr.  VanderZanden's                                                              
testimony that  no state  general funds are  used at  the airport.                                                              
He  then  moved  on to  the  page  titled  "Public  Infrastructure                                                              
Investment  2007-2009," which  relates the  list of  such and  the                                                              
cost of  each.   For instance, the  Concourse A  & B remodel  will                                                              
continue  through  the  fall  of   2009.    Another  item  is  the                                                              
Operations  & Facilities  Center, which  is a  building that  will                                                              
connect  the  north  and  south  terminals.    The  aforementioned                                                              
building  will   house  a  communications  center,   an  emergency                                                              
operations  center,   the  facilities  section,   operations,  and                                                              
police  as  well  as  providing  a  covered,  enclosed  pedestrian                                                              
walkway between the two terminals.                                                                                              
                                                                                                                                
MR.  PARROTT opined  that  TSAIA does  all  of the  aforementioned                                                              
while keeping  landing fees  and rental  rates for terminal  space                                                              
very reasonable.   The landing fees were predicted,  forecast, and                                                              
bonds  were sold  in 1999.   As illustrated  by the  chart on  the                                                              
page  titled "ANC  Landing Fees  Actual  vs. Forecast,"  Anchorage                                                              
has been  very near  or slightly to  greatly under the  forecasted                                                              
landing  fee,   with  one  exception.     The  aforementioned   in                                                              
conjunction  with the  strength  of the  traffic  has resulted  in                                                              
TSAIA  receiving  bond rating  upgrades  from  each of  the  three                                                              
rating agencies.                                                                                                                
                                                                                                                                
2:28:57 PM                                                                                                                    
                                                                                                                                
MR. PARROTT informed  the committee that TSAIA has  a staff of 380                                                              
airport employees  and an  operating budget  of approximately  $55                                                              
million.   He  explained that  TSAIA  budgets on  a monthly  basis                                                              
knowing  there   will  be  seasonal   variances  in   relation  to                                                              
expenditures.  Last  year, TSAIA watched its expenditures  and was                                                              
able to  return approximately  $1.5 million to  the airlines.   In                                                              
fiscal  year 2008,  TSAIA  is on  track and  hopes  to stay  under                                                              
budget.                                                                                                                         
                                                                                                                                
MR.  PARROTT  returned to  the  goal  of customer  service,  which                                                              
includes customer  service to tenants as well  as customer service                                                              
from the  tenants to the passengers.   There is a  mystery shopper                                                              
program  during  which  people   purchase  items  at  the  various                                                              
vendors  in  the  airport and  the  outstanding  customer  service                                                              
winners are  rewarded.   Additionally, TSAIA  has been  recognized                                                              
through a couple  of publications for its service  to its tenants.                                                              
Mr. Parrott related that TSAIA is most proud that it's a four-                                                                  
time  recipient of  the  Balchen  Post Award.    The Balchen  Post                                                              
Award is a national  award given for outstanding  airport snow and                                                              
ice  control.   With regard  to  environmental stewardship,  TSAIA                                                              
recycles  cardboard  and  paper.   Furthermore,  [glycol  recovery                                                              
operations]  have  significantly  improved  the water  quality  in                                                              
Lakes Hood  and Spenard.  The  TSAIA also has a  residential sound                                                              
insulation program that helps mitigate the noise of the airport.                                                                
                                                                                                                                
MR.  PARROTT turned  to current  issues for  TSAIA, which  include                                                              
keeping  an  eye on  the  FAA reauthorization  bill  in  Congress.                                                              
Also,  the property  of the  Kulis  Air National  Guard Base  will                                                              
come  back into  the  airport inventory.    Furthermore, TSAIA  is                                                              
negotiating  a new operating  agreement with  the airlines  and is                                                              
about halfway through  the development of a master  plan.  Looking                                                              
forward, there  are several  organizations interested  in building                                                              
a hotel  at TSAIA.   The TSAIA is  also reviewing the  development                                                              
of West Airpark,  which is one  of the last large  areas available                                                              
at the airport.   However, development of that area  may require a                                                              
tunnel under  runways.  The master  plan for TSAIA  is considering                                                              
the  potential   need  for   an  additional  north-south   runway.                                                              
Additionally, the  existing air  traffic control tower  is located                                                              
on  a  prime piece  of  real  estate  and TSAIA  will  review  the                                                              
potential relocation of it.                                                                                                     
                                                                                                                                
2:32:55 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FAIRCLOUGH   inquired  as  to   TSAIA's  operating                                                              
budget versus its revenue.                                                                                                      
                                                                                                                                
MR.  PARROTT explained  that airport  system  utilizes a  residual                                                              
arrangement,  which means  that the  airlines have  agreed to  pay                                                              
the bills  at the end  of the year.   Therefore, TSAIA's  revenues                                                              
and  expenses  can't  be very  far  off.    Whatever it  costs  to                                                              
operate the  airport, the airlines  have agreed  to fund.   As Mr.                                                              
VanderZanden mentioned,  the revenue  from landing fees,  terminal                                                              
rent, and  airport parking  is used to  pay for plowing  the snow,                                                              
utilities, and employees.   In further response  to Representative                                                              
Fairclough,  Mr.  Parrott  confirmed   that  his  earlier  comment                                                              
regarding  the  airlines  returning   funds  to  the  airlines  is                                                              
related   to  the   aforementioned  agreement.     The   agreement                                                              
specifies that  the airlines  agree to pay  the bills at  the same                                                              
time  the airport  can't  make a  profit.   Therefore,  if  excess                                                              
revenue is  collected through landing  fees, that revenue  may not                                                              
actually be  returned to  the airlines but  rather is  credited to                                                              
them in relation to their bills in the next period.                                                                             
                                                                                                                                
2:34:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FAIRCLOUGH  surmised then that the  contract limits                                                              
TSAIA's profitability.                                                                                                          
                                                                                                                                
MR. PARROTT  replied yes.   In further response  to Representative                                                              
Fairclough,  Mr.   Parrott  said  he  wasn't  sure   whether  that                                                              
limitation was per state statute or FAA grant assurances.                                                                       
                                                                                                                                
REPRESENTATIVE  FAIRCLOUGH inquired  as to why  TSAIA has  some of                                                              
the lowest landing fees and terminal rental rates.                                                                              
                                                                                                                                
MR.  PARROTT  pointed out  that  one  of  the limitations  on  the                                                              
profitability  of the airport  system is  that the FAA  assurances                                                              
require those funds  be spent on the airports.   The revenue can't                                                              
divert that revenue  to other areas on which the  state might want                                                              
to spend.                                                                                                                       
                                                                                                                                
2:35:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FAIRCLOUGH asked  if  other airports  in the  U.S.                                                              
operate at a profit.                                                                                                            
                                                                                                                                
MR. PARROTT  related that there  may be private airports  that can                                                              
operate at  a profit.  However,  to the best of his  knowledge, he                                                              
related  that  any  airport  that  receives  federal  funds  isn't                                                              
allowed to  divert profit outside  of the  airport.  In  fact, Los                                                              
Angeles  had to  pay back  several  million dollars  that the  FAA                                                              
determined it had diverted from the airport.                                                                                    
                                                                                                                                
                                                                                                                                
2:37:04 PM                                                                                                                    
                                                                                                                                
CHRISTINE KLEIN,  Deputy Commissioner  of Aviation, Office  of the                                                              
Commissioner,  Department of Transportation  & Public  Facilities,                                                              
explained that  federal regulations prohibit airports,  as federal                                                              
public  facilities, from  garnering  a profit  from the  airlines.                                                              
However, airports  have different agreements.  Some  airports have                                                              
residual  agreements while  others  have compensatory  agreements.                                                              
Because  the  infrastructure  of  the airport  has  been  provided                                                              
through the  FAA, the airports aren't  allowed to take  money back                                                              
that  can used  for the  local community.   Most  airports in  the                                                              
nation,  she  noted,  are community  airports  rather  than  state                                                              
airports.     The  aforementioned  prevents  revenue   from  being                                                              
diverted to  other community  needs.  She  offered to  provide the                                                              
committee with this federal regulation.                                                                                         
                                                                                                                                
2:38:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   FAIRCLOUGH  asked   if   the  state   contributes                                                              
anything to the airport besides the enterprise agency itself.                                                                   
                                                                                                                                
MS.  KLEIN  said that  the  Alaska  DOT&PF does  provide  services                                                              
through aviation  design, planning,  and engineering.   Therefore,                                                              
there  are services  that the  international  airports utilize  to                                                              
carry out engineering,  design, and construction.   There are also                                                              
accounting  and human  resource  functions that  are provided  [by                                                              
the  state]  and typically  paid  for  through  an "ICAP"  on  all                                                              
projects.                                                                                                                       
                                                                                                                                
2:39:26 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FAIRCLOUGH  opined that it's outstanding  that [the                                                              
state's  airports]  offer low  terminal  rates and  landing  fees.                                                              
However, the state's  ferry system is collapsing.   If air service                                                              
can be offered to  communities at a lower rate than  the state can                                                              
subsidize ferries,  perhaps the state should build  gravel runways                                                              
rather  than invest  in ferries,  she  suggested.   Representative                                                              
Fairclough  said that if  all the  funds aren't being  recaptured,                                                              
then there  are costs  that the air  carriers aren't  bearing that                                                              
are part of the expenses.                                                                                                       
                                                                                                                                
MS. KLEIN said that she would analyze that for the committee.                                                                   
                                                                                                                                
2:40:55 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DOOGAN  questioned whether TSAIA would  issue bonds                                                              
if it's  budget is  net zero every  year and it  wants to  build a                                                              
new runway.                                                                                                                     
                                                                                                                                
MR.  PARROTT clarified  that  at  this point  the  master plan  is                                                              
studying the need  and feasibility of a new runway.   Should a new                                                              
runway  be needed,  there  would  first be  an  attempt to  secure                                                              
federal funds.   The  remainder of funds  would involve  a variety                                                              
of funding  strategies that  may include bonding  a portion  of it                                                              
and paying  it back through the  landing fee the air  carriers are                                                              
charged.    In further  response  to  Representative  Doogan,  Mr.                                                              
Parrott  said   that  the  funding  strategies   wouldn't  include                                                              
seeking funds from the state.                                                                                                   
                                                                                                                                
2:42:03 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DOOGAN, referring  to how  TSAIA has  a budget  of                                                              
zero at the end  of the year, asked if TSAIA  estimates its budget                                                              
and structures the rates to hit zero.                                                                                           
                                                                                                                                
MR. PARROTT  replied yes,  adding that the  rates can  be adjusted                                                              
throughout the year.                                                                                                            
                                                                                                                                
2:42:41 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DOOGAN, recalling  the substantial  growth in  the                                                              
cargo landings  at TSAIA, asked if  there has been a  reduction in                                                              
the amount of money paid by the passenger airlines.                                                                             
                                                                                                                                
MR. PARROTT  said that  there is  a complicated  formula in  which                                                              
the   terminal  and   airfield   costs  are   factored   together.                                                              
Currently, the landing  fee pays for the airfield and  some of the                                                              
terminal  and  the  terminal  rent   pays  the  remainder  of  the                                                              
passenger portion.                                                                                                              
                                                                                                                                
2:43:32 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DOOGAN surmised  then  that  different planes  are                                                              
paying different landing fees.                                                                                                  
                                                                                                                                
MR. PARROTT noted  his agreement, specifying that  the landing fee                                                              
is accessed  per thousand  pounds of  certified max gross  takeoff                                                              
weight.    In  further  response  to  Representative  Doogan,  Mr.                                                              
Parrott confirmed  that the  increase in  cargo landings  has kept                                                              
the overall landing fee lower for all.                                                                                          
                                                                                                                                
2:44:31 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FAIRCLOUGH  inquired as to  how that works  when an                                                              
individual city  contributes to lower individual  carriers' rates.                                                              
She related  her understanding that  the City & Borough  of Juneau                                                              
contributes to Alaska  Airlines in an effort to  offer constituent                                                              
fares.                                                                                                                          
                                                                                                                                
MR. PARROTT  said that  there are certain  mechanisms that  can be                                                              
used  to encourage  additional  service  to  an airport,  such  as                                                              
waiving  landing fees  for the first  three flights  of the  week.                                                              
In  the  International  Airport  System,  there  aren't  any  such                                                              
mechanisms, other  than the grant  mentioned by Mr.  VanderZanden.                                                              
However,  he noted  that  they would  entertain  such to  increase                                                              
service.   Existing  service  is generally  not  eligible for  any                                                              
such incentives.                                                                                                                
                                                                                                                                
2:45:52 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FAIRCLOUGH  asked if it  would be fair to  say that                                                              
[the International  Airport System] is working somewhat  on an LLC                                                              
model  in which  there  is a  percentage  of  ownership or  shared                                                              
expense ratio.                                                                                                                  
                                                                                                                                
MR.  PARROTT  explained  that in  exchange  for  underwriting  the                                                              
airport,  the  airlines  are  given  a  vote  and  opportunity  to                                                              
provide  input on capital  projects,  which are  one of the  large                                                              
cost  drivers.     Therefore,  the  airport  can't   simply  build                                                              
whatever it wants.                                                                                                              
                                                                                                                                
2:46:37 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FAIRCLOUGH inquired  then  as to  how business  is                                                              
attracted   without  having  anti-trust   violations   under  that                                                              
scenario.                                                                                                                       
                                                                                                                                
MR.  PARROTT  clarified  that  the   airlines  don't  vote  for  a                                                              
particular airline  to enter  the airport, but  rather vote  for a                                                              
particular project  that would benefit the operations  of existing                                                              
airlines.   One of the  ways other carriers  are attracted  is the                                                              
low landing fees and keeping the airport open.                                                                                  
                                                                                                                                
2:47:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FAIRCLOUGH related  her understanding  that TSAIA,                                                              
under  a  limited  liability  company  (LLC)  model,  has  greater                                                              
revenue  than FIA.   She recalled  that TSAIA  allocates about  $8                                                              
million to FIA,  as a secondary landing site.  She  inquired as to                                                              
how the landing fees are grouped together.                                                                                      
                                                                                                                                
MR. PARROTT clarified  that for accounting purposes  TSAIA and FIA                                                              
aren't  two   separate  airports   but  rather   are  the   Alaska                                                              
International Airport  System.  Therefore, TSAIA  doesn't allocate                                                              
money to  FIA.  He  explained that the  revenue is  deposited into                                                              
the system  and withdrawn  as needed.   He informed  the committee                                                              
that it's  very unusual  for two  airports to  be linked  together                                                              
because  there are  no  other airports  within  about three  hours                                                              
flying time  that can  handle large aircraft  on a regular  basis.                                                              
In  the  Lower 48,  there  are  numerous  airports that  serve  as                                                              
divert bases,  and therefore  two airports don't  have to  be tied                                                              
together in a  symbiotic relationship.  This is  a relatively rare                                                              
case of  joining two airports  and dealing  with them as  a single                                                              
entity.   The  landing  fees are  the same  at  both airports,  he                                                              
highlighted.                                                                                                                    
                                                                                                                                
2:49:56 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FAIRCLOUGH  inquired as to why a  military facility                                                              
isn't used as a backup airport.                                                                                                 
                                                                                                                                
MR. PARROTT  related his understanding  that most of the  time the                                                              
military  wouldn't allow  civilian  aircraft to  land on  military                                                              
facilities for security reasons.                                                                                                
                                                                                                                                
2:50:24 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DOOGAN  asked if there's a way to  tie all airports                                                              
together.                                                                                                                       
                                                                                                                                
MR. PARROTT answered  that he didn't believe [the  department] has                                                              
been able to find a way to do that.                                                                                             
                                                                                                                                
2:50:49 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FAIRCLOUGH  asked if the  reason TSAIA and  FIA are                                                              
allowed  to be  tied  together  is because  they're  international                                                              
airports.                                                                                                                       
                                                                                                                                
MS. KLEIN  explained that at  one time  the two airports  were one                                                              
and  the  management  and  staff  support were  shared.    As  the                                                              
airports  grew, separation  occurred  although  some shared  staff                                                              
remains.   The  two airports  share  resources and  the same  fees                                                              
because   they're    under   the    same   operating    agreement.                                                              
Furthermore, both airports  have the same airline mix.   Also, the                                                              
two offer proximity in an emergency.                                                                                            
                                                                                                                                
2:51:55 PM                                                                                                                    
                                                                                                                                
CHAIR JOHANSEN  inquired as  to whether  it's common for  airports                                                              
to go into the  hotel business.  He inquired as  to how that would                                                              
be accomplished.                                                                                                                
                                                                                                                                
MR. PARROTT  said that it  isn't common.   He then  clarified that                                                              
TSAIA wouldn't be  in the hotel business, a hotel  would merely be                                                              
located  at  the  airport  much  like  the  restaurants  that  are                                                              
located at  the airport.  Therefore,  the hotel would be  a tenant                                                              
and pay  rent and  a percentage  of the revenue.   In  response to                                                              
Representative  Fairclough,  Mr. Parrott  confirmed  that a  long-                                                              
term lease,  not selling  [the property],  is what's  anticipated.                                                              
In  further response,  Mr.  Parrott  explained that  the  standard                                                              
leases  the airport  utilizes are  such that  the property  always                                                              
belongs to the  airport and the improvements are  either left, per                                                              
the airport's approval, or the lessee is required to take them.                                                                 
                                                                                                                                
2:53:07 PM                                                                                                                    
                                                                                                                                
MR.  PARROTT,  in response  to  Representative  Keller,  clarified                                                              
that there is a  large swath of land located west  of the existing                                                              
north-south runway  that is airport  property still  available for                                                              
development.   In further response  to Representative  Keller, Mr.                                                              
Parrott specified  that on a previous  master plan the  tunnel was                                                              
anticipated  to  be north  of  the  north  terminal and  north  of                                                              
taxiway  "Victor" and  from  there  it would  proceed  west.   The                                                              
hotel  is  anticipated  to  be  very  near  or  connected  to  the                                                              
passenger terminal.                                                                                                             
                                                                                                                                
2:54:14 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FAIRCLOUGH commented  that in  Anchorage there  is                                                              
conflict between  airport growth  and usage.   She asked  if there                                                              
are airspace problems  or is there airspace time  that would allow                                                              
expansion.   She  then  suggested  that the  land  use around  the                                                              
airport is causing  conflicts.  Therefore, she  questioned whether                                                              
it  would be  in the  state's best  interest  to acquire  adjacent                                                              
property to the air traffic pattern as it becomes available.                                                                    
                                                                                                                                
MR.  PARROTT said  that  the master  plan  team  is analyzing  the                                                              
ability of the airspace  to handle more air traffic.   Moreover, a                                                              
FAA  team  from  the  Lower  48   is  reviewing  reallocating  and                                                              
reapportioning the  airspace over all of Alaska,  but specifically                                                              
in the  Anchorage  Bowl area  to try to  make it  as efficient  as                                                              
possible.  With  regard to the land use around  the airport, there                                                              
are  some  areas the  airport  is  looking  to acquire  when  they                                                              
become  available.   One such parcel,  which  would meet some  FAA                                                              
safety  area  requirements, is  located  north  of the  Lake  Hood                                                              
strip.    The TSAIA  is  also  working  with the  Municipality  of                                                              
Anchorage as  it goes through its  zoning and planning  process to                                                              
ensure  that   the  airport  and   surrounding  areas   are  zoned                                                              
appropriately.                                                                                                                  
                                                                                                                                
2:57:07 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FAIRCLOUGH  noted  her  appreciation  for  TSAIA's                                                              
efforts, but  pointed out  that people are  moving in  adjacent to                                                              
the airport and  then complaining to the city  after-the-fact.  If                                                              
steps  aren't taken  to mitigate  the problem  now, it  will be  a                                                              
long-term problem.   She then recalled that in the  past there has                                                              
been  conversation  regarding separating  freight  from  passenger                                                              
mobility.   The location  of that  has been rumored  to be  in the                                                              
Mat-Su area.                                                                                                                    
                                                                                                                                
MS. KLEIN  confirmed that  a number of  things will  be considered                                                              
in  the Alaska  Airport  System  Improvement Plan,  including  the                                                              
potential separation  of freight and  passengers.  She  noted that                                                              
the plan hasn't  been updated since about 1996.   The plan is part                                                              
of the  National Transportation System  and thus has  to integrate                                                              
with it.   At  this time,  the Alaska  Airport System  Improvement                                                              
Plan is  being started and  it will cover  the entire state.   The                                                              
plan  will review  forecasts  for traffic,  the  changes over  the                                                              
past  10-15 years,  the  demand for  the next  30  years, and  the                                                              
improvement necessary  in Alaska  to make the  system whole.   Ms.                                                              
Klein  encouraged   everyone  to   participate  in   those  public                                                              
meetings and surveys over the next year-and-a-half.                                                                             
                                                                                                                                
2:59:56 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KELLER  commented  that  there is  room  on  Point                                                              
McKenzie.                                                                                                                       
                                                                                                                                
3:00:21 PM                                                                                                                    
                                                                                                                                
CHAIR JOHANSEN  inquired as  to how  Ms. Klein came  to be  in her                                                              
current position.                                                                                                               
                                                                                                                                
MS. KLEIN informed  the committee that she is  a life-long Alaskan                                                              
who has  worked in the international  airport system for  about 13                                                              
years.   She related  that she  departed that  system in  2005, at                                                              
which point  she returned to the  private sector where  she ran an                                                              
engineering  company the  last couple  of years.   Ms. Klein  said                                                              
that she  was honored  when the governor  and the commissioner  of                                                              
DOT&PF asked  her to take  this position, which  she characterized                                                              
as challenging.   She  then informed the  committee that  she grew                                                              
up in rural Alaska  in a small community outside  of Ketchikan and                                                              
thus is very  familiar with the  marine highway system  as well as                                                              
aviation as  those were  the only modes  of transportation  to get                                                              
to  her homestead.   Ms.  Klein noted  that she  is an  accredited                                                              
airport executive  and has  a background  in engineering  from the                                                              
University of Alaska Fairbanks.                                                                                                 
                                                                                                                                
3:01:51 PM                                                                                                                    
                                                                                                                                
MS. KLEIN, in  further response to Chair Johansen,  identified the                                                              
biggest  challenge to  be funding  for rural  airports, which  are                                                              
critical  to Alaska's  future  economy.   The  greatest  challenge                                                              
will  be to  determine  how  to fund  and  operate  the 256  rural                                                              
airports.  She  highlighted that these airports are  the only link                                                              
to medical facilities for most of the citizens.                                                                                 
                                                                                                                                
3:02:40 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FAIRCLOUGH  asked if Ms. Klein served  as the chair                                                              
of the transition team for DOT&PF.                                                                                              
                                                                                                                                
MS.  KLEIN replied  yes, adding  that  the governor  asked her  to                                                              
chair the  transition team.   She noted  that she selected  the 18                                                              
members  of  the   team  from  throughout  Alaska   and  the  team                                                              
completed its report in about three weeks.                                                                                      
                                                                                                                                
3:03:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FAIRCLOUGH recalled  that  one of  the issues  the                                                              
transition  team   tackled  was  lack  of  morale   and  personnel                                                              
problems in DOT&PF.                                                                                                             
                                                                                                                                
MS. KLEIN said  that she has heard  that morale continues  to be a                                                              
problem,  and therefore  she will  work with  the commissioner  to                                                              
improve  morale,  visit  the  employees  "in  the  trenches,"  and                                                              
actively listen to their concerns.                                                                                              
                                                                                                                                
3:03:40 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FAIRCLOUGH  related  her  understanding  from  the                                                              
commissioner  that the low  morale had changed.   She  inquired as                                                              
to how long Ms. Klein has been on the job.                                                                                      
                                                                                                                                
MS. KLEIN answered about three days.                                                                                            
                                                                                                                                
REPRESENTATIVE  FAIRCLOUGH   expressed  the  need   to  understand                                                              
transportation  as  it  affects  communities,  especially  in  the                                                              
rural  areas.   Representative Fairclough  relayed  what she  told                                                              
the chair  after a previous challenging  meeting, as follows:   "I                                                              
don't want  people in  the trenches to  think, just  because we're                                                              
trying to figure  out where the administration  and the leadership                                                              
is taking  us, that we don't  truly ... understand that  there are                                                              
many  fine   people,  including   leadership,  that  are   in  the                                                              
department  that are  doing  excellent work  for  Alaskans."   She                                                              
requested a report on morale and how employees will be valued.                                                                  
                                                                                                                                
MS.  KLEIN related  her understanding  that there  is an  employee                                                              
survey underway,  which hasn't been  completed.  Once  that survey                                                              
is  complete, the  findings could  be shared  with the  committee.                                                              
The commissioner  is also visiting  with employees [in  an attempt                                                              
to address morale].   Therefore, Ms. Klein opined  that there have                                                              
been some improvements.                                                                                                         
                                                                                                                                
3:06:23 PM                                                                                                                    
                                                                                                                                
CHAIR  JOHANSEN pointed  out that  the  Ketchikan Gateway  Borough                                                              
runs the local airport.   He then inquired as to  the implications                                                              
for the  aviation division  if that  airport, including  access to                                                              
the airport, is given back to the state.                                                                                        
                                                                                                                                
MS.  KLEIN  responded  that  she  would  have  to  research  that.                                                              
However, she noted  that at this point, the  department encourages                                                              
communities  to  keep  their  airports  since  they  have  greater                                                              
interest  in maintaining  and caring  for  them.   Ms. Klein  said                                                              
that she couldn't  imagine that the department would  want to take                                                              
the  airport   back  due   to  the   department's  operating   and                                                              
maintenance    concerns   as    well    as   budget    shortfalls.                                                              
Additionally,  the  Ketchikan  airport is  linked  to  Ketchikan's                                                              
ferry and the borough owns some of the infrastructure.                                                                          
                                                                                                                                
3:07:45 PM                                                                                                                    
                                                                                                                                
CHAIR JOHANSEN  then asked  whether the state  would need  to take                                                              
over access  to the airport if  the borough decided it  wasn't its                                                              
responsibility.                                                                                                                 
                                                                                                                                
MS.  KLEIN  answered that  she  would  have  to review  the  grant                                                              
assurances.                                                                                                                     
                                                                                                                                
3:08:16 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being  no further business  before the committee,  the House                                                              
Transportation  Standing Committee meeting  was adjourned  at 3:08                                                              
p.m.                                                                                                                            

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