Legislature(2021 - 2022)BARNES 124

03/20/2021 12:30 PM House TRANSPORTATION

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12:33:54 PM Start
12:35:08 PM HJR13
12:52:36 PM Presentation: Alaska Marine Highway System
02:53:43 PM Adjourn
* first hearing in first committee of referral
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                     ALASKA STATE LEGISLATURE                                                                                 
             HOUSE TRANSPORTATION STANDING COMMITTEE                                                                          
                          March 20, 2021                                                                                        
                            12:33 p.m.                                                                                          
MEMBERS PRESENT                                                                                                               
Representative Grier Hopkins, Chair                                                                                             
Representative Sara Hannan, Vice Chair                                                                                          
Representative Ivy Spohnholz                                                                                                    
Representative Harriet Drummond                                                                                                 
Representative Kevin McCabe                                                                                                     
Representative Mike Cronk                                                                                                       
MEMBERS ABSENT                                                                                                                
Representative Tom McKay                                                                                                        
COMMITTEE CALENDAR                                                                                                            
HOUSE JOINT RESOLUTION NO. 13                                                                                                   
Urging the  United States  Congress to  exempt cruise  ships from                                                               
certain  provisions  of the  Passenger  Vessel  Services Act  and                                                               
other applicable provisions of federal  law for the period during                                                               
which Canadian  ports are  closed to  cruise ships  carrying more                                                               
than 100  people; and urging  the President of the  United States                                                               
not to fine  or take actions against cruise ships  sailing to the                                                               
     - HEARD & HELD                                                                                                             
PRESENTATION: ALASKA MARINE HIGHWAY SYSTEM                                                                                      
     - HEARD                                                                                                                    
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: HJR 13                                                                                                                  
SHORT TITLE: URGE EXEMPTION FOR CRUISE SHIPS                                                                                    
SPONSOR(s): REPRESENTATIVE(s) ORTIZ                                                                                             
03/01/21       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/01/21       (H)       TRA                                                                                                    
03/20/21       (H)       TRA AT 12:30 AM BARNES 124                                                                             
WITNESS REGISTER                                                                                                              
REPRESENTATIVE DAN ORTIZ                                                                                                        
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Introduced HJR 13 as prime sponsor.                                                                      
PATTI MACKEY                                                                                                                    
President and CEO                                                                                                               
Ketchikan Visitors Borough                                                                                                      
Ketchikan, Alaska                                                                                                               
POSITION STATEMENT:  Provided testimony during the meeting.                                                                   
KATI CAPOZZI                                                                                                                    
President and CEO                                                                                                               
Alaska Chamber of Commerce                                                                                                      
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Provided testimony during the meeting.                                                                   
SHANNON ADAMSON                                                                                                                 
Masters, Mates, and Pilots Union                                                                                                
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Provided testimony during the meeting.                                                                   
ROB CARPENTER                                                                                                                   
Deputy Commissioner                                                                                                             
Department of Transportation & Public Facilities                                                                                
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented a PowerPoint and answered                                                                      
questions during the meeting.                                                                                                   
MATT MCLAREN                                                                                                                    
Business Manager                                                                                                                
Alaska Marine Highway System                                                                                                    
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented a PowerPoint and answered                                                                      
questions during the meeting.                                                                                                   
CAPTAIN JOHN FALVEY                                                                                                             
General Manager                                                                                                                 
Alaska Marine Highway System                                                                                                    
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions during the meeting.                                                                   
ACTION NARRATIVE                                                                                                              
12:33:54 PM                                                                                                                   
CHAIR  GRIER HOPKINS  called  the  House Transportation  Standing                                                             
Committee meeting to order at 12:33 p.m.                                                                                        
              HJR 13-URGE EXEMPTION FOR CRUISE SHIPS                                                                        
12:35:08 PM                                                                                                                   
CHAIR HOPKINS  announced that the  first order of  business would                                                               
be  HOUSE JOINT  RESOLUTION  NO. 13,  "Urging  the United  States                                                               
Congress to  exempt cruise ships  from certain provisions  of the                                                               
Passenger Vessel Services Act and  other applicable provisions of                                                               
federal  law  for the  period  during  which Canadian  ports  are                                                               
closed to cruise ships carrying  more than 100 people; and urging                                                               
the President  of the United States  not to fine or  take actions                                                               
against cruise ships sailing to the state."                                                                                     
12:36:11 PM                                                                                                                   
REPRESENTATIVE  DAN ORTIZ  shared  on February  4, 2021  Canada's                                                               
transport ministry  announced it  would prohibit  large passenger                                                               
vessels  from transiting  their  waters until  2022.   Under  the                                                               
Passenger Vessel  Services Act (PVSA), large  foreign vessels are                                                               
required to stop in a large  foreign port such as Canada at least                                                               
once during their  voyage.  The announcement  from Canada coupled                                                               
with  the PVSA  requirement would  prevent Alaska  from receiving                                                               
cruise ships  throughout the  entire 2021  season.   This follows                                                               
the 2020  season in which  Alaska also  saw no large  cruise ship                                                               
activity,  he  pointed  out.     The  Alaska  Visitors  Industry,                                                               
particularly  cruise tourism,  is  the  cornerstone of  Southeast                                                               
Alaska's economy,  he stated.   Prior to  the pandemic,  in 2019,                                                               
Alaska had  more than  2.2m visitors, over  half of  whom arrived                                                               
via cruise ship.  While  many businesses were able to "hibernate"                                                               
for 2020,  the threat of such  limited visitors in 2021  could do                                                               
irreparable harm,  he stated.   The Congressional  delegation has                                                               
been hard at  work to try to  find a way to save  the 2021 cruise                                                               
ship season,  he shared.   He added Representative Don  Young has                                                               
brought forth the  Alaska Tourism Recovery Act,  which proposes a                                                               
temporary workaround which would  make round-trip voyages between                                                               
Alaska and Washington a foreign voyage  under US law.  If passed,                                                               
Representative Ortiz  continued, HJR 13 would  signal the support                                                               
of  the Alaska  State  Legislature and  would  urge Congress  and                                                               
President  Joe  Biden to  take  necessary  actions to  allow  for                                                               
cruise ships to visit Alaska ports.                                                                                             
12:39:17 PM                                                                                                                   
REPRESENTATIVE MCCABE asked if HJR 13 had an end date.                                                                          
REPRESENTATIVE  ORTIZ  replied yes,  and  it  coincided with  the                                                               
duration of Canada's cruise prohibition.                                                                                        
REPRESENTATIVE  MCCABE asked  if  there would  be opportunity  to                                                               
extend should Canada become less cooperative with their date.                                                                   
REPRESENTATIVE ORTIZ  replied he was  not sure if it  allowed for                                                               
flexibility;  in the  event of  continued  prohibition there  may                                                               
need to be another resolution.                                                                                                  
REPRESENTATIVE MCCABE said he supports  HJR 13 in general, but is                                                               
skeptical  of allowing  foreign vessels,  which have  less strict                                                               
rules, point-to-point in  the US.  He expressed his  hopes HJR 13                                                               
wouldn't undo 100 years of maritime law.                                                                                        
12:41:43 PM                                                                                                                   
REPRESENTATIVE HANNAN  expressed appreciation  for Representative                                                               
McCabe's point and said  it would not be the intent  of HJR 13 to                                                               
undo any  work done by the  Passenger Vessel Services Act  or the                                                               
Jones Act, which would have a  ripple effect across the entire US                                                               
economy.   It  was a  resolution and  therefore a  more temporary                                                               
solution,  she pointed  out.   She  mentioned it  should be  made                                                               
clear  HJR  13   was  not  to  be  extended   in  perpetuity  and                                                               
acknowledged  US standards  of health  care on  board the  cruise                                                               
ship  vessels to  make sure  they are  meeting health  and safety                                                               
REPRESENTATIVE  ORTIZ answered  as a  resolution, HJR  13 had  no                                                               
authority  to  undo  anything,  and  its  extension  would  be  a                                                               
Congressional decision.                                                                                                         
12:44:44 PM                                                                                                                   
REPRESENTATIVE CRONK expressed support  for HJR 13 especially for                                                               
Interior Alaska.                                                                                                                
CHAIR HOPKINS agreed.                                                                                                           
12:45:39 PM                                                                                                                   
PATTI MACKEY,  shared Alaska has withstood  more negative effects                                                               
from  COVID-19 than  any  other state  in the  US.   Focusing  on                                                               
Ketchikan,  Alaska, Ms.  Mackey shared  tourism brought  in about                                                               
$263m annually,  and 96%  of visitors came  to Alaska  via cruise                                                               
ship.   The  loss of  passenger and  crew member  spending, along                                                               
with port  fees and ancillary  services purchased by  the various                                                               
cruise lines,  took a devastating  toll on the community  in 2020                                                               
and created a  huge loss in municipal revenues.   Tourism jobs in                                                               
Ketchikan  numbered around  1350,  she shared,  with another  400                                                               
indirectly, resulting  in about $76m  in labor income;  and while                                                               
the aid has been helpful  in some instances, businesses wanted to                                                               
get back to doing what they  did best, she imparted.  A temporary                                                               
waiver  or  other  workaround  to  resolve  the  restrictions  on                                                               
foreign-flagged ships is  more than a cruise  industry issue, she                                                               
said, and  is not the  only answer  to the challenges,  but would                                                               
have a direct [positive] impact on Alaskan families, she said.                                                                  
12:47:56 PM                                                                                                                   
CHAIR HOPKINS opened public testimony on HJR 13.                                                                                
12:48:12 PM                                                                                                                   
KATI  CAPOZZI, President  and CEO,  Alaska  Chamber of  Commerce,                                                               
testified  in support  of  HJR 13.   She  shared  the Chamber  of                                                               
Commerce was founded  in 1953 and its mission is  to advocate for                                                               
a  healthy  business  environment  in Alaska.    She  shared  the                                                               
tourism industry  needed immediate Congressional action  to allow                                                               
cruise ships to return to Alaska.                                                                                               
12:49:55 PM                                                                                                                   
SHANNON ADAMSON, Masters, Mates, and  Pilots Union, put forth the                                                               
state of  Alaska owned vessels  that met  all Jones Act  and PVSA                                                               
requirements:   the AMHS vessels  currently tied up  in Ketchikan                                                               
could boost tourism  and help communities.   Putting the Colombia                                                               
into  service, she  gave as  an example,  which could  spend half                                                               
days  in Skagway,  Ketchikan, and  Juneau,  just to  name a  few,                                                               
could be  offered as the  way to see Juneau  by way of  one's own                                                               
vehicle, she  added.  Mitigation  measures were already  in place                                                               
on AMHS vessels,  and it would be a way  to boost tourism without                                                               
affecting AMHS or DOT&PF budgets, she pointed out.                                                                              
12:52:05 PM                                                                                                                   
CHAIR HOPKINS closed public testimony on HJR 13.                                                                                
^PRESENTATION: Alaska Marine Highway System                                                                                     
            PRESENTATION: Alaska Marine Highway System                                                                      
12:52:36 PM                                                                                                                   
CHAIR HOPKINS  announced that the  final order of  business would                                                               
be to finish the presentation  begun 3/18/21 on the Alaska Marine                                                               
Highway System.                                                                                                                 
12:53:01 PM                                                                                                                   
The committee took an at-ease from 12:53 p.m. to 12:56 p.m.                                                                     
12:57:11 PM                                                                                                                   
ROB CARPENTER, Deputy  Commissioner, Department of Transportation                                                               
&  Public   Facilities,  continued  a  discussion   on  the  AMHS                                                               
Reshaping  Work  Group  (RWG)   recommendations.    In  terms  of                                                               
improving  reliability, the  endeavor at  Cascade Point  (CP), 30                                                               
miles north of  the end of the road in  Juneau, would shorten the                                                               
trip  from  Juneau  to  Haines.   The  DOT&PF  was  working  with                                                               
procurement  and  legal  counsel  to ensure  proper  process  for                                                               
proceeding with Goldbelt, the landowner.   In terms of increasing                                                               
revenue, Dynamic Pricing was implemented in October 2019.                                                                       
1:00:32 PM                                                                                                                    
REPRESENTATIVE ORTIZ  commented constituents were not  happy with                                                               
dynamic pricing,  as the AMHS is  not necessarily the same  as an                                                               
airline.   The  function of  the AMHS  and its  purposes was  too                                                               
different than an  airline to be able to make  the comparison, he                                                               
MR. CARPENTER  said he disagreed  as there has  been considerable                                                               
pressure to increase  revenue and the AMHS was trying  to be more                                                               
REPRESENTATIVE   ORTIZ   maintained   that   from   constituents'                                                               
perspective,  the impact  of  dynamic pricing  on  the runs  from                                                               
Bellingham  to anywhere  in Southeast  Alaska when  vehicles were                                                               
included was such that passengers  could no longer afford to pay.                                                               
Similar taxes were not applied  on highways during busy times, he                                                               
added:     the  AMHS  is   a  public  transit  system,   and  its                                                               
affordability must be kept within reach, he stated.                                                                             
1:03:51 PM                                                                                                                    
REPRESENTATIVE   HANNAN  asked   about   dynamic  pricing's   two                                                               
different  methodologies:   in the  first instance,  she related,                                                               
the closer  to the  sailing date  the price went  up, and  in the                                                               
second instance  the higher  the occupancy  price the  price went                                                               
up.  She asked why discounts  couldn't be applied instead of only                                                               
increases.  She pointed out that  people using the AMHS for their                                                               
military move may fill it up  and it leaves those waiting to book                                                               
their ticket at a big disadvantage  and asked if numbers had been                                                               
run to fill vessels by way of selling discounted tickets.                                                                       
MR. CARPENTER  said he  personally agreed and  had brought  it to                                                               
coworkers'  attention.   He said  it  was not  "exactly easy"  to                                                               
implement, but it was being considered.                                                                                         
REPRESENTATIVE HANNAN asked  that this issue be  raised with Matt                                                               
1:07:42 PM                                                                                                                    
MATT  MCLAREN, Business  Manager, Alaska  Marine Highway  System,                                                               
replied  at  the time  of  dynamic  pricing's implementation  the                                                               
possibility of discounting  had not been analyzed.   The AMHS had                                                               
been assisted by the McDowell  group's tariff study, he said, and                                                               
full capabilities  of the reservation  system were  not available                                                               
at  that time.    That system  was being  improved  and could  be                                                               
looked at presently, he stated.                                                                                                 
1:08:38 PM                                                                                                                    
REPRESENTATIVE MCCABE said  the AMHS could no  longer be compared                                                               
to highways,  as the more  driving the more  was paid in  gas and                                                               
taxes.    He  said  the   comparison  was  impeding  fixing  AMHS                                                               
1:10:25 PM                                                                                                                    
REPRESENTATIVE SPOHNHOLZ commented the  same amount of motor fuel                                                               
tax was paid no matter how  many people were traveling, so it was                                                               
a  user fee,  but  surcharges  such as  toll  roads were  charged                                                               
during peak hours.   There is a way of doing  it which takes into                                                               
consideration  capacity  of  the  road  and  cost  recovery,  she                                                               
1:11:24 PM                                                                                                                    
REPRESENTATIVE  ORTIZ  clarified  he was  speaking  about  public                                                               
transit systems, of  which the AMHS fit since  highways were also                                                               
for public  use.  Airlines were  private, for-profit enterprises,                                                               
he pointed out.                                                                                                                 
1:12:06 PM                                                                                                                    
MR.  CARPENTER  imparted  there   was  a  new  dedicated  planner                                                               
position now  included in the  AMHS RWG.   There would also  be a                                                               
federally  funded new  organizational "change  management" expert                                                               
position  added, he  stated.   The  person would  act as  liaison                                                               
between the AMHS  and the new board,  he said.  In  terms of cost                                                               
reduction,   union  contracts   for   MM&P  and   MEBA  were   in                                                               
negotiations, and the  IBU contract expired on June  30, 2022, he                                                               
said.    Lastly,  the  fast  ferries'  divestment  would  add  to                                                               
savings, he mentioned.                                                                                                          
1:14:23 PM                                                                                                                    
REPRESENTATIVE MCCABE stated fast  vehicle ferries were purchased                                                               
for $68m  and sold for  $5.6m, so  their "divestment" was  a $63m                                                               
loss.   The  Malaspina is  parked at  a price  of $416K/year,  he                                                               
stated, and asked at what point the AMHS would cut losses.                                                                      
MR.  CARPENTER   said  the  correct  path   for  the  Malaspina's                                                               
disposal/divestiture/scuttling was still being determined.                                                                      
REPRESENTATIVE MCCABE asked for a timeframe.                                                                                    
MR.  CARPENTER   replied  an   investment  to   remove  hazardous                                                               
materials would need to be made in the event of scuttling.                                                                      
CHAIR  HOPKINS expressed  agreement with  Representative McCabe's                                                               
questioning of a more specific plan.                                                                                            
1:18:01 PM                                                                                                                    
REPRESENTATIVE CRONK  asked what  kind of  interest there  was in                                                               
the Malaspina.                                                                                                                  
1:18:29 PM                                                                                                                    
CAPTAIN  JOHN  FALVEY,  General Manager,  Alaska  Marine  Highway                                                               
System, said someone in the Midwest  wanted to use it for housing                                                               
for  the homeless,  but  that scuttling  was  also being  closely                                                               
looked at.                                                                                                                      
REPRESENTATIVE CRONK  said it  was a  waste of  money, especially                                                               
when  looked  at  in  terms  of  the  payment  of  Personal  Fund                                                               
1:20:09 PM                                                                                                                    
REPRESENTATIVE HANNAN asked what the  timeframe was for either of                                                               
the two divestment mechanisms, selling or scuttling.                                                                            
CAPT.  FALVEY  said  the  AMHS  was  actively  working  with  the                                                               
Environmental Protection Agency  (EPA), and that he  did not have                                                               
a timeline for the process.                                                                                                     
REPRESENTATIVE  HANNAN   expressed  her   desire  to   move  from                                                               
"actively looking" to  "give me a timeline," and  again asked for                                                               
a window of time.                                                                                                               
CAPT. FALVEY replied no more than one year.                                                                                     
1:22:45 PM                                                                                                                    
REPRESENTATIVE MCCABE asked  what it would cost to  clean out the                                                               
CAPT. FALVEY replied around $500K.                                                                                              
1:23:48 PM                                                                                                                    
CHAIR  HOPKINS   asked  when   discussions  with   EPA  regarding                                                               
scuttling began.                                                                                                                
CAPT. FALVEY replied three or four months ago.                                                                                  
CHAIR  HOPKINS clarified  so that  should be  three or  four more                                                               
CAPT. FALVEY replied maybe sooner.                                                                                              
CHAIR HOPKINS said good, maybe by January 2022.                                                                                 
1:25:13 PM                                                                                                                  
MR. CARPENTER shared  slide 9 on the AMHS's work  with the Alaska                                                               
State  Legislature.   In terms  of strengthening  governance, the                                                               
RWG   strongly   recommended   a    reshaping   of   the   Marine                                                               
Transportation  Advisory Board  (MTAB),  he stated,  so that  was                                                               
being done  via House Bill 134,  which would give the  board more                                                               
"teeth,"  and likewise  a  more  business- and  operations-focus.                                                               
House Bill 134 would also  add marine business/vessel experience.                                                               
In  terms of  stabilizing  planning, the  AMHS was  "conceptually                                                               
supportive" of  forward funding, albeit difficult  in this fiscal                                                               
environment, he put forth.                                                                                                      
1:26:55 PM                                                                                                                    
CHAIR HOPKINS  said the  House Transportation  Standing Committee                                                               
passed HB  63 in  the past  week, and  hopefully that  would mesh                                                               
with the current priorities.                                                                                                    
MR. CARPENTER shared  work with the RWG, which,  as the committee                                                               
knew from  HB 63 had as  a goal short- and  long-range operations                                                               
planning,  improving  reliability,   and  reducing  costs,  fleet                                                               
size/design and  replacement strategy, and cost  reduction, which                                                               
could  entail   "anything  from"   alternative  solutions/service                                                               
providers  to  additional   leveraging  of  road  infrastructure.                                                               
There  was a  longer-term evaluation  that still  needed to  take                                                               
place for the AMHS, he put forth.                                                                                               
1:28:49 PM                                                                                                                    
REPRESENTATIVE MCCABE asked about service providers.                                                                            
MR. CARPENTER  replied there  could be  a contracting  service if                                                               
the AMHS  "gave up," or if  there were a different  solution than                                                               
using ferries.                                                                                                                  
REPRESENTATIVE MCCABE  said the  AMHS already had  contracts with                                                               
Allen Marine and  Goldbelt to provide some day  ferry service and                                                               
asked  why a  better way  to subcontract  day use  ferries hadn't                                                               
been sought before this point.                                                                                                  
MR. CARPENTER replied union  contracts prohibited contracting for                                                               
certain routes;  he said  he believed  there were  just six.   He                                                               
expressed the new board may be  able to better determine what was                                                               
REPRESENTATIVE MCCABE  expressed his desire for  better frequency                                                               
and more tailored, quicker service to some of the smaller ports.                                                                
CHAIR HOPKINS asked which ports were contractable.                                                                              
MR. MCLAREN  replied Hoonah, Pelican, Tenakee,  Kake, Angoon, and                                                               
one more.                                                                                                                       
1:33:26 PM                                                                                                                    
REPRESENTATIVE DRUMMOND  said it was her  understanding there was                                                               
a contract  in place between  Allen Marine and Goldbelt  to begin                                                               
to provide  service with  smaller vessels  to smaller  ports, but                                                               
that only  one run was made  before COVID-19.  She  then asked if                                                               
there  was possibility  of  continuing  similar contracting  this                                                               
MR. CARPENTER  replied if  not in  summer 2021,  it was  still on                                                               
AMHS radar.                                                                                                                     
REPRESENTATIVE DRUMMOND replied this summer  would be the time to                                                               
do  it,  as Allen  Marine  was  ready  to serve  when  passengers                                                               
returned en masse.  She added  it would still be a temporary fix,                                                               
and she  would really like to  see service provided to  the small                                                               
communities which were able to  be served without violating union                                                               
1:36:01 PM                                                                                                                    
REPRESENTATIVE  HANNAN stated  only  Tenakee  and Pelican,  which                                                               
were  both on  their way  to  other places,  didn't have  vehicle                                                               
MR.  MCLAREN  confirmed the  only  port  that AMHS  didn't  carry                                                               
vehicles to  was Tenakee,  but other ports  were visited  on that                                                               
1:38:26 PM                                                                                                                  
MR. CARPENTER  put forth a  "sample" plan forward, which  the RWG                                                               
had entitled "notional budget goals"  and which entailed lowering                                                               
the UGF  budget by $18m  - $22m over  three to four  years, fleet                                                               
streamlining and/or  modernization which would include  TRV, crew                                                               
quarters, and the gradual retiring of high-cost legacy ships.                                                                   
As  far  as  the  long-term,  there  was  potential  for  another                                                               
mainliner replacement vessel, he stated.                                                                                        
1:40:42 PM                                                                                                                    
REPRESENTATIVE ORTIZ asked how much  UGF funding had been lowered                                                               
for the AMHS from 2013-2014 until 2021.                                                                                         
MR.  MCLAREN replied  the biggest  year  for UGF  was $112m,  and                                                               
currently it's around $50m, so about a $62m, or 65%, reduction.                                                                 
REPRESENTATIVE ORTIZ clarified  the $18m - $22m  reduction was on                                                               
top of the just-stated 65% reduction.                                                                                           
MR. MCLAREN replied yes.                                                                                                        
REPRESENTATIVE  ORTIZ  asked  for   an  explanation  of  how  the                                                               
reduction supported  the stated  underlying themes of  "value and                                                               
importance  of AMHS  to coastal  communities and  the state  as a                                                               
whole" from the  RWG's report, and how  coastal communities' best                                                               
interest was being kept in mind.                                                                                                
MR. CARPENTER reemphasized  what was put forth was  just a sample                                                               
plan  and was  not being  put forth  as what  should happen.   He                                                               
urged the  committee to  allow a walkthrough  of the  sample plan                                                               
and stated the budget could still be adjusted.                                                                                  
1:44:39 PM                                                                                                                    
MR. MCLAREN  shared slide 12,  a chart  listing each of  the nine                                                               
vessels in  the fleet along  with the year built,  operating cost                                                               
per  week, and  size of  crew:   Columbia, built  1973, operating                                                               
cost per  week $476K,  63 crew  members; Kennicott,  1998, $420K,                                                               
53;  Matanuska,  1963, $343K,  49;  Tustumena,  1969, $259K,  38;                                                               
Aurora,  1977,  $182K, 24;  LeConte,  1974,  $161K, 24;  Tazlina,                                                               
2019, $133K,  21; Hubbard, 2019,  $133K, 21; Lituya,  2004, $21K,                                                               
5.  He also pointed out  the estimated weekly operating costs per                                                               
week and  crew size of  the Mainliner Replacement  Vessel ($270K;                                                               
46), TRV  ($245K; 35),  Tazlina with  crew quarters  ($146K; 24),                                                               
and Hubbard with crew quarters ($146K; 24).                                                                                     
1:48:06 PM                                                                                                                    
REPRESENTATIVE ORTIZ asked if, with  crew quarters being added to                                                               
the Tazlina and  the Hubbard, operating costs  currently at $133K                                                               
per  week would  go up,  and if  the costs  included housing  for                                                               
MR. MCLAREN replied yes; the  cost savings came in because Aurora                                                               
and LeConte  could potentially be  replaced, and the  addition of                                                               
crew quarters would save money.                                                                                                 
1:49:44 PM                                                                                                                    
CHAIR HOPKINS  asked how DOT&PF  was looking at  utilizing rescue                                                               
package funds and CARES Act funds to make capital improvements.                                                                 
MR.  CARPENTER clarified  Federal Transport  Authority money  did                                                               
not have  a capital aspect  to it for operational  costs; Federal                                                               
highway funds did;  and there had been no proposal  yet on intent                                                               
of money.  In the long-term  plan, investment decisions  would be                                                               
addressed, he put forth.                                                                                                        
CHAIR HOPKINS said so with passage of HB 63.                                                                                    
1:51:40 PM                                                                                                                    
REPRESENTATIVE   SPOHNHOLZ   asked   if  any   renewable   energy                                                               
technology could be  utilized to cut down on fuel  costs and help                                                               
reduce   the  carbon   footprint,  especially   with  the   Biden                                                               
administration making transportation a priority.                                                                                
CAPT.  FALVEY   replied  green  operations  were   becoming  more                                                               
prevalent, and  electric batteries  were under  consideration for                                                               
shorter runs, but  equipment would need to be refit  to the point                                                               
of almost  needing a new ship  except for the Lituya.   Dual-fuel                                                               
engines such  as L&G were  under consideration as  well depending                                                               
on the supply chain into Alaska, he put forth.                                                                                  
REPRESENTATIVE  SPOHNHOLZ   asked  for  more   information  about                                                               
Washington state electrifying ferries.                                                                                          
CAPT. FALVEY replied they were for  short runs and were much more                                                               
amenable to charging.                                                                                                           
1:56:01 PM                                                                                                                    
REPRESENTATIVE ORTIZ asked  if the technology was  not even there                                                               
in terms of using batteries to power larger vessels.                                                                            
CAPT. FALVEY  replied yes, when  they needed to be  recharged for                                                               
longer routes the technology was not there yet.                                                                                 
1:56:55 PM                                                                                                                    
REPRESENTATIVE MCCABE  asked if  they were diesel-electric  or if                                                               
it were solely diesel.                                                                                                          
CAPT. FALVEY  replied specifics  would depend on  if the  TRV was                                                               
SOLAS or non-SOLAS, diesel-electric may be required.                                                                            
1:57:35 PM                                                                                                                    
MR. MCLAREN clarified the chart  looked specifically at operating                                                               
costs.    But the  big  difference  in  whether the  Tazlina  and                                                               
Hubbard were able  to operate or not was also  the capacity size,                                                               
as these were much bigger  in terms of passengers (290 passengers                                                               
for the  Tazlina, whereas the  Aurora holds 250, e.g.)  and cars.                                                               
With the  bigger vessels there  was more opportunity  to generate                                                               
revenue as well as save costs.                                                                                                  
MR. MCLAREN shared  on slide 13 a hypothetical  timeline for AMHS                                                               
vessel replacement.   The  TRV design &  build process  was still                                                               
about  six months  out, he  stated, with  the construction  about                                                               
four  years out  from that  point.   An amount  of $275m  was set                                                               
aside  for the  project, depending  on if  it was  SOLAS or  non-                                                               
SOLAS, he imparted.   The Alaska Class Ferry  crew quarter design                                                               
& bid  process was  at 90%  to 95% completion,  and if  done with                                                               
federal money,  a shipyard  in which to  build the  crew quarters                                                               
would  need to  be  located.   As the  Tazlina  and Hubbard  were                                                               
completed, the  LeConte and Aurora could  potentially be retired,                                                               
he  stated.   The Colombia  pitch  propellor project  was in  the                                                               
works, which  would enable  the Matanuska  to retire,  he shared.                                                               
The Colombia was  the most expensive ship to  operate, he shared.                                                               
A mainliner  replacement could  be looked at  for that  run, like                                                               
the TRV  to save design  costs, also a four-year  timeline, rough                                                               
estimate $300m, maybe less, he shared.                                                                                          
2:02:26 PM                                                                                                                    
REPRESENTATIVE  HANNAN asked  for real  time estimates,  and from                                                               
where the authority came.                                                                                                       
MR. CARPENTER said  everything was still being  evaluated, and it                                                               
was up to Governor Dunleavy.                                                                                                    
REPRESENTATIVE   HANNAN  said   CP  would   only  be   seasonally                                                               
available, so  we were two years  out from having it  as a point,                                                               
and the vessels aren't running.                                                                                                 
MR.  CARPENTER said  CP  was  out two  years  at  best with  2021                                                               
construction season being out.                                                                                                  
2:06:08 PM                                                                                                                    
REPRESENTATIVE ORTIZ  asked when  the timeline  on the  TRV would                                                               
MR. CARPENTER replied  construction could start as  early as fall                                                               
2021, and then there was a 15-month buildout.                                                                                   
REPRESENTATIVE ORTIZ clarified  "if [they] had the  'go'" was the                                                               
MR. CARPENTER replied  no, and anyway the governor  had the final                                                               
REPRESENTATIVE ORTIZ again looked to  clarify if the timeline put                                                               
forth by the DOT&PF was from today's date or another point.                                                                     
MR. CARPENTER replied it was a hypothetical timeline.                                                                           
MR. MCLAREN  said even  if everything were  "green lit  today" it                                                               
would still be a bit of  a process.  Approval process for federal                                                               
funds must  be undergone, a shipyard  must be found, and  it must                                                               
be determined to  do projects concurrently or one at  a time.  He                                                               
added six to nine months may  be a safe estimate for Alaska Class                                                               
2:11:38 PM                                                                                                                    
REPRESENTATIVE SPOHNHOLZ  asked about  using the same  design for                                                               
the mainliner replacement vessel as  the TRV, and how much design                                                               
MR. MCLAREN  replied for mainliners,  from scratch,  the estimate                                                               
was about  $10m for design,  plus "all the detailed  design after                                                               
REPRESENTATIVE SPOHNHOLZ  imparted technology was  changing fast,                                                               
and design may  be 65-80% cheaper in the next  decade, so waiting                                                               
two years and saving money in  fuel output may be a prudent long-                                                               
term savings goal.                                                                                                              
MR.  MCLAREN replied  there were  many advantages  of building  a                                                               
ship that is more cost-efficient to  run, and design costs may be                                                               
made up in operating and even construction savings.                                                                             
2:14:32 PM                                                                                                                    
REPRESENTATIVE  DRUMMOND asked  if there  was  a road  in CP  two                                                               
years, if a terminal would be involved, and what was the cost.                                                                  
MR.  CARPENTER replied  the road  already existed  at the  end of                                                               
Echo Cove and  there was an extension in place  owned by Goldbelt                                                               
where a terminal "of some sort" would be built for the AMHS.                                                                    
REPRESENTATIVE  DRUMMOND  asked  what   the  completed  road  and                                                               
terminal,  that  would  allow  the Tazlina  and  Hubbard  to  run                                                               
without crew quarters, would be.                                                                                                
MR. CARPENTER  replied $20m depending  what was agreed  upon with                                                               
REPRESENTATIVE  DRUMMOND clarified  that was  different than  the                                                               
original road design which went  our significantly further north,                                                               
and if so, if that project had been abandoned.                                                                                  
MR. CARPENTER  replied yes, the  Juneau Access Project  from Echo                                                               
Cove almost to Skagway, was  different, and yes, that project was                                                               
shelved for now.                                                                                                                
REPRESENTATIVE DRUMMOND asked if the  Hubbard had run any routes,                                                               
and  if  would  it  be  out of  commission  during  crew  quarter                                                               
MR.  CARPENTER replied  both  the Hubbard  and  Tazlina have  not                                                               
sailed,  may be  able  to provide  backup  service contingent  on                                                               
Certificate(s) of Inspection (COI).                                                                                             
REPRESENTATIVE  DRUMMOND   confirmed  the  vessels   during  crew                                                               
quarter rebuild would be out of commission.                                                                                     
MR. CARPENTER replied yes, out of commission.                                                                                   
2:18:43 PM                                                                                                                    
REPRESENTATIVE MCCABE asked  if CP were completed  for $20m, crew                                                               
quarters  need  not be  put  into  Tazlina  and Hubbard  nor  the                                                               
vessels taken out of service.   Taking the vessels out of service                                                               
would be a loss of 16 months of revenue, he pointed out.                                                                        
MR.  CARPENTER replied  CP and  crew quarters  were not  mutually                                                               
exclusive options; CP was needed  to leverage the road system, he                                                               
stated.  Alaska Class Ferries could run  out of Auke Bay or CP to                                                               
other ports, he added.                                                                                                          
REPRESENTATIVE  MCCABE asked  if it  would be  better to  do crew                                                               
quarters on one boat for CP and  leave the other as it was as the                                                               
day boat and have a backup with crew quarters.                                                                                  
2:21:33 PM                                                                                                                    
The committee took an at-ease from 2:21 p.m. to 2:22 p.m.                                                                       
2:22:28 PM                                                                                                                    
REPRESENTATIVE  ORTIZ  asked  if  the  use  of  CP  had  seasonal                                                               
MR.  CARPENTER replied  unless  there were  a  sizable, and  thus                                                               
costly, breakwater, then yes.                                                                                                   
2:23:31 PM                                                                                                                    
REPRESENTATIVE  SPOHNHOLZ  asked  if road  maintenance  had  been                                                               
factored into the $20m capital cost.                                                                                            
MR.  CARPENTER replied  $20m was  a rough  estimate for  terminal                                                               
buildout;  there  was   still  a  lot  being   negotiated.    The                                                               
improvements  that  needed to  be  made  were not  on  Goldbelt's                                                               
property, he added.                                                                                                             
REPRESENTATIVE SPOHNHOLZ  clarified access to the  property would                                                               
need to be given by Goldbelt.                                                                                                   
MR. CARPENTER replied  yes, Goldbelt would provide  access to the                                                               
REPRESENTATIVE  SPOHNHOLZ  asked  if  it would  be  a  new  dock,                                                               
separate from the Kensington Mine access dock.                                                                                  
MR. CARPENTER  replied yes it was  new; that it would  need to be                                                               
much bigger for AMHS ships.                                                                                                     
REPRESENTATIVE SPOHNHOLZ asked if  Goldbelt would receive payment                                                               
for use of the road.                                                                                                            
MR. CARPENTER replied  a lot of details needed to  be worked out;                                                               
it may  be leased, but  the idea is there  is a staging  area for                                                               
folks who had bought tickets in Auke Bay.                                                                                       
2:26:13 PM                                                                                                                    
MR. MCLAREN shared  a list of each ship in  the current fleet and                                                               
year built.   He shared "legacy vessels" that  were headed toward                                                               
retirement:   MV Malaspina    proposed sale as soon  as possible,                                                               
MV LeConte   proposed sale 2022,  MV Aurora   proposed sale 2022,                                                               
MV Matanuska    proposed sale 2023, MV Tustumena    proposed sale                                                               
2025,  and  MV  Columbia  -   proposed  sale  2028.    He  shared                                                               
projections  for a  2029  fleet  if things  ran  smoothly:   TRV,                                                               
estimated 2025,  mainliner replacement  vessel    estimated 2028,                                                               
Kennicott, Lituya, Hubbard and Tazlina.                                                                                         
2:28:55 PM                                                                                                                    
REPRESENTATIVE ORTIZ asked  if it was correct that  having a more                                                               
flexible and  usable fleet  also spoke to  the benefit  of adding                                                               
crew quarters to the Tazlina and Hubbard.                                                                                       
MR. MCLAREN replied that was correct.                                                                                           
REPRESENTATIVE ORTIZ asked  for a quick summary of  what it meant                                                               
to  make  a   vessel  SOLAS  and  what  it  meant   in  terms  of                                                               
MR.  MCLAREN replied  for the  TRV  $275m was  estimated for  the                                                               
current size SOLAS  (Safety of Life at Sea),  $235m non-SOLAS. It                                                               
was  an International  standard for  ship evacuation,  needed for                                                               
Prince Rupert Sound.                                                                                                            
REPRESENTATIVE  ORTIZ  asked  if   there  were  added  costs  for                                                               
upkeep/maintenance costs regarding SOLAS or non-SOLAS.                                                                          
MR. MCLAREN replied yes, SOLAS  vessels ran about $300K more than                                                               
normal COI requirements.                                                                                                        
2:32:17 PM                                                                                                                    
REPRESENTATIVE MCCABE clarified  Tazlina, and Hubbard retrofitted                                                               
for crew  quarters could  only operate  in Southeast,  not cross-                                                               
MR.  MCLAREN replied  they would  also be  able to  go in  Prince                                                               
William  Sound (PWS)  but not  in the  open ocean;  only TRV  and                                                               
2:33:13 PM                                                                                                                    
REPRESENTATIVE HANNAN asked if Yakutat-PWS would need SOLAS.                                                                    
MR. MCLAREN  replied it would  depend on  the design of  the hull                                                               
and whether that could handle the open ocean.                                                                                   
REPRESENTATIVE  HANNAN  asked  whether  the TRV  would  be  Gulf-                                                               
MR. MCLAREN replied yes.                                                                                                        
2:34:32 PM                                                                                                                    
REPRESENTATIVE  DRUMMOND asked  what mainliner  replacements were                                                               
capable of  and whether it  was cross-Gulf capable, and  which of                                                               
the fleet were mainliners.                                                                                                      
MR. MCLAREN replied the mainliner  replacement vessel could still                                                               
be designed as  to what was needed,  and it was not  needed to be                                                               
cross-Gulf but could be made SOLAS if  need be.  It would be made                                                               
to replace the Colombia or the Matanuska, he added.                                                                             
2:35:43 PM                                                                                                                    
REPRESENTATIVE MCCABE  clarified cross  Gulf also  included Dutch                                                               
MR. MCLAREN  replied cross-Gulf  referred to  the Juneau-Yakutat-                                                               
Whittier run; Homer-Kodiak  and out the chain  was not considered                                                               
cross-Gulf, he  stated, but was  just called the  Southwest Chain                                                               
2:36:33 PM                                                                                                                    
MR. CARPENTER showed slide 15  on revenue generated for the AMHS;                                                               
state  funding   received;  and  the  fare   box  recovery  rate,                                                               
projected to 2029.   He said the graph notional  budget goals and                                                               
a budget reduction, showed in  FY 22, $100m-plus budget with $50m                                                               
revenue, $50m state funding, "45%-ish"  fare box recovery; intent                                                               
would be, with  the modernized fleet, in theory  the budget could                                                               
2:38:29 PM                                                                                                                    
REPRESENTATIVE  MCCABE asked  if  Allen Marine  and Goldbelt  had                                                               
been put into  the mix to see  what the recovery would  be, or if                                                               
the chart was only for AMHS ferries.                                                                                            
MR.  CARPENTER replied  the  chart  was just  AMHS  and fare  box                                                               
recovery, but  the new  board would attempt  to improve  the AMHS                                                               
yet again.                                                                                                                      
2:39:39 PM                                                                                                                    
REPRESENTATIVE  HANNAN asked  about  the fare  box recovery  rate                                                               
from the Ketchikan-Hollis  route and how much had  been made with                                                               
that route excluded.                                                                                                            
MR. MCLAREN said he would follow up with numbers.                                                                               
2:42:29 PM                                                                                                                    
MR. MCLAREN went  over slide 16 on vessel  capital costs, showing                                                               
the  current  fleet  costs  over  the  past  ten  years  and  the                                                               
projected  costs for  the next  ten years.   The  annual overhaul                                                               
cost to  keep vessels in operation  was $16.6m, he shared.   Over                                                               
the last  10 years $400m  has been  spent, he shared.   Projected                                                               
capital  to  be  spent  to keep  current  fleet  operational  was                                                               
2:45:19 PM                                                                                                                    
REPRESENTATIVE  HANNAN asked  about  the  difference between  the                                                               
cost of capital expenses between  Tazlina and Hubbard because the                                                               
same side-door improvements had been done on both.                                                                              
MR. MCLAREN  replied neither included  the side doors;  both were                                                               
included in the projected capital spent.                                                                                        
2:47:23 PM                                                                                                                    
CHAIR  HOPKINS asked  if the  projected capital  would drop  from                                                               
$110m to  a more  nominal expenditure  once the  Tustumena became                                                               
the TRV.                                                                                                                        
MR. MCLAREN replied yes.                                                                                                        
2:47:52 PM                                                                                                                    
REPRESENTATIVE ORTIZ  asked what accounted for  $215K and Hubbard                                                               
MR.  MCLAREN  replied the  COI  had  not  yet  been done  on  the                                                               
2:48:32 PM                                                                                                                    
MR.  CARPENTER  showed,  on  a total  net  present  value  basis,                                                               
cumulative costs of continuing with  the current fleet investment                                                               
on both  the current fleet,  represented by  the red line  on the                                                               
graph, and the sample plan, represented  by the green line on the                                                               
graph.   Cash  flow  in  the sample  plan,  while  higher in  the                                                               
earlier  years, over  a certain  period would  drop significantly                                                               
once the investment had been made.                                                                                              
CHAIR HOPKINS asked if the cost  of keeping ships docked had been                                                               
MR. MCLAREN replied a little bit was built in, but it was not in                                                                
the plan for them to be stored for years and incur great costs.                                                                 
2:51:18 PM                                                                                                                    
REPRESENTATIVE MCCABE asked if any Federal CARES Act money was                                                                  
going toward the AMHS.                                                                                                          
MR. CARPENTER replied he had heard there was a certain amount,                                                                  
but that it wasn't expected to make a big impact.                                                                               
2:53:43 PM                                                                                                                    
There being no further business before the committee, the House                                                                 
Transportation Standing Committee meeting was adjourned at 2:53                                                                 

Document Name Date/Time Subjects
HJR 13 - Letter of Support Southeast Conference 3.20.2021.pdf HTRA 3/20/2021 12:30:00 PM
HJR 13
HJR 13 Sponsor Statement 03.20.2021.pdf HTRA 3/20/2021 12:30:00 PM
HJR 13
HJR 13 - Letter of Support Alaska Policy Forum 3.20.2021.pdf HTRA 3/20/2021 12:30:00 PM
HJR 13
HJR 13 - Letter of Support Southeast Conference 3.20.2021.pdf HTRA 3/20/2021 12:30:00 PM
HJR 13
HJR 13 Letter of Support Kodiak Chamber 3.20.2021.pdf HTRA 3/20/2021 12:30:00 PM
HJR 13
HJR 13 Letter of Support ATIA 3.20.2021.pdf HTRA 3/20/2021 12:30:00 PM
HJR 13
HJR13 AML Letter of Support 3.20.2021.pdf HTRA 3/20/2021 12:30:00 PM
HJR 13
2021-03-24 - DOTPF Follow Up from 3-20-2021 meeting re AMHS.pdf HTRA 3/20/2021 12:30:00 PM
AMHS Presentation Q&A Response