Legislature(2009 - 2010)CAPITOL 17
02/09/2010 01:00 PM House TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| HJR42 | |
| HB329 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HJR 42 | TELECONFERENCED | |
| *+ | HB 329 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE TRANSPORTATION STANDING COMMITTEE
February 9, 2010
1:06 p.m.
MEMBERS PRESENT
Representative Peggy Wilson, Chair
Representative Craig Johnson, Vice Chair
Representative Kyle Johansen
Representative Cathy Engstrom Munoz
Representative Tammie Wilson
Representative Max Gruenberg
Representative Pete Petersen
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE JOINT RESOLUTION NO. 42
Proposing amendments to the Constitution of the State of Alaska
creating a transportation infrastructure fund.
- MOVED HJR 42 OUT OF COMMITTEE
HOUSE BILL NO. 329
"An Act relating to the transportation infrastructure fund, to
local public transportation, to motor fuel taxes, and to the
motor vehicle registration fee; and providing for an effective
date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HJR 42
SHORT TITLE: CONST. AM: TRANSPORTATION FUND
SPONSOR(s): TRANSPORTATION
02/05/10 (H) READ THE FIRST TIME - REFERRALS
02/05/10 (H) TRA, JUD, FIN
02/09/10 (H) TRA AT 1:00 PM CAPITOL 17
BILL: HB 329
SHORT TITLE: DEDICATED TRANSPORT FUND/PUB TRANSPORT
SPONSOR(s): TRANSPORTATION
02/05/10 (H) READ THE FIRST TIME - REFERRALS
02/05/10 (H) TRA, FIN
02/09/10 (H) TRA AT 1:00 PM CAPITOL 17
WITNESS REGISTER
REBECCA ROONEY, Staff
Representative Peggy Wilson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HJR 42, on behalf of the prime
sponsor, Representative Peggy Wilson.
BRIAN KANE, Attorney
Legislative Legal Counsel
Legislative Legal and Research Services
Legislative Affairs Agency
Juneau, Alaska
POSITION STATEMENT: Answered questions during the discussion of
HJR 42.
BRIAN HORSCHEL
Associated General Contractors (AGC);
Acme Fence Company
Anchorage, Alaska
POSITION STATEMENT: Testified during the discussion on HJR 42.
KEVIN WELKER, Alaska Manager
Key Corporation;
Executive Board Member, Associated General Contractors (AGC)
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HJR 42.
JOHN MCKINNON, Executive Director
Associated General Contractors (AGC)
Anchorage, Alaska
POSITION STATEMENT: Testified during the discussion of HJR 42
and HB 329.
JEFF OTTESEN, Director
Division of Program Development
Department of Transportation & Public Facilities (DOT&PF)
Juneau, Alaska
POSITION STATEMENT: Testified and answered questions during the
discussion of the Federal Stimulus Package.
FRANK RICHARDS, Deputy Commissioner
Office of the Commissioner
Department of Transportation & Public Facilities (DOT&PF)
Juneau, Alaska
POSITION STATEMENT: Testified and answered questions during the
discussion of HJR 42.
REBECCA ROONEY, Staff
Representative Peggy Wilson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 329 on behalf of the prime
sponsor, Representative Peggy Wilson.
LOIS EPSTEIN, Professional Engineer; Director
Alaska Transportation Priority Project (ATPP)
Anchorage, Alaska
POSITION STATEMENT: Testified during the discussion of HB 329.
KATHIE WASSERMAN, Executive Director
Alaska Municipal League (AML)
Juneau, Alaska
POSITION STATEMENT: Testified and answered questions during the
discussion of HB 329.
ACTION NARRATIVE
1:06:31 PM
CHAIR PEGGY WILSON called the House Transportation Standing
Committee meeting to order at 1:06 p.m.
Representatives Petersen, T. Wilson, Johnson, Munoz, Gruenberg,
and P. Wilson were present at the call to order. Representative
Johansen arrived as the meeting was in progress.
HJR 42-CONST. AM: TRANSPORTATION FUND
1:07:12 PM
CHAIR P. WILSON announced that the first order of business would
be HOUSE JOINT RESOLUTION NO. 42, Proposing amendments to the
Constitution of the State of Alaska creating a transportation
infrastructure fund.
1:08:12 PM
REBECCA ROONEY, Staff, Representative Peggy Wilson, Alaska State
Legislature, on behalf of the sponsor, Representative Peggy
Wilson, stated that HJR 42 would propose an amendment to
Alaska's constitution to create a transportation infrastructure
fund. This resolution would place before the voters whether to
change the Alaska Constitution to allow a dedicated fund for
capital transportation projects.
MS. ROONEY explained that last session and through the interim,
the committee has had many presentations from DOT&PF and other
organizations identifying challenges of transportation in our
geographically challenged and diverse state. The committee held
hearings throughout the state, including flying to villages to
view rural airports, which provide the basic transportation into
and out of the communities. The committee traveled on the urban
highways to view the challenges on Alaska's highways, including
safety, congestion, and deferred maintenance. The committee
heard testimony from the Alaska Municipal League (AML) and the
Matanuska-Susitna Borough, who teamed together to contract an
independent study on the fiscal challenges of transportation in
Alaska. The National Conference of State Legislatures (NCSL)
provided information on what other states are doing to address
transportation needs, and Larry Persily, staff, Representative
Hawker, compiled funding options to address the fiscal
shortfalls of Alaska's transportation needs. This resolution is
the culmination of all of the work performed by the DOT&PF, the
committee, and research. Alaska needs to shoulder some of the
responsibility for its transportation costs. Last year, the
state received 87 percent of its transportation funding from the
federal government, more than any other state, per capita. The
new pending federal reauthorization bill for transportation
points to less funding for states with low populations, like
Alaska. State-funded projects can be performed more quickly as
they do not have the same constraints and stringent requirements
that the federal government imposes. Thus, more state projects
could be built if the state had access to a transportation fund.
MS. ROONEY stated that the time is right to put this in place to
plan a smart, long-range solution to our transportation
problems. Alaska will know the level of funds available from
year-to-year to provide for a long-term plan that can be
implemented. The proposed Alaska Transportation Infrastructure
Fund (ATIF) will grow as the investment returns compound.
Additionally, the motor fuel tax and the vehicle registration
fees will generate funds. The ATIF could generate an
anticipated $65 million the first year, which would increase by
approximately $6 to $7 million per year.
1:11:30 PM
MS. ROONEY referred to a colored graph in the committee packets
detailing the funding that would be available for appropriation
each year. One of the reasons that the constitutional drafters
gave for disallowing dedicated funds was to avoid losing the
ability to respond to public need. An excerpt in members' green
packets contains an excerpt from Governor Hickel's State of the
State address in the early 1990s, relating to a dedicated
transportation fund. She read:
This is not as radical a proposal as it might sound.
Over half the states already have the same type of
financing arrangement. In fact, Alaska's founding
fathers supported this exact mechanism and provided
for it at statehood. With a dedicated fund Alaskans
will receive more stable service levels. And if new
revenues are needed to preserve or improve service,
Alaskans will be assured that any new fee will go
directly to their transportation system.
MS. ROONEY remarked that Governor Hickel's comments are as
relevant now as they were nearly 20 years ago. The state needs
to take action now as the future and well-being of Alaska's
citizens is critically dependent upon a reliable transportation
system. The change to Alaska's constitution proposed in HJR 42,
which allows for a dedicated transportation fund, is needed to
create and maintain a modern and reliable transportation system
for Alaska.
1:13:44 PM
REPRESENTATIVE GRUENBERG referred to the term "special
registration fee" and asked whether it was a term of art.
BRIAN KANE, Attorney, Legislative Legal Counsel, Legislative
Legal and Research Services, Legislative Affairs Agency,
identified two subsections in the vehicle registration fee
section identify certain license plates special fees that are
accounted for separately. The special registration fees
collected in those subsections would still be accounted for
separately, while the generic fee would be deposited in the
dedicated transportation fund.
1:15:29 PM
CHAIR P. WILSON recalled her prior discussions with legal
counsel, identifying one of the special plates as the veterans'
license plates. She further recalled that she did not want to
change the way those fees were handled, or interfere with the
special designation in any way. She understood that the
standard vehicle registration fees would be directed to the
dedicated transportation fund.
MR. KANE agreed. He related that the specific military plate
fee accounting structure and purpose would still be in place.
1:16:03 PM
REPRESENTATIVE GRUENBERG asked for the amount of the fees.
MR. KANE referred to AS 28.10.421 (d) and (f). He explained
that those subsections would be exempted from the proposed
dedicated transportation fund. He explained that the subsection
relates to fees for vehicles, including vehicles whose primary
purpose is for historical exhibition, Alaska National Guard
personnel, Iditarod, recipients of the purple heart, Iditarod
race finishers, and other similar categories. Typically, these
funds are deposited to a special account to support a certain
goal or purpose.
1:17:49 PM
CHAIR P. WILSON asked for clarification that these groups would
be exempted under the resolution.
MR. KANE answered yes.
1:18:12 PM
REPRESENTATIVE GRUENBERG referred to page 1, line 14 of HJR 42,
which identifies the revenue source as any state tax on fuel.
He asked whether the tire tax is exempted from the resolution.
MR. KANE responded that it is not explicitly exempted. He
explained that the taxes identified are taxes on fuel used for
the propulsion of motor vehicles, so fuel is limited to fuel
used for motor vehicles. He said he does not believe the tax on
tires is involved.
REPRESENTATIVE GRUENBERG wondered whether it was the intent of
the sponsor to exclude taxes on tires or if the sponsor wanted
to include other taxes.
CHAIR P. WILSON answered that it was her intent to limit the
revenue to the state tax on fuel as identified in HJR 42.
1:19:41 PM
MS. ROONEY, in response to Representative Munoz, answered that
she does not have the specific figure for the 87 percent of the
state's transportation budget funded by the Federal Highway
Administration (FHWA).
REPRESENTATIVE MUNOZ asked for examples of other states that
have implemented dedicated transportation funds, and the ratio
of state to federal funding.
CHAIR P. WILSON related that Alaska receives more federal
funding than any other state. The Alaska delegation has advised
legislators that other states are upset since Alaska does not
pay in as much as it receives in transportation funding. Under
the new federal transportation reauthorization bill under
consideration, as currently crafted, states with lower
populations will not fare as well as more densely populated
states. She affirmed the state's need to plan and take action
to assure the state's transportation needs can be met. This
resolution will help with this process.
1:22:13 PM
REPRESENTATIVE MUNOZ said she thought this resolution is a great
direction to take. She expressed interest in knowing how other
states are leveraging their state support with federal support
to better assess the anticipated return and whether the fund
will meet the transportation needs.
MS. ROONEY offered to provide some information from the National
Conference of State Legislatures on other states.
1:22:54 PM
REPRESENTATIVE JOHNSON remarked that this resolution is a great
start. The state could put tons of money in the proposed
dedicated transportation fund and it would still not be enough.
He said that the legislature needs to start somewhere and that
is the reason that he is supportive of this resolution.
CHAIR P. WILSON commented that that most of the states with
dedicated transportation fund have taxes as revenue sources for
the fund. Additionally, almost all other states have
implemented a state sales tax or state income tax, or both.
1:23:36 PM
BRIAN HORSCHEL, Member, Associated General Contractors (AGC);
and Acme Fence Company, stated he has been interested in a
dedicated transportation fund for over five years. He recalled
advertising that depicted potholes. The Lower 48 roads are
better roads and he is willing to pay for transportation that
provides a safer experience for his family. He applauded the
committee's efforts to create the dedicated transportation fund.
He stated that AGC is behind this resolution and he is also.
MR. HORSCHEL, in response to Representative Johnson, stated that
he is speaking on behalf of the AGC and that the AGC's official
position is in support of HJR 42.
KEVIN WELKER, Alaska Manager, Key Corporation, stated that his
company works throughout the U.S. He stated that many other
states have a dedicated transportation fund in place and this
approach works well. He stated that a dedicated transportation
fund will provide the opportunity for Alaska to plan projects
for five to ten years out. This will also bridge the gap from
one administration to the next and give Alaska the ability to
direct funding for specific purposes. He stated that when he is
fueling his vehicle he will know that a certain amount of the
motor fuel tax will help fix the roads. He said he was raised
in Alaska and would like to see roads maintained and new ones
built.
1:26:58 PM
JOHN MCKINNON, Executive Director, Associated General
Contractors (AGC), stated that the AGC is in Juneau for its
annual fly-in so many contractors are in town. He stated that a
dedicated transportation fund is long overdue and has been an
AGC priority for years. He acknowledged the transportation
needs in Alaska. This is a good time to start. This dedicated
transportation fund would spin off state dollars for new
construction projects. He recalled the majority of the
transportation projects are federally funded. Speaking from his
prior experience as a Deputy Commissioner of the DOT&PF, he
related that a federally-funded project is more difficult to
build. The rule of thumb is that a federal dollar is worth
about $.75. A state dollar will stretch further and better meet
Alaska's needs than federal funding.
1:28:36 PM
REPRESENTATIVE JOHNSON asked for examples of state-built roads
that demonstrate efficiencies.
MR. MCKINNON recalled the Glenn/Bragaw Interchange in Anchorage.
That project timeframe from the funding appropriation to
contract spanned about 22 months. He speculated that it would
probably have taken at least twice as long to go through the EIS
phase using the federal process. He related that the
environmental permits are still required at the state level but
the National Energy Policy Act (NEPA) process is avoided, which
results in considerable time savings.
MR. MCKINNON stated that the average time to conduct an
Environmental Impact Statement (EIS) takes about 36 months,
which takes the project into the design phase, not the
construction phase.
REPRESENTATIVE JOHNSON recalled that the project was designed
and built in about the same time as it would have taken to
perform an EIS.
1:30:40 PM
JEFF OTTESEN, Director, Division of Program Development,
Department of Transportation & Public Facilities (DOT&PF), in
response to Representative Johnson, answered that the EIS
process takes approximately 5 to 7 years to complete if the
project has any complexity at all. However, he recalled that
nationally it is approaching an average of 12 to 13 years to
complete the process. He recalled that the Cooper Landing
project was initiated in 1975 and is the oldest active EIS in
the country, and the project is still several years away from
construction. He stated that using state funds provides
significant advantages. The Elmore Road Extension Project in
Anchorage provides an example of a project that he was unsure
would have ever been built due to the substantial environmental
considerations.
1:32:05 PM
REPRESENTATIVE T. WILSON asked whether an EIS is required for
all projects in Alaska.
MR. OTTESEN responded that some type of environmental document
must be done if a federal permit is involved, which is typically
the case. However, the EIS is processed through the agency
issuing the permit, which is often issued by the U.S. Corps of
Engineers. Although technically the environmental document is
still considered a federal EIS document, the U.S. Corps of
Engineers process is simpler and faster process. He speculated
that since the FHWA deals with so many highway projects and has
been subject to so much litigation, that the agency is very
protective and wants to insure that it will not lose in court.
1:33:13 PM
REPRESENTATIVE MUNOZ asked for instances in which the project is
already undergoing an EIS process and is under litigation,
whether the state could take a larger role.
MR. OTTESEN surmised which project she might be referring to and
offered to report back. He recalled a project under litigation,
that the permits and right-of-way have been rescinded. He
offered that the state would likely have to start over and none
of the previous work would be valid. He further recalled the
case he was referring to is currently under appeal so it is
technically still active.
1:34:10 PM
REPRESENTATIVE JOHANSEN asked how many projects that are
currently being worked on would qualify as state projects.
MR. OTTESEN answered that typically the decision on whether to
fund a project with state or federal funds is made at the time
of appropriation of the Capital Improvement Budget (CIB). He
said that essentially determines the funding type in the CIB;
and the decision is not as much a department decision as it is a
budgetary decision made through the budget process, including
that the CIB is submitted to the legislature for funding
approval. In further response to Representative Johansen, he
related that the DOT&PF's currently has a list of active
projects by funding type for the CIB.
REPRESENTATIVE JOHANSEN understood him to say that the decision
for funding projects strictly from general fund dollars is made
entirely by the legislature and that the DOT&PF does not make
any internal decisions. He related that he is frustrated by the
perception that the DOT&PF has magical powers after legislative
appropriation that differs from the legislature's decisions on
projects. He asked whether it is the legislature's specific
role to determine which projects that will qualify as general
fund projects instead of using federal funding.
MR. OTTESEN related that some circumstances exist in which a
community might be pursuing a project, but not enough general
fund funding is available to complete the project so the DOT&PF
cannot award the bid. The option is to wait for another budget
cycle, but in those instances, the DOT&PF would use federal
funds to fund the project. The decision would be made by the
DOT&PF design team, within the three regions.
REPRESENTATIVE JOHANSEN asked whether, in fact, some of the
decisions can be made by the DOT&PF to take the project out of
the general fund category.
MR. OTTESEN answered yes. The DOT&PF could make the choice.
However, while the DOT&PF can make the choice, the department
cannot spend federal funds without the legislature's approval.
He related a scenario in 2002 using GO bonds. Many of the
projects were underfunded at the time of the appropriation
request. Thus, a $10 million project may have been budgeted as
a $5 million project, but due to inflation the project becomes a
$20 million project. In that scenario the department can either
attempt to find a way to make up the difference using $15
million in federal funds or let the funds lapse since not enough
funds are available to complete the project. He agreed that the
instance left complicated choices, and the department lost the
flexibility offered when using general funds. He asked if the
reverse could happen, if a federal funded project could be
funded with general fund dollars. He answered no, that the
DOT&PF does not have the ability to do so. In further response
to Representative Johansen, he answered he did not recall the
specific matching funds for this year, but that the general fund
match is typically $40 to $45 million per year for the FHWA, and
other funds are requested for aviation and transit.
CHAIR WILSON offered to have the DOT&PF come before the
committee to provide the detailed process, if needed.
1:41:56 PM
REPRESENTATIVE GRUENBERG related that HJR 42 requires the
dedicated transportation fund to be managed as an endowment. He
asked if he was correct that in order for an endowment to work
that the state would provide funding and use the interest from
the dedicated transportation fund for projects.
MR. OTTESEN advised that he was not involved in drafting the
resolution, but agreed conceptually.
REPRESENTATIVE GRUENBERG surmised the state would initially need
15 to 20 times the annual budget amount of $15 to $20 million
anticipated.
MR. OTTESEN related his understanding on a similar measure under
consideration a few years ago that it was anticipated that on
average the fund would receive an 8 percent return on the
investment, would spend 5 percent and use the remaining 3
percent to inflation-proof the fund.
1:43:24 PM
CHAIR P. WILSON remarked that HJR 42 is limited to placing the
matter on the ballot for voters to decide if they want a
dedicated transportation fund. She stated that a separate bill
would determine sources of revenue for the proposed dedicated
transportation fund and questions concerning that could be
addressed at the time the bill is being considered by the
committee.
1:43:57 PM
REPRESENTATIVE GRUENBERG agreed. He referred to page 2, lines 4
5 of HJR 42, relating to capital projects for transportation and
related facilities. He asked whether that would include rolling
stock, such as buses.
CHAIR P. WILSON related that matter would better be addressed
during the discussion of HB 329.
1:44:46 PM
REPRESENTATIVE GRUENBERG asked whether it would be possible for
the legislature to fund the endowment and then reduce the
transportation funding from the general fund.
MR. OTTESEN responded that the legislature is the appropriating
body and could choose to make decisions about funds outside of
the endowment for the proposed dedicated transportation fund.
CHAIR P. WILSON, after first determining no one else wished to
testify, closed public testimony on HJR 42.
REPRESENTATIVE JOHANSEN stated that HJR 42 would establish a
fund to accomplish a specific goal. He expressed interest in
understanding the rules that would apply for DOT&PF's use of the
proposed dedicated fund. He said that he supports the concept
of the dedicated transportation fund, but at the same time he
wants the legislature retains the decision-making authority for
projects.
REPRESENTATIVE JOHNSON inquired as to whether DOT&PF has taken a
position on HJR 42 and the concept of a dedicated transportation
fund.
FRANK RICHARDS, Deputy Commissioner, Office of the Commissioner,
Department of Transportation & Public Facilities (DOT&PF)
responded that the DOT&PF supports the concept of a
transportation fund, but does not have an opinion on the funding
mechanism. He acknowledged that the state has many
transportation needs across the modes and would appreciate and
support the funds to address the needs.
1:49:16 PM
REPRESENTATIVE JOHNSON moved to report HJR 42 out of committee
with individual recommendations and the accompanying fiscal
notes.
REPRESENTATIVE GRUENBERG objected for the purposed of making a
statement.
REPRESENTATIVE GRUENBERG asked whether the DOT&PF supports a
constitutional amendment for dedicated transportation fund. He
remarked that he is aware of only two exceptions, the Permanent
Fund and the Constitutional Budget Reserve Fund. Otherwise, the
legislature has not adopted a dedicated fund. He related that
Mr. Richards will be speaking on behalf of the DOT&PF and
administration, noting that this will set precedent to authorize
other dedicated funds in the state's constitution. He clarified
his query, asking whether the DOT&PF supports the proposed
dedicated transportation fund rather placing it in statute.
1:50:10 PM
MR. RICHARDS answered that the concept of whether to create a
dedicated fund is in the purview of the voters of the state.
REPRESENTATIVE GRUENBERG understood that to mean that the
administration does not have a position.
MR. RICHARDS agreed. He stated that the DOT&PF and the
administration would wait for the outcome of the resolution to
create a dedicated transportation fund, as to whether it will be
approved by the legislature and the general public vote.
1:50:49 PM
REPRESENTATIVE GRUENBERG said that he supports the concept of a
dedicated transportation fund, but has grave problems with
dedicating a transportation fund in the constitution. He
remarked that he has not supported dedicated funds in the
constitution in the past since it will open the door for other
dedicated funds. The constitutional convention provided a
specific provision that there shall be no dedicated funds unless
established by a constitutional amendment. He said he does not
want his position misinterpreted. He stated that the concept of
prohibiting dedicated funds was good enough for the
constitutional framers. He remarked that he was interested
whether the administration had taken a position on that issue.
REPRESENTATIVE PETERSEN agreed that this would set a precedent.
He agreed that the constitutional framers did not want dedicated
funds, which has worked well so far. However, he thinks the
people of Alaska should be allowed to express their opinion on
this. Thus, he offered his support for HJR 42.
1:53:02 PM
REPRESENTATIVE T. WILSON asked for any other reliable mechanisms
to obtain transportation funding.
MR. RICHARDS clarified that if she was asking for revenue
streams specifically for capital investments used by other
states that a variety of means exists, ranging from special tax,
motor fuel tax, and bonding capacities. He related that most
other states have specific responsibilities for highway systems.
In Alaska, the state has the ability to spend the federal
dollars on all road systems. The National Conference of State
Legislatures provided a range of funding options for states to
consider.
1:54:20 PM
CHAIR P. WILSON remarked that during the interim the committee
spent a full day discussed transportation funding options.
1:54:40 PM
MR. RICHARDS, in response to Representative T. Wilson, related
that the current federal transportation reauthorization bill
that has passed out the U.S. House of Representatives
Infrastructure Committee does not provide a rosy future for
Alaska since it favors high density urban areas with populations
over 500,000. Over 20 percent of the funding would be
prohibited from coming to Alaska since it does not have
population centers over 500,000. Funding for other major modes,
including high-speed rail, freight rail, or intercity transit
reduces the amount of funding for highways from the motor fuel
taxes.
1:55:40 PM
REPRESENTATIVE T. WILSON explained that Fairbanks was not
eligible for the federal stimulus funding, since it was one of
the communities disallowed by federal rules. She thanked the
sponsor for bringing this issue forward. She characterized this
resolution as a step in right direction.
REPRESENTATIVE JOHANSEN remarked that Fairbanks joined the rest
of the state in having to compete for transportation dollars.
1:56:27 PM
REPRESENTATIVE JOHNSON moved to report HJR42 out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, HJR 42 was reported from the
House Transportation Standing Committee.
CHAIR P. WILSON stated that she was very proud of the committee
for its work on this issue.
1:57:47 PM
HB 329-DEDICATED TRANSPORT FUND/PUB TRANSPORT
CHAIR P. WILSON announced that the final order of business would
be HOUSE BILL NO. 329, "An Act relating to the transportation
infrastructure fund, to local public transportation, to motor
fuel taxes, and to the motor vehicle registration fee; and
providing for an effective date."
REBECCA ROONEY, Staff, Representative Peggy Wilson, Alaska State
Legislature, stated that she would not discuss reasons for the
dedicated transportation fund since she previously outlined
them. She offered to provide a section-by-section analysis, on
behalf of the prime sponsor of HB 329, Representative Peggy
Wilson. She stated that HB 329 would define the Alaska
Transportation Infrastructure Fund (ATIF), including management
of the fund and expenditures from the fund. Section 1 would
provide legislative intent to appropriate $1 billion in seed
money. She referred to two graphs in members' packets that
depict what the proposed Dedicated Transportation Fund would
look like over time. The first graph shows the potential growth
for the fund with a $1 billion appropriation, the second graph
also includes anticipated revenue from the state's motor fuel
tax.
MS. ROONEY stated that Section 2 would amend AS 28.10.421 (g),
and would deposit motor fuel fees collected by the department
into the proposed dedicated transportation fund, the Alaska
Transportation Infrastructure Fund (ATIF). Fees from the
special license plates, as previously discussed, would continue
to be deposited to the general fund. Three percent of the fees
destined for the ATIF will be deposited to the general fund for
administration of the Alaska Mandatory Insurance Act. The goal
of this section is not to divert funding from programs currently
funded by vehicle registration fees. Under Section 3, the
Watercraft Fuel Tax Account reference was removed since this tax
is being used to help fund the proposed ATIF. However, a
mechanism that makes appropriations to the Municipal Harbor
Grant Fund still exists, but the legislature may also
appropriate money to the fund from the fisheries business tax.
The ATIF can appropriate 8 percent of the ATIF to the Municipal
Harbor Grant Fund, which is detailed in a provision contained in
Section 4.
2:01:01 PM
MS. ROONEY stated that Section 4 would provide technical
corrections to the statutes. Section 5 details the description
of the proposed ATIF, which will consist of appropriations made
to the fund. Secondly, any revenue derived from the motor fuel
tax after April 1, 2011, and from vehicle registration fees
collected after April 1, 2011 will be deposited to the fund.
The Alaska Department of Revenue (DOR) will manage the fund as
an endowment, and will invest funds to yield at least a 6
percent return on investment over time. Funds remaining in the
account at the end of the fiscal year will remain in the ATIF.
The DOR will report on the health of the fund and the amount
available for appropriation, which is 6 percent of the average
of the percentage of market value over the previous five years.
The appropriation will be used for capital projects for
transportation. Appropriations will not be made for federal
match unless the total match does not exceed 10 percent of the
amount available for appropriation. This provision was inserted
to help insure that the funds would not be used for projects
using the arduous federal construction processes. The goal is
to fund projects using state guidelines, which are faster and
less costly to construct.
2:02:25 PM
MS. ROONEY outlined the guidance for appropriations from the
fund detailed in Section 4, including that 60 percent of the
appropriations from the fund are designated for highway
projects, 13 percent for aviation projects, 12 percent for the
Alaska Marine Highway System (AMHS), as previously mentioned 8
percent can be appropriated for harbor facilities and state-
owned marine facilities, 5 percent for transit, and 2 percent
for projects related to roads and trails.
MS. ROONEY explained that a Transportation Infrastructure Fund
Advisory Council (TIFAC) is established and consists of 8
members: the chairs of the House and Senate Transportation
Committee; one legislator appointed by the House Transportation
Committee; one legislator appointed by the Senate Transportation
Committee, the Commissioner of DOT&PF, and three regional
directors of the DOT&PF. Of the legislators appointed to the
TIFAC, two legislators must represent a rural area, and two must
represent an urban area. The DOT&PF will develop criteria and
report its recommendations to the legislature by December 31 of
each year listing transportation projects that should be funded
by the ATIF.
2:04:05 PM
MS. ROONEY explained that Section 6 refunds 60 percent of the
aviation fuel back to municipalities owning and operating an
airport in proportion to the revenue collected at the airport.
All other proceeds collected on aviation fuel will be deposited
to the ATIF. Section 7 would provide that all motor fuel tax
receipts shall be paid into the ATIF. Section 8 would remove
the exception in AS 43.40.010 (j) since it is repealed in
Section 12 of the bill. Section 9 refers to motor fuel refund
checks, which will be made from the ATIF instead of the highway
fuel tax account. Section 10 amends the list of DOT&PF
responsibilities, including that the department will promote and
support methods or modes of local public transportation and
transit, and develop criteria to determine eligibility of
projects for use by the advisory committee. Section 11 removes
a reference to a deleted statute, and Section 12 is a technical
amendment to repeal the Watercraft Fuel Tax Account, the Special
Highway Fuel Tax Account and the Non-Public Highway Use Account
since those accounts would not be necessary as the fuel taxes
will be deposited to the ATIF.
MS. ROONEY stated that Section 13 would establish the transition
language for calculating the amount of the ATIF values. During
the first five years since the DOR will not have a five-year
average to use for its calculations, the transition calculation
will be to use five percent of the POMV in the first year, as of
July 1, 2011. Subsequently, the appropriation will be five
percent of the average market value of the ATIF fund as of each
year through June 30, 2015. The DOR will file a report on
October 1 of each of the first five years to provide the funds
available for appropriation. Section 14 would provide a
contingency, that the change to Alaska's constitution must be
approved by the voters before April 1, 2011 before this bill can
take effect. Section 15 would direct the DOT&PF to initiate its
work to develop the criteria for prioritization of proposed
DOT&PF projects. Section 16 would direct the motor fuel taxes
into the ATIP commencing April 1, 2011.
2:06:39 PM
REPRESENTATIVE PETERSEN referred to Section 5 and to revenues
received after April 1, 2011. He asked whether July 1 would be
a better date to use.
MS. ROONEY offered that the end of the first quarter date was
selected to allow the DOR to work out any issues before the end
of the fiscal year.
REPRESENTATIVE PETERSEN asked whether this would create any
problems to budget three-fourths of a year of revenue since the
DOR would likely need to make adjustments.
2:07:47 PM
REPRESENTATIVE PETERSEN, in response to Representative Johansen,
provided the reference as page 2, line 22 of HB 329.
CHAIR P. WILSON related that she would research the matter with
DOR.
REPRESENTATIVE JOHANSEN asked for the effective date of the
bill.
CHAIR P. WILSON related that HB 329 is contingent upon HJR42
passing, and the ballot proposition requiring a vote of the
people for passage so she was unsure of the effective date.
2:09:29 PM
REPRESENTATIVE GRUENBERG related that he has held a long
standing interest in the legal aspects of a cruise ship head
tax, which is currently under litigation. He related a line of
cases of constitutional issues help define what the cruise ship
head tax can be used to fund. He said the funds can be used for
projects directly related to cruise ships. He suggested that
funding can be spent on piers, or dredging harbors, but probably
not for projects in Interior Alaska. He suggested that since
this bill considers transportation funding, that the committee
might also consider the head tax itself, including specific
permissible uses of the taxes in HB 329 that could help bolster
it against future challenges. He offered that it would not need
to amend the constitution but could provide a dedicated fund
that is allowable under federal law. This approach would not
require a constitutional amendment, but could provide a
perpetual source of constitutionally permissible projects in the
coastal communities. He envisioned such a fund could also be
used by future coastal communities for projects as the Northwest
Passage opens up, noting that coastal communities would also
include the Aleutians and Anchorage.
2:11:50 PM
REPRESENTATIVE JOHNSON offered that funds need to be used for
tourist-related activities. He said, "I think we're way down a
rabbit hole on that one."
REPRESENTATIVE GRUENBERG understood. However, he said he
thought the proposed dedicated transportation fund could be
sequestered until that happens. By that time the state would
have time to build up a real endowment, he surmised.
REPRESENTATIVE JOHNSON remarked that would assume that members
support the imposition of a head tax in the first place.
2:12:45 PM
REPRESENTATIVE MUNOZ referred to page 4, lines 12 - 28, to the
composition of the Transportation Infrastructure Advisory
Council. She asked whether it would be better to use the
current team of DOT&PF members to determine which projects to
fund to avoid political decisions.
MR. RICHARDS related that the composition of the proposed board
closely mirrors the DOT&PF's internal team. He also mentioned
that the ATIFAC would develop the criteria and the projects
would be ranked in a consistent and fair manner.
2:14:33 PM
MR. RICHARDS, in response to Representative Munoz, responded
that legislators do not serve on the current DOT&PF criteria
team, just DOT&PF employees. He listed the group, including
regional directors.
CHAIR P. WILSON stated that legislators were added to assist the
perception of neutrality and to shift away from the sense that
the DOT&PF makes the decisions to one that is more evenly
balanced.
2:15:39 PM
REPRESENTATIVE MUNOZ expressed concern to politicize in the
decision-making process for projects.
2:15:58 PM
REPRESENTATIVE GRUENBERG asked for the reason that the ATIFAC
does not include a public member or industry to bring the
consumer perspective.
CHAIR P. WILSON agreed. She stated it is similar to the State
Transportation Improvement Plan (STIP) process.
REPRESENTATIVE GRUENBERG asked for the department's position on
the ATIFAC composition.
MR. RICHARDS related his initial reaction would be that the
legislator represents the public. The criteria will be set and
the scoring will determine which projects will be selected, and
the projects will be approved by the legislature for
appropriation. He related this ad hoc council could be large
and unwieldy to obtain transparency. He mentioned that the
current DOT&PF's structure is open and in fact, Chair Wilson
attended the scoring process last spring. He remarked that the
DOT&PF provides the technical expertise and the legislative
branch can provide the public process.
2:17:59 PM
MR. RICHARDS, in response to Representative Gruenberg, stated
that he was not certain if the DOT&PF's meetings are subject to
the Open Meetings Act. However, the DOT&PF does public notice
their processes. He deferred to the Department of Law for a
more definitive answer.
2:18:19 PM
MR. KANE, in response to Representative Gruenberg, answered that
he was not certain if the ATIFAC would be subject to the Open
Meetings Act. He offered to research and report back to the
committee.
CHAIR P. WILSON asked Mr. Kane to provide the committee with the
results.
2:19:11 PM
REPRESENTATIVE JOHANSEN asked whether the current DOT&PF's
Project Evaluation Board (PEB) process is in Open Meetings Act.
MR. RICHARDS deferred to the Department of Law.
REPRESENTATIVE JOHANSEN asked if Mr. Kane could also report on
whether the current PEB process falls under the Open Meetings
Act.
2:19:58 PM
REPRESENTATIVE JOHANSEN asked about the current PEB board and
whether the AMHS has been part of the process.
MR. RICHARDS explained that the AMHS projects are funded
primarily from the FHWA funds, which would fall under the
purview of the DOT&PF Commissioner. The needs of the AMHS are
met through planning and are driven by the U.S. Coast Guard
regulations. Thus, the DOT&PF has statutory or regulatory
requirements that it must meet.
2:21:26 PM
REPRESENTATIVE JOHANSEN referred to page 4, line 25 of HB 329,
and asked whether urban and rural terms are defined.
MS. ROONEY answered that the terms are not specifically defined,
but surmised the bill drafters used standard definitions.
2:22:33 PM
REPRESENTATIVE GRUENBERG asked for time to ask questions at the
next meeting.
CHAIR P. WILSON agreed.
2:23:11 PM
REPRESENTATIVE T. WILSON asked for the scoring process that
DOT&PF uses in determining projects.
CHAIR WILSON offered to provide the information.
2:23:25 PM
REPRESENTATIVE JOHANSEN referred to page 5, line 20, of HB 329,
and explained his understanding that an endowment would be
created and would be managed by the Department of Revenue (DOR).
He asked whether the fund will be structured to allow enough
liquidity to refund claims. He recalled that funds are often
invested and not available for use.
MS. ROONEY related that the bill addresses that since the DOR
must manage the fund with the knowledge it must pay out 6
percent of the percentage of market value (POMV). She explained
that she has not held a specific conversation, but will do so.
2:25:20 PM
CHAIR WILSON stated that she would leave the public testimony
open on HB 329 to allow for further public comments.
2:25:28 PM
REPRESENTATIVE GRUENBERG referred to page 2, lines 22 - 26,
which read, "..."from any state tax on fuel used for the
propulsion of motor vehicles, aircraft, and watercraft..." would
be deposited to the fund, as well as registration fees. He
asked whether any taxes relating to transportation would be
excluded by the previously mentioned phrases.
2:26:31 PM
CHAIR P. WILSON commented that the goal is to use state funds,
although some funds may be used on federal projects. She stated
that she did not want to deplete the general funds since the
DOT&PF will still want to fund some projects outside of the
dedicated transportation fund.
MR. RICHARDS, in response to Representative Gruenberg, stated
that the DOT&PF would like to review the various funds and will
work with the DOR to provide a response.
CHAIR P. WILSON projected that revenues for the vehicle
registration fees would generate about $40 million, and the
Motor Fuel Tax would raise about $40 million annually. Thus,
the ATIF would receive $80 million each year. She suggested
taking a cautious approach since it is important not to supplant
federal funding.
2:28:20 PM
REPRESENTATIVE GRUENBERG referred to page 1, line 8, of HB 329,
and read, "on establishment of the fund." He asked whether this
sum would be a lump sum from the general fund or if a ceiling of
$80 million per year would fund the dedicated transportation
fund.
CHAIR P. WILSON related that $1 billion in seed money will be
included in an appropriation bill as the mechanism to fund the
endowment.
REPRESENTATIVE GRUENBERG asked whether the seed money was in
addition to the $80 million from taxes.
CHAIR P. WILSON answered yes. In further response to
Representative Gruenberg, she answered that a provision was not
made for any repayment plan.
2:29:38 PM
JOHN MCKINNON, Executive Director, Associated General
Contractors (AGC), said he spoke previously on encouraging the
use of state funds for construction projects. He remarked that
it does not get any better than this. This proposed ATIF is
multi-modal and while he was unsure about the percentage of
allocation in the bill, he understood the methods used. This
bill will create jobs, but more importantly, will also create
transportation improvements. He reviewed bond issues approved
by voters between 1960 - 1982 and as many as four or five bond
issues, with at least one each year related to transportation
issues, and they all passed. During 1982 - 2002, the state had
ample general funds and did not need bonds. In 2002, GARVEE
bonds and road improvement bonds passed with good solid support
of the voters. In 2008, $315 million transportation bond issue
passed with 63 percent of the vote, without any organized group
advertising its passage. He said that Alaska loves
transportation projects. This bill can do a lot for citizens to
reduce congestion. He recalled an informal calculation done
during his time with the DOT&PF that congestion caused a daily
sum total of $60 million per year.
2:33:16 PM
MR. MCKINNON further recalled the calculation was based on the
cost of people and businesses waiting due to traffic congestion.
The rate used was an hourly rate of $100 per hour for a
commercial truck, and $15 per hour for citizens, but the sum
total added up to $60 million. This can go a long way to
improve the safety improvements. He recalled during a six year
period, from 1996 - 2002, the highway authorization bill that
the federal government required the DOT&PF to spend a certain
amount for non-highway transportation projects like trails.
Thus, the DOT&PF was required to spend $40 million over 6 years.
The politics at the time resulted in over $160 million on those
projects. He stated that the $120 million diverted to those
non-highway projects could have been spent on safety
improvements and lives could have been saved. He stated the
proposed ATIF could be used for safety improvements, new routes
and connectivity, which could result in some spin off. Some
rural villages could be connected to share airports and reduce
the necessity of having to build airports and clinics to serve
small communities. The proposed fund could add ferries, similar
the M/V Lituya which serves Metlakatla. This could help improve
access to transportation and could lower transportation costs.
2:35:35 PM
LOIS EPSTEIN, Professional Engineer; Director, Alaska
Transportation Priority Project (ATPP), stated that the ATTP
works with conservation organizations, transit advocates,
community and governmental leaders, neighborhood organizations,
engineers, and the public to promote sensible transportation
systems and policies in Alaska. She stated that ATPP believes
it is a good idea to address the upcoming decline in federal
transportation funds. However, some problems exist and it is
limited in overall effect. This bill does not include money for
maintenance and preservation, which is roughly $500 million per
year for highways and bridges, and $100 million for preserving
and operating ferries. She cautioned the state should not build
projects it cannot maintain and this dedicated transportation
fund approach does not address maintenance issues.
MS. EPSTEIN discussed the allocation between modes, including
that 60 percent is designated to major roads and bridges, and
only 5 percent for community roads and public transit. These
allocations may not be the right allocations. She related that
since HB 329 provides for an advisory council, that it does not
need to bind the decision making process so tightly. She
offered that she would not be opposed to a maximum amount to be
spent on roads between 40 to 60 percent to ensure that other
modes are appropriately funded. She related that she also
serves on the Anchorage Metropolitan Area Transportation
Solutions (AMATS) Advisory Committee, which uses ranges for
funding. Today's approach does not address the high amounts on
questionable projects like the road to Juneau or Nome road or
Gravina Bridge. There is not enough money for these projects;
but the state continues to fund studies on them at the level of
millions of dollars each year, regardless of the overall cost.
The FHWA and Federal Transit Administration recently sent a
letter dated November 2009 to the DOT&PF, which read, "Alaska
will be over-programmed in the long term and sufficient funds
are not available from current recognizable sources to complete
a number of large projects contemplated by the state's program."
The projects she just identified cost between $400 million to
$2.5 billion and would not be affected by HB 329 since the
projects would require federal dollars. She urged the
legislature and the Governor to show fiscal leadership and
cancel one or more of the projects rather than spending millions
of the state's transportation dollars each year pursing them
without any financial plan. None of those projects mentioned
have a financial plan in place. She suggested holding another
hearing.
2:39:56 PM
CHAIR P. WILSON offered to contact her to obtain information on
using ranges between modes. She expressed her willingness to
work on establishing ranges rather than have specific
percentages between modes. In response to Representative
Gruenberg, she related that it may work out to hold a conference
call.
2:40:51 PM
KATHIE WASSERMAN, Executive Director, Alaska Municipal League
(AML), stated that she is very thankful to the sponsor for
introducing the resolution and the bill. She stated that while
she has not analyzed the specifics of the proposed dedicated
transportation fund, she believed that conceptually the bill
addresses the AML's questions on how the state will address
decreasing federal funds. During the AML trips to Washington
D.C., Alaska's Congressional delegation has often acknowledged
the difficulties in obtaining federal highway funds. She
explained that the AML prepared a report, the "Alaska
Transportation Finance Study," which members have in their
packets. She related that SAFETEA-LU has been extended month-
by-month and is not any way to approach transportation funding
planning. She attended a transportation discussion at the White
House, and every time transportation was mentioned it was in
conjunction with transit. She asked how this would affect
Alaska, and the answered was that even small communities could
benefit from mass transit. Thus, she surmised that the
administration may not understand Alaska's transportation needs.
MS. WASSERMAN referred to a table that provides the per capita
to transit, stating that Wyoming receives $8.32 per capita for
mass transit, while Alaska receives $54.74 per person. Since
Alaska receives so much and pays in so little, other states
object. She stated that she serves on the National Association
of Counties Transportation Committee, and other members complain
that their potholes could be filled if Alaska did not receive so
much money. Thus, AML supports the concept that Alaska must
find ways to fill the funding gap due to reductions in federal
transportation funding. She said the AMLS realizes that a
billion dollars is a lot of money, but Alaska has many needs.
Transportation is one of the basic tenets that government does
and should provide.
2:45:51 PM
REPRESENTATIVE GRUENBERG asked what the committee can do to
maximize the capture of federal funds for urban areas in
Anchorage and Fairbanks.
MS. WASSERMAN said she did not know.
REPRESENTATIVE GRUENBERG acknowledged Ms. Wasserman's expertise
and experience in Washington, D.C. and asked her consider how
Alaska could obtain maximum federal dollars since Alaska is
clearly eligible to receive, noting that it is also important to
consider rural needs.
REPRESENTATIVE JOHNSON remarked that the purpose of HB 329 is to
avoid using federal dollars. He thought it would be
counterproductive to work to obtain federal dollars for mass
transit in HB 329. This bill is intended to provide general
fund dollars for transportation projects that can be completed
much more quickly than using federal funding, he stated. He
suggested that attempting to leverage federal funding in this
bill would be ill advised.
CHAIR P. WILSON offered her goal is to maintain the current
DOT&PF budget, including obtaining FHWA funding for projects,
but to use the dedicated transportation fund to complete
additional projects more quickly, to create jobs, and enhance
access to Alaska's natural resources. It is not the intention
of this bill to supplant transportation funding in the state.
She recalled other states established specific funds for
education, only to discover that their dedicated funds became
the only source of funding for education. She maintained she
did not want that to happen in Alaska, in terms of
transportation funding.
2:48:40 PM
REPRESENTATIVE T. WILSON remarked that completing projects more
timely will also save money in long run since the roads would
not deteriorate as quickly.
MS. WASSERMAN agreed. However, she said she thought the DOT&PF
and municipalities work as fast as possible to complete the
permitting process, but money is the driving factor.
REPRESENTATIVE T. WILSON offered her belief that all communities
in Alaska are affected by delays. She asked whether AML has
obtained similar feedback from communities on problems. She
stated that Alaska must collectively work to obtain and complete
projects.
MS. WASSERMAN stated that the AML is comprised of members from
every single community in Alaska. She suggested she is well
aware of problems statewide, especially the importance of
transportation to small communities.
2:50:11 PM
REPRESENTATIVE GRUENBERG conveyed that he also supports needs in
rural areas. He acknowledged that members are also aware of
transportation problems in his district in Mountain View. He
stated that many of his constituents do not own cars, must push
shopping carts on sidewalks, and cannot easily navigate
Anchorage without buses. He expressed concern with language in
HB 329. He referred to page 3, lines 10, which read:
"...capital projects for transportation and related facilities."
He noted that phrase also appears on page 3, lines 15 -16. He
suggested that the phrase should be defined to include public
transportation and facility maintenance, as well as general
maintenance. He recalled the Governor stating that Alaska must
maintain what it owns or the state will continually be replacing
its infrastructure. He asked if Ms. Wasserman disagreed.
MS. WASSERMAN stated no, she did not disagree.
[HB 329 was held over.]
2:53:40 PM
ADJOURNMENT
There being no further business before the committee, the House
Transportation Standing Committee meeting was adjourned at 2:53
p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 329 Sponsor Stmt.pdf |
HTRA 2/9/2010 1:00:00 PM HTRA 2/11/2010 1:00:00 PM |
HB 329 |
| HB 329 AK Trans Finance Study.pdf |
HTRA 2/9/2010 1:00:00 PM HTRA 2/11/2010 1:00:00 PM |
HB 329 |
| HJR 42 Sponsor Stmt.pdf |
HTRA 2/9/2010 1:00:00 PM |
HJR 42 |
| HJR 42 Resolution ATIF.pdf |
HTRA 2/9/2010 1:00:00 PM |
HJR 42 |
| HJR 42 Exec Summary AK Trans Finance Study.pdf |
HTRA 2/9/2010 1:00:00 PM |
|
| ATIF values w-out taxes.pdf |
HTRA 2/9/2010 1:00:00 PM |
HB 329 |
| fund values with taxes.pdf |
HTRA 2/9/2010 1:00:00 PM |
HB 329 |