Legislature(2005 - 2006)FAHRENKAMP 203

03/02/2006 02:00 PM TRANSPORTATION


Download Mp3. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Time and Location Change --
*+ SB 303 KNIK ARM BRIDGE AND TOLL AUTHORITY TELECONFERENCED
Moved CSSB 303(TRA) Out of Committee
Bills Previously Heard/Scheduled
= SB 273 MOTOR VEHICLE SALES
Moved SB 273 Out of Committee
                    ALASKA STATE LEGISLATURE                                                                                  
            SENATE TRANSPORTATION STANDING COMMITTEE                                                                          
                         March 2, 2006                                                                                          
                           2:03 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Charlie Huggins, Chair                                                                                                  
Senator John Cowdery, Vice Chair                                                                                                
Senator Gene Therriault                                                                                                         
Senator Hollis French                                                                                                           
Senator Albert Kookesh                                                                                                          
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members were present                                                                                                        
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                              
SENATE BILL NO. 273                                                                                                             
"An Act relating to a  motor vehicle dealer's selling or offering                                                               
to sell  motor vehicles  as new  or current models  or as  new or                                                               
current model motor vehicles having manufacturer's warranties."                                                                 
     MOVED SB 273 OUT OF COMMITTEE                                                                                              
                                                                                                                                
SENATE BILL NO. 303                                                                                                             
"An Act amending  the Knik Arm Bridge and Toll  Authority Act and                                                               
the   powers  and   authority  of   the   authority  to   finance                                                               
construction and maintenance  of the Knik Arm Bridge,  to set and                                                               
collect  tolls,  and   to  carry  out  its   duties,  and  making                                                               
conforming changes to statutes relating  to issuance, renewal, or                                                               
reinstatement of driver's licenses and  to levy on permanent fund                                                               
dividends; and providing for an effective date."                                                                                
          MOVED CSSB 303(TRA) OUT OF COMMITTEE                                                                                  
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                              
BILL: SB 273                                                                                                                  
SHORT TITLE: MOTOR VEHICLE SALES                                                                                                
SPONSOR(s): SENATOR(s) COWDERY                                                                                                  
                                                                                                                                
02/08/06       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/08/06       (S)       TRA, L&C                                                                                               
02/23/06       (H)       TRA AT 1:30 PM CAPITOL 17                                                                              
02/23/06       (H)       -- Meeting Canceled --                                                                                 
                                                                                                                              
BILL: SB 303                                                                                                                  
SHORT TITLE: KNIK ARM BRIDGE AND TOLL AUTHORITY                                                                                 
SPONSOR(s): TRANSPORTATION                                                                                                      
                                                                                                                                
02/17/06       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/17/06       (S)       TRA, FIN                                                                                               
03/02/06       (S)       TRA AT 2:00 PM FAHRENKAMP 203                                                                          
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                              
Ed Sniffen, Assistant Attorney General                                                                                          
Department of Law                                                                                                               
PO Box 110300                                                                                                                   
Juneau, AK  99811-0300                                                                                                          
POSITION STATEMENT:  Commented on SB 273                                                                                      
                                                                                                                                
George Wuerch, Chairman of the Board                                                                                            
Knik Arm Bridge and Toll Authority                                                                                              
POSITION STATEMENT: Commented on and answered questions                                                                       
regarding SB 303                                                                                                                
                                                                                                                                
William Green, Project Counsel                                                                                                  
Knik Arm Bridge and Toll Authority                                                                                              
POSITION STATEMENT: Commented on and answered questions                                                                       
regarding SB 303                                                                                                                
                                                                                                                                
Tom Boutin, Deputy Commissioner                                                                                                 
Department of Revenue                                                                                                           
PO Box 110400                                                                                                                   
Juneau, AK  99811-0400                                                                                                          
POSITION STATEMENT: Commented on and answered questions                                                                       
regarding SB 303                                                                                                                
                                                                                                                              
Jim Cantor, Chief Assistant Attorney General                                                                                    
Transportation Section                                                                                                          
Department of Law                                                                                                               
PO Box 110300                                                                                                                   
Juneau, AK  99811-0300                                                                                                          
POSITION STATEMENT: Commented on and answered questions                                                                       
regarding SB 303                                                                                                                
                                                                                                                                
Anton Johansen, Partner                                                                                                         
Great Northwest Incorporated                                                                                                    
POSITION STATEMENT: Testified in opposition to SB 303                                                                       
                                                                                                                                
Steve Cleary, Executive Director                                                                                                
Alaska Public Interest Research Group                                                                                           
POSITION STATEMENT: Testified in opposition to SB 303                                                                       
                                                                                                                                
Merle Thompson                                                                                                                  
POSITION STATEMENT:  Testified in opposition to SB 303                                                                        
                                                                                                                                
Emily Ferry                                                                                                                     
Alaska Transportation Priorities Project                                                                                        
POSITION STATEMENT:  Commented on SB 303                                                                                      
                                                                                                                                
Stephanie Kesler, President                                                                                                     
Government Hill Community Council                                                                                               
Anchorage, AK                                                                                                                   
POSITION STATEMENT:  Testified in opposition to SB 303                                                                        
                                                                                                                                
Colleen James                                                                                                                   
POSITION STATEMENT:  Testified in opposition to SB 303                                                                        
                                                                                                                                
Robert Wells, Executive Director                                                                                                
MatSu Resource and Development Council                                                                                          
POSITION STATEMENT:  Testified in support of SB 303                                                                           
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
CHAIR CHARLIE  HUGGINS called the Senate  Transportation Standing                                                             
Committee meeting to order at  2:03:50 PM.  Present were Senators                                                             
Albert Kookesh, Gene Therriault,  John Cowdery, and Chair Charlie                                                               
Huggins.                                                                                                                        
                                                                                                                                
                   SB 273-MOTOR VEHICLE SALES                                                                               
                                                                                                                                
2:04:15 PM                                                                                                                    
CHAIR   CHARLIE  HUGGINS   announced  SB   273  to   be  up   for                                                               
consideration.                                                                                                                  
                                                                                                                                
ED SNIFFEN, Assistant Attorney General,  Department of Law (DOL),                                                               
testified he has been working on  SB 273 for two years to resolve                                                               
a  current  problem in  Alaska  statutes.  Currently dealers  are                                                               
prohibited from  selling used current model  motor vehicles. They                                                               
are required to  hold onto the vehicle until the  next model year                                                               
comes out  in order to  sell them legally  as used. SB  273 would                                                               
fix  the problem  by  removing current  model  language from  the                                                               
statute.                                                                                                                        
                                                                                                                                
2:06:19 PM                                                                                                                    
SENATOR  JOHN COWDERY  commented both  new and  used car  dealers                                                               
support the bill.                                                                                                               
                                                                                                                                
2:07:00 PM                                                                                                                    
SENATOR COWDERY  moved SB  273 out  of committee  with individual                                                               
recommendations   and   attached   fiscal   notes.   Hearing   no                                                               
objections, the motion carried.                                                                                                 
                                                                                                                                
2:07:32 PM                                                                                                                    
Senator French joined the committee.                                                                                            
                                                                                                                                
           SB 303-KNIK ARM BRIDGE AND TOLL AUTHORITY                                                                        
                                                                                                                                
2:09:40 PM                                                                                                                    
CHAIR   CHARLIE  HUGGINS   announced  SB   303  to   be  up   for                                                               
consideration.                                                                                                                  
                                                                                                                                
SENATOR  JOHN COWDERY  moved to  adopt version  F as  the working                                                               
document before the committee.                                                                                                  
                                                                                                                                
GEORGE WUERCH,  Chairman of the  Board, Knik Arm Bridge  And Toll                                                               
Authority  (KABATA), introduced  Deputy Commissioner  Tom Boutin,                                                               
John Manly,  Jim Cantor, and  project counsel, William  Green. He                                                               
stated they were all in  support of the committee substitute (CS)                                                               
for SB 303.                                                                                                                     
                                                                                                                                
WILLIAM  GREEN  thanked  the legislative  staff  for  the  Senate                                                               
Transportation    Standing   Committee,    particularly   Deborah                                                               
Grundmann, for being so helpful.                                                                                                
                                                                                                                                
2:13:06 PM                                                                                                                    
MR. GREEN  said the Knik  Arm Bridge and Toll  Authority (KABATA)                                                               
was created  in 2003 to  build a bridge  across Knik Arm  for the                                                               
purpose  of  connecting  the Municipality  of  Anchorage  to  the                                                               
Matanuska-Susitna Borough, to  improve the transportation systems                                                               
in upper Cook Inlet and to  stimulate and enhance the support for                                                               
economic development on a statewide basis.                                                                                      
                                                                                                                                
Since  2003   KABATA  has  been   busy  with   investigative  and                                                               
environmental  impact studies  and  have found  that the  federal                                                               
funding will  be insufficient to  complete the project and  so it                                                               
must  look to  other  public and  private  financing and  funding                                                               
sources.                                                                                                                        
                                                                                                                                
In discussions  with various  experts who  have been  through the                                                               
process of raising funds from  the private sector and the Federal                                                               
Highway  Administration it  has been  identified that  the KABATA                                                               
Act   be  specific   in  several   aspects.   For  example,   the                                                               
Transportation Infrastructure Finance  and Innovation Act (TIFIA)                                                               
would like the  statute to mention them as a  source of financing                                                               
by name.                                                                                                                        
                                                                                                                                
The purpose  of SB 303 is  to clarify and make  more specific the                                                               
powers of  KABATA and to ensure  both the public and  the private                                                               
financing  sectors   that  the   Authority  has   the  underlying                                                               
legislative authority to allow them to form partnerships.                                                                       
                                                                                                                                
2:17:55 PM                                                                                                                    
MR.  GREEN   continued  explaining  SB  303   provides  exclusive                                                               
authority to  KABATA for setting bridge  tolls, provides explicit                                                               
authority  to enter  into public-private  partnerships and  other                                                               
financing arrangements.  It authorizes  obtaining loans  from the                                                               
TIFIA,  it sets  the  dollar  amount of  revenue  bonds that  the                                                               
authority may issue, and it  provides several different means for                                                               
collection of tolls and other  obligations owing to the Authority                                                               
that need to be collected.                                                                                                      
                                                                                                                                
2:19:13 PM                                                                                                                    
The CS eliminates redundancies,  clarifies language, and corrects                                                               
technical errors. He said none of the  changes in the CS are of a                                                               
significant substantive nature. He offered to answer questions.                                                                 
                                                                                                                                
2:20:26 PM                                                                                                                    
SENATOR COWDERY asked  Mr. Green whether KABATA has  come up with                                                               
a toll figure.                                                                                                                  
                                                                                                                                
MR. GREEN deferred the question to Mr. Wuerch.                                                                                  
                                                                                                                                
MR. WUERCH informed  committee members they have  no final number                                                               
yet but data  collected suggests between three  and five dollars.                                                               
They also recommended that once set,  the toll not be changed for                                                               
ten years.  A tollgate on  the bridge  will not be  necessary. An                                                               
electronic  card could  be installed  in the  vehicle and  a beam                                                               
would be used to tally the  passage to an established account. He                                                               
said  a strenuous  financial analysis  would be  made before  any                                                               
investor would be approached.                                                                                                   
                                                                                                                                
SENATOR  COWDERY  commented  the Whittier  Tunnel  sustains  more                                                               
traffic than  what early surveys estimated.  He expressed support                                                               
for the  bill. He  asked whether  it would be  possible to  add a                                                               
railroad to the bridge.                                                                                                         
                                                                                                                                
MR. WUERCH said a railroad bridge  could be built alongside but a                                                               
highway bridge would not be able to support a railroad.                                                                         
                                                                                                                                
2:25:11 PM                                                                                                                    
SENATOR FRENCH noted  the CS gives the  toll-setting authority to                                                               
KABATA. He asked whether that was the case in the original bill.                                                                
                                                                                                                                
MR.  WUERCH  responded  it  was  in the  original  bill  but  the                                                               
language made it unclear.                                                                                                       
                                                                                                                                
SENATOR  FRENCH asked  the  entity  that sets  the  toll for  the                                                               
Whittier Tunnel.                                                                                                                
                                                                                                                                
MR. WUERCH  did not  know. He  noted the  Whittier Tunnel  was an                                                               
operational toll  collected by  the Department  of Transportation                                                               
(DOT), not one that requires bond paybacks.                                                                                     
                                                                                                                                
2:27:16 PM                                                                                                                    
SENATOR  FRENCH  expressed  concern   over  the  high  toll  rate                                                               
anticipated for the Knik Arm Bridge.  He said initial data on the                                                               
Whittier Tunnel suggested the toll  would be one dollar and fifty                                                               
cents but  is actually twelve  dollars. He expressed  unease that                                                               
the Knik Arm Bridge could become comparable.                                                                                    
                                                                                                                                
MR. WUERCH agreed and said  the federal money that was originally                                                               
set aside  for the Knik Arm  Bridge has shrunk from  $230 million                                                               
to $93 million  dollars. The state match is not  on the table yet                                                               
so that  is a "wait  and see." He compared  the deal to  buying a                                                               
house and  said if you have  a good down payment  the mortgage is                                                               
easy to find.                                                                                                                   
                                                                                                                                
2:29:32 PM                                                                                                                    
SENATOR FRENCH asked Mr. Green  whether there was something about                                                               
the non-recourse  bonds that required  more explicit  language in                                                               
the bill.                                                                                                                       
                                                                                                                                
MR.  GREEN said  yes. The  original  legislation did  set up  the                                                               
authority to issue  revenue bonds but it also  said the Authority                                                               
had  to come  back to  the Legislature  to get  approval for  the                                                               
aggregate amount of the bonds.                                                                                                  
                                                                                                                                
SENATOR FRENCH asked the process of  how the bonds would be sold.                                                               
He  questioned  the relationship  between  TIFIA  and the  United                                                               
States Department of Transportation.                                                                                            
                                                                                                                                
MR. GREEN responded  technically there is no  relationship from a                                                               
legal perspective but from a  financial perspective they are both                                                               
funding  sources.  The state  would  have  no obligation  on  the                                                               
bonds.                                                                                                                          
                                                                                                                                
2:33:19 PM                                                                                                                    
SENATOR FRENCH noted  the primary mechanism is to  sell the bonds                                                               
on  Wall  Street   and  then  the  federal   government  notes  a                                                               
multiplier effect.                                                                                                              
                                                                                                                                
MR. GREEN explained  the purpose of the TIFIA loan  program is to                                                               
provide subordinated debt to fill  gaps in the funding stream. It                                                               
is a layered  financing mechanism that has to  be coordinated but                                                               
not necessarily dependant on one another.                                                                                       
                                                                                                                                
SENATOR FRENCH  clarified that  they all  ultimately look  to the                                                               
toll as the source of repayment.                                                                                                
                                                                                                                                
MR. GREEN agreed.                                                                                                               
                                                                                                                                
2:34:50 PM                                                                                                                    
SENATOR KOOKESH  asked whether they  are confident they  have the                                                               
money to build the bridge.                                                                                                      
                                                                                                                                
MR.  WUERCH responded  they  have  a work  plan  that phases  the                                                               
project and  they hope to get  some work done in  summer of 2006.                                                               
There is also  a governor's bill, which includes  paving the Port                                                               
McKenzie Road.  Initially that was  a large cost  associated with                                                               
building the bridge but it is  now proposed as a separate funding                                                               
item  in the  supplemental. KABATA  is working  closely with  the                                                               
Port of Anchorage  to share as many costs as  possible. After the                                                               
pre-built  pieces are  done, then  they intend  to sit  down with                                                               
private  investors and  look for  partnerships to  finish up  the                                                               
project. The idea of phasing allows the project to move ahead.                                                                  
                                                                                                                                
2:36:27 PM                                                                                                                    
SENATOR COWDERY expressed  support for the paving  project on the                                                               
Port McKenzie Road.                                                                                                             
                                                                                                                                
MR. WUERCH agreed.                                                                                                              
                                                                                                                                
2:38:28 PM                                                                                                                    
CHAIR HUGGINS  noted the Anchorage  Parking Authority  is allowed                                                               
to access a  person's permanent fund dividend to  collect on fees                                                               
owed and said there are provisions  in SB 303 which allow that as                                                               
well.                                                                                                                           
                                                                                                                                
MR. GREEN agreed. He said  the financial advisors and others like                                                               
the language of the bill.                                                                                                       
                                                                                                                                
2:41:42 PM                                                                                                                    
CHAIR HUGGINS  said SB 303 seems  to be directed more  toward the                                                               
Senate Finance Standing Committee  than the Senate Transportation                                                               
Standing Committee.                                                                                                             
                                                                                                                                
MR. GREEN added  the CS takes things a step  further, which would                                                               
allow the  Authority to  build the bridge  in phases  without 100                                                               
percent  financing. He  said the  bill  places a  ceiling on  the                                                               
total  amount  of revenue  bonds  that  could  be issued  by  the                                                               
Authority.  The  State  Bond   Council,  the  attorney  general's                                                               
office, and the  Department of Revenue reviewed the  bill and the                                                               
suggestions made have  been incorporated in the CS.  He made note                                                               
of a typographical error that needs correcting.                                                                                 
                                                                                                                                
2:47:50 PM                                                                                                                    
SENATOR FRENCH  noted the cost of  steel is rising each  year. He                                                               
asked Mr.  Wuerch whether the  funds for the project  would cover                                                               
the true costs of steel.                                                                                                        
                                                                                                                                
MR.   WUERCH  admitted   KABATA   was  concerned   as  well   and                                                               
commissioned  their   engineering  firm  to  look   at  commodity                                                               
pricing.  There   are  two  concepts  for   bridge  construction,                                                               
reinforced concrete or all steel  trust. Both options would still                                                               
be estimated  at $600 million  or less taking  into consideration                                                               
the increased price  of steel. KABATA built a  contingency in the                                                               
initial cost so the commodity increase has been accommodated.                                                                   
                                                                                                                                
SENATOR FRENCH  said fiscal  conservatives worry  that proponents                                                               
of a project typically  over-estimate benefits and under-estimate                                                               
costs.  He said  his gut  feeling was  that the  KABATA estimates                                                               
were lower than what they are  actually going to be. He expressed                                                               
concern that  the outcome  would be  a toll  so high  that nobody                                                               
could use the bridge.                                                                                                           
                                                                                                                                
2:51:26 PM                                                                                                                    
ANTON JOHANSEN commented on the bill.  He said the traffic on the                                                               
Whittier Tunnel  is lower  than was projected  and the  state now                                                               
takes  $2 million  a  year out  of  the Statewide  Transportation                                                               
Improvement  Program (STIP)  to  fund the  operational costs.  He                                                               
said he heard  there was lobbying to take more  from the STIP. He                                                               
expressed concern  over the  funding of the  Knik Arm  Bridge and                                                               
said they  could destroy state transportation  funding. He stated                                                               
concern that  the roads could be  built up to the  bridge and the                                                               
bridge might  never get  built, which  would be  a case  of roads                                                               
leading to nowhere.                                                                                                             
                                                                                                                                
2:53:27 PM                                                                                                                    
CHAIR HUGGINS asked Mr. Johansen his affiliation.                                                                               
                                                                                                                                
MR.  JOHANSEN  identified himself  as  a  highway contractor  and                                                               
partner with Great Northwest Incorporated.                                                                                      
                                                                                                                                
2:54:01 PM                                                                                                                    
STEVE   CLEARY,  executive   director,  Alaska   Public  Interest                                                               
Research Group  (AKPIRG), shared  concerns over  the relationship                                                               
with KABATA  and the State of  Alaska. He said he  interprets the                                                               
bill to  read such that  KABATA would have eminent  domain power,                                                               
which  should be  reserved for  government agencies.  He wondered                                                               
whether the state  would have to consume the debt  were KABATA to                                                               
fail and  go bankrupt.  He said  the bill  also gives  KABATA the                                                               
power to  sell land  and to  receive land  from the  state, which                                                               
appears like a  land grant. He suggested they put  a higher limit                                                               
on the bonds.                                                                                                                   
                                                                                                                                
2:56:08 PM                                                                                                                    
MR. CLEARY added there were  bills out in the current Legislature                                                               
limiting the powers  of eminent domain and  he questioned whether                                                               
other toll  authorities receive it.  Finally, he said  it appears                                                               
there could be  conflict of interest between KABATA  and the land                                                               
ownership status  on either  side of  the bridge.  If a  staff or                                                               
board member  owns land but  was also deciding on  eminent domain                                                               
of that  land it would  appear to be  a conflict of  interest. He                                                               
looked up  the State Bond  Committee and said it  encompasses the                                                               
commissioners  of  the  Departments  of  Community  and  Economic                                                               
Development,   Administration,   and   Revenue   and   that   the                                                               
commissioner of Revenue is a board member of KABATA.                                                                            
                                                                                                                                
2:58:00 PM                                                                                                                    
CHAIR HUGGINS asked Mr. Cleary  whether he supported the Knik Arm                                                               
crossing.                                                                                                                       
                                                                                                                                
MR. CLEARY  said his  group was  not in support  of the  Knik Arm                                                               
crossing.  They believe  it will  be  a financial  burden to  the                                                               
state  and  that the  state  will  end  up  stuck with  both  the                                                               
construction and operational cost of the bridge.                                                                                
                                                                                                                                
JIM  CANTOR,  Chief  Assistant Attorney  General,  Transportation                                                               
Section,  Department   of  Law  (DOL),  announced   that  he  was                                                               
available  to   answer  questions.  As  far   as  eminent  domain                                                               
authority, the Alaska Railroad has that, he said.                                                                               
                                                                                                                                
CHAIR HUGGINS  asked Mr.  Cantor about the  authority to  own and                                                               
manage the land.                                                                                                                
                                                                                                                                
MR.  CANTOR said  currently the  Department of  Natural Resources                                                               
(DNR)  and  the Department  of  Transportation  (DOT) manage  the                                                               
land.                                                                                                                           
                                                                                                                                
CHAIR HUGGINS  asked Mr. Cantor  whether there was a  conflict of                                                               
interest  with  the Commissioner  of  the  Department of  Revenue                                                               
being on both boards.                                                                                                           
                                                                                                                                
MR.  CANTOR  said not  from  a  legal perspective.  The  Attorney                                                               
General wants  a bill that  would meet KABATA's  requirements but                                                               
also make  sure that nothing  halts the  ability of the  state to                                                               
issue the bonds and that it would be a revenue bond.                                                                            
                                                                                                                                
3:01:13 PM                                                                                                                    
TOM  BOUTIN, Deputy  Commissioner, Department  of Revenue  (DOR),                                                               
testified that  the DOR  has a  seat on each  of the  boards that                                                               
issues debts  and he is the  person delegated to those  seats. SB
303 sets  up the ability  to issue stand-alone revenue  bonds and                                                               
those bonds  would not  impact the State  of Alaska  credit. Some                                                               
state agencies have the authority  to issue a variety of credits.                                                               
The Student Loan Corporation, for  instance, is authorized by the                                                               
Legislature to  issue state  moral obligation  debt and  they are                                                               
revenue bonds backed by student  loan receipts. There are revenue                                                               
bonds that carry  the moral obligation to the  state, which carry                                                               
a higher  level of credit and  a higher level of  commitment than                                                               
is in SB 303.                                                                                                                   
                                                                                                                                
3:02:35 PM                                                                                                                    
A small amount of the  debt of Alaska Housing Finance Corporation                                                               
is  moral obligation  debt  and some  is  state guaranteed  debt,                                                               
which was authorized  by the Legislature and by  the voters. Some                                                               
of Alaska  Industrial Development  Export Authority  (AIDEA) debt                                                               
carries a  moral obligation,  which has to  be authorized  by the                                                               
Legislature but  most of their  debt issuing programs  are stand-                                                               
alone  revenue  bonds.  The international  airport  system  is  a                                                               
stand-alone  revenue bond,  relying entirely  upon the  rates and                                                               
fees of the airport system.                                                                                                     
                                                                                                                                
CHAIR  HUGGINS asked  Mr.  Boutin  whether he  felt  there was  a                                                               
conflict of  interest with  an employee from  the DOR  sitting on                                                               
the KABATA board.                                                                                                               
                                                                                                                                
MR. BOUTIN  said no.  The Department of  Revenue is  secretary to                                                               
the State  Bond Committee and  has a seat  on each of  the boards                                                               
that issue  debt. Those  boards issue  debts that  have different                                                               
levels of  credit security  and commitment by  the state.  SB 303                                                               
authorizes  stand-alone   revenue  bonds  and   the  bondholder's                                                               
recourse would be limited to the  rates and fees and the value of                                                               
the structures and any revenues  and reserve funds that have been                                                               
pledged by KABATA to repay the debt.                                                                                            
                                                                                                                                
3:04:50 PM                                                                                                                    
MERLE  THOMPSON testified  against SB  305. Initially  he was  in                                                               
favor of the  bill but has attended many meetings  on the project                                                               
and  now  questions whether  it  is  a  good idea.  He  mentioned                                                               
dangerous stretches  of road  close to  the proposed  bridge that                                                               
need improvement and suggested that should be a priority.                                                                       
                                                                                                                                
3:07:51 PM                                                                                                                    
MR.  THOMPSON felt  that most  people  would not  use the  bridge                                                               
because  it  does   not  save  much  time  and   the  cost  seems                                                               
prohibitive. He  said business owners  in Wasilla  have expressed                                                               
concern that a bypass road would affect their businesses.                                                                       
                                                                                                                                
3:10:02 PM                                                                                                                    
CHAIR HUGGINS asked  Mr. Thompson whether he would  be in support                                                               
of the bridge if the government earmark were intact.                                                                            
                                                                                                                                
MR.  THOMPSON said  he would  feel better  if the  state had  the                                                               
federal  monies. He  described himself  as a  fiscal conservative                                                               
and said SB 303 does not seem fiscally responsible.                                                                             
                                                                                                                                
STEPHANIE KESLER,  President, Government Hill  Community Council,                                                               
testified  with concern  over KABATA's  power of  eminent domain.                                                               
She  said the  KABATA board  is very  small and  only requires  a                                                               
quorum of  three who  would be able  to exercise  eminent domain.                                                               
Three private individuals would have  the power of eminent domain                                                               
and  could  take property  if  they  so  desire. She  said  their                                                               
experience with  KABATA during  the EIS process  has been  a less                                                               
than positive  experience. She challenged  the will of  KABATA to                                                               
follow an open process in good faith.                                                                                           
                                                                                                                                
3:14:17 PM                                                                                                                    
SENATOR COWDERY  noted that  many legislative  committees operate                                                               
with a quorum of three.                                                                                                         
                                                                                                                                
STEPHANIE KESLER  countered that legislative proceedings  are run                                                               
by elected officials who represent  the people. She re-stated her                                                               
concern   that  the   KABATA  board   is  comprised   of  private                                                               
individuals who could benefit from their votes.                                                                                 
                                                                                                                                
3:15:12 PM                                                                                                                    
EMILY  FERRY  testified  she  works  with  Alaska  Transportation                                                               
Priorities  Project, a  statewide watchdog  group advocating  for                                                               
safe,    reliable,    efficient    and    fiscally    responsible                                                               
transportation within Alaska. She  brought the 2005 annual report                                                               
from  KABATA  to  the committee's  attention  and  advised  that,                                                               
according to  their budget; about  256 million dollars  are still                                                               
without an identified funding source.  She expressed concern that                                                               
the project would  take away from the other roads  in Alaska that                                                               
are in need of repair.                                                                                                          
                                                                                                                                
3:16:38 PM                                                                                                                    
MS. FERRY added  the second concern was the  conflict of interest                                                               
issue.  One  of   the  KABATA  board  members   is  Mike  Barton,                                                               
Commissioner of  the Department  of Transportation,  who oversees                                                               
the   STIP   process    whereby   transportation   projects   are                                                               
prioritized.  Because   of  that  conflict,   the  Commissioner's                                                               
position should  be removed from  the KABATA board. She  said her                                                               
organization was pleased  to see the contract  tightened and that                                                               
the state's credit would not be affected.                                                                                       
                                                                                                                                
SENATOR KOOKESH asked  Ms. Ferry the process  of how Commissioner                                                               
Barton got appointed to the KABATA board.                                                                                       
                                                                                                                                
MS. FERRY  explained it  is in  the authorizing  legislation that                                                               
the Legislature drafted.                                                                                                        
                                                                                                                                
SENATOR COWDERY asked  whether her group was  affiliated with any                                                               
other political or watchdog group.                                                                                              
                                                                                                                                
MS.  FERRY  said  they  work with  other  organizations  but  are                                                               
essentially  a stand-alone  organization. They  have an  advisory                                                               
board  of retired  DOT  engineers and  people  within the  state.                                                               
Their funding comes from a variety of foundations.                                                                              
                                                                                                                                
SENATOR COWDERY  asked whether  her testimony  was a  conflict of                                                               
interest.                                                                                                                       
                                                                                                                                
MS. FERRY  said no. The Alaska  Transportation Priorities Project                                                               
is pretty  consistent in their  message that Alaska  should spend                                                               
transportation  dollars  on  existing  infrastructure  first  and                                                               
foremost  by  improving  existing  roadways,  ferries,  airports,                                                               
ports and harbors.                                                                                                              
                                                                                                                                
3:19:54 PM                                                                                                                    
COLLEEN JAMES  testified in  opposition to SB  303. She  said the                                                               
transportation money should be spent on more critical projects.                                                                 
                                                                                                                                
ROBERT  WELLS, Executive  Director,  MatSu Resource  Conservation                                                               
and  Development, testified  in support  of SB  303. He  said the                                                               
bridge would be  a vital contribution to the future  of the MatSu                                                               
and Wasilla area.                                                                                                               
                                                                                                                                
MR. GREEN  came back to  the table to  advise the committee  of a                                                               
technical error  in the CS. Page  8 line 24, the  sentence should                                                               
read,  "The bond  resolution shall  fix  the aggregate  principle                                                               
amount  and..."   So after  the  word "shall"  insert "fix  the",                                                               
after the  word aggregate, strike  the word "the" and  strike the                                                               
second "fix."                                                                                                                   
                                                                                                                                
CHAIR  HUGGINS advised  he  would  transfer the  CS  back to  the                                                               
drafters. He  said he preferred to  move the bill today  since it                                                               
really  was more  of an  issue  for the  Senate Finance  Standing                                                               
Committee.                                                                                                                      
                                                                                                                                
3:24:53 PM                                                                                                                    
SENATOR  COWDERY   moved  CSSB   303(TRA)  from   committee  with                                                               
individual recommendations and attached fiscal notes.                                                                           
                                                                                                                                
There being  no further  business to  come before  the committee,                                                               
Chair Huggins adjourned the meeting at 3:25:55 PM.                                                                            
                                                                                                                                

Document Name Date/Time Subjects