HOUSE JOINT RESOLUTION NO. 4 Proposing amendments to the Constitution of the State of Alaska creating a transportation infrastructure fund. 8:35:35 AM REPRESENTATIVE PEGGY WILSON, SPONSOR, provided a comprehensive overview of the Alaska Transportation Infrastructure Fund (ATIF). She explained that HJR 4 would place a constitutional amendment before the voters to re- establish a dedicated fund for transportation infrastructure. She reported that HB 30(DEDICATED TRANSPORT FUND/PUB TRANSPORT) and HB 31(TRANSPORT INFRASTRUCTURE FUND APPROP) were the enabling and appropriating pieces of HJR 4. Together, the trio of bills created the Alaska Transportation Infrastructure Fund. The fund created by an endowment and seeded with $1 billion [general fund appropriation] would grow through investment earnings. In addition, revenue from the motor fuel tax, vehicle registration fees, studded tire tax, and 50 percent of the vehicle rental tax compensated the fund. The legislature could direct other transportation fees and taxes into ATIF. The legislature would appropriate up to six percent of the market value of ATIF averaged over the previous five years and 50 percent of the revenue deposited the previous year. The fund was expected to generate $100 million the first year and increase over $3 million each subsequent year. She referred to a spreadsheet handout "ATIF Payout Rate 6.0%" (copy on file) developed by the Department of Revenue depicting estimated payout rates. The legislature would appropriate ATIF funds and its administrative costs in tandem with the budget cycle. Administrative costs would be deducted from by the fund. She envisioned ATIF exclusively funding transportation capital and deferred maintenance projects. The provision was included in the enabling statute (HB 30). She assured that in times of budget shortfalls legislative flexibility was built into the legislation. The legislature could appropriate ATIF funds for any Department of Transportation and Public Facilities (DOT) operations or transportation related project. The appropriation would require a change in the statute that defined ATIF use but not require a constitutional amendment. 8:39:39 AM Representative Peggy Wilson announced that she did not commit any transportation taxes to ATIF's revenue stream that were dedicated for other uses. Co-Chair Thomas asked whether the ATIF funds would solely cover all transportation capital expenses or require additional general funds as well. Representative Peggy Wilson expected that initially, general fund appropriation was necessary to preserve the ATIF funds for the back log of deferred maintenance. She anticipated that ATIF would primarily cover transportation deferred maintenance, large high priority projects and projects related to safety. Representative Neuman noted that much of the revenue allocated to ATIF was used to operate the Division of Motor Vehicles (DMV). He wondered how DMV would operate with lost revenue. Representative Peggy Wilson responded that ATIF funds would pay for DMV operations. Representative Neuman asked if the legislation created a board to oversee distribution of ATIF funds. He did not see that in the current legislation. Representative Peggy Wilson explained that HB 30 created a 17 member board with two non-voting legislative members. The board supervised the fund. She furthered that the board acted in an advisory capacity, forwarding recommendations on to the governor and legislature. 8:45:16 AM Representative Neuman asked whether the legislature had the final say. Representative Peggy Wilson replied in the affirmative. Representative Gara stated that the sponsor had done a good job drafting the bill. Co-Chair Stoltze announced that HJR 4 was referred to the same subcommittee established for HB 30 and HB 31, chaired by Vice-chair Fairclough, for interim hearings and activities. HJR 4 was HEARD and HELD and referred to subcommittee consisting of Vice-chair Fairclough, Co-Chair Thomas, Representative Costello, Representative Doogan, Representative Peggy Wilson (adjunct member) for further consideration.