HB 63-ALASKA MARINE HIGHWAY OPERATIONS BOARD  3:04:44 PM CHAIR KREISS-TOMKINS announced that the first order of business would be HOUSE BILL NO. 63, "An Act relating to the duties of the Department of Transportation and Public Facilities; renaming the Alaska Marine Transportation Advisory Board the Alaska Marine Highway Operations Board; relating to the membership and duties of the Alaska Marine Highway Operations Board; and providing for an effective date." [Before the committee was CSHB 63(TRA).] 3:05:55 PM CHAIR KREISS-TOMKINS invited questions from the committee. REPRESENTATIVE STORY asked whether an effective date of July 1, 2021, or an immediate effective date would allow the legislation to move forward as effectively as possible. 3:08:33 PM KERRY CROCKER, Staff, Representative Louise Stutes, Alaska State Legislature, on behalf of Representative Stutes, prime sponsor, deferred to the Department of Transportation & Public Facilities (DOT&PF). 3:09:18 PM ROB CARPENTER, Deputy Commissioner, Department of Transportation & Public Facilities, said the governor's bill has an immediate effective date. He stated that policy wise, the department supports the bill moving forward as soon as possible. REPRESENTATIVE STORY asked how the legislation would be implemented if it were effective immediately. MR. CARPENTER was unsure. He pointed out that it would take time to convene the Alaska Marine Highway Operations Board ("the board"), establish board members, and effectively operate. Further, he acknowledged that Alaska Marine Highway System's (AMHS's) reliability is a concerning issue. For those reasons, he said, "the sooner this board can convene and take action, the better." 3:11:00 PM REPRESENTATIVE CLAMAN stated his understanding that in addition to the bill before the committee, there's the governor's bill, which is not identical. He asked for the department's position on HB 63. MR. CARPENTER reiterated that conceptually, the department is fully supportive and aligned on the policy goals that came from the reshaping work group. He noted that there are several minor issues that the department would like to resolve with the bill sponsor, most notably, the "separation of powers issue" in regard to the appointment of board members, which was identified by the Department of Law (DOL) and Legislative Finance Division (LFD). REPRESENTATIVE CLAMAN sought to verify that the administration would likely support this legislation if the aforementioned concerns could be resolved. MR. CARPENTER reiterated that [DOT&PF] is "supportive, conceptually, of the policy direction" of the bill. He declined to express support for the final product at present. 3:12:59 PM REPRESENTATIVE STORY indicated that she would like the board to be seen as a decision-making board; further, that the board would remain throughout administration changes. She pointed out that CSHB 63(TRA) specifies that the head of the Division of Marine Transportation would sit on the board and advise the commissioner [of DOT&PF]. She asked whether the board would have enough authority to implement lasting changes. MR. CARPENTER said he envisions the deputy commissioner being on the board. He opined that if a high-level member from the agency were on the board, that would give the board considerable authority; alternatively, if there were no DOT&PF representation, the board would take on more of an advisory role. MR. CROCKER expressed interest in resolving that issue with the department. CHAIR KREISS-TOMKINS asked whether the department has a position on the public corporation concept. 3:16:06 PM MR. CARPENTER stated his understanding that the reshaping workgroup considered many different possibilities, including the corporate model to which there were both benefits and downsides. He emphasized the importance of the intermodal transportation aspects associated with having AMSH under DOT&PF, along with the substantial administration functions that the department provides. He opined that operating under a corporate model would require duplicating those administration functions, which would be challenging. CHAIR KREISS-TOMKINS responded, "sounds like it's complicated." 3:18:03 PM REPRESENTATIVE KAUFMAN asked whether there is a quality/risk management position in AMHS that assures the processes are working and continuously being improved upon. He noted that typically, that position would report to someone high in the organizational structure. MR. CARPENTER relayed that the reshaping work group recommended a "change management team" consisting of three people that would facilitate the board's transition and work on operations to ensure that goals were being accomplished. He stated that the department is considering adding a position to facilitate that recommendation and report back to the commissioner's office. REPRESENTATIVE KAUFMAN expressed support for the addition of that new position. Additionally, he indicated that the board should be enabled to help support that process. 3:20:31 PM REPRESENTATIVE EASTMAN opined that "change management" sounds similar to "transition." He asked whether the change management team would exist temporarily or permanently. MR. CARPENTER said he is unsure whether it would be a long-term non-permanent position or a permanent position. He conveyed that he envisions the position interfacing closely with the board and ensuring that communications between AMHS, the board, and the commissioner's office are clear. He added that the continued necessity of the position could be decided in the future. REPRESENTATIVE KAUFMAN emphasized that the position he envisioned would be a permanent position. He speculated that any organization managing the operational risk posed by Alaska's waters wouldn't proceed with the endeavor without a position that's looking at optimizing the organization on a continuous basis and trying to drive improvement with the full support of upper management. He reiterated the need for an effective position that handles quality, integrity, and risk-management. 3:23:08 PM CHAIR KREISS-TOMKINS opened public testimony. 3:23:39 PM MALENA MARVIN urged the committee's support for HB 63. She opined that "diversity is the spice of life and makes for a good public board." She indicated that she likes that the bill allows the legislature to appoint a portion of the board members as opposed to appointments made only by the governor. In addition to ensuring that the board represents diverse communities around the state, she said, the provision differentiates HB 63 from SB 103 by buttressing the new board against "changes in the political wind." She also expressed support for the provision that directs the commissioner of DOT&PF to incorporate the recommendations of the board into the department's long-term plans, which further stabilizes AMHS and ensures that the agency doesn't reverse course with each political appointee, she said. To succeed, she opined that the board must be able to shape long-term planning. She stated her belief that under current statute, a single politician can unilaterally sink the ship "without ever having ridden it." She advised working with Alaska's congressional delegation to invest in an innovative, climate friendly fleet for the future. She stressed the need for an affordable and dependable marine highway in coastal Alaska to keep communities connected. 3:26:43 PM SHANNON NYE stated her support for HB 63. She recommended involving active employees and licensed marine engineers in this process, as they have a unique and valuable perspective. She advised involving people that know the ships and actively engage in fuel consumption, deck quarters, and overhauls - people that are familiar with the problems and know the numbers. She urged the committee to involve these people in furthering AMHS. 3:28:24 PM SHANNON ADAMSON, Regional Representative; Masters, Mates, and Pilots (MMP); informed the committee that she sailed with AMHS as a licensed deck officer for seven years and currently serves on MTAB [Marine Transportation Advisory Board]. She expressed MMP's support for the bill for several reasons. Firstly, board members are appointed by more than just the governor, resulting in more diversity to level the political playing field; Secondly, the bill language requires DOT&PF to incorporate the board's recommendations in long-term plans. She pointed out that every report on AMHS in the last 10 years has recommended a change in the management structure. She shared her belief that HB 63 would initiate that process. 3:29:53 PM CHAIR KREISS-TOMKINS asked for examples of recommendations from MTAB to DOT&PF, which had not been followed up on or executed. MS. ADAMSON recalled that five years ago, a dynamic pricing model was recommended by MTAB to increase fares close to sailing while decreasing fares when the boats were not full. The idea was that because it costs the same to sail from point A to point B regardless of the number of passengers, the dynamic pricing model would help fill the boat. 3:30:58 PM NANCY BIRD, expressed strong support for HB 163, adding that she does not support the governor's bill. She said the new board for AMHS is "desperately" needed to accomplish long-term planning. Furthermore, she opined that the appointment of members must be as non-partisan as possible. She shared her belief that the past five years demonstrated the negative side of operating AMHS by political whims. She urged the passage of HB 163 with the inclusion of an immediate effective date. 3:32:00 PM CHAIR KREISS-TOMKINS closed public testimony and invited questions from the committee. REPRESENTATIVE EASTMAN directed attention to page 4, line 7 of CSHB 63(TRA) and inquired about the legal significance of [the commissioner] approving each component of the plan. MR. CROCKER stated his understanding that there is no legal obligation for the department to follow the plan. He expressed his hope that the department would be more inclined to follow the recommendations of the new board as opposed to the current board [MTAB]. REPRESENTATIVE KAUFMAN suggested that the board could issue a corrective action notice, which would provide notification that a serious problem required corrective action. Even without a direct "authority mechanism," he said, there would still be public and legislative awareness. He indicated that there are ways to craft levers that would create awareness of existing problems and drive improvement. 3:34:22 PM REPRESENTATIVE EASTMAN remarked: I'm just wondering if there's a reason that we have, in the bill ... this requirement for a plan to be approved if there's really no requirement for anybody to follow it once it is approved. MR. CROCKER shared his belief that the language in question was already in the existing statute. 3:35:08 PM REPRESENTATIVE STORY inquired about the present status of MTAB and whether it would help the new board implement its directive. MR. CARPENTER stated that MTAB is not meeting at present. he shared his belief that [HB 63] stymied any effort for MTAB to convene, given the proposed changes. He speculated that if the passage of HB 63 were delayed, MTAB could reconvene to take action or discuss with the department. REPRESENTATIVE STORY asked who has the authority to schedule MTAB meetings. MR. CARPENTER was unsure of the answer. He speculated that "the director" organizes the meetings. REPRESENTATIVE STORY expressed her hope that MTAB could meet, as any direction they could offer to the new board would be helpful. 3:37:47 PM CHAIR KREISS-TOMKINS in response to Mr. Carpenter, sought to clarify which director he had referred to. MR. CARPENTER clarified that he meant to say the chair of the MTAB board, not the director. 3:38:16 PM REPRESENTATIVE STORY inquired as to MTAB's current chair. MR. CARPENTER answered Robert Venables. He expounded that [board] meetings may be called by the chair or by the majority of the members of the board, as per AS 19.65.140. 3:38:49 PM CHAIR KREISS-TOMKINS announced that CSHB 63(TRA) would be held over.