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." 2:18:20 PM CHAIR P. WILSON explained that a new committee substitute has been prepared. REPRESENTATIVE JOHANSEN made a motion to adopt a proposed committee substitute, labeled 26-LS1207\N, Kane, 2/18/10, as the working document. 2:19:32 PM REPRESENTATIVE GRUENBERG objected for the purpose of discussion. 2:19:38 PM REBECCA ROONEY, Staff, Representative P. Wilson, Alaska State Legislature, on behalf of Representative P. Wilson, stated that explained changes contained in Version N. She explained that the first change removed legislative intent. Another bill will be vehicle for appropriation of the proposed $1 billion endowment to the proposed Alaska Transportation Infrastructure Fund (ATIF), she stated. 2:20:24 PM MS. ROONEY referred to page 2, line 5 of Version N. She reported that the committee previously discussed removing the Watercraft Fuel Tax Account (WFTA) from the bill since it may appear that the Fisheries Business Tax Account (FBTA) was the only revenue source for the Municipal Harbor Facility Grant Fund (MHFGF). Thus, the WFTA was replaced with the ATIF. On page 2, lines 19-22, the committee previously discussed the beginning as July 1, 2011 instead of April 1, 2011, to coincide with the start of fiscal year. She referred to page 3, to the allocation of funds between modes, noting the committee previously discussed the desire for more flexibility between the transportation modes. She referred to page 3, line 13, which was changed to read..."not to exceed" to allow the legislature the ability to increase and decrease appropriations between the transportation mode, which would allow additional funding for a runway erosion issue or other issue that may require additional funding to be addressed. 2:22:36 PM MS. ROONEY referred to page 4, line 10, to the composition of the Transportation Infrastructure Fund Advisory Council (ATIFAC) which was increased to 10 members. Some committee members suggested that the legislature's Transportation Committee Chairs might have too large a role. Thus, paragraphs 4 and 5 added two additional legislators to be appointed by the leadership instead of the Chairs of the House and Senate Transportation Standing Committees. The bill adds two legislators from urban and rural districts to ensure the representation of expertise in different modes. The DOT&PF commissioner's position was deleted, but his/her three deputy commissioners were added since they are responsible for surface transportation, aviation, and the AMHS. 2:24:10 PM MS. ROONEY referred to page 4, lines 24-31, which is the bill drafter's first attempt to capture legislators from urban and rural districts. CHAIR P. WILSON expressed her intention to hold HB 329 over today. 2:26:21 PM MS. ROONEY referred to page 5, line 7 of Version N. The date was changed to October 15 to allow the report from the ATIFAC to mesh with the DOT&PF's budget timeframe. Additionally, the ATIFAC's report will be submitted to governor as well as the legislature to help alleviate the issue of the separation of powers. This disparity comes into play since having legislators on the council basically gives the legislature both the power to affect the suggested list of projects as well as choose the actual projects that receive funding. 2:27:04 PM MS. ROONEY referred to page 9, lines 22 and 29, and indicated the dates were changed to reflect the beginning of the fiscal year. CHAIR P. WILSON referred to page 9, line 25 of proposed Section 15 of Version N, which read, "If, under sec. 13 of this Act, AS 44.42.020(a)(17), enacted by sec. 9 of this Act, takes effect immediately under AS 01.10.070(c)." This means that this bill would take effect only if the results if the joint resolution [HJR 42] passes and the voters pass the constitutional amendment, she stated. 2:28:22 PM REPRESENTATIVE GRUENBERG related a series of concerns and suggestions. He referred to page 4, of Version N, to the composition of the ATIFAC, which would consist of four legislators. He expressed concern that members would be majority members and no provision was made for minority members. He related that two legislators should represent communities with small populations and two legislative members were not described. He asked for consideration for urban areas and the population that uses the public transit systems. He referred to page 5, line 3, which refers to AS 39.20.180. He asked whether that was the correct statute or if the travel and per diem should correspond to a statute in Title 24. He also referred to page 5, line page 7, to capital projects and suggested flexibility to cover items such as higher fuel costs or operating expenses instead of restricting the recommendations to capital projects. 2:32:06 PM REPRESENTATIVE GRUENBERG suggested that the sponsor specifically consider an alternate plan for a statute in case the constitutional amendment for the dedicated transportation fund does not pass. If that happened, the committee would need to start a new process to develop an alternate plan which would take time. If an alternate plan were incorporated into the bill, it would ensure that transportation issues could be funded. 2:33:28 PM REPRESENTATIVE JOHANSEN referred to page 2, lines 1-9, of Version N. He was unsure whether the Fisheries Business Tax should be included. CHAIR P. WILSON answered the Fisheries Business Tax is an existing tax. She explained that she wanted the flexibility to use the tax for the proposed ATIF. REPRESENTATIVE JOHANSEN referred again to proposed Section 2 and to the appropriations to the Municipal Harbor Facility Grant Fund. This proposed section allows the legislature to appropriate to the proposed ATIF, deletes the reference to the Watercraft Fuel Tax Account, and "out of the blue" states, "and from Fisheries Business Tax collected under AS 43.75.015 after payments to municipalities are made..." He suggested that any of a hundred funds from the general fund could be deposited to the Municipal Harbor Facility Grant Fund. He asked why the Fisheries Business Tax is singled out since the legislature may make other appropriations to the fund. He also remarked that this tax is collected under AS 43.75.150, but payments are made to municipalities under AS 43.75.130. CHAIR P. WILSON explained that the state is in the process of fixing harbors and allowing local municipalities to take over ownership. She commented that municipalities will not take over harbors until the repairs are made. She recalled that about 29 harbors have not yet been transferred or fixed and this mechanism may provide a method to repair the state's harbors. REPRESENTATIVE JOHANSEN agreed but maintained his concern. CHAIR P. WILSON offered to flag areas of concern that members have on the bill. 2:37:10 PM REPRESENTATIVE JOHANSEN referred to page 3, lines 6-8 of Version N, and read, "An appropriation from the fund may not be made to a project for which federal money has been allocated..." He referred to page 3, line 13, which read, "...shall be distributed..." He asked for clarification since one is "may" and the other is "shall." CHAIR P. WILSON explained that she sought flexibility. State funded projects can move more quickly through the process, yet there might be times the legislature may wish to use federal funds. She expressed her intent to limit the amount of the fund that could be used for capital projects. 2:38:47 PM BRIAN KANE, Attorney, Legislative Legal Counsel, Legislative Legal and Research Services, Legislative Affairs Agency, explained that "may not" and "shall not" basically mean the same thing. He referred to page 3, line 6, and explained that the state is limited to making an appropriation for matching funds for a federally funding project. Additionally, federal matching funds cannot exceed 10 percent of the appropriations for any given year. 2:40:29 PM CHAIR P. WILSON stated she did not know if federal projects always require matching funds. She asked whether it would be clearer if it read that an appropriation from the fund "cannot or shall not" be made instead of "may not." REPRESENTATIVE GRUENBERG agreed that "cannot" is a clearer term. He suggested the sponsor consider discussing this further with the bill drafter. He stated that "may not" is likely the normal term in the drafting manual but in this instance is confusing. 2:41:39 PM REPRESENTATIVE JOHANSEN referred to page 3, lines 12-13, which read, "Appropriations made from the fund for capital projects for transportation and related facilities shall be distributed based on amounts not to exceed the following percentages..." He asked whether the dedicated fund, which sets specific parameters for allocation of funds between transportation modes, would challenge the decision-making process of the legislature. MR. KANE responded that he did not believe the program would challenge the appropriation process. He stated the determination was the resolution would place into the constitution a provision for a dedicated fund for transportation and related facilities. The proposed language in HB 329 sets the allocation to ensure money is spread out for transportation needs such as roads, ferries, and transit. However, in any given year the entirety of the fund would not be appropriated for only one project. The legislature could still appropriate 80 percent of the available funding for road and surface transportation funding and not appropriate any funds to other types of transportation projects. 2:43:40 PM REPRESENTATIVE JOHANSEN referred to page 3, lines 12-15 of Version N and asked what would happen if the legislature chose to appropriate 85 percent instead of 80 percent for roads and surface transportation. MR. KANE answered that based on the language that the statute would not allow the legislature to spend beyond these percentages from the proposed Transportation Infrastructure Fund (ATIF), but the legislature could appropriate additional funds from another fund such as the general fund (GF). 2:44:19 PM REPRESENTATIVE GRUENBERG pointed out that this is an authorization bill and the legislature cannot appropriate beyond the manner authorized. He referred to page 3, line 25, of Version N. He expressed discomfort with the current percentages of allocation from the dedicated transportation fund. However, he suggested that the 20 percent referred to in this paragraph is intended for "public" transportation. He further suggested that it should read, "...projects related to local community public transportation and transit..." to be certain the intent is crystal clear. He referred to page 3, line 7, and offered that it may be appropriate to refer to capital projects in this instance. 2:45:49 PM REPRESENTATIVE MUNOZ referred to page 3, lines 17-18, of Version N and asked whether municipal airports are eligible for up to 25 percent for aviation projects. MS. ROONEY responded that she believed that all airports could apply for the funds. 2:46:20 PM CHAIR P. WILSON recalled that the Juneau International Airport is owned by the City and Borough of Juneau and that Juneau receives a portion of the aviation fuel tax. REPRESENTATIVE MUNOZ agreed that the Juneau International Airport receives 60 percent of the aviation fuel tax. She referred to page 3, to paragraph 5, which allows for the inclusion of other community transportation projects, and asked why municipal airports would be excluded under paragraph 2. CHAIR P. WILSON offered her belief that public transportation could include airports. 2:47:51 PM REPRESENTATIVE MUNOZ asked whether the 25 percent allocation for aviation could include municipal airports. MR. KANE answered he was not aware of another provision in statute that would prohibit municipal airports from receiving any type of appropriations so he assumed airports would be eligible for appropriations under this paragraph as well as under the public transportation provision. 2:48:50 PM REPRESENTATIVE MUNOZ referred to page 3, paragraph 4, and asked whether the 20 percent allocation for harbor projects would be deposited into Municipal Harbor Facility Fund. MR. KANE related that these are ceiling percentages for allocation from the proposed fund, but no specific percent is required to be deposited into the Municipal Harbor Facility Grant Fund. There is also another option for projects related to harbor facilities and state-owned marine facilities as well as the Municipal Harbor Facility Grant Fund. As much as 20 percent can be deposited directly into the grant fund, but the allocation cannot exceed the 20 percent, he stated. 2:49:46 PM REPRESENTATIVE MUNOZ referred to the composition and make-up of the ATIFAC. She asked how the creation of another DOT&PF review team would impact the department and whether this council would create a duplication of effort. She also expressed concern about inclusion of legislators on that team since this is a statewide project fund. She suggested that legislators would naturally focus on own areas. She asked the committee to consider an amendment to the composition of the ATIFAC. She indicated she would also like the DOT&PF to comment. CHAIR P. WILSON clarified that this would not represent a duplication of efforts since the Statewide Transportation Improvement Program (STIP) relates to federally funded projects. REPRESENTATIVE MUNOZ maintained she would like to hear from the DOT&PF on this matter of creating another panel. CHAIR P. WILSON remarked that some constituents do not believe the public's concerns are addressed in the current process. This option would have someone directly representing the constituency in the process. 2:52:21 PM FRANK RICHARDS, Deputy Commissioner, Office of the Commissioner, Department of Transportation & Public Facilities (DOT/PF), stated that the DOT&PF provided a packet for members to identify the project evaluation boards that the DOT&PF currently has in place for surface transportation highway, aviation, and harbors projects. The process for each of the boards is similar, although the criterion differs slightly. He related that the DOT&PF would welcome another board to address state projects. The inclusion of public members or legislators would also be welcome for their viewpoint and perspective. The DOT&PF welcomes this participation to ensure that the process is an open and transparent process. 2:53:42 PM REPRESENTATIVE PETERSEN recalled prior committee discussion. He further recalled that the committee thought having the Chair of the House and Senate Transportation Committees might have too much influence in the process. He was not certain if that issue has been addressed. CHAIR P. WILSON recalled that the Chairs of the Transportation Standing Committees initially would appoint legislators to serve on the advisory committee, but a provision has been expanded in Version N to allow the leadership of each body to appoint legislative members. REPRESENTATIVE PETERSEN said he thought the DOT&PF process worked well, but he expressed concern that having the legislative members on the advisory committee might be creating another "committee of committees." He said he also thought another layer of bureaucracy might slow down the process. 2:55:37 PM REPRESENTATIVE JOHANSEN referred to page 4, line 18, of Version N, and asked whether the commissioner's designee is another DOT&PF employee or if the commissioner can appoint anyone to serve. MR. RICHARDS responded that the commissioner's designee has always has been a DOT&PF person. MR. KANE offered his belief that in each instance a DOT&PF designee has been filling in for the commissioner the designee has been a DOT&PF employee. He offered to research this further. 2:57:43 PM REPRESENTATIVE JOHANSEN remarked that an appointed legislator could be a minority member of the legislature. CHAIR P. WILSON commented that it could be transportation chair. REPRESENTATIVE GRUENBERG stated that it would be unlikely legislature leadership would appoint a minority legislative member to serve. MR. KANE, in response to Chair P. Wilson, stated that the appointment process to decide which legislators will serve on boards and commissions has usually been left to the discretion of the leadership of the legislature. He offered to check into this further. 3:00:11 PM REPRESENTATIVE GRUENBERG referred to page 3, to paragraphs 1 through 5, and asked whether surface transportation includes public transportation. He thought that surface transportation would relate to rolling stock, which would be public and real property in the sense of roads. He also thought it might allow for projects such as a bus barn. He wanted to be certain that the language in paragraph 1 indicates that the dedicated transportation fund could be used for bus barn or a roundhouse for the railroad. He asked for clarification and to flag the issue for the sponsor to contemplate. CHAIR P. WILSON remarked that all of the state projects are for the public. MR. KANE suggested that the legislature could define that the allocation for distribution from the proposed ATIF could be defined as specific or in broad terms. 3:03:16 PM MS. ROONEY related that the discussions for the allocations were limited to roads and the means of conveying vehicles. The reason for the inclusion of paragraphs specified for local community public transportation and transit is because these items were specifically separate from roads and surface transportation category. REPRESENTATIVE GRUENBERG commented that he could envision at some point the need for a bus barn. CHAIR P. WILSON offered her belief that a bus barn project would be covered under the allocation in paragraph 5, which allows funds to be used for projects related to local community public transportation and transit. In further response to Representative Gruenberg, she explained that the Alaska Railroad Corporation is specifically not listed since it is a separate entity. This fund is not for Alaska Railroad Corporation projects, she stated. REPRESENTATIVE GRUENBERG strongly suggested that this "be put in black and white" as it is not clear in the specific language. REPRESENTATIVE JOHANSEN suggested that the sponsor should also consider how the Anchorage Metropolitan Area Transportation Solutions (AMATS) and the Fairbanks Metropolitan Area Transportation Solutions (FMATS) process fits together. REPRESENTATIVE GRUENBERG agreed. He remarked that as Southcentral grows a rail commuter system may be needed and he would like the dedicated transportation fund to be used for that purpose. [HB 329 was held over.] 3:11:39 PM