CS FOR SENATE BILL NO. 21(STA) "An Act relating to ferries and ferry terminals, establishing the Alaska Marine Highway Authority, and relating to maintenance of state marine vessels; and providing for an effective date." Senator Taylor, sponsor of SB21 was invited to join the committee. In a brief explanation of the bill he noted this bill would be an ongoing working document. He said the creation of the Marine Highway Authority would bring stability to the system. At the present there was an increasing level of bureaucracy and a decreasing level of services. In answer to a question from Senator Adams he said the Authority would be an entity within the Department of Transportation. Senator Torgerson asked if the Authority would be able to spend Federal funds. Senator Taylor indicated they would. Senator Adams said he would still like to look at the matter of setting up an Authority. He felt there had been a lack of communication. Senator Taylor responded that within the entire infrastructure there had been a lack of communication. He would applaud any change to bring expertise to the Marine Highway. The bandaid approach up until now only fixed part of the problem. Senator Torgerson commented on fiscal notes. He noted the chief operating officer's fancy fee. He suggested amending the Department of Transportation's fiscal note to zero and send the money otherwise earmarked to the Authority. Senator Phillips in a comment to the committee noted that Juneau was against the bill and Ketchikan supported the bill. In conclusion of his testimony, Senator Taylor said the best time to make the transition to the Authority would be in the winter when the ferry system was slowed down. Commissioner Joseph Perkins, Department of Transportation and Public Facilities was invited to join the committee. He said the Administration did not support SB 21. Reductions to the operating budget year after year had caused operational problems and reductions in services. Stable funding must be addressed and there should be an adequate stable funding source. He said due to maintenance for ships having been cut there would be some difficulty in getting Coast Guard certification. The majority of the marine routes were a part of the federally designated highway system. This tied the system into the road network. Further, he noted the Authority was not in the Department of Transportation and it would operate independently. The creation of the Authority would only cause more competition. Two points he brought up for the committee to consider for the creation of the Authority were: 1. the project must get on STIP for federal funds; and 2. they must receive legislative authority. He felt the Authority at this time was moving in the wrong direction. There would be the same isolation for the Marine Highway as for the Alaska Railroad system. The needs of the travelling public have drastically changed. There should be changes made within the Department of Transportation to address these needs. Senator Adams voiced a concern for Federal funding for the Authority. Commissioner Perkins explained that Federal funds were given to the Department of Transportation. The Marine Highway Authority would have to compete for federal funds based on how projects were graded and scored. Bob Ward, City Manager, Skagway, Alaska was invited to join the committee. He said the City of Skagway opposed SB 21. If there was enough money there would be enough ships and therefore no problems. He felt there were many significant points that needed to be addressed. A continued trend of decreased funding had led to a decrease in service levels to community residents in the winter. Andrea Barkley, Alaska Marine Highway System/IBU Executive Committee was invited to join the committee. She was a 19- year Marine Highway employee and supported the bill. She said there were many problems that needed to be changed and the creation of the Authority offered potential improvement. Stephanie Rainwater, Alaska Marine Highway System, Chairman of Management Labor Advisory Board was invited to join the committee. She was a 10-year Marine Highway employee and also supported the bill. She explained the last three years there had been a decrease in services and poor reservations system. There had been too much cutting back and now not enough money left to keep the system running. There needed to be a change and she said that Marine Highway employees supported SB 21. They were good employees, wanted to give good service; and therefore the Marine Highway System should keep people employed and let them provide good service. She also noted that many times the ships are not always full. Senator Adams concurred and said that everything was going down because of budget cuts. Senator Torgerson responded by saying that there had been a cut in Administration but that $1 million had been put back into the Marine Highway budget specifically for vessel operation. Ms. Rainwater said perhaps one should look at the Administration employees. Gerald Hope, Tribal Council Officer as Secretary, Ketchikan Indian Corporation was invited to join the committee. He spoke on behalf of the Southeast Alaska families and said the Alaska Marine Highway System provided transportation for these families to keep in close touch with each other. He said the Corporation supported SB 21. Fred Shield, representative, Haines Borough and Chamber of Commerce was invited to join the committee. He said Haines supported SB 21. James L. Van Horn, member, Ketchikan Gateway Borough was invited to join the committee. He said the death spiral system of the Alaska Marine Highway had to be changed. He supported SB 21. Senator Taylor in response to the given testimony noted that three years ago the captains for the Alaska Marine Highway sent in a letter to their superiors asking only for competent management. Co-chair Sharp set the bill aside.