SENATE BILL NO. 264 "An Act relating to aid for municipal road maintenance; and providing for an effective date." CS FOR SENATE BILL NO. 264(TRA) "An Act relating to aid for municipal road maintenance, and to the transfer of roads to municipalities; and providing for an effective date." Co-chair Pearce noted that there was a transportation committee CS in members' files. Senator Torgerson explained that the bill would remove the current municipal road maintenance office out of the State- shared revenue statutes and makes it a stand-alone program. The new program would adopts the same eligibility and requirements as the old program. It further asked the revenue sharing for roads be increased to $1000/mile from the current level. It is the intent of the legislation that the balance of approximately $4 million be put into another program that would be available for the upgrade and transfer of roads from State to local governments. This would create a stable funding source for the road program. Senator Adams said he opposed this legislation. He did not feel this would bring stability to other parts of the statute. With regards to section 4, which provided the motor fuel collections would be deposited into a separate account. They would have to go back and look at the current status of revenue sharing. There is a cost of living for roads and hospitals, but what is being done under this is placing a flat fee of $1000/mile and that is a concern to many of his rural communities. Senator Torgerson advised his colleague that rural communities get revenue sharing for roads also. He concurred with Senator Adams that perhaps they were taking the strongest link out of what is left of revenue sharing by removing this program. However, that is the reason that it is being taken out. It is a high priority. It is not feasible to hold the entire revenue sharing program harmless because this program is mixed in with it. This program needs to be removed and shored up with additional funds, establish the road transfer program, which would allow local governments to take over some of the roads. Senator Torgerson MOVED amendment #1. Senator Adams OBJECTED. He said he did not know the impact of this amendment. (Tape #103, Side A switched to Side B.) By a hand vote of 5 yeas (Pearce, Sharp, Donley, Torgerson, Parnell) and 1 nay (Adams) the amendment was ADOPTED. Senator Torgerson MOVED amendment #2. Senator Adams OBJECTED. He felt it should be in the capital budget. Senator Torgerson concurred that it should be in the capital budget before Senator Sharp. However, they needed something to act on. By a hand vote of 5 yeas (Pearce, Sharp, Donley, Torgerson, Parnell) and 1 nay (Adams) the amendment was ADOPTED. Co-chair Pearce noted for the committee that fiscal note #3, Department of Transportation and Public Facilities was an update for fiscal note #1. Dennis Poshard, Legislative Liaison, Office of the Commissioner, Department of Transportation and Public Facilities was invited to join the committee. He said the STIP communities compete for funding of projects. He explained the revenue sharing of maintenance of roads and noted a current cap of $3,000 depending on the appropriation. He said 5,000 road miles currently receive revenue sharing and felt this legislation would make false commitments to municipalities. He had no comments to the amendments. Pat Poland, Director, Division of Municipal and Regional Assistance, Department of Community and Regional Affairs testified via teleconference from Anchorage. He said the department would like to see a more comprehensive program and not a program where urban areas were winners and rural areas were losers. He explained a few minor technical concerns and said he could get his written comments to the committee. Mike Cushing, Research and Analysis, Division of Municipal and Regional Assistance, Department of Community and Regional Affairs was invited to join the committee. He did not have any further comments to add to Mr. Poland's testimony. Jim Swing, Parks and Recreation, Matanuska-Susitna Borough testified via teleconference from Mat-Su on behalf of the borough administration and assembly. He said they strongly supported the bill and welcomed the reimbursement level. Ocie Adams, member, Road Service Area Advisory Board to the Matanuska-Susitna Borough testified via teleconference from Mat-Su. He also indicated they supported the bill. Senator Torgerson MOVED CSSB 264(FIN). Senator Adams OBJECTED. He said the bill would take money from rural areas and that it belonged under the capital project. Under section 4 the 37.5% was dedicated to roads and it could have a potential constitutional problem because of dedication of roads. He feels the bill will hurt rural Alaska. Co-chair Pearce pointed out that subsistence was unconstitutional, also, but that was why they were spending time trying to fix it. Senator Adams said the way to fix subsistence was to vote on a constitutional amendment with rural preference. Senator Torgerson said the bill was not an attack on rural Alaska. He said it would reimburse $1000/mile. It was a novel concept to pay one to do something and then expect that it be done. By a roll call vote of 4 yeas (Pearce, Sharp, Donley, Torgerson ) and 1 nay (Adams) CSSB 264(FIN) was REPORTED OUT with individual recommendations and accompanying fiscal notes from the Department Revenue, zero; and Department of Transportation and Public Facilities, $38.5. Co-chair Pearce HELD SB 263 until Tuesday. There followed miscellaneous conversation regarding the committee schedule. ADJOURNMENT Co-chair Pearce recessed the committee at approximately 11:02 a.m. until Saturday at 9:00 a.m. SFC-98 -14- 3/27/98