SENATE BILL NO. 314 "An Act relating to the Alaska marine highway system and to municipal feeder vessel authorities." Senator Torgerson spoke to this bill, saying: "What this bill is attempting to do is to recognize if some municipalities, especially here in Southeast Alaska might want to own, construct, operate their own ferry vessels. Mr. Chairman, in fact several communities - I believe eight of them have voted to form a port authority mainly made up of Prince of Whales Island communities, Petersburg and Wrangell to establish their own authorities and to come to the State Of Alaska or to the federal government and ask for funding for these ferries as far to built them. Mr. Chairman, it is my belief this group has met with a lot of opposition from the administration on whether - on how to crank these things up and how to operate them. They basically went directly to Senator Stevens for some of the funding and Senator Stevens actually gave appropriation, which up until the budget came out this year they thought was going to come direct to them. But it does run through the STIP. We'll be taking that up as a capital appropriation a little later on." "Mr. Chairman, also all of the Southeast plans that I've reviewed starting from 1971, and there's been about six of them, have established the need for feeder vessels to give better service to the communities. This has been rejected by not only this administration but also every administration until now as far as starting these vessels. We know that if these vessels are operating that they would reduce the subsidy required through the Marine Highway System." "So it's my hope that these communities, when they come forward to establish the feeder vessels will be able to participate in the federal funding programs that are currently available for the rest of the state and the National Highway System. This bill sets that up." "So just to go through it, Section 4 is kind of the meat of the bill. It provides a mechanism for establishing the authority in Subsection A. Subsection B provides a mechanism for disolving authority in case the local government decides they don't want it. Subsection C describes the power of the authority; D, the liability of the authority; E, provides administration of the authority and F, establishes that feeder vessels can be a grant authority for the grant fund." "Basically, Mr. Chairman, we all know that Senator Stevens, Senator Murkowski and Representative Young were successful in getting more money that was going to be directly allocated to the State Of Alaska for the ferry system. It is my hope that by passing this bill we'll use that money to help build, construct and maintain vessels that are owned and operated by the municipal governments." Senator Torgerson then indicated that he had an amendment to offer. Senator Pearce assumed that although he referred to Southeast Alaska that the bill would in no way be limited to that area of the state. Senator Torgerson said any interested municipality would be able to participate, but that communities in Southeast were the most likely. He mentioned that Homer, Kodiak and Anchorage were others that may wish to establish feeder vessels. Senator Pearce questioned the insertion of the word "feeder". She felt it implied that the ferries would need to link up to the main Marine Highway System. She wondered if communities that weren't served by the main ferry system would be able to take advantage of this program if they chose to establish a ferry system. Because they were not strictly feeding into something that already existed, could they participate in the program, she asked. She wanted to ensure as much flexibility as possible. Senator Torgerson responded by saying the bill didn't really define feeder vessels. He said the other common term was "day boat" and he was told the correct terminology would be "feeder vessel". He felt the bill spoke to Senator Pearce's concerns, and referred to Section 1, which said the State Of Alaska was to operate the mainline ferries north and south and the feeder vessels would feed that mainline service. Therefore, Homer and Anchorage would qualify. Other communities might be precluded if their vessels wouldn't be feeding into the established routes. The Ketchikan Airport ferry wouldn't qualify, he noted, but he couldn't think of any others who wouldn't. He admitted someone could make that stretch. Senator Pearce said she didn't want the department to be able to make that stretch. Senator Adams pointed out that the language in Section 1 did not make it mandatory for municipal feeder authority. He had a question about page 3 line 31, the feeder vessel authority grant fund set-up. Could the Legislature still place the $30 million to subsidize the ferry system through the operating budget, he asked. Senator Torgerson said that was correct, this had nothing to do with the Marine Highway fund itself. This was just for feasibility studies and grants for construction, acquisition, and maintenance and so forth. Senator Torgerson moved for adoption of Amendment #1. Senator Adams objected. Senator Torgerson spoke to his amendment, saying the senator from Craig approached him and had concerns about the community of Craig being left out because of language in the bill relating to port authorities. Senator Torgerson said it was not his intention to exclude Craig, and he offered this amendment to correct that. He spoke more about the formation of the port authorities. Senator Adams removed his objection. Co-Chair Sharp ordered Amendment #1 adopted there being no objection. There was no further discussion on the legislation and Co- Chair Sharp noted there was no one signed up to testify. Senator Phillips offered a motion to move CS SB 314 (FIN) from committee with amended fiscal notes. The amount of the fiscal note would be lowered to $12,000, reducing the advertising costs to $8,000, which Co-Chair Sharp felt would be adequate. Senator Adams noted the Department of Law's expenses to ensure that the advertising be done properly. Co-Chair Sharp said he would leave that amount. There was no objection to the motion and the bill was reported out of committee.