SENATE BILL NO. 163 "An Act providing for and relating to the issuance of general obligation bonds for the purpose of paying the cost of municipal port projects; and providing for an effective date." 1:07:34 PM Co-Chair Hoffman MOVED to ADOPT the proposed committee substitute for SB 163, Work Draft 27-GS2769\D (Finley/Kirsch, 4/7/12.) 1:07:44 PM Co-Chair Stedman OBJECTED for the purpose of discussion. 1:08:01 PM WESTON EILER, STAFF, SENATOR BERT STEDMAN, highlighted the changes in the committee substitute (CS). He cited that Page 1, line 1, contained a title revision that expanded the bill's coverage exclusively from ports to other state transportation projects. He added that Page 1, line 10, amended the amount of the general obligation bonds (GEO) to $453,499,200. He reported that on Page 2, line 1, renamed the project fund to the "2012 State Transportation Project Fund". He noted that on Page 2, line 8, Section 3 broadened the grant award statutes, AS 37.05.316, and changed the grant fund total to $188.4 million (line 13.) He listed the transportation grant projects, which contained changes from previous versions of SB 163. He read the list beginning on Page 2 line 16: PROJECT AMOUNT Anchorage - Port of Anchorage $50,000,000 Expansion Bethel - Harbor Dredging 4,000,000 Bristol Bay Borough - Port of Bristol Bay 7,000,000 Expansion and Pile Dock Replacement Haines Borough - Boat Harbor Upgrades 12,000,000 Kodiak - Pier III Replacement 15,000,000 Kotzebue - Cape Blossom Road and Port 10,000,000 Matanuska - Susitna Borough - Bogard Road Extension 13,500,000 Matanuska-Susitna Borough - Port Mackenzie 30,000,000 Rail Extension Nenana - Totchaket Resource Development 6,500,000 Corridor Access Newtok Traditional Council - Mertarvik Evacuation 4,100,000 Road Construction Nome - Port Design and Construction 10,000,000 Sand Point - Sand Point Road Rehabilitation 2,500,000 Seward - Marine Industrial Center Expansion 10,000,000 Sitka - Sawmill Cove Industrial Park Dock 7,500,000 St. George - Harbor Reconstruction 3,000,000 Togiak - Waterfront Transit Facility 3,300,000 Mr. Eiler directed attention to Section 4, line 6, which added a new section that authorized (AS 37.07.080(e)) the Department of Transportation and Public Facilities (DOT) to appropriate the following from the 2012 State Transportation Project Fund: PROJECT AMOUNT Anchorage - Glenn Highway, Hiland Road to Artillery Road 35,000,000 Reconstruction Anchorage - Glenn Highway/Muldoon Road Interchange 15,000,000 Reconstruction Anchorage - New Seward Highway/36th Avenue 26,000,000 Reconstruction Anchorage - New Seward Highway - MP 75 - 90 10,000,000 Bridge Repairs Anchorage - O'Malley Road Reconstruction 15,000,000 Fairbanks - Elliott Highway, MP 108 - 120 Reconstruction 6,500,000 Fairbanks - Old Steese Highway to McGrath Road 24,000,000 Reconstruction and Extension Fairbanks - Wendell Street Bridge Replacement 14,400,000 Haines - Maintenance Shop Replacement 3,000,000 Juneau - Glacier Highway, MP 4 - 6 Improvements 5,500,000 Juneau - Mendenhall Loop Road Improvements 6,000,000 Kenai - Kenai Spur Road Rehabilitation 20,000,000 Ketchikan - Shelter Cove Road Construction and Improvements 19,000,000 Mat-Su - Fairview Loop Road Reconstruction 10,000,000 Mat-Su - Knik Goose Bay Road Reconstruction 15,000,000 North Pole - Plack Road Improvements 5,000,000 Platinum Airport Runway Extension 3,100,000 Port Clarence Access Improvements 4,000,000 Richardson Highway - Ruby Creek Bridge Replacement 11,000,000 Sitka - Katlian Bay Road Construction 14,000,000 Mr. Eiler noted that Section 5, Page 4 contained instructions and authorizations for the State Bond Committee. He read the following language (Page 4, Lines 11 - 15): If the issuance of the bonds is ratified by a majority of the qualified voters of the state who vote on the question, the amount of $3,599,200 or as much of that amount as is found necessary is appropriated from the 2012 state transportation project fund of the state to the state bond committee to carry out the provisions of this Act and to pay expenses incident to the sale and issuance of the bonds authorized in this Act. He concluded with Section 7 (Page 4, line 26), which contained the ballot question and the total amount [$453,499,200] of the bond package. 1:15:09 PM Senator Thomas referred to Page 3, line 23; Fairbanks - Elliott Highway, MP 108 - 120 Reconstruction 6,500,000 and indicated that the project was located 118 miles outside of Fairbanks. He did not want the project attributed to Fairbanks. Co-Chair Stedman replied that the language would be remedied later on in the process. Co-Chair Stedman REMOVED his OBJECTION. There being NO further OBJECTION, Work draft 27-GS2769\D was ADOPTED. KAREN REHFELD, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET, spoke to the original version of the bill. She reported that the original version of SB 163 authorized $350,000,000 in general obligation bonds for six port projects around the state. Four new projects were incorporated into the CS. ANGELA RODELL, DEPUTY COMMISSIONER, TAX DIVISION, DEPARTMENT OF REVENUE, spoke to the fiscal note. She explained that $3,500,000 of the bond total, $453,499,200 was the associated costs to issue the bonds. Upon ballot approval, the first issuance would begin in February, 2013 and would continue into FY 14 and FY 15. She assured the committee that the proceeds would be expended in a timely manner. She expected a low cost for the first bond issuance of approximately 2.6 percent. She commented that the projects were long-term and anticipated a 20 year bond issue. The administration planned to finance the projects over the 20 year period to free up funds for other priorities. Co-Chair Stedman cited the fiscal note from the Department of Revenue (DOR) that appropriated $900,000 in general funds for FY 2013. 1:19:47 PM STEPHEN RIBUFFO, INTERIM DIRECTOR, PORT OF ANCHORAGE, ANCHORAGE (via teleconference), testified in support of SB 163. He thanked the committee for the additional funding totaling $50,000,000 but related that the funding fell short of the $350,000,000 requested by the municipality. He considered the port a statewide project and felt that it benefited the entire state. ALLEN JOSEPH, VICE-CHAIR, SEA LION CORPORATION, BETHEL (via teleconference), expressed his support of SB 163. He worked in collaboration with the city of Hooper Bay on various projects. Currently, the community sought to construct a small boat harbor at a cost of $8,000,000 and to extend a road at a cost of $700,000, for the transportation of goods that arrive by barge. The harbor was unprotected and the goods brought in by barge were trucked on the beach. The residents of Hooper Bay were concerned that a barge or truck accident would affect subsistence fishing. He requested the project's inclusion in SB 163. CHRISTINE KLEIN, CALISTA CORPORATION, ANCHORAGE (via teleconference), testified in support of including the Emmonak port project in SB 163 and clarified that the project was included in earlier versions of the legislation. She explained that the Emmonak port was the hub for villages along the Yukon River. The port was relied on for fuel deliveries and utilized by the fisheries plant that provided jobs for residents. She detailed that the project design was complete and it was "shovel ready." The total cost was $16,500,000. The cost of Phase 1 was $10 million for construction of the dock and wharf. The landing ramp cost $6,400,000. The project was supported by Kwik'Pak Fisheries, the City of Emmonak, Calista Regional Corporation, and the Tribe of Emmonak. 1:24:24 PM MARTIN B. MOOR SR., CITY MANAGER, CITY OF EMMONAK, EMMONAK (via teleconference), testified in support of including the Emmonak port and dock facility project in SB 163. He noted that the city was located 10 miles from the mouth of the Yukon River and served as the regional hub. He served the city since 1963, which included some time as mayor. He spoke of interior Alaska's increasing costs for fuel and basic necessities, which threatened rural Alaska's physical survival. Every necessity must be shipped in. He shared that expanding the Emmonak port benefited the entire region and could potentially reduce the costs. BOSCO OLSON, SENIOR CITY ADMINISTRATOR, CITY OF HOOPER BAY, HOOPER BAY (via teleconference), expressed his support of the inclusion of the road extension and the small boat harbor in SB 163. He explained that the road extension would expand the road over a slough and that the small boat harbor protected boats from potentially destructive storms in the fall. 1:31:45 PM WILBUR R. HOOTCH, MAYOR, CITY OF EMMONAK, ANCHORAGE (via teleconference), testified in support of including the Emmonak port and dock facility project in SB 163. He remarked that the region was experiencing a crippling energy crisis and listed the positive effects of the project for the region. GORDON SEVERSEN, MICHAEL L. FOSTER AND ASSOCIATES, ANCHORAGE (via teleconference), testified in support of the City of Emmonak's port and dock facility project. He voiced that in 2009, 80 barges off loaded 1,500 containers in Emmonak. The dock area was too small, congested, and inadequate. Barge offloading caused bank erosion. JOMO STEWART, SELF, FAIRBANKS (via teleconference), testified in support of expanding the legislation to include funding in SB 163 for solutions to the "crippling energy needs" in Fairbanks. He remarked that the actual definition of "port" in the statutes was fairly broad; "a facility of transportation related commerce located within the state." He briefly shared his ideas for funding. 1:38:40 PM SB 163 was HEARD and HELD in committee for further consideration. 1:38:43 PM AT EASE 1:46:13 PM RECONVENED