SB 189-INTERNATIONAL AIRPORT AUTHORITY MR. BEN GRENN, legislative aide for Senator Kelly, read the following sponsor statement: The public process surrounding the implementation of an Alaska Airport Authority combining Alaska's two international airports promises to be comprehensive. The process will allow the public and affected organizations to review the proposed legislation and begin a thorough discussion of its merits. Forming an airport authority encourages the development of trade on a statewide level and allows the Anchorage International Airport and Fairbanks International Airport to benefit from the economies offered by a single administrative body. The proposed board structure will give this authority the long term management stability it needs to more effectively and rapidly respond to fast-changing world market conditions. Only Alaska and Hawaii have regional international airports that are state operated. The other 48 states international airports are run by authority systems. Concern may arise over some elements of this legislation. The term authority can be misleading and even inaccurate in implying a voracious and autonomous self-sustaining public body. Some authorities do in fact meet that criteria. However, in SB 189 the Governor of Alaska will appoint the members of the board of directors and the legislature will review and appropriate the budget. All things done by the authority are public and the acquisition of land by eminent domain may take place only with prior approval of the governor. Responsibility to repay existing airport bonds is assumed by the authority, and the authority also assumes repayment of new bond issues. Existing state employees transferred to the authority become authority employees, and transfer with their collective bargaining agreements for the duration of that contract. These employees continue to participate in their existing retirement benefit programs. The authority may choose to engage in collective bargaining with its employees. Senate Bill 189 provides for the continuation of litigation, hearings, investigations and other proceedings that were begun under a law that was amended or repealed by this Act, notwithstanding the amendment or repeal of that law. Likewise, regulations adopted under pre-existing law remain in effect for the term adopted or until repealed. This legislation requires the authority to annually prepare a concise report for the governor, legislature, mayors of the Municipality of Anchorage, the Fairbanks North Star Borough and the City of Fairbanks describing the operations, income and expenditures of the authority for the prior fiscal year. MS. SHERRY MCCONNELL, Chair of the Port Association of Louisiana, stated Louisiana has 26 port authorities that are political subdivisions of the state. The authorities are statutorily established and governed by a local body of commissioners. Number 472 SENATOR PEARCE asked if the enabling statute allows parishes to have more than one port authority, or whether authorities can cross parish lines. MS. MCCONNELL answered she did not know of a prohibition for crossing parish lines. She deferred to Mr. Prejean to elaborate on the issue. SENATOR PEARCE asked if authorities have powers by statute of eminent domain. MR. PREJEAN answered parishes can have more than one port authority, and authorities do have the right of eminent domain but it is not absolute--there has to be a court process. None of the ports share jurisdiction. CHAIRMAN WARD confirmed that Louisiana has appointed and elected port commissioners, and he asked for clarification of the umbrella organization. MR. PREJEAN responded the umbrella organization is a trade organization which meets monthly and works with the legislature on port issues. Number 737 SENATOR PEARCE asked if authorities have jurisdiction over airports. MR. PREJEAN responded they are traditional port authorities. SENATOR PEARCE asked if the New Orleans International Airport is operated by the city or by an authority. MR. PREJEAN answered the airport is operated by a commission appointed by the city. Number 870 CHAIRMAN WARD asked if Louisiana authorities have powers of taxation on land. MR. PREJEAN responded yes, most of the capital projects are supported by the state through a transportation trust fund. CHAIRMAN WARD asked when the ports became port authorities were lands transferred to the authorities. MR. PREJEAN answered land was not transferred to start ports. Land donations came from private land owners or from land purchases. Airports in Louisiana are a portion of the Louisiana Trust Fund and they receive monies to match federal funds for construction. MS. MCCONNELL clarified that most ports started with a port authority whose mission was to start ports. MR. PREJEAN agreed. SENATOR PEARCE asked Mr. Grenn if this bill is similar to one she introduced in 1996. MR. GRENN responded yes. MR. DOYLE RUFF, Manager of the Fairbanks International Airport, presented the Department of Transportation and Public Facilities' (DOTPF) position on SB 189. The department disagrees with language in the bill saying the viability and competitive position of the Anchorage and Fairbanks International Airports would be best protected under the operation of an independent authority. Alaska's international airports are being operated in an efficient, responsive and business-like manner and they are being operated with the best interest of all Alaskans and visitors in mind. DOTPF believes there is no point in fixing something that is not broken, and it believes the department should be recognized for some of its successes. The international airport system has continued to grow, and cargo has grown in excess of 6% per year in the last 5 years--Anchorage is ranked the number one "all cargo airport" in the country and Fairbanks is ranked number thirty six. Over $100 million of private investments have been committed and there have been over $350 million in infrastructure improvements. DOTPF is concerned that creating an authority would create another level of bureaucracy and confusion. Fairbanks or Anchorage board members could veto a decision proposed by the board causing a block vote. The bill also does not assure airport independence, and it may eliminate airport managers and staff. The department feels this bill defeats the purpose of transportation planning, and the goals of the bill can best be accomplished within the existing system. Number 1409 SENATOR LINCOLN commented the sponsor statement says only Alaska and Hawaii have state operated international airports, other international airports are run by authority systems. She asked for Mr. Ruff's response. MR. RUFF responded only three states have airports under DOT-- Alaska, Hawaii and Maryland. With regard to airports that are under authorities, Anchorage is one of the top one hundred airports based on total passengers--ranked 58. The top one hundred airports are broken down into hubs--large, medium and small. Anchorage is a medium hub, Fairbanks is a small hub. Of the large hubs, 12 out of 28 are operated by authorities. There are 19 out of 44 medium hubs operated by authorities, and 11 out of 28 small hubs operated by authorities. SENATOR LINCOLN stated that the fiscal note attached to the bill for 2001 is $401,000, she asked Mr. Ruff what the cost differential will be. MR. RUFF responded he would defer to other staff at DOTPF, but he feels the legislation would create a need for additional staff and expenses. SENATOR LINCOLN responded additional staff is not mentioned in the analysis of the fiscal note, and she asked if there is support from the Anchorage and Fairbanks assemblies. MR. RUFF answered that Mr. James Dodson should answer Senator Lincoln's question. SENATOR PEARCE asked how much of the overhead costs are charged back to airports by DOTPF to pay for the Commissioner and his staff. MR. RUFF responded the requirements within the legislation demand, in his opinion, a constant staff for meeting the reporting requirements. Number 1770 MR. JAMES DODSON, representing the Mayor and Chamber of Commerce of Fairbanks, stated Fairbanks opposed this legislation in 1996 and is still concerned about this issue. The city will voice its position at a later time. CHAIRMAN WARD set SB 189 aside until the sponsor and DOTPF have more time to address the concerns brought to committee's attention.