SB 103-AMHS OPERATION & PLANNING BOARD  2:02:40 PM CHAIR MYERS reconvened the meeting and announced the consideration of SENATE BILL NO. 103 "An Act repealing the Alaska Marine Transportation Advisory Board; establishing the Alaska Marine Highway System Operation and Planning Board; and providing for an effective date." 2:03:22 PM SENATOR KIEHL moved to take up Amendment 11, 32-GS1649\A.4, which was previously tabled. 32-GS1649\A.4 Fisher 4/2/21 AMENDMENT 11 OFFERED IN THE SENATE BY SENATOR KIEHL TO: SB 103 Page 4, following line 25: Insert a new subsection to read: "(e) Not later than August 1 of each year, the board shall submit proposed operating and capital budgets for the Alaska marine highway system for the next fiscal year to the governor and to the senate secretary and chief clerk of the house of representatives and notify the legislature that the proposed budgets are available." Reletter the following subsection accordingly. Page 5, line 21: Delete "AS 19.65.280" Insert "AS 19.65.280(d)" CHAIR MYERS removed his objection [from the April 8, 2021, hearing when the measure was tabled]. 2:03:44 PM SENATOR KIEHL moved to adopt Conceptual Amendment 1 to Amendment 11, to change the date from August 1 to October 1. CHAIR MYERS objected for discussion purposes. 2:04:06 PM SENATOR KIEHL stated that the committee had previously discussed the date. He offered his view that the department indicated October 1 would be a more workable date. CHAIR MYERS asked Mr. Mills to respond. 2:04:29 PM ANDY MILLS, Special Assistant to the Commissioner, Department of Transportation and Public Facilities (DOTPF), Juneau, Alaska, stated that the rationale the department used was to provide two months from the start of a new fiscal year for preparation and resources to be supplied to the board. It would allow two and one-half months until the governor's proposed budget was released. The department considered it to be "meeting in the middle." CHAIR MYERS removed his objection. There being no further objection, Conceptual Amendment 1 to Amendment 11 was adopted. CHAIR MYERS stated that Amendment 11, as amended, was before the committee. 2:05:32 PM SENATOR MICCICHE stated that currently, the duties and powers do not include budgeting. He asked if it was an appropriate role of the board to provide proposed budgeting for AMHS or if it would be an obstacle for the board's primary mission. He asked for clarification on the intent. SENATOR KIEHL offered his view that it would be an excellent complement to the Operating and Planning Board (OPB) because budgets are policy documents. He stated there is no better way to understand how something works than to review spending fully. For the board to obtain the most detailed and thorough understanding of the Alaska Marine Highway System and how it accomplishes its mission, OPB must understand its budget and spending. The governor will retain all constitutional powers to propose the final budget. 2:07:13 PM CHAIR MYERS removed his objection. 2:07:25 PM SENATOR MICCICHE objected. He asked the Department of Transportation and Public Facilities (DOTPF) how AMHS's budgeting would mesh with OPB's role. 2:07:57 PM ROB CARPENTER, Deputy Commissioner, Department of Transportation and Public Facilities (DOTPF), Juneau, Alaska, responded that the language in the final bill will determine the board's responsibilities. As far as process, the agency will be working on the proposed budget. He said he fully expects the board to discuss the budget. DOTPF does not have a position as to whether it should be a board requirement. He thought it would be remiss for the board not to hold discussions on financial aspects of AMHS. He said it would all come down to the governor's budget proposal. He was unsure whether the department would consider this as a need, but the board would consider AMHS's budget either way. 2:09:16 PM SENATOR SHOWER stated that this would give the board sufficient power to move AMHS to a sustainable model. He wondered if any efforts were duplicated and if this was the right direction, but if some of these changes are not made, it means doing things the same way. He stated that he was leaning in favor of Amendment 11, but he understood the concern. 2:11:17 PM SENATOR MICCICHE expressed concern about setting up an expectation for a board that's not a corporate board. The committee has discussed the next step. He said he would like to see an Alaska Railroad Corporation model used in the future. He said he hoped OPB might achieve this. It may depend on who is elected as the next governor. Since this budget would hold some weight, he would prefer the language suggested or recommended instead of proposed. He pointed out that OPB is not an elected board and it may set up an unsustainable expectation. He acknowledged that members each have a vision of what OPB will do and that vision may vary among members. 2:13:17 PM SENATOR SHOWER asked whether "proposed" means it is just a proposal; that the governor will ultimately decide on the budget. SENATOR KIEHL answered yes. He related his understanding that this board would suggest the budget. He recalled that constitutional language for the Board of Education gives it the power to set or approve the budget that is binding. He said he used "proposed" to clarify that since OPB is an advisory board, it will propose the budget, but the governor and the Office of Management and Budget (OMB) will send a proposed budget to the legislature. 2:14:55 PM SENATOR MICCICHE removed his objection. There being no further objection, Amendment 11, as amended, was adopted. 2:15:30 PM SENATOR SHOWER moved to take up Amendment 9, 32-GS1649\A.9, which was previously tabled. 32-GS1649\A.9 Fisher 4/2/21 AMENDMENT 9 OFFERED IN THE SENATE BY SENATOR SHOWER TO: SB 103 Page 1, line 2, following "Board;" Insert "relating to the powers and duties of  the Alaska Marine Highway System Operation and  Planning Board and the commissioner of  transportation and public facilities;" Page 3, lines 20 - 25: Delete all material and insert: "Sec. 19.65.280. Powers, duties, and functions. (a) The commissioner of transportation and public facilities in conjunction with the board shall, without regard to political affiliation, solicit, interview, and recruit the head of the division of marine transportation, who shall report to and function at the direction of the board." CHAIR MYERS stated that Amendment 9 was before the committee. 2:15:50 PM SENATOR SHOWER read Amendment 9. He stated that there is precedent on boards. He said he requested an opinion from the Department of Law on how the Board of Fisheries operates but he had not heard back. He pointed out the Department of Education says "The board shall appoint the commissioner of education and early development subject to the approval of the governor. The commissioner serves at the pleasure of the board and may not be appointed for a fixed term." He said if the committee would like to give the board more power, it could be left to the board's discretion. Another approach could be to add language "and the commissioner" to indicate that the director works for the board, but also reports to the commissioner. He asked the committee to consider which direction to go. 2:19:10 PM SENATOR KIEHL expressed concern that Amendment 9 raises a constitutional issue. He said he requested Legislative Legal Services to draft something similar to Amendment 9. Ultimately, the attorneys convinced him it could not be done because the Boards of Fisheries and Game and the Department of Education and Early Development are under Art. III, Sec. 26 of the Alaska Constitution, which indicates the board heads the department and is confirmed by the legislature. SENATOR SHOWER responded that was why he asked for alternate methods. He suggested a half step would be to add "and the commissioner" which may prevent a constitutional challenge. He indicated that this language might help bridge the concern and it may be worth going through with a challenge. 2:21:30 PM SENATOR MICCICHE stated that this board is an interim board that will get the legislature to the next step. He expressed concern that this board has the structural authority to operate AMHS. He said he would like to get there. He offered his view that this tries to drag a subject-matter board to suggest fundamental changes to how AMHS operates, its vessels, and routes and convert it into a relatively new one. He offered support for an independent AMHS structure. He said he viewed SB 103 as the halfway point. Further, he agreed that the legislature had not gotten anywhere. He offered his belief that OPB can provide the expertise to identify recommended changes. Then a final solution could be made to operate the board independently. However, he did not believe Amendment 9 was the right direction to take at this time. 2:23:45 PM SENATOR SHOWER offered his belief that it was problematic to have AMHS under the commissioner and that the board lacked sufficient authority. He expressed concern that this board will not affect change because it will still be up to the commissioner to make the final decisions. He offered his belief that it was time to get something done since the state does not have two, three, or five years to change the direction of AMHS. SENATOR SHOWER withdrew Amendment 9. 2:25:19 PM SENATOR MICCICHE said he was not concerned about the constitutional issues. He stated that the committee changed SB 103 by adding legislative appointees to OPB, which will move the process forward. He offered his belief that this expert board with its authority can propose AMHS's budget, which will help the ferry system rely less and less on the state over time. This board will demand better results, he said. CHAIR MYERS held SB 103 in committee.