Sponsor Statement for Draft House CS for CS for SB 21

An Act Relating to Ferries and Ferry Terminals, Relating to the Alaska Railroad Corporation, Establishing the Alaska Marine Highway and Railroad Authority; Relating to Maintenance of State Marine Vessels; and Providing for an Effective Date.

The premise of this Committee Substitute is to establish an Alaska Marine Highway and Railroad Authority that would combine both of the state's transportation entities under one authority for purposes of operation and management.

The authority would be a public corporation of the state and instrumentality of the Department of Transportation, but would have a legal existence independent and separate from the state. The authority, and its entities, the Alaska Marine Highway system and the Alaska Railroad, would be subject to the provisions of the Executive Budget Act.

The powers of the authority would be vested with a nine member board. The Commissioner of Transportation and the Commissioner of Commerce and Economic Development would be ex-officio, non-voting members. The appointed directors would include two state residents who have high level experience in maritime matters; one member who has at least 10 years experience in railroad management; one member who is or has been an executive official of a United States railroad; one state resident who is a member of a union representing employees of the Alaska Marine Highway system; one state resident who is a member of a union representing employees of the Alaska Railroad Corporation; and one member who is a resident of the state. The appointed board members would serve staggered five-year terms.

The requirements and makeup of the board would ensure a significantly high level of expertise in maritime and railroad management matters, as well as representation of the Alaska Marine Highway system and Alaska Railroad employees' interests. The addition of union representation on the board would finally give the employees of both transportation entities a voice in the management and operation of said entity; something which has been lacking within the present management structure of the Alaska Marine Highway system.

Additionally, subject to legislative appropriation, the revenue derived from the lands deemed not necessary to the operation of the railroad, could be used to support the operations of the railroad, the marine highway system and the authority itself. This would result in a means to sustain the operation of both entities with reduce legislative funding.

Establishment of the Alaska Marine Highway and Railroad Authority would not only benefit the citizens of the State of Alaska, but also the millions of tourists who avail themselves of ferry and railroad service by ensuring continuity and improvement of operation by a management structure responsive to and understanding of Alaska's unique needs and settings.

Sponsor Statement for SB 21

Senate Bill 21 would establish an Alaska Marine Highway Authority to assume management of the Marine Highway System from the Department of Transportation and Public Facilities.

The Authority would be a public corporation of the state as an instrumentality of DOT/PF, but would have a legal existence independent and separate from the state. The new Authority would be comparable to the Alaska Housing Finance Corporation or the Alaska Industrial Development and Export Authority.

The powers of the authority would rest with a seven member Board, appointed by the Governor. One member would be the Commissioner of Transportation. The six other members would be required to have experience in maritime affairs and would serve staggered five year terms. The Board would hire the system director.

Establishment of such an authority board would bring maritime experience and continuity to the management of the Alaska Marine Highway System.

Based on information gathered at public hearings over the interim, the Senate Task Force on the Alaska Marine Highway System concluded that the legislature should consider the creation of such an Authority.

Testimony received by the Task Force indicated that DOT management of the Marine Highway lacks focus and that AMHS administration under DOT lacks maritime experience.

Management under DOT has become insular and is unresponsive to input from vessel employees and the general public. Scheduling is chaotic and the fare structure has discouraged ridership. The reservations system has been an abject failure.

While concerns over funding levels are valid, the naturally bureaucratic mind-set of the Department has tightened what former director Jim Ayers termed a "death spiral".

Establishment of the Alaska Marine Highway Authority will not be a panacea, but will give the system a new perspective.

I ask your support for Senate Bill 21.