House committee hears bid to shift Knik bridge authority

Richard Mauer

In a move that appeared to have her leadership's support, a House member from Anchorage proposed Tuesday morning to wipe out the independent agency that hopes to build the Knik Arm bridge and make it an advisory group to the Alaska Housing Finance Corp.

Rep. Mia Costello, R-Anchorage, made the bid to all but eliminate the Knik Arm Bridge and Toll Authority in the House Rules Committee. Her proposal was contained in a 22-page amendment to the five-page House Bill 23, which had been poised for a House vote as recently as Monday.

The original bill would have allowed KABATA to sell up to $600 million in bonds. It would also establish a $10 million reserve account that would be funded by the current capital bill.

The chairman of the KABATA board, Michael Foster, said the bill would have allowed the agency to seek a private builder this summer.

But the bill hit a wall Saturday when a critical legislative audit said KABATA's traffic and toll projections were inflated. Tolls would pay for the bridge over 35 years. If they fell short, as the audit projected, the state would have to make up the difference.

Costello's amendment would all but fire KABATA, a remnant of the Palin administration, shifting authority for constructing the bridge to the Alaska Housing Finance Corp. Rules chairman Craig Johnson, R-Anchorage, a member of the House leadership team, said he hoped the Knik crossing could still be built.

The AHFC has long been a favored agency of the Legislature. When proposals to build an in-state gas line were faltering in 2010, the Legislature gave the project to the AHFC, with legislators praising the abilities of its director, Dan Fauske, to work with the financial industry to sell bonds, the construction industry to build houses, and with Alaskans who used the agency's services. Fauske set up the Alaska Gasline Development Corp. within the AHFC, and now the gas line corporation is poised to become its own independent state corporation through another bill in the Legislature.

Fauske said Tuesday he only learned of the proposal to shift the bridge project to his agency late Monday night. In testimony Tuesday to the House Rules Committee and later in an interview, he said Costello's amendment needed to be reworked by attorneys to ensure the bridge wouldn't negatively affect the AHFC. He said his first priority was to protect the AA-plus bond rating of the housing agency.

"Is this something you can do?" Johnson asked.

"Absolutely, absolutely," Fauske replied.

Rep. Mark Neuman, R-Big Lake and the prime sponsor of House Bill 23, said he feared the amendment would hurt the effort to get federal financing and could kill the bridge. He said he was concerned that "politics" was involved.

"You know, there's always going to be people out there in the weeds who don't like projects," said Neuman, who serves on the KABATA board as an appointee of the Legislature. He said Alaska has "yearned" for the bridge project for years.

But as Neuman was about to launch into one of his familiar pitches -- that the bridge was necessary to save the lives of Valley residents who commute daily on the Glenn Highway -- he was cut off by Johnson, another sign, if any more were needed, that his bill as written had lost favor with House leadership.

Costello, in offering her amendment, read out the complete laundry list of KABATA functions to make it clear the agency would be dismantled, bit by bit.

"It provides for a smooth transition of the assets, obligations, the rights, the titles, the interest, the agreements, the contracts, the instruments, the indebtedness, the investments, the leases, the real and personal property, the lines of credits, gifts, grants, loans, fees, rents, tolls, civil actions, revenue, funds, insurance, permits, licenses, studies and intellectual property to the Alaska House Finance Corp. and it automatically transfers the budget that currently KABATA has," she said.

The KABATA board would be granted a year to work as advisers, she said.

Foster, the chairman of KABATA, testified after Neuman.

"I passionately ask you to not pass this amendment," Foster said. "Pass the bill as approved by the governor and allow us to move forward with this project, and I can assure you the credibility will be strengthened and the project will be a success."

Foster said he learned of the move to amend KABATA out of existence Saturday. He said he was summoned to the office of Senate President Charlie Huggins, R-Wasilla, the sponsor of an identical Senate version of the House bill. In Huggins' office was Costello and two other Anchorage House Republicans, majority leader Lance Pruitt and Lindsey Holmes.

As Fauske spent Tuesday reworking the amendment, the Senate Finance Committee announced it would hold a hearing on the Huggins' version of the bill Wednesday. A spokeswoman for the Finance Committee leadership said there were no plans as of Tuesday to amend the bill, Senate Bill 13.

The Senate Finance Committee will be meeting on Senate Bill 13 at 1:30 p.m. House Rules announced it would reconvene on House Bill 23 at 9 a.m.



Contact Richard Mauer at or on