Legislature(2009 - 2010)SENATE FINANCE 532

03/02/2009 09:00 AM Senate FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 123 SUPP./CAP. APPROPS: ECON. STIMULUS TELECONFERENCED
Heard & Held
*+ SB 124 AUTHORIZE ECONOMIC STIMULUS PARTICIPATION TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
SENATE BILL NO. 124                                                                                                           
                                                                                                                                
     "An  Act   relating  to   the  authorization   for  the                                                                    
     Department of  Transportation and Public  Facilities to                                                                    
     participate in  the American Recovery  and Reinvestment                                                                    
    Act of 2009; and providing for an effective date."                                                                          
                                                                                                                                
9:08:37 AM                                                                                                                    
                                                                                                                                
MICHAEL BARNHILL, ASSISTANT  ATTORNEY GENERAL, DEPARTMENT OF                                                                    
LAW (LAW), informed  the committee that SB  124 ensures that                                                                    
the  Department  of  Transportation  and  Public  Facilities                                                                    
(DOT/PF)  has  the  authority  needed  under  state  law  to                                                                    
participate in  the American  Recovery and  Reinvestment Act                                                                    
(ARRA)  of 2009,  otherwise known  as the  economic stimulus                                                                    
bill. The  bill has three  sections of intent  language. The                                                                    
purpose of intent  language sections A and B  is to identify                                                                    
the sections of  the economic stimulus bill  in which DOT/PF                                                                    
will  participate.  Each of  the  sub-agencies  of the  U.S.                                                                    
Department of  Transportation (USDOT) to which  DOT/PF would                                                                    
apply for funding  are identified. He noted  that Section C,                                                                    
Title XII,  gives the Federal Aviation  Administration (FAA)                                                                    
discretion regarding funding.                                                                                                   
                                                                                                                                
9:11:48 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman asked  about  the  timeline regarding  the                                                                    
certification. Mr.  Barnhill answered that action  had to be                                                                    
taken  as  soon  as  possible.  He  anticipated  making  the                                                                    
governor's certification as early  as mid-March. Funds would                                                                    
be ready to flow on 3/4/09.                                                                                                     
                                                                                                                                
FRANK  RICHARDS, DEPUTY  COMMISSIONER,  HIGHWAYS AND  PUBLIC                                                                    
FACILITIES,   DEPARTMENT   OF  TRANSPORTATION   AND   PUBLIC                                                                    
FACILITIES,    reported    that    the    Federal    Highway                                                                    
Administration (FHWA) has  said the funds are  ready as soon                                                                    
as the certification is provided.                                                                                               
                                                                                                                                
Co-Chair Hoffman stated that many  legislators want to apply                                                                    
for all available  funds. He quoted from Section  C, page 2,                                                                    
line 14:  "to seek  to maximize  the funding  available." He                                                                    
noted   the  legislation   mentions   the   intent  of   the                                                                    
legislature and  queried who  the administration  had talked                                                                    
to regarding intent.                                                                                                            
                                                                                                                                
Mr. Barnhill acknowledged  that they had spoken  with no one                                                                    
in the  legislature; the  language had  been phrased  in the                                                                    
usual  manner of  intent language.  He believed  it was  the                                                                    
intent  of  the  administration  to  maximize  applying  and                                                                    
receiving  funding  under Title  VI  and  Title XII  of  the                                                                    
economic stimulus  bill. The  only notice  made is  that the                                                                    
FAA has discretion, which the state has no control over.                                                                        
                                                                                                                                
Co-Chair Hoffman stated that his intent was open dialogue.                                                                      
                                                                                                                                
Co-Chair  Stedman returned  to the  question of  when action                                                                    
needs  to be  taken.  Some thought  action  should be  taken                                                                    
immediately. He  emphasized the need  to know  firm deadline                                                                    
dates. Mr.  Barnhill answered  that there  are a  variety of                                                                    
deadlines  in the  stimulus bill  for  certification by  the                                                                    
governor. The governor has 45  days until April 3 to certify                                                                    
with respect to use of  the funds. Another deadline is March                                                                    
19.  He  stated  the   administration  would  do  everything                                                                    
possible  to  meet  the  deadlines.   He  did  not  know  of                                                                    
legislative  deadlines   except  the   backstop  legislative                                                                    
certification;  there   was  question  whether   the  45-day                                                                    
deadline applied  to that. He  thought an opinion  was being                                                                    
sought  regarding the  deadline from  the federal  Office of                                                                    
Management and Budget (OMB).                                                                                                    
                                                                                                                                
9:16:09 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman  asked for  definitions  of  Title VI  and                                                                    
Title XII.  Mr. Barnhill replied  that Title VI  is Homeland                                                                    
Security and Title XII is USDOT.                                                                                                
                                                                                                                                
Co-Chair  Stedman stated  that  legislators  were under  the                                                                    
impression that they could take  action after the governor's                                                                    
deadline   date;  other   information  indicated   that  the                                                                    
legislature and  governor had the  same deadline  dates. Mr.                                                                    
Barnhill reiterated  than an opinion  was being  sought from                                                                    
the federal OMB.  He stated that there  is frenetic activity                                                                    
across the country with respect to details about deadlines.                                                                     
                                                                                                                                
Co-Chair  Stedman  asked  if  he   would  get  back  to  the                                                                    
committee when  the deadlines  were clarified.  Mr. Barnhill                                                                    
reiterated that  the governor has  deadlines but he  knew of                                                                    
no deadlines for the legislature.                                                                                               
                                                                                                                                
Senator  Huggins   stated  that  he  was   offended  by  Mr.                                                                    
Barnhill's   tone  and   use  of   the  language   "frenetic                                                                    
activity." Mr. Barnhill apologized.  He clarified that there                                                                    
was a great  deal of activity around  the country, including                                                                    
many emails  with misleading, false, and  changing deadlines                                                                    
regarding certification.                                                                                                        
                                                                                                                                
Senator Huggins  was surprised with  the statement  that Mr.                                                                    
Barnhill had  not spoken  to anyone  in the  legislature. He                                                                    
emphasized  that  both  the administration  and  legislature                                                                    
work for Alaskans. He was  surprised that the department had                                                                    
not spoken  to the legislature.  He wanted to  cooperate and                                                                    
move  thoroughly and  thoughtfully  to make  the process  go                                                                    
well.                                                                                                                           
                                                                                                                                
Senator  Huggins queried  the deadline  for the  approval of                                                                    
the legislation.                                                                                                                
                                                                                                                                
9:19:50 AM                                                                                                                    
                                                                                                                                
Mr. Barnhill  stated for the  record that he  simply drafted                                                                    
the  legislation  and has  no  authority  to speak  for  the                                                                    
administration or  to negotiate. Senator  Huggins understood                                                                    
and hoped  to develop  a positive  relationship in  order to                                                                    
move forward.                                                                                                                   
                                                                                                                                
Mr.  Richards  answered  that  regarding  the  timeline  the                                                                    
stimulus  bill  requires  DOT/PF  to obligate  at  least  50                                                                    
percent  of  the  transportation  funds  awarded  to  Alaska                                                                    
within  120 days  of enactment,  or  by June  15, 2009.  The                                                                    
projects  have to  be developed  and authorized  by FHWA  to                                                                    
solicit project bids  in order to get Alaskans  to work. The                                                                    
department has  been communicating with the  legislature and                                                                    
intends  to  continue  dialogue  so that  the  bill  can  be                                                                    
understood  fully. Almost  two  weeks  after enactment,  the                                                                    
department   is   still   learning  the   nuances   of   the                                                                    
legislation.  Personnel  are  working many  extra  hours  to                                                                    
maximize transportation funding for Alaska.                                                                                     
                                                                                                                                
Senator  Huggins   asked  for  more   information  regarding                                                                    
deadlines. Mr. Richards replied that  at least 50 percent of                                                                    
the money  must be obligated  by June  15, 2009, and  all of                                                                    
the funds must be obligated by February 17, 2010.                                                                               
                                                                                                                                
Senator Huggins  clarified that the  purpose of  the current                                                                    
phase is to maximize funding.  He asked to be walked through                                                                    
the  process  of  legislative involvement  during  the  next                                                                    
phase.                                                                                                                          
                                                                                                                                
9:22:35 AM                                                                                                                    
                                                                                                                                
Mr.  Richards explained  that  the  department is  currently                                                                    
aware  of  funding  formulas  through  FAA,  FHWA,  and  the                                                                    
Federal  Transit Administration  (FTA).  Criteria are  being                                                                    
developed by the Office of  the Secretary of USDOT for other                                                                    
discretionary programs within the  bill. The department does                                                                    
not  know yet  what funds  will be  available for  states to                                                                    
compete  for.  The  department  will  communicate  with  the                                                                    
legislature  about the  additional  programs  when it  knows                                                                    
more.                                                                                                                           
                                                                                                                                
Co-Chair  Hoffman stated  that he  was under  the impression                                                                    
that the  legislature could  apply for funds  if it  did not                                                                    
agree  with the  governor's application.  He wondered  if SB
124  addressed the  issue of  the  legislature applying  for                                                                    
different  appropriations.  He  asked if  other  departments                                                                    
such as the  Department of Health and  Social Services would                                                                    
also look to the legislature to apply for funds.                                                                                
                                                                                                                                
Mr. Barnhill understood that the  intent of the bill was for                                                                    
the administration to  apply for all funds  available to the                                                                    
state  under  Title VI  (Homeland  Security)  and Title  XII                                                                    
(Transportation) of the economic stimulus bill.                                                                                 
                                                                                                                                
Co-Chair Hoffman pointed  out that SB 124  states the intent                                                                    
of  the legislature  to have  the department  apply for  the                                                                    
funds.  He reiterated  his understanding  that the  governor                                                                    
applies and  then the legislature makes  a determination and                                                                    
decides  whether  it  wants  to   apply.  He  asked  if  the                                                                    
legislature  would still  have  the authority  to apply  for                                                                    
projects if SB 124 were passed.                                                                                                 
                                                                                                                                
Mr.  Barnhill  assumed  Co-Chair Hoffman  was  referring  to                                                                    
Section 1607 of ARRA,  the "backstop authorization section."                                                                    
The  section requires  the governor  to certify  by April  3                                                                    
that she  will apply for  and use funds available  under the                                                                    
economic stimulus  bill. If the  governor does  not certify,                                                                    
the   backstop  legislation   gives   the  legislature   the                                                                    
authority  to certify  that it  will apply  for and  use the                                                                    
funds.  He  did not  think  the  backstop authorization  was                                                                    
triggered  unless  the governor  did  not  apply for  funds.                                                                    
Senate  Bill  124  assumes  the   governor  will  apply  for                                                                    
everything available.                                                                                                           
                                                                                                                                
9:26:43 AM                                                                                                                    
                                                                                                                                
Senator Huggins asked if there  were other ways to apply for                                                                    
funds.  Mr. Barnhill  replied that  there are  a variety  of                                                                    
other agencies drafting bills to  get the authority to apply                                                                    
for other funding sources in  ARRA. The objective is to have                                                                    
a collection  of bills that  will cover the  entire stimulus                                                                    
bill.  He noted  the  complexity of  the  stimulus bill.  He                                                                    
admitted one  option was to  have a single, broad  bill with                                                                    
more agencies and  more funding, but he thought  it might be                                                                    
easier to take smaller steps at the beginning.                                                                                  
                                                                                                                                
Co-Chair Stedman  noted the lack  of backup  information and                                                                    
asked   that  more   be  included   in   the  bill   packet.                                                                    
Specifically,  he wanted  the governor's  timeline with  her                                                                    
planned actions clearly laid out.                                                                                               
                                                                                                                                
Senator  Huggins asked  if other  states had  been consulted                                                                    
regarding  techniques  used.   Mr.  Barnhill  answered  that                                                                    
several  weeks  previously  LAW  had  conducted  a  national                                                                    
search  for a  pattern  of response  with  respect to  state                                                                    
implementation. At  that time,  there did not  seem to  be a                                                                    
pattern. Senator Huggins  encouraged conversation with other                                                                    
states.                                                                                                                         
                                                                                                                                
9:31:18 AM                                                                                                                    
                                                                                                                                
Mr.  Barnhill   offered  to  provide   information  garnered                                                                    
regarding  the various  task forces  being  put together  by                                                                    
other  states. He  referred to  a  document with  a list  of                                                                    
approximately 26 states.                                                                                                        
                                                                                                                                
Senator Thomas  confirmed that other bills  were forthcoming                                                                    
that would correspond to other  titles [similar to Titles VI                                                                    
and  XII]  such as  military  and  education. He  asked  for                                                                    
clarification  regarding  what  he thought  was  a  critical                                                                    
deadline,  the  thirty  days from  enactment.  Mr.  Barnhill                                                                    
replied  that the  thirty-day deadline  referred to  Section                                                                    
1511 certification that must be  made by the governor or the                                                                    
head   executive   of   DOT/PF.   The   provision   requires                                                                    
certification  of   maintenance  of  effort   regarding  the                                                                    
expenditure of  funds. He stated  that he could  provide the                                                                    
committee  with  copies of  a  memo  listing the  governor's                                                                    
deadlines.                                                                                                                      
                                                                                                                                
Senator  Thomas asked  if the  certification also  indicated                                                                    
that  the  state  would  follow  up  on  the  projects.  Mr.                                                                    
Barnhill  offered  to  provide  a  listing  of  all  of  the                                                                    
deadlines.                                                                                                                      
                                                                                                                                
Senator Olson understood that SB  124 gave the authorization                                                                    
for DOT/PF  to apply for the  funding, but not to  spend the                                                                    
money. Mr.  Barnhill replied  that a  partner bill,  SB 123,                                                                    
would provide for appropriations of the funds.                                                                                  
                                                                                                                                
9:34:01 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman  asked if there were  a representative from                                                                    
the administration present to  speak to the legislation. Mr.                                                                    
Richards  replied that  Karen Rehfeld,  Director of  OMB had                                                                    
been slated  to speak to the  bill, but her flight  had been                                                                    
delayed.                                                                                                                        
                                                                                                                                
Co-Chair  Stedman  stated that  the  committee  had made  an                                                                    
effort  to  schedule  the  bill  as  soon  as  possible.  He                                                                    
reiterated concerns  about the  lack of  backup information.                                                                    
He stated that no action  would be taken without more backup                                                                    
and without  hearing testimony from the  administration. Mr.                                                                    
Richards answered that he understood.                                                                                           
                                                                                                                                
Co-Chair Hoffman  asked if the  bill were required  in order                                                                    
for the  state to  receive the  funds. Mr.  Barnhill replied                                                                    
that the bill was an exercise  of due caution to ensure that                                                                    
DOT/PF has explicit authorization to participate.                                                                               
                                                                                                                                
Co-Chair Stedman wanted to work  before the next meeting for                                                                    
clarification  regarding what  the  administration needs  in                                                                    
terms of legislative authorization.                                                                                             
                                                                                                                                
Mr.  Richards  added  that   regarding  the  maintenance  of                                                                    
effort, the bill  requires the governor to  certify that the                                                                    
state will  maintain planned Alaska  transportation funding.                                                                    
The  department interprets  this  to mean  its current  year                                                                    
budget  amount  since  next  year's   budget  has  not  been                                                                    
enacted. The  administration will  certify that it  will not                                                                    
supplant previous project funds with stimulus funds.                                                                            
                                                                                                                                
9:38:10 AM                                                                                                                    
                                                                                                                                
Senator Thomas  asked if the  department would  not supplant                                                                    
FY09  budget  but  would  supplant   the  FY10  budget.  Mr.                                                                    
Richards  answered with  an  example: if  project  X had  $2                                                                    
million  in   general  fund  dollars  appropriated   by  the                                                                    
legislature,  the  department  would   not  extract  the  $2                                                                    
million general funds  and use $2 million  in stimulus funds                                                                    
instead.                                                                                                                        
                                                                                                                                
Senator  Thomas thought  that the  money could  be used  for                                                                    
shovel-ready  projects,   but  that  the   department  would                                                                    
forward the state's allocated money to another project.                                                                         
                                                                                                                                
Co-Chair  Stedman  said that  the  SB  123 discussion  would                                                                    
cover  the relationship  between the  maintenance of  effort                                                                    
and general funds.                                                                                                              
                                                                                                                                
SB  124  was  HEARD  and   HELD  in  Committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                

Document Name Date/Time Subjects
2009-02-24 Co-Chairs Letter.pdf SFIN 3/2/2009 9:00:00 AM
SB 123
DOT Aviation Revised 2-24.pdf SFIN 3/2/2009 9:00:00 AM
SB 123
DOT Hwy and Bridge Revised 2-24.pdf SFIN 3/2/2009 9:00:00 AM
SB 123
DOT response 2 20 09.pdf SFIN 3/2/2009 9:00:00 AM
SB 123
Economic Stim Fund Source Change DOT 2-20-09.pdf SFIN 3/2/2009 9:00:00 AM
SB 123
Stimulus project lists 2 22 09.pdf SFIN 3/2/2009 9:00:00 AM
SB 123
SB 124 Hearing Request.pdf SFIN 3/2/2009 9:00:00 AM
SB 124
US DOT Letter.pdf SFIN 3/2/2009 9:00:00 AM
SB 123
OMB response 3-2-09.pdf SFIN 3/2/2009 9:00:00 AM
SB 124
DOTPF Project Ready for Stimulus.pdf SFIN 3/2/2009 9:00:00 AM
SB 123