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 FINANCE COMMITTEE                                                                                       
                       March 2, 2009                                                                                            
                         9:05 a.m.                                                                                              
                                                                                                                                
9:05:43 AM                                                                                                                    
                                                                                                                                
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair  Stedman   called  the  Senate   Finance  Committee                                                                    
meeting to order at 9:05 a.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Lyman Hoffman, Co-Chair                                                                                                 
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Charlie Huggins, Vice-Chair                                                                                             
Senator Johnny Ellis                                                                                                            
Senator Kim Elton                                                                                                               
Senator Donny Olson                                                                                                             
Senator Joe Thomas                                                                                                              
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Frank  Richards,  Deputy  Commissioner,  Highways  &  Public                                                                    
Facilities,   Department   of  Transportation   and   Public                                                                    
Facilities;  Michael Barnhill,  Assistant Attorney  General,                                                                    
Department of  Law; Christine Klein, Deputy  Commissioner of                                                                    
Aviation,   Department   of    Transportation   and   Public                                                                    
Facilities;    Nancy   Slagle,    Director,   Division    of                                                                    
Administrative  Services, Department  of Transportation  and                                                                    
Public Facilities.                                                                                                              
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 123    "An  Act  making supplemental  appropriations  and                                                                    
          capital appropriations; amending appropriations;                                                                      
          and providing for an effective date."                                                                                 
                                                                                                                                
          SB  123  was  HEARD  and  HELD  in  Committee  for                                                                    
          further consideration.                                                                                                
                                                                                                                                
SB 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."                                                                                     
                                                                                                                                
          SB  124  was  HEARD  and  HELD  in  Committee  for                                                                    
          further consideration.                                                                                                
                                                                                                                                
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.                                                                                                                  
                                                                                                                                
SENATE BILL NO. 123                                                                                                           
                                                                                                                                
     "An Act making supplemental appropriations and capital                                                                     
     appropriations; amending appropriations; and providing                                                                     
     for an effective date."                                                                                                    
                                                                                                                                
9:39:49 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman  announced that  public testimony  would be                                                                    
taken at a later date.                                                                                                          
                                                                                                                                
FRANK  RICHARDS, DEPUTY  COMMISSIONER,  HIGHWAYS AND  PUBLIC                                                                    
FACILITIES,   DEPARTMENT   OF  TRANSPORTATION   AND   PUBLIC                                                                    
FACILITIES, gave  an overview of the  legislation. He framed                                                                    
what the  America Recovery and  Re-investment Act  (ARRA) is                                                                    
providing to  Alaska for  transportation. He  emphasized the                                                                    
intent to create jobs and  invest in assets so that citizens                                                                    
would  benefit.  The  stimulus  funds  through  the  formula                                                                    
programs  include approximately  $175  million for  highways                                                                    
projects, $42 million for transit  projects, and $85 million                                                                    
for  aviation  projects.  The department  has  been  working                                                                    
diligently  with federal  funding partners  to maximize  the                                                                    
potential use of the funds for Alaskans.                                                                                        
                                                                                                                                
Mr.  Richards  explained  that   funding  for  highways  and                                                                    
transit projects  will be  provided through  regular formula                                                                    
programs,  while aviation  funding will  go directly  to the                                                                    
FAA  for discretionary  allocation.  Expectations were  high                                                                    
regarding  easy  access to  and  use  of the  transportation                                                                    
funds.  However, the  funds will  flow  through the  regular                                                                    
federal  formula programs,  which means  following mandatory                                                                    
rules and regulations.                                                                                                          
                                                                                                                                
Mr. Richards  listed requirements that apply  to funding for                                                                    
roads and bridges:                                                                                                              
                                                                                                                                
    To access the funds, the funds must have been                                                                            
     developed under Title XXIII rules.                                                                                         
    Funds will flow through state DOTs.                                                                                      
    At least 50% of the funds must be obligated within 120                                                                   
     days  (June 15,  2009 deadline).  This leaves  104 days                                                                    
     from the time  of enactment to make sure  the funds are                                                                    
     obligated, or the  funds will be lost  to another state                                                                    
     (use it or lose it provision).                                                                                             
    Remaining 50% must be obligated by one year (February                                                                    
     17, 2010).                                                                                                                 
    The funds specifically for the highway and transit                                                                       
     program come with an allocation defined by the bill.                                                                       
     Of those funds:                                                                                                            
        o 3% goes to transportation enhancement projects,                                                                       
          such as sidewalks, waysides, bike paths, etc.67%                                                                      
          to be used on state highways and roads.                                                                               
        o 19% must go to communities of less than 5,000.                                                                        
        o 11% must go to communities with populations of                                                                        
          greater than 200,000.                                                                                                 
        o The remaining 67% will go to state roads,                                                                             
          highways, and bridges.                                                                                                
    All projects must be in a current State Transportation                                                                   
     Improvement Plan (STIP); Amendment #18 is out for                                                                          
     public comment.                                                                                                            
                                                                                                                                
Mr.   Richards  stressed   that  the   provisions  will   be                                                                    
challenging to  accomplish within  the short  timeframe. The                                                                    
guidelines  must  be followed  or  Alaska  will lose  funds.                                                                    
Essentially, Congress  has mandated  that funds be  spent on                                                                    
projects that  have previously been developed  following the                                                                    
federal rules.                                                                                                                  
                                                                                                                                
9:44:39 AM                                                                                                                    
                                                                                                                                
Mr.  Richards  stated  that SB  123  contains  projects  the                                                                    
department  felt would  meet the  required  rules. The  bill                                                                    
represents  about  $330  million  in  highway  projects.  He                                                                    
stressed  that the  projects have  already  been before  the                                                                    
legislature and received authority to proceed.                                                                                  
                                                                                                                                
Mr.   Richards  listed   the  criteria   developed  by   the                                                                    
department to put together a  priority list of projects. The                                                                    
criteria correspond to ARRA emphasis areas, projects that:                                                                      
                                                                                                                                
    Address safety issues                                                                                                    
    Are located in economically distressed areas, where                                                                      
     the unemployment rate is 1 percentage point higher                                                                         
     than the national average                                                                                                  
    Provide gasline logistic benefits                                                                                        
    Leverage other funds                                                                                                     
    Could be under construction by 2009                                                                                      
                                                                                                                                
Mr. Richards  referred to  a letter  sent the  previous week                                                                    
identifying  the  projects.  The   letter  also  provided  a                                                                    
spreadsheet  listing  the  priorities  for  the  recommended                                                                    
projects as well as contingency  projects following the same                                                                    
criteria.                                                                                                                       
                                                                                                                                
Mr.  Richards  pointed  out that  SB  123  contains  several                                                                    
appropriations  with  individual  project  allocations.  The                                                                    
governor's  priorities  are  included  in  the  highway  and                                                                    
bridge stimulus  projects list. There  is also  a contingent                                                                    
list with eligible projects.                                                                                                    
                                                                                                                                
Mr. Richards  reported that  one unfortunate  consequence of                                                                    
the  stimulus  bill  was  the  use of  a  1991  formula  for                                                                    
allocation of  "local funding." Alaska has  been exempt from                                                                    
the  formula  since  1991.  Under  the  formula,  funds  are                                                                    
allocated to  communities of greater  than 200,000  and less                                                                    
than  5,000.  Remaining  funding  could be  spent  in  other                                                                    
communities  with  populations  between 5,000  and  200,000,                                                                    
such as  Fairbanks, Ketchikan, Juneau, Palmer,  Wasilla, and                                                                    
Sitka,  if the  funding level  met 110  percent of  the 1991                                                                    
allocation to those communities.                                                                                                
                                                                                                                                
9:47:01 AM                                                                                                                    
                                                                                                                                
Mr. Richards stressed that Alaska  is the only state without                                                                    
the  ability  to allocate  projects  under  the category  of                                                                    
funding to the mid-sized communities.                                                                                           
                                                                                                                                
Mr.  Richards pointed  out that  not all  the funding  would                                                                    
flow through the state. Under  transit, $42 million has been                                                                    
designated  for  Alaska;  $32.5   million  will  go  to  the                                                                    
Anchorage Metropolitan Planning  Organization (AMPO) and the                                                                    
Fairbanks   Metropolitan   Planning   Organization   (FMPO).                                                                    
Alaskans  will probably  receive $85  million for  aviation,                                                                    
but FAA  will determine where  the money is  spent. Portions                                                                    
of  the aviation  funds  will be  given  to local  sponsors,                                                                    
meaning   non-state-owned  airports,   such  as   in  Juneau                                                                    
Municipal Airport and Merrill Field Airport in Anchorage.                                                                       
                                                                                                                                
Mr. Richards  reminded listeners  that the  department still                                                                    
has  STIP  Amendment  18  out   for  comment  and  he  urged                                                                    
committee   and  community   members  to   participate.  The                                                                    
department has been learning  that communities have projects                                                                    
that some  believe are eligible  for the stimulus  funds. He                                                                    
emphasized   the   importance   of  dialogue   between   the                                                                    
communities  and the  department  to  determine if  projects                                                                    
will meet  the requirements of  Title XXIII. He  warned that                                                                    
the department  does not have  authority to  provide funding                                                                    
if the projects are not currently on the federal STIP.                                                                          
                                                                                                                                
Co-Chair Stedman  queried the communication  process between                                                                    
the  communities  and  DOT/PF. Mr.  Richards  reported  that                                                                    
DOT/PF  had recently  been  approached  by communities  with                                                                    
projects. Department  staff would work with  the communities                                                                    
to determine  if procedure was followed  regarding right-of-                                                                    
way  certification and  environmental and  design documents.                                                                    
The   process   takes    time.   Communities   should   have                                                                    
communications with FHWA  regarding project eligibility. The                                                                    
stimulus  funds flow  through DOT/PF,  so  projects must  be                                                                    
part of the STIP.                                                                                                               
                                                                                                                                
9:50:36 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman  underlined the need for  communities to be                                                                    
proactive  and  get in  contact  with  DOT/PF. Mr.  Richards                                                                    
agreed;  otherwise, the  department  has no  way of  knowing                                                                    
about  potential projects.  Co-Chair Stedman  asked how  the                                                                    
department would  assist communities. Mr.  Richards answered                                                                    
that the department  has developed a matrix  tree to provide                                                                    
to  communities   for  determining  the  eligibility   of  a                                                                    
project.                                                                                                                        
                                                                                                                                
Co-Chair Stedman asked  for a brief synopsis  of amounts for                                                                    
projects, not  including funds that  could be  obtained from                                                                    
other states.  Mr. Richards summarized  that the  amount for                                                                    
highways and bridges is $175,461,000.                                                                                           
                                                                                                                                
Co-Chair Stedman  emphasized the difference  between federal                                                                    
receipt  authority  and  cash  in hand  to  move  a  project                                                                    
forward. The priority is to move projects forward.                                                                              
                                                                                                                                
Mr.  Richards added  that there  will be  approximately $9.1                                                                    
million for transit projects.                                                                                                   
                                                                                                                                
9:54:12 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman  stated that he  was interested in  a broad                                                                    
overview  of  projects  because of  an  administration  news                                                                    
release regarding additional funds.                                                                                             
                                                                                                                                
Mr.  Richards added  that there  would be  approximately $75                                                                    
million worth of aviation projects.                                                                                             
                                                                                                                                
Co-Chair  Hoffman  asked  for a  delineation  of  funds  for                                                                    
transportation.  Mr. Richards  answered  that a  spreadsheet                                                                    
was  attached  to  the February  20,  2009  letter  ("Alaska                                                                    
Transit,  Highway and  Bridge Stimulus  List, Based  on ARRA                                                                    
2009," Copy  on File).  The spreadsheet  identifies projects                                                                    
that    were   stimulus    (recommended),   with    transit,                                                                    
transportation,  local, and  state dollars  identified. Each                                                                    
of the projects  is then funded under one  of the categories                                                                    
that is  shown as 2009  stimulus funds needed.  The specific                                                                    
transportation  enhancement projects  are on  the bottom  of                                                                    
page 1:                                                                                                                         
                                                                                                                                
    Valdez   Areawide   Bike   and   Ped   Trail   Pavement                                                                  
     Refurbishment                                                                                                              
    Denali Highway Wayside Project                                                                                           
                                                                                                                                
Mr.  Richards  referred  to page  2,  the  transit  projects                                                                    
totaling approximately $9 million.                                                                                              
                                                                                                                                
9:57:17 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman asked  how long the five  priority items on                                                                    
page 1  of the document had  been on the STIP.  Mr. Richards                                                                    
replied  that the  project descriptions  in  the bill  would                                                                    
indicate when each  project first showed up on  the STIP. He                                                                    
said he could get the information.                                                                                              
                                                                                                                                
Co-Chair Stedman  asked what the  timeframe would be  if the                                                                    
STIP  were modified  to deal  with  community projects.  Mr.                                                                    
Richards  replied that  FHWA  procedures  require an  entire                                                                    
STIP amendment for a new  project funded with federal money.                                                                    
The  amendment process  includes  a  public comment  period;                                                                    
from initiation  of the STIP  amendment to sign-off  by FHWA                                                                    
and  FTA  is approximately  90  days,  with very  aggressive                                                                    
scheduling.  The  department believes  it  will  be able  to                                                                    
accomplish Amendment  18, which  includes the  funding cycle                                                                    
for the  projects that have  been identified in SB  123. New                                                                    
projects brought forward that  meet the requirements for use                                                                    
of the stimulus funds would require a new STIP amendment.                                                                       
                                                                                                                                
10:00:29 AM                                                                                                                   
                                                                                                                                
Co-Chair  Hoffman spoke  to the  67  percent funds  category                                                                    
that can  be used in  any area of  the state and  noted that                                                                    
appropriations are concentrated in  area. He asked why there                                                                    
was  not  more  equity  in the  location  of  projects.  Mr.                                                                    
Richards  answered  that  the  department  wanted  equitable                                                                    
distribution  across the  state. The  news that  local funds                                                                    
could not  be used for communities  with populations between                                                                    
5,000 and  200,000 upset  plans for  equitable distribution.                                                                    
The  department  had   to  act  quickly  to   meet  the  new                                                                    
guidelines provided  by Congress.  He felt the  project list                                                                    
in  SB 123  meets the  intent of  Congress of  providing for                                                                    
safety,   jobs  in   economically   distressed  areas,   and                                                                    
equitable distribution.                                                                                                         
                                                                                                                                
10:03:12 AM                                                                                                                   
                                                                                                                                
Co-Chair  Stedman  queried  the   process  used  to  develop                                                                    
prioritization, as  the fund amounts are  lower than numbers                                                                    
mentioned in  the administration's news release.  He pointed                                                                    
out that  federal receipt  authority was a  good way  to get                                                                    
allocations but  not to accomplish anything.  He wanted cash                                                                    
in hand  for projects  around the  state instead  of federal                                                                    
receipt authority that may not materialize.                                                                                     
                                                                                                                                
Senator  Thomas  wondered  if  the  prioritization  criteria                                                                    
considered how  close a project had  to be to an  area to be                                                                    
considered a stimulus for that area.                                                                                            
                                                                                                                                
10:06:10 AM                                                                                                                   
                                                                                                                                
Mr. Richards stated that the  department was willing to talk                                                                    
about prioritization  factors used for  individual projects.                                                                    
He added  that the  presentation letter  included a  list of                                                                    
projects   previously  identified   as  eligible   when  the                                                                    
timeline  to obligate  was  thought to  be  18 months.  When                                                                    
Congress condensed  the timeline to  12 months, some  of the                                                                    
projects dropped off  the list; the dropped  projects can be                                                                    
found on page four of the spreadsheet.                                                                                          
                                                                                                                                
10:08:08 AM                                                                                                                   
                                                                                                                                
Co-Chair  Hoffman stated  concerns  that the  administration                                                                    
limited  flexibility  by  making early  decisions  regarding                                                                    
where  the stimulus  funds would  be spent.  Early decisions                                                                    
meant  that the  projects had  to be  funded out  of the  67                                                                    
percent  discretionary  funds.   He  emphasized  that  other                                                                    
conditions needed  to be  considered when  making decisions,                                                                    
such  as high  unemployment  and equity  of distribution  of                                                                    
projects.  He   did  not  feel  those   considerations  were                                                                    
utilized when  decisions were  made about  the discretionary                                                                    
funds. The early decisions tied  the hands of the department                                                                    
as  well  as the  legislature.  He  questioned if  the  bill                                                                    
treated all Alaskans fairly.                                                                                                    
                                                                                                                                
10:11:04 AM                                                                                                                   
                                                                                                                                
Mr. Richards replied that 60  percent of the funds will flow                                                                    
to areas in economic distress.                                                                                                  
                                                                                                                                
Co-Chair Hoffman wanted  to see a list of  the projects that                                                                    
fit the criteria.  Mr. Richards replied that the  list is on                                                                    
the  spreadsheet  under  the prioritization  factor  "serves                                                                    
economic distress" column.                                                                                                      
                                                                                                                                
Mr. Richards  addressed the  question regarding  whether the                                                                    
projects  on the  governor's recommended  list provides  for                                                                    
equitable distribution across the  state. He stated that the                                                                    
question is  multi-faceted. Because  Alaska has  the ability                                                                    
under the regular  federal funding formula to  use the funds                                                                    
on all roads  within the state, the state  has experienced a                                                                    
major  reduction  in its  ability  to  use national  highway                                                                    
system  funds.  National  highways  include  the  Parks  and                                                                    
Dalton Highways,  roadways that  serve the vast  majority of                                                                    
the state and  not any particular community.  Ten years ago,                                                                    
the  state was  able  to do  approximately  12 projects  per                                                                    
year. Now,  the normal program  is underfunded at  about $75                                                                    
million per  year, covering only  two or three  projects per                                                                    
year. The top priorities  in the governor's recommended bill                                                                    
are the  national highway system  assets that have  not been                                                                    
sufficiently  funded  to  address needed  safety  and  other                                                                    
related issues.  The department felt  that the  projects put                                                                    
forward and  recommended by  the governor  were some  of the                                                                    
most needed.                                                                                                                    
                                                                                                                                
Mr. Richards stressed  that if the projects  are selected by                                                                    
the legislature  to fund, other  STIP projects  will advance                                                                    
and be  funded, greatly benefiting the  state and addressing                                                                    
the needs of smaller communities.                                                                                               
                                                                                                                                
10:14:29 AM                                                                                                                   
                                                                                                                                
Co-Chair Stedman observed that  the administration seemed to                                                                    
have  a  high  degree  of  assurance  that  the  contingency                                                                    
projects  will move  ahead and  be funded.  He asked  if the                                                                    
administration was  saying that  the legislature  should not                                                                    
be concerned  which group  is the first  group and  which is                                                                    
contingent,  because  both  would be  funded.  Mr.  Richards                                                                    
answered that based on the  current level of federal highway                                                                    
program funding  in 2009 and  the likely level in  2010, the                                                                    
administration  feels that  both recommended  and contingent                                                                    
projects will be  addressed in the near term  because of the                                                                    
economic stimulus funds.                                                                                                        
                                                                                                                                
Co-Chair Stedman  asked why the administration  is concerned                                                                    
about re-arranging  the list if  all the projects  that will                                                                    
get done in  the end. Mr. Richards replied that  his goal is                                                                    
to  present   projects  that  would  meet   the  eligibility                                                                    
requirements   of  the   stimulus   bill.  Previously,   the                                                                    
department was asked to provide prioritization of projects.                                                                     
                                                                                                                                
Co-Chair Hoffman  reiterated concerns  that there  would not                                                                    
be a stimulus package next  year and that the administration                                                                    
would not  utilize the same  criteria on future  projects as                                                                    
the  stimulus  bill  utilizes.  He  questioned  whether  the                                                                    
administration  could  ensure   that  future  funding  would                                                                    
address the  concerns of economically distressed  areas. Mr.                                                                    
Richards  replied  that  Congress  placed  emphasis  on  the                                                                    
creation  of  jobs. Most  of  the  recommended projects  are                                                                    
those that can be under  construction in 2009. The focus has                                                                    
been  to provide  for jobs  in 2009  and some  in 2010.  The                                                                    
regular STIP funds projects were already in line.                                                                               
                                                                                                                                
10:18:07 AM                                                                                                                   
                                                                                                                                
Co-Chair  Hoffman   referred  to  prior  testimony   by  the                                                                    
department that projects  in other areas of  the state would                                                                    
be  addressed  "next  year.He    stated  that  by  then  the                                                                    
criteria  could be  different; there  is  no guarantee  that                                                                    
projects in  economically distressed areas would  be funded.                                                                    
He asked  if the  administration would use  similar criteria                                                                    
[to that used in the stimulus package] for the 2011 budget.                                                                     
                                                                                                                                
Mr.  Richards addressed  the question  regarding the  use of                                                                    
funds in next year's STIP.  Major projects will be taken out                                                                    
of the  lineup because of economic  stimulus funds, enabling                                                                    
funding  of   the  vast  majority  of   remaining  projects.                                                                    
Concurrent with STIP amendment 18,  the 2010 to 2013 STIP is                                                                    
out for public  comment. The public and  the legislature are                                                                    
being  asked  to look  at  existing  criteria used  to  rank                                                                    
upcoming projects.  He invited  the legislature  to identify                                                                    
different  criteria.  The  STIP ranking  for  the  2010-2013                                                                    
programs will occur soon after  the legislative session ends                                                                    
in April.                                                                                                                       
                                                                                                                                
Co-Chair Hoffman  wanted the  stimulus package  to stimulate                                                                    
jobs throughout  the state. He stated  concerns about equity                                                                    
of  the projects  throughout the  state, particularly  areas                                                                    
with the highest unemployment rates.  He questioned what the                                                                    
committee  could  do to  change  that.  He referred  to  the                                                                    
community of Emmonak.                                                                                                           
                                                                                                                                
10:22:28 AM                                                                                                                   
                                                                                                                                
Mr. Richards stated that Emmonak  was part of the governor's                                                                    
recommended   list.  Co-Chair   Hoffman  pointed   to  other                                                                    
communities in Western Alaska that were not on the list.                                                                        
                                                                                                                                
Senator  Huggins  referred  to   $130  million  that  DOT/PF                                                                    
requested during  the summer 2008  special session.  The co-                                                                    
chairs told  the department to  come back with  the requests                                                                    
during the  regular session. He  asked if the  same projects                                                                    
are now in the stimulus  package. Mr. Richards answered that                                                                    
they were.                                                                                                                      
                                                                                                                                
Senator Huggins  asked if the  administration looked  at the                                                                    
capital  budget with  an eye  towards using  state funds  to                                                                    
stimulate  the state  economy,  since  there is  flexibility                                                                    
with  the capital  budget. Mr.  Richards  believed that  the                                                                    
amendments put forward for the  capital budget would address                                                                    
the issue for transportation.                                                                                                   
                                                                                                                                
Senator Huggins  asked for examples that  meet the criteria.                                                                    
He  asked whether  highway  safety  corridors projects  meet                                                                    
criteria  to get  pushed forward.  Mr. Richards  answered in                                                                    
the  affirmative. He  referred to  the Parks  Highway, which                                                                    
has  high traffic  incidents and  fatalities. Interim  steps                                                                    
have been  taken to  address the  issue. The  challenge with                                                                    
projects like the Parks Highway  from Wasilla to Big Lake is                                                                    
cost.  A  project  that costs  $125  million  could  consume                                                                    
nearly 75  percent of the  stimulus funds. The  project also                                                                    
did not meet the initial cut.                                                                                                   
                                                                                                                                
10:26:36 AM                                                                                                                   
                                                                                                                                
Senator Olson  opined that there was  an uneven distribution                                                                    
of the stimulus  money, with $175 million  going to highways                                                                    
and bridges and only $75  to aviation. He thought more money                                                                    
should  go  towards  aviation projects  in  a  region  where                                                                    
aviation  is so  essential. Mr.  Richards agreed.  He stated                                                                    
that the compromise  bill had a smaller  amount for aviation                                                                    
than   originally    hoped   for.   He    urged   continuing                                                                    
communication with  FAA regarding aviation needs  in Western                                                                    
and Southwestern Alaska.                                                                                                        
                                                                                                                                
Senator  Olson  asked  for clarification  of  what  aviation                                                                    
funds would be used for.                                                                                                        
                                                                                                                                
10:29:12 AM                                                                                                                   
                                                                                                                                
Senator Huggins  asked about railroad funding.  Mr. Richards                                                                    
replied  that  the railroad  is  eligible  to receive  funds                                                                    
under transit  funding. Of  the $42  million that  the state                                                                    
will receive,  more than  $32 million  will go  to Anchorage                                                                    
and Fairbanks. Fairbanks will  receive $760,000 for transit.                                                                    
The remainder  to Anchorage will be  distributed by formula,                                                                    
which favors  the Alaska railroad  because of  its passenger                                                                    
load. The railroad will receive  approximately 80 percent of                                                                    
Anchorage's funds.  Railroads also  have the  opportunity to                                                                    
apply  for discretionary  funds  that USDOT  is writing  the                                                                    
criteria for, related to  projects of national significance.                                                                    
Once  the  criteria  are  developed,   there  may  be  other                                                                    
projects that would qualify.                                                                                                    
                                                                                                                                
Senator Ellis  asked where  the Port  of Anchorage  ranks on                                                                    
the  priority list.  Mr. Richards  responded that  currently                                                                    
the  Port of  Anchorage is  available for  the discretionary                                                                    
money that  will come  in the  future. There  is no  Port of                                                                    
Anchorage money within SB 123.                                                                                                  
                                                                                                                                
Senator  Ellis   queried  the  rejection  of   the  Port  of                                                                    
Anchorage  project.  Mr.  Richards   answered  that  SB  123                                                                    
identified highway,  bridge, and transit projects  that have                                                                    
been  in the  pipeline  through DOT/PF.  These are  projects                                                                    
that have  already received  legislative authority  and that                                                                    
have used federal dollars for design and permits.                                                                               
                                                                                                                                
10:32:58 AM                                                                                                                   
                                                                                                                                
Co-Chair Stedman  requested information  regarding non-state                                                                    
airports.                                                                                                                       
                                                                                                                                
CHRISTINE   KLEIN,   DEPUTY    COMMISSIONER   OF   AVIATION,                                                                    
DEPARTMENT   OF   TRANSPORTATION  AND   PUBLIC   FACILITIES,                                                                    
provided  an  overview of  funds  provided  by the  stimulus                                                                    
package for  aviation. Alaska will  receive 7.7  percent, or                                                                    
$85 million,  of the $1.1  billion allocated to  all states.                                                                    
Allocations are based  on the number of  airports. The funds                                                                    
will   be  distributed   under  the   discretionary  program                                                                    
according  to FAA  criteria, which  focus  on projects  that                                                                    
contribute most to safety,  security, aviation capacity, and                                                                    
efficiency of the state's airport  system. The criteria also                                                                    
consider  airport   activity  levels,  whether   for  small,                                                                    
medium,  and non-hub  airports, or  for commercial  service.                                                                    
The  largest  airports  in  Alaska   are  medium  hub.  Also                                                                    
considered  is the  priority level  of work,  based on  work                                                                    
already  underway.  Routine   and  preventative  maintenance                                                                    
projects  are discounted.  Airports with  compliance actions                                                                    
are ineligible.                                                                                                                 
                                                                                                                                
Ms.  Klein stated  that there  is approximately  $10 million                                                                    
for municipal  airports, such as Merrill  Field in Anchorage                                                                    
and  the  Kenai,  Palmer,   Wasilla,  and  Juneau  airports;                                                                    
basically the airports that  submit grant applications first                                                                    
will get the  funding. The money has to  be obligated within                                                                    
120 days  and the projects  have to be completed  within two                                                                    
years.                                                                                                                          
                                                                                                                                
10:36:45 AM                                                                                                                   
                                                                                                                                
Co-Chair  Stedman  referred to  the  Port  of Anchorage  and                                                                    
railroad  integration and  the expansion  of facilities.  He                                                                    
hoped there  would be a gasline  in the next ten  or fifteen                                                                    
years, but regardless of what  happens with the gasline, the                                                                    
Port  of Anchorage  will  be shipping  in  most of  Alaska's                                                                    
goods. He  emphasized the importance of  projects that would                                                                    
benefit the state for some time to come.                                                                                        
                                                                                                                                
Senator  Olson  asked  about  the  eligibility  of  deferred                                                                    
maintenance  projects. Ms.  Klein answered  that maintenance                                                                    
and   operation  projects   are  not   eligible  under   the                                                                    
discretionary formula;  under federal law,  those activities                                                                    
are the obligation of the state.                                                                                                
                                                                                                                                
Senator  Thomas pointed  to  the $45.6  million  in SB  123,                                                                    
approximately  half of  the total  funds. He  asked if  more                                                                    
money was  coming for aviation  projects. Ms.  Klein replied                                                                    
that  there  were  $104  million   in  projects  that  could                                                                    
potentially  be  ready.   The  amount  in  SB   123  is  the                                                                    
legislative  authority   needed  in  order  to   finish  the                                                                    
projects.   The  projects   have   been   approved  by   the                                                                    
legislature already for permitting, design, and planning.                                                                       
                                                                                                                                
10:39:40 AM                                                                                                                   
                                                                                                                                
Senator Thomas asked  how much was coming to  the state. Ms.                                                                    
Klein  answered $88  million. Senator  Thomas  asked if  the                                                                    
balance was coming soon.                                                                                                        
                                                                                                                                
Ms. Klein listed  the projects that would  be recommended to                                                                    
move ahead:                                                                                                                     
                                                                                                                                
    Akiachak Airport Relocation                                                                                              
    Allakaket Airport Improvements                                                                                           
    Fairbanks   International   Airport   Security   Access                                                                  
     Control Improvements                                                                                                       
    Fairbanks International Airport Taxiway and Apron                                                                        
     Improvements                                                                                                               
    Fort Yukon Airport Improvements                                                                                          
    Hoonah Airport Improvements                                                                                              
    Kodiak Chemical Storage Building                                                                                         
    Kotzebue Apron Expansion                                                                                                 
    Ouzinkie Airport Relocation                                                                                              
    Cordova Apron Improvements                                                                                               
    Anchorage International Airport North Terminal Gate                                                                      
     Reconstruction                                                                                                             
    Lake Louise Runway Rehabilitation                                                                                        
                                                                                                                                
Ms.  Klein   said  the   project  total   on  the   list  is                                                                    
approximately $104 million. Around  $75 is available; if the                                                                    
legislature   approves  the   projects,  $45.6   million  in                                                                    
legislative  authorization would  still be  needed to  bring                                                                    
the projects to completion.                                                                                                     
                                                                                                                                
Co-Chair  Stedman  clarified  that  the white  page  in  the                                                                    
aviation  section  of   SB  123  is  the   list  before  the                                                                    
amendments; the yellow page has a different total.                                                                              
                                                                                                                                
Ms. Klein  explained that FAA is  still developing criteria;                                                                    
on  Friday [February  27], FAA  asked the  administration to                                                                    
put forward the  Huslia and Lake Louise  projects, which had                                                                    
previously been lower on the list.                                                                                              
                                                                                                                                
10:42:25 AM                                                                                                                   
                                                                                                                                
Senator Olson asked the  difference between a rehabilitation                                                                    
project and  deferred maintenance.  Ms. Klein  answered that                                                                    
it usually depends  on how much work has to  be done and the                                                                    
cost. A project that will  take a significant amount of time                                                                    
and  material becomes  a  reconstruction  project, which  is                                                                    
what happened  to the Lake Louise  project. Co-Chair Hoffman                                                                    
asked  if  she meant  a  rehabilitation  project. Ms.  Klein                                                                    
answered in the affirmative.                                                                                                    
                                                                                                                                
Co-Chair  Hoffman  asked  if   she  meant  King  Salmon  and                                                                    
Cordova. Ms.  Klein replied that  the King Salmon  Apron and                                                                    
Taxiway Resurfacing  project was  added. The  two amendments                                                                    
had  been added  because  FAA wanted  the  projects to  move                                                                    
forward.                                                                                                                        
                                                                                                                                
Co-Chair   Stedman   noted   several   appropriations   with                                                                    
allocations.   He reminded the  public that  the legislature                                                                    
appropriates funds  and the department has  flexibility with                                                                    
appropriations.  He asked  why the  legislature should  give                                                                    
broad appropriation and a lot  of allocations versus smaller                                                                    
numbers  of  appropriations  and   have  DOT/PF  go  to  the                                                                    
legislature to move projects around.                                                                                            
                                                                                                                                
Mr.  Richards explained  that the  appropriations in  SB 123                                                                    
were  designated  by   airport  stimulus  projects,  transit                                                                    
stimulus   projects,  and   highway   and  bridge   stimulus                                                                    
projects. The structure is similar  to annual capital budget                                                                    
appropriations  for  the  highway program.  Funds  within  a                                                                    
program  can   be  used  within  the   projects.  Individual                                                                    
appropriations  by  project  would present  challenges.  For                                                                    
example,  if  a certain  amount  were  appropriated and  the                                                                    
department went out to bid and  the bid came in high, DPT/PF                                                                    
would not  have the ability  to go forward with  the project                                                                    
until   coming  back   to  the   legislature  in   the  next                                                                    
legislative  cycle   to  ask  for  additional   monies.  The                                                                    
stringent timeline of the  stimulus legislation requires the                                                                    
flexibility to use the funds for cost increases.                                                                                
                                                                                                                                
10:47:07 AM                                                                                                                   
                                                                                                                                
Co-Chair Stedman pointed out there  were 21 projects costing                                                                    
approximately $139  million and queried whether  the finance                                                                    
committee should  give the  department flexibility  with the                                                                    
whole  amount or  break the  number  into compartments.  Mr.                                                                    
Richards  responded   that  there  would  not   be  complete                                                                    
flexibility, as  the projects have  been through  the public                                                                    
and legislative  process. The department was  now asking for                                                                    
the authority to  use the federal dollars  from the stimulus                                                                    
package for  the projects in  SB 123. The  legislature would                                                                    
determine the allocation within the appropriation.                                                                              
                                                                                                                                
Co-Chair  Stedman added  that there  were 18  non-contingent                                                                    
projects costing  $148 million.  The legislature  would work                                                                    
the  details out  through time.  Mr. Richards  stressed that                                                                    
the important  deadline is the  120-day obligation  limit by                                                                    
June  15.  He  stated  that  he was  available  as  much  as                                                                    
necessary  to  work  with the  committee  regarding  project                                                                    
needs. He emphasized the need  to work within the parameters                                                                    
placed by Congress,  and the dynamic nature  of the process.                                                                    
Much is still being learned.                                                                                                    
                                                                                                                                
10:50:38 AM                                                                                                                   
                                                                                                                                
Co-Chair Stedman drew attention to  page 8, lines 8, 14, and                                                                    
20, which address appropriation  issues from 2001, 2002, and                                                                    
2003.                                                                                                                           
                                                                                                                                
NANCY   SLAGLE,   DIRECTOR,   DIVISION   OF   ADMINISTRATIVE                                                                    
SERVICES,   DEPARTMENT   OF    TRANSPORTATION   AND   PUBLIC                                                                    
FACILITIES,  explained  that   the  stimulus  bill  requires                                                                    
tracking of  activity. Therefore, a funding  source has been                                                                    
established  to identify  any  funds  received and  expended                                                                    
from  the   federal  economic  stimulus   bill.  Legislative                                                                    
authorization has  already been provided for  several of the                                                                    
recommended projects.  Section 4 in SB  123 changes previous                                                                    
appropriations  from the  regular  federal authorization  or                                                                    
source  codes  to the  new  federal  economic stimulus  fund                                                                    
source codes.                                                                                                                   
                                                                                                                                
Co-Chair Stedman added that a  different process may be used                                                                    
to clean  up. Ms. Slagle  agreed that there were  other ways                                                                    
to deal  with old  appropriations; one option  was reflected                                                                    
in  the  bill.   Items  could  also  be   repealed  and  re-                                                                    
appropriated, or the full amount  of the project costs could                                                                    
be provided with the new source codes.                                                                                          
                                                                                                                                
Co-Chair Stedman said the committee  would work with OMB and                                                                    
DOT/PF to  make the process  more transparent. He  stated an                                                                    
interest  in   housekeeping,  which  might  be   an  interim                                                                    
project.                                                                                                                        
                                                                                                                                
Co-Chair   Hoffman  noted   looking  forward   to  continued                                                                    
collaboration with the department on the stimulus package.                                                                      
                                                                                                                                
SB  123  was  HEARD  and   HELD  in  Committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
10:55:27 AM                                                                                                                   
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 10:54 AM.                                                                                          
                                                                                                                                
                                                                                                                                

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