Legislature(2017 - 2018)SENATE FINANCE 532

03/06/2018 09:00 AM Senate FINANCE

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                 SENATE FINANCE COMMITTEE                                                                                       
                       March 6, 2018                                                                                            
                         9:02 a.m.                                                                                              
9:02:17 AM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair  MacKinnon  called  the  Senate  Finance  Committee                                                                    
meeting to order at 9:02 a.m.                                                                                                   
MEMBERS PRESENT                                                                                                               
Senator Lyman Hoffman, Co-Chair                                                                                                 
Senator Anna MacKinnon, Co-Chair                                                                                                
Senator Click Bishop, Vice-Chair                                                                                                
Senator Peter Micciche                                                                                                          
Senator Donny Olson                                                                                                             
Senator Gary Stevens                                                                                                            
Senator Natasha von Imhof                                                                                                       
MEMBERS ABSENT                                                                                                                
ALSO PRESENT                                                                                                                  
Juli  Lucky, Staff,  Senator Anna  MacKinnon; Senator  Kevin                                                                    
Meyer, Sponsor;  Edra Morledge, Staff, Senator  Kevin Meyer;                                                                    
Sara  Chambers, Deputy  Director, Division  of Corporations,                                                                    
Business   and   Professional   Licensing,   Department   of                                                                    
Commerce,   Community   and  Economic   Development;   Laura                                                                    
Stidolph,  Staff, Representative  Adam  Wool; Heather  Fair,                                                                    
Statewide Right-Of-Way  Chief, Department  of Transportation                                                                    
and Public Facilities, Juneau.                                                                                                  
PRESENT VIA TELECONFERENCE                                                                                                    
David  Derry,   Chair,  Board   of  Certified   Real  Estate                                                                    
Appraisers, Kenai; William  Scroggins, Real Estate Valuation                                                                    
Advocacy Association, North Carolina.                                                                                           
SB 155    REAL ESTATE APPRAISAL MNGMT. COMPANIES                                                                                
          SB 155 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
HB 131    RELOCATION ASSISTANCE FOR FED. PROJ/PROG                                                                              
          HB 131 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
SENATE BILL NO. 155                                                                                                           
     "An Act relating to the  registration and regulation of                                                                    
     real  estate appraisal  management companies;  relating                                                                    
     to  the  establishment of  fees  by  the Department  of                                                                    
     Commerce,   Community,    and   Economic   Development;                                                                    
     relating  to   the  Board  of  Certified   Real  Estate                                                                    
   Appraisers; and relating to real estate appraisers."                                                                         
9:02:52 AM                                                                                                                    
Vice-Chair Bishop MOVED to ADOPT proposed committee                                                                             
substitute for SB 155, Work Draft 30-LS1295\D (Radford,                                                                         
Co-Chair MacKinnon OBJECTED for discussion.                                                                                     
JULI  LUCKY, STAFF,  SENATOR ANNA  MACKINNON, discussed  the                                                                    
Committee Substitute (CS) for SB  155. She informed that the                                                                    
changes  to the  bill were  a result  of questions  that had                                                                    
arisen related to concerns about the legislation.                                                                               
Ms. Lucky read from the Explanation of Changes document                                                                         
(copy on file):                                                                                                                 
     ? Increases the  limit for the required  surety bond to                                                                    
     $50,000 (previous  bill limit was $25,000)  see page 5,                                                                    
     line 21.                                                                                                                   
     ?  Removes  the   fingerprinting  requirement  for  the                                                                    
     "controlling person"  - AS 08.87.135  (c) on page  5 of                                                                    
     the previous bill.                                                                                                         
     ? Allows the department to  collect fees to cover costs                                                                    
     by removing  the specific references to  subsection (j)                                                                    
     of AS 08.01.165 on page 4, line 18.                                                                                        
     ? Adds transition language  with an immediate effective                                                                    
     date to allow the  department to promulgate regulations                                                                    
     before  the   effective  date  of  the   act,  per  the                                                                    
     department's request.                                                                                                      
     ? Conforming amendments, as required, including                                                                            
     deletion of:                                                                                                               
     Previous Section 8      removed due to deletion of                                                                         
     fingerprinting requirement                                                                                                 
     Previous Section 9  duplicative of language already                                                                        
     appearing in statute is AS 37.05.146(c)(24).                                                                               
Co-Chair MacKinnon  WITHDREW her  OBJECTION. There  being NO                                                                    
OBJECTION, the proposed committee substitute was ADOPTED.                                                                       
9:06:13 AM                                                                                                                    
SENATOR KEVIN MEYER, SPONSOR, introduced himself.                                                                               
EDRA  MORLEDGE, STAFF,  SENATOR KEVIN  MEYER, discussed  the                                                                    
bill. She  shared that, due to  the Dodd Frank Act  of 2010,                                                                    
there   was  a   federal  deadline   for  states   to  enact                                                                    
comprehensive  regulations  regarding  appraisal  management                                                                    
companies. The  deadline was August 2018.  Subsequently, the                                                                    
department  requested a  one-year  waiver  to implement  the                                                                    
program,  but there  was no  notification whether  the state                                                                    
had  been granted  that waiver.  She  stated that  appraisal                                                                    
management   companies    were   business    entities   that                                                                    
administered networks  of independent appraisers  to fulfill                                                                    
real estate appraisal assignments  on behalf of lenders. She                                                                    
noted that the companies would  no longer be able to operate                                                                    
in  the state  without  the  comprehensive legislation.  She                                                                    
stated  that it  would cause  problems for  realtors, banks,                                                                    
and  other  lenders;  and  have an  adverse  effect  on  the                                                                    
economy. She noted  that Alaska was one of  four states plus                                                                    
the   District   of  Columbia   that   have   yet  to   pass                                                                    
comprehensive  legislation on  the subject.  Those locations                                                                    
were  currently in  the legislative  process to  address the                                                                    
Co-Chair  MacKinnon noted  that there  had been  significant                                                                    
changes to the  bill, and there were people  ready to answer                                                                    
Senator Olson  asked if  the sponsor  was in  agreement with                                                                    
the changes in the CS.                                                                                                          
Senator  Meyer answered  in  the  affirmative. He  continued                                                                    
that he had wanted an  immediate effective date, which would                                                                    
allow for compliance by August  2018 without the need for an                                                                    
extension.  He  thought  there  might  be  a  difference  of                                                                    
opinion  on the  effective date,  as well  as with  the bond                                                                    
9:10:31 AM                                                                                                                    
Co-Chair  MacKinnon  advised  that  the bill  would  not  be                                                                    
moving from committee in the  current meeting. The committee                                                                    
was  working with  the sponsor  to address  issues with  due                                                                    
Co-Chair MacKinnon  stated that  the meeting  would continue                                                                    
with invited testimony.                                                                                                         
DAVID  DERRY,   CHAIR,  BOARD   OF  CERTIFIED   REAL  ESTATE                                                                    
APPRAISERS, KENAI (via teleconference),  spoke in support of                                                                    
the bill. He stated that  the Board of Certified Real Estate                                                                    
Appraisers  was  ready  to  assume  oversight  of  appraisal                                                                    
management companies. He  appreciated the changes identified                                                                    
in  the committee  substitute. He  spoke in  support of  the                                                                    
amendments, except for the bond  amount. He recalled that he                                                                    
had originally  requested that the bond  amount be increased                                                                    
from  $25,000   to  $150,000.  He   pointed  out   that  the                                                                    
Washington  had a  bond  amount of  $100,000.  He felt  that                                                                    
since the appraisal management companies  were all lower 48-                                                                    
based   companies,  and   that  the   board  had   fiduciary                                                                    
responsibilities,  the   bond  amount  would   provide  some                                                                    
coverage  and  protection. He  reported  that  there was  an                                                                    
opinion  that  the $150,000  would  be  too costly,  and  he                                                                    
disagreed. He  remarked that, currently, Alaska  real estate                                                                    
appraisers currently  paid a recertification fee  of $1,130.                                                                    
He furthered that all appraisers  that worked for them, were                                                                    
usually  required  to  carry  insurance,  which  could  cost                                                                    
between  $1000  and  $2500  per year.  He  shared  that  the                                                                    
defense of  keeping the bond  amount low, was that  it would                                                                    
affect competition  and result  in higher consumer  fees. He                                                                    
disagreed with  that argument. He  pointed out that  some of                                                                    
the larger  Alaska-based lenders  did not use  a third-party                                                                    
mortgage initiator.  He felt  that it  would not  affect the                                                                    
9:15:02 AM                                                                                                                    
Co-Chair MacKinnon noted that she  had a list of states with                                                                    
bonding fees  of $25,000. She  queried a  nationwide average                                                                    
to consider.                                                                                                                    
Mr. Derry did not have an  average, but had a list of states                                                                    
that had  the legislation  enacted, but stated  other states                                                                    
had a $50,000 bonding amount.                                                                                                   
Senator von Imhof  wondered how the bill  sponsor had chosen                                                                    
the amount of $50,000.                                                                                                          
Senator Meyer was not sure  what the right amount should be.                                                                    
He used  the example of  Hawaii, which would have  a similar                                                                    
geographical circumstances.  He observed  that the  State of                                                                    
Washington  was  at  $100,000,  but of  the  states  he  had                                                                    
researched, most were lower than $100,000.                                                                                      
Co-Chair MacKinnon  asked if  there had  been an  average of                                                                    
surety bond rates.                                                                                                              
Ms.  Morledge had  found in  her initial  research that  the                                                                    
average was approximately $33,000.                                                                                              
9:19:14 AM                                                                                                                    
Senator Micciche  asked Mr.  Derry what  costs would  not be                                                                    
covered   by  a   $50,000  surety   bond,  and   what  other                                                                    
protections  would be  available  if there  was  a claim  or                                                                    
appraisal problem above that amount.                                                                                            
Mr. Derry replied  that there may be a  default payment from                                                                    
an out of business appraisal  company. He remarked that many                                                                    
appraisals  servicing rural  areas must  charge airfare,  in                                                                    
addition to  the appraisal fee,  which often exceed  the fee                                                                    
Senator  Micciche  asked if  Mr.  Derry  was more  concerned                                                                    
about  a  collective  cost  rather  than  a  single  company                                                                    
defaulting and having exposure on several appraisals.                                                                           
Mr. Derry answered in the affirmative.                                                                                          
Co-Chair MacKinnon  asked whether a  company had had  to use                                                                    
its share of surety bonds.                                                                                                      
Mr. Derry stated that he had no oversight                                                                                       
Co-Chair  MacKinnon  wondered  whether  there  was  anything                                                                    
prohibitive in the  bill that would restrict  a company from                                                                    
going above the $50,000 proposed limit.                                                                                         
Mr. Derry  replied in the  affirmative. He stated  that they                                                                    
could  set  any  appraisal  amount.   He  felt  that  normal                                                                    
business practices would at least push to meet the minimum.                                                                     
9:23:52 AM                                                                                                                    
Co-Chair Hoffman shared that he  had several appraisals done                                                                    
in rural  Alaska. He noted  that appraisers had not  come to                                                                    
the area unless there  were multiple appraisals to complete.                                                                    
He  thought  the  practice was  working  well  currently  in                                                                    
Western Alaska.                                                                                                                 
Co-Chair  MacKinnon asked  about  the amount  of the  surety                                                                    
Senator Meyer  thought the amount  of the surety bond  was a                                                                    
policy call by  the committee. He thought if  the amount was                                                                    
set too high, it might dissuade some appraisers                                                                                 
Ms. Morledge reminded  that the surety bond  was a recurring                                                                    
Co-Chair  MacKinnon had  no issue  with  the $50,000  surety                                                                    
limit. She noted that the  lending agencies were referred to                                                                    
within the bill.                                                                                                                
Ms.   Morledge  replied   that   the  appraisal   management                                                                    
companies  were  standalone   agencies.  She  stressed  that                                                                    
lending institutions would contact the individual agencies.                                                                     
Vice-Chair  Bishop  thought  the  bill sponsor  had  made  a                                                                    
reasonable compromise.                                                                                                          
9:27:07 AM                                                                                                                    
AT EASE                                                                                                                         
9:33:53 AM                                                                                                                    
Senator   Micciche   thought   there   may   have   been   a                                                                    
misunderstanding  about  the  need   for  surety  bonds.  He                                                                    
understood that  an appraisal management company  could hire                                                                    
the same  individual to do  multiple appraisals. He  did not                                                                    
know  that  $50,000  was  adequate.  He  thought  he  better                                                                    
understood Mr. Derry's concern.                                                                                                 
Co-Chair MacKinnon  asked Mr. Derry if  Senator Micciche had                                                                    
accurately reflected his concern.                                                                                               
Mr. Derry answered in the affirmative.                                                                                          
Co-Chair  MacKinnon  asked  Mr.  Derry  to  stay  online  to                                                                    
comment on further topics.                                                                                                      
Co-Chair  MacKinnon referenced  a letter  dated February  8,                                                                    
2018  (copy on  file).  She asked  for  comments about  that                                                                    
SARA  CHAMBERS, DEPUTY  DIRECTOR, DIVISION  OF CORPORATIONS,                                                                    
BUSINESS   AND   PROFESSIONAL   LICENSING,   DEPARTMENT   OF                                                                    
COMMERCE, COMMUNITY  AND ECONOMIC DEVELOPMENT,  relayed that                                                                    
she  had submitted  a letter  to the  appraisal subcommittee                                                                    
requesting an  extension from  the 2018  deadline to  a 2019                                                                    
deadline.  She  stated that  the  bulletin  issued from  the                                                                    
subcommittee   stated  that   draft  legislation   would  be                                                                    
considered a cause for an extension.                                                                                            
9:39:22 AM                                                                                                                    
Co-Chair  MacKinnon thought  the sponsor  had indicated  the                                                                    
bill needed to move forward with implementation.                                                                                
Ms. Chambers answered in the affirmative.                                                                                       
Co-Chair MacKinnon  thought the  sponsor was  concerned that                                                                    
without implementation, there would be consequences.                                                                            
Ms. Chambers understood  that there may be a  period of time                                                                    
(if  Alaska did  not  receive the  extension) that  business                                                                    
could   continue.   Without  state   oversight,   federally-                                                                    
regulated  companies would  still  be able  to operate.  Her                                                                    
assessment was  that there  could be a  period of  time that                                                                    
non-federally-regulation would be available.                                                                                    
Co-Chair  MacKinnon  asked  if   there  was  an  option  for                                                                    
emergency regulations.                                                                                                          
Ms. Chambers stated  that the Department of  Law had advised                                                                    
that emergency  regulations should  be reserved  for matters                                                                    
of   public   emergency,    and   not   for   administrative                                                                    
Co-Chair MacKinnon  asked why it  would take over a  year to                                                                    
implement regulations for an existing board.                                                                                    
Ms. Chambers informed without the  extension, the bill would                                                                    
take effect and licensure would  be required before the 3 to                                                                    
4 month time period necessary to complete regulations.                                                                          
Co-Chair MacKinnon surmised that the issue was complex.                                                                         
Senator  von Imhof  wondered  if the  extension  was for  an                                                                    
"all-in" scenario.                                                                                                              
Ms. Chambers answered in the affirmative.                                                                                       
Vice-Chair  Bishop thought  Ms.  Chambers  had provided  the                                                                    
worst  case  scenario.  He  asked  if  there  was  a  better                                                                    
scenario to consider.                                                                                                           
Ms. Chambers stated  that what she had  described was likely                                                                    
the best case scenario.                                                                                                         
Co-Chair  MacKinnon   asked  when  the   federal  compliance                                                                    
Ms.  Chambers stated  that the  federal compliance  deadline                                                                    
was  July  2018; unless  an  application  for extension  was                                                                    
Co-Chair MacKinnon felt that there  needed to be contingency                                                                    
9:46:30 AM                                                                                                                    
Vice-Chair Bishop referenced  Ms. Chambers comment regarding                                                                    
federal loans  being currently  processed within  the state,                                                                    
and asked for more information about that statement.                                                                            
Ms. Chambers understood  that there were federally-regulated                                                                    
appraisal   management   companies  currently   that   would                                                                    
continue to operate without the legislation.                                                                                    
Senator  Micciche wondered  why the  bill was  up against  a                                                                    
Ms.  Chambers  stated that  the  board  worked to  secure  a                                                                    
sponsor  to accomplish  the goal  of  legislation two  years                                                                    
previously. The board was unable to do so.                                                                                      
9:49:04 AM                                                                                                                    
Mr. Derry thought there was  a question of implementation of                                                                    
regulations, and  recalled that  there was  effectively only                                                                    
one or two AMCs that were federally regulated.                                                                                  
Co-Chair  MacKinnon asked  Mr. Derry  to help  elucidate the                                                                    
consequences if regulations were not put into place.                                                                            
Mr. Derry  supported Ms. Chambers.  was not aware  if either                                                                    
of the federally-regulated AMCs.                                                                                                
Co-Chair  MacKinnon stated  that  the  committee would  work                                                                    
with the sponsor  on this particular issue.  She stated that                                                                    
there was an  issue about a "controlling  person" within the                                                                    
bill. It  had been proposed  to remove the  requirement that                                                                    
the controlling person be within the state.                                                                                     
9:55:26 AM                                                                                                                    
WILLIAM   SCROGGINS,   REAL    ESTATE   VALUATION   ADVOCACY                                                                    
ASSOCIATION,    NORTH    CAROLINA   (via    teleconference),                                                                    
association  had worked  with  many states  to push  forward                                                                    
legislation  to  satisfy  Dodd-Frank  Act  requirements.  He                                                                    
viewed  $50,000  to be  excessive  but  did not  oppose  the                                                                    
provision. He  did not want  to limit the  certification. He                                                                    
thought it had been a drafting oversight.                                                                                       
Co-Chair MacKinnon  asked Mr. Scroggins to  be available for                                                                    
questions later in the meeting.                                                                                                 
Co-Chair MacKinnon  referenced page  4, lines 28  through 30                                                                    
of  the  bill,  which  talked  about  uniform  standards  of                                                                    
professional appraisal  practices. She wondered  whether the                                                                    
standards were "like" or "exact."                                                                                               
Mr.  Derry  queried  the requirement  that  the  controlling                                                                    
person be within the state.                                                                                                     
Co-Chair MacKinnon referenced page 5, line 22.                                                                                  
Mr. Derry supported the bill as it was currently written.                                                                       
Co-Chair  MacKinnon  stated  that the  committee  would  get                                                                    
legal clarification on the matter.                                                                                              
10:03:02 AM                                                                                                                   
Ms. Chambers  stated that the bill  section referenced being                                                                    
active  was the  same as  Mr. Derry's.  She agreed  that the                                                                    
person must be certified, but  did not have to be physically                                                                    
a resident of the state.                                                                                                        
Co-Chair MacKinnon  stated that  she had  a comment  from an                                                                    
individual who believed that was  a burden for larger out of                                                                    
state management firms.                                                                                                         
Senator   Stevens  asked   Ms.   Chambers   to  comment   on                                                                    
reciprocity with other states.                                                                                                  
Ms.    Chambers   stated    that   licenses    were   fairly                                                                    
transportable. She announced that  if a state's requirements                                                                    
were equal  to or greater  than Alaska's, there would  be an                                                                    
expedited process to recognize the standards.                                                                                   
Co-Chair MacKinnon relayed that  the committee still awaited                                                                    
a new fiscal  note for the bill. The committee  would have a                                                                    
new CS drafted for a future meeting.                                                                                            
SB  155  was  HEARD  and   HELD  in  committee  for  further                                                                    
HOUSE BILL NO. 131                                                                                                            
     "An   Act  relating   to   relocation  assistance   for                                                                    
     federally assisted public  construction and improvement                                                                    
     projects and  programs; and providing for  an effective                                                                    
10:05:57 AM                                                                                                                   
Co-Chair MacKinnon directed attention to HB 131.                                                                                
LAURA  STIDOLPH,  STAFF,  REPRESENTATIVE ADAM  WOOL,  stated                                                                    
that Representative Wool was  currently unavailable, and she                                                                    
was   working  on   behalf  of   the  House   Transportation                                                                    
Ms.  Stidolph  addressed  the  Sponsor  Statement  (copy  on                                                                    
     House Bill 131  would allow an increase  of the maximum                                                                    
     relocation  benefits   available  to  a  person   or  a                                                                    
     business   displaced   by   federally-funded   highway,                                                                    
     bridge,  or  facilities   project.  In  2012,  Congress                                                                    
     relaxed  the  eligibility  criteria and  increased  the                                                                    
    maximum reimbursement limits for states' relocation                                                                         
     assistance  payment  programs  when they  passed  their                                                                    
     transportation  authorization  and  funding  bill,  the                                                                    
     Moving Ahead for Progress in  the 21st Century Act, aka                                                                    
     MAP-21. Prior to MAP-21, the payment rates hadn't been                                                                     
     changed for 30 years.                                                                                                      
     These  changes  went  into   effect  October  1,  2014.                                                                    
     Unfortunately, Alaska Statute  continues to reflect the                                                                    
     more  stringent eligibility  criteria  and the  smaller                                                                    
     maximum reimbursement limits.                                                                                              
     HB131  will also  protect  Alaska's approximately  $700                                                                    
     million   annual   allocation    of   Federal   Highway                                                                    
     Administration  and   Federal  Aviation  Administration                                                                    
     funding by bringing the State into compliance.                                                                             
     Having  an  equivalent  state statute  is  one  of  the                                                                    
     requirements  for  a  state   to  receive  a  delegated                                                                    
     authority  to  independently   administer  the  federal                                                                    
     program.  Additionally, being  out of  compliance, even                                                                    
     for   a  short   period   of   time,  jeopardizes   our                                                                    
     relationship  with our  funding  partners, putting  our                                                                    
     entire program at risk.                                                                                                    
     Further,  the  bill  would  provide  that  a  displaced                                                                    
     person or business in the  state would be retroactively                                                                    
     eligible for  an increased federal maximum  benefit for                                                                    
    relocation expenses incurred after October 1, 2014.                                                                         
10:09:06 AM                                                                                                                   
Ms. Stidolph discussed the Sectional Analysis (copy on                                                                          
     Section   1       amends  AS   34.60.010   to   clarify                                                                    
     applicability  and intent,  adopting and  incorporating                                                                    
     by referencing the  corresponding federal law's payment                                                                    
     amounts available to  displaced persons. Clarifies that                                                                    
     federally  assisted  programs   subject  to  relocation                                                                    
     assistance  and  real  property  acquisition  practices                                                                    
     includes public construction and improvement projects.                                                                     
     Section  2    repeals and  reenacts AS  34.60.040(c) to                                                                    
     clarify  eligibility   for  displacement   payments  in                                                                    
     accordance  with  corresponding   federal  law,  mirror                                                                    
     federal  language,  and   increase  the  maximum  fixed                                                                    
     payment  in   lieu  of  itemized   reimbursements  from                                                                    
     $20,000 to $40,000 for displaced parties.                                                                                  
     Section 3    amends  AS 34.60.040(d) payment  amount in                                                                    
     accordance with corresponding federal law.                                                                                 
     Section 4    amends AS 34.60.050(a)  payment amount and                                                                    
     dwelling  owned/occupied  period   for  eligibility  in                                                                    
     accordance with corresponding federal law.                                                                                 
     Section  5 -  amends  AS 34.60.060  payment amounts  in                                                                    
     accordance with corresponding federal law.                                                                                 
     Section  6      amends  uncodified  law   to  establish                                                                    
     retroactive effective date of law to                                                                                       
     October  1,  2014   in  accordance  with  corresponding                                                                    
     federal law.                                                                                                               
     Section 7  provides for an immediate effective date.                                                                       
10:10:32 AM                                                                                                                   
Co-Chair   MacKinnon  asked   if   the  administration   was                                                                    
supportive of the bill.                                                                                                         
HEATHER  FAIR, STATEWIDE  RIGHT-OF-WAY CHIEF,  DEPARTMENT OF                                                                    
TRANSPORTATION  and PUBLIC  FACILITIES, JUNEAU,  answered in                                                                    
the affirmative.                                                                                                                
Vice-Chair Bishop  wondered whether  the bill could  lead to                                                                    
increased payments  to affected parties along  the right-of-                                                                    
way, from an acquisition standpoint.                                                                                            
Ms. Fair  replied that it  could lead to  increased payments                                                                    
to  affected parties.  She  stated that  the  intent was  to                                                                    
bring the federal regulations into  the present-day costs to                                                                    
relocate a  family. She  remarked that  the state  match was                                                                    
very small,  and would  come out  of the  appropriation. The                                                                    
state match  appropriation was  approximately 10  percent of                                                                    
the  total federal  appropriation, and  was included  in the                                                                    
department's capital budget.                                                                                                    
Senator  von Imhof  stressed that  relocating was  different                                                                    
than compensating market value for the land loss.                                                                               
Ms. Fair answered in the  affirmative, and noted that market                                                                    
value  minimum was  first paid  for the  acquisition of  the                                                                    
property for a  project. Additionally, relocation assistance                                                                    
was paid where applicable.                                                                                                      
Senator  von  Imhof recalled  that  there  was previously  a                                                                    
$20,000  maximum to  relocate a  farm, business,  or family.                                                                    
That  number would  be  changed to  $40,000,  which was  the                                                                    
federal government's maximum.                                                                                                   
Ms. Fair stated that  there were different numbers available                                                                    
for families  versus businesses and  farms. She  agreed that                                                                    
the numbers  had increased,  and in  some cases  the numbers                                                                    
had been doubled.                                                                                                               
Senator  Micciche asked  if the  numbers  provided were  for                                                                    
non-residential properties.                                                                                                     
Ms. Fair agreed.  She noted that the  federal government had                                                                    
not increased those amounts in over thirty years.                                                                               
Senator  Micciche queried  the  process  of determining  the                                                                    
escalation number.                                                                                                              
Ms. Fair  replied that they  used historical data  of actual                                                                    
relocations. She  remarked that  the numbers were  still set                                                                    
based on actual expenses.                                                                                                       
10:15:25 AM                                                                                                                   
Co-Chair MacKinnon  explained that  the fiscal note  did not                                                                    
reflect   cost  to   the  state,   although  the   bill  had                                                                    
retroactive   costs  dating   to  2014.   She  queried   the                                                                    
accumulated additional  GF spend  or federal spend  would be                                                                    
on those retroactive  costs. She stressed that  the date was                                                                    
used, because that was the point of authorization.                                                                              
Ms.  Fair   affirmed  that  the   date  was  based   on  the                                                                    
authorization from  the federal government under  the Moving                                                                    
Ahead for  Progress in  the 21st Century  (MAP 21)  Act. She                                                                    
remarked  that   the  federal   regulations  were   not  yet                                                                    
finalized and  updated, so those would  have the retroactive                                                                    
number. She  noted that there were  no estimated retroactive                                                                    
payments owed for  past payments. She stated  that there was                                                                    
only a small amount estimated for the upcoming four years.                                                                      
Co-Chair MacKinnon  estimated that  there would  be $100,000                                                                    
given to property owners along rights-of-way.                                                                                   
Mr. Fair  answered in  the affirmative,  and the  number was                                                                    
federal funds.                                                                                                                  
Senator   von  Imhof   asked  how   the   option  would   be                                                                    
communicated to alert those that were affected since 2014.                                                                      
Ms. Fair  replied that the option  was already communicated.                                                                    
She stated  that in  order to  exceed state  maximums, there                                                                    
was a  complex progress process  called the Housing  of Last                                                                    
Resort, with participation from the federal government.                                                                         
Senator von  Imhof wondered there were  individuals who felt                                                                    
they  were uncompensated  in 2016,  and  whether they  would                                                                    
know that the option was available.                                                                                             
Ms. Fair  stated that  there were  no affected  parties that                                                                    
would qualify, because there were very few relocations.                                                                         
Senator   von  Imhof   surmised   that   the  lookback   was                                                                    
immaterial, because there were no affected parties.                                                                             
Ms. Fair replied in the affirmative.                                                                                            
Co-Chair MacKinnon OPENED public testimony.                                                                                     
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
Vice-Chair Bishop addressed the fiscal note.                                                                                    
Co-Chair MacKinnon  commented that that the  estimates would                                                                    
be  absorbed in  the State  Transportation Improvement  Plan                                                                    
Senator  Micciche  understood  that there  was  estimate  on                                                                    
future costs in the upcoming four years in STIP.                                                                                
Ms. Fair answered in the affirmative.                                                                                           
10:21:00 AM                                                                                                                   
Co-Chair MacKinnon pointed out that  a similar bill had been                                                                    
considered by  the committee in a  previous legislature. She                                                                    
felt  that  it  was  troublesome  to  link  with  a  federal                                                                    
statute,  because there  was little  control  over what  the                                                                    
federal government would communicate.                                                                                           
Ms.  Fair acknowledged  Co-Chair  MacKinnon's concern  about                                                                    
the  link to  the  federal regulation.  She  noted that  the                                                                    
state  was buffered  from  the risk,  because  of the  large                                                                    
federal   percentage.  She   felt   that   it  allowed   for                                                                    
flexibility in prioritizing projects.                                                                                           
Co-Chair MacKinnon  wondered whether there could  be a fixed                                                                    
number as opposed to an open statutory amount.                                                                                  
Ms. Fair replied in the affirmative.                                                                                            
Co-Chair MacKinnon highlighted committee business.                                                                              
HB  131  was  HEARD  and   HELD  in  committee  for  further                                                                    
10:24:10 AM                                                                                                                   
The meeting was adjourned at 10:24 a.m.                                                                                         

Document Name Date/Time Subjects
HB131 Sectional Analysis.pdf SFIN 3/6/2018 9:00:00 AM
HB 131
HB131 Sponsor Statement .pdf SFIN 3/6/2018 9:00:00 AM
HB 131
HB131 Supporting Documents-Rellocation Assistance Program Q&A.pdf SFIN 3/6/2018 9:00:00 AM
HB 131
SB 155 CS v. D Explanation.pdf SFIN 3/6/2018 9:00:00 AM
SB 155
SB 155 CS work draft version D.pdf SFIN 3/6/2018 9:00:00 AM
SB 155
SB 155 Sectional Version D.pdf SFIN 3/6/2018 9:00:00 AM
SB 155
SB 155 AK Board AMC extension request - Bulletin 2017-02 Extension of Implementation Period.pdf SFIN 3/6/2018 9:00:00 AM
SB 155