Legislature(2003 - 2004)
04/30/2004 09:12 AM Senate FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CS FOR SENATE BILL NO. 371(TRA)
"An Act relating to the powers and duties of the Department of
Transportation and Public Facilities; relating to a long-range
program for highway construction and maintenance; and
providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken stated this bill sponsored by the Senate State
Affairs Committee, "relates to the powers and duties of the
Department of Transportation and Public Facilities. It affirms the
validity of the current Department's planning process." He noted
the provisions of the legislation would be retroactive to 1977.
AT EASE
JEFF OTTESON, Director, Division of Program Development, Department
of Transportation and Public Facilities, testified this legislation
is "vitally important to both the Department and to the State." It
has been discovered through a lawsuit, that the Department must
undertake a consideration of costs and benefits at the time of
project selection for the capital budget in the Statewide
Transportation Improvement Program (STIP). This has not been done
for a significant number of projects and all such projects
currently underway are at risk.
Mr. Otteson furthered that undertaking cost and benefit analyses at
the time a project is under consideration for inclusion in the
capital budget would not always be useful. This would not be
meaningful information to decision makers for several classes of
projects, or would incur such costs as to be overwhelming to the
project.
Mr. Otteson outlined Section 1 reflects language recommended by the
Department of Law as necessary to instruct the court that the
current project involved in litigation should be allowed to
proceed. Section 4 has been the most widely discussed substance of
the bill and pertains to the consideration of cost and benefits for
new transportation projects and facilities. The language in statute
was codified from administrative code in 1977 and has never
undergone the legislative process. Section 6 stipulates the new
provisions would be retroactive to 1977. This would allow any
project underway to be covered by the amended statute, some of
which actually are 30 years old, including the Cooper River Project
on the Sterling Highway.
Mr. Otteson stressed the importance of this legislation to the
Illiamna/Nondalton project, which has been underway since 1975 and
is nearly complete. The key portion of the project is the
construction of a bridge across the Newhalen River. This
legislation is important to address other projects that could be
similarly litigated. Environmental organizations have indicated
using the existing statute to halt other projects. He warned that
this would be easily accomplished for these groups were the statute
not changed.
Mr. Otteson compared the stoppage of the project at the Pogo Mine
to the potential existing for projects with the existing statute.
The Pogo Mine project obtained all permits and was underway, until
the project was halted due to complications in federal law. State
statute could not address the Pogo Mine issues, but this
legislation could prevent such occurrences for State projects.
SENATOR GARY STEVENS informed that Governor Walter Hickel signed an
executive order in 1977 establishing the Alaska Transportation
Council and stipulated that no project could be undertaken without
review and approval by the Council. However, the Governor never
appointed members to this Council and adherence to the approval
requirement was overlooked. The existing statute should be amended
to avoid future lawsuits and to prevent further delays with the
Illiamna/Nondalton project.
JEFF PARKER, Attorney, testified via teleconference from Anchorage
and indicated he is the attorney to the plaintiffs of the
Illiamna/Nondalton litigation, Bob Gilliam [spelling not verified]
and Trout Unlimited. Mr. Parker recommended the bill be held in
Committee. The requirement of cost benefit analyses relate directly
to fiscal issues. If the ability to undertake cost benefit analyses
for new transportation modes and facilities is undermined, the
legislature would "put fiscal resources of this State at risk"
because projects would be constructed that are not cost effective
and would therefore not be maintained. The cost benefit requirement
does not apply to improvements or repairs to existing
transportation projects and facilities. Cost benefit analyses allow
the legislature to make reasonable decisions about the most
effective use of fiscal resources. Absent this requirement,
projects become "political horse trading" because no other
objective criterion is imposed in statute to facilitate decisions.
Existing statute does not prohibit the undertaking of certain
projects that do not have a favorable cost benefit ratio.
Mr. Parker informed that the litigation over the Illiamna/Nondalton
project arose because it was one of two projects included in the
Southwest Regional Transportation Plan in which the Department
decided "on the record" to not conduct a cost benefit analysis.
Although Mr. Otteson warns that all transportation projects are at
risk without the adoption of this legislation, Mr. Parker countered
that cost benefit analyses were conducted for all other projects
and are therefore not subject to the provisions of current statute.
Co-Chair Wilken asked Mr. Otteson the threat to the
Illinois/Barnett Street Connector bridge project located in
Fairbanks if this legislation were not adopted.
Mr. Otteson surmised it would be, along with many of the projects
included in the bond package approved by voters in the last
statewide general election. He listed the North Pole interchange, C
Street extension, Donlin Creek Mine project, as examples. Cost
benefit analyses could be conducted for each of these projects,
although only at significant expense. A cost benefit analysis was
recently completed for a Naknek River bridge project at a cost of
$185,000 and six months of time. An analysis is underway for the
Illiamna/Nondalton project with a projected cost of $55,000 for the
consultants alone. In both instances, the analysis confirmed the
Department's assessment that the projects are legitimate.
Mr. Parker countered that this legislation "creates a greater
likelihood of projects getting into the ten year time track". He
defined the "ten-year time track" as a provision of federal law
that stipulates that if federal funds are expended on a project for
planning, design or other activities, and the project does not
reach construction within ten years, the State is potentially
liable to refund the federal funds. The STIP includes approximately
60 projects within the ten-year time track and involve hundreds of
millions of dollars of federal funding.
Mr. Parker contended that the more options to facilitate making
better-informed decisions that are eliminated, the greater the
likelihood that "mere politics" would move a project forward. As
"more reasoned" decision-making is implemented later, these
projects are "put on the back burner". This is the situation that
occurred with the Illiamna/Nondalton project. He stated that
project is not near completion, as attested to by Mr. Otteson and
he spoke of the high cost and political motivation behind the
project.
Co-Chair Green offered a motion to report the bill from Committee
with individual recommendations and accompanying fiscal note.
There was no objection and CS SB 371 (TRA) MOVED from Committee
with zero fiscal note #1 from the Department of Transportation and
Public Facilities.
| Document Name | Date/Time | Subjects |
|---|