Legislature(1997 - 1998)

04/27/1998 01:50 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
HOUSE BILL NO. 227                                                             
                                                                               
"An Act relating to the Alaska Capital Improvement                             
Project Authority; relating to the powers and duties                           
of the Department of Transportation and Public                                 
Facilities; and providing for an effective date."                              
                                                                               
MARCO PIGNALBERI, STAFF, REPRESENTATIVE JOHN COWDERY,                          
commented that the purpose of HB 227 was to increase public                    
involvement, stability and discipline in capital project                       
planning for the State of Alaska.                                              
                                                                               
Planning for Alaska's capital improvement projects is                          
presently carried out by the Planning Division of the                          
Department of Transportation and Public Facilities (DOTPF).                    
Three regional planning teams carry out research and                           
planning.  These regional planning teams coordinate with                       
the local governments, including Anchorage Metropolitan                        
Transportation System (AMATS) and Fairbanks Metropolitan                       
Transportation System (FMATS) within their region.  These                      
regional plans are feed into the statewide planning team in                    
Juneau at which point they are consolidated into statewide                     
plans.  These stipulations are required for internal                           
management and to meet requirements for federal funding.                       
                                                                               
Mr. Pignalberi noted that HB 227 would come into play at                       
the level of statewide prioritization and funding                              
alternatives.  It would not change the basic planning                          
process now in use, although, it would change the method by                    
which projects are rated, prioritized and submitted to the                     
Governor and the Legislature.                                                  
                                                                               
Mr. Pignalberi pointed out that despite efforts of DOTPF to                    
make the planning process more inclusive and transparent to                    
the public, capital project planning remains a science for                     
most Alaskans.  He suggested that planning was hindered by                     
a lack of continuity at the executive level.  He noted that                    
past DOTPF commissioners have had an average tenure less                       
than two years.  Permanent professional planners become                        
committed to the project which they work on.                                   
                                                                               
Mr. Pignalberi explained that the provisions of HB 227 are                     
intended to make the capital project planning process more                     
comprehensive, coherent to the public and stable in its                        
role of building Alaska's infrastructure.  The Authority                       
would have a single purpose mission rather than be                             
entangled with the multi-purposes of the Governor,                             
Legislature and DOTPF.                                                         
                                                                               
Mr. Pignalberi urged passage of the proposed legislation.                      
He noted that both the federal highway administration and                      
the federal aviation administration have testified in other                    
committees expressing deep "fear" of "potential" problems                      
in the legislation.  He guaranteed that this would not                         
happen.  Mr. Pignalberi closed, noting that no one knows                       
what the State's priority projects are now for any mode of                     
transportation.  HB 227 will provide policy and continuity.                    
                                                                               
Representative Martin voiced concern with the separation of                    
the proposed authority and the Executive Budget Act.                           
Additionally, he believed that by such an Authority                            
establishing fees would be in direct competition with the                      
powers of taxation.  He stressed that the legislation would                    
be interfering with the Executive Branch of government. He                     
pointed out that the role of the commissioner would loose                      
all power to the proposed authority.                                           
                                                                               
Representative Grussendorf noted that under the current                        
system, it is clear who gets held accountable for problems                     
which occur and credit due.  He questioned who would                           
ultimately be responsible in a system proposed in the bill.                    
                                                                               
(Tape Change HFC 98- 128, Side 1).                                             
                                                                               
Mr. Pignalberi addressed Representative Martin's concern,                      
pointing out that it was the intent that the proposed                          
legislation fall within the Executive Budget Act.                              
Representative Martin recommended that there be an                             
amendment which specifies that the authority stay under the                    
Executive Budget Act.  Co-Chair Therriault suggested                           
checking with legal drafters to find that statute                              
placement.                                                                     
                                                                               
Representative J. Davies thought it preposterous that more                     
duties would be added in order to create an authority.  Mr.                    
Pignalberi noted that this was an issue that some attorneys                    
have differed over and that it was not central to the                          
sponsor's interest.  He pointed out that Legal Services had                    
recommended that it be added and he felt it could be                           
removed.                                                                       
                                                                               
Representative J. Davies referenced Page 3, Line 21, and                       
asked what authorization the authority would have power to                     
revise.  Mr. Pignalberi replied that all planning powers                       
that currently reside within the Department would move to                      
the Authority.                                                                 
                                                                               
Representative Martin asked if Mr. Pignalberi thought by                       
statute, the legislation could change the power of the                         
Executive Branch authority.  Mr. Pignalberi stated that was                    
the intent, which could be done by changing statute.                           
Representative Martin disagreed, pointing out that there                       
need to be a change to the Constitution.  The Constitution                     
states that all commissions are part of the Executive                          
Branch.  Mr. Pignalberi pointed out that all changes being                     
made are changes in statute.  He advised that 17 positions                     
in the Department's Headquarters Planning Division would be                    
moved to the Authority.  The Department has many other                         
functions which would not be moved such as operations,                         
design and maintenance.                                                        
                                                                               
Representative J. Davies asked if it would be funded by                        
general funds.  He stressed that the federal government                        
will not fund a separate planning effort.  Mr. Pignalberi                      
stated that the federal government would fund whatever                         
process the State comes up with.  They will not fund a                         
duplicative activity.                                                          
                                                                               
HENRY SPRINGER, (TESTIFIED VIA TELECONFERENCE), DIRECTOR,                      
ASSOCIATION OF GENERAL CONTRACTORS, ANCHORAGE, spoke in                        
favor of the proposed legislation.  (Testimony inaudible).                     
                                                                               
THOMAS BRINGHAM, DIRECTOR, DIVISION OF STATEWIDE PLANNING,                     
DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES,                            
commented that HB 227 was a well intentioned effort to add                     
stability to the transportation project development                            
process.  However, close examination of the bill has left                      
the Department to conclude that if enacted, it would cause                     
many problems in an attempt to solve problems that no                          
longer exist.  As a result, DOTPF does not support the                         
legislation.  DOTPF believes the process available for                         
prioritizing and selecting projects is fair, stable and                        
provides well for statewide transportation needs.                              
                                                                               
He enumerated the problems created by the bill:                                
                                                                               
? The proposed Authority is not a true authority or                            
commission which would be responsible for all                                  
capital and operating activities of the                                        
department.  Capital programs approved by the                                  
authority would still be subject to legislative                                
approval on a project by project basis.  Under                                 
the Authority as proposed in HB 227, the                                       
Department and staff would be serving two                                      
masters, the Governor and the Authority.  There                                
are 13 states which have commissions with direct                               
line authority, i.e., the commissions are                                      
responsible for all aspects of the operations of                               
the department.  There are 15 states that have                                 
commissions that are advisory to DOTPF or the                                  
Governor and DOTPF.  Unlike these two types of                                 
commissions with clearly defined roles, the                                    
Authority proposed in HB 227 would establish an                                
Authority with responsibilities that are more                                  
than advisory but less than a commission with                                  
line authority.  The in-between status lead to                                 
confusion both inside and outside DOTPF.                                       
? The intention of HB 227 in regard to the day-to-                             
day operation of the Authority is unclear.                                     
? This Authority will increase the cost of project                             
selection and add costs and delays to programming                              
efforts.  It would add another layer to the                                    
existing project approval process, and would                                   
reduce responsiveness and add general fund                                     
administrative costs.                                                          
? The legislation would give the Authority the                                 
ability to delete and add projects to the                                      
Statewide Transportation Improvement Plan (STIP).                              
Changes to the federally funded program must be                                
made in accordance with the STIP process.                                      
Deviation from the process would render the                                    
project ineligible for funding.                                                
                                                                               
Mr. Bringham added that the Department has submitted a note                    
outlining what the fiscal impacts of the legislation would                     
be.  These impacts total over $500 thousand dollars per                        
year.  All staff and related costs are to be paid for with                     
State general funds.                                                           
                                                                               
Representative G. Davis voiced frustration with the current                    
process and the lack of public input.  He noted that there                     
is a lot of flexibility in the planning process regarding                      
how federal dollars are spent.                                                 
                                                                               
Representative J. Davies asked how the prioritization of                       
projects would occur when the bill was in place.  He asked                     
if the Authority made a change, would the proposal need to                     
go through the public process again.  Mr. Bringham replied                     
that was not clear to the Department.  At present time, the                    
regional staff works with the communities to pool the                          
projects together and the highest scored ones go to                            
statewide competition.                                                         
                                                                               
Representative J. Davies asked the relationship between the                    
AMATS and the FMATS.  Mr. Bringham responded that federal                      
law protects the AMATS program.  That program must be                          
totally incorporated into the Department's STIP.  The State                    
agency does not have any authority to change it.                               
                                                                               
(Tape Change HFC 98- 128, Side 2).                                             
                                                                               
JACK KREINHEDER, SENIOR POLICY ANALYST, OFFICE OF                              
MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR, stated that                     
the Office of Management and Budget (OMB) believes that the                    
proposed Authority would be an unnecessary level of                            
bureaucracy.  Mr. Kreinheder agreed with Mr. Bringham in                       
problems which would occur during a turnover, when the                         
Authority becomes "out-of-sink" with the Administration.                       
At that point, they would become a dual entity to do                           
business with.  He projected that the Governor would end up                    
ignoring the commission, as the Governor's constitutional                      
power can not be changed by statute.                                           
                                                                               
He pointed out that OMB would suggest to the Governor that                     
the proposed legislation would create constitutional                           
problems.  Mr. Kreinheder advised that the Administration                      
is open to suggestions for improving the planning process                      
with public and legislative input.                                             
                                                                               
In conclusion, Mr. Kreinheder stated that in regard to the                     
legislative amendments, the entire concept is flawed.  He                      
recommended against going with a full commission,                              
suggesting that an advisory commission could address some                      
of the problems.  Mr. Kreinheder would recommend the bill                      
be vetoed.                                                                     
                                                                               
HB 227 was HELD in Committee for further discussion.                           

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