Legislature(2005 - 2006)

05/02/2005 02:33 PM House FIN

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CS FOR SPONSOR SUBSTITUTE FOR SENATE BILL NO. 16(TRA)                                                                         
     "An  Act  relating  to  the powers  and  duties  of  the                                                                   
     Department  of  Transportation  and  Public  Facilities;                                                                   
     repealing the  requirement for a long-range  program for                                                                   
     highway  construction and  maintenance; and repealing  a                                                                   
     requirement  that public  facilities comply with  energy                                                                   
     standards  adopted by the  Department of  Transportation                                                                   
     and Public  Facilities; and  providing for an  effective                                                                   
DOUG LETCH, STAFF, SENATOR GARY  STEVENS, spoke in support of                                                                   
SB 16.  He noted that the  legislation would  update obsolete                                                                   
statutes regarding  the powers  and duties of  the Department                                                                   
of Transportation  and Public  Facilities. The key  provision                                                                   
is  the removal  of  the requirement  for  the department  to                                                                   
conduct  a  cost  benefit  analysis  for  all  projects.  The                                                                   
regulation has  placed the department at a  huge disadvantage                                                                   
because it  makes every project  no matter how  small subject                                                                   
to a cost  benefit analysis. He maintained that  opponents of                                                                   
Department of  Transportation and Public  Facilities projects                                                                   
have used the provision as a basis of litigation.                                                                               
Representative  Croft  observed  that the  legislation  would                                                                   
eliminate a cost  benefit study on all projects  and asked if                                                                   
it would  be appropriate  to require  it on  medium to  large                                                                   
projects. Vice-Chair  Meyer asked  that the question  be held                                                                   
till after Mr. Ottensen's presentation.                                                                                         
JEFF  OTTENSEN, DIRECTOR,  DIVISION  OF PROGRAM  DEVELOPMENT,                                                                   
DEPARTMENT OF TRANSPORTATION AND  PUBLIC FACILITIES, referred                                                                   
to  a sectional  analysis  (copy on  file.)  Section 1  would                                                                   
grant the department  the ability to issue grants,  when they                                                                   
have  been authorized  by appropriation  of the  legislature.                                                                   
The department  receives  money in at  least three  different                                                                   
categories from federal  sources that is then  granted out to                                                                   
local governments  and non-profits.  Section 3 contained  the                                                                   
old  cost  benefit  language.  Section  5  adds  a  new  cost                                                                   
effectiveness  requirement  for  new projects  that  are  not                                                                   
local. This would  eliminate the burden from 80  - 90 percent                                                                   
of their  projects. Significant  projects  that are beyond  a                                                                   
local town  or road would  be included. A cost  effectiveness                                                                   
analysis  would  be  required,  at  a  lower  cost  than  the                                                                   
traditional  cost  benefit  analysis.  Section  8  gives  the                                                                   
department   one  year   to  implement   Section  5   through                                                                   
regulation. He noted that the  statutes are over 30 years old                                                                   
and  felt  that  the legislation  would  be  good  for  local                                                                   
governments and the department.                                                                                                 
3:40:46 PM                                                                                                                    
Representative  Croft questioned  how  the legislation  would                                                                   
benefit  the public.  In  response  to further  questions  by                                                                   
Representative  Croft, Mr.  Ottensen referred  to section  5,                                                                   
which  requires  a  new  cost   effective  analysis  for  new                                                                   
highways,  airports,  terminals,  ferries,  and  other  major                                                                   
components.    Projects    requiring    rehabilitation    and                                                                   
maintenance of the existing system,  or would primarily serve                                                                   
local transportation needs are excluded.                                                                                        
Representative  Croft asked why  there should  not be  a cost                                                                   
benefit analysis  for these  projects. Mr. Ottensen  stressed                                                                   
that  the greatest  burden  is  on municipalities  and  local                                                                   
government. The  state of Alaska  is geared up to  make these                                                                   
analyses. The  cost benefit analysis  occurs at  the planning                                                                   
stage. The  quality of data goes  up on almost  every project                                                                   
as  it goes  through the  process. Cost  studies become  more                                                                   
meaningful later in the process.                                                                                                
Representative  Croft  questioned why  not  require the  cost                                                                   
studies later and asked if they are being done twice.                                                                           
3:44:38 PM                                                                                                                    
Mr. Ottensen agreed  and reiterated that the  statute affects                                                                   
planning.   Cost  effective  studies   exempted  during   the                                                                   
planning stage could be required at the building stage.                                                                         
3:45:37 PM                                                                                                                    
Representative  Holm asked  if  the legislation  would  solve                                                                   
problems with cost  benefit analysis that have  no merit. Mr.                                                                   
Ottensen felt that the legislation  would fix the problem. He                                                                   
maintained  that delay  of the  legislation  resulted in  the                                                                   
death of three individuals due  to the department's inability                                                                   
to go forward on a bridge.                                                                                                      
3:47:09 PM                                                                                                                    
Mr. Ottensen  noted that projects  in the GARVEE  legislation                                                                   
have  not   gone  through  a   cost  benefit   analysis.  The                                                                   
department will  need to do a  cost benefit analysis  on each                                                                   
of  these projects  as soon  as the  [GARVEE] legislation  is                                                                   
3:47:21 PM                                                                                                                    
Representative Hawker MOVED to  report CSSSSB 16 (TRA) out of                                                                   
Committee  with  individual  recommendations   and  with  the                                                                   
accompanying fiscal  notes. There being NO OBJECTION,  it was                                                                   
so ordered.                                                                                                                     
CSSSSB  16 (TRA) was  REPORTED  out of Committee  with  a "do                                                                   
pass" recommendation  and with two zero fiscal  impact notes:                                                                   
#1 DOT, #2 DPS.                                                                                                                 
3:48:23 PM                                                                                                                    

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