Legislature(2001 - 2002)
04/02/2002 04:14 PM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CS FOR SENATE BILL NO. 59(CRA)
"An Act relating to awards of federal funds to municipalities
for road projects; and providing for an effective date."
This was the second hearing for this bill in the Senate Finance
Committee.
MARY JACKSON, Staff to Senator John Torgerson, the bill's sponsor,
informed the Committee that this bill would establish a new program
that would direct approximately $20 million in non-National Highway
System (NHS) federal transportation funds annually to
municipalities rather than to State agencies. She continued that
the proposal specifies an annual limit of $3 million be allotted
per municipality; that the recipient municipality must possess the
power and authority to use the funds to construct roads; and that
the municipality must provide matching funds as detailed in the
bill's fiscal note. She explained that the focus of the bill is to
provide municipalities with the ability to expedite road
construction projects within their boundaries, and furthermore, she
stressed, the State would save approximately $1.5 million in
general funds because the municipality, rather than the State,
would provide the required matching funds.
TIM ROGERS, Legislative Program Coordinator, Municipality of
Anchorage, testified via teleconference from Anchorage to voice
support for this legislation as it would enable the City to
undertake ownership of seven identified road projects. He noted
that only one of these projects is under the current program
threshold of $350,000 and that the average project ranges between
$4 million and $5 million with a total cost for all seven projects
being $30 million. He urged the Committee to consider elevating the
threshold level to allow Anchorage the ability to assume
responsibility for these road projects.
JEFF OTTESEN, Statewide Planning Chief, Division of Statewide
Planning, Department of Transportation and Public Facilities
asserted that current practice allows funding to be appropriated to
local governments through the Statewide Transportation Improvement
Program (STIP) that annually provides approximately $75 million to
local road projects.
Mr. Ottesen continued that while the alternate funding process
proposed in this bill would allow local governments to execute road
projects and administer funds on a local level, he contended that
the technicalities of the federal aid process are extremely
complex. He declared that Department "staff have spent their entire
careers learning how to work within those rules, they undergo
constant training and re-training to stay abreast of the changes in
those rules. It is not a trivial body of knowledge they that have
to work within and to assume that local officials, already immersed
in their day-to-day routines and responsibilities of local
government, can automatically just step in and learn all this is
our worry." He showed the Committee a large manual that contains
overviews of the federal program, and he stated that a multitude of
similar manuals would be required reading.
Mr. Ottesen stressed that this federal aid is a reimbursement
program rather than a grant program as incorrectly perceived by
many people. He expressed that communities would be required to
"float the cash" for a project in adherence to federal rules and
regulations, and then request reimbursement for the expenditures.
He asserted that, if the project were determined to be non-
compliant with the federal regulations, the money would not be
forthcoming. He reiterated the difficulties associated with the
process.
Mr. Ottesen informed the Committee that, in addition to receiving
regular STIP funding, some communities, including Anchorage,
receive additional STIP funding that is available to support
administrative expenses.
Mr. Ottesen stressed that, were this legislation enacted, the local
community projects would continually require State involvement. He
stressed that in a situation where a local project fails to comply
with federal rules and "gets into financial trouble," the State
would be required "to bail them out" because the State is
"obligated under the relationship with the Federal Highways
Administration (FHA) to take that responsibility."
Mr. Ottesen furthered that because the Department is ultimately
responsible for this funding, the "management of these projects
would require a high level of oversight by DOT staff." He detailed
the multitude of procedures and documentation mandated by the FHA
that the communities would be required to perform in order to
receive the federal aid. He stated, "that the technical realities
of the legislation are sobering."
Mr. Ottesen pointed out that, although it is separate federal
st
legislation, the Transportation Equity Act for the 21 Century
(TEA-21), identified many transportation projects for communities
in the State; however because of the complexity of the federal
guidelines, the risks that would be assumed, and the multitude of
procedural requirements, only one has been pursued by local
governments. He commented that the federal requirements of this
legislation would be similar.
Co-Chair Kelly asked the Municipality of Anchorage representative
to respond to the Department's position that the technicalities of
this endeavor are too much for a local government to undertake.
Mr. Rogers informed the Committee that the program proposed by this
legislation is optional rather than mandatory, and he reiterated
that this legislation would provide communities with the ability to
further their priority road projects. He countered that the
Municipality of Anchorage does not perceive the federal regulations
and requirements to be an issue, and he attested that Anchorage and
other municipalities in the State are capable of handling the
projects independently from the State.
Amendment #2: This amendment raises the maximum amount of federal
highway funds awarded to a single municipality from $3 million to
$7 million per year.
Co-Chair Donley moved for adoption of Amendment #2.
Senator Austerman objected. He voiced concern that raising the
award level might be beneficial to large communities such as
Anchorage that have big projects; however, because the funds are
limited, raising the level would reduce the funding amount
available for other communities' projects.
Senator Green voiced that, to address Senator Austerman's concern,
the Committee should consider increasing the total amount of
available funding.
Ms. Jackson verified that federal funds could be available to
provide for an elevated level.
Senator Green asserted that increasing the total amount of funding
awarded would be beneficial because there are multiple levels of
funding needs in the State.
Senator Green moved to amendment the amendment to increase the
total amount awarded in a fiscal year from $20 million to $40
million, and increases the maximum amount of federal highway funds
awarded to a single municipality to $6 million per year.
Co-Chair Kelly objected then removed his objection.
Senator Hoffman asked the sponsor's representative to comment on
what he (Senator Hoffman) characterized as "double-dipping;"
whereby some municipalities, such as Anchorage with its AMATS
Anchorage Metropolitan Area Transportation Study (AMATS) program,
receive transportation funding from multiple sources.
Ms. Jackson responded that she "heard that and noted it, and
frankly I was a little surprised to hear it because the Department
would have the authority to establish the regulations for the
program" to ensure against such double-dipping.
Senator Hoffman asked whether this "would be the intent of the
sponsor."
Ms. Jackson replied, "Certainly."
A roll call was taken on the motion to amend the amendment.
IN FAVOR: Senator Ward, Senator Green
OPPOSED: Senator Wilken, Senator Austerman, Senator Hoffman,
Senator Leman, Senator Olson, Co-Chair Donley, Co-Chair Kelly
The motion FAILED (7-2)
The amendment FAILED to be amended.
Co-Chair Kelly announced that Amendment #2 is before the Committee.
Co-Chair Donley avowed that the AMATS program that was incorporated
under the Municipal Planning Organizations (MPOs) program initiated
by TEA-21 "has been a curse" to Anchorage and other nation-wide
metropolitan areas nationwide that have populations exceeding
200,000, because completion of the various components required by
the study, particularly the major investment study, is tedious. He
stated that because of AMATS, the federal STIP program has
"intentionally discriminated" against Anchorage for many years and
has resulted in less funding being provided to the City because
roads could not be constructed without a completed study.
Co-Chair Donley stated that because most of the projects in
Anchorage exceed $7 million, this amendment would allow Anchorage
to participate in receiving some of the funding proposed in this
legislation. He contended that with 42 percent of the State's
population, Anchorage would be entitled to $8.4 million if the
distribution of funds were determined on a per capita basis. He
asserted that the Municipality of Anchorage expends "more per
capita for road maintenance than any other community in the State."
He argued that to limit the allotment per community to $3 million
would be "really unfair to the people of the Anchorage community,"
as it makes it difficult for the community to access the money.
Senator Wilken reminded the Committee that in previous hearings, a
$10 million maximum per community was discussed, and he asked the
witness how the sponsor views that level of funding.
Ms. Jackson advised that Senator Torgerson would not support an
amendment that would substantially increase the funding level. She
contended that numerous communities in the State might have
projects in the $7 million range; however, she stressed, the goal
is to distribute the money around the State. She stated that, "the
practical application would be to break a project into components"
to fit within the specified levels of the bill.
A roll call was taken on the motion.
IN FAVOR: Senator Leman, Senator Ward, Co-Chair Donley, Co-Chair
Kelly
OPPOSED: Senator Wilken, Senator Austerman, Senator Green, Senator
Hoffman, Senator Olson
The motion FAILED (4-5)
Amendment #2 FAILED to be adopted.
Amendment #3: This amendment changes the bill's effective date to
July 1, 2002.
Senator Leman moved for adoption of Amendment #3.
Without objection, Amendment #3 was ADOPTED.
Senator Ward made a motion to report "committee substitute for
Senate Bill Number 59 out of committee with individual
recommendations, as amended, and accompanying notes."
Co-Chair Donley objected. He stated that this bill "perpetuates a
decade of unfair, unreasonable discrimination against the road
needs of the Anchorage Bowl, and that the rest of the State has
benefited by the shortchanging of the Anchorage community through
the STIP and the unreasonable redistribution of that money to the
rest of the State, with promise after promise that eventually the
money would be coming to our community to deal with the problems
that we have with just basic traffic." He continued that the State
receives most of its revenue from motor fuel taxes and licensing
fees from Anchorage's residents, who comprise 42 percent of the
State's population, and he contended that Anchorage residents are
entitled to some funding. He stated that the criteria for this
distribution is biased against any urban area and has resulted in
"severe discrimination" against the Anchorage community.
Senator Hoffman also objected. He stated that although this bill
might be well-intentioned, the problems that communities would have
in adhering to the federal regulations and guidelines, as
identified by the Department of Transportation and Public
Facilities, would prevent the majority of small rural areas from
accessing this funding because they do not have the necessary
expertise or capability to participate in this program.
A roll call was taken on the motion.
IN FAVOR: Senator Green, Senator Austerman, Senator Olson, Senator
Wilken, Senator Ward, Senator Leman, Co-Chair Kelly
OPPOSED: Co-Chair Donley, Senator Hoffman
The motion PASSED (7-2)
CS SB 59(FIN) was REPORTED from Committee with a new Department of
Transportation and Public Facilities zero fiscal note, dated April
23, 2002.
At EASE 6:02 PM / 6:05 PM
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