Legislature(2005 - 2006)SENATE FINANCE 532

04/15/2005 09:00 AM Senate FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 66 APPROP: MENTAL HEALTH BUDGET TELECONFERENCED
Moved Out of Committee 4/14
+= HB 67 APPROP: OPERATING BUDGET/LOANS/FUNDS/CBR TELECONFERENCED
Moved Out of Committee 4/14
+= SB 130 WORKERS' COMPENSATION TELECONFERENCED
Moved Out of Committee 4/11
+ SB 131 WAGE & HOUR ACT: EXEC/PROF/ADMIN/SALES TELECONFERENCED
Moved CSSB 131(FIN) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= SB 16 POWERS/DUTIES DOTPF/TRANSPORTATION PLAN TELECONFERENCED
Moved CSSSSB 16(TRA) Out of Committee
+= SB 88 POLICY ON GENERAL FUND REVENUE SHORTFALL TELECONFERENCED
Moved SB 88 Out of Committee
+= SB 112 TAX ON REAA RESIDENTS TELECONFERENCED
Heard & Held
+= SB 158 MUNI TAX ON STATE CONSTRUCTION CONTRACTS TELECONFERENCED
Moved SB 158 Out of Committee
+= SB 147 SPORT FISHING FACILITY REVENUE BONDS TELECONFERENCED
Scheduled But Not Heard
                                                                                                                                
     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 date."                                                                                          
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
DOUG  LETCH, Staff  to Senator  Gary  Stevens, the  bill's  sponsor,                                                            
informed the Committee  that this legislation would either eliminate                                                            
or update several  obsolete statutes  relating to the powers  of the                                                            
Department  of Transportation  and Public  Facilities. Specifically                                                             
the  bill would  remove  the burden  of  conducting  a cost  benefit                                                            
analysis for each of the  Department's projects, regardless of size.                                                            
This   cost-effectiveness   analysis    requirement   has   provided                                                            
opportunities  for  project opponents  to  sue the  State. The  bill                                                            
contains  several key provisions  that would  change the powers  and                                                            
duties of the  Department to bring  those statutes in line  with the                                                            
Department's  practice  of today.  There is widespread  support  for                                                            
this legislation,  as indicated by  the letters of support  included                                                            
in  the  Member's  backup material.  He  asked  that  any  technical                                                            
questions regarding this  legislation be directed to the Department.                                                            
                                                                                                                                
9:35:51 AM                                                                                                                    
                                                                                                                                
Senator Stedman  understood that one of the bill's  provisions would                                                            
exclude  the  cost   effective  analysis  for  local   service  area                                                            
projects. He asked for further information in this regard.                                                                      
                                                                                                                                
9:36:24 AM                                                                                                                    
                                                                                                                                
JEFF OTTESEN,  Director, Division of Program Management,  Department                                                            
of Transportation  and Public Facilities,  stated that the  language                                                            
in question  is  located in  Section 5,  subsection  (e), page  six,                                                            
beginning  on  line  five  of the  bill.  Subsection  (e)  reads  as                                                            
follows.                                                                                                                        
                                                                                                                                
     (e) In evaluating  new highways, airports, terminals,  ferries,                                                            
     and  other major  components  for inclusion  in  the plan,  the                                                            
     commissioners   shall prepare  a  cost-effectiveness   analysis                                                            
     using a consistent  methodology. A cost-effectiveness  analysis                                                            
     is not required for  a project that involves the rehabilitation                                                            
     and maintenance  of an existing  transportation system  or that                                                            
     primarily serves local transportation needs.                                                                               
                                                                                                                                
Mr. Ottesen  clarified that the cost  benefit analysis would  not be                                                            
required  for the  rehabilitation and  maintenance  of a variety  of                                                            
existing projects  or that are essentially  local in nature  such as                                                            
local  roads, local  trails,  buses, and  vans for  senior  centers.                                                            
Conducting  such analyses is currently  a burden on the Department.                                                             
                                                                                                                                
Senator Stedman asked for  further information regarding the "local"                                                            
exemption; specifically  whether it would pertain  to such things as                                                            
roads on islands.                                                                                                               
                                                                                                                                
Mr.  Ottesen   responded  that  the   bill's  sponsor,  working   in                                                            
conjunction with  the Department, deliberately drafted  a short bill                                                            
with the  determination  that the  specifics would  be addressed  in                                                            
regulations.   "Generally   speaking,   a   local  road   would   be                                                            
transportation  within a  borough that basically  moves people  from                                                            
one part of a  borough to another, be it on an island  or be it on a                                                            
part of the  mainland". This would  include National Highway  System                                                            
(NHS)  routes,  major  airports,  and  major  port  facilities  that                                                            
connect  the State.  The  cost effectiveness  requirement  would  be                                                            
required on any  "major new facilities, with new being  the key word                                                            
here, that  are not local  in nature. The  trouble with the  current                                                            
statute, which  was developed in 1977, is that it  is now being used                                                            
as  a club  to halt  projects.  It applies  to anything".  The  cost                                                            
benefit  analysis requirement  applies to  projects approved  by the                                                            
Legislature, projects approved  by voters, or even a transit van for                                                            
a senior citizen center.  It also applies to such things as training                                                            
programs  and other  things to which  determining  how to develop  a                                                            
cost benefit  analysis  would be difficult.  The  goal is to  exempt                                                            
local  roads and  activities  from "this  burdensome"  cost  benefit                                                            
analysis.                                                                                                                       
                                                                                                                                
Senator Stedman  opined that, "by that definition,  all the roads in                                                            
Southeast Alaska  would be excluded" from the exemption,  as none of                                                            
the  roads are  tied together.  The  majority  of the  roads are  on                                                            
islands.                                                                                                                        
                                                                                                                                
Mr.  Ottesen clarified  that  the NHS  connection  definition  would                                                            
apply to  a variety of  roads in Southeast  Alaska. In Ketchikan  it                                                            
would apply  to the  ferry from the  airport to  town; in Juneau  it                                                            
would apply to Egan Drive  between the airport and downtown. Most of                                                            
the other roads in Juneau  and similar roads across the State "would                                                            
be excepted".                                                                                                                   
                                                                                                                                
Senator Olson  inquired to the two  accompanying zero fiscal  notes:                                                            
Fiscal Note #1,  dated March 22, 2005 from the Department  of Public                                                            
Safety  and zero  Fiscal  Note #2,  dated March  21,  2005 from  the                                                            
Department  of Transportation  and  Public Facilities.  It would  be                                                            
expected that this legislation would save the State money.                                                                      
                                                                                                                                
Mr. Ottesen  responded  that  there would  be cost  savings in  that                                                            
"more  money would  be spent  on pavement  and less  money spent  on                                                            
process". The  amount of money that the Department  is allocated is,                                                            
in its entirety,  reflected in the budget; however,  now it is being                                                            
divvied  up   "to  support  economists   and  planners  to   conduct                                                            
processes" rather than building projects.                                                                                       
                                                                                                                                
Co-Chair  Green understood  therefore that  the funds would  be more                                                            
project specific.                                                                                                               
                                                                                                                                
Mr.  Ottesen responded  that  the total  amount received  would  not                                                            
change.                                                                                                                         
                                                                                                                                
Senator  Dyson questioned  whether, "aside  from the standards  that                                                            
are  applied  to  really  minor  sorts  of  things",   some  federal                                                            
standards  in  regards  to  such  things  as  thermal  and  lighting                                                            
analysis  on  highways  are really  inappropriate  because  of  such                                                            
things as the State's environment and population densities.                                                                     
                                                                                                                                
Mr. Ottesen responded that  the State's responsibility in regards to                                                            
thermal  standards  and  lighting  standards  were  incorporated  in                                                            
statute in  the 1970s at a time when  the nation was undergoing  its                                                            
first energy crisis. The  Department was designated as the entity to                                                            
have that oversight;  however, over  time, the Department's  role in                                                            
"the building  world" has  diminished and  the Department no  longer                                                            
conducts building  projects for municipalities or  schools for Rural                                                            
Educational  Attendance  Areas. National  entities  rather than  the                                                            
Department set  standards, which are then adopted  by local building                                                            
codes.  The  Department's  role  in that  entire  arena  has  simply                                                            
evaporated yet the statute  remains the same. This legislation is an                                                            
attempt to conduct some housekeeping."                                                                                          
                                                                                                                                
Co-Chair  Wilken  moved  to  report the  bill  from  Committee  with                                                            
individual recommendations and accompanying fiscal notes.                                                                       
                                                                                                                                
There  being  no objection,  CS  SSSB  16 (TRA)  was  reported  from                                                            
Committee with  zero Fiscal Note #1,  dated March 22, 2005  from the                                                            
Department  of Public Safety  and zero Fiscal  Note #2, dated  March                                                            
21,  2005   from  the  Department   of  Transportation  and   Public                                                            
Facilities.                                                                                                                     
                                                                                                                                
9:42:54 AM                                                                                                                    
                                                                                                                                

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