04/20/2006 01:00 PM Senate FINANCE

1:24:36 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
     SENATE BILL NO. 271                                                                                                        
     "An Act  authorizing the commissioner of  transportation and                                                               
     public facilities to participate  in certain federal highway                                                               
     programs  and relating  to that  authorization; relating  to                                                               
     powers of the  attorney general to waive  immunity from suit                                                               
     in federal  court related to  those programs;  and providing                                                               
     for an effective date."                                                                                                    
                                                                                                                                
                                                                                                                                
This was the  second hearing for this bill in  the Senate Finance                                                               
Committee.                                                                                                                      
                                                                                                                                
Co-Chair  Green  reminded  that   this  bill  would  provide  the                                                               
statutory authority  necessary for  the establishment of  a pilot                                                               
program  proposed by  US  Congressman Don  Young  of Alaska.  The                                                               
provision  relating to  immunity waivers  is necessary  to reduce                                                               
delays.                                                                                                                         
                                                                                                                                
1:25:46 PM                                                                                                                    
                                                                                                                                
Senator Stedman  clarified that no  changes were proposed  to the                                                               
original version of the bill previously heard in Committee.                                                                     
                                                                                                                                
Co-Chair Green affirmed.                                                                                                        
                                                                                                                                
Senator  Stedman recalled  that concern  was expressed  about the                                                               
amount of the  fiscal note and the increased  number of positions                                                               
this  bill  would entail.  Funding  for  additional positions  is                                                               
included  in the  FY 07  Operating Budget  earlier reported  from                                                               
Committee. He was  not convinced that the  proposed program would                                                               
improve  the  process to  the  extent  that  the costs  would  be                                                               
warranted.                                                                                                                      
                                                                                                                                
1:27:19 PM                                                                                                                    
                                                                                                                                
JOHN    MACKINNON,    Deputy    Commissioner,    Department    of                                                               
Transportation and Public Facilities,  testified that funding for                                                               
the  additional positions  as listed  in the  fiscal note  is not                                                               
included  in the  FY 07  Operating Budget.  The program  would be                                                               
funded primarily  with federal funding,  but would  require State                                                               
matching  funds. The  Department  supports the  creation of  this                                                               
program. It would benefit Alaska  by streamlining the process and                                                               
allowing  for decision-making  "in house"  within the  Department                                                               
rather  than  by the  federal  government.  The  cost is  low  in                                                               
comparison to  the large  program. The  cost savings  incurred in                                                               
one year from streamlining a  project would pay for the operation                                                               
of the program.                                                                                                                 
                                                                                                                                
1:29:23 PM                                                                                                                    
                                                                                                                                
Senator Stedman expressed concern  of the potential risk exposure                                                               
to  the State  by waiving  this sovereign  immunity. He  asked if                                                               
more exposure to liability could occur than anticipated.                                                                        
                                                                                                                                
Mr.  McKinnon had  contacted the  federal Highway  Administration                                                               
and learned  it had little  litigation history on this  issue. In                                                               
cases of  litigation resulting from accidents  the court directed                                                               
that certain  changes be made  to prevent additional  crashes. He                                                               
told of a  case involving the state of Utah  in which hearings on                                                               
an environmental  impact statement were  held as an  open meeting                                                               
forum and information was inadvertently posted and made public.                                                                 
                                                                                                                                
1:31:33 PM                                                                                                                    
                                                                                                                                
Senator Stedman pointed  out that few roads  had been constructed                                                               
in Alaska in the last 20  years. New roads would improve commerce                                                               
and  travel.  He  asked  if   this  legislation  is  intended  to                                                               
facilitate  the construction  of new  roads or  just shorten  the                                                               
length  of time  to resolve  "the inevitable"  litigation by  one                                                               
year.                                                                                                                           
                                                                                                                                
1:32:08 PM                                                                                                                    
                                                                                                                                
Mr. McKinnon  expressed the Department's  intent to  address this                                                               
undertaking  "seriously"  by  following procedure  correctly  but                                                               
also to provide  "checks and balances" to  ensure against errors.                                                               
This program  would provide no  guarantee against  litigation. In                                                               
the  history  of  these  State  projects,  two  cases  have  been                                                               
litigated  against; Illiamna/Nondalton  road and  bridge project,                                                               
which is  still pending, and  the Whittier Tunnel. The  State and                                                               
federal agencies have  prevailed to date on  all actions relating                                                               
to these projects.                                                                                                              
                                                                                                                                
1:32:59 PM                                                                                                                    
                                                                                                                                
Senator Olson asked the amount  of time until the federal funding                                                               
is  eliminated and  the State  would  be required  to assume  all                                                               
costs to  operate this program,  as is occurring with  many other                                                               
programs.                                                                                                                       
                                                                                                                                
1:33:26 PM                                                                                                                    
                                                                                                                                
Mr.  McKinnon answered  that the  provisions of  this legislation                                                               
would be  part of the  federal highway aide program.  The federal                                                               
funding is assured  for five years for this  six-year program. He                                                               
presumed that  if federal funding  for highway  construction were                                                               
eliminated nationwide "serious mutiny" would occur.                                                                             
                                                                                                                                
1:34:06 PM                                                                                                                    
                                                                                                                                
Senator Olson clarified that State  funding would not be required                                                               
to "backfill" a  reduction or elimination of  federal funding for                                                               
five years.                                                                                                                     
                                                                                                                                
Mr. McKinnon responded  the federal funding would  be assured for                                                               
at least five years and most likely longer.                                                                                     
                                                                                                                                
Senator Olson  asked if  State assumption  of this  process would                                                               
affect the eligibility to receive federal funding.                                                                              
                                                                                                                                
Mr. McKinnon surmised  this undertaking would not  make the State                                                               
more  or less  eligible  for federal  funding for  transportation                                                               
projects.                                                                                                                       
                                                                                                                                
1:34:53 PM                                                                                                                    
                                                                                                                                
Co-Chair  Wilken  offered  a  motion  to  report  the  bill,  24-                                                               
GS2042\A,  from  Committee  with individual  recommendations  and                                                               
accompanying fiscal notes.                                                                                                      
                                                                                                                                
There was no  objection and SB 274 was MOVED  from Committee with                                                               
fiscal   note   #1   for  $647,400   from   the   Department   of                                                               
Transportation  and Public  Facilities  and zero  fiscal note  #2                                                               
from the Department of Environmental Conservation.