Legislature(2005 - 2006)SENATE FINANCE 532

03/21/2006 09:00 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 261 REGULATION OF HWYS; TRAFFIC OFFENSES TELECONFERENCED
Moved CSSB 261(FIN) Out of Committee
+ SB 271 AUTHORIZE HWY PROGRAM PARTICIPATION TELECONFERENCED
Heard & Held
+ SB 308 ALASKA RAILROAD REVENUE BONDS TELECONFERENCED
Moved SB 308 Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
                                                                                                                                
     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 first hearing for  this bill in the  Senate Finance                                                               
Committee.                                                                                                                      
                                                                                                                                
JOHN  MACKINNON,   Deputy  Commissioner  of  Highways   &  Public                                                               
Facilities,  Department of  Transportation and  Public Facilities                                                               
explained  that  a  National   Environmental  Policy  Act  (NEPA)                                                               
delegation  six-year pilot  program was  included in  the federal                                                               
highway  Safe,  Accountable, Flexible,  Efficient  Transportation                                                               
Equity  Act:  A  Legacy  for  Users  (SAFETEA-LU),  when  it  was                                                               
reauthorized  by  Congress in  the  summer  of  2005. He  read  a                                                               
segment of  a handout titled  "NEPA Delegation Pilot  Fact Sheet"                                                               
[copy on file] as follows.                                                                                                      
                                                                                                                                
     SAFETEA-LU  includes a  NEPA  delegation  pilot program  for                                                               
     five  states  -  Alaska,  California,  Oklahoma,  Ohio,  and                                                               
     Texas. Under  the program, the  five states are  eligible to                                                               
     apply for  delegation of  the Secretary  of Transportation's                                                               
     (Secretary) NEPA  responsibilities for  one or  more highway                                                               
     projects  within the  state. The  state may  also apply  for                                                               
     delegation  of some  or all  of the  Secretary's review  and                                                               
     consultation    responsibilities    under   other    Federal                                                               
     environmental  laws.   The  scope  of  delegation   will  be                                                               
     determined   through  application   to  the   Secretary  and                                                               
     execution of a Memorandum of Understanding (MOU).                                                                          
                                                                                                                                
     Time Frame:                                                                                                                
                                                                                                                                
        · Duration of the pilot program is six years from                                                                       
          enactment of SAFETEA-LU. Unless extended by statute,                                                                  
          the pilot terminates on August 10, 2011.                                                                              
                                                                                                                                
        · The Secretary is required to promulgate regulations to                                                                
          establish    delegation    application    requirements.                                                               
          Rulemaking is required to be complete within 270 days                                                                 
          of the Act. Rulemaking is behind schedule.                                                                            
                                                                                                                                
        · The State may not submit its application until                                                                        
          * Rulemaking is complete and                                                                                          
          * The State must advertise the application and solicit                                                                
             public comment.                                                                                                    
                                                                                                                                
        · After its application is accepted, the State and                                                                      
          Secretary will enter into an MOU.                                                                                     
                                                                                                                                
     Once the MOU is executed, delegation may proceed.                                                                          
                                                                                                                                
Mr. MacKinnon pointed  out that this program  would transfer "the                                                               
decision   making  process   on  what   level  of   environmental                                                               
documentation  is  required  out  of the  hands  of  the  federal                                                               
Highway  Administration  and  puts  in the  hands  of  the  State                                                               
Department  of  Transportation".  The   State  would  have  "more                                                               
control of the process and  the rate at which these environmental                                                               
reviews  proceed". This  program would  not reduce  environmental                                                               
protections or environmental reviews,  as the State must continue                                                               
to follow  federal Environmental  Protection Act  guidelines. The                                                               
benefit  would be  that  the  State could  control  "the pace  at                                                               
which" the process proceeds.                                                                                                    
                                                                                                                                
Mr.  MacKinnon qualified  that the  program would  be limited  to                                                               
highway   projects   administered    by   the   Federal   Highway                                                               
Administration (FHWA). Furthermore, the  program would be limited                                                               
"to environmental decision making"  and would exclude engineering                                                               
issues.  Airport aviation  projects  and  other federal  projects                                                               
occurring in the State would be unaffected.                                                                                     
                                                                                                                                
Senator Bunde  ascertained therefore that, even  though the State                                                               
might  have more  control,  it could  strengthen  but not  reduce                                                               
restrictions, as it must "abide by federal standards".                                                                          
                                                                                                                                
Mr. MacKinnon affirmed that the  State would be required to abide                                                               
by  federal   regulations  and  could   not  establish   its  own                                                               
environmental policy.                                                                                                           
                                                                                                                                
Senator  Bunde questioned,  therefore,  the  benefit the  program                                                               
would provide  to the  State. To  that point,  were the  State to                                                               
participate in this  program and a lawsuit  regarding its actions                                                               
presented "as  there often  is", the State  would be  required to                                                               
defend its action.                                                                                                              
                                                                                                                                
Mr. MacKinnon affirmed.                                                                                                         
                                                                                                                                
Senator  Bunde   suggested  therefore   that  the   fiscal  notes                                                               
accompanying the bill  must "be adjusted" to  address that issue.                                                               
In   conclusion,  he   asked   what   "advantages"  the   State's                                                               
participation  in this  program  would provide,  since the  State                                                               
would be required to follow the same rules.                                                                                     
                                                                                                                                
Co-Chair Green understood one benefit  to be that the State would                                                               
be "in more  of a position" to improve  project timeframes rather                                                               
than being dependent on federal decision timeframes.                                                                            
                                                                                                                                
Mr. MacKinnon affirmed. The State  has no control over the timing                                                               
of the federal decision making  process. "It would not be unusual                                                               
for work  to sit  on a  desk for a  significant period  of time."                                                               
"There is  a greater  chance" that documents  "sitting on  one of                                                               
our desks" could be processed faster.                                                                                           
                                                                                                                                
Mr. MacKinnon mentioned that the  bill would also pertain to "the                                                               
level   of   documentation   required.  The   majority   of   the                                                               
environmental    documentation"    consists    of    "categorical                                                               
exclusions"   (Cat-Ex's),  which   are  the   simplest  form   of                                                               
documentation. The NEPA process is  required for projects such as                                                               
road repavings  or the  construction of  an overpass.  Under this                                                               
program,  the  State  would   assume  responsibility  for  Cat-Ex                                                               
documentation.  When the  federal government  is involved,  "they                                                               
make the  decision on what  level of documentation  is required".                                                               
At  times,  the federal  government  required  projects that  had                                                               
historically been  subject to Cat-Ex documentation  to be subject                                                               
to   an   environmental   assessment  or   the   more   extensive                                                               
environmental  impact statement.  Were the  State to  assume "the                                                               
NEPA  delegation, those  decisions  would be  made  at the  State                                                               
level and not at the federal level".                                                                                            
                                                                                                                                
Mr.  MacKinnon   affirmed  that  with  the   assumption  of  this                                                               
responsibility,  the  State  would  be  required  to  defend  its                                                               
decisions in  Court. Language that  "waived the  State's immunity                                                               
from suit  in federal  court" is  specified in  Section 1  page 1                                                               
lines 9  and 10 of  the bill. Since  "NEPA is procedural  law", a                                                               
basis for  a Court  case "would  be that  the Department  for one                                                               
reason  or another  did not  follow the  correct procedure."  The                                                               
Court's  decision could  require the  Department to  go back  and                                                               
redo    something,   "following    the   procedure    correctly".                                                               
Historically in  such FHWA  cases, the judgments  as well  as the                                                               
defense costs have been small.  Nevertheless, some of the federal                                                               
cases have been lengthy and expensive.                                                                                          
                                                                                                                                
Mr.  MacKinnon  stated  that,  were   the  State  to  assume  the                                                               
responsibilities of  the program, the  expectation would  be that                                                               
the  cost  of defending  such  a  case  would be  considered  "an                                                               
eligible"  individual project  cost, rather  than a  general fund                                                               
expense.                                                                                                                        
                                                                                                                                
9:43:25 AM                                                                                                                    
                                                                                                                                
Senator Bunde voiced  concern as to whether what  the State would                                                               
"be gaining is worth the price."                                                                                                
                                                                                                                                
Co-Chair Wilken deemed "this is just  a little tiny piece" of the                                                               
answer  to  peoples'  question  as  to  "why  government  grows".                                                               
Referring  to   the  Analysis  section   of  the   Department  of                                                               
Transportation and  Public Facilities  fiscal note #1,  he voiced                                                               
disbelief that  the work required  by the State for  assuming the                                                               
responsibilities  of  this program  "would  require  160 hours  a                                                               
week". This would  be something he would be unable  to explain to                                                               
constituents.  Were this  program enacted,  he predicted  that in                                                               
five years, "we're  going to sit here and just  think the world's                                                               
coming  to an  end  because  this program's  going  to go  away".                                                               
Continuing, he asked  whether the State would be  able to conduct                                                               
the program  using $647,000 in Capital  Improvement Project (CIP)                                                               
receipts and only hire two people.                                                                                              
                                                                                                                                
9:44:54 AM                                                                                                                    
                                                                                                                                
Mr. MacKinnon  responded that the  Department based  its staffing                                                               
determinations on  the number  of people  currently administering                                                               
the federal program  and on the Department's  own internal review                                                               
of the program. "It's not a simple thing to assume."                                                                            
                                                                                                                                
Co-Chair Wilken  announced that the  question needed to  be asked                                                               
even though the response provided no relief.                                                                                    
                                                                                                                                
Senator  Bunde  understood  therefore   that  the  project  would                                                               
require four or five new positions.                                                                                             
                                                                                                                                
Senator Stedman, observing that  the expenses associated with the                                                               
project  and the  new staffing  positions would  be approximately                                                               
$650,000  per year,  remarked that  "we're  certainly not  paying                                                               
these  people  by  the  road   mile  built,"  as  the  State  has                                                               
historically conducted  a tremendous amount of  planning, but has                                                               
built few new roads. He  voiced concern regarding the sovereignty                                                               
of  the State  as  well  as the  hiring  of  people "without  any                                                               
parameters  on production".  He  was  disinterested in  compiling                                                               
office hours  without accompanying road  construction. Therefore,                                                               
even  though "the  intent is  good",  he was  hesitant to  expand                                                               
planning activities.  The cost  of planning  per road  mile built                                                               
"is alarming".                                                                                                                  
                                                                                                                                
Mr. MacKinnon advised that the goal  of the Department was not to                                                               
assume NEPA responsibilities  "and proceed at the  same pace. The                                                               
status quo  isn't good enough  for us." The Department,  like the                                                               
Legislature  and the  public, is  also frustrated  with the  time                                                               
that  is required  to  develop  a project.  NEPA  is  one of  the                                                               
factors affecting  the time  it takes to  develop a  project. The                                                               
money   the   Department   has  spent   on   developing   certain                                                               
Environmental  Impact  Studies   (EIS)  or  Environmental  Impact                                                               
Assessments (EIA)  would "astound" the Committee.  In addition to                                                               
the   time  spent   on  developing   a  project,   $8,000,000  to                                                               
$15,000,000 is  typically spent on  developing a  major project's                                                               
EIS.  One factor  that increases  the  amount of  time and  money                                                               
spent on  an EIS is  the amount of  time spent "dealing  with the                                                               
various   resource  agencies   when   they  say   we  need   this                                                               
information,  we   need  that  information,  and   we  need  this                                                               
information in order to do  a complete environmental assessment".                                                               
The State is not currently in  a position to say, "we don't think                                                               
you need that  information. The information that's  there on this                                                               
particular  issue   is  adequate,   it's  more   than  adequate".                                                               
Currently "the  federal government makes those  decisions because                                                               
they have the NEPA assumption".                                                                                                 
                                                                                                                                
Mr. MacKinnon  stressed that the  State is willing to  assume the                                                               
risk  of making  those decisions.  "We're a  lot less  adverse to                                                               
risk  than  the  federal  government  is  in  these  issues.  The                                                               
likelihood  of a  serious mistake  in carrying  out one  of these                                                               
documents because  you didn't  gather sufficient  information is,                                                               
the  judge would  say, well  you need  to go  back and  count the                                                               
caribou there  one more time. We're  willing to take that  risk …                                                               
The benefits far outweigh the potential costs in that."                                                                         
                                                                                                                                
9:49:35 AM                                                                                                                    
                                                                                                                                
Senator Dyson  asked what  would be  included in  the Contractual                                                               
Services  $154,700   expense  depicted   on  the   Department  of                                                               
Transportation and Public Facilities fiscal note #1.                                                                            
                                                                                                                                
Mr. MacKinnon  understood the  expense would  provide for  a NEPA                                                               
"expert"  attorney  in  the Department  of  Law.  A  Reimbursable                                                               
Services    Agreement   (RSA)    between   the    Department   of                                                               
Transportation and  Public Facilities  and the Department  of Law                                                               
would address that expense.                                                                                                     
                                                                                                                                
Senator Dyson  concluded therefore  that adding this  position to                                                               
the Department of  Law would be preferred to  contracting out for                                                               
that service.                                                                                                                   
                                                                                                                                
Mr. MacKinnon affirmed. He noted  that a legal sufficiency review                                                               
must be conducted on each NEPA document before it is finalized.                                                                 
                                                                                                                                
Senator Dyson asked  whether this would be a new  position in the                                                               
Department  of Law  or whether  the Department  of Transportation                                                               
and  Public  Facilities  would be  contracting  for  an  existing                                                               
employee's services.                                                                                                            
                                                                                                                                
Mr.  MacKinnon responded  that while  there  is a  person in  the                                                               
Department of Law who is "very  well versed in NEPA", that person                                                               
oversees a  number of attorneys.  The person being  referenced in                                                               
the  fiscal note  would be  required to  have "a  fairly specific                                                               
education and orientation towards NEPA".                                                                                        
                                                                                                                                
Senator Stedman requested that the  issue of cost of planning per                                                               
road mile built  be set aside; else wise, upon  review, the costs                                                               
"would be  alarming". Continuing,  he was  curious of  the reason                                                               
that Alaska was  one of a select group of  states chosen for this                                                               
pilot program; specifically whether  Alaska was chosen because it                                                               
"has  a harder  time than  other states  in getting  its projects                                                               
through the NEPA process.                                                                                                       
                                                                                                                                
Co-Chair  Green  remarked  that   Alaska  Congressman  Don  Young                                                               
included the State in this project.  She attested to the time and                                                               
effort that the State conducts in regards to the NEPA process.                                                                  
                                                                                                                                
9:52:13 AM                                                                                                                    
                                                                                                                                
Co-Chair Green stated  that, in her opinion, the  majority of the                                                               
"projects that are  very important to us are  very small potatoes                                                               
in Washington DC as far as  their importance on the NEPA interest                                                               
level",  particularly  in  comparison to  larger  projects  being                                                               
conducted in other states.                                                                                                      
                                                                                                                                
Mr.   MacKinnon  characterized   Co-Chair  Green's   comments  as                                                               
"accurate".  He  noted  that  half   of  the  other  four  states                                                               
designated  for  this  program  "have  ranking  members"  on  the                                                               
federal Transportation  Committee. They  want their states  to be                                                               
included in  the five and a  half year pilot program.  This is an                                                               
opportunity that the Department would not want "to lose".                                                                       
                                                                                                                                
Senator Stedman  asked the Department to  provide the Legislature                                                               
a report  comparing the  program expenditures  to the  road miles                                                               
constructed  at the  conclusion  of the  pilot  program, were  it                                                               
enacted.                                                                                                                        
                                                                                                                                
Mr.  MacKinnon  trusted that  the  Department  would be  able  to                                                               
provide "a  metric that will  hopefully show an  improvement over                                                               
the status quo".                                                                                                                
                                                                                                                                
Senator  Bunde shared  that he  had "serious  reservations" about                                                               
what  Co-Chair Wilken  coined as  "growing government:  four more                                                               
fulltime State employees and the  risk of lawsuits." The net gain                                                               
is questionable. He would vote no on the bill.                                                                                  
                                                                                                                                
Co-Chair  Wilken moved  to report  the bill  from Committee  with                                                               
individual recommendations and accompanying fiscal notes.                                                                       
                                                                                                                                
Senator Bunde objected.                                                                                                         
                                                                                                                                
Senator Stedman  preferred the bill  to be held in  Committee for                                                               
further consideration.                                                                                                          
                                                                                                                                
Co-Chair  Wilken moved  and asked  unanimous consent  to withdraw                                                               
the motion.                                                                                                                     
                                                                                                                                
Without objection, the  motion to report the  bill from Committee                                                               
was WITHDRAWN.                                                                                                                  
                                                                                                                                
Co-Chair Green ordered the bill HELD in Committee.                                                                              
                                                                                                                                
9:55:28 AM                                                                                                                    
                                                                                                                                

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