Legislature(1993 - 1994)

02/23/1993 01:30 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                     HOUSE FINANCE COMMITTEE                                   
                        February 23, 1993                                      
                            1:30 P.M.                                          
  TAPE HFC 93 - 30, Side 1, #000 - end.                                        
  TAPE HFC 93 - 30, Side 2, #000 - end.                                        
  TAPE HFC 93 - 31, Side 1, #000 - #389.                                       
  CALL TO ORDER                                                                
  Co-Chair Ron Larson called the meeting of  the House Finance                 
  Committee to order at 1:30 P.M.                                              
  Co-Chair Larson                    Representative Therriault                 
  Co-Chair MacLean                   Representative Foster                     
  Representative Grussendorf         Representative Parnell                    
  Representative Hoffman                                                       
  Representatives  Martin, Hanley, Brown  and Navarre were not                 
  present for the meeting.                                                     
  ALSO PRESENT                                                                 
  W.  Keith   Gerken,  Deputy   Commissioner,  Department   of                 
  Transportation and  Public Facilities;  Ron Lind,  Director,                 
  Plans, Programs and Budget, Department of Transportation and                 
  Public Facilities.                                                           
  SUMMARY INFORMATION                                                          
  HB 60     FY 94 CAPITAL BUDGET                                               
            OVERVIEWS:     Transportation & Public Facilities                  
  TRANSPORTATION AND PUBLIC FACILITIES, provided the Committee                 
  with handouts regarding  ISTEA and  its relationship to  the                 
  Department of  Transportation and Public  Facilities (DOTPF)                 
  CIP request for FY 94.  [Attachments #1 - #4].                               
  Mr. Gerken provided the Committee with information regarding                 
  ISTEA, an act which allows Alaska to put its  transportation                 
  policy into practice.   Under  ISTEA, state government  does                 
  not  have  to  ask federal  permission  regarding  roads and                 
  ferries before decision making.                                              
  In 1956, the federal government  established a highway trust                 
  fund.    From  this  trust flows  most  funding  for highway                 
  construction in Alaska.   In return, the  federal government                 
  requires  maintenance of  the completed  projects.   Highway                 
  trust  fund  dollars are  authorized  by multi-year  highway                 
  acts, the recent of which is ISTEA.                                          
  By enacting ISTEA, the federal government mandated change in                 
  transportation  policy.    It provides  the  opportunity  to                 
  improve how transportation  decisions are  made.  The  ISTEA                 
  funds  are  divided  between  three  programs.   Mr.  Gerken                 
  explained each of the elements of the program.                               
       *    BOROUGH  TRANSPORTATION  PROGRAM   -  (thirty-five                 
  The   Borough  Transportation   Program   builds  upon   the                 
  foundation.   It  establishes a  funding target  made  up of                 
  ISTEA  dollars  for  each borough  and  for  the unorganized                 
  borough.  Each borough will  work with local communities  in                 
  preparing a six year plan made  up of ISTEA projects.  These                 
  plans provide the basis  for preparing the local portion  of                 
  the CIP and capital budget  request.  Thirty-five percent of                 
  ISTEA funding goes to the Borough Transportation Program and                 
  is  then  distributed.    The  distribution  is  based  upon                 
  population   and  vehicle   registrations.     Each  borough                 
  automatically receives a  base allocation  of $350  thousand                 
  dollars.   Eighty percent of  the program is  designated for                 
  individual boroughs, whereas, twenty percent of  the program                 
  is distributed on a competitive basis.                                       
       *    CORE SYSTEM IMPROVEMENTS - (fifty percent)                         
  Core  highways  and  ferries  move  passengers  and  freight                 
  throughout the  State.   The  purpose  of the  core  highway                 
  system is to serve statewide purposes such as the long-range                 
  movement  of people  and  goods.   Core  highways and  ferry                 
  routes stretch across rural Alaska.  At  each community, the                 
  core  system includes  the  link  from  the airport  to  the                 
  community center.                                                            
  "Core" highways  provide connections from:  Community center                 
  to community center; airport to  community center; and ferry                 
  terminal to community  center.  "Core" highway  also provide                 
  access to rural  resources and connect strategic  import and                 
  export   points   that  ship   to   or  from   national  and                 
  international markets.                                                       
       *    SYSTEM EXPANSION - (fifteen percent)                               
  The purpose  of the  system expansion  is to  invest in  the                 
  future.   ISTEA  provides the  capability to  do  this while                 
  meeting the investment needs of the  existing transportation                 
  system.    ISTEA  provides  federal  funds  to  address  the                 
  investment needs in the State.                                               
  Following legislative approval, ISTEA dollars can be used to                 
  finance  system  expansion.   However,  first each  of these                 
  priorities  must   undergo  an  exhaustive   assessment,  as                 
  required  by  federal law.    A  public  comment and  review                 
  process helps to  guide a  full technical and  environmental                 
  evaluation.   The purpose  of this  process is  to carefully                 
  assess  the   proposed  improvements  and  its   social  and                 
  environmental impacts.                                                       
  Mr. Gerken referenced  the key points of  the ISTEA funding.                 
  [Attachment #2].  The  proposal calls for a  federal funding                 
  allocation   for   surface    transportation   to    borough                 
  governments.  It explains the  process for selecting capital                 
  improvements to the local  portion of surface transportation                 
  systems in Alaska.  The proposal affects only the funding of                 
  capital  improvements.    Maintenance arrangements  are  not                 
  altered by this proposal.                                                    
       1.   A working group was convened at the request of the                 
            Conference of Mayors to evaluate the proposal from                 
            DOTPF  to  establish   a  borough   transportation                 
       2.   The working group recommends that at least thirty-                 
            five percent of the ISTEA  funding be allocated to                 
            local transportation improvements.                                 
       3.   DOTPF  should  help  each  borough  government  to                 
            prepare a multi-year transformation plan.                          
       4.   Applying  thirty-five  percent  of  the  statewide                 
            target for  ISTEA  funding results  in  a  minimum                 
            program level of $83 million annually.  The figure                 
            includes  $75  million  in  ISTEA  funding  and $8                 
            million in  State match,  and will  change if  the                 
            statewide target for ISTEA funding changes.                        
       5.   ISTEA  funding  alone  is inadequate  to  meet the                 
            transportation needs  of  our  State.    Municipal                 
            officials  must  work   with  state  officials  to                 
            identify other  sources of funding  to meet  those                 
  Co-Chair  Larson asked  if the match  listed in  the Borough                 
  Transportation Program was local or State general fund.  Mr.                 
  Gerken stated it  was a state  match, and would be  included                 
  with  the  federal monies.   DOTPF  would be  responsible to                 
  provide the match funds.                                                     
  Co-Chair    MacLean    questioned    if   the    computation                 
  determinations were  arbitrarily agreed upon  by the borough                 
  program.  She felt that snow machines and other unregistered                 
  vehicles should be included by  unorganized boroughs if that                 
  would  entitle  them to  a  larger allocation.    Mr. Gerken                 
  explained that the current system in use is fair and easy to                 
  understand.  He reiterated that all  areas begin with a base                 
  rate of $350 thousand dollars.                                               
  Representative Hoffman asked how funding for the unorganized                 
  boroughs  would  be  allocated.   Mr.  Gerken  replied those                 
  boroughs have been a challenge to the Department.  DOTPF has                 
  provided funds to  the Department of Community  and Regional                 
  Affairs (DCRA) to help identify and  prioritize needs in the                 
  unorganized boroughs.                                                        
  (Tape Change, HFC 93-30, Side 2).                                            
  Representative Hoffman stressed that DOTPF has not addressed                 
  the  transportation needs  in  rural  Alaska.    Unorganized                 
  boroughs consume over fifty percent of  the State.  In order                 
  to be  equitable in  the negotiation  process, the  costs of                 
  construction should be taken into consideration.  Mr. Gerken                 
  acknowledged  that  the  cost  of  construction  concern  is                 
  complicated.  ISTEA  provides new flexibility  standards for                 
  construction considerations.  Representative  Hoffman stated                 
  the assessment  process would  be fair  if the  urban versus                 
  rural standards were equal in the beginning.                                 
  Co-Chair  Larson questioned  how  a local  government  could                 
  exempt  vehicles  from  being registered.    He  stated that                 
  should  be  a source  of  additional revenues.    Mr. Gerken                 
  stated these rules  have been  determined in State  statute.                 
  There is an exemption  which is based on community  size and                 
  the estimated number of vehicles.                                            
  Representative  Grussendorf  asked  if  communities  in  the                 
  unorganized boroughs  would receive  allocations for  FY 94.                 
  Mr. Gerken noted,  proposals from some of  those communities                 
  have been provided  to the Department.   The budget will  be                 
  amended to include those requests if  they are received in a                 
  timely manner.  Mr. Gerken agreed that the process does give                 
  the advantage to the larger communities.                                     
  Co-Chair MacLean asked the status of those boroughs which do                 
  not  have  "road  powers".    Mr.  Gerken stated  in  FY  94                 
  projections, there  are projects  previously planned,  which                 
  will  begin  in unorganized  boroughs.   These  projects are                 
  equal to  allocations given  the urban  areas.   He stressed                 
  that all boroughs  have planning powers.   In order for  the                 
  borough to decide  how they are  going to spend the  capital                 
  construction dollars, they  must have "road powers".   Until                 
  they have those powers  they will not  be able to spend  the                 
  allocated funds.                                                             
  Co-Chair  Larson indicated  that second class  boroughs have                 
  three powers:                                                                
       1.   Taxation                                                           
       2.   Education                                                          
       3.   Planning and zoning.                                               
  CIP REQUESTS                                                                 
  Mr.  Gerken referenced Attachment  #3 which itemizes DOTPF's                 
  funding  source for  budget requests  including the  general                 
  fund match.  The match is half of  the general fund request.                 
  The source of funds originate as follows:                                    
       *    General Funds                                $                     
       *    Federal Funds                                                      
       *    International Airport Revenue Fund           $                     
       *    Highway Working Capital Fund                 $                     
       *    Oil and Hazardous Spill Fund                 $                     
       *    Vessel Replacement Fund                      $                     
       *    CIP Receipts                                 $                     
  OF  TRANSPORTATION  AND  PUBLIC  FACILITIES,  explained  the                 
  process used in  calculating the State's general  fund match                 
  percentage and factors which were examined.                                  
  Mr. Gerken  commented on the  statewide uses of  DOTPF's CIP                 
       *    General  Fund  match   for  Federal-Aid   Highways                 
            general fund allocations $23.2 million dollars.                    
       *    General  Fund  match  for   Federal-Aid  aviation,                 
            general fund dollars $5.5 million dollars.                         
       *    State    equipment    fleet    and   refurbishment                 
            replacement  program  allocation  provided by  the                 
            Highway  Working  Capital  Fund  which allows  the                 
            purchase of trucks, graters and snowblowers.                       
  (Tape Change, HFC 93-31, Side 1).                                            
       *    Corps of Engineers Program allocations request for                 
            $2.5  million  dollars  which  provides  community                 
            match funds.  Co-Chair MacLean asked the impact of                 
            the budget cut from the original $6 million dollar                 
            request to the Governor's requested amount of $2.5                 
            million  dollars.   Mr. Gerken  stated the  impact                 
            would depend upon  the decisions  of the Corp  and                 
            the speed in which they make those decisions.                      
       *    Annual  Planning  Work Program  allocation request                 
            for $550.0 thousand dollars.   This is state money                 
            accompanied with federal highway planning research                 
            funds  of $3.7  million  dollars to  fund planning                 
            activities through  DOTPF and  the boroughs.   Co-                 
            Chair MacLean  questioned if  the  funds would  be                 
            used for ISTEA.  Mr. Gerken stated they would not.                 
       *    Statewide facilities major repair,  renovation and                 
            equipment request for  $1.5 million dollars  which                 
            would  fund  the  renovation  of  buildings,  heat                 
            ventilating  systems, roofs  and windows  on DOTPF                 
       *    Highway  and   aviation  non-routine   maintenance                 
            capital request  for $1.0  million dollars  is the                 
            emergency fund  for bridges,  roads, flooding  and                 
            other small emergencies which  can not be elevated                 
            to the place of receiving State emergency funds.                   
       *    Statewide advanced  project definition  allocation                 
            request for  $650.0 thousand  dollars which  would                 
            fund CIP positions  in the  Department to do  work                 
            which  does  not   currently  have  an  authorized                 
       *    Ports and harbors non-routine  maintenance request                 
            for $1.0 million dollars, an allocation for harbor                 
            facilities  which  are  affected  by  storms   and                 
       *    The  American  Disabilities  Act   statewide  code                 
            compliance request for  $8.0 million dollars which                 
            addresses the highest prioritized needs identified                 
            by the  inventory of buildings complying with this                 
            Act.  Co-Chair MacLean asked if there were federal                 
            dollars associated with compliance with this code.                 
            Mr. Gerken said  there may be federal  dollars for                 
            undertaking the assessments.                                       
       *    The U.S.G.S. Digital Mapping Program match for $30                 
            thousand  dollars will  allow the  State an  equal                 
            amount  of money to the Geological Physical Survey                 
            to provide additional mapping within the State.                    
       *    The Federal Transit Administration  grants request                 
            for  $16   thousand  dollars   flow  through   the                 
            Administration for capital expenditures for buying                 
       *    DOTPF  maintained  facilities energy  code upgrade                 
            request  for $3.5  million dollars  which  will be                 
            used  to  upgrade heating/ventilating  systems, to                 
            install more  energy efficient  overhead doors  in                 
            maintenance  shops  and   place  high   efficiency                 
            burners on heating equipment.                                      
       *    Federal   Transit    Administration   Metropolitan                 
            Planning  Grant  request  for  federal dollars  of                 
            $200.0 thousand dollars  all of which would  go to                 
            Anchorage for their transit planning.                              
       *    The standards manual publishing request for  $80.0                 
            thousand dollars in  program receipts in  order to                 
            publish   a   number   of    standards,   contract                 
            specifications and manuals.  There is a charge for                 
            distribution of  publications and that  revenue is                 
            used to produce new manuals.                                       
       *    Hazardous  Materials  Response   Contingency  Fund                 
            allocation for $250.0 thousand  dollars originates                 
            from the Spill  Response Fund.  The  appropriation                 
            funds  an   analysis  of  clean   up  requirements                 
            throughout  DOTPF   facilities.     Representative                 
            Therriault disagreed with using 470 funds for this                 
            request.  Mr. Gerken did  not know the appropriate                 
            use of those funds  and recommended referring that                 
            question  to  the   Department  of   Environmental                 
            Conservation (DEC).                                                
  Co-Chair  MacLean  concluded  the  meeting  and   asked  for                 
  continuation of DOTPF's discussion of the CIP requests to be                 
  scheduled for a later date.                                                  
  The meeting adjourned at 3:05 P.M.                                           

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