Legislature(2015 - 2016)BUTROVICH 205
03/29/2016 03:30 PM House TRANSPORTATION
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| Presentation: H.r. 2029 - Consolidated Appropriations Act, 2016 | |
| Adjourn |
* first hearing in first committee of referral
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= bill was previously heard/scheduled
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ALASKA STATE LEGISLATURE
JOINT MEETING
SENATE TRANSPORTATION STANDING COMMITTEE
HOUSE TRANSPORTATION STANDING COMMITTEE
March 29, 2016
3:33 p.m.
MEMBERS PRESENT
SENATE TRANSPORTATION
Senator Peter Micciche, Chair
Senator Click Bishop, Vice Chair
Senator Mike Dunleavy
Senator Bert Stedman
Senator Dennis Egan
HOUSE TRANSPORTATION
Representative Shelley Hughes, Co-Chair
Representative Neal Foster, Co-Chair
Representative Benjamin Nageak
Representative Matt Claman
Representative Dan Ortiz
MEMBERS ABSENT
SENATE TRANSPORTATION
All members present
HOUSE TRANSPORTATION
Representative Charisse Millett
Representative Louise Stutes
COMMITTEE CALENDAR
Presentation: H.R. 2029 - Consolidated Appropriations Act, 2016,
Repurposing Alaska Earmarks
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
MARK LUIKEN, Commissioner
Department of Transportation and Public Facilities (DOTPF)
Juneau, Alaska
POSITION STATEMENT: Commented on H.R. 2029 - Consolidated
Appropriations Act, 2016: Repurposing Alaska's Earmarks.
MIKE VIGUE, Director
Program Development
Department of Transportation and Public Facilities (DOTPF)
Juneau, Alaska
POSITION STATEMENT: Commented on H.R. 2029 - Consolidated
Appropriations Act, 2016: Repurposing Alaska's Earmarks
ACTION NARRATIVE
3:33:49 PM
CHAIR PETER MICCICHE called the joint meeting of the Senate and
House Transportation Standing Committees to order at 3:33 p.m.
Present at the call to order were Senators Stedman, Dunleavy,
Egan, Bishop, and Chair Micciche; Representatives Ortiz, Nageak,
Claman, and Co-Chair Hughes.
^Presentation: H.R. 2029 - Consolidated Appropriations Act, 2016
H.R. 2029 - Consolidated Appropriations Act, 2016
Repurposing Alaska's Earmarks
3:34:37 PM
CHAIR MICCICHE said the purpose of the meeting today is a
presentation by the Department of Transportation and Public
Facilities (DOTPF) on H.R. 2029, the Consolidated Appropriations
Act of 2016, which addresses the Alaska earmarks.
3:35:17 PM
REPRESENTATIVE CLAMAN joined the committee.
3:35:34 PM
MARK LUIKEN, Commissioner, Department of Transportation and
Public Facilities (DOTPF), Juneau, Alaska, said today he would
focus on DOTPF employee, Miles Brookes, who is a research
analyst, but in reality he collects, analyzes and sends out data
on all crashes in the state. He collaborates with department
engineers to target SAFETEA-LU projects; he also partners with
the State Troopers and the two major police departments so they
can use that data for their safety measures.
3:36:43 PM
MIKE VIGUE, Director, Program Development, Department of
Transportation and Public Facilities (DOTPF), said he would
provide an overview of Congress's omnibus December
appropriations bill, talk a little bit about the requirements
that the Federal Highway Administration (FHWA) has put on the
repurposing program, and give them a heads-up on the
department's strategy in order to use that money in the most
efficient way.
MR. VIGUE said the Section 125 of the omnibus bill gave all the
states authority to repurpose any earmarks that were designated
prior to September 30, 2005, which in essence is all the
earmarks that the states have received since Congress stopped
earmarks after the Safe, Accountable, Flexible, and Efficient
Transportation Equity Act: A Legacy for Users (SAFETEA-LU) bill
was passed.
3:38:22 PM
CO-CHAIR FOSTER joined the committee.
MR. VIGUE related that in order for the earmarks to be eligible
for repurposing they have to meet one of two criteria. They
either have to have less than 10 percent of the total amount
obligated on a project or they have to have a project that has
been closed and final-vouchered in the Federal Highway
Administration's (FHWA) accounting system. Alaska has a mix of
both.
One of the requirements for repurposed earmarks is that they
have to stay within 50 miles of the original designation. The
FHWA has language on how that is calculated around a 50-mile
radius around some point of the project.
All of the repurposed funding is eligible under Section 133(b)
of 23 United States Code, which is the Surface Transportation
Program, the most flexible type of federal aid funding that the
department receives. Lastly, all of the repurposed earmarks have
to be identified by the end of 2016, and some of that money can
be used in federal fiscal year 2016.
3:40:07 PM
MR. VIGUE explained that the state has to identify a specific
amount for each project when it requests the repurposing along
with the specific location and description. Once the funds are
repurposed for a project, the department has no ability to
change that decision once the request has been sent. This is one
of the reasons they have some time to make an informed and
correct decision.
He explained that the obligation authority is similar to the way
the State of Alaska works where Congress gives the state
obligation authority in appropriation bills. When earmarks were
used, obligation authority was provided in several different
ways depending on whether the earmark was in the House or the
Senate. The State of Alaska was given 100 percent obligation
authority in only a few cases. So, in order to fully utilize the
repurposed earmarks, he will have to use the state's formula
obligation authority, which is what they get for their regular
federal aid program that is tied to funds like the National
Highways System funds and Surface Transportation funds.
MR. VIGUE said all repurposed funds must be obligated by the end
of federal fiscal year 2019, September 30, 2019. Generally,
federal aid projects have a lot of requirements and take a
fairly long lead time to get to the point of obligating
construction and this doesn't give them a whole lot of time to
develop the projects, so they are looking at projects that are
in the Statewide Transportation Improvement Program (STIP) and
already under design or ready for construction in order to fully
utilize the funds.
SENATOR MICCICHE asked if the "within 50 miles" in the original
earmark designation is as the crow flies or a highway distance.
MR. VIGUE replied it's a 50-mile radius. There is a little bit
of latitude as to where the spot is, but it has to be within the
original scope. "So, if you had a corridor, you have to pick one
end or the other."
He explained that they have two deadlines. If the state wants to
use any of these funds in 2016, they have until the end of
August of this year to get something to the FHWA. If they intend
to use funds in 2017, 2018, or 2019, they have until the middle
of September, which doesn't really play into their strategy.
Their hope is to get this figured out and get something over to
the Federal Highway Administration in August.
SENATOR BISHOP asked if he needed any help.
MR. VIGUE answered yes; they probably will need help since there
are quite a few moving pieces.
3:43:47 PM
He explained that after the funds are repurposed, quarterly
reporting is required of all the projects. When Congress passed
the Stimulus Bill and gave the State of Alaska a significant
amount of money for ERA, quarterly reporting had to be done on
every project. So, that same requirement has been put on the
repurposed earmarks. About 90 earmarks need to be repurposed and
they will all require individual reports, which will
significantly impact their staff time. So, they are looking at
ways to package the projects for efficiency, and because some of
them are small amounts that are left over after a project has
been closed out, the idea would be to find a few projects that
could be finished, which would lessen the burden of the
reporting requirement.
CO-CHAIR HUGHES asked the typical number of projects they do
quarterly reports for now - to put the 90 earmarks in context,
MR. VIGUE answered that they don't do any quarterly reporting at
this point with the Federal Highway Administration (FHWA) on
projects.
SENATOR DUNLEAVY asked what if a project is not in the 50-mile
radius, like if it says the Richardson Highway or the Parks
Highway.
MR. VIGUE replied he thinks as long as they are within 50 miles
of the corridor, but they are getting clarification on that from
the FHWA.
3:46:05 PM
MR. VIGUE said the history of the SAFETEA-LU earmarks was the
majority of them were deducted from their program. So, when
Congress created the earmarks, it went into the SAFETEA-LU
formula and took money off of the top and then did the earmarks.
So, the states received less formula funds. So, when SAFETEA-LU
expired in 2009, there was an increase in Alaska's formula money
in 2010, 2011, and 2012 because they were extensions of SAFETEA-
LU, and the secretary determined that the earmark projects were
sufficiently funded. So, that money went back into the formula
program. That is another reason they are looking at projects
that are currently in the STIP to move the money to.
Right now they are trying to identify the available obligation
limitation that came with the earmarks to fully obligate all of
the earmark money. After a quick run-down, they think they have
between $20 million and $25 million of formula obligation to
use.
MR. VIGUE said their plan is to finish working on their list of
recommendations and present it to the commissioner, legislature
and the governor for review. Then they are expecting to send out
communications and letters to communities that have earmarks in
and share what is on the list and what's in the STIP. The
dilemma is with the short timeframe a brand new project that is
not already under way poses a risk of not being able to fully
obligate the funds and those will lapse if they are not
obligated by the end of 2019. They don't want to be in the
position of losing the money, because they can't get to the
point of obligation in the proper time frame.
3:48:34 PM
MR. VIGUE noted that FHWA put out some frequently asked
questions (FAQ). One question was if earmarks have to be
repurposed, and the answer is that it is not a requirement. If
the earmarks are repurposed and don't get obligated, they lapse
in 2019. He speculated that in the 2019 federal appropriations
bill if there are any unobligated balances of any earmarks, they
will be put back into the Highway Trust Fund. There have been
several attempts over the years by various congressmen and
senators to do that and so he thinks this Congress is giving the
state the ability to find homes for the projects that didn't
move forward with the earmarks.
3:49:51 PM
CO-CHAIR HUGHES asked if any of the formula funding that went up
in 2009 got applied to projects that otherwise would have gotten
earmarks so that now those earmarks aren't needed, because that
project was done with formula funding.
MR. VIGUE answered that he didn't believe so. He said the next
question was if all the earmark repurposing requests have to be
submitted this fiscal year, and the answer is yes, at the latest
by September 12, 2016. Their goal is to get the list to the
Federal Highway Administration in August.
The third question is how long the funds and associated
obligation authority are available, and that answer is through
2019. If you don't obligate them, they will lapse.
Another question is if an earmark is repurposed under this
provision, can it be changed? The answer is no; there is only
one small area where you could actually reuse the money you
repurposed and that's if you put money on a project that
actually comes in under budget and there is some leftover money.
If you happen to identify another project in that same earmark,
you could move the leftover funds to that other project. But you
can't move them between earmarks once it has been repurposed.
The idea is for the state to present the plan to the FHWA and
then they keep track of it through the quarterly reporting.
3:52:19 PM
CHAIR MICCICHE asked if the reason for the strict sideboards is
so that the funds can be directed to shovel-ready priorities
instead a funding grab for another project or a new project.
MR. VIGUE answered yes. FHWA wants the projects to be identified
and trackable, and they want to make sure the money gets spent.
He added if you go back in time and look at the Stimulus Bill,
shovel-ready was one of the big terms. Also, some of this money
was appropriated in the late 1990s, and the purchasing power of
those dollars isn't as much now. The idea of having a shovel-
ready project means it's immediately going to be put into the
economy.
SENATOR DUNLEAVY noted that some of this money is not for
shovel-ready projects, because some of it is for a multi-media
broad band project in the Valley and for a study.
3:54:35 PM
CO-CHAIR HUGHES said she noticed that some projects on the list
are at the edge of land by water and with the 50-mile radius
goes out into the water where there wouldn't be a project. She
asked if there was any effort to adjust the land area in those
instances.
MR. VIGUE answered that adjusting the radius isn't an option.
REPRESENTATIVE ORITZ asked if the first item on the list of
unobligated monies for $531,443 is leftover monies from a
project in his district.
MR. VIGUE replied that he was referring to a project in Seward
that has an earmark balance of $531,000 left over from a
completed project. So, now they are trying to work through the
process to identify projects that will meet the 50-mile boundary
around Seward.
3:57:24 PM
REPRESENTATIVE ORITZ said it sounds like potential projects are
already in the pipeline and asked if he has an example of
something that might work for that $531,430 or will he have to
communicate with local community officials to look for potential
projects.
MR. VIGUE replied that it may mean both of those things. The
department is in the process of going through the STIP looking
for projects that meet the FHWAL criteria. If more than one
project is found, those would be presented as options. If no
project is found, that raises a different dilemma of trying to
identify a new project that could actually be fully funded with
that money and that could be delivered in the time frame
necessary. Another dilemma is if a new project is identified in
Seward that costs $3 million where the other $2.5 million is
going to come from.
SENATOR EGAN asked if this list is by legislative district.
MR. VIGUE answered yes. The color coding coordinates with the
two other lists (less than 10 percent obligated and the more
than 10 percent obligated) in the other spread sheets.
3:59:49 PM
SENATOR BISHOP asked the department if they'll consider
directing these funds to projects that will yield revenue.
COMMISSIONER LUIKEN answered that being a benefit to the state
is a factor and why they are looking at the STIP.
CO-CHAIR HUGHES asked for clarification on what can be
repurposed.
MR. VIGUE replied that all the earmark projects can be
repurposed according to two FHWA criteria: less than 10 percent
of the money was used - in most circumstances this means that
the project it was earmarked to was not viable or ready to go -
or if more than 10 percent of the money was obligated and the
project was already completed and has a closed final voucher in
the accounting system.
CO-CHAIR HUGHES asked if the red category ones met the second
half of what he just described.
MR. VIGUE answered yes.
4:02:39 PM
SENATOR BISHOP asked about the $40 million on the list of over
10 percent, any purpose eligible under Section 133(b) of Title
23.
CHAIR MICCICHE remarked those were the Knik Arm Bridge and the
Gravina Island Bridge.
MR. VIGUE replied that Senator Bishop was looking at Demo I.D.
AK074, and that is funding from the Gravina earmark. He
explained that in 2006 Congress passed a technical collections
bill that made money earmarked for the Gravina Bridge and the
Knik Arm Bridge flexible.
SENATOR STEDMAN pointed out that the Gravina Bridge money was in
addition to the regular highway money.
4:04:16 PM
CHAIR MICCICHE asked how legislators can engage in the process
and if Mr. Vigue will reach out to some or all of them.
MR. VIGUE replied that their plan is to work through the list of
earmarks looking for candidate projects that are in the STIP.
They would make it available for the commissioner, the governor
and the legislature to look at prior to sending anything out to
the communities, and he hoped to have a draft within the next
couple of weeks.
4:05:16 PM
CHAIR MICCICHE said one thing is not clear to him: if the $30
million earmark was part of the discussion on the recent
Infrastructure Finance and Innovation Act (TIFIA) loan denial
for the Knik Arm Bridge.
COMMISSIONER LUIKEN replied that $30 million is part of that
project. It is a known quantity of funding that is dedicated to
that project. It does calculate in the TIFIA consideration and
is still in play.
CHAIR MICCICHE said his concern is whether or not that can be
encumbered and qualified under this program with the current
stage of the bridge. Is there a way it can be counted as being
repurposed if the project is further along?
COMMISSIONER LUIKEN responded that the thing to recognize is
that these all have the opportunity to be repurposed, but they
don't have to be. However, they have to be obligated by 2019.
CHAIR MICCICHE said he was looking for a definition of
"obligated."
MR. VIGUE answered that in order for the funding to be
obligated, a project agreement would be put in place and sent
over to the Federal Highway Administration for approval. It is
basically a contract between the Alaska Department of
Transportation and Public Facilities (DOTPF) and the FHWA that
commits funding to a project.
4:07:36 PM
SENATOR BISHOP asked if the repurposed project has to be 100
percent permitted. Could the money be obligated by 2019 but yet
still be waiting on a few permits to come in?
MR. VIGUE answered that it depends on what phase of work is
being obligated. If one is obligating construction money, then
all of the permits must be in place. A Project Specifications
and Estimates (PSE) package is needed. An estimate must be done,
right-of-way certified, and utilities squared away.
SENATOR BISHOP asked if one wants to obligate to a project, but
is on the front end of the permitting, could the funds still be
obligated to it. And what if you identify a project in 2019, but
won't receive all the permits until 2026, could you
theoretically obligate that money to the project?
MR. VIGUE answered you wouldn't be able to obligate the funds
for construction, but it depends on how much money you have
already. If you had $2 million available and a design estimate
of $4 million, and the EIS is done, you could obligate the money
for final design. It depends on what phase the project is in
when the money is being obligated. The typical stages where
money is obligated is by starting the project and obligating
funds through the environmental document (EIS). Once the EIS is
complete, then funds can be obligated for the right-of-way phase
or for final design. Once those are complete, funds can be
obligated for construction. You can't obligate funds ahead of
time to hold it for the project later on.
SENATOR BISHOP asked if having an EIS in hand changes the
picture on obligating the funds 100 percent to the project.
MR. VIGUE answered not really, because if you want to obligate
money for the construction phase, which is where most of the
large sums are, you still have to have a PSE package in order
for the FHWA to approve the obligation. If you have your
environmental document in hand, you could obligate right-of-way
acquisition phase or final design phase, but it must be in
sequence.
CHAIR MICCICHE asked if obligated earmarked federal dollars
could be used as a federal match.
MR. VIGUE answered no.
4:12:04 PM
CO-CHAIR HUGHES asked when legislators might see the draft list
of projects and if it would then go out for public comment.
MR. VIGUE answered that a project is already in the STIP, it
doesn't have to go out for public comment. They are going out to
the communities and asking for their input, because some of
these earmarks were asked for by the communities and not by
DOTPF. The idea is that the department will come up with their
best recommendation based on what is shovel-ready and present
that to the various stakeholders where the earmark resides and
get some feedback.
CO-CHAIR HUGHES asked when legislators would see the list.
MR. VIGUE replied in a couple of weeks. They still need
clarification from FHWA and internal review.
CHAIR MICCICHE said he assumed the money is useful on a lower
dollar project that can be funded with the repurposed earmark
that can't be used as a federal match and wouldn't save the
state in general fund matching dollars on a larger project.
MR. VIGUE said that was correct.
CO-CHAIR HUGHES thanked the chair for accommodating the House
Transportation Committee.
CHAIR MICCICHE thanked Mr. Vigue and Commissioner Luiken.
4:15:30 PM
CHAIR MICCICHE, finding no other business to come before the
committee, adjourned the Senate Transportation Committee meeting
at 4:15 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| DOT&PF Earmark Repurpose.xlsx |
HTRA 3/29/2016 3:30:00 PM |
|
| Repurposing Congressional Earmarks Senate Transportation Committee 3-29-....pptx |
HTRA 3/29/2016 3:30:00 PM |