02/04/2025 01:30 PM Senate TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| Presentation(s): 2025 Construction Outlook and Economic Impact | |
| SB47 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| *+ | SB 47 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE TRANSPORTATION STANDING COMMITTEE
February 4, 2025
1:34 p.m.
MEMBERS PRESENT
Senator Jesse Bjorkman, Chair
Senator Jesse Kiehl
Senator Bert Stedman
Senator Mike Shower
MEMBERS ABSENT
Senator Löki Tobin, Vice Chair
COMMITTEE CALENDAR
PRESENTATION(S): 2025 CONSTRUCTION OUTLOOK AND ECONOMIC IMPACT
- HEARD
SENATE BILL NO. 47
"An Act relating to Chugach State Park; and providing for an
effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 47
SHORT TITLE: CHUGACH STATE PARK EASEMENTS
SPONSOR(s): SENATOR(s) GIESSEL
01/17/25 (S) PREFILE RELEASED 1/17/25
01/22/25 (S) READ THE FIRST TIME - REFERRALS
01/22/25 (S) TRA, RES
02/04/25 (S) TRA AT 1:30 PM BUTROVICH 205
WITNESS REGISTER
ALICIA AMBERG, Executive Director
Associated General Contractors of Alaska
Anchorage, Alaska
POSITION STATEMENT: Co-presented the report, 2025 Construction
Outlook and Economic Impact.
MARCUS TRIVETTE, Immediate Past President
Associated General Contractors of Alaska
Fairbanks, Alaska
POSITION STATEMENT: Co-presented the report, 2025 Construction
Outlook and Economic Impact.
JEFF MILLER, Director
Associated General Contractors of Alaska
Palmer, Alaska
POSITION STATEMENT: Co-presented the report, 2025 Construction
Outlook and Economic Impact.
ROGER MARKS, Board of Supervisors
Glen Alps Road Service Area
Anchorage, Alaska
POSITION STATEMENT: Testified by invitation on SB 47.
ACTION NARRATIVE
1:34:18 PM
CHAIR BJORKMAN called the Senate Transportation Standing
Committee meeting to order at 1:34 p.m. Present at the call to
order were Senators Kiehl, Stedman, and Chair Bjorkman. Senator
Shower arrived thereafter.
^PRESENTATION(S): 2025 CONSTRUCTION OUTLOOK and ECONOMIC IMPACT
PRESENTATION(S): 2025 CONSTRUCTION OUTLOOK and ECONOMIC IMPACT
1:35:13 PM
CHAIR BJORKMAN announced the presentation titled 2025
Construction Outlook and Economic Impact.
1:35:44 PM
ALICIA AMBERG, Executive Director, Associated General
Contractors of Alaska, Anchorage, Alaska, introduced herself and
advanced to slide 2:
[Original punctuation provided.]
AGC of Alaska:
Who we are
• Since 1948, AGC has served as the voice of
Alaska's commercial construction industry.
• As the state's leading construction trade
association, we provide our members products and
services designed to improve and grow their
business and enhance the professionalism of
Alaska's construction industry.
MS. AMBERG stated that Associated General Contractors of Alaska
(AGC) is the largest commercial construction trade association
in Alaska, representing over 600 businesses. She briefly
described these. She said that ACG works to advocate, educate,
and promote its members. She noted that ACG works alongside
government agencies to ensure industry advancement and give
members a collective voice.
1:37:39 PM
MS. AMBERG advanced to slide 3:
[Original punctuation provided.]
PARTNERING AGREEMENT
The Alaska Department of Transportation and Public
Facilities and the AGC of Alaska mutually recognize
the importance of providing an efficient, high
quality, responsive transportation system for the
people of Alaska. Therefore, we are committed to
working together in a spirit of mutual respect, trust,
honesty, common sense, and fairness through
cooperation, open communication and mutual commitment
to achieve the following partnership goals.
• Ensure a commitment to continuing communication
between ADOT&PF and AGC at all levels in a manner
that fosters trust and understanding.
• Encourage joint support on statewide and national
issues.
• Encourage the use of the most cost-effective
design, construction, administrative, and
management techniques to provide a safe,
effective, and environmentally sound,
transportation system for our families, statewide
commerce, and economic development.
• Maintain a safe work environment.
• Promote quality through continuous improvement
and communication.
• Promote fair and consistent treatment that
fosters an open and competitive contracting
environment.
• Develop and maintain an educational program to
enhance the perception of the highway design &
construction team and encourage Alaskans to enter
that industry.
• Promote a cooperative relationship for compliance
with Alaska Pollutant Discharge Elimination
System requirements and strive for zero
violations.
[Slide 3 includes a graphic indicating a relationship
between STIP and FHWA challenges; AGC advocacy efforts
from 2023-present; and a significant decrease in the
Construction program in 2024, the trend continuing in
2025.]
1:38:49 PM
MS. AMBERG advanced to slide 4
[Original punctuation provided.]
CONSTRUCTION COMPANIES
• DIRECT IMPACTS: Construction company spending
with Alaska businesses
• INDIRECT IMPACTS: Vendor spending impacts on jobs
and payroll
• DIRECT IMPACTS: Construction company wages paid
to employees
• INDUCED IMPACTS: Employee spending impacts on
jobs and payroll
Construction Industry-Related Jobs and Labor Income
Impacts in Alaska:
• Direct:
• Jobs: 25,200
• Labor Income: $2.5 billion
• Indirect & Induced:
• Jobs: 16,700
• Labor Income: $1.1 billion
• Total:
• Jobs: 41,900
• Labor Income: $3.6 BILLION
MS. AMBERG said that the construction industry is vital to
Alaska's economy. She described the industry's economic reach.
She briefly discussed the direct (e.g. jobs) and indirect (e.g.
wages spent locally for housing, etc.) economic impact of the
industry. She stated that the loss of construction jobs has an
outsized impact on the state's economy, due to higher-than-
average annual wages and provided data to illustrate this.
1:40:48 PM
SENATOR SHOWER joined the meeting.
1:41:58 PM
MS. AMBERG offered an example to illustrate the impact that the
decline in available contracts has had on construction companies
around the state. She emphasized the negative impact this has on
both prime, skilled contractors and the subcontractors and
suppliers that rely on these contracts. She questioned how this
decline in contracts is occurring during a time of unprecedented
federal infrastructure spending in Alaska.
1:42:17 PM
MS. AMBERG advanced to slide 5:
[Original punctuation provided.]
State of Alaska Transportation Funding
• Statewide Transportation Improvement FY17-FY25
Enacted, FY26 Proposed Program (STIP) FY24-FY27
• Rejected by FHA Feb 2024
• Partial federal approval March 2024
• Amendments and public comment
• Amended STIP approved
• Federal DOT&PF capital appropriations decreased
between FY24 and FY25 by ~$200 million
• Inflationary pressure impacting projects
[Slide 5 includes a bar graph displaying Alaska DOT&PF
Capital Appropriations, FY17-FY25 Enacted, and FY26
Proposed and differentiating state from federal
funding.]
MS. AMBERG stated that the decrease in appropriations for fiscal
year (FY) 2025 is directly related to Statewide Transportation
Improvement Program (STIP) delays. She pointed out that, in
recent years, Department of Transportation and Public Facilities
(DOTPF) capital budget appropriations have been higher; however,
this has not been adequate to counterbalance the impacts of
inflation.
1:43:37 PM
MARCUS TRIVETTE, Immediate Past President, Associated General
Contractors, Fairbanks, Alaska, advanced to slide 6:
[Original punctuation provided.]
Industry Concerns
• Dozens of meetings with DOT leadership regarding
the STIP, upcoming projects, and negative trends
since late 2023
• Met with the administration in Sept 2024 to
elevate and emphasize our concerns and
trickledown impacts
• Tentative advertising list continues to slip,
creating the perfect storm
• This is an alarming and unprecedented
circumstance for our industry and the Alaskan
economy, especially considering the tremendous
potential amount of federal funding our state has
the opportunity to receive during this historic
period infrastructure funding available at the
federal level. The Alaska public and contracting
community, including subcontractors, DBEs, and
suppliers, and their families, heavily depend on
Alaska DOT&PF's ability to deliver a stable and
reliable construction program.
MR. TRIVETTE said that two years ago, ACG began to prioritize
workforce development. This was related to the Infrastructure
Investment and Jobs Act (IIJA) and the Inflation Reduction Act
(IRA). He described issues related to Alaska's infrastructure
and substantial shifts in workload. He described discussions
with DOTPF regarding STIP and emphasized that the department
offered assurances that the industry would not be negatively
impacted in spite of evidence to the contrary. He explained that
the Tentative Advertising Schedule (TAS) is the basis for
industry-wide planning decisions and accuracy and consistency is
important. He discussed a study done by McKinley Research Group
and said that annual volume of work needs to be $1.3 billion in
2024 dollars to maintain historic averages, adjusted for
inflation. He said that in 2025, AGC projects that less than
$700 million in contract payments. He noted that this is in line
with the recent decreases in project bids for the previous
federal fiscal year. He expressed concern with the impacts this
will have on the industry.
1:46:15 PM
MR. TRIVETTE emphasized concerns related to the TAS, explaining
that DOTPF had indicated 30 projects would be advertised;
however, the advertising period ended with only 11 of those
projects having been advertised. He indicated concern with the
continued decrease in contract volume.
1:47:00 PM
JEFF MILLER, Director, Associated General Contractors, Palmer,
Alaska, advanced to slide 7, Alaska Construction Employment, and
described the impact this decrease in contracts has on the
industry. He emphasized the industry's effort to increase its
workforce. He explained that the number of apprentices doubled -
but companies struggled to find jobs for those apprentices in
2024. As a result, companies are now reducing the number of
apprentices taken in by 50 percent. He asserted that this is the
direct result of the unpredictability and instability of project
bidding times. He emphasized the impact this has a significant
negative impact on contractors and labor partners - and their
ability to balance training with future needs.
1:48:48 PM
MS. AMBERG advanced to slide 8. She explained that much of the
data presented comes from a report done by McKinley Research
Group, which examines the economic impact of Alaska's
construction industry. The report offers a forecast for the
upcoming year's construction spending. She indicated that, while
the report indicates some positive areas (particularly in
private projects), ACG's specialized DOTPF contractors are not
in that category. She expressed appreciation for the opportunity
to share ACG's concerns.
1:49:37 PM
SENATOR STEDMAN noted that the legislature determines the
capital budget appropriations, independent of the administration
and DOTPF. He briefly described the process of determining the
capital budget and how each region is broken down. He said that
while the legislature is aware of the challenges, there is a
struggle with respect to location. He noted that certain areas
struggle more than others. He requested more information on how
these issues are distributed across the state, which would help
to find solutions.
1:51:35 PM
MS. AMBERG noted movement in the Southcoast region, while the
Central and Northern regions continue to lag.
1:51:54 PM
SENATOR STEDMAN concurred. He pointed out that the Northern and
Central regions are significantly larger and asked for
additional information. He indicated that this would enable the
legislature to work more effectively with DOTPF and federal
highways. He said that an increased match (from 10 to 20
percent) would significantly inhibit the capital budget.
1:52:56 PM
MR. TRIVETTE noted that AGC tracks estimated payments to
contractors by region and compares the department's estimates
with its own. He stated that this season, the Southcoast region
was accurately tracking with AGC's payment estimates. The
largest deltas (over $100 million) were split evenly between the
Northern and Central regions. He explained that in those
regions, DOTPF estimated a larger amount of contract work than
AGC estimates. He briefly explained the potential reasons for
this discrepancy, including late bids and project delays.
1:54:37 PM
SENATOR KIEHL referred to DOTPF's recent presentation and noted
that posting bids was not on the department's list of key
issues. He asked what major stumbling blocks might be delaying
this process.
MS. AMBERG said that AGC is uncertain of the specific issues.
She surmised that there are many. She acknowledged that AGC
communicates regularly with DOTPF but indicated that the numbers
the department has provided are not reflected in AGC's numbers.
She emphasized that the implications for these issues are far-
reaching.
1:56:08 PM
SENATOR KIEHL noted concerns about moving to a 2-year STIP. He
asked if this would have a positive or negative impact.
1:56:48 PM
MS. AMBERG replied that AGC has not analyzed this or had
discussions about this issue.
SENATOR KIEHL expressed interest in AGC's insights on this
issue.
1:57:11 PM
SENATOR STEDMAN stated that the legislature would have multiple
meetings with DOTPF regarding the capital budget and to free up
the bottlenecks. He asked whether AGC has also noted issues with
airport projects.
1:57:45 PM
MR. TRIVETTE answered that there have also been delays in the
delivery of Federal Aviation Administration (FAA) program and
projects advertised late in the season. He noted that this is
unrelated to STIP; however, projects continue to be delayed.
1:58:26 PM
SENATOR SHOWER noted that the legislature is currently
discussing education and asked if AGC has any suggestions for
education planning and workforce development. He wondered if
Alaska is sufficiently meeting the education needs of the
industry.
1:59:08 PM
MS. AMBERG replied that AGC does not have a position on this
issue at this time.
1:59:23 PM
CHAIR BJORKMAN commented that AGC has indicated that upcoming
construction projects will significantly impact the Alaskan
economy. He shared his understanding that bids must be awarded
by mid-March for summer projects. He noted that this date is
quickly approaching and asked what AGC would propose as a
solution to mitigate the problems outlined in the presentation.
He wondered what changes could be made to ensure that the
construction industry and associated businesses stay afloat for
the next year. Specifically, he asked what actions DOTPF can
take to ensure a successful construction season.
2:00:48 PM
MR. TRIVETTE answered that AGC has suggested that DOTPF look for
projects that have flexible funding sources and could therefore
be moved forward on the timeline.
2:01:45 PM
CHAIR BJORKMAN opined that the relationship between the state
and federal highways has been unproductive. He asked if other
states are facing similar challenges as they move through the
STIP process.
2:02:27 PM
MS. AMBERG replied that AGC has not heard reports of other
states experiencing these challenges. She noted that AGC is one
of 89 chapters across the United States and nearly all states
have a highway-specific AGC chapter and are supportive of the
Federal Highway Administration (FHA). She shared that other
state chapters have questioned why Alaska is experiencing these
issues.
2:03:16 PM
SENATOR SHOWER noted that there has been an increase in military
construction (MILCON) projects and opined that this is a
positive development. He asked AGC's perspective on these
projects.
2:04:01 PM
MS. AMBERG agreed that MILCON is a bright spot in the industry;
however, highway contractors are specialized, and it is
difficult for them to take on different types of contract work.
2:04:44 PM
SENATOR STEDMAN directed attention to the apprenticeship
program. He noted that the capital budget previously dedicated a
significant amount of funding to develop this program, only to
later lose many of the apprentices to other states (as they left
Alaska to go where the work is). He asked if the industry is
losing its younger workforce to other states.
2:05:33 PM
MR. MILLER surmised that when young people leave the state and
find a livelihood elsewhere, they are unlikely to return. He
said that this is very much a concern.
2:06:05 PM
CHAIR BJORKMAN referred to a letter he received from
Commissioner Anderson addressing some of AGC's concerns. This
was followed by a list of potentially advertised projects. He
noted that AGC (and members of Senate Transportation Standing
Committee) also received a copy of this letter. He asked AGC to
comment on this letter.
2:07:00 PM
MS. AMBERG said AGC is still analyzing the letter and would get
back to the committee with comments.
CHAIR BJORKMAN said that AGC's comments would be helpful. He
noted that different methods of communication can offer a new
perspective. He expressed interest in ensuring roads in Alaska
are safe. He opined that a written response from AGC is
important, as the road project deadlines are quickly approaching
and there are real consequences for working families in Alaska.
2:09:08 PM
At ease.
SB 47-CHUGACH STATE PARK EASEMENTS
2:11:47 PM
CHAIR BJORKMAN reconvened the meeting and announced the
consideration of SENATE BILL NO. 47 "An Act relating to Chugach
State Park; and providing for an effective date."
2:12:14 PM
SENATOR GIESSEL paraphrased from the following sponsor statement
for SB 47:
[Original punctuation provided.]
Senate Bill 47 Sponsor Statement
"An Act relating to Chugach State Park; and providing
for an effective date."
Chugach State Park hosts 1.5 million visitors annually
- more than Denali National Park - and most of the
road traffic leading to the park originates from
outside of the Anchorage Hillside neighborhood. The
roads that provide access to the park, including the
Glen Alps and Upper DeArmoun/Canyon Road corridors are
in need of significant upgrades. In 2023, Anchorage
residents voted to establish the Chugach State Park
Access Service Area (CASA), which includes the
Anchorage Bowl, creating the first mechanism for
financing capital upgrades to roads leading to Chugach
State Park. In 2024, Anchorage voters approved a $4
million bond to fund much needed improvements to
Canyon Road, which is in poor condition. This project
involves pacing and drainage for about 0.6 miles of
the road, extending to the park boundary. About half
of this section lies within Chugach State Park, and
because the municipality cannot bond for improvements
on state-owned land, those portions fall outside the
scope of the bond.
To address this, SB 47 reinforces existing statutes
designating the Department of Transportation and
Public Facilities (DOTPF) as the agency responsible
for maintaining public roads within Chugach State
Park. This ensures DOTPF will continue managing the
maintenance of roads that provide access to this
important state resource. Additionally, the bill
grants the Department of Natural Resources (DNR) the
authority to grant easements or rights-of-ways within
Chugach State Park to municipalities. This provision
allows municipalities to improve access to the park,
provided they meet certain requirements. Before
granting any easements, the DNR commissioner must
provide public notice and hold hearings. If an
easement is granted, responsibility for maintaining
and repairing the road will shift from the state to
the municipality.
By allowing municipalities to assume responsibility
for certain infrastructure improvements, SB 47
provides the flexibility needed to support upgrades
that will increase safety, access, and overall public
enjoyment of Chugach State Park. It creates a pathway
for municipalities to invest in and maintain key
resources within their community, improving access to
trailheads and other park features.
SENATOR GIESSEL noted that Chugach State Park receives the most
visitors out of any state park in Alaska and encompasses 500,000
acres. The park's fee station revenues are nearly $600,000 per
year. One of the park's current projects is a new parking area,
which will bring additional revenue.
2:15:03 PM
SENATOR GIESSEL continued to paraphrase from the sponsor
statement for SB 47. She directed attention to slide 2 of the
presentation titled, "SB 47 Chugach State Park Easements" which
includes a map of Chugach State Park. She noted that Canyon Road
(in red) extends into the park, passes the Rabbit Lake
Trailhead, and continues beyond the park boundaries. The Rabbit
Lake Trailhead (one of the most popular in the park) is the site
of the new parking lot. She pointed out that the green areas of
the map are parkland while the grey areas indicate municipal
roads. She emphasized that the section of Canyon Road that falls
within the boundaries of the park is almost impassable and
allowing the municipality to take over this section of road
would ensure a continuous, maintained road through Chugach State
Park. She directed attention to AS 41.21.122, which states that
DOTPF is responsible for the roads inside the boundaries of the
park; however, she asserted that DOTPF has not been maintaining
this portion of the road. She noted that SB 47 was drafted in
collaboration with the Municipality of Anchorage.
2:18:25 PM
SENATOR GIESSEL noted that there are a few private residences in
the area. There is also wildfire concern in this area. A well-
maintained road is important for safely exiting the park in the
event of a wildfire. She reiterated that SB 47 would allow the
Municipality of Anchorage to take over the portion of Canyon
Road that falls within Chugach State Park. She noted that there
are other entrance points, and those areas could be impacted by
SB 47 if a municipal road is crossing parkland.
2:20:49 PM
CHAIR BJORKMAN announced invited testimony on SB 47.
2:21:01 PM
ROGER MARKS, Board of Supervisors, Glen Alps Road Service Area,
Anchorage, Alaska, explained that road service areas (RSA) can
be thought of as small, independent districts on the hillside
that manage area road maintenance (e.g. road repair, grading,
drainage, and snow removal for a particular area). There are
roughly 20 of these, and they are paid for by area property
taxes. He explained that RCAs were set up to decentralize snow
removal. He pointed out that elevation changes result in a
variety of microclimates in the area and decentralized snow
removal has been effective. He said that the roads in this RSA
lead to the Glen Alps and Rabbit Lake trail heads - which are
among the most utilized in the park. He explained that most of
the traffic in this RSA originates outside of the RSA, passing
through it to reach the trailheads. This traffic is the leading
cause of road depreciation. He said that the Anchorage
municipality is not able to bond on roads within the park. Few
residents and a low tax base have resulted in an inability to
cover the costs of the capital upgrades (which he estimates at
millions of dollars). He said that in 2023, a service area was
created to finance infrastructure for access through the park.
In 2024, Anchorage voters voted for a bond to finance upgrades
to Canyon Road. He stated that the road is in terrible shape.
However, the bond cannot be applied to park assets; therefore,
the municipality is seeking an easement from the state. He
emphasized the importance of maintaining the roads to ensure
safety.
2:25:58 PM
CHAIR BJORKMAN asked whether the municipality was asking to
trade responsibility for roads with the state of whether the
municipality would like to take over maintenance without
expectation of anything in return.
2:26:18 PM
MR. MARKS clarified that that the municipality is already
maintaining the road, although this is not technically the
municipality's responsibility. He surmised that it would be
inefficient for DOTPF vehicles to work on those short segments
of the road. He indicated that the municipality would continue
to maintain these RSAs, and SB 47 would help to reduce the cost
of the maintenance.
2:26:54 PM
CHAIR BJORKMAN commented that Department of Transportation and
Public Facilities (DOTPF) has stopped maintaining certain roads
in his district - and these roads are later leveraged in road
trades. He wondered if SB 47 would set a precedent for DOTPF and
other organizations to transfer their roadwork to municipalities
without a corresponding trade. He said this is a matter of
statewide policy that could have unintended negative
consequences in other areas of the state.
2:28:12 PM
SENATOR GIESSEL noted that DOTPF has not been maintaining the
section of Canyon Road, despite being required by statute to do
so. She said that this is the reason for SB 47.
2:28:36 PM
SENATOR STEDMAN said that he does not see any surface issues
with the request and asked how wide the easement is and how it
is delineated.
2:28:53 PM
SENATOR GIESSEL deferred to Mr. Marks.
MR. MARKS surmised that the easement would be as wide as the
roadbed. He said that portions of the road lay outside the
right-of-way. He surmised that the easement would be roughly 30
feet.
2:29:44 PM
SENATOR STEDMAN said that while he is not familiar with the
applicable statute, he has had experience on planning
commissions. He opined that it would be fine for the community
to come together to fix the road; however, he suggested that
DOTPF be held accountable for the money collected. He surmised
that the money could be used for road maintenance in the region
of the road where the funds are collected.
2:30:40 PM
CHAIR GIESSEL noted that SB 47 has a fiscal note for easement
adjudication, title easement, and survey work. She shared her
understanding that this only needs to be done once and
questioned why the fiscal note includes a charge for multiple
years. She opined that the funds collected from fee boxes would
be sufficient to cover any costs. She stated her intention to
discuss this with DOTPF.
2:31:35 PM
CHAIR BJORKMAN held SB 47 in committee.
2:31:55 PM
There being no further business to come before the committee,
Chair Bjorkman adjourned the Senate Transportation Standing
Committee meeting at 2:31 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 20250204_AGC Transportation Committee 2025.pdf |
STRA 2/4/2025 1:30:00 PM |
AGC 2025 Construction Outlook presentation to STRA |
| SB 47 Version A.pdf |
STRA 2/4/2025 1:30:00 PM |
SB 47 |
| SB 47 Sponsor Statement.pdf |
STRA 2/4/2025 1:30:00 PM |
SB 47 |
| SB 47 Sectional Analysis.pdf |
STRA 2/4/2025 1:30:00 PM |
SB 47 |
| SB 47 Supporting Map.pdf |
STRA 2/4/2025 1:30:00 PM |
SB 47 |
| SB 47 (S)TRA Presentation.pdf |
STRA 2/4/2025 1:30:00 PM |
SB 47 |
| SB047-DNR-DPOR-01-31-25.pdf |
STRA 2/4/2025 1:30:00 PM |
SB 47 |
| 20250203 DOT&PF Letter to Senator Bjorkman.pdf |
STRA 2/4/2025 1:30:00 PM |
AGC 2025 Construction Outlook presentation to STRA |