CS FOR SENATE BILL NO. 71(TRA) An Act relating to funding for transportation projects; and providing for an effective date. Co-Chair Harris MOVED to ADOPT work draft #23-LS0583\U, Utermohle, 5/12/03, as the version of the legislation before the Committee. There being NO OBJECTION, it was adopted. RANDY RUARO, STAFF, REPRESENTATIVE BILL WILLIAMS, explained the changes made to the House Finance Committee substitute st for SB 71. The change indicates that after October 1, 2006, the amount that the Department of Transportation & Public Facilities can annually allocate to the track program for non-restricted highway apportionment reduced from 4% to 2%. SENATOR BEN STEVENS noted that he did not oppose the House Finance version of the legislation. He commented on the original version of the bill in which federal law, Transportation Efficiency Act (TEA)-21, and its predecessor, Intermodal Surface Transportation Efficiency Act (ISTEA), mandates that all states expend at least 10% of Federal Surface Transportation Program funds on enhancements such as trails and landscaping. Over the past several years, the State of Alaska has expended amounts well beyond the minimum requirements for enhancement projects that could otherwise be applied to roadway construction and improvement projects. SB 71 will decrease the amount allocated for the Trails and Recreational Access Program to be in line with federal minimum requirements, making available millions for roadway construction and improvement projects. SB 71 proposes to reduce the Department of Transportation's allocation of non-restricted federal apportionments to projects classified under the Trails and Recreational Access Program (TRAAK). Under current Department regulations, they allocate at least 8% percent to TRAAK projects; the House CS for SB 71 reduces that allocation to not more than 4% in 2004 and not more than 2% in 2006. The bill would redirect the funding into the Department's allocation for transportation projects classified under the Community Transportation Program (CTP), which includes the Statewide Road Surface Treatment program and the Highway System and Bridge Refurbishment program. Administrative Order #161 from 1996, Knowles Administration established the Trails and Recreational Access for Alaska (TRAAK) program to address features such as trails, scenic highways, recreational access points and interpretive facilities. From 1998 to 2003, over $150 million was allocated to the TRAAK projects while the federal minimum for transportation enhancement expenditures was $43 million dollars, more than a 200% increase. The expenditures do not include separate bike paths or waysides for individual construction projects in the National Highway System, the Alaska Highway system or community transportation programs. Only a municipality that is federally recognized, as a Municipal Planning Organization (MPO) would be impacted by Section (c) of the legislation, which is Anchorage and Fairbanks. In 1998, the Anchorage Metropolitan Area Transportation Solutions (AMATS) adopted a policy of programming 15% of its transportation funding allocation for enhancements. The three-year average at 15% for transportation enhancements from 2000-2002 in the Transportation Improvement Program averaged roughly $5.5 million dollars. If realized, 10% of the Anchorage share of TEA-21 federal-aid transportation funds for a three-year average between 2004-2006, would roughly amount to $5.8 million dollars. Representative Berkowitz inquired about Section 1 of the bill and comments made regarding exceeding the federal guidelines. Senator Ben Stevens referenced the spreadsheet, noting that in FY03, the $6.4 million dollar number came from a percentage of the none-restricted federal money. Adding a match to that, the State spent $22 million dollars for similar projects. Representative Berkowitz asked where the other $15 million dollars came from. Senator Ben Stevens replied that it came out of the CTP, the federal money pot. He referenced the Alaska Trails & Recreational Access for Alaska (TRAAK) Program handout in the file. (Copy on File). The bill takes TRAAK money and puts it back into the CTP. Representative Berkowitz clarified that the federal government now provides money to the State with flexibility on how to appropriate it. Senator Stevens explained that the federal government provides funding with guidelines on how much to spent on transportation, clear outs, landscaping and pedestrian access. The State has been outspending the minimum by 3 to 1. SB 71 will reduce it to the minimum requirement. Representative Berkowitz noticed that since the federal guidelines address specifics, how was the State able to exceed the appropriation. Senator Stevens advised that the federal established criterion is a minimum with no maximum established. He did not know of a way to get the non- restricted highway money into non-road projects. The objective of the legislation is to go to the minimum required in order to maintain the State's eligibility for transportation funding and then use 90% of that for road construction for meeting existing traffic concerns in Anchorage. JEFF OTTENSEN, ACTING DIRECTOR, STATEWIDE PLANNING CHIEF, DIVISION OF STATEWIDE PLANNING, DEPARTMENT OF TRANSPORTATION & PUBLIC FACILITIES, referenced the large pie chart in the TRAAK handout. That chart indicates a category of federal aid received by the State called the Surface Transportation Program (STP). One of the rules with that category of money is that 10% be spent on transportation enhancements and 10% must be spent on safety. Those are minimum amounts. Representative Berkowitz questioned Alaska's need for a bill, which determines federal appropriation percentages. He suggested that should be built in. Senator B. Stevens disagreed. He stated that the Legislature does not have anything to do with the Surface Transportation Improvement Program (STIP) and only approves that program. However, the program is developed by criteria set forth by the Department of Transportation & Public Facilities. The legislation would clarify that in the amount provided by the program, the amount used on transportation enhancement program would be limited. The numbers indicate that the State has exceeded the suggested percentages for the other enhancements, often by four times the amount of the federal minimum. The bill is an attempt to clarify in statute, what the minimum guidelines should be. Representative Berkowitz noted that STP carries a 10% minimum enhancement and a 10% minimum safety. He asked if there were any other requirements and how the State arrived at the 40% - 50% enhancements. Mr. Ottensen explained that those are minimum amounts and that the State has the prerogative for spending more than the minimum on safety projects. Representative Berkowitz inquired if the remaining 80% would be funds that the State was free to use, as needed. Mr. Ottensen replied that was correct, pointing out the requirements. Representative Kerttula asked if under the proposed program, would funding be taken from other projects. Mr. Ottensen responded that the State would have to "slow down" the pace of building TRAAK projects and transportation improvements. There will be an acceleration of road building projects. Representative Kerttula noticed that currently, there were decisions made to spend more funding on alternate types of projects and that the proposed legislation would shift the considerations. Mr. Ottensen acknowledged that was correct. In March 2002, the Department declared 8% be used for the TRAAK program and 33% for community transportation, essentially roads and buses. SB 71 was drafted to change that ratio to 4% & 37%; the committee substitute would change it further in FY06 to 2% & 39%. Representative Kerttula inquired if comments had been received regarding regulations and projects completed. Mr. Ottensen replied that there had been few comments made. When Commissioner Barton took over, he determined that statewide needs for the TRAAK program were too large. Last year, a public interest finding was made, shrinking the program to 5%. When SB 71 was drafted, the Department was consulted and recommended that 4% would be adequate. Mr. Ottensen acknowledged that the decision had been a "policy call" regarding basic necessities for Alaskan communities. He noted that in some parts of the State, transportation is virtually non-existent. Representative Kerttula asked if the legislation would affect all safety entities. Mr. Ottensen explained that some projects address both safety and enhancement, making the language confusing. Representative Kerttula inquired if there was a way to separate safety projects under the current spending. Mr. Ottensen replied that would be difficult but they could provide that information in a few days as the projects are all coded. Representative Berkowitz stated that Subsection © intrudes on local control. Senator Stevens commented that to be able to comprehend the impact of Section ©, it is important to note that that the allocation to AMATS recently had an increase to the reallocation transportation project. It moved from 22% to 27.5%, shifting the money. The Department of Transportation & Public Facilities recognizes that shift and increase in allocation. He noted that his position was to realize that increase and not spend 15% on road enhancement but rather return it to 10%. He pointed out that the $5.7 million dollars used for trails has proven to build a good trail system in Anchorage and kept up with the steady expansion of other projects. Representative Berkowitz commented on the determinations made by AMATS, agreeing that those should essentially be local considerations. Senator B. Stevens interjected that it was local determination utilizing federal money and was another example of exceeding minimum requirements for federal money. Representative Berkowitz asked if Subsection © would apply to any other areas of the State outside Anchorage. Senator Stevens replied that it would also apply to Fairbanks. Senator Stevens pointed out that an Administrative Order by the previous Administration established the existing track program. That order was signed in 1996. The regulations were not adopted until March 2002. The Department has been managing the TRAAK Program for six years. Representative Kerttula questioned why the percentage was being dropped to 2% so quickly. Mr. Ottensen responded that the 2% was the change introduced in the adopted committee substitute. He added that it had not been a recommendation made by the Department, however, they are not opposed to it. There is a tremendous need reservoir for highways and that the global warming is having a devastating effect on the State's highways. Senator Stevens noted that the Department of Transportation & Public Facilities has indicated over a $3 billion dollar backlog in road projects. He reiterated that the State should stay within the federal minimums. Representative Berkowitz asked if there was anything in Subsection © that would impede Anchorage or Fairbanks from adopting it on their own. Mr. Ottensen replied there was not. MATT DAVIDSON, ALASKA CONSERVATION VOTERS, testified against the legislation and the changes proposed in the committee substitute. He claimed that it was totally appropriate for the State of Alaska to spend more money on transportation enhancements than the federal minimal. In Alaska, these monies are used on a wide variety of projects. Putting only 2% into the enhancements would be a dramatic change. He provided a list of scheduled projects for this year created in October 2002. These projects total $30 million dollars. Under SB 71, in 2006, that amount would be cut to $7 million dollars statewide. Mr. Davidson urged that current funding remain in place. Representative Chenault responded that there have been no new roads built statewide for many years and that in his district, some of the roads are not safe to drive. He noted that he would be willing to give up trails and wayside enhancements for safe roads. Representative Kerttula asked the percentage of TRAAK projects that had been scheduled for safety. Mr. Davidson responded that they had not worked it out that way. He did not know if the cuts in the proposed funding could go to the reconstruction of the roads without major overhauls. Those are capital budget discussions. Representative Berkowitz MOVED to delete Subsection ©, allowing municipalities to make their own decisions on how to use the funds. He urged more local control. Representative Stoltze OBJECTED. KRISTI TIBBLES, STAFF, SENATOR BEN STEVENS, stated that Senator Stevens would oppose the recommended change. A roll call vote was taken on the motion. IN FAVOR: Kerttula, Moses, Berkowitz OPPOSED: Meyer, Stoltze, Whitaker, Chenalut, Foster, Hawker, Harris, Williams THE MOTION FAILED (3-8). REPRESENTATIVE KERTTULA MOVED to ADOPT Amendment #2, which would keep the percentages at the 4%/37% margin, allowing 4% go to projects classified under the Trails and Recreational Access. She thought that type project would use safety projects such as widening school crossings. Co-Chair Williams OBJECTED. A roll call vote was taken on the motion. IN FAVOR: Moses, Berkowitz, Kerttula OPPOSED: Meyer, Stoltze, Whitaker, Chenault, Foster, Hawker, Williams, Harris THE MOTION FAILED (3-8). Representative Foster MOVED to report HCS CS SB 71 (FIN) out of Committee with individual recommendations and with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. HCS CS SB 71 (FIN) was reported out of Committee with a "do pass" recommendation and with zero note #1 by the Department of Transportation & Public Facilities.