HOUSE BILL NO. 259 "An Act relating to relocation assistance for federally assisted projects and programs; and providing for an effective date." 8:50:17 AM MARK LUIKEN, COMMISSIONER, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES, explained that the purpose of the bill was to bring Alaska statutes into compliance with federal law. He continued that when right-of-ways were acquired for public transportation purposes federal law required the department to compensate property owners for the value of the property and to provide relocation benefits to displaced families, businesses, and farms. Under the federal initiative known as MAP 21 [Moving Ahead for Progress], the previous federal transportation bill passed in 2012, the state's funding partners had made it easier to qualify and increase the maximum relocation assistance available to the affected parties. Benefits paid to Alaska families and businesses related to the program were eligible for federal reimbursement. He thanked the committee for hearing the bill and considering its passage. He was happy to respond to any questions. Co-Chair Neuman asked why the state needed the bill since the state could already accept federal funds without legislative approval. 8:51:53 AM HEATHER FAIR, RIGHT-OF-WAY CHIEF, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES, asked Co-Chair Neuman to elaborate on his question. Co-Chair Neuman restated his question. Ms. Fair confirmed that the state already had authorization to accept federal funding. However, the current statutes limited- the department's ability to pay the funding to families, farms, and businesses. There was a statutory limit that did not currently comply with the new federal maximums. The bill would bring the state into compliance with the new federal maximums. 8:52:56 AM Co-Chair Neuman asked Ms. Fair to explain further. He had worked with the commissioner on expansions within the state. He asked her to provide sideboards including the previous limit and the current limit. Ms. Fair explained that the limits had been raised under the MAP 21 bill for federal highways. Under previous legislation by congress, business reestablishment payments were only limited to $10,000. They were now $20,000 under federal limits. Fixed payments in lieu of actually moving and reestablishment used to be only $20,000 and was now $40,000. The perimeters around replacement housing for home owners used to include having to live in your home 180 days and now was only 90 days. The limit used to be $22,500 and now it was $31,000. The final increase was replacement housing for tenants that were not owners. She explained that being a 90 day tenant used to be $5250 and was now $7200. 8:54:18 AM Co-Chair Neuman clarified that the state was required to assist people that had been displaced because of eminent domain. Commissioner Luiken responded in the affirmative. He emphasized that it was purely the relocation assistance piece of the process - to help people when they were moving. 8:54:53 AM Representative Wilson asked if it was all federal funding or if there was state funding as well. Ms. Fair responded that there was a portion of state funding that could be applicable. The state's share was roughly 9 percent. It was a small amount relative to the total cost of relocation. The federal government's share was about 91 percent. 8:55:34 AM Representative Wilson asked her for the definition of "reasonable" noted in the language of the bill. Ms. Fair replied that there were definitions in the federal regulations to which they were being referred to in the bill under Section 1. 8:55:59 AM Representative Munoz asked how the department dealt with businesses that had a loss of business due to a transportation project. She wondered if there was a reimbursement policy to deal with the issue. Ms. Fair reported that the state did not compensate for business losses, but it did compensate for relocation and for reestablishment of a business under federal law. Representative Kawasaki asked if similar legislation in other states had eased eminent domain takings. He asked if that was the purpose of the legislation. Ms. Fair stated that it was specific to relocations apart from the acquisitions. In general, congress' purpose was to help assist families for relocation and businesses for reestablishment. Any type of relocation could be disruptive and congress recognized that prices had gone up, costs to relocate had increased, and it was time to adjust the amounts available to eligible parties. Representative Kawasaki suggested that it was a substantive policy call when discussing eminent domain and federal road projects which he wanted the committee to be aware of. 8:57:56 AM Representative Guttenberg relayed being involved with a project in his district. The right-of-way had been on private property. The department had been willing to move a building or a septic system. He asked if there was an example of a building needing to be moved or a similar situation. He wondered about the qualifications. Ms. Fair replied that the bill assisted with some qualifications which allowed an easier pathway by reducing the number of days that a person had to be a homeowner or tenant from 180 to 90 days. As far as relocating a building or a septic system, that fell under the category of acquisition which the bill did not address. Relocation meant moving to another site. 8:59:52 AM Representative Gattis asked about farms. She wondered why farms were mentioned independent of businesses. She asked about the distinction for farming. Ms. Fair suggested that in federal law there was a distinction for farming. The law was referred to in the new legislation. She admitted that she was also a fellow farmer. Representative Gattis thought it was important to recognize issues that accompanied a right-of-way on a farm. It was possible that with a right-of-way farming could potentially not be possible on either side or crossing could be impeded. There had been certain situations that came up around these issues. She wondered if such issues were the reason for farming having a distinction over other businesses. Ms. Fair stated that the federal government made the distinction because of the reasons Representative Gattis had brought up. The bill did not address the specific issues mentioned, only the relocation of a farm, for example. 9:01:35 AM Representative Gattis thought it was a lengthier conversation. She suggested that some of the same issues could apply to any business. 9:02:05 AM Vice-Chair Saddler wanted to know historic numbers of people that had been displaced by federally assisted programs and the associated costs. Ms. Fair stated that the effective date was in October 2014. There was just a hand full of people and businesses that had increased eligibility. The state's share of the costs were estimated to be $12,000 in retroactive payments. Through a design process the state tried to minimize relocations as best as possible understanding how disruptive they could be. 9:03:04 AM Vice-Chair Saddler wanted a firm number. Ms. Fair stated that there were about a dozen people that qualified for additional money under the statute since the effective date. 9:03:35 AM Representative Kawasaki referenced Section 3 regarding business and moving expenses but not acquisitions, he wondered if there had been any relocations resulting from various right-of-way acquisitions in the Fairbanks area. He asked if there were examples of a business having to move. He provided an example of a veterinary clinic on the corner of a Fairbanks intersection that had to be moved. He wondered if his example was one where moving expenses were compensated above the $10,000 cap. Ms. Fair responded that the veterinarian clinic was an example where the state assisted in relocation. It was prior to October 2014. However, it would be an example where they would be eligible for more in relocation but not acquisition. Acquisition was always market value or greater. 9:04:51 AM Co-Chair Thompson OPENED public testimony. 9:05:06 AM Co-Chair Thompson CLOSED public testimony. 9:05:11 AM AT EASE 9:06:46 AM RECONVENED Commissioner Luiken reemphasized that the purpose of the bill was to bring the state into compliance with federal law so that the state was able to pay Alaska residents what they would be due in additional relocation benefits. Co-Chair Neuman MOVED to REPORT HB 259 out of committee with individual recommendations and the accompanying fiscal note(s). There being NO OBJECTION, it was so ordered. HB 259 was REPORTED out of committee with a "do pass" recommendation and with a previously published zero fiscal note: FN1 (DOT). 9:07:49 AM AT EASE 9:10:22 AM RECONVENED