HOUSE BILL NO. 131 "An Act relating to relocation assistance for federally assisted public construction and improvement projects and programs; and providing for an effective date." 1:34:55 PM MATT GRUENING, STAFF, REPRESENTATIVE LOUISE STUTES, introduced himself and read a prepared statement: Good afternoon, Mister Chair and members of the House Finance Committee, for the record, Matt Gruening, staff to the House Transportation Committee. It has been about a month since the committee has heard this bill and my intention is to provide a brief refresher. I would be remiss, if did not mention that Laura Stidolph, who previously presented this bill has a very good reason for not being here today. I am pleased to announce that at 3:58 this morning, Laura gave birth to an 8 lb. 15 oz. baby boy. Both mother and baby are in perfect health. In front of you is House Bill 131 "Federal Relocation Assistance Programs/Projects" which will bring Alaska into compliance with Federal law concerning reimbursement for relocation expenses incurred by individuals or businesses that were displaced due to a federally funded highway, bridge, or facilities project. Alaskans deserve to be fairly compensated in these circumstances. HB 131 will also protect Alaska's approximately $700 million annual allocation of Federal Highway Administration (FHWA) and Federal Aviation Administration (FAA) funding by bringing the state into compliance. $500 million is allocated annually from the FHWA and on average $200 million is allocated from the FAA. Having an equivalent state statute is one of the requirements for a state to receive a delegated authority to independently administer the federal program. Additionally, being out of compliance, even for a short period of time, jeopardizes our relationship with our funding partners, putting our entire program at risk. These projects currently amount to approximately $700 million annually in federal participation, as well as countless jobs. In 2012, Congress relaxed the eligibility criteria and increased the maximum reimbursement limits for State's relocation assistance payment programs when they passed their transportation authorization and funding bill, the Moving Ahead for Progress in the 21st Century Act, aka MAP-21. Prior to MAP-21, the payment rates had not been changed for 30 years. These changes went into effect October 1, 2014. Unfortunately, Alaska Statute continues to reflect the more stringent eligibility criteria and the smaller maximum reimbursement limits. During the second half of the 29th Alaska Legislature, this inconsistency between state and federal law was nearly fixed. Language similar to HB 131 was proposed and passed the House unanimously. It passed through the Senate State Affairs and Senate Finance. However, the bill was held in Senate Rules and never calendared for a Senate floor vote. HB 131 assures Alaskans that their Legislature wants them to be compensated the same as a resident of any other state. Thank you for the opportunity to present this bill on behalf of the House Transportation Committee. Heather Fair, the Department of Transportation & Public Facilities' Statewide Right-of-Way Chief, is here to answer any questions you may have. Representative Wilson conveyed that last time the committee heard the bill there would be approximately $12 thousand or 9 percent in state funding, although the fiscal note was zero. She wanted to make sure the fiscal note was accurate. Mr. Gruening responded that the zero fiscal note was correct. He added that federal funding was approximately 91 percent with a 9 percent state match. Representative Wilson asked why the fiscal note would be zero if there was a 9 percent state note. She was fine with the bill. 1:39:19 PM HEATHER FAIR, CHIEF RIGHT-OF-WAY, DEPARTMENT OF TRANSPORTATION, answered that the state would design projects based on available state funding and absorb the additional costs when the department allocated projects. Representative Wilson noted that the fiscal note was retroactive to 2014. She wondered if the department was confirming that even though there might be funding, the department had enough in its budget to absorb the costs. Ms. Fair responded affirmatively. She indicated that the department estimated about $12 thousand liability to the state, a small enough amount that the department could absorb the cost back to 2014. Representative Wilson suggested that in the future the committee might want to take a closer look at the department's budget. 1:40:24 PM Representative Guttenberg spoke about the railroad recently acquiring a significant amount of right-of-way. The railroad's authority to make that acquisition was in question. He asked if the bill would cover what the railroad was doing. Right-of-way was required but not for capital projects. The bill encompassed compensating people for property right of ways. He asked if the railroad's actions were covered in the legislation. Ms. Fair responded that the railroad was a separate corporation. Vice-Chair Gara understood the explanation about the zero fiscal note. He thought it was due to the projects being dependent on there being a federal project in the future and the legislature having to pay to relocate a family. He suggested that the department would not know when or how frequently it would happen and when it would be in the capital budget. He remarked it was an ongoing operating budget expense normally seen in a fiscal note. He queried the reason for the zero fiscal note. Ms. Fair responded that it was very difficult to estimate how the department would impact businesses, farms, and families with future projects. The department took it into consideration when it had the Statewide Transportation Improvement Program (STIP). The department prioritized projects based on available funding and need. Vice-Chair Gara asked if there would be a capital expense request of 9 percent. Ms. Fair responded, "That's correct, and again we expect it to be a de minimis impact to the state." Representative Wilson suggested that in the future relocation funds would be part of federal funding which would be matched with 10 percent state funding. She thought that what had been discussed applied to retroactive funds and which accounts they would come out of. She reiterated that going forward the relocation of funds would be part of the grants from the transportation program and would be seen in the capital budget. She asked if she was correct. Ms. Fair responded affirmatively. She added that roughly $12 thousand of the state liability was retroactive to-date as well as what the department could foresee in the following 1 to 2 years on known projects. Representative Guttenberg commented that in a capital appropriation for a project it included engineering costs and costs associated with property acquisitions including right-of-way properties. He thought the legislation would authorize DOT to add 10 percent or absorb the cost. However, it was enclosed inside a capital project bid document going forward. He did not believe the legislature would see the amount in a budget item. He asked if his assessment was accurate. Ms. Fair responded that the legislature would not see the detailed line items in the request. She added that the legislature was currently not seeing a line item, as it was already something the department paid. There would be new limits. 1:45:44 PM Vice-Chair Gara reviewed one zero fiscal note: Department: Department of Transportation and Public Facilities Appropriation: Design, Engineering, and Construction OMB Component: 2357 Vice-Chair Gara MOVED to report HB 131 out of Committee with individual recommendations and the accompanying fiscal note. There being NO OBJECTION, it was so ordered. HB 131 was REPORTED OUT of Committee with a "do pass" recommendation and with a previously published zero fiscal note: FN1 (DOT). 1:46:46 PM AT EASE 1:50:01 PM RECONVENED