CS FOR SPONSOR SUBSTITUTE FOR SENATE BILL NO. 16(TRA) "An Act relating to the powers and duties of the Department of Transportation and Public Facilities; repealing the requirement for a long-range program for highway construction and maintenance; and repealing a requirement that public facilities comply with energy standards adopted by the Department of Transportation and Public Facilities; and providing for an effective date." This was the first hearing for this bill in the Senate Finance Committee. DOUG LETCH, Staff to Senator Gary Stevens, the bill's sponsor, informed the Committee that this legislation would either eliminate or update several obsolete statutes relating to the powers of the Department of Transportation and Public Facilities. Specifically the bill would remove the burden of conducting a cost benefit analysis for each of the Department's projects, regardless of size. This cost-effectiveness analysis requirement has provided opportunities for project opponents to sue the State. The bill contains several key provisions that would change the powers and duties of the Department to bring those statutes in line with the Department's practice of today. There is widespread support for this legislation, as indicated by the letters of support included in the Member's backup material. He asked that any technical questions regarding this legislation be directed to the Department. 9:35:51 AM Senator Stedman understood that one of the bill's provisions would exclude the cost effective analysis for local service area projects. He asked for further information in this regard. 9:36:24 AM JEFF OTTESEN, Director, Division of Program Management, Department of Transportation and Public Facilities, stated that the language in question is located in Section 5, subsection (e), page six, beginning on line five of the bill. Subsection (e) reads as follows. (e) In evaluating new highways, airports, terminals, ferries, and other major components for inclusion in the plan, the commissioners shall prepare a cost-effectiveness analysis using a consistent methodology. A cost-effectiveness analysis is not required for a project that involves the rehabilitation and maintenance of an existing transportation system or that primarily serves local transportation needs. Mr. Ottesen clarified that the cost benefit analysis would not be required for the rehabilitation and maintenance of a variety of existing projects or that are essentially local in nature such as local roads, local trails, buses, and vans for senior centers. Conducting such analyses is currently a burden on the Department. Senator Stedman asked for further information regarding the "local" exemption; specifically whether it would pertain to such things as roads on islands. Mr. Ottesen responded that the bill's sponsor, working in conjunction with the Department, deliberately drafted a short bill with the determination that the specifics would be addressed in regulations. "Generally speaking, a local road would be transportation within a borough that basically moves people from one part of a borough to another, be it on an island or be it on a part of the mainland". This would include National Highway System (NHS) routes, major airports, and major port facilities that connect the State. The cost effectiveness requirement would be required on any "major new facilities, with new being the key word here, that are not local in nature. The trouble with the current statute, which was developed in 1977, is that it is now being used as a club to halt projects. It applies to anything". The cost benefit analysis requirement applies to projects approved by the Legislature, projects approved by voters, or even a transit van for a senior citizen center. It also applies to such things as training programs and other things to which determining how to develop a cost benefit analysis would be difficult. The goal is to exempt local roads and activities from "this burdensome" cost benefit analysis. Senator Stedman opined that, "by that definition, all the roads in Southeast Alaska would be excluded" from the exemption, as none of the roads are tied together. The majority of the roads are on islands. Mr. Ottesen clarified that the NHS connection definition would apply to a variety of roads in Southeast Alaska. In Ketchikan it would apply to the ferry from the airport to town; in Juneau it would apply to Egan Drive between the airport and downtown. Most of the other roads in Juneau and similar roads across the State "would be excepted". Senator Olson inquired to the two accompanying zero fiscal notes: Fiscal Note #1, dated March 22, 2005 from the Department of Public Safety and zero Fiscal Note #2, dated March 21, 2005 from the Department of Transportation and Public Facilities. It would be expected that this legislation would save the State money. Mr. Ottesen responded that there would be cost savings in that "more money would be spent on pavement and less money spent on process". The amount of money that the Department is allocated is, in its entirety, reflected in the budget; however, now it is being divvied up "to support economists and planners to conduct processes" rather than building projects. Co-Chair Green understood therefore that the funds would be more project specific. Mr. Ottesen responded that the total amount received would not change. Senator Dyson questioned whether, "aside from the standards that are applied to really minor sorts of things", some federal standards in regards to such things as thermal and lighting analysis on highways are really inappropriate because of such things as the State's environment and population densities. Mr. Ottesen responded that the State's responsibility in regards to thermal standards and lighting standards were incorporated in statute in the 1970s at a time when the nation was undergoing its first energy crisis. The Department was designated as the entity to have that oversight; however, over time, the Department's role in "the building world" has diminished and the Department no longer conducts building projects for municipalities or schools for Rural Educational Attendance Areas. National entities rather than the Department set standards, which are then adopted by local building codes. The Department's role in that entire arena has simply evaporated yet the statute remains the same. This legislation is an attempt to conduct some housekeeping." Co-Chair Wilken moved to report the bill from Committee with individual recommendations and accompanying fiscal notes. There being no objection, CS SSSB 16 (TRA) was reported from Committee with zero Fiscal Note #1, dated March 22, 2005 from the Department of Public Safety and zero Fiscal Note #2, dated March 21, 2005 from the Department of Transportation and Public Facilities. 9:42:54 AM