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." 10:05:57 AM Co-Chair MacKinnon directed attention to HB 131. LAURA STIDOLPH, STAFF, REPRESENTATIVE ADAM WOOL, stated that Representative Wool was currently unavailable, and she was working on behalf of the House Transportation Committee. Ms. Stidolph addressed the Sponsor Statement (copy on file): House Bill 131 would allow an increase of the maximum relocation benefits available to a person or a business displaced by federally-funded highway, bridge, or facilities project. In 2012, Congress relaxed the eligibility criteria and increased the maximum reimbursement limits for states' 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 hadn't 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. HB131 will also protect Alaska's approximately $700 million annual allocation of Federal Highway Administration and Federal Aviation Administration funding by bringing the State into compliance. 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. Further, the bill would provide that a displaced person or business in the state would be retroactively eligible for an increased federal maximum benefit for relocation expenses incurred after October 1, 2014. 10:09:06 AM Ms. Stidolph discussed the Sectional Analysis (copy on file): Section 1 amends AS 34.60.010 to clarify applicability and intent, adopting and incorporating by referencing the corresponding federal law's payment amounts available to displaced persons. Clarifies that federally assisted programs subject to relocation assistance and real property acquisition practices includes public construction and improvement projects. Section 2 repeals and reenacts AS 34.60.040(c) to clarify eligibility for displacement payments in accordance with corresponding federal law, mirror federal language, and increase the maximum fixed payment in lieu of itemized reimbursements from $20,000 to $40,000 for displaced parties. Section 3 amends AS 34.60.040(d) payment amount in accordance with corresponding federal law. Section 4 amends AS 34.60.050(a) payment amount and dwelling owned/occupied period for eligibility in accordance with corresponding federal law. Section 5 - amends AS 34.60.060 payment amounts in accordance with corresponding federal law. Section 6 amends uncodified law to establish retroactive effective date of law to October 1, 2014 in accordance with corresponding federal law. Section 7 provides for an immediate effective date. 10:10:32 AM Co-Chair MacKinnon asked if the administration was supportive of the bill. HEATHER FAIR, STATEWIDE RIGHT-OF-WAY CHIEF, DEPARTMENT OF TRANSPORTATION and PUBLIC FACILITIES, JUNEAU, answered in the affirmative. Vice-Chair Bishop wondered whether the bill could lead to increased payments to affected parties along the right-of- way, from an acquisition standpoint. Ms. Fair replied that it could lead to increased payments to affected parties. She stated that the intent was to bring the federal regulations into the present-day costs to relocate a family. She remarked that the state match was very small, and would come out of the appropriation. The state match appropriation was approximately 10 percent of the total federal appropriation, and was included in the department's capital budget. Senator von Imhof stressed that relocating was different than compensating market value for the land loss. Ms. Fair answered in the affirmative, and noted that market value minimum was first paid for the acquisition of the property for a project. Additionally, relocation assistance was paid where applicable. Senator von Imhof recalled that there was previously a $20,000 maximum to relocate a farm, business, or family. That number would be changed to $40,000, which was the federal government's maximum. Ms. Fair stated that there were different numbers available for families versus businesses and farms. She agreed that the numbers had increased, and in some cases the numbers had been doubled. Senator Micciche asked if the numbers provided were for non-residential properties. Ms. Fair agreed. She noted that the federal government had not increased those amounts in over thirty years. Senator Micciche queried the process of determining the escalation number. Ms. Fair replied that they used historical data of actual relocations. She remarked that the numbers were still set based on actual expenses. 10:15:25 AM Co-Chair MacKinnon explained that the fiscal note did not reflect cost to the state, although the bill had retroactive costs dating to 2014. She queried the accumulated additional GF spend or federal spend would be on those retroactive costs. She stressed that the date was used, because that was the point of authorization. Ms. Fair affirmed that the date was based on the authorization from the federal government under the Moving Ahead for Progress in the 21st Century (MAP 21) Act. She remarked that the federal regulations were not yet finalized and updated, so those would have the retroactive number. She noted that there were no estimated retroactive payments owed for past payments. She stated that there was only a small amount estimated for the upcoming four years. Co-Chair MacKinnon estimated that there would be $100,000 given to property owners along rights-of-way. Mr. Fair answered in the affirmative, and the number was federal funds. Senator von Imhof asked how the option would be communicated to alert those that were affected since 2014. Ms. Fair replied that the option was already communicated. She stated that in order to exceed state maximums, there was a complex progress process called the Housing of Last Resort, with participation from the federal government. Senator von Imhof wondered there were individuals who felt they were uncompensated in 2016, and whether they would know that the option was available. Ms. Fair stated that there were no affected parties that would qualify, because there were very few relocations. Senator von Imhof surmised that the lookback was immaterial, because there were no affected parties. Ms. Fair replied in the affirmative. Co-Chair MacKinnon OPENED public testimony. Co-Chair MacKinnon CLOSED public testimony. Vice-Chair Bishop addressed the fiscal note. Co-Chair MacKinnon commented that that the estimates would be absorbed in the State Transportation Improvement Plan (STIP). Senator Micciche understood that there was estimate on future costs in the upcoming four years in STIP. Ms. Fair answered in the affirmative. 10:21:00 AM Co-Chair MacKinnon pointed out that a similar bill had been considered by the committee in a previous legislature. She felt that it was troublesome to link with a federal statute, because there was little control over what the federal government would communicate. Ms. Fair acknowledged Co-Chair MacKinnon's concern about the link to the federal regulation. She noted that the state was buffered from the risk, because of the large federal percentage. She felt that it allowed for flexibility in prioritizing projects. Co-Chair MacKinnon wondered whether there could be a fixed number as opposed to an open statutory amount. Ms. Fair replied in the affirmative. Co-Chair MacKinnon highlighted committee business. HB 131 was HEARD and HELD in committee for further consideration.