HOUSE TRANSPORTATION STANDING COMMITTEE February 9, 1998 1:10 p.m. MEMBERS PRESENT Representative William K. (Bill) Williams, Chairman Representative Beverly Masek, Vice Chair Representative John Cowdery Representative Bill Hudson Representative Jerry Sanders Representative Kim Elton Representative Albert Kookesh MEMBERS ABSENT All members present COMMITTEE CALENDAR HOUSE BILL NO. 227 "An Act relating to the Alaska Capital Improvement Project Authority; relating to the powers and duties of the Department of Transportation and Public Facilities; and providing for an effective date." - HEARD AND HELD (* First public hearing) PREVIOUS ACTION BILL: HB 227 SHORT TITLE: CAPITAL IMPROVEMENT PROJECT AUTHORITY SPONSOR(S): REPRESENTATIVES(S) PHILLIPS, Cowdery Jrn-Date Jrn-Page Action 04/03/97 923 (H) READ THE FIRST TIME - REFERRAL(S) 04/03/97 923 (H) TRANSPORTATION 04/21/97 (H) TRA AT 1:45 PM CAPITOL 17 04/21/97 (H) MINUTE(TRA) 02/09/98 (H) TRA AT 1:00 PM CAPITOL 17 WITNESS REGISTER MARCO PIGNALBERI, Legislative Assistant to Representative John Cowdery Alaska State Legislature Capitol Building, Room 416 Juneau, Alaska 99801 Telephone: (907) 455-3879 POSITION STATEMENT: Answered questions regarding HB 227. FRANK DILLON, Executive Vice President Alaska Trucking Association 3443 Minnesota Drive Anchorage, Alaska 99503 Telephone: (907) 276-1149 POSITION STATEMENT: Testified in support of HB 227. TOM BRIGHAM, Director Division of Statewide Planning Department of Transportation and Public Facilities 3132 Channel Drive Juneau, Alaska 99801-7898 Telephone: (907) 465-4070 POSITION STATEMENT: Testified in opposition of HB 227. PAUL BOWERS, Director Statewide Aviation, Leasing Department of Transportation and Public Facilities P.O. Box 196900 Anchorage, Alaska 99519-6900 Telephone: (907) 269-0734 POSITION STATEMENT: Testified on HB 227 and answered questions regarding the DOT/PF's budget process. STEVE MORENO, Administrator Alaska Division Federal Highway Administration P.O. Box 21468 Juneau, Alaska 99802 Telephone: (907) 586-7180 POSITION STATEMENT: Testified on HB 227. RON SIMPSON, Manager Airports Division Alaska Region Federal Aviation Administration 222 West Seventh Avenue Anchorage, Alaska 99519 Telephone: (907) 271-5438 POSITION STATEMENT: Testified on HB 227. HENRY SPRINGER Box 4041 "B" Street Anchorage, Alaska 99503 Telephone: (907) 561-5359 POSITION STATEMENT: Testified on HB 227. ACTION NARRATIVE TAPE 98-3, SIDE A Number 0001 CHAIRMAN WILLIAM K. (BILL) WILLIAMS called the House Transportation Standing Committee meeting to order at 8:10 a.m. Members present at the call to order were Representatives Williams, Masek, Cowdery, Hudson, Sanders and Elton. Representative Elton arrived at 1:17 a.m. HB 227 - CAPITAL IMPROVEMENT PROJECT AUTHORITY Number 0090 CHAIRMAN WILLIAMS announced the committee would address HB 227, "An Act relating to the Alaska Capital Improvement Project Authority; relating to the powers and duties of the Department of Transportation and Public Facilities; and providing for an effective date," sponsored by Representative Phillips. He noted the committee heard this legislation late last session. Chairman Williams indicated it was not his intention to move the legislation and noted it would be brought up again at a later hearing. Number 0113 CHAIRMAN WILLIAMS called for an at-ease at 1:12 a.m. He called the meeting back to order at 1:13 a.m. Number 0141 MARCO PIGNALBERI, Legislative Assistant to Representative John Cowdery, Alaska State Legislature, came before the committee to explain the legislation. He said if each member of the committee were to ask themselves a few questions about our capital improvement project planning process, they would see the need for the legislation. He asked what the Department of Transportation and Public Facilities' (DOT/PF) three priority projects are for highways, airports or other facilities. Mr. Pignalberi said if the committee knows what those projects are, maybe there isn't a need for the legislation. If the committee doesn't know what they are, maybe there is a need for a change. He asked, "What projects are you personally interested in the capital improvement process? Where are they on the priority list? And which priority list are they on or should they be on?" Mr. Pignalberi said if the committee knows the answer to those questions, maybe there isn't a need for the bill. If the committee doesn't know the answer to those questions, maybe a change needs to be made. MR. PIGNALBERI asked when the window of opportunity is for a legislator to get their project included onto a priority list. He asked who drives the project selection process. He said it certainly isn't the public or the legislature. Mr. Pignalberi explained HB 227 will make the answers to the questions more evident to members of the legislature and public. For that reason, the bill has been put forward for the committee members' consideration. Number 0304 REPRESENTATIVE KIM ELTON referred to the question of who drives the project list and whether it is the Governor, the legislature or the public and said one (indisc.) that wasn't mentioned was the federal government. He pointed out that the state uses an awful lot of federal dollars. He asked how the structure integrates the processes that we need to secure the federal dollars. Number 0341 MR. PIGNALBERI said he believes the committee will hear testimony from federal representatives who are concerned about the capital project planning authority. He said, "As a matter of fact, if you will just ask any objection that comes up to refer to a section of the bill, I think you'll find the bill is not going to really change that process." He pointed out that he believes that DOT/PF currently has a project selection board, or something similar, that makes the final selection. It is all an in-house activity. There is not outside accountability. The authority would simply replace that board. The replacement board would be comprised of public members. It is not going to short-circuit the planning process or make any federal funds ineligible. He said it wouldn't change the relationship that the state currently has with the federal government. Number 0472 REPRESENTATIVE BILL HUDSON pointed out that when he first came to Juneau, there was a three member transportation commission and noted there were three commissioners, one of which was former Governor Keith Miller. He asked, "How does this jive with that?" MR. PIGNALBERI responded, "Not at all because that was a regulatory body which basically had rate setting and entry to market...." REPRESENTATIVE HUDSON said it was like a limited entry type of a commission. Number 0449 MR. PIGNALBERI stated the new organization would to make the planning more evident and more accessible to the public. REPRESENTATIVE HUDSON asked if it would be more consistent. MR. PIGNALBERI said there would be a master list of projects and if there is a change, there would have to be some accountability for making that change. Number 0542 FRANK DILLON, Executive Vice President, Alaska Trucking Association testified via teleconference from Anchorage. He explained his organization is a 38-year-old trade association that represents the interest of truck users throughout the state of Alaska. Mr. Dillon said he supports HB 227. He said he feels the bill lays out a very positive direction that his organization would like to see the state take. Number 0578 MR. DILLON said he believes that DOT/PF has struggled for a long time to come up with ways to translate dollars into project improvements and maintenance on the infrastructure. He said the existing process doesn't allow for the long-term stability needed to carry through professional judgements of those people who truly are in a position to assess what this state needs or to satisfy the motoring public, the elements of commerce that the trucking industry provides, general safety and to ensure the longevity of our infrastructure. Mr. Dillon referred to concerns that may be raised by the federal government and said his association believes they can be addressed. The legislation may need to be modified. Mr. Dillon said, "In one instance, we're not sure exactly what's going to happen with the federal highway bill under the National Economic Crossroads Transportation Efficiency Act (NECTEA), and what the real planning requirements under the NECTEA are going to be. He said it is the trucking industry's point of view that the process that was used in the Intermodal Surface Transportation Efficiency Act (ISTEA) will be considerably modified. MR. DILLON said the bill incorporates some extremely good ideas. A number of other states are using a similar process. Mr. Dillon said, "What we're interested in is having our fair share of the taxes that we put (indisc.) the infrastructure, maintenance and improvements and we think that this might give a good shot towards improving that (indisc.)." Number 0697 REPRESENTATIVE JOHN COWDERY said, "What is your feeling about the stability of this commission, say from one administration to the other. It seems, in my opinion, that some administrations are going in one direction. A new administration may come and go in a different direction? What is your comments of this bill that have -- in relation to that scenario?" Number 0727 MR. DILLON said he believes that HB 227 will really make an approvement in the stability from one Administration to another or one commissioner to another. He stated he believes Commissioner Perkins has the greatest longevity of any DOT/PF commissioner in the history of this state. Mr. Dillon said that because it takes a long time to implement a transportation infrastructure project, he believes the state suffers as a result of that. He said hopefully we realize that the bill does not completely remove the planning process from the political arena, but he does feel that it would dampen the short-term effects of politics on long-term projects. REPRESENTATIVE COWDERY said he believes that the legislation would put a lot of stability in long-range planning. MR. DILLON said he agrees with Representative Cowdery's statement. Number 0825 REPRESENTATIVE BILL HUDSON asked if the authority would have better access to the legislature's appropriation process than the Administration. He asked Mr. Dillon if he believes that it might professionally elevate the need for funding of programs that are designed and planned for versus what we currently have. He said there are often new Administrations that come and political discourse takes place. He asked Mr. Dillon if he would see the authority as providing stability from a political and funding sense. MR. DILLON said the legislation provides exactly for that sort of circumstance and he hopes that is precisely what develops. He said, "We don't believe that people's intentions in this process are necessarily suspect. It's just that the outcome eventually, because it does take so long and because there is political element in the appropriation process that we are not going to get away from, we believe that the establishment of the planning authority would help mitigate those circumstances and provide for a circumstance like we have now where we have a difference between philosophical difference and a party difference between the Governor and the Administration. It might help mitigate some of those rough spots." MR. DILLON said there is no feature in Alaska that is more important to the quality of life than an efficient and safe transportation system. Currently, just because of the way the planning process takes place, his organization doesn't believe Alaskans are being particularly well-served. Number 0977 TOM BRIGHAM, Director, Division of Statewide Planning, Department of Transportation and Public Facilities, came before the committee to testify on HB 227. Mr. Brigham said he has spoke to Chairman Williams' staff and it was requested that the department outline or summarize a presentation that was made last year. He asked Chairman Williams if he would still like him to do that. CHAIR WILLIAMS asked him to please make it brief. MR. BRIGHAM said the department does not support HB 227, relating to the establishment of a capital improvement project authority. He said DOT/PF believes the current process for prioritizing and selecting projects is stable and provides well for statewide needs. There are a number of areas and issues that the bill has the authority delving into that goes way beyond what the department currently does with the Project Evaluation Board (PEB). Mr. Brigham said a concern the department has is that the proposed authority is really not a true authority, as seen in many other states, that would be responsible for both the capital and operating budgets of the department. He said the department's concern is that it would probably more greatly confuse a lot of issues than it would clarify them. Mr. Brigham pointed out that there are also concerns about the extent to which its activities would be federally eligible for funding. He said if changes were to be made to the program late in the process, there would be a question as to whether those projects would remain federally eligible. He indicated that the Federal Highway Administration (FHWA) and the Federal Aviation Administration (FAA) might be able to shed some light on. Number 1123 MR. BRIGHAM referred to a question asked by Mr. Pignalberi, "What are the DOT/PF's three highest priorities?" He said the department doesn't have just three high priority projects. Mr. Brigham pointed out they have a 1998 program that represents the department's highest priorities. He informed the committee that is laid out in the Statewide Transportation Improvement Program (STIP) and the Aviation Improvement Program (AIP), which are available. He noted all legislators have been furnished with the STIP document as it is submitted to the Federal Highway Administration and the Federal Transit Administration. Mr. Brigham said the department welcomes comments from legislators. Number 1182 MR. BRIGHAM referred to the question, "When and what is the window of opportunity?" He said the department has gone to great lengths to create what is called a public involvement process. There was public involvement to develop the public involvement process. He noted there is a book that describes it. Mr. Brigham pointed out that part of the business of working with federal funding is that you need to follow the process that you establish. He said the department has two 45-day periods for public comment on the "needs list." The "needs list" is the first big list of projects that come in. The department sorts those projects and develops a draft STIP. There is then another 45-day comment period. Mr. Brigham said they received comments from members of the legislature and constituents. Number 1229 MR. BRIGHAM referred to the question of who drives the process and said he would argue that particularly for the Community Transportation Program (CTP) and for the Trails and Recreation Access for Alaska (TRAAK) Program - the enhancement program, it is the public that drives that process through elected representatives within the communities. The projects come out of the communities and the DOT/PF does very few of those projects. Mr. Brigham pointed out that it is a little different for the national highway system. He said, "Those are the state's highways and we are the driver there." Number 1259 MR. BRIGHAM indicated he would like to add a couple of comments regarding the testimony that was provided by the department last year. He said it is good to bear in mind that in Anchorage the Anchorage Metropolitan Area Transportation Study TIP really can't be changed by the DOT/PF or any authority that might be put in place and that is simply how the federal regulations work. He said they take the TIP and fold it into the statewide program - the STIP. He noted that is the way the federal regulations work and that would need to be carried forward. The notion that the Anchorage projects might be affected by the authority is not a notion the committee should entertain. MR. BRIGHAM said the DOT/PF believes that they have been proactive in addressing a lot of the issues that gave rise to the legislation. He informed the committee that they have formed the Evaluation Board and the Aviation Evaluation Board and the results of those evaluations are public information. They have matrices of scores by evaluator, by criteria, for each project. People ask for those and they are handed out. There is nothing that is really hidden. Mr. Brigham pointed out that those processes have been supported by the FHWA on the part of the PEB and the FAA in terms of the Aviation PEB. He noted the aviation version is being used as a model by the FAA to redo their national prioritization process. Mr. Brigham stated the department believes that is a good process and they try hard to fairly administer that process and to create a level playing field for projects from all over the state. It would be difficult to change that process without years of work. Number 1398 REPRESENTATIVE COWDERY asked Mr. Brigham how long he has worked for the department. MR. BRIGHAM responded that he has worked for the department for about two and a half years. Number 1409 REPRESENTATIVE COWDERY asked Mr. Brigham if he thinks the current priorities are the same as they were during the last Administration. He also asked Mr. Brigham if he thinks Administrations change priorities. MR. BRIGHAM pointed out that there is no question that each Administration brings a set of priorities. Number 1445 REPRESENTATIVE COWDERY asked Mr. Brigham why he thinks HB 227 was introduced. He referred to earlier statements by Mr. Brigham that what the department is doing is supported by the public. He again asked Mr. Brigham what he thinks the motive is behind the introduction of the legislation. MR. BRIGHAM responded by saying, "Representative Cowdery, I would really hesitate to speculate as to what the motives were, although looking at the sort of preamble to the bill, I can understand perhaps that some of those were concerns. I would hope, I guess -- in my testimony what I wanted to point out was I would hope we have addressed a lot of those concerns in the way the current process is put together and the relative stability that the process has enjoyed." REPRESENTATIVE COWDERY stated he believes the changes provided in the bill would benefit both DOT/PF and the state. Number 1515 REPRESENTATIVE ELTON referred to Mr. Brigham speaking about the public involvement process that the department now uses for the creation of the project list and said he is assuming that if HB 227 is signed into law, the processes the department uses in developing the project list will be essentially the same as they currently are. What changes is that process continues up the line of command, through the public hearing process, until it gets to the level at which the department then turns that list over to the authority. He said the authority would have the ability to review the work that has been done, review the public testimony that has been gathered and then submit that list to the Office of the Governor. Representative Elton said it seems that another layer of bureaucracy is being added through the creation of the authority. Representative Elton said the legislation doesn't preclude the commissioner from submitting an independent list to the Governor. He said the bill doesn't say that the only list that goes to the Governor comes through the authority. The commissioner will still have the ability to submit a list right to the Governor. Number 1591 MR. BRIGHAM said the way the bill is written, it is a bit foggy as to whether the program by the authority would be the only program or whether the department could advance a separate program. He said he doesn't believe it is clear at all because the bill gives the authority the ability to create a staff. So you could have an authority staff and department staff. Exactly how the process would work at that point is unclear. Mr. Brigham provided the committee members with an exhibit. He said the exhibit is the department's sense of how this would or wouldn't work. The exhibit describes how the department sees how the bill would establish and authority and an authority director, and then allows the authority to create a staff. How the authority relates to the commissioner is spelled out to some degree in the bill, but how the director and the staff relate to the current DOT/PF staff and the commissioner is not at all clear. Number 1679 REPRESENTATIVE ELTON said the committee previously heard that there are other states that have this kind of a system. He said he would think that this template could be superimposed over how other states do it. He asked Mr. Brigham if he is saying that other states may have a commission that does all the work, or may have a commissioner that does all the work, but there aren't other jurisdictions that have kind of this bifurcated responsibility. Number 1706 MR. BRIGHAM said his understanding and experience is that there are a number of states that have commissions and he believes there are about 12 where the commission is the chief policy and decision making body for the Department of Transportation. They then have an executive director, or someone who is the chief administrator, who reports directly to the commission for all matters. He said that is very clear and there is no question as to what is going on. Mr. Brigham said HB 227 doesn't provide for that. The other main model is a commission that is more of a policy advisory body, but is not in the direct chain of command. Those are very clear in that they operate to advise the governor or commissioner as to transportation policy and needs, but they do not have line authority. Mr. Brigham said there is typically one or the other kind of an approach. House Bill 227 kind of confuses the two which concerns the department. Number 1763 CHAIRMAN WILLIAMS said Mr. Brigham mentioned that the department has a lot of problems with the legislation. He asked if there were written comments to that effect. MR. BRIGHAM said in reading the minutes of the previous hearing on HB 227, Deputy Commissioner Parkin had submitted written comments. He said in checking with Chairman Williams' staff, it turns out that the written comments weren't submitted. He informed the committee the comments will be prepared and submitted within one or two days. Number 1788 REPRESENTATIVE COWDERY noted the committee members have a chart from the department. He asked Mr. Brigham if he can point out in the legislation where it speaks about staff. Representative Cowdery referred to meetings he has had with Mr. Brigham and said it was his understanding that the commission would use DOT/PF staff. Number 1818 MR. BRIGHAM directed the committee to page 3, line 22, "(e) The authority may hire the minimum of staff, including a director, necessary to efficiently perform the functions of the authority." He stated it isn't mandatory, but it certainly leaves the door open. It doesn't say that the authority shall use DOT/PF staff. REPRESENTATIVE COWDERY said, "Am I correct in thinking that the commission has got to go through the -- before it goes to the Governor the ACIPA - you know staff has got to go through this staff -- between that and the Governor. Am I correct to thinking -- my interpretation?" Number 1866 MR. BRIGHAM said he believes the way the bill is currently written, Representative Cowdery's interpretation is certainly good as any. He pointed out it is open to more than one interpretation which is one of the department's main concerns. Number 1888 REPRESENTATIVE ALBERT KOOKESH asked if there is anything in HB 227 that is not already being done by DOT/PF. He said it is a broad question, but he wants to be able to support or not support the legislation based on some rational findings and facts. MR. BRIGHAM responded that there is one thing. He said the authority, as outlined in the legislation, would transcend administrations. Number 1947 REPRESENTATIVE KOOKESH asked, "Does this bill give any independent authority to the new department?" MR. BRIGHAM responded that he doesn't believe so. Number 1969 PAUL BOWERS, Director, Statewide Aviation, Leasing, Department of Transportation and Public Facilities, testified via teleconference from Anchorage. He said, "In follow-up to statewide planning director, Tom Brigham's comments that the genesis for this bill may have been trying to address a problem that we have historically had that we in DOT think we have fixed it with the APEB process - the Airport Project Evaluation Board and the Project Evaluation Board." Mr. Bowers explained that the reason the department believes they have fixed the problem is that APEB process has been in place for almost three years. It has gone through two legislative sessions without change and has resulted in significant improvements with federal dollars. He stated, "In recent years, we are at approximately $81 million in FAA administered AIP funds this year. That's up nearly 20 percent from about two years ago. That's a rather dramatic increase and it is tied directly to this process that the FAA has bought into and the national headquarter's folks has bought into. It simply is working." Number 2039 REPRESENTATIVE COWDERY asked, "Do you attribute any credit for the extra funding to our recently appropriation member back in -- the heads of the Appropriation Committee back in Washington, D.C.?" MR. BOWERS responded that is obviously doesn't hurt. He noted the process that the department goes through is one that is competed for on a national basis. He said he believes the process is significantly better than the rest of the country and our projects compare favorably in that regard. Number 2092 STEVE MORENO, Administrator, Alaska Division, Federal Highway Administration, came before the committee to testify. He noted he is replacing Bob Ruby who testified last year on HB 227. Mr. Moreno indicated concern regarding language in the legislation. He said the bill specifically states that the authority may submit proposals for capital improvement projects. There is also other language that says the authority shall review and revise, as appropriate, the various programs that the DOT/PF puts together. Mr. Moreno said there are several things that are tied together in making a state transportation improvement program. The projects don't exist in a vacuum, they exist because they're tied to one another. In the case of the AMATS process, the federal requirement is that the AMATS process come together and generate a list of projects - the TIP. The Governor, or the Governor's representative, and the AMATS' policy group together agree on what the content of that list is. Mr. Moreno explained the federal requirement is that the list must be put into the statewide TIP without any adjustments. In other words, it must be included verbatim either by reference or directly by physically putting it in the document. Mr. Moreno informed the committee that his concern is perhaps the authority would reach a decision at which point they say, "Okay, we're going to remove this project from the AMATS list." He said at the point, the project is removed from the AMATS list and a new one is inserted, the FHWA could not support that new project because it's not being developed in the cooperative process that is required by federal regulation. MR. MORENO said a second issue is that AMATS is a air quality nonattainment area. What that means for the federal government is when that AMATS list is put together for their TIP, it has to be tested against criteria to show whether or not it helps achieve the national ambiant air quality standards. In other words, are we going to make the air better or worse as a result of these projects. Mr. Moreno explained that the testing is an actual numerical test of cranking numbers and looking at what the omissions are. That is something that the FHWA does together with the Federal Transit Administration. He noted they also receive advice from the U.S. Environmental Protection Agency (EPA) on whether or not the program, as a whole, will go towards furthering achieving of the air quality standards. Mr. Moreno said the problem would be that if you start changing the mix of projects, and they're significant projects, you run the risk of being out of conformity. If the TIP is no longer in conformity with the state implementation plan for air quality, then the federal government cannot support it financially. He noted that is a provision of both the Clean Air Act and the ISTEA legislation. Mr. Moreno informed the committee that there is a problem with the Fairbanks area because it is also a nonattainment area. He said there is also a requirement that all STIPs be financially constrained. What the intake is, in terms of revenue, has to be similar to what the outlay is going to be. Mr. Moreno said, "Here again, if at the last minute somebody starts pulling projects or inserting projects, it may disturb the financial aspect of it. Once again, the feds are required to make that test. Is this financially constrained?" Number 2258 MR. MORENO explain a final issue has to do with the public involvement process. Here again, the feds set out a process that states are to follow. He said they don't perscribe the exact details of it, but there must be a process with some key steps in it. That process involves various documents, putting them out for public review and then acting on whatever the public comments are. He stated the issues they are concerned with are the financial constraints, the public involvement, the air quality conformity in the nonattainment areas, and the idea that the TIP for the AMATS area must be included as a verbatim unit from what was passed by the appropriate group. Number 2301 REPRESENTATIVE COWDERY asked where in the bill it talks about public comments not being allowed. MR. MORENO informed Representative Cowdery that the bill doesn't say that public comments won't be allowed. He pointed out what he is saying is that the public is presented, in the state's process, with some listings of projects, priorities, scheduling, et cetera. If that changes from what the public is seeing, he isn't sure that the public is given an ample opportunity to see the final product. Number 2322 REPRESENTATIVE COWDERY asked, "Do you intreprete the bill then to bypass AMATS?" MR. MORENO referred the committee to page 2, line 25, "(a) The authority shall review, revise as appropriate, and approve the following plans and programs...." It then lists a bounch of plans and programs. He said he believes there is the opportunity for this authority to change the list. He also referred the committee to page 3, line 19, "(d) The authority may submit proposals for capital improvement projects for construction...." Mr. Moreno said he intreprets that to mean if you submit a proposal, you could include, but you could also delete. He referred to page 6, line 30, "Long-range program for highway construction and maintenance." He said he read that to be the STIP and then on page 7, line 2, it says, "Subject to review, revision, and approval by the Alaska Capital Improvement Project Authority,..." He said the word "revision" suggests the authority would be acting somewhat autonomously from the rest of the process. Number 2393 REPRESENTATIVE COWDERY asked Mr. Moreno if he thinks that currently there is never any revisions. MR. MORENO responded that there are revisions and the process is designed to allow revisions. He said when those revisions take place, such as when a new project comes from somewhere and it is attempted to be put on the STIP, it must go through the process that the original STIP went through. Some would argue that it is buracratic and others would say it is protecting that interest of not allowing for individual munipulation of the project list. Number 2416 REPRESENTATIVE COWDERY asked Mr. Moreno if he belives that if the authority wouldn't be astute enough to recognize the funds that might be in jeopardy and would conform to the.... TAPE 98-3, SIDE B Number 0001 MR. MORENO responded, "...and sometimes they fall outside the rules, and when they do that part of my job is to say, 'I'm sorry, we can't participate in that.' And so we obviously are bound by the laws and regulations of Title 23 where our program lives. So I'm not saying it would be an intential thing. I'm saying it can happen and there is not a lot of flexibility when it does happen." REPRESENTATIVE COWDERY said, "It is my understanding the intent of the sponsors and everything and the bill is to use that from DOT for these problems that we just talked about. I mean it has some language in here to allow for some executive, maybe, staff or something (indisc.) in here. But the main source of information and guidance is going to come from DOT. Would you belive that's a fair statement?" MR. MORENO responded that he would certainly hope so. Number 0042 REPRESENTATIVE ELTON said his understaning of what Mr. Moreno said is that the authority is okay as long as they don't exercise any of the prerogatives given to them in HB 227. If they exercise their prerogatives by taking out or inserting projects, then it is not okay. If they do take out or insert any projects, the state of Alaska jeopardizes federal funds. MR. MORENO said that is fairly accurate. If they insert their judgement for the process which is in place, then those projects that they have inserted don't have any status as far as federal funding goes. Number 0089 REPRESENTATIVE ELTON asked if the concerns would be alleviated if the authority was to be put at the beginning of the process instead of the end of the process. MR. MORENO referred to his interpretation of HB 227 and said it looks as if the authority would have line item substitution authority for projects, whether they add or delete them. He said it is not whether or not you have an authority or commission or whether you function under the existing set up. He noted there are lots of states that have commissions and authorities and they function. The question is whether or not this authority would be using its position to remove or delete projects that would external to the accepted process. Number 0135 REPRESENTATIVE JERRY SANDERS asked Mr. Moreno if he believes the current process works well. MR. MORENO answered in the affirmative. REPRESENTATIVE SANDERS asked Mr. Moreno how he can feel that way about a system that hasn't built a road in 25 years. He also asked Mr. Moreno how he can feel that it is working well. Representative Sanders said it seems like anything would be better than the way we've done it. MR. MORENO responded, "I guess I have the opportunity to share with you a perspective when you say, 'We haven't built a road in so many years,' because much of what is being done by the federal funds that are made available, nationally, is basically to rehabilitate what is out there. When you say we haven't built a road, I guess I, you know, I don't know the specifics locally. But there is a great need out there to rehabilitate what we have on the ground and it's being done everywhere in the nation - that we're spending more and more of our money doing projects that are on existing alignment. We're attacking safety problems, we're widening, putting up new signals, we're straightening out alignments. And so on the one hand you'd say, 'You know we're spending a lot of money, but we're not getting any new roads.' And that's true, but that's not unique to here. And in my past position, I came back from a situation where we were sitting around a table debating the environmental status of a project that's been on the board for 30 years. We still hadn't built it. And I mean we're building other things around them. We're rehabilitating. We're changing out the guardrail to make it safer for people. We're repaving so we're putting down new surface. We're converting, in some places, gravel over to pavement. So those are all parts of the legitimate expenditure of funds, but they don't represent a new road to a new location. That's not unique to Alaska and it's not unique to the DOT." Number 0220 REPRESENTATIVE SANDERS said, "I could appreciate that if we were in a state like most others where it was criss-crossed with roads, but 90 percent of our state doesn't have a road in it." MR. MORENO said that is true. REPRESENTATIVE SANDERS said that we need to build some roads so we can fix them. MR. MORENO responded, "Well I think you have been fixing them and I think you have been building them." He pointed out that to build new roads on new alignment is a very difficult process. He said he was in Juneau from 1983 to 1993 and said during that period there were several improvements to Egan Drive, Old Glacier was redone, Riverside Drive was redone. He said they weren't new roads in that sense, but they offered new features such as things like bike paths, sidewalks, shoulders that never existed before, et cetera. He pointed out they also moved into some environmental areas that they hadn't traditionally been into. Number 0270 REPRESENTATIVE KOOKESH said it has been 25 years since a state- funded road has been built. That information came from a letter the committee had from Bruce Campbell, dated February 9, 1998, where Mr. Campbell says the last road built with state funds was from Anchorage to Fairbanks. He said he would bet that road wasn't built all with state funds. REPRESENTATIVE KOOKESH said he appreciates the amount of money that we have spent in Alaska just to fix up the roads because Angoon would not have benefited. He stated the last place another road is needed is in Anchorage. He noted he has been on the Anchorage roads and a lot of them go nowhere. We don't need to build roads that go nowhere. Number 0333 RON SIMPSON, Manager, Airports Division, Federal Aviation Administration, testified via teleconference from Anchorage. He informed the committee that his division administers Airport Improvement Program (AIP), the federal funded program for airport development in the state. He read the following statement into the record: "I'd like to express our concerns regarding this proposed House Bill Number 227, relating to the establishment of an Alaska Capital Improvement Project Authority. This authority, as we understand it, would be used to rank, prioritize and improve capital development projects as well as provide stability and continuity in the Capital Development Program when administration changes occur. However, from an FAA perspective, this House Bill 227 has major consequences and would jeopardize the ability of the state of Alaska to optimize federal airport capital development funds. "These AIP funds are distributed on a competitive basis based on the selection of high priority projects. The state of Alaska competes with every other state on a national basis for a commensurate share of AIP funds. We are working very closely with DOT/PF to ensure that the maximum amount of AIP funds are secured and meet the airport development needs in Alaska. "We understand that his authority, as proposed, will be approving a list of development projects by February 2 of each year, for construction over the next succeeding two fiscal years. This proposed process will not match with the complexities or timing of the AIP application process. In the AIP Program, we submit ACIPs (Airport Capital Improvement Plan) comprised of the proposed airport development projects for Alaska. We submit them from the regions of FAA Headquarters in the October time frame to compete for AIP funds for the succeeding construction season. "Furthermore, to compete effectively on a national basis requires at least two to three years advanced planning to accomplish AIP programming requirements such as obtaining environmental permits and land acquisitions before a project can be approved for funding. Legislative authority is also needed for DOT/PF to perform the required preliminary engineering, design and bidding that must occur before an AIP grant can be issued. Any inability to timely submit ACIPs, or meet AIP programming requirements, will be perceived by FAA Headquarters in Washington is an indication that the state of Alaska may not really need this necessary AIP funding, thus jeopardizing our future funding levels. "We believe that this authority is being proposed to fix a problem that has already been recognized and corrected by DOT/PF; a backlog on capital development projects that were designed, but never constructed. The DOT/PF formed the Airport Project Evaluation Board (APEB) two years ago to address this apparent problem with their project selection process. We've worked very closely with DOT/PF to ensure that this new AIP project selection process results in the highest priority projects being selected. The APEB, in our opinion, has corrected this problem and has improved the state of Alaska's ability to compete for AIP funds. "The APEB is a panel that is comprised of a fairly high level of state representation including the statewide planning director, the statewide aviation director, three regional directors and the deputy commissioner of Aviation, which we believe provides a good statewide perspective incorporating the entire state's development needs and concerns into the process. The APEB selection process uses a ranking criteria that considers such factors as safety, health and quality of life, economic benefits, community support, community maintenance and operation contribution, airport security and airport certification requirements, aviation and transportation alternatives, runway length and condition, aviation hazards, erosion and flooding problems, among others. This project selection ranking criteria closely resembles the FAA's national priority system for AIP project selection. "The establishment of the APEB has really been a benefit for the state of Alaska because it incorporates the federal priorities with overall statewide needs to compile ACIPs that are credible. These ACIPs are three to five-year plans that provide a measure of stability and continuity to the state's Airport Capital Development Program. "We are beginning to see the benefits of the APEB process in the state of Alaska's ability to compete for AIP funding. Prior to the APEB selection process being put into place, the state's AIP funding level averaged about $60 million annually. Since the APEB process has been established and utilized for the last two fiscal year programs, and we've been through a complete cycle, it has enabled the state to acquire $75 million in AIP funds in FY 97, and we anticipate an all time high of over $81 million in AIP funding for fiscal year 98. This increased funding would not have occurred without a selection process that resulted in many projects that are high priority and competitive on a national basis consistent with FAA national priority system. "Another point, this new authority, as proposed in House Bill 227, will be made up of public citizens that will serve with staggered terms. This causes us great concern as we have invested countless hours in educating the APEB on the FAA national priority system to ensure that they have the expertise to select the highest priority projects to give the state of Alaska a best competitive edge for AIP funds. Re-educating this new authority and building the necessary expertise is no small undertaking; and with staggered terms and a rotating membership, this educational process will undoubtedly be ongoing, and significantly impact our resources as well as the state's ability to optimize AIP funding. "With all due respect, we would encourage the Alaska State Legislature to enable the DOT/PF and FAA to continue to work cooperatively together incorporating the APEB process to pursue, capture and retain all of the airport infrastructure development funds we can possibly get to meet the aviation needs in Alaska. We in the FAA strongly endorse the APEB project selection process and we feel that the establishment of an authority will only add an additional layer of review that will jeopardize and impact the state of Alaska's ability to optimize federal airport capital development funding." Number 0655 CHAIRMAN WILLIAMS referred to Mr. Simpson speaking about the authority and changing board members every three or five years. He referred to the possibility of a change in the Administration and asked what would then happen to the FAA. MR. SIMPSON responded that the ACIP which is submitted to Headquarters is a five-year plan. Number 0687 CHAIRMAN WILLIAMS asked if direction would be changed. MR. SIMPSON said to change the next five-year plan in midstream would impact the credibility of the program and impact the ability to secure federal funds for development in Alaska. He said, "That's why we like to look at the ACIP as being a very important document and incorporate a statewide perspective when we put them together and make sure that they do have within them the highest priority needs that's identified for the state. So should we be moving from one administration to another, we would look to see that there is continuity as far as which projects are rated the highest priority projects based on the specific specified criteria. In a change of administration, the selection criteria should not be changed in that predicament. Number 0728 CHAIRMAN WILLIAMS said the committee wants to make sure there is continuity and make sure that nothing changes within that. He said, "I know that having one administrator that is appointed because he is an administrator in that field, whether it's FAA or whatever, that it is better for the state for having someone appointed because he is a political -- helped the Administration get into office." Number 0763 REPRESENTATIVE COWDERY asked Mr. Simpson if he feels that if the authority is created, they would not maximize the funds available from any of the sources. Number 0789 MR. SIMPSON responded, "I'm not being critical of the authority and its intentions, but what I would like to add is that what we have in place now with the APEB process is an accepted proven process that has already shown benefits in the state of Alaska as far as the ability to secure their maximum amount of federal funding. And the project selection criteria that they use to determine which projects we forward to Washington, D.C., for funding has been very successful and consistent with our FAA national priority system and really serves as a model for selecting and documenting and justifying which projects are forwarded to Headquarters for funding." Number 0829 REPRESENTATIVE COWDERY asked if it is possible that another system could be more successful than the current system. MR. SIMPSON responded that they work with the DOT/PF on a continual basis. The membership of the APEB consists of the regional directors, statewide aviation directors, statewide planning directors and the deputy commissioner of Aviation. He said they work with them on a continual basis and have developed a close relationship with those individuals as far as coming to some agreement as to what the aviation needs are in the state of Alaska, which ones of those needs are high priority needs, and where should the federal investment be focused so that the constituency of the state of Alaska gets the most benefits out of the aviation program. Mr. Simpson indicated he believes the relationship between the DOT/PF and his agency would be impacted if there is another level of review inserted into the process. Number 0892 REPRESENTATIVE COWDERY asked Mr. Simpson if he believes that there is ever any political influence in any decisions that are made. MR. SIMPSON informed the committee he has been in his position since 1991. He said, "Back in those days, yes, I did see political pressure and political maneuvering impacting our program. But in the last few with APEB process, as Mr. Bowers, Statewide Aviation Director has indicated, the ACIP that's been formulated by the APEB has withstood the scrutiny of the Alaska State Legislature, has not been influenced or impacted by political assertion and gone forward from our offices to Headquarters intact. Number 0899 HENRY SPRINGER came before the committee to testify on behalf of himself. He said he has been in Alaska since 1960 and spent three years in the Army. From 1963 to 1986 he was with the old Highway Department and was with DOT/PF as a director. Mr. Springer referred to HB 227 and said his interest is in the transportation of Alaska. He said, "I feel great as a taxpayer that I was (indisc.) there is really no need to fix anything. If it ain't broke, don't fix it and I believe in that. But I also have a keen interest in the historic perspective in transportation in the state and I don't think we're doing all that great." MR. SPRINGER said he believes there was a more responsive system in the state 50 or even 100 years ago that fulfilled the needs. The simple reason for HB 227 or some kind of a different approach is the instability. He said what a lot of people don't understand is what the shock effect is in a department, especially as big and complex as DOT/PF is when a commissioner changes. It is not just philosophical or policy changes, it's bureaucratic changes that come with the personnel system. There is the insecurity of people in different jobs. Mr. Springer said, "A simple thing is that we have produced, through the years, partly because it was mandated by the federal aid and Federal Aid Administration, that we had three- year, five-year, six-year and ten-year plans. And I have been heavily involved with all those." Number 1115 MR. SPRINGER informed the committee that in his personal library, he has about 1,200 pounds of studies and planning documents, since statehood, of which hardly any of them were ever used longer than the administrations they were produced in. That is somewhat understandable because if you produce something and that reflects your policy and your philosophic direction, that is what you're trying to work with. Mr. Springer said the next person comes in and she/he may or may not have completely different ideas. A prime example is what Governor Hickel produced and what the present Administration is doing. He stated he is not saying one is better than the other, he is just using it as an example of instability. He said he believes the department is making very creditable efforts in coming up with a good and placable and logical planning process with whatever criteria they use. The underlying problem is stability and there hasn't been any stability in any way, shape or form since statehood. Mr. Springer asked "What should a transportation system do for the state?" The conventional wisdom says a transportation system is necessary for the economic stability and well-being of the state. Number 1207 MR. SPRINGER said we have to have intermodal considerations. In some areas marine transportation is paramount, in others land transportation and also air transportation. He said he would submit that none of it, in this state, has come about because of careful planning or some government entity having a lot foresight and skill. It has all come about because commerce, industry and individuals found necessities to have whatever mode of transportation was necessary for the well-being for those people. MR. SPRINGER referred to the villages years ago and said the old timers had a better trail system in place to accommodate winter travel than what we currently have. Maybe we don't need it to that extent anymore because aviation is taking over. MR. SPRINGER said he has looked at some congressional records from years ago and there was a well-planned system with minimal money they had shelter cabins, firewood, staked trails which connected the villages. There are trails in Anchorage. That's great for some people, but that is a luxury and not a necessity and we're not meeting the basic necessities because of policy shifts. Number 1282 MR. SPRINGER pointed out that 31 states have used some kind of a commission approach and it is not a rigid thing. There could be a system where there is a full system that would take the place of the commissioner and he believes that would be the desirable thing to do. He said he honestly thinks a full commission that takes over the policy for DOT/PF would be the thing to do. He asked, "Why not do that?" He said our constitution has given the Governor very broad and probably more authority than any other Governor in the nation. The same thing holds true for the legislature. Mr. Springer said if we wanted to establish a broad commission, it would probably cut, even deeper than HB 227, into the authority of the Governor. It also will be perceived to infringe on some of the authority of legislators. Mr. Springer stated he believes it is politically not doable. He said since the planning and programming is the key to at least capital programs, such an authority would provide a vehicle to establish that stability. MR. SPRINGER said, "I want to get into some specific things that come up and I think either people don't see it directly in the bill or can't envision it - why that authority is a good and workable thing. Number one, it would not raise another level of bureaucracy. The way I think the bill envisions it, it would keep the planning process in the regions completely intact. The regional planners in the three regions within DOT would continue to do whatever they are -- basically (Indisc.) acquisition and so on. That is for all modes of transportation. What it would basically do is replace a large portion of the Headquarter's planning and programming group, and I said 'replace.' It is not parallel group coming up. And there are some functions that need to be maintained because of federal requirements like keeping statistics, and so on, so the commissioner's office would be able to continue that." Number 1446 MR. SPRINGER said the key question is, "Who sets the policy? Who makes the selections?" He pointed out that there is nothing in the present stipulations, both in the FAA and the FHWA, to prevent such an approach. It can be just as compatible meeting the requirements as the present set-up is. You take one group and replace it with another. Mr. Springer said the big difference it that this group has authority to basically decide what is going to be in the Capital Program. One thing that has been pointed out is AMATS which is under the ISTEA provision. He pointed out under ISTEA, they see a necessity for a municipal planning authority in those types of communities. He said that doesn't mean AMATS is set rigidly as to its composition. It just has to comply with the federal requirements pertaining to municipal planning authorities. Mr. Springer stated the commissioner can be replaced with the chairman of that board. The mayor of the municipality can still be in the process. Number 1520 MR. SPRINGER said, "The other (indisc.) that is of some political concern, while we are going to knock off jobs -- well I think one of the key points here in the legislature is dealing with fiscal gaps and so on." He said he doesn't think it affects the job security. It will eliminate some planning positions, but most of those are funded by federal dollars. That money could be used in design and construction which where it is more needed than in the planning process. Mr. Springer referred to the current planning process and said it is very expensive. He said the committee has heard about the necessity of public involvement. He stated, "It has been my observation that the public involvement process has reached dimensions where the mechanisms are such that there isn't much sausage coming out of that hopper. There are a lot of ingredients going in, but they're just stirring the pot and making hamburger and there are no patties coming out." Mr. Springer stated that is a problem for two reasons. He said we have planning processes that are continually on-going. Mr. Springer said he sees the same faces, for example, in the Anchorage public hearings. That is a concern. He asked what the public involvement is. He said he would submit to the committee that a body that is appointed by the governor, confirmed by the legislature, represents different modes and geographic areas is an ideal way to get the feedback and access of the public in the hearing processes. It isn't a process that would be manipulated by bureaucrats. It is a process that is composed of and done by citizens. MR. SPRINGER explained that bureaucrats don't need to teach people what is needed, it's the other way around. Industry and commerce is the thriving force, not some bureaucracy. He said on the flip side, you can't expect people from all sorts of life to make a decision that should be done along professional guidelines. To use a process where you take only people's input and try to formulate a policy is absurd and is a guarantee that nothing will happen. That is where the professionals with training and the elected leaders should use a leadership role and decide what is the right thing to do. It should be established as a policy and then that policy should be pursued over a long period and not be at the whim of one Administration or another. Number 1728 MR. SPRINGER referred to what the authority would do and said he doesn't see anything where it is not compatible with federal guidelines. He said, "To address the concern that the authority will indeed have the power to add, subtract or change a program - they're well founded, but that authority also, in the end, can decide if that has a priority and if the federal participation can not (indisc.) be guaranteed, maybe there is a situation where state funding should be used. We have, right now, a couple of examples I can give you with a well thought out process in place right now that are exemptions. I'm amazed at its political expediency. One of them is a thirty some million dollars that has been announced to be used for the Anchorage International Airport. It wasn't in the STIP or in the long-term planning process. It came out like that just as predictable as the next election. The same thing with the intersection at Tudor and Lake Otis. That didn't show up in any planning document or anything. All of a sudden Mayor Mystrom and the Governor fall all over each other saying that it has a high priority. Where the hell were the planners at? I'm not being critical. I'm just pointing a couple of examples which we have just seen within the last two weeks which points out to me that the planning process and the priority setting is problematic. The second thing is I think it guarantees sufficient citizen access and input. I think it takes the operational needs that the industry and commerce and the people have into consideration. It provides a geographic balance. It is more results oriented because it's based on business decisions and not so much political (indisc.) I think there are better decisions in regards to the cost benefit ratio of a project. We are required to have a cost benefit analysis. I don't see that in hardly any of the planned projects - what is coming out of the hopper? I think it is a cheaper process. I think we can cut the costs that is being used right now for planning probably in half. We don't lose that money, we just use it in another sector." Number 1900 CHAIRMAN WILLIAMS said he agrees with Mr. Springer as far as continuity. He said Mr. Moreno had concerns about some of the wording in the bill and asked Mr. Springer if there is a big issue in that area. Number 1930 MR. SPRINGER said, "I tried to address the AMATS and the MPO question as far as air quality goes. It is obvious that a commission like that is not going to bite its nose off. If there is a decision that is paramount to utilize all available federal funds, which I think anybody, I don't care if it's the Governors Office or a commission or whoever, that is paramount. But at the same time, we shouldn't overlook the flexibilities, in some cases, for specific projects if they are too problematic that we should use only state funding or bond funding which we have done. There is plenty of necessity to use the federal dollars up without getting into any problems. Air quality attainment in Fairbanks and Anchorage is well known, but there is nothing that the authority couldn't do that is presently being done." Mr. Springer continued to discuss his experience while he worked for the Department of Fish and Game. MR. SPRINGER referred to Representative Sanders question of why haven't we built any roads. Mr. Springer said in 1963, we used approximately 80 percent to 90 percent that went into a project. Currently, we have 52 percent of the money going into projects and the rest going to air quality, water quality, storm water runoff, ASHA, planning, trails, et cetera. He stated that roads aren't being built because the money is being used for other things besides construction. Number 2086 REPRESENTATIVE COWDERY asked Mr. Springer to comment on what he believes the composition of the board should be. MR. SPRINGER informed the committee that in the early 1980s, Governor Egan established a transportation advisory board made up of citizens. Governor Egan appointed people who he felt had expertise in different matters who would help the commissioner establish a transportation policy. The met twice a year. Some of the people appointed ran barge companies, fuel docks, et cetera. Mr. Springer said maybe those people were a little short on education or weren't politically correct, but they sure knew how to run barges, trucks and airlines. He said a concern is how much time people can spend working on the board. Mr. Springer stated he doesn't see an adverse situation between the commissioner and that body. He sees it as a very compatible and cooperative effort. Number 2368 CHAIRMAN WILLIAMS indicted there needs to be some limited changes to the legislation. He said HB 227 would be held for further consideration. ADJOURNMENT Number 2442 CHAIRMAN WILLIAMS adjourned the House Transportation Standing Committee meeting at 2:45 p.m.