HOUSE TRANSPORTATION STANDING COMMITTEE March 2, 1998 1:55 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 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 * HOUSE BILL 291 "An Act requiring certain motor vehicles to yield to following traffic." - SCHEDULED BUT NOT HEARD (* 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 4/03/97 923 (H) READ THE FIRST TIME - REFERRAL(S) 4/03/97 923 (H) TRANSPORTATION 4/21/97 (H) TRA AT 1:45 PM CAPITOL 17 4/21/97 (H) MINUTE(TRA) 2/09/98 (H) TRA AT 1:00 PM CAPITOL 17 2/09/98 (H) MINUTE(TRA) 2/25/98 (H) MINUTE(TRA) 3/02/98 (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) 465-3879 POSITION STATEMENT: Provided information on HB 227. PETER ECKLUND, Legislative Assistant to Representative Bill Williams Alaska State Legislature Capitol Building, Room 424 Juneau, Alaska 99801 Telephone: (907) 465-3424 POSITION STATEMENT: Provided information on HB 227. TOM BRIGHAM, Director Headquarters Division of Statewide Planning Department of Transportation and Public Facilities 3132 Channel Drive Juneau, Alaska 99801 Telephone: (907) 465-4070 POSITION STATEMENT: Testified in opposition to HB 227. RON SIMPSON, Manager Air Force Division Federal Aviation Administration 222 West Seventh Avenue Anchorage, Alaska 99501 Telephone: (907) 271-5438 POSITION STATEMENT: Testified in opposition to HB 227. ACTION NARRATIVE TAPE 98-10, SIDE A Number 0001 CHAIRMAN WILLIAM K. (BILL) WILLIAMS called the House Transportation Standing Committee meeting to order at 1:55 p.m. Members present at the call to order were Representatives Williams, Cowdery, Sanders, Elton and Kookesh. Representatives Hudson and Masek arrived at 1:57 p.m. and 2:20 p.m. respectively. Number 0058 CHAIRMAN WILLIAMS stated HB 291, "An Act requiring certain motor vehicles to yield to following traffic," will be brought up on Wednesday. CHAIRMAN WILLIAMS noted Representative Hudson joined the meeting. HB 227 - CAPITAL IMPROVEMENT PROJECT AUTHORITY Number 0158 CHAIRMAN WILLIAMS announced the first order of business is 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. CHAIRMAN WILLIAMS mentioned HB 227 was previously heard in the Transportation Committee, this would be its third hearing. REPRESENTATIVE JOHN COWDERY indicated his staff, and Transportation Committee staff have been working on language to address some of the concerns. He urged the committee to adopt the proposed committee substitute. 0286 REPRESENTATIVE BILL HUDSON made a motion to adopt proposed committee substitute, Version 0-LS0789\F, Utermohle, 2/27/98 for discussion. There being no objection that version was before the committee. Number 0317 MARCO PIGNALBERI, Legislative Assistant to Representative John Cowdery, Alaska State Legislature, came before the committee. He said he was asked to compare Version E and F. MR. PIGNALBERI explained Section 1, Findings and Intent is new, the reason it was put in is because there seems to have been some misunderstanding about the purpose of the bill, especially by people outside of Juneau and some of the federal authorities that work with transportation planning. He said page 2, subsection (b) is the meat of the bill, he read: (b) It is the intent of the legislature that the Alaska Capital Improvement Project Authority (1) review, revise, prioritize, and approve plans for transportation systems and public facilities that are funded with state, federal, and other nonstate funds; MR. PIGNALBERI pointed out all other things that this authority does involves from that statement that is a new section. Number 0444 REPRESENTATIVE KIM ELTON asked for the definition of public facilities. For example, does this mean a school that is funded by the state would fall under the purview of the Capital Improvement Project Authority. MR. PIGNALBERI replied no, that's probably something we need to look up. Public facilities mean the buildings that are under Department of Transportation and Public Facilities (DOT/PF) perusal for repair, maintenance and construction and so forth. There is a specific title in the statute (he wasn't able to locate the title). But it does not include schools. REPRESENTATIVE ELTON said the reason he asked is because the title clearly applies to DOT/PF but when you go into for example new Section 1, and say, "Will maintain transportation systems and public facilities," public facilities right now includes schools. He indicated there might be a title problem or it needs to specify what this doesn't cover. MR. PIGNALBERI replied it's our intention to go through the changes today, he noted the fiscal note is not completed. He indicated he would pull the statute and provide how the definition fits in at the next meeting. Number 0566 REPRESENTATIVE ALBERT KOOKESH stated the new findings section doesn't mention the basis for project selection. He asked if the current process going to include any of that. MR. PIGNALBERI responded that is addressed later in the bill, the authority has the authority to prescribe what the selection prioritization process will be. Much the same as it is now done by the Project Evaluation Board (PEB) within the commissioner's office and headquarters planning. The real difference here is that were going to leave ultimate decision-making and prioritization to a citizen panel which is the five-member authority. That's the only difference. MR. PIGNALBERI said Section 2 creates the authority, they basically made something that was explicit to implicit. He referred to page 4, line 2, subsection (b) which reads: (b) The authority shall allocate the funding available for transportation systems among the categories and classes of transportation systems and approve plans and programs for transportation systems that are consistent with that allocation. MR. PIGNALBERI indicated that's something that the commissioner's office now does in conjunction with the governor's office. That's to say that so (indisc.) of the total pool of dollars available for transportation projects some money will be allocated to aviation, highway, marine highway, highway construction and so forth. This was implicit in the bill, now it is explicit. Number 0704 REPRESENTATIVE HUDSON said appropriation is obviously being a function only of the legislature, he wondered if allocation wouldn't also fit - he asked Mr. Pignalberi to put a question mark on that to see how that might - whether or not there's any conflict between their authority visa ve that which is prescribed to the legislature. MR. PIGNALBERI replied I think not because all of the plans that are approved by the authority must be submitted to the legislature. Everything this authority does is preliminary to final legislative approval. REPRESENTATIVE ELTON asked does this paragraph effect the allocation scheme that is now presently said by the community of Anchorage. They allocate a certain percentage to trails, roads, would this supersede that community's authority. MR. PIGNALBERI responded only in the same way that presently when the governor and commissioner make a determination of how much is going to go to roads or highways. That has an effect on what money is available to the communities. Now the authority will be making that decision about how much money will be in each classification, so it will have an effect but it will not have - it's no change in terms of the communities (indisc. - noise), they need to know how much money the state is going to be putting out there for a particular transportation mode and that's what governs (indisc. - paper shuffling). Number 0828 REPRESENTATIVE ELTON said to put it more specifically, right now the City of Anchorage is going through a rather tortious debate on whether or not 20 percent of the funding they get for transportation should be allocated to trails. He asked if that means that debate would now take place at this authority level rather than at the Anchorage level. MR. PIGNALBERI replied yes, he believes that would have an impact. This section is basically what the governor and commissioner now do in terms of deciding how much money is going to go into each transportation mode, for example consider trails, they may or may not say that - put a percentage or dollar ceiling on the amount of money that may go to trails. The local governments, that would then participate in programs underneath this allocation are going to be governed by that ceiling for whatever they get. MR. PIGNALBERI said as he's saying this, he's starting to see what Representative Elton was driving at. For example if the Anchorage Metropolitan Area Transportation Study (AMATS) has so many dollars available through federally allocated programs, with an overall ceiling they will make their own decision about how much they want to go to roads, trails, or bikeways, what they call traffic enhancements. REPRESENTATIVE ELTON said so we're not taking that authority away. MR. PIGNALBERI replied no, we're not taking the local discretion away. It's only the dollar ceiling, the cap, is all this addresses. Number 0932 PETER ECKLUND, Legislative Assistant to Representative Bill Williams, Alaska State Legislature, came before the committee. He explained the state right now puts, for example, $20 million into Trails and Recreation Access for Alaska (TRAAK), $80 million into the Community Transportation Program (CTP), and $120 million in the National Highway System (NHS). He said that was a policy decision by the governor and commissioner. This language would allow the authority to have that broad policy discretion. When a new governor or commissioner comes on, it's possible that those broad funding categories could change. But we want to take that and give that broad policy decision power to the authority. REPRESENTATIVE COWDERY said for stability I assume, to make it stable. MR. ECKLUND responded yes, the commission, commissioners, serve five-year terms and it will potentially provide stability to the overall Statewide Transportation Improvement Program (STIP). MR. PIGNALBERI addressed Section 3, page 5, line 14 which reads: be undertaken by the department during the following construction season, Number 1033 MR. PIGNALBERI said it was suggested by the Federal Aviation Administration (FAA) that "construction season" be replaced with "fiscal year." He noted they didn't have a problem with that and asked for a proposed amendment to make that change. REPRESENTATIVE ELTON remarked he could see a potential problem, the construction season may go from May until September. If you change it to a fiscal year, it seems to him, you might have to change it to the following two fiscal years because if the fiscal year changes on July 1, you've only given off authority for projects up until the middle of the construction season. MR. PIGNALBERI read, "must include the projects to be undertaken by the department during the following fiscal year." The time line for these plans is going to be earlier than say the legislative session. It's not a case of saying in May or January of one year that we're not going to have a plan prepared for that following summer. These plans are going to have at least a two-year horizon. Number 1118 REPRESENTATIVE COWDERY implied they must include the projects to be undertaken by the department during the following fiscal year. That doesn't mean that the construction is going to happen particularly tied to that. The construction could take three years, it could be a big project or it could be a short project. What this is saying is that they must include the projects to be constructed. MR. PIGNALBERI said he will do a time line on how this will work and will show it at the next hearing. REPRESENTATIVE ELTON said that might be helpful. He asked what happens if we're going to do some bridge repair work, but the bridge repair work is going to occur after -- maybe you have somebody on mile 90 of the Seward Highway, and there's a bridge down the road and you want to do both during the same construction season because your going to have the materials, work crew, and equipment in the area. It seems to him the word that if you changed a fiscal year, unless you do that bridge project before the end of June, that the authority may not have had the ability to approve it if you're not going to start the bridge project until July. MR. PIGNALBERI noted this section pertains to aviation projects, but the principals the same. He indicated this was discussed with the FAA. Number 1216 REPRESENTATIVE KOOKESH referred to page 5, subsection (b), he read: (b) The authority shall establish standards for making and posting highways, REPRESENTATIVE KOOKESH said it looks like were going to do that even in certain municipalities. Anchorage, for instance, posts their own highways and speed limits. He stressed there clearly is a conflict. MR. PIGNALBERI stated this is in current law, the DOT/PF has statewide authority to set the standards by which the local governments may set specific speed limits, a difference being between the broad standard and establishing criteria versus setting a specific speed limit or posting a specific sign. Now DOT/PF has that power, under this bill the authority will assume that responsibility. REPRESENTATIVE KOOKESH stated, "Okay, so there's clearly no conflict between the Municipality of Anchorage and the way that this bill is written. MR. PIGNALBERI replied that's correct. This is only transfer of power from the DOT/PF to the authority. Number 1282 MR. PIGNALBERI added you might further note several of these provisions have to do with posting of speed limits, the collection and setting of tolls, signing authority on highways and so forth, are regulatory functions and Legal Service advises that we are required to put these regulatory services in the authority because of the nature of the appointment process. In order to justify legislative confirmation of the directors they must have certain powers and duties. There is a family of regulatory powers that go along with these transportation activities that are in authorities for that reason. REPRESENTATIVE ELTON said that raises a significant issue. He asked are you saying that now the state does have the authority to set signage and traffic signals within the Municipality of Anchorage. Has the state delegated that to the municipality? MR. PIGNALBERI remarked again it's not the specific speed zone or speed limit, it's the authority to set the criteria by which speed limits, signs, and speed zones will be set. The state has always had that authority, unless there is something in Title 29, the home rule, local government statute where they have that power because of a home rule city, he indicated he wasn't sure. MR. ECKLUND stated thus is existing law and suggested that question be answered by DOT/PF staff. Number 1383 MR. PIGNALBERI pointed out the remaining Sections (three to eight) are the same. Section 9, page 8, is the same as it was except the five-year horizon has been restored. In fact, it's the way it is in existing statute, in the earlier draft we had changed the planning horizon for the department, for this highway construction program, down to two years and there was no need for that. We simply restored it back to five years. MR. PIGNALBERI continued, at the end of this section, page 8, line 11, a new sentence was added which basically requires that any amendments that are made to the approved highway construction plans that are funded by the Federal Highway Administration, that if the authority amends that plan, they must amend it in accordance with a process that has been preapproved by the authority. You can't arbitrarily say, "Lets take project 67 and make it number 1," it has to go through the process. As requested, we tried to make it explicit. The authority may make amendments to an approved program that affect projects for construction or maintenance of highways approved by the Federal Highway Administration only if the amendments are adopted in accordance with the program review, revision, and approval process established by the authority. MR. PIGNALBERI noted "program that affect projects" should be plural, "affects" projects. Number 1483 MR. PIGNALBERI addressed Section 10. He said it's the same, but added they added the last sentence. This section requires the DOT/PF to prepare a status list of the projects that have been approved at various levels. It simply says that the department shall send the list or the statement to the new authority. It reads: The department shall send the statement to the Alaska Capital Improvement Project Authority. MR. PIGNALBERI pointed out Section 10 has been deleted. It was a cleanup (the old version) that the bill drafter put in to clean up a purchasing provision for DOT/PF because it was not directly relevant to the bill we asked him to take it out. Both old Section 10 and old Section 16 are identical sections, both were deleted. MR. PIGNALBERI brought up proceeded to Section 11. He stated it is the same as the old Section 11. It has to do with local service roads and trails funding. MR. PIGNALBERI said the next change is in Section 13, line 31. He said the previous language said that "the state shall only participate in projects approved by the governor on recommendation of the commissioner and the authority." We deleted the word "commissioner" because it was redundant to have the commissioner and the authority both approve for the sake of the governor: The state shall participate only in those projects approved by the governor on recommendation of the Alaska Capital Improvement Project Authority. Number 1589 REPRESENTATIVE ELTON said he may have misunderstood. It may have been redundant, but it seems to him that it's a fairly significant change. Essentially what we're saying is it's a lot fun to be governor because that latitude is taken away from the governor that they now have. MR. PIGNALBERI replied that's correct. He read the old sentence: The state shall participate only in those projects approved by the governor on recommendation of the commissioner and the authority. MR. PIGNALBERI stressed if it's approved by the governor, is the governor going to approve something that hasn't been approved by the commissioner. Having the governor, commissioner and the authority is redundant. He explained the authority is a separate entity from the department and the commissioner is part of the governor's staff, so to speak, that's why he used the word redundant. Mr. Pignalberi reiterated, "We're saying now that the state will only participate in projects approved by the governor, who does the governor seek council from to participate in such projects, but the commissioner of DOT/PF and this requires it be also be approved by the authority." Number 1654 REPRESENTATIVE ELTON said it seems to him that's backwards. He said, "What were saying here is the governor can only approve projects that have come by recommendation of the authority. So what you've done, is you've got it the other way around, the funnel is the authority going to the governor and the governor can't add something, the governor can only approve something that is coming from the authority." MR. PIGNALBERI replied he thinks that's the intent. REPRESENTATIVE HUDSON indicated that's precisely what we're doing, is we're elevating the recommendation of the authority to a higher level, and obviously the commissioner who works for the governor - the governor doesn't have to get his permission so it just simply says that we can't participate unless it's approved by the governor and on recommendations of this authority. He reiterated, so we're elevating the authority recommendations to a very high level. Number 1703 REPRESENTATIVE BEVERLY MASEK asked what is the relationship between the commissioner of DOT/PF, who reports to the governor, and the authority, and authority's director, who reports to the authority. MR. PIGNALBERI replied the authority is an independent body, it's appointed by the governor and confirmed by the legislature. The authority will have staff that is (indisc.) moved over from the DOT/PF and report - a much smaller staff, will report to the authority. There is no direct connection between the staff of the authority and the governor, that staff would go through the chairman of the authority. REPRESENTATIVE MASEK asked what is the purpose of the authority to have a director. MR. PIGNALBERI replied the purpose of the director of the authority, having a director is to have a full-time -- the authority members are part-time citizens of the state and special - they come from geographically disbursed areas with special expertise and different modes of transportation. They are part- time, they will have a full-time staff that is comprising of some expertise, just like the commissioner now has a staff comprising transportation planners, engineers and designers. There will be a smaller staff like that for the authority. Number 1783 REPRESENTATIVE MASEK asked what would happen to DOT/PF and all the staff. MR. PIGNALBERI replied DOT/PF Headquarters Planning staff would be reduced in size, part of its functions would be transferred to the authority. CHAIRMAN WILLIAMS added there have been so many changes in the DOT/PF because their commissioner has not wanting to stay. He believes in the last two years we've had five commissioners that keep changing the direction of DOT/PF. What we want to do is not necessarily change the direction but keep -- the governor is going to have a say about what's happening, but we're going to have a person that is an expert in that area and keeping the people in DOT/PF that knows what they're doing all the time without changing every year. Today we go down four levels, he believes, of leadership and every time we change a governor -- we may change a governor this year and they'll be changing the department again. REPRESENTATIVE MASEK understands the intent, but is concerned about the interference of the Intermodal Surface Transportation Efficiency Act (ISTEA) funding. She asked that be addressed because in Section 3, page 5, which reads: Construction and maintenance program for airports and air navigation facilities. Number 1877 REPRESENTATIVE MASEK asked could this interfere with the established federal program for airport improvement and construction. MR. PIGNALBERI responded no, it was never intended to do that. Some of the amendments that they are reviewing today are simply amplifications to make it explicit that that is not intended to happen or will not happen. He pointed out the charge is made in Section 1, a new section of the bill. In fact, the authority must maximize the use of all federal funding sources. There would be no design or intent to, in any way, lesson the amount of federal funds that would be used for state projects. REPRESENTATIVE MASEK indicated she may have more questions. MR. PIGNALBERI said he believes FAA is on-line. He indicated they have been working very closely with FAA just to answer these questions. Number 1937 REPRESENTATIVE KOOKESH stated this is the first time he's heard that they are going to reduce staff in DOT/PF and noted it doesn't say that in the bill. He said he is a little concerned because he hasn't been convinced yet that this is a good vehicle because it looks to him, like we're just putting another layer of bureaucracy in there and he's not convinced that we're going to do other than that. Maybe, in going through the whole process, a light may come on some place, he'll be amazed that this may work but far he hasn't seen that. MR. PIGNALBERI replied here comes the light. The light is that we want to have an external authority, an external group of people from all over the state with diverse interests who are interested in maximizing our transportation system in all modes. And to have them play a significant role on behalf of the public in the selection, in the prioritization of projects, including the funding allocation that goes to those projects. Number 1988 MR. PIGNALBERI continued, "When you start with that premise, then you say, 'Well, how can I make that happen at the least possible cost.' Rather than add an additional or separate layer of bureaucracy, we took a look at the process that is now in place in the DOT/PF and said, 'Look, really what we want the authority to do is somewhat redundant with what the Headquarters Planning Section does in the DOT/PF.' Number one, we want to cutback the size of the government in general. We think we can afford to cutback some of the Headquarters Planning functions in DOT/PF. Take what we need ... and give it to the authority so that the authority members will have the staff they need to interface with the department and to make the intelligent decisions they need to allocate and prioritize the CIP. That's the overall goal and it necessitates that we're going to fund it somehow, we're not going to add new dollars to the budget we're simply taking some existing funds from the DOT/PF and using them in a better way, we think." REPRESENTATIVE KOOKESH indicated there's probably a light at the end of the tunnel, eventually he'll see it. His initial reaction has to be that there's just another layer of bureaucracy. Number 2061 REPRESENTATIVE ELTON said, "It seems to me, easy to answer the way in which you (Mr. Pignalberi) did answer, and it seems to me easy to say that what we're doing is were inducing stability in the process. The other thing that we are doing, and maybe this can be part of the light when we get there, ... we're depoliticizing the process which means that we're making -- I can make an argument, we're taking the voters out of this because I can tell you one of the ways I evaluate the governor, and the job the governor is doing, is how well he and his staff are doing on the marine highway system." CHAIR WILLIAMS asked Representative Elton to hold his debate. REPRESENTATIVE ELTON said he appreciated that but maybe that can help us get to the light at the end of the tunnel. CHAIR WILLIAMS indicated they will make time for debate. Number 2130 MR. PIGNALBERI moved onto Section 14, a new sentence has been added on lines 23 and 24: The department shall send the list to the Alaska Capital Improvement Project Authority. MR. PIGNALBERI said this was also in an earlier section, it simply says that when the department compiles its list of projects that have been proposed by the department, funded by legislature, recommended by the authority that it does the status list and must send it to the authority each year. MR. PIGNALBERI referred to Section 15, page 11, line 1. He said Section 15 is a grammatical change the drafter did, without any request on our part. Mr. Pignalberi indicated he cannot see any substantive difference between the old and new sentence. It now reads: ... Alaska Capital Improvement Project Authority. MR. PIGNALBERI brought up Section 16. The old section was deleted -- it's the one that had purchasing language that was cleaned up. New Section 16 is the same as the old Section 17 with no change. Number 2198 MR. PIGNALBERI said the next change occurs in Section 21, page 14, line 23. The old version had the plan being submitted to the governor and to the legislature by the department. In fact, if you strike the word "authority" and put the word "department" you'll have what the old language said. This makes it clear that the authority will submit directly to the governor and to the legislature. MR. PIGNALBERI referred to Section 24, page 16, line 24. He said, "We received this this morning from the drafter and so there are a couple things that are not clear. First of all if you look at line 24, subsection (6) 'submit its findings, 'its' even though it's in the old statute is inappropriate there and ought to be deleted. But that sentence in number six if you read it is a very convoluted sentence, it's difficult to understand. In the old version of the bill there were two sentences there, it's been now combined into a single sentence. What we've asked the drafter to do was just to make sure that the submittals and the recommendations would go from the CIP authority, to the governor and the legislature without having to go back to the department. And there was just no reason for it to go back to the department, and it is just is not clear what this sentence really means. So we need to fix this sentence, it will probably have to be changed in a different section of the statute, it wasn't very easy to do or we would have done it before this meeting." He indicated they would clean up that language at the next meeting. Number 2311 MR. PIGNALBERI said, "Finally, in Section 29, the last change is a new Section 29, which simply gives precedence to an Alaska Marine Highway Authority - should it be (indic.) into life in this legislature, if we have a marine highway authority, it will be its own planning authority independent of this planning authority." Section 29. CONFORMANCE WITH OTHER LEGISLATION. If a bill transferring the Alaska marine highway system to a state authority is passed by the Twentieth Alaska State Legislature and enacted into law, the provisions of that bill as enacted into law supersede conflicting provisions of sec. 12 of this Act and other provisions of this Act relating to the Alaska marine highway system. REPRESENTATIVE ELTON referred to Section 29 which gets rid of the potential conflict with the marine authority, and references Section 12. He asked would you then need have some place in this bill, a definition of public facilities, since you're using public facilities throughout the bill. He believes there are other sections of this that would also supersede a marine authority. You can maybe take care of that by defining public facilities and excluding the marine highway system as a public facility. MR. PIGNALBERI replied that Section 12 of course refers to marine highways. He indicated he wasn't catching Representative Elton's meaning. Number 2372 REPRESENTATIVE ELTON explained he knows that it does, but a marine highway system -- without a definition of a public facility -- a public facility right now is a marine highway system, it's a harbor, it's an airport, it's a road, it's a building. It seems to him that you may at least need to define public facilities somewhere in this bill so that it would exclude marine highway system from the definition of a public facility instead of just addressing the Section 12. MR. PIGNALBERI replied okay, he'll take that up with the drafter. REPRESENTATIVE MASEK asked what happens when the commissioner and the authority are at odds. For example, you have a project - the authority can refuse to approve a project advanced by the commissioner, and likewise the commissioner can decide not to build a project approved by the authority. MR. PIGNALBERI responded the authority has the final say. He again noted the makeup of the authority and their responsibility to prioritize and allocate funding to the projects. CHAIRMAN WILLIAMS indicated HB 227 will be brought up again. REPRESENTATIVE ELTON remarked he wasn't sure if this was on the bill or if the committee substitute addresses this - if it's not part of the committee substitute they can address it later. He said we've established through the committee substitute the processes that apply in making the decisions. He asked is there anything in the committee substitute that requires the authority to follow federal processes that we're required to follow now in order to access federal dollars. MR. PIGNALBERI noted the new amendments require the authority to follow its own procedures, those procedures being set up to maximize federal funding. He indicated that he didn't know that we concede the state power to the federal government and give the federal agencies veto authority over our planning process or our selection process. He mentioned, "I think you'll see in the new language in Section 2 of the bill, and in the highway construction plan, that we did try to tie the process into approval in a working relationship with the federal agencies, and we've been on the phone for the past week talking with federal agencies to arrive at this language." TAPE 98-10, SIDE B Number 0001 CHAIRMAN WILLIAMS informed the committee the would be in committee until 3:00. He asked Tom Brigham to come forward. Number 0024 TOM BRIGHAM, Director, Division of Statewide Planning, Headquarters, Department of Transportation and Public Facilities, stated, "I would summarize our views here by basically saying our concerns have really not been changed significantly by the changes in this committee substitute. In that you still have essentially a half-measure. That our recommendation would be, if the legislature chooses to do a commission [authority], do a commission [authority], do the whole nine-yards where the commission [authority] runs the department, and chooses the projects, and does the whole works as opposed to something that is kind of in the middle here, as I think we're trying to do with this case. Or, leave it alone because it certainly is clear and does, we believe at least, function well under the systems that are set up right now." TOM BRIGHAM continued. "I will say that, one further comment and that is that it is not at all clear - as to the issue of the two staffs - Mr. Ruby, Director of Federal Highways here (at the hearing that was held last year) testified that the relationship between the federal government and the state is with the commissioner, it was not with an authority. It is the department's staff that prepares the STIP and the Airport Improvement Program (AIP), I don't think that would change under this. Those are federally reimbursed. Our division is almost entirely federally funded. I believe Mr. Ruby also said last year, that the authority, as such as its set up in this bill, would not be eligible for federal reimbursement. So what you'd be doing is setting up this staff that would in fact be funded with state general funds." MR. BRIGHAM concluded, "So we see it as difficult, expensive, confusing and would probably work - we would hope it would work okay, as long as the governor's appointees are largely in the authority. Then ... everybody's on the same team and it all works along. But if you can imagine when you change administrations, and change governors, and you have an administration at odds with the bulk of the members of the authority, ... the way this is set up, it can get quite messy. Because I don't think it's at all clear, the question I believe Representative Masek asked - it is not at all clear, so who has the last word in terms of actually constructing - what projects actually get built or constructed under the current set up. And we'd be happy to continue the dialogue and work with your staffs and see if we can't help create something workable here, if that's the desire." Number 0151 REPRESENTATIVE HUDSON observed over the years that many of the projects that are put on the plan so to speak, for a particular timetable, are as much influenced by changes in the availability of federal money and approval of land acquisitions, and right-of-ways, and things that are beyond the original plans scope of understanding. He asked if that was still the case. MR. BRIGHAM replied he would say that is a fair statement. Most of the changes are the result of changes in the specifics of the project. REPRESENTATIVE HUDSON interjected "As opposed to changes, in say a new commissioner dumping an old plan and proceeding with some new ideas. As I understand it, ... what we're looking for here is continuity, where we say this is what we want to do, these are the roads we want to build, to maintain, to expand, this is the new docks and harbors to replacement and vessels to replace, and things of this nature there. And the frustration is with the turnover, as the director has said of one commissioner after another and several layers underneath and through the appointed process, because there all in the PX [partially exempt] category. And so the bill is, as I understand it at any rate, is seeking stability and performance of the plan." He asked the prime sponsor if that was right. REPRESENTATIVE COWDERY replied that's true. He said, "You stated that this plan, since it's not a full-blown authority, would be in conflict with the governor - could have conflicts with the governor's plan. Would a full-blown authority have the same conflicts?" Number 0246 MR. BRIGHAM explained, "A full-blown authority would be in charge of all aspects, the operations as well as the capital program of DOT/PF, so the likelihood of having any problems, and in fact would report -- well, its set up differently in different states, but you wouldn't have this potential sort of dueling bureaucracy potential that I think you run the risk of creating the way this is set up right now. Take Washington State for example, the commission itself has the final authority, they don't report to the governor or the legislature, or anyone." REPRESENTATIVE COWDERY interjected does it work well. MR. BRIGHAM replied it depends. If you happen to like the people who are on the commission that will be there for some time it works great, if you don't then it's a problem. There are pros and cons of both approaches here. You do get stability, but some times you get more stability than you really ever bargained for. REPRESENTATIVE COWDERY indicated he talked to the commissioner, and the commissioner said like in Missouri it works well, very well. He said, "So I don't know, we'll wait until we get the thing finalized here. But I think this is a step in the right direction and that's why we're creating the bill for the speaker." Number 0300 MR. BRIGHAM stressed the objective here is, we would agree is, that stability is a noble objective. He said, "Our concern is that the cure is going to be worse than the problem." Number 0316 RON SIMPSON, Manager, Airports Division, Federal Aviation Administration, testified via teleconference. He stated FAA is responsible for the administration of the AIP which provides federal funding for airport development in Alaska. Mr. Simpson read the following testimony: "I would like to take this opportunity to express our concerns regarding the modifications made in the proposed committee substitute [CSHB 227] relating to the establishment of an Alaska Capital Improvement Project Authority. The modifications to the subject bill in the 'working draft' do not fully address the concerns expressed in our prior testimony and in our letter of February 9. "The proposed HB 227 has negative consequences that may jeopardize the ability of the State of Alaska to optimize federal airport capital development funds. These 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 its commensurate share of AIP funds. Number 0363 "Factors proposed in this bill may adversely impact the state's ability to compete for funding are: 1. The proposed authority would be made up of public citizens that would serve with staggered terms and a rotating membership. This causes us concern as we have invested countless hours in educating DOT/PF on the FAA National Priority System to ensure they have the expertise to pursue the highest priority projects to give the State of Alaska the best competitive edge for AIP funding. Reeducating this new authority to fill in the necessary expertise is no small undertaking; and with staggered terms and a rotating membership, this educational process will be ongoing, significantly impacting our resources and the state's ability to optimize AIP funds. 2. To compete effectively on a national basis requires at least two to three years advanced planning to accomplish AIP programming requirements once a project has been selected, such as attaining environmental permits and land acquisition, before a project can be approved for AIP funding. The proposed bill is not clear on the need for advanced planning, nor does it acknowledge the steps that must be accomplished to meet AIP programming requirements. 3. Legislative authorization is needed for DOT/PF to perform the required preliminary engineering, design and bidding that must occur before an AIP grant can be issued. AIP grant amounts are based on actual bid prices. Number 0416 The proposed bill is not clear on the need for advance(d) legislative authorization in order to recognize the preliminary work needed to meet AIP requirements before grants can be issued. 4. The proposed bill does not reference or recommend any criteria for project selection or approval. Without a specified criteria, it's not clear what value the authority will add to the project selection process. To ensure that maximum amount of AIP funds are secured, the highest priority airport development projects must be submitted consistent with the FAA's National Priority System for AIP project selection. "With all due respect, we encourage the Alaska State Legislature to enable the DOT/PF and FAA to continue to work cooperatively together incorporating the Airport Project Evaluation Board (APEB) process to pursue, capture and retain all of the airport infrastructure development funds we can to meet the aviation needs of Alaska. The establishment of the APEB has resulted in higher priority projects being forwarded by the State of Alaska to FAA Headquarters to compete for these limited federal funds. The APEB process effectively incorporates federal priorities with overall statewide needs to compile Alaska Capital Improvement Projects (ACIP) that are credible. Number 0516 "We are just 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 project selection process being put into place, the State's AIP funding level averaged approximately $60 million annually. Since the APEB process has been established and utilized for the last two fiscal year programs, it has enabled the state to acquire $75 million in AIP funds in FY (fiscal year) 97 [1997], and we anticipate over $81 million in AIP funding for FY-98. This increase in funding would not have occurred without a project selection process that results in submitting projects that are the highest priority and competitive on a national basis consistent with the FAA National Priority System. The FAA endorses the APEB selection process. "The establishment of an authority may provide more continuity when changes in administration take place. However, it may also provide the opportunity for political agendas and special interests to be inserted into the project selection process, at a point in the process that is critical in securing federal funding." Number 0557 CHAIRMAN WILLIAMS asked Mr. Simpson to fax a copy of his statement. He indicated HB 227 would be heard again on Wednesday. ADJOURNMENT CHAIRMAN WILLIAMS adjourned the House Transportation Standing Committee at 3:00 p.m.