Call to Order and Roll Call
The 1st meeting of the Interim Joint Committee on Transportation was held on<Day> Tuesday, June 6, 2017, at 1:00 PM, in Room 154 of the Capitol Annex. Senator Ernie Harris, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Ernie Harris, Co-Chair; Representative Marie Rader, Co-Chair; Senators Joe Bowen, Jared Carpenter, C.B. Embry Jr., Jimmy Higdon, Paul Hornback, Gerald A. Neal, Albert Robinson, Brandon Smith, Johnny Ray Turner, and Mike Wilson; Representatives Lynn Bechler, Tim Couch, Ken Fleming, Chris Fugate, Al Gentry, David Hale, Dennis Horlander, Kenny Imes, Dan Johnson, James Kay, Donna Mayfield, Suzanne Miles, Charles Miller, Robby Mills, Tim Moore, Rick Rand, Steve Riggs, John Sims Jr, Jim Stewart III, and Walker Thomas.
Guests: Rick Taylor; Deputy Commissioner, Department of Vehicle Regulation, KYTC; Matt Cole, Director of Driver’s License, KYTC; Brian Beaven, Director, Motor Carriers; Stephanie Williams, Director, Motor Vehicle Licensing; Mike Miller, Assistant Director, Customer Services, KYTC, Patty Dunaway, State Highway Engineer, KYTC, Paul Looney, Deputy State Highway Engineer, KYTC, and John Moore, Director of Planning, KYTC.
LRC Staff: John Snyder, Brandon White, Dana Fugazzi, and Christina Williams
Implementation of Legislation from the 2017 Session
Rick Taylor, Deputy Commissioner, Department of Vehicle Regulation, Kentucky Transportation Cabinet, (KYTC) updated the Committee on the implementation of 14 key pieces of legislation from the 2017 Session. Joining Mr. Taylor for an update on HB 192 and HB 410 was Matt Cole, Director, Division of Driver Licensing. Director Cole stated that HB 192 encompasses how a foster child may be able to proceed with getting a license or an ID. He stated that a hurdle that was once an issue was getting a court order that would make the foster parents fiscally responsible, adding that HB 192 will open up two different paths to help with this process. One path will consist of a foster child being evaluated with a nine page form through the Cabinet for Health and Family Services (CHFS) to ensure eligibility to further pursue the process. After that point, there will be a letter issued that the foster parent will fill out in conjunction with the parent/guardian form, which will allow a child to proceed with the process of obtaining their licenses. The second path, currently still being constructed, involves CHFS getting an insurance policy so a child who is in the custody of the state but not under a foster parent, can legally sign for themselves and be protected under that insurance policy. The cabinet is currently developing an RFP to obtain this coverage. Until that path becomes viable, the foster parent form path will be the only option available.
In response to a question asked my Chairman Harris, Director Cole stated that the nine page document has been constructed by CHFS, and KYTC has given feedback on the document. Once it is complete KYTC will be notified. The letter that is issued has also been a collaborative effort between both cabinets.
Mr. Taylor gave an update on HB 410 stating that KYTC recently received a response from Department of Homeland Security, which issued a grace period to all states that are under an extension set to expire June 4, 2017 in order to continue to review extension requests. The grace period lasts until July 10, 2017. The feedback has been positive and the cabinet does not anticipate any issues. Circuit Court Clerks continue to be front line actors, communicating with citizens on the issue, and KYTC has continued to meet with them as the process has continued. The cabinet has also met with stakeholders such as all of the airports in Kentucky that have commercial flights, TSA, the Social Security Administration, Fort Knox and Fort Campbell, Kentucky State Police, and the Kentucky Board of Elections. All of the stakeholders have been given an overview of the legislation and communication has been established for the continuation of the process.
Mr. Taylor stated the next deadline in the process is July 10, 2017, in which the grace period ends. The Department for Homeland Security ensures that the cabinet will receive feedback from them on the status of the extension request. He added the cabinet has developed an RFP work team; the deadline to issue the RFP is September 1, 2017. The cabinet has a goal to select a provider by January 1, 2018, which will give the provider 12 to 15 months to roll out and fully implement the program. Mr. Taylor stated the last deadline that has been set is to gather information on state to state verification which will tackle after the new system is rolled out. He added that the next deadline for TSA and air travel is January 22, 2018. If there is an extension, there is no change of process, and Kentucky citizens will be able to use their Kentucky Driver’s licenses as they do currently.
In response to a question asked by Senator Embry, a citizen who wishes to fly commercially within the next several months will be able to use their current Kentucky Driver’s licenses to do so, as the first deadline does not occur until January, 2018. At that time Kentucky licenses and ID cards may be used if the state receives the expected extension.
In response to a question asked by Representative Bechler concerning citizens who have recently obtained their driver’s license, Director Cole stated there would be a prorated fee in place for those who wish to later receive a REAL ID.
Brian Beaven, Director, Division of Motor Carriers joined Mr. Taylor for update on HB 174, HB 184, and HB 265. Mr. Taylor stated for both HB 174 and HB 265, there is no action needed by KYTC other than to have communication with commercial vehicle enforcement to inform them of the changes in weight tolerance and the definition of non-divisible loads for state maintained routes from an 8 hour dismount and disassemble to a 4 hour dismount and disassemble, which has been done. Mr. Beaven updated the Committee on HB 184, the metal commodity permit bill. He stated the permit will be a benefit to the growing aluminum and steel industries in Kentucky. The cabinet is on target for a July 1, 2017 roll out of the permit. It will be available online via the Drive.Ky.Gov website. A map is also in the process of being developed of approved routes for the implementation of this legislation.
Senator Bowen, who stated he was in full support of HB 184, raised awareness on the possible need to address other commodities, such as the transportation of wood products, having similar permits in the future.
Mr. Taylor and Stephanie Williams, Director, Division of Motor Vehicle Licensing, testified on several key legislation affecting the division. Mr. Taylor stated HB 27 is a speed title bill, which moves the timeframe for review of a title from 24 hours to 48, giving staff adequate time to review those title applications before they are approved. House Bill 163 involving salvage titles for insurance companies has been put into place with no foreseen issues. House Bill 270 involves the process that allows manufactured homes that have been converted to real property to receive a title by filing an affidavit of severance with the County Clerk. The creation of the affidavit of severance is the key piece that is needed for the implementation of this legislation. The County Clerk Association is creating the document. House Bill 350 changes the eligibility requirements to obtain a Veteran license plate for National Guard and Reserve members from two years to 180 days of active duty time service. No issue has been anticipated on this legislation.
House Bill 404 allows golf carts and low speed utility vehicles to make commercial parcel deliveries. Mr. Taylor stated the cabinet has been tasked with titling and registering such vehicles and making sure that they have commercial insurance on file, which will require some programming efforts by KYTC. The cabinet has been working on the programs needed, but the programs have not been completed. They are expected to be completed by mid-September 2017. A commercial low speed vehicle license plate will then be issued. This should be an acceptable timeframe because delivery services estimate that peak usage from these vehicles will occur during the Christmas season.
Senate Bill 73 will allow for the titling and registration of autocycles as motorcycles. The cabinet is creating a new category for statistical and tracking purposes in the state registration system. They have also contacted the Kentucky State Police to discuss updating of accident report forms to add autocycles as a category or the possibility of marking autocycles in the other category. The cabinet anticipates being ready to register and title autocycles beginning July 1, 2017.
Senate Bill 122 involves allowing sons and daughters of veterans to obtain a Gold Star license plate. The effective date for this legislation will January 1, 2018. No issues are anticipated for the rollout of SB 122.
Senate Bill 176 allowed for the titling and registration of high mobility multipurpose military vehicles (HMMMVs). The cabinet has gathered and reviewed inspection forms from other states, as well as worked with other military surplus owners to get their feedback, in order to move forward with this legislation. The cabinet will be ready to title and register these vehicles by July 1, 2017. He added KYTC will continue to work towards developing a regulation that needs to be filed. Several issues that need to be placed in the regulation have already been identified.
Senate Bill 189 involves placing a deaf or hard of hearing indicator in the AVIS system to notify law enforcement when someone is stopped that the person operating that motor vehicle may be deaf or hard of hearing. That cabinet is currently working on the system to get allow for the implementation of SB 189, which the anticipated timeframe is August, 2017.
Representative Moore inquired about homeschooled children who have reached 16 years of age that are told in order to obtain a license they must first get proof of academic performance from a local school board, which has no knowledge of their academic performance. Matt Cole stated that is addressed on a daily basis with the no pass, no drive stipulation. He stated all student drivers are required to meet that eligibility and currently the gap is being bridged between homeschooled, private, and publicly schooled children.
Mike Miller, Assistant Director, Customer Services Division, addressed KYTC’s communication efforts concerning the implementation of new legislation. Mr. Miller stated there are three different approaches to informing the traveling public about new legislation. The Department’s frontline support call center assists customers, businesses, clerks, and other agencies. Agents at the call center use scripted knowledge articles (KAs) to provide approved information to the public. The KAs reflect new or revised Department of Vehicle Regulation related laws and regulations. The website Drive.ky.gov is also a tool that is utilized. The website hits have increased 44 percent since its go-live date with over 288,000 customers helped last month alone. The website has been the best source for informing and educating the public. Social media platforms such as Facebook and Twitter are also utilized, with more social media platforms being launched.
In response to a question asked by Representative Fleming concerning the plan of action to address Governor Bevin’s request for a 1 percent cut (approximately $113 million), Mr. Taylor stated the Department for Vehicle Regulation is always looking for ways to save money, and that effort will continue. Representative Fleming also requested information for a five year trend of what type of vehicles have been registered.
In response to a question asked by Representative Miles, Mr. Miller stated there are links available on Drive.ky.gov to each division, and within each division, there are different menus where customers can look up specific information they are interested in such as truck weight information.
Chairman Harris congratulated and thanked the cabinet, both previous and current administrations, for its thorough work and excellent professionalism.
Update on the status of the PAUSE 50 initiative
Patty Dunaway, State Highway Engineer, KYTC, and Paul Looney, Deputy State Highway Engineer, KYTC updated the Committee on the status of the PAUSE 50 initiative which was put in place to help shore up the road fund following the loss of the 6.5 cents on the motor fuels tax, as well as spending on projects over the previous few years. Ms. Dunaway stated KYTC had planned to allot approximately $50 million of state funds for projects for all phases, including design, right-of-way, utility, and construction, for the second year in the biennium (FY 18.) Currently, the cash balance of the cabinet will allow for that $50 million allotment. The road fund balance has also been positive, therefore more than the $50 million may be able to be invested towards projects. The amount of that additional investment is unsure due to major payments that still need to be made, but the cabinet plans to evaluate those balances month to month. Ms. Dunaway stated there is not yet a list of projects that will be coming out in the letting in July, or projects that will enter the design, and continuing in the utility and right-of-way phases. She added in the near future KYTC plans to place projects on the website that will include what will be in the letting in July. The cabinet will continue to communicate with each district to discuss which projects can be moved forward into the design, utility, and right-of-way phases. Chairman Harris reiterated that what the cabinet’s purpose is with the PAUSE 50 plan is to protect cash flow. He added August and September are two critical months for large payments, therefore that tends to dictate what is being done within PAUSE 50.
Strategic Highway Investment Formula for Tomorrow (SHIFT)
Ms. Dunaway stated that for many years, Kentucky’s highway plan has been overpromised. There are currently more than 1,400 projects in the highway plan. Of those 1,400, only half are even partially funded, and they are funded mostly with federal dollars. This results in an undermining of public confidence due to not being able to count on projects that are in the plan. She added that state projects are vastly exceeded funding. More than 90 percent of the state-funded projects in the current highway plan don’t have state dollars to pay for them. The current state funding in the current highway plan has $7.165 billion listed projects, with anticipated funds available of only $690 million. Therefore, the implementation of a plan such as SHIFT is needed.
Ms. Dunaway stated the goal in implementing SHIFT is to embrace a data-driven approach to guide transportation spending, establish clear priorities, invite input at both the district and local level, provide transparency, deliver a reliable and dependable plan for businesses and citizens, and to create confidence for future federal and state infrastructure investments. The top priorities in implementing SHIFT are to improve safety, preserve existing infrastructure, reduce congestion, fuel economic growth, and spend tax dollars wisely- benefits versus cost.
In considering the first factor of safety, the cabinet plans to measure this by how many crashes and the frequency of crashes that there are on roadways, as well as how the roadway design impacts the number and frequency of crashes. When considering congestion, KYTC will be observing how many vehicles are on the road daily, and how that volume impacts service levels. In considering economic growth, potential job growth and the daily traffic volume, as well as daily freight volume will be considered. In making sure tax dollars are spent wisely, formula measurements that are considered are how much travel time could be saved, what the financial value of time savings could be, how much could be saved by reducing crashes, and what the project costs would be. Asset management is also another factor to be considered, which includes knowing what pavement repair and replacement costs would be, and what the condition of bridges and overpasses are.
The proposed statewide funding formula of five components are weighted as follows: improve safety 25 percent, reduce congestion 20 percent, fuel economic growth 20 percent, spend tax dollars wisely 20 percent and preserve infrastructure 15 percent. The proposed regional funding formula has seven components, weighted as follows: improve safety 20 percent, reduce congestion 10 percent, fuel economic growth 15 percent, spend tax dollars wisely 15 percent, preserve infrastructure 10 percent, district priorities 15 percent, and local priorities 15 percent.
Mr. Looney informed the Committee of where KYTC is in the process of developing the highway plan. He stated KYTC first develops an initial project list and then each district and local leaders identify needed changes. The cabinet then calculates scores for statewide and regional projects. District and local leaders provide input on regional projects. The Kentucky Transportation Cabinet then develops a draft highway plan for the Governor. The Governor finalizes, and presents the plan to the General Assembly. The final step is when the General Assembly and the Governor enact a highway plan. Mr. Looney added currently the cabinet is in the process of calculating scores for the statewide model. He added that, in the upcoming weeks, KYTC will be meeting with district offices to look at their projects. On June 22, the cabinet will release its preliminary recommendations for the statewide project prioritization, as well as the scores for the regional model. In early August, KYTC will be meeting with each region to look at the projects and how those projects can be delivered. In late August final regional project selections will be determined, with a target date of a September 1st deadline to have final recommendations for statewide and regional levels.
In response to a question asked by Senator Hornback concerning the makeup of regions and each region receiving equal funding when the North Region contains the three major metropolitan areas of the state, Ms. Dunaway responded that there are two funding categories both regional and statewide. The statewide funding would include the national highway system and those major routes such as interstates. She added the cabinet anticipates that the majority of the projects through the statewide funding allocation are going to be in the metropolitan areas. Ms. Dunaway added that after the statewide list of projects comes out, remaining funding will be divided equally amongst the regions, which would ensure that all districts and areas across the state would have an opportunity to receive funding.
In response to a question asked by Representative Miller, Ms. Dunaway reiterated that the progress of the PAUSE 50 projects will be revealed in July, 2017 and will be updated on a monthly basis as far as which projects are in which part of the process, once debt payments are made.
In response to a question asked by Senator Wilson, Ms. Dunaway stated all 1,200 sponsored projects that received local input on are the ones that will be evaluated using the SHIFT formula.
Representative Fleming expressed his appreciation to KYTC for the quality of work that it performs, especially through difficult processes such as PAUSE 50 and SHIFT. He also requested a historical view of data driven past allocations of dollars compared to current projects as well as future projects.
Senator Bowen stated his appreciation for the SHIFT plan. In clarification on funding of projects of the SHIFT plan, Mr. Looney stated the projects that can be federalized, will be federally funded. Senator Bowen reiterated Senator Hornback’s comments concerning federal dollars primarily being allocated to the economic engines of the state, such as northern Kentucky, Louisville, and Lexington, and that perhaps the federal money should be allocated to other areas of Kentucky that they too might become economic engines.
Representative Imes thanked KYTC for the efforts that have been put forth in developing the SHIFT plan. He asked for clarity in the reducing congestion and fueling economic growth areas. Mr. John Moore, Director of Planning, stated the cabinet is evaluating economic growth in two different ways. He stated for statewide projects the cabinet modeled North Carolina’s process, which used an economic model called Tetris, a commercially available software that uses the projects potential improvement of travel time and mobility throughout the region, as well as the census and economic indicators of the area to predict what the economic impact of that project will be. The regional process involves looking at the disadvantaged counties in the state and how a project would impact the predominate routes in those counties.
Mr. Moore stated cost/benefit analysis is evaluated as commercially available software is used. Factors that are evaluated include travel time savings and the anticipated improvement of mobility, as well as the safety benefit which involves the anticipated number of accidents that would be reduced by the project, and that is the benefit vs. overall cost.
Representative Bechler stated he appreciated that data driven work is being done to preserve the infrastructure. He argued with only a statewide infrastructure score of 15 percent and a local score of 10 percent for infrastructure funding, that safety might be improved if there were better bridges and roads. He encouraged the cabinet to look into the possibility of more money going towards infrastructure, primarily bridges. Ms. Dunaway reiterated that there are separate pots for maintenance funding. Statewide maintenance funding, known in budget language as “Z various” accounts, are used for unexpected needs. She added the cabinet has a responsibility to preserve the infrastructure and that it continues to focus on doing that.
In response to a question asked by Representative Miles, Ms. Dunaway stated if projects are being let into the construction phase, they would not be evaluated in the SHIFT category, but those that are in the design, right-of-way, or utility phases would need evaluation for the SHIFT category.
Chairman Harris stated that the gasoline tax dropped from approximately 32 cents per gallon to 26 cents per gallon, of which approximately 1.4 cents is for underground storage. He added that every penny in fuel tax results in approximately $30 million in revenue. Ms. Dunaway added that fuel tax revenues are shared at approximately a 50/50 split with cities, counties, and the rural secondary road program. Chairman Harris made the argument that in order to get us back to where we were prior to the tax rate falling, the gas tax should be raised approximately 5 to 7 cents per gallon. Chairman Harris also reminded the Committee of the upcoming loss of toll credits. Mr. Looney stated the state has been fortunate enough to use toll credits for the state match on federal projects in the past. Those toll credits will be running out in approximately 2020 to 2021. When that happens, more state dollars will need to be transferred to match in order to receive federal funding. Kentucky receives approximately $700 million in state funds. He stated starting in 2019, the state will be adding another $40 million in state funds to match and by 2020 and 2021 there will be an approximate match of $100 million to $150 million per year. Chairman Harris added that as a result of this, SP type projects will be shorted by approximately $100 million.
In response to an inquiry by Representative Fleming concerning different ways to possibly calculate the gas tax, Ms. Dunaway stated the cabinet would be happy to meet with him regarding different ways to do that.
Chairman Harris requested a monthly update on the PAUSE 50 plan as projects are being let. With no further business to come before the Committee, Chairman Harris adjourned the meeting at 2:25 P.M.