Legislature(2003 - 2004)

03/26/2004 08:03 AM House STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB 327-POWERS/DUTIES DOTPF                                                                                                    
[Contains brief mention of SB 371.]                                                                                             
Number 1312                                                                                                                     
CHAIR WEYHRAUCH  announced that  the next  order of  business was                                                               
HOUSE BILL NO. 327, "An Act  relating to the powers and duties of                                                               
the  Department  of  Transportation and  Public  Facilities;  and                                                               
repealing  a  requirement  that  public  facilities  comply  with                                                               
energy standards adopted by the  Department of Transportation and                                                               
Public Facilities."                                                                                                             
Number 1335                                                                                                                     
REPRESENTATIVE  HOLM  asked  if   the  committee  had  previously                                                               
adopted [CSHB 327(TRA)].                                                                                                        
Number 1350                                                                                                                     
CHAIR  WEYHRAUCH  responded,  "So  moved,  and  I'll  object  for                                                               
discussion purposes."                                                                                                           
REPRESENTATIVE HOLM,  speaking as  sponsor of  HB 327,  invited a                                                               
representative  from the  Department of  Transportation &  Public                                                               
Facilities to address the sectional analysis for the committee.                                                                 
Number 1372                                                                                                                     
JEFF   OTTESEN,  Director,   Division  of   Program  Development,                                                               
Department of Transportation & Public  Facilities, noted that Jim                                                               
Cantor  from the  Department of  Law is  available to  answer any                                                               
legal questions  that may arise.   He stated his belief  that the                                                               
proposed legislation  is important  to the state;  it potentially                                                               
could  ensure that  transportation projects  are accomplished  in                                                               
the coming years that otherwise might be subject to litigation.                                                                 
MR. OTTESEN,  speaking to the prepared  sectional analysis, noted                                                               
that  he  would not  address  Sections  3,  6,  and 7,  which  he                                                               
described as  housekeeping sections that  are "the first  look at                                                               
DOT&PF's power and duties in 30  years" and the changes that have                                                               
taken  place  in that  time.    He  stated that  the  substantive                                                               
portions of the bill have two purposes:   One is to ensure that a                                                               
specific  road  and  bridge  project  known  as  the  Iliamna  to                                                               
Nondalton is not subject to  endless planning and litigation.  He                                                               
told  the  committee  that  this project  has  been  started  and                                                               
stopped since the mid 1970s  and currently is under a preliminary                                                               
injunction,  because  the judge  found  that  the state  had  not                                                               
"followed  a particular  aspect  of the  planning  of statute  in                                                               
question."   The  second  [purpose],  he noted,  is  to make  the                                                               
planning  process  more   efficient  by  eliminating  duplication                                                               
between federal  and state  law and  to [remove]  provisions that                                                               
subject   other  projects   to  the   same  type   of  litigation                                                               
surrounding the Iliamna to Nondalton project.                                                                                   
MR. OTTESEN  stated that  Section 1 is  recommended to  DOT&PF by                                                               
the  Department of  Law.   Section 1,  particularly coupled  with                                                               
Section  8, ensures  that "the  law  will directly  apply to  the                                                               
subject   project  currently   before  the   superior  court   in                                                               
Anchorage."    Section 2,  he  noted,  applies to  the  statutory                                                               
requirement  that existed  when  [DOT&PF] was  the Department  of                                                               
Highways, prior  to the  merger of  "highways and  public works."                                                               
He said [Section 2] clarifies  that the requirement for a program                                                               
of projects  is a piece  of the  overall program of  projects now                                                               
required  at AS  44.42.050.   Furthermore,  it  would change  the                                                               
timing from annual to periodic.                                                                                                 
MR. OTTESEN  said Section 4  of the  bill applies to  the state's                                                               
requirement for  a multi-modal transportation plan  and clarifies                                                               
that the plan is comprised  of many different documents - perhaps                                                               
as many as  80 or 100.   He emphasized that this is  a key point.                                                               
He  offered examples.   Furthermore,  he noted  that [Section  4]                                                               
sets  the  standard for  planning  to  be the  federal  standard,                                                               
"primarily  at [23  U.S.C. 135]."   He  noted that  the committee                                                               
packet includes  "several documents  that help describe  just how                                                               
significant those steps  are."  He noted one of  the documents is                                                               
from  a  Power  Point  presentation  and  describes  the  federal                                                               
process.   He  offered his  understanding  that there  is also  a                                                               
chart that  describes the growth  in federal law that  applies to                                                               
transportation  planning.    He stated  that  the  transportation                                                               
planning  process is  not static,  but continues  to become  more                                                               
cumbersome and process-driven.                                                                                                  
Number 1555                                                                                                                     
REPRESENTATIVE HOLM  said Mr. Ottesen mentioned  something to him                                                               
yesterday that  he thought may  be of interest to  the committee:                                                               
He  recollected   that  Mr.  Ottesen  had   indicated  that  [the                                                               
Transportation Equity  Act: a Legacy  for Users]  (TEA-LU), which                                                               
was recently  passed through  the [House  Transportation Standing                                                               
Committee] was over 500 pages in length.                                                                                        
MR. OTTESEN replied  yes.  He explained that TEA-LU  is the House                                                               
version of  the reauthorization of the  transportation program at                                                               
the  federal  level  and  is  over 500  pages  in  length.    The                                                               
companion  bill  on   the  Senate  side,  known   as  [the  Safe,                                                               
Accountable, Flexible and Efficient  Transportation Equity Act of                                                               
2004] (SAFETEA) is  also over 500 pages in length.   He said that                                                               
he has read both bills from  cover to cover and there are "hardly                                                               
ten pages in them that [are] in common."                                                                                        
Number 1592                                                                                                                     
REPRESENTATIVE BERKOWITZ  asked how  the permissive "may"  in the                                                               
language  of state  statute intersects  with  the requirement  of                                                               
23 U.S.C. 135 and the supremacy  clause of the U.S. Constitution.                                                               
He said it seems to  him that [the legislature] cannot optionally                                                               
decided whether or not to follow federal law.                                                                                   
MR.   OTTESEN  replied   that  the   name   was  chosen   because                                                               
23 U.S.C. 135  applies   to  surface   transportation,  primarily                                                               
ferries, transit,  highways, and  trails.  It  does not  apply to                                                               
aviation, ports  and harbors, and  "some of the other  modes that                                                               
we're  also responsible  for."   He  stated, "We  could not  find                                                               
comparable sections  in federal law  for those modes  not covered                                                               
by 23 U.S.C. 135."  He explained as follows:                                                                                    
     Saying "shall"  would then lead to  the conclusion that                                                                    
     we  must apply  the surface  transportation (indisc.  -                                                                    
     paper  shuffling) programs  to modes  of transportation                                                                    
     which they  are not directed to  do.  The truth  is, if                                                                    
     this  entire section  was extinguished  from the  state                                                                    
     law, we would still have  to comply with 23 U.S.C. 135,                                                                    
     where it  is applicable;  it's simply a  requirement of                                                                    
     our federal funds.                                                                                                         
REPRESENTATIVE   BERKOWITZ    asked   what   would    happen   if                                                               
23 U.S.C. 135  is amended  subsequently.   He  asked, "Aren't  we                                                               
adopting, by reference, the possibility of future changes?"                                                                     
MR. OTTESEN answered that's true.   He said he thinks changes are                                                               
anticipated.    He  said,  "I  know  the  bill  that's  in  [U.S.                                                               
Congress] right  now will almost  undoubtedly have changes  in it                                                               
from the current  statutes at the federal level.   I'd have to go                                                               
back and  look at that.   I thought  we'd said, 'as  amended', or                                                               
'as modified'."                                                                                                                 
REPRESENTATIVE  BERKOWITZ  stated  for  the  record  that  he  is                                                               
uncomfortable with  "adopting by  reference" federal  statutes or                                                               
any other  statutes that are  subject to  change.  He  added, "It                                                               
seems to me it's an abrogation of our legislative power."                                                                       
MR. OTTESEN returned  to his coverage of  the sectional analysis.                                                               
Section 5 of  the bill, he noted, applies to  eliciting a project                                                               
slated to be  set up for design and construction.   He noted that                                                               
those  projects   are  called:    the   Statewide  Transportation                                                               
Improvement    Program    (STIP),   regarding    highways;    the                                                               
Transportation  Improvement   Program  for  urban   areas  (TIP),                                                               
regarding    programs   prepared    by   Metropolitan    Planning                                                               
Organizations  (MPOs)   in  Fairbanks  and  Anchorage;   and  the                                                               
Aviation  Improvement   Program  (AIP),  regarding  the   use  of                                                               
aviation funding.  He said  the department basically wants to set                                                               
up state law to comply with the several aspects of federal law.                                                                 
MR.  OTTESEN turned  to Section  8, which  he said  makes HB  467                                                               
retroactive to  the time  that AS  44.42 was  first adopted.   He                                                               
explained that this  section of statute was  adopted by executive                                                               
order, not  as a  matter of  a legislative Act.   He  stated that                                                               
Section 9 makes the effective date immediate.                                                                                   
Number 1743                                                                                                                     
MR. OTTESEN  pointed to a  write-up regarding why the  section on                                                               
cost and  benefits should not be  mandatory.  He returned  to the                                                               
Power Point presentation  and the examples in the  growth of laws                                                               
that have applied  to the federal side since  1977 "and earlier."                                                               
He   also   indicated  a   matrix   of   "the  requirement,   the                                                               
consultation, and public outreach  in the transportation planning                                                               
process."    He  noted  that  there  are  about  seven  or  eight                                                               
different  laws that  [the department]  has to  comply with,  and                                                               
virtually all  of them apply  to the STIP  process.  Many  of the                                                               
laws are new since 1977.   He concluded, "Pointing to the federal                                                               
process, or simply even extinguishing  this particular law, would                                                               
not leave  us without a  significant public process  and planning                                                               
requirement that we have to live with."                                                                                         
Number 1775                                                                                                                     
CHAIR  WEYHRAUCH stated  his understanding  that a  specific case                                                               
"brought [DOT&PF] here."  Notwithstanding  that, he observed that                                                               
HB  467 is  a broad  bill  that would  change a  lot of  DOT&PF's                                                               
policies.   He asked, "If we're  worried about the bridge  or the                                                               
road on that case, why don't we just deal with that?"                                                                           
MR. OTTESEN  explained that he  thinks the department  fears that                                                               
there are many other projects that are currently at risk.                                                                       
CHAIR WEYHRAUCH  indicated that people have  expressed concern to                                                               
him that "this is abrogating  the public involvement in a process                                                               
that  [DOT&PF]  is  engaged  in."    He  mentioned  cost  benefit                                                               
analysis and a broad array of projects.                                                                                         
MR.  OTTESEN, regarding  cost benefit  analysis, stated  that the                                                               
current  law  requires  the  department  to  do  a  cost  benefit                                                               
analysis  for  any  new  project  or  facility.    He  said,  "It                                                               
unfortunately leads to the law  of unintended consequences."  For                                                               
example, he  said last  week the  department considered  vans for                                                               
the elderly  and the disabled.   Every community has  a different                                                               
set of facts and costs and the  department will have to do a cost                                                               
benefit analysis in order to issue  the vans to "those 12 report-                                                               
paying communities."   He explained that [doing  the cost benefit                                                               
analysis]  will slow  down  the  process, as  well  as cost  more                                                               
money.  He  said the department knows that whether  there are 10,                                                               
100, or  1,000 seniors  in a  community, vans  will be  needed to                                                               
transport them  to various activities.   He said, "Those  are the                                                               
kinds  of projects  that  simply don't  lend  themselves to  cost                                                               
benefit analysis."  He continued as follows:                                                                                    
     Trails,  transit,  ferries  are never  undertaken  with                                                                    
     cost benefit analysis.   If we were  to compare ferries                                                                    
     to  roads -  where it's  possible to  build roads  - we                                                                    
     would almost inevitably come up  with a completion that                                                                    
     the road is  the right solution, or that  the ferry ...                                                                    
     in Southeast  is not  warranted because  a new  road in                                                                    
     another  part of  the state  would have  more benefits.                                                                    
     So, it's  a slippery slope  we walk on when  we require                                                                    
     cost benefit [analyses] in all cases.                                                                                      
Number 1862                                                                                                                     
REPRESENTATIVE BERKOWITZ  said he would  like to know  more about                                                               
the need for retrospectivity.                                                                                                   
MR. OTTESEN deferred to Mr. Cantor.                                                                                             
JAMES    CANTOR,   Transportation    Section,   Civil    Division                                                               
(Anchorage),  Department Of  Law,  told Representative  Berkowitz                                                               
that retrospectivity addresses a couple  of issues.  He continued                                                               
as follows:                                                                                                                     
     One is on the Iliamna  [to] Nondalton road, where costs                                                                    
     were  not ignored,  but there  was not  a cost  benefit                                                                    
     weighing,  because it's  a rural  project where  it may                                                                    
     not be susceptible  to that kind of analysis.   And the                                                                    
     court said, "No,  the state law says you  must use cost                                                                    
     benefit analysis."                                                                                                         
     Now, the  type of analysis  that was done on  that case                                                                    
     was through the federal process  - which ... is the 500                                                                    
     pages  of  ISTEA   [Intermodal  Surface  Transportation                                                                    
     Efficiency  Act  of  1991]  or  TEA-21  [Transportation                                                                    
     Equity Act for  the 21st Century - 1998],  and now TEA-                                                                    
     LU  - that  sends us  through an  inordinate amount  of                                                                    
     analysis  and  public  process, but  not  cost  benefit                                                                    
     analysis.  The cost benefit  analysis is left over from                                                                    
     this  executive order,  during  the [Governor]  Hammond                                                                    
     administration, that became  law.  And so,  part of the                                                                    
     retrospectivity  is  addressed   specifically  to  that                                                                    
     case, to  essentially overrule  the judge  and continue                                                                    
     proceeding with that project.                                                                                              
     The remainder of the  retrospectivity looks at projects                                                                    
     that   we  thought   were  appropriately   and  legally                                                                    
     conducted using  federal money over the  last 20 years,                                                                    
     or so, and  other ones that are still  in the pipeline.                                                                    
     It's kind  of similar to  what Mr. Ottesen  was saying,                                                                    
     [regarding]  the  types  of  incidences  that  are  not                                                                    
     susceptible to cost benefit analysis.                                                                                      
REPRESENTATIVE BERKOWITZ  asked Mr.  Cantor to review  the status                                                               
of "the case that necessitates these actions."                                                                                  
MR.  CANTOR offered  his understanding  that  the superior  court                                                               
issued  a  preliminary injunction  on  the  basis of  this  cross                                                               
benefit language,  and the  state has "gone  back to  comply with                                                               
the order to conduct that analysis."                                                                                            
Number 1968                                                                                                                     
JEFF PARKER, Attorney  at Law, informed the committee  that he is                                                               
representing the plaintiffs in Trout  Unlimited and Bob Gillam v.                                                             
ADOT&PF.  He  noted that the state has advised  the court "in its                                                             
papers" that it will complete its cost benefit analysis by July.                                                                
REPRESENTATIVE  BERKOWITZ  asked,  "Why  are we  jumping  in  the                                                               
middle of a court case?"                                                                                                        
MR. CANTOR  offered his understanding that  [DOT&PF] is concerned                                                               
that "this case could be litigated  forever."  He noted, "This is                                                               
the second  piece of litigation  on this  project - it  was first                                                               
litigated in  about 1996 or  1997."   He indicated that  there is                                                               
concern that  even the  department's attempts  to comply  will be                                                               
litigated.   He stated,  "The department  believes that  even its                                                               
attempts to  comply -  and it  hopes to comply  fully -  are ones                                                               
that  are  unnecessary to  the  planning  process, which  is  why                                                               
they've  backed  up and  taken  kind  of  a  broader view."    In                                                               
response to questions from Representative  Berkowitz, he said the                                                               
first case  was a federal  case and the  second case has  not yet                                                               
reached  the supreme  court.   He  said there  is  not an  appeal                                                               
pending,  because currently  the  case  is still  in  court.   He                                                               
proffered  that there  was a  preliminary  injunction motion  and                                                               
there  could  be  further proceedings,  "depending  on  the  next                                                               
REPRESENTATIVE BERKOWITZ asked how long  the second case has been                                                               
Number 2053                                                                                                                     
MR. PARKER  said the case  has been pending for  approximately 18                                                               
months, for  discovery and pretrial  practice.  In response  to a                                                               
follow-up question  from Representative Berkowitz, he  noted that                                                               
the motion  was issued  January 6, 2004,  about two  months after                                                               
argument.   He  announced  he  would like  to  fully address  the                                                               
question  of project  delays.    He noted  that  Mr. Ottesen  had                                                               
previously stated  that the  project has  been delayed  since the                                                               
1970s.   In fact, he  said, the department suspended  the project                                                               
in 1986 after  doing a cost benefit analysis  and concluding that                                                               
[the project] was not economically  justified.  He indicated that                                                               
the benefit cost ratio [from  that analysis] "worked out at 0.26"                                                               
and the  department judged  that it  is not  "normal" to  build a                                                               
project with  a benefit cost ratio  of less than one.   He noted,                                                               
"The  costs  were  in  excess  of $12  million  to  complete  the                                                               
project; the benefits were calculated at $3 million."                                                                           
MR. PARKER CONTINUED as follows:                                                                                                
     Now also, in response to  the large picture of what Mr.                                                                    
     Cantor  and Mr.  Ottesen just  said, if  you look  in a                                                                    
     regional  Southwest  transportation  plan,  you'll  see                                                                    
     that the  defendants, [DOT&PF], did  cost effectiveness                                                                    
     [analyses]  on  every  ... new  road  project  that  is                                                                    
     proposed  in that  plan, including  the Williams  Port,                                                                    
     West  side  Cook Inlet  to  ...  King Salmon  and  King                                                                    
     Salmon to the Chignik (ph).   And you can calculate and                                                                    
     see the cost effectiveness dollars right there.                                                                            
     What  caught  them  up  in  this  case  was  that  they                                                                    
     excluded  this  project  from that  cost  effectiveness                                                                    
     analysis.  And  if you read the court's  opinion with a                                                                    
     decision,  which I  think  you have  in  front of  you,                                                                    
     you'll see  that the court  says that  [the department]                                                                    
     did cost  effective [analyses] for every  other project                                                                    
     in  the Southwest  regional  transportation  plan.   It                                                                    
     similarly did  it for projects  - all new  facilities -                                                                    
     in  the Prince  William  Sound regional  transportation                                                                    
     plan   and    in   the   Southeast    Alaska   regional                                                                    
     transportation plan.   And Mr. Ottesen  can correct me,                                                                    
     but I  think it also  did them for  marine-improved new                                                                    
     facilities  and new  vessels, when  you  look at  those                                                                    
     So, the  information has been  put in front of  you for                                                                    
     many projects, and it is  an excellent basis upon which                                                                    
     to make decisions.   And what this bill is:   this bill                                                                    
     eliminates putting  that information  in front  of you.                                                                    
     And what caught [the department]  up in the [Iliamna to                                                                    
     Nondalton] case  is its affirmative decision  not to do                                                                    
     cost benefit  [analyses], and I  surmise it  so decided                                                                    
     because there  was such  a negative  determination made                                                                    
     in 1986  - that it  had a 0.26  and you never  build at                                                                    
     less than one.                                                                                                             
Number 2207                                                                                                                     
DEE ESSERT testified on behalf  of Sand Lake Community Council in                                                               
opposition  to amending  the state's  transportation statute,  AS                                                               
44.42.050,  which  would  eliminate  the  state's  obligation  to                                                               
review the  cost of improvements  to existing roads and  the cost                                                               
and benefits to new roads.   She explained the opposition was due                                                               
to    her   experience    with   Anchorage    Metropolitan   Area                                                               
Transportation  Solutions (AMATS),  the  local MPO.   She  stated                                                               
that the cost of AMATS  projects have escalated because engineers                                                               
and  project  managers  have  failed  to  consider  hidden  costs                                                               
[resulting from] soils, environmental impacts, and property                                                                     
MS. ESSERT continued as follows:                                                                                                
     Why is the  state seeking to eliminate  a key statutory                                                                    
     requirement at  state level  that would  control costs,                                                                    
     when it  has initiated policies  at the local  level to                                                                    
     address  costs?    The   cost  overruns  for  Anchorage                                                                    
     projects initiated a change  by state [DOT&PF], whereby                                                                    
     the  policy  committee  of AMATS  is  now  required  to                                                                    
     provide  quarterly obligation  reports.   As a  project                                                                    
     increases funding  for a phase  by more  than $500,000,                                                                    
     or  50 percent  of  the project  phase,  the city  must                                                                    
     approve the change.  At  the March 11 policy committee,                                                                    
     members were asked to  approve approximately $3 million                                                                    
     to cover  additional construction costs for  C Street -                                                                    
     phase three  - due  to extensive  peat deposits  in the                                                                    
     right-of-way.  If there had  been a better cost benefit                                                                    
     analysis  of  C Street,  would  the  initial design  or                                                                    
     right-of-way   have  changed   to  allow   for  greater                                                                    
     I  am also  among  many who  oppose  the coastal  trail                                                                    
     extension below the buffer in  the refuge.  The project                                                                    
     has risen from  $12 million to $37 million  as the cost                                                                    
     of the  environment and private property  is escalated.                                                                    
     The  [Draft Environmental  Impact Statement]  (DEIS) is                                                                    
     an  example of  a  politically  motivated document  and                                                                    
     does  not  reflect  accurate  billable  costs,  because                                                                    
     there   is   no   objective  cost   benefit   analysis.                                                                    
     Engineers and  attorneys who have considered  the legal                                                                    
     and construction  costs estimate  the cost in  the $60-                                                                    
     million to $80-million-range.                                                                                              
     House Bill  327 eliminates the public  claim that costs                                                                    
     and benefits  must be considered.   Projects  in remote                                                                    
     areas  are  subject to  greater  cost  overruns.   When                                                                    
     federal dollars  are declining and state  resources are                                                                    
     limited,  it  makes  no sense  to  eliminate  the  only                                                                    
     objective   criteria   applicable   to   transportation                                                                    
     planning.     With  the  new  administration   that  is                                                                    
     emphasizing   resource    development,   transportation                                                                    
     planning  in remote  areas must  be cost-effective  and                                                                    
     accountable.   Transportation projects  in metropolitan                                                                    
     areas  must emphasize  traffic flow,  air quality,  and                                                                    
     safety,  and serve  vehicular traffic,  public transit,                                                                    
     and  pedestrians;  it  must  not  be  based  on  Bush's                                                                    
     entrails exclusively.                                                                                                      
     The  state must  allocate  scarce  resources for  those                                                                    
     projects  that provide  the  greatest  benefit for  the                                                                    
     most reasonable  cost.   With appropriate  cost benefit                                                                    
     criteria,  a  change  in administration  won't  mean  a                                                                    
     bridge  to  nowhere  ....    In  a  time  of  declining                                                                    
     revenues,   the  state   must   retain  all   statutory                                                                    
     requirements  that preserve  an orderly  transportation                                                                    
     system  by subjecting  all subjects  to a  cost benefit                                                                    
     analysis.  I oppose HB 327 and its companion SB 371.                                                                       
Number 2345                                                                                                                     
CHAIR WEYHRAUCH asked  Ms. Essert if there is any  part of HB 327                                                               
that she does not oppose.                                                                                                       
MS. ESSERT  replied that  it is  a complex bill.   She  said that                                                               
when  she began  studying  the  bill, she  thought  it was  about                                                               
energy requirements,  but when she  got into it, she  became more                                                               
confused about  certain sections of  it.  She indicated  that she                                                               
would  [limit]  her   comments  [to  those  parts   of  the  bill                                                               
regarding] cost  benefit analysis.   In  response to  a follow-up                                                               
question from Chair Weyhrauch, she  clarified where the Sand Lake                                                               
Community Council area is.                                                                                                      
Number 2348                                                                                                                     
MARY  WHITMORE testified  on  behalf of  herself  to address  two                                                               
sections in  the bill regarding  the issues of cost  benefits and                                                               
retroactivity.   She stated her  belief that  HB 327 is  really a                                                               
"slap in  the face  to American tax  payers," because  it removes                                                               
the  economic  analysis,  [which   is  how]  projects  should  be                                                               
TAPE 04-47, SIDE B                                                                                                            
Number 2378                                                                                                                     
MS.  WHITMORE  opined  that   economic  competitive  analyses  of                                                               
projects  is really  a driving  force in  how projects  should be                                                               
done, and also "it's the way  our economy works."  She explained,                                                               
"You have  to look at  the competitive  basis of projects."   Ms.                                                               
Whitmore  said  HB 327  is  insulting  and detrimental  to  every                                                               
Alaskan, because  it means that  projects will not  be considered                                                               
for benefits and  costs to the community, but  will be influenced                                                               
by whim  and political clout.   She said she'd like  to know what                                                               
the justification is for this.                                                                                                  
MS. WHITMORE continued as follows:                                                                                              
     I find that  HB 327 is offensive, because  it raises my                                                                    
     suspicions of why  a bill would be  retroactive to 1977                                                                    
     - 27  years.  This  means that any person  who's raised                                                                    
     any objection  to a transportation  plan over  the last                                                                    
     27 years  is cut out  if the  basis of that  dispute is                                                                    
     based on cost.  There's  something very wrong with this                                                                    
     approach.   I think that  HB 327 gives the  green light                                                                    
     to any project.  No  matter how poorly conceived it is,                                                                    
     it could  go forward.   If it has political  backing or                                                                    
     clout, you never  have to look at the  measure [of] the                                                                    
     project, as  far as its  benefits to the  community and                                                                    
     how much it's going to cost.                                                                                               
MS.  WHITMORE  urged  the  committee  not to  pass  HB  327  but,                                                               
conversely, to bury it.                                                                                                         
Number 2302                                                                                                                     
BOB  DOLL  told  the  committee  that although  he  is  a  former                                                               
director  of the  Southeast region  of [DOT&PF]  and speaks  from                                                               
that viewpoint, he is testifying on  behalf of himself.  He asked                                                               
the committee to  withhold support from those portions  of HB 327                                                               
that  would delete  the cost  benefit analysis  in transportation                                                               
planning.  He continued reading his testimony as follows:                                                                       
     I  make this  request  with some  understanding of  the                                                                    
     dilemma you  face.  You're  being asked, in  this bill,                                                                    
     to endorse bad government.   You're being asked to lend                                                                    
     your support  to enshrining  the terms  "arbitrary" and                                                                    
     "capricious," not  as accusations to be  avoided but as                                                                    
     the standard  for government  decision-making.   I have                                                                    
     appeared   before  the   committee  only   recently  in                                                                    
     connection with  another such arbitrary  and capricious                                                                    
     decision,  and my  apprehension of  such events  is all                                                                    
     too clear.                                                                                                                 
     And what is it that the  bill seeks to avoid?  I cannot                                                                    
     imagine an  economist with an ounce  of imagination who                                                                    
     could not  make a positive cost  benefit conclusion for                                                                    
     a marginal  project, if  that were  his tasking.   Such                                                                    
     "taskings" are  accomplished routinely.  Only  with the                                                                    
     most worthless  proposals would  he fail,  and properly                                                                    
     The current statute does not  provide us with certainty                                                                    
     regarding the  value of  a project,  but it  does offer                                                                    
     some objective criteria for us  to use in examining how                                                                    
     our  tax  dollars  are  being spent.    And  given  the                                                                    
     general  deference  of  courts  to  executive  agencies                                                                    
     which have complied with their  own regulations and the                                                                    
     statutes  in effect  at the  time, it  is difficult  to                                                                    
     understand   why  this   requirement  is   so  onerous.                                                                    
     Federal dollars pay for the  work and the time required                                                                    
     is  measured  in months.    In  the timeline  for  most                                                                    
     transportation projects  that's inconsequential.   As a                                                                    
     transportation professional, I would  not want to spend                                                                    
     my time, or that of my  staff, on a project which could                                                                    
     not meet this  simple test.  As a citizen,  I hope that                                                                    
     public money will  not be thus squandered  on a project                                                                    
     which could not meet that test.                                                                                            
Number 2226                                                                                                                     
MR. DOLL pointed out that federal dollars pay for "this whole                                                                   
thing"; there is no imposition on the state for it.  He                                                                         
continued reading his testimony as follows:                                                                                     
     The  dilemma that  I mentioned  earlier arises  because                                                                    
     there  are  transportation   projects  currently  under                                                                    
     consideration  that  may not  meet  this  test.   Those                                                                    
     projects  represent some  of the  most cherished  hopes                                                                    
     and  dreams of  the  residents of  the locations  where                                                                    
     they're  contemplated.    If their  ambitions  are  not                                                                    
     realized,   they   would   be,  to   say   the   least,                                                                    
     I  would suggest  to  you that  you  could measure  the                                                                    
     value  of  the  project  inversely to  the  protest  at                                                                    
     having it  examined closely.   In  fact, if  a positive                                                                    
     cost  benefit  ratio  is as  easily  achieved  as  I've                                                                    
     suggested to you, you may  well wonder why anyone would                                                                    
     object to  the requirement, particularly since  it does                                                                    
     not require  that the project  be positive in  its cost                                                                    
     benefit  analysis.     It   only  requires   that  that                                                                    
     information be produced so that  the public and you, as                                                                    
     members of  the legislature,  can see it  as well.   HB
     327 endorses bad government and  ... should not receive                                                                    
     the committee's approval.                                                                                                  
Number 2150                                                                                                                     
CHAIR  WEYHRAUCH asked  Mr.  Doll if  he  conducted cost  benefit                                                               
analyses for projects when he was director.                                                                                     
MR. DOLL answered,  "Yes, Mr. Chairman, with  the exceptions that                                                               
Mr.  Ottesen has  mentioned, we  did, routinely.   ...  I believe                                                               
that whatever difficulty  [DOT&PF] may have with  this, they have                                                               
ample  opportunity to  overcome it."   He  suggested that  if the                                                               
department  were to  encounter a  project that  obviously doesn't                                                               
require  a  cross  benefit  analysis  -  such  as  Mr.  Ottesen's                                                               
previously stated example  of "the transit case" - it  would be a                                                               
simple  matter to  provide a  two-page statement  explaining that                                                               
the analysis is unnecessary.  He  surmised that is all that would                                                               
be required.                                                                                                                    
Number 2128                                                                                                                     
CHAIR  WEYHRAUCH observed  that  although part  of the  Southeast                                                               
transportation plan indicated that it  would be less expensive to                                                               
have a road than a ferry,  "we didn't move forward too quickly on                                                               
the road north from Juneau."                                                                                                    
MR. DOLL responded that writing  a cost benefit analysis for that                                                               
project would be a  task.  He stated that he  is not certain that                                                               
anyone  should ever  do  a cost  benefit  analysis that  compares                                                               
water transportation  with land  transportation, because  the two                                                               
are  so   different  that  the   conclusions  reached   would  be                                                               
questionable.  He  added, "But I'm sure we could  do it, and have                                                               
done it."                                                                                                                       
Number 2090                                                                                                                     
REPRESENTATIVE HOLM asked Mr. Doll  why he didn't testify on this                                                               
issue before the House Transportation Standing Committee.                                                                       
MR. DOLL responded that he  had been unaware of [that committee's                                                               
Number 2074                                                                                                                     
REPRESENTATIVE  SEATON told  Mr.  Ottesen that  the second  point                                                               
made in the  handout from Mr. Parker [available  in the committee                                                               
packet]  states  that  passage  of  HB  327  would  increase  the                                                               
likelihood  that the  state  will  have to  refund  money to  the                                                               
federal government.  He asked Mr.  Ottesen if he is familiar with                                                               
that argument and would address it.                                                                                             
Number 2053                                                                                                                     
MR. OTTESEN  replied, "I don't  know the reason he's  making that                                                               
statement, so no, I don't ... see the connection."                                                                              
REPRESENTATIVE  SEATON suggested  that Mr.  Ottesen could  review                                                               
the handout  from Mr.  Parker and  respond to  the question  at a                                                               
later date.                                                                                                                     
Number 2030                                                                                                                     
CHAIR WEYHRAUCH,  in response to  a question  from Representative                                                               
Berkowitz,  stated his  intention for  the  bill is  to not  take                                                               
action on  HB 327  until the  next time  the committee  hears the                                                               
bill.   He  revealed  that  a lot  of  people  have voiced  their                                                               
concerns about the bill with him.   He said he wants to air those                                                               
concerns  and  "talk  about  how  sensitive  the  sponsor  is  to                                                               
amending it."                                                                                                                   
Number 2006                                                                                                                     
REPRESENTATIVE BERKOWITZ  noted that  he has amendments  in mind,                                                               
as well.   He stated his intent is to  basically strip [the bill]                                                               
down to "just the housekeeping."                                                                                                
[HB 327 was heard and held.]                                                                                                    

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