Segment 1 Of 6     Next Hearing Segment(2)

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PLEASE NOTE: The following transcript is a portion of the official hearing record of the Committee on Transportation and Infrastructure. Additional material pertinent to this transcript may be found on the web site of the Committee at []. Complete hearing records are available for review at the Committee offices and also may be purchased at the U.S. Government Printing Office.



House of Representatives,

Subcommittee on Surface Transportation,

Committee on Transportation and Infrastructure,

Washington, DC.

    The subcommittee met, pursuant to call, at 10:50 a.m., in Room 2167, Rayburn House Office Building, Hon. Thomas E. Petri (chairman of the subcommittee) presiding.

    Mr. PETRI. The subcommittee will come to order.

    We are meeting today to begin a series of hearings on the approval of the National Highway System and other issues relating to our highway and transit programs.
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    The specific focus of our hearing this morning is to look at mandates, burdens and inefficiencies in our Federal highway and transit programs. This meeting continues the committee-wide review of our programs which began last week when several of our Nation's governors testified before the full committee.

    We want to take this opportunity to see if there are some common-sense changes that can be made to improve our programs and get more results from the investment of Federal highway and transit dollars.

    I have asked our witnesses to identify areas where programs can be made more efficient through revision or repeal of burdensome or unnecessary regulations, where greater flexibility can be given to States and local agencies, where private sector involvement can be expanded, and where inappropriate or burdensome Federal mandates have been imposed on States and local agencies. In our area of jurisdiction, we don't have many of the classic unfunded mandates since our programs are primarily grant programs, and most of the mandates we impose are made as a condition of accepting the Federal grant. But I do know that we do have plenty of mandates—ranging from maximum speed limits and the use of crumb rubber to controlling junk yards and clean air compliance. In fact, there are 19 specific congressional mandates in our highway program which result in the loss of Federal assistance if the Federal will is not followed by the States.

    I hope that the effort we begin today will be viewed as a positive one and not as an attack on any particular interest or against a particular cause. But I think we should take advantage of this opportunity to look with as open a mind as possible on ways to improve our programs.
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    I am particularly pleased with the witnesses who will kick off this series of hearings, the people who are charged with actually implementing on a State and local level the laws that we write here in Washington.

    This morning we will hear testimony from various States' secretaries of transportation and from a cross-section of transit agencies from across the country. At a later date, we will hear from various other interests on a wide variety of issues.

    So I would like to welcome our witnesses here today. It is an exciting and we hope an historic day, kicking off a major national initiative. I know that your testimony will be of great help to the subcommittee.

    Now I would like to recognize my colleague, Congressman Nick Rahall, for any statement he would like to make at this time.

    Mr. RAHALL. Thank you very much, Mr. Chairman.

    Mr. Chairman, as we all know, this was to have been the first in a series of hearings on legislation to approve the National Highway System. Instead, we find ourselves today spending a great deal of our time listening to a parade of witnesses, who actually benefit from billions of dollars of Federal funding, tell us, in what we have seen so far from their prepared testimony, about so-called regulatory burdens. I guess that is all fine and well; the purpose of our hearings is to hear from those affected by the policies that we enact.

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    I did just catch a sentence in your opening statement, Mr. Chairman, with which I fully agree and that is, I hope today doesn't turn into a day of bashing certain sectors or certain interests, but rather a day in which we can learn from our witnesses how the policies we have passed are affecting them. Perhaps, just perhaps we might hear something new that we did not cover in the last session of Congress' list of some 276 witnesses that we heard on the proposed NHS system. That alone—all of the witnesses we heard in the previous year's hearings on the implementation of ISTEA.

    I know that you are operating under some type of mandate perhaps, or directive of some sort, to root out all of the unfunded mandates that have been passed by Congress, the regulatory burdens and the inefficiencies that are supposedly plaguing our highway and transit programs. But when all is said and done, I certainly hope that these activities do not delay us in the implementation of the National Highway System designation bill. As all of us know, if we fail in that endeavor, then approximately $6.6 billion worth of interstate maintenance and NHS funding will cease to flow to the States.

    So if we want to talk about unfunded mandates, I would submit that if that event happens, that will be the granddaddy of all unfunded mandates, because we will be placing the States in a position of having to maintain the interstate highway system without the benefit of Federal funding.

    It is a fact that last year the NHS bill passed the House in a bipartisan fashion to the tune of 412 to 12. I hope that we can devise such an equally noncontroversial bill that does get the job done of designating the NHS.

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    So Mr. Chairman, I look forward to working with you, and with that task completed, I would hope we could then move on to address other concerns of the highway and transit program in the reauthorization process.

    Mr. PETRI. I yield to the Chairman for any opening comments.

    Mr. SHUSTER. Thank you very much, Mr. Chairman.

    Mr. Chairman, based on my emphasis on our being punctual at these subcommittee and committee hearings, I have been quite properly admonished for our press conference running over in time. So with that in mind, hoping to make amends, I will yield back the balance of my time.

    Mr. PETRI. Thank you very much.

    Norm is not here, so are there other opening statements?

    If not, we will proceed right to the witnesses, and our colleague, Nathan Deal, would like to introduce his Secretary of Transportation.

    Mr. DEAL. Thank you, Mr. Chairman. I appreciate this opportunity to introduce to our committee the Honorable Wayne Shackelford, who is the Commissioner of the Department of Transportation of the State of Georgia.

    My personal relationship with him goes back some 25 years when he was an extension agent in Gwinnett County, Georgia, and then later became the executive assistant to that Board of Commissioners for a period of 9 years. And as many of you know, that is one of the fastest, in fact, was one of the ten fastest-growing counties in the Nation.
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    He had that position and then moved on a little over 3 years ago to be appointed as the Commissioner of the Department of Transportation of the State of Georgia, and now is serving as President of the national organization, AASHTO.

    It is my privilege to introduce to the committee my good friend, Commissioner Wayne Shackelford.

    Mr. PETRI. We have other Members who would like to introduce the rest of the panel.

    Peter Blute.

    Mr. BLUTE. Thank you very much, Mr. Chairman. I am very honored to welcome to the committee our Commonwealth of Massachusetts, State Secretary of Transportation James Kerasiotes. He has done a tremendous job at the State Transportation Department, turning it into a mission-driven results-oriented, fiscally responsible arm of the State government. He currently is presiding over the Nation's largest public works project and has successfully moved that project from the drawing board to construction, a project which involves more than 300 companies and 9,000 people.

    We think he has done a tremendous job and we welcome him to the committee.

    Thank you, Mr. Chairman.

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    Mr. PETRI. Mr. Kim.

    Mr. KIM. Thank you, Mr. Chairman. I would like to welcome Mr. Andrew Poat, representing the State of California. He is the Chief Deputy Director of Caltrans.

    I would like to talk about this Caltrans particularly, because some of you may not know, but we had earthquake damage on the Santa Monica Freeway a couple of years ago and Caltrans—under Caltrans' leadership, we completed the project—it is a complicated project—ahead of schedule, below budget, something that we never heard of in this town.

    I am so proud that we have Mr. Poat here today.

    Also I would like to mention that we had an excellent press interview this morning about this bill separating trust fund money off the budget. I am glad that our Chairman finally took a leadership role in pushing this, which is almost identical to my bill that I introduced some time ago, House Resolution 564; and perhaps we will get together and fold it into one bill.

    I am so glad that our Chairman finally took a leadership role; I am very proud of that. Thank you again.

    And welcome, Mr. Poat, and I am—it is shocking to you from sunny California to below zero temperature.

    Thank you.
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    Mr. PETRI. Thank you.

    I would also like to note the presence and welcome our Wisconsin Secretary of Transportation, Mr. Chuck Thompson, who is a leader in the business community and also has been a leader in the Thompson administration in Wisconsin, one that has done an awful lot for our State over the past few years. Welcome.


    Mr. PETRI. Gentlemen, would you proceed as you wish.

    Mr. SHACKELFORD. Thank you, Mr. Chairman.

    Mr. Chairman, Members of the committee, I am delighted to be here on behalf of my own State of Georgia and on behalf of AASHTO to testify at this hearing on legislation that begins the process to move for the approval of the National Highway System today. Not only are my three colleagues representative of the 52 member departments, our AASHTO Executive Director, Francis B. Frank, of course, is here, and I am delighted to welcome him. I also would like to ask that my prepared remarks be entered into the record.
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    Mr. Chairman, my comments will focus on AASHTO's policies and positions and some observations from my experience with the Georgia Department of Transportation.

    In November, AASHTO undertook a survey of our member departments on mandates that impinged Federal surface transportation programs. We provided the subcommittee a report on the survey reports. That AASHTO survey concentrated on 19 FHWA mandates and one FTA mandate. We found that relief from 14 of the 20 mandates is a high priority with our member departments.

    Of these 14, the AASHTO members cited five mandates that are particularly important for review: sanctions associated with the Clean Air Act amendment's requirement for State implementation plans; the transportation conformity requirements of the Clean Air Act amendments; the requirements of Section 1038 of ISTEA on using crumb rubber and hot-mix asphalt and the related sanctions; the management systems required by the ISTEA, and in particular, the burdens of excessive data-gathering and analysis they impose; and enforcement of the national maximum speed limit and related sanctions.

    My written testimony and the AASHTO report provide more information about our findings on these 20 mandates and some other issues.

    We now have under way within AASHTO broader effort to obtain information from member department positions on a number of other mandates, several of which are commented on in my written testimony. They include,

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    The Davis–Bacon Act and Transit Section 13(c): AASHTO believes that the time for review of the need for both of these laws has come. They cost substantial effort and funds that could be better spent on meeting our transportation needs, and seem to offer little, if any, real benefit to anyone other than the lawyers who handle the paperwork.

    Metric conversion: Most member departments in AASHTO have completed or are near completing their ''internal'' conversion to metric units for engineering, as required by the Congress. There is much concern over the possible need to spend millions on changing our highway signs to metric, especially when most Americans are not familiar with the system.

    Alternative design: The FHWA requirements for alternative designs on major structures at an average cost of some $500,000 per structure is viewed as a waste by many of our member departments.

    Americans with Disability Act: While ADA has a worthy purpose that we support, it is an outstanding example of a high-cost, unfunded Federal mandate.

    The Clean Water laws: Again, these have an important purpose, but they impose large unfunded mandates on transportation programs.

    The Environmental Law Enforcement Procedures: Our member departments are faced with a host of environmental laws administered by a large number of Federal agencies who frequently collide with each other. In my written testimony, I relate two current events, projects in New Hampshire that clearly define that collision. Mr. Chairman, we must find a way to stop such tail-chasing and get on with our transportation mission.
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    My testimony only scratches the surface. The regulations often represent overkill. My colleagues commend to you addressing those, and I finish by saying, clearly the highest priority of AASHTO is passage of the National Highway System.

    I thank you for the opportunity to be here.

    Mr. PETRI. Thank you very much. Your full statement will be in the record, and we appreciate your summarizing it so well for us.

    Secretary Thompson.

    Mr. THOMPSON. Good morning, Mr. Chairman, Members of the committee. I truly appreciate the opportunity for the invitation to address your committee this morning. Wisconsin Governor Thompson and I share with the 104th Congress the issue of Federal mandates.

    Today, we see the Federal role is reflected in prescriptive, process-oriented, burdensome requirements that are part and parcel of most Federal programs. Previous Congresses have imposed unnecessary controls and mandates on States, assuming States do not have the ability to achieve those goals. And then States have been further burdened with bureaucratic interpretations that far exceed what most Members of Congress thought they were voting for.

    Today, I would like to focus on a few of the Federal mandates that are costly and damaging to the States' ability to provide quality transportation. What we need is some flexibility, as an example, in the Clean Air Act.
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    Kewaunee, Wisconsin is a small rural town of 3,000 people, a great distance from the industrial areas of Milwaukee and Green Bay. Yet the Federal Clean Air Act says Kewaunee causes the same degree of pollution as Pittsburgh and Dallas. Science shows that most of Kewaunee's ozone pollution comes from other parts of the country. In fact, Kewaunee could probably have to shut down completely its industry and its transportation and still not comply.

    Another example is Milwaukee. Businesses have to spend $50 million to implement the Employee Commute Options provision of the Clean Air Act, yet study after study shows that cleaner cars and fuels, not getting people out of their cars and into transit, is the answer for clean air. But the U.S. EPA continues to send mixed messages on whether ECO is mandatory or voluntary; and businesses are confused and irritated with implementing a program for which the costs far outweigh the benefits.

    The Clean Water Act: Wisconsin has a nonpoint pollution program that leads the Nation in protecting water quality. We work hard to protect that record. Our nonpoint source program has been in place for years, providing targeted and cost-effective protection to waters at risk.

    But now some people are looking to expand the very rigid coastal zone requirements to all waters, all highway projects and all municipalities, whether or not their water is at risk. That would cost Wisconsin tens of millions of dollars each year with little benefit.

    The Endangered Species Act: We all agree that we need to protect our endangered species, but Federal restrictions go way too far with very little benefit. An example is Highway 53, which runs from Superior–Duluth down to our interstate system connecting northwestern Wisconsin. We are to spend $1 billion and delay the project for 2 years to study a timber wolf crossing. During that time, people continued to lose their lives and businesses continued to be isolated from their markets. After all that, the study proved that very few wolves would ever cross the highway. Beyond the billion-dollar study, we had to provide a quarter-mile-wide median and a quarter mile on each side of the highway, which cost extensive dollars for additional mitigation and for real estate.
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    ISTEA flexibility: ISTEA held out the promise that Federal procedures would be streamlined and flexibility increased, but in reality the opposite has occurred. The proliferation of apportionment categories is just one example. Initially, fundings were to be reduced to the National Highway System, surface transportation program and the interstate and bridge programs. Instead, congressional requirements and FHWA rule-making creating suballocations and county codes that required States to track funds in 38 different categories.

    In the area of transit, Madison, Wisconsin must employ an equivalent of 3.5 full-time staff to manage its Federal transit program. It only takes one State employee three-and-a-half weeks to manage the State funds, which cover 11 times more of the operating costs than does Federal aid.

    In the area of helmets, Wisconsin has one of the best motorcycle safety records in the country. Yet because we have no motorcycle helmet law, millions are transferred from our highway programs to safety programs. There is no demonstration that this Federal mandate will improve motorcycle safety.

    I have provided for you a number of mandates and comments and suggestions that I would like to have entered into the record, Mr. Chairman. Thank you for the opportunity this morning.

    Mr. PETRI. Thank you very much, Secretary Thompson.

    We are going to have to suspend the hearing for about 10 minutes so that Members can go and vote. I think we will all make an effort to be back as promptly as we can.
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    Mr. PETRI. The hearing will resume, and I believe we were about to hear from the Honorable James Kerasiotes from the Commonwealth of Massachusetts.

    Mr. KERASIOTES. Thank you, Mr. Chairman. We are delighted to be here today to talk about requirements and mandates, specifically because this is the first time in all of our adult lives that we are talking about paying the piper, or even acknowledging that a piper exists. There is a recognition here that governments at every level are broke, near broke, or going broke; that requirements suck dollars out of our economy that people need for mortgage payments, tuition payments, basic necessities; that requirements are interpreted, reinterpreted, and misinterpreted by the regulators and the regulated, with each generation becoming a new floor and not a ceiling; and finally, that the results are increasingly dependent, inefficient, costly, and even comatose bureaucracies.

    That was the Massachusetts that we inherited in 1991. We were in fiscal chaos; the State had a $2 billion budget deficit, the economy was a disaster, people throughout Massachusetts were losing their jobs, taking pay cuts and furloughs, while the bureaucrats in Boston were continuing to say, feed the bureaucracy. The well was dry and we had to find new ways to deliver services.

    Fiscal stability was restored in fairly short order. We focused on investment rather than consumption; we haven't increased taxes and we have cut taxes eight times.

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    A few weeks ago in the Wall Street Journal there was an editorial that talked about the pre–Federal era in terms of mass transit, that 30 years ago the fare box recovered 98 percent of transit's costs nationally. When we arrived in 1992, when I became Secretary in 1992, the MBTA in Boston was getting less than 20 percent back from the fare box. The MBTA was losing $650 million a year—taxpayer dollars a year, on an $800 million budget. In 2 years, we have reduced our budget more than $70 million, the first time it has ever been done. We added service and we added police. That is not great management; that was just a commitment to cut some fat, to flatten thirteen levels of management to five, and to attack the anything-goes culture.

    We are committed in Massachusetts to doing more with less, but we need some help. My colleagues have talked about many of the mandates. I would like to focus very briefly, if I can, on just two or three.

    The first is the shift from governors and States to cities and towns and mayors and MPOs and ISTEA. The result in Massachusetts has been conflict; the balanced statewide program has given way to bickering and arguing over individual regional needs. Our regions and our MPOs are asking and are demanding, based on what they perceive as the ISTEA mandate, more money, more money than they can spend, and ultimately those dollars will be reverted to the Federal Government if we don't spend them. So we find ourselves in a very peculiar position vis-a-vis the MPOs.

    Second, and a much more onerous piece is 13(c). Several years ago the MBTA switched commuter rail contractors from Amtrak to the B&M—from B&M to Amtrak. On the last day of the B&M contract, B&M terminated the employment of its work force, who were immediately rehired by Amtrak. That 1-day termination resulted in over $50 million in 13(c) claims against the MBTA, 10 of which have already been paid, another 25 of which are currently pending before the Board of Directors and probably will be paid.
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    Beyond those kinds of claims, 13(c) heaps upon our system an unreasonable expectation in terms of new projects and a lack of a sense of urgency in terms of getting some things done. We have a project in Massachusetts called the Old Colony project that we are currently, because of delays—a 2-year delay in getting a certificate from the Department of Labor is holding up $200 million in Federal funds that we may never recover—competitive contracting and the problems that 13(c) will ultimately create for us as we look to find new ways to deliver services more efficiently. And in the end, whether it is 13(c)—and I will wrap this up—whether it is 13(c) or whether it is MBTA or whether it is the ADA requirements that will cost us $1 billion to make the oldest subway system in this country compliant.

    We need some help, we ask for your help, and we are delighted to you are addressing the issue. Thank you very much.

    Mr. PETRI. Thank you very much for your testimony. There will be an opportunity to expand during questions and answers.

    And now Mr. Poat.

    Mr. POAT. Thank you, Mr. Chairman. My name is Andrew Poat, Chief Deputy Director of Caltrans. On behalf of Governor Wilson, we appreciate the chance to be here today.

    Mr. Chairman and Members, 13 months ago the Northridge earthquake caused the collapse of seven highway bridge structures and closed freeways to perhaps the most automobile-dependent population in the world. Preliminary estimates were that the repairs would require 2 to 3 years.
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    Convinced that Los Angeles and the State could not afford such disruption, Governor Wilson signed executive orders setting aside business-as-usual rules and regulations. Together with emergency repair funding, for which many Members of this committee deserve great credit, along with the regulations that the Governor was able to set aside, the results were quite startling. Despite the initial consideration of 2 to 3 years, Caltrans was able to reopen the world's busiest freeway in less than three months; and all damaged highways have been completed in fewer than—fewer than 300 days.

    Mr. Chairman, the question is, why can't this happen every day? You and this committee are to be congratulated for convening today's hearing which I think will begin to answer that question and provide a road map for solving some of the problems.

    I would like to briefly highlight three areas of needed reform:

    First is the area of transportation funding. Funding uncertainties require the transfer of valuable resources from highway planning and construction to financing gymnastics. The problems and solutions are well known to many of you, and indeed one of them was discussed at the press conference prior to this hearing. We believe that the Chairman of the full committee and Ranking Member Mineta, as well as all of the Members of this committee that are supporting legislation to take the Highway Trust Fund off budget, deserve our support. There are other options, as well, ranging from block granting to perhaps even removing the Federal gas tax entirely and reverting greater opportunity back to the States for control of this very important program.

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    Whatever the committee decides to pursue, the State of California believes that we can only benefit taxpayers by creating a much more efficient system.

    We are also concerned about demonstration projects which sometimes—to take away funding from projects which California and other policy leaders have determined to be important. We would like to see demonstration projects removed, or at least require that they appear on the programming documents of State policy transportation policy leaders.

    Second, I would like to focus on regulatory reform, and would I associate myself with the remarks of all of my predecessors on this board: the Clean Water Act, the Clean Air Act, the Endangered Species Act, NEPA, the Environmental Protection Act—as many of you know, the environmental movement practically started in California, and yet we maintain the requirement that we have two separate processes, one Federal, one State. We are trying to look at how we can change State law so as to be able to permit a single authority to proceed and to cut back on the unnecessary delay that is required from numerous reviews of the same environmental information.

    These delays are costing, for example, six to nine months when Caltrans has to send back in a NEPA study for Federal Highway Administration review. We believe we can get past that. Caltrans is a sophisticated organization with an extensive history of completing very authoritative and useful documents. Further, those who oppose Caltrans in certain issues have shown no reluctance to utilize their full options in raising questions to those reports when they do not feel that they are complete. Adding yet another layer of six to nine months in which very little value is added is, we believe, a step that can be eliminated.

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    The Clean Air Act, to add an illustration, costs California $7 million annually in the procedures that are required on conformity with transportation plans, programs, and air quality goals—$7 million. Worse, many of the models that are being used are fairly unsubstantiated and some of them outdated compared to other models which California is using to help maintain its air quality. As many of you know, California maintains very specific air quality problems and has much more specific and higher standards than does most of the Nation.

    I think my colleagues will agree that one need only mention the words Endangered Species Act to gain the most unfavorable reaction to anyone involved with having to put together a project in any State of the Union. We are particularly anxious to see some reasonable changes made to the ESA.

    The Davis–Bacon Act is another area where we believe we need to review laws that are decades old. It has come time for us to review whether or not State programs oftentimes can take care of this problem.

    California is a perfect microcosm of the Nation. It is very large. We have things—cities as large as Los Angeles and as small as Monterey. There is no one size that fits all, and yet most Federal programs attempt to do so. We think we need to start looking at some of these older programs and determine whether they continue to have value.

    I will just close with a final note on mandates. Again, talking about demonstration projects, the 20 different programs that maintain sanctions against highway funding, the clean air, water and other programs that force us to divert funds and needed staff from the project planning and construction stage to, usually, paperwork that adds very little value to the ultimate product, which is transportation available in the State of California.
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    Mr. Chairman, I would be glad to expand on any of these ideas in further questioning.

    Mr. PETRI. Thank you very much, Mr. Poat. I apologize for introducing your chief. He was on an earlier draft, and he called last night, and you very ably pinch-hit for him. I appreciate your testimony.

    I have one question of Mr. Kerasiotes.

    You touched on a number of different mandates and discussed some of their costs, but did not have a chance to comment on a section of your written testimony having to do with looming mandates in the Americans with Disabilities Act. And this is something that I think a lot of people in the mass transit community are concerned about and wrestling with. They want to be good citizens, but they are concerned about the cost and how they are going to serve the general traveling public and at the same time fulfill the mandate.

    Could you discuss that a little bit and any ideas you might have with regard to how we could solve this problem?

    Mr. KERASIOTES. Sure.

    In my problems, I talked a little bit about the impact of the regulator and the regulated, and the interpretation that is made by both with respect to ADA; and I will give you a specific example.
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    Last week, or two weeks ago, we had a board meeting at which there was an item to purchase about a half a million dollars' worth of teletypewriters that would be attached to public telephones in our stations. And the staff presented it to us as an ADA-mandated item. As we—about a half a million dollars' expenditure.

    As we began to ask questions, we found that in fact it was not an ADA-mandated item and our response was, well, why don't we get NYNEX or the telephone company to make this kind of investment? Not that we shouldn't make it or somebody shouldn't make it, but that we need to get a better sense of what this mandate requires us to do.

    The estimate that the folks at the MBTA have placed on ADA requirements is about $1 billion. Whether all of that is actually required or whether just part of that is actually required is less important than the fact that they believe that it is required of them and the fact that we are moving ahead full steam to make those expenditures.

    We are in a situation where we have a crisis with one of our lines, our Green Line cars. We need to get new cars so that the ones that we—because the ones that we have are not going to stay in service very long; and we tried to move ahead and put a rush order in to get some regular Green Line cars in. We came up against roadblock. The roadblock was, we had to buy low-floor cars.

    So, you know, 2 years from now or 3 years from now we may find ourselves in a situation where an expenditure, a small expenditure in the 50-to–100-million range could have gotten us cars that would stay in certain service, or be in service during this critical period, versus the 350 million that we are ultimately going to spend on the cars that are coming in 5 or 6 years from now.
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    Those are the kinds of issues that we come up against, and I think from the State perspective, it is not that we don't want to implement ADA, it is the speed with which we implement, A; B, the interpretation that our staff makes of what they are told from the folks at FTA, two; and three, in the case of Boston, you have got the oldest subway system in the country and making a system like that, with 57 stations, accessible is very, very difficult.

    So assuming the price tag is $1 billion, or something less than $1 billion, obviously what we are looking for is some flexibility in how it happens; and clearly, that we get some different interpretation from Washington and from FTA in terms of what the requirements actually are.

    Mr. PETRI. Thank you. The oldest and the most honored in folk song transit system in the country.

    Mr. Laughlin, did you have any questions?

    Mr. LAUGHLIN. No, I don't. Thank you.

    Mr. PETRI. All right.

    Mr. Poshard.

    Mr. POSHARD. Just a couple of quick questions, Mr. Chairman, if I may.
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    Can a few of you speak to the Clean Air Act amendments which are going to be kicking in and requiring, or mandating, people to basically carpool from the outlying areas into the various cities around this country? Do you favor a more voluntary approach to that, or do you agree with the legislation in the Clean Air Act that requires employers to get involved in assuring that these pools are formed, utilizing their own parking lots and facilities and so on? Could you speak to that, any of you?

    Mr. THOMPSON. I would like to just address it briefly.

    In Wisconsin, our experience has been that we have been able to go to employers and say that we have this Federal law where you participate, and we have had over 250 employers and over 100 employees participate. The problem of it is—as we see it, is that vacillating back and forth that the EPA currently is at.

    We really think it should be a voluntary program with no sanctions to State or to the employers, and another would be a program that let the public make it work. I really think that can happen.

    Mr. POSHARD. Mr. Poat.

    Mr. POAT. On behalf of the State of California, we are very concerned about the Clean Air Act. In fact, Governor Wilson will be testifying tomorrow on some of the problems we are having between the FIP and the SIP.

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    But more to the point you are raising here, we would like to see standards put in place and then let the States determine how they are going to meet that standard. Too often, individuals who are looking—again, early in my testimony I talked about people who perceive one size fits all.

    California has a very sophisticated clean air strategy; we also have very difficult geographic considerations that feed into our clean air problems. I think what we need to do is come to some consensus on what quality standard we want to meet and then let the State take care of deciding how it is going to meet that standard, because we have a variety of ways in which that can be met.

    In certain basins, it may make sense to try and reduce one type of trip or another. It another basin, it may not make much sense to do that. So I think that, again to draw the parallel, California is much like the Nation in that we are a microcosm of the Nation. We have communities as large as Los Angeles and as small as—you know, small towns with a few hundred people in them. And I think what is unfair is for anyone sitting—as remote as Washington to sit back and say that we know what is going to be best and to create artificial hurdles. I would just point out one example.

    On the smog check program, EPA has adopted regulations which essentially say that if you don't adopt a centralized testing procedure that the value of your emissions reductions is going to be discounted by 50 percent. Well, if you look into that formula, you find that it is based on absolutely no science. It is basically a preference for centralized testing.

    Again, that is a preference we just don't think is appropriate in California. We would like to—if we want a certain level of clean air, let's come to that agreement, but then leave it in our hands to decide how we are going to get to that accomplishment.
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    Mr. POSHARD. So we need more flexibility and more of the ability of the State governments, at least, to determine voluntary versus mandated appliance here?

    Mr. POAT. That would be our view.

    Mr. POSHARD. Okay.

    Thank you.

    Mr. PETRI. Thank you.

    Mr. Baker.

    Mr. BAKER. Thank you very much, Mr. Chairman, and thank you for this good panel. I have a couple of questions for my friend from California, Mr. Poat.

    First, on behalf of Mrs. Seastrand from the central coast, she is awaiting bridge design on Moro Bay, twin bridges. When can we expect to see it, and will I be alive to review it? We have to be brief, because I have three or four questions.

    Mr. POAT. Congressman, I have every assurance that you will not only be alive, but very vital. The environmental impact study, it is my understanding, is being taken forward by the county at this particular point, which is the relevant jurisdiction.

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    We don't have—

    Mr. BAKER. We don't have a bridge design, and that is kind of crucial to the EIR process.

    Mr. POAT. Right. The design, as I understand it, is proceeding; and I probably should follow up with your staff, and I am sure we can provide a definite time frame for its completion.

    Mr. BAKER. We held an election November the 8th, and the people decided there was too much red tape, there was too much power in Washington, and we were going to decentralize. You have mentioned NEPA, the Clean Air Act, the Endangered Species Act, the centralization of the authority to review cars for their cleanliness, all of the big government that we got rid of November 8th.

    Do you find it difficult working with the staff of the Minority and the Majority on this committee, helping us redesign those bills?

    Mr. POAT. Well, I appreciate that question very much, because it really speaks to our ability to work together; and I would simply say that—with no disrespect intended to anyone here in the Congress previously—this is my second trip to the Washington in the last two months. I can say that the attentiveness to the views of the States has been outstanding.

    And I am sure I speak for all of my colleagues in saying that we are not asking to come run things, that is what you all were elected to do, but we really do appreciate the opportunity to let you know what our view of things is. So I would say that the change in attitude is not only measurable, it is outstanding.
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    Mr. BAKER. I would like to admonish our staff that we have decentralized at Caltrans; they are reducing their central process and putting the decision-making in the districts. They are doing everything in California that we want to do here nationally, so I hope we can kind of correspond with them as we produce these documents on both sides of the aisle here, to see if Caltrans doesn't have a better idea than we do in the first place.

    You mentioned the rubber and the asphalt and some of these other impediments. We often in California allow the rurals to build roads with State money and not use Federal money, to avoid all of the million mandates.

    Could you just spend one second on that for the committee?

    Mr. POAT. Not only is that the case, but of course in California we have also been experimenting with toll roads as a way of getting around more regulations. And it just goes to show that all of these regulations are creating quite a new economy, and that is—or a new economic model, and that is, it is so valuable not to be held to those restrictions that people are going to find a way around them.

    And I think there is an important model for people here to recognize, and that is that if we keep layering all of these regulations on top, like water, it finds a way to get around the barrier. And I think what you are going to find is increased creativity on the part of the States, who are going to want to avoid those regulations and try and build highways in some other way.

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    Mr. BAKER. Lastly, California, as was mentioned in your testimony, had tremendous success in building after the earthquake, and basically you used principles of free enterprise—if you get it done faster, we will pay you more, because of the billions of dollars we are losing rerouting people all over the State of California.

    Could you give us some of those principles, and maybe not today in your testimony, but could you give the committee, both the Minority and the Majority side, some of the principles that sped up the work and saved us money?

    Mr. POAT. Absolutely. I will follow up.

    Let me just leave you with two basic ideas: number one, that a number of the regulations that don't apply very specifically to a situation should just be set aside. For example, we were rebuilding in a—we are rebuilding a structure that previously existed. So it didn't make any sense to require us going through a bunch of additional environmental analyses. All we were doing was restoring something to its previous state. We introduced the very common-sense logic that if you give a person an incentive to get something done faster than they originally intended that they will indeed accomplish it faster than they thought that they could originally do it.

    So the contractors came through for us, and as a matter of fact, Governor Wilson has introduced in his budget proposal this year an initiative to expand contracting out, because we would like to see the flexibility to bring in whoever can perform the job best and accomplish that right now, rather than having to wait months and months and months to find the right staff and bring the money all together.
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    So we are really going—we have been implementing some of our lessons from Northridge, and I would be glad to share some of those with you all at the appropriate time.

    Mr. BAKER. Thank you for your excellent testimony.

    Thank you, Mr. Chairman.

    Mr. PETRI. Thank you.

    Representative Laughlin, you had a question?

    Mr. LAUGHLIN. Yes, thank you, Mr. Chairman.

    Since none of you represent—or are representing the transportation department in my State, I wanted to ask you what your experience has been dealing with metropolitan planning organizations. In my State, we have those organizations and very little representation from the experts in the transportation department who know something about transportation and road and bridge construction.

    And then the other problem we deal with in my State is the rural areas within that Metropolitan Planning Organization have no voice and get no attention. And I just wonder if that is your experience in your respective States.

    Mr. SHACKELFORD. Obviously, there were some rough moments in the early days after the ISTEA was passed. The Metropolitan Planning Organization effort in the ISTEA is now working in our State. It is absolutely essential that we not lose the progress that we made as any proposed reorganization of U.S. DOT takes place. The key is that the MPOs must listen to the professionals, the law calls on them to do so, and our State is now working.
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    Mr. KERASIOTES. I would like to offer perhaps a different perspective. For 20 years or more in Massachusetts, the State didn't take advantage of all of the Federal highway aid available to it. Year after year after year, monies would lapse back to the Federal Government.

    When Massachusetts finally got its act together and decided it was going to complete its interstate, that obviously put an additional pressure on the State to make sure that it, A, completed the interstate; and B, that it provided for a balanced statewide road and bridge program, which over the past 10 years it had not.

    So during a period of time when the State made a commitment to double its effort in the State bridge and road program, we also found ISTEA with a newly empowered group of MPOs that were arguing that the—even though we were providing more than twice the amount of money that had previously been provided to statewide road and bridge programs and additional State dollars to cover projects that might otherwise be funded with Federal aid, but were not going to get done unless we found some State dollars to do them, we ended up in a situation where the State—where the MPOs were arguing to the State that they were entitled to certain levels of funding that they absolutely could not spend and get out the door.

    So what we found was that the MPO was saying, hey, listen, the law says we are entitled to this money and the professionals are saying, but you couldn't possibly get this money out of the door in terms of 351 cities and towns that you folks represent and putting ourselves back in a situation where programs, perhaps if we had agreed to the demands that were placed on us by the MPOs, we would find ourselves in the same situation we found ourselves in for 20 years, which is giving money back at the end of the year and then not solving statewide road and bridge needs that needed to be taken care of.
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    So it has been a very difficult situation for us.

    Mr. PETRI. Thank you.

    Representative Horn.

    Mr. HORN. Thank you, Mr. Chairman. You have mentioned, all of you, some of the things that annoy you about Federal mandates and laws; and California is saying, if we are duplicating the service, either one or the other ought to do it, not both, which makes a lot of sense. Obviously, we have a series of specific pieces that incrementally apply over time; and at the State level, we all learn to top those in a way that we think is effective for us.

    If you could advise the Congress, wave a wand, how would you develop the legislation and what needs to be done that hasn't been done that would make your job easier, besides some of the points you made?

    But just on the broad scale, what can the Federal Government do in legislation that would make it easier? Should most of these programs be grouped in one block, if you will, where at the State level you can decide between different modes of transportation and all the rest of it? How do you feel about it?

    Mr. THOMPSON. I think what the States are really looking for is some type of standards. One of the problems I think that we really have is that we have five or six agencies that are involved in looking at transportation. What we need to have is some kind of one-stop shopping that we can go to, bringing these agencies together, and get the permits and get the qualifications taken care of at one time rather than continuing to have one agency drag on and on. What we need is some kind of standards that the Federal Highway would come up with, along with the EPA and the historic society groups and so forth.
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    That is what I would be looking for, anyway.

    Mr. HORN. Well, could you give me an idea of a few of the standards that you would like to see? Because you have made it clear there are other standards that you are really not too keen on, such as the helmet law and so forth. But you are talking about the physical aspects of what you are doing, as opposed to saving lives here or there, or what?

    Mr. THOMPSON. Well, if I might just comment on the Clean Air Act. I think we created in 1990–1991 a Clean Air Act that focused on with the best of what we knew at the time. Since that time, we have had considerable modeling across the country. We have discovered in some parts of the country that transport is, without question, a problem that a State cannot solve.

    We do need to have the ability to have some flexibility, and the Clean Air Act, we need to have some standards; maybe we need to have some kind of a study for a period of time to look at transport, how it affects States in given nonattainment areas.

    Mr. HORN. Any other comments?

    Mr. Poat.

    Mr. POAT. One of our big concerns is process-oriented requirements. When you force the State of California, for example, in the Clean Air Act to—it specifically tells you how to analyze a particular plan of some sort. With all due respect to whoever regulates that in Washington—and California has an incredibly good analytical tool in place for compliance with State law, it seems to me we need to start finding out if there are Federal and State organizations doing the same thing and then certifying one or the other.
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    CalOSHA is a good example. You know, we don't have a Federal and a State authority; we have two that mutually recognize a single authority, which go in and perform some needed regulatory activity. You know, having, for example, Caltrans' complete environmental assessment, and then sending it to the Federal Highway Administration where it sits for six to nine months before going on to whatever final agencies have to complete the document, it doesn't make sense.

    There may be some States in which the sophistication of such reports is not as high, because they don't have to do as many, and so perhaps Federal Highways should continue to play a role for them. But I think for the larger States, it doesn't make sense.

    So I go back to the notion of this one-size-fits-all. I think we have to do away with that notion within all of these regulatory programs and start recognizing that there is a great degree of sophistication in the States, and where it exists, we would certainly like to see it recognized.

    Mr. HORN. Since we don't have jurisdiction in that area, remind me. There a waiver process where they could delegate responsibility to the States, especially as California has higher standards, I believe, than the Federal ones.

    Mr. POAT. My understanding is that—we work with them, but in fact, I think it is specifically prohibited that Federal Highway Administration waive any of its oversight in the environment process.

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    Mr. HORN. Well, obviously that is something we ought to take a look at.

    Mr. POAT. Absolutely.

    Mr. HORN. Okay. Any other good thoughts?

    Mr. SHACKELFORD. Yes, sir.

    You mentioned safety. I am painfully focused on the fact that lives continue to be lost while regulatory agencies attempt to plan our roads rather than letting professionals plan the roads.

    We desperately need a redirection of national purpose. We need them to share ownership with us in the solutions that affect the mobility, the competitiveness of this Nation at the same time that we share with them in the mitigation solutions. There needs to be a dramatic change in direction, a pulling together, sir.

    Mr. HORN. Well, I thank you. My time is up.

    Mr. Chairman, thank you.

    Mr. PETRI. Mr. Rahall.

    Mr. RAHALL. Thank you, Mr. Chairman. I have no specific questions. I just want to thank the panel for their testimony; and good to see you, several of you, once again.
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    I think you know where I disagree with your testimony on some of the labor issues, Davis–Bacon, 13(c), I don't see any need to harangue or to go into that in any great detail at this particular point, knowing the lack of ability to switch either of our positions on the issues.

    I would just in a general manner ask you, Mr. Shackelford—and I know this is not the subject of today's hearings, but of future hearings, although I thought it was going to be today's hearings—whether you can give us just some general update on how you are doing in preparation for the Summer Olympics in Atlanta?

    Mr. SHACKELFORD. I would be delighted, sir. If we deal effectively with accessibility, if we deal with mobility, the world will remember the Games. If we fail to deal with mobility, they will remember they couldn't get there.

    There has been splendid cooperation with Federal, State and local efforts in transportation. The demonstration project in the ISTEA to develop an advanced transportation management system for the Olympics, I believe will be a world-class model, and it will be ready. We feel extremely good.

    One of the great solutions of Federal transit has taken a suggestion that was put forth from our region. Over 2,400 buses will be cycled to Atlanta to be used for transportation at the Games as they make their destination to transit entities around America—a great spirit of cooperativeness.

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    There is an awesome amount of construction that will be a permanent benefit to the State and to the region. Cooperation from our neighboring States, Kentucky and Tennessee, will put to bed widening on Interstate 75 during the Games to make it easier to get across our Nation.

    So, great opportunity; it is not about Atlanta, it is not about Georgia, it is about the United States. We are very excited, sir.

    Mr. PETRI. We have been briefed by our former colleague, Lindsay Thomas, a number of times on the remarkable job you all are doing.

    Mr. BAKER. Mr. Chairman, if I could interrupt, could I ask the honorable lead on the Minority side a question? And I respect his position on Davis–Bacon, but in California we have taken an interesting law, fixing wages, and made it worse by using the median instead of the mean. So we have taken the highest possible—highest possible wage and imposed it to the point where a flag person in California makes $25 an hour.

    Is your position intractable on this, or is it subject to negotiation so that some of the more excessive use of the Davis–Bacon act can be modified?

    Mr. RAHALL. The former.

    Mr. PETRI. Mr. Blute.

    Mr. BAKER. Let me interpret that as a ''needs work.''
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    Mr. BLUTE. Thank you, Mr. Chairman. I want to thank the witnesses for their testimony. I want to say to Mr. Shackelford that some of those buses that will be used at the Olympics are destined for southeastern Massachusetts, so take it easy on them, and let's be careful out there. But I want to thank you all for your very informative testimony.

    And Secretary Kerasiotes, you dwelled on 13(c) at some length; and I wanted to ask the other people—I didn't hear your testimony—about what you think, how much you think that limits your flexibility, limits your ability to do the job that you are supposed to do.

    Mr. SHACKELFORD. It is very substantial in Atlanta, sir.

    Mr. POAT. We would—everything that was said, we stand behind. We believe very much that we would like to see some change in that area.

    Mr. BLUTE. Would you support Secretary Kerasiotes' vision of a complete repeal of that? Would that be something that you would support?

    Mr. POAT. You are probably going to get the wrong group to suggest that we are going to ask for any regulation on that issue. We believe—our perspective is that everyone here has to answer to a lot of constituents themselves, or we answer to governors who do or someone else who does in a legislature that watches us very carefully.

    I think also true of our States is that there are a number of protections in law regarding wages and, you know, terminations and things of that nature. So we believe that there are a number of protections around, and we would like to see greater flexibility to make sure that we are doing with taxpayer dollars what taxpayers expect to be done. And as Congressman Baker demonstrated, I think there are instances in which rules and regulations are making us do things with tax dollars that they would not expect to be done with their tax dollars.
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    Mr. BLUTE. Well, let me just say that as we shift more of a burden to the States, which is clearly the direction the Congress is going in in terms of block grants and all kinds of policy changes, we do have to combine that with a maximum amount of flexibility at the local level. If we don't, then we are just creating a huge problem at the local level. I don't think that is what we are intending to do.

    But thank you very much.

    Thank you, Mr. Chairman.

    Mr. PETRI. Mr. Kim.

    Mr. KIM. Thank you, Mr. Chairman. I do have a couple of questions, and comments, actually.

    As you know, the House has passed the unfunded mandates, even though the bill is prospective. However, the bill could behave like retractive. What I am saying is that the bill allows us to create the commission to evaluate all of the existing unfunded mandates, and they will make recommendations to us within 11 months, what mandates should be consolidated, just simply banned or even repealed.

    Now, in the meantime, we could propose separate legislation to start, bang, or repeal certain critically important unfunded mandates. I am talking about the Endangered Species Act, which is really having a great impact on California.
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    Now, my study shows that, average, in 3 years EPA added an additional 25 endangered species to the existing endangered species list. On top of that, the State of California also had another dozen. If the current trend continues, eventually everything moving will be an endangered species. So that is a critically important point.

    Also, the rubberized asphalt that California is experiencing, that we mandate by 1994, all the asphalt has to contain at least 5 percent of rubber and then eventually, by 1997 I believe, 20 percent. By doing that, the price has gone up from $30 per cubic yard, up to $108, almost three times more. These are to me, unfunded mandates, unfair. However, Mr. Shackelford reports—on page 9, it says, rubberized asphalt is really a funded mandate. I don't quite follow that.

    Mr. SHACKELFORD. Unfunded.

    Mr. KIM. On page 9, section 1038.

    Mr. SHACKELFORD. It is funded because it comes out of the Highway Trust Fund, but it is absolutely reducing the dollars available.

    Mr. KIM. Then, it is unfunded then. I am glad you agree with me.

    And it is important for us to know what unfunded mandates you have right now that are detrimental to your operation, if you would let us know. We would be more than happy to look at it, perhaps propose an independent bill to take care of this individual unfair unfunded mandate.
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    If you would like to comment on that—

    Mr. POAT. We appreciate that, your willingness to take that forward. I think we have all been able to touch today on the principal ones. You have talked about endangered species, Clean Water Act, Clean Air Act; they are all imposing tremendous costs.

    I think, most important, a lot of them are procedural costs that we are seeing very little benefit from when push comes to shove. I think if we could get back to the point of, if Congress has an objective in mind and they would like to see it met, you know, let us know, if it is a big-picture item. But really I think there is sophistication in the States to determine what type of asphalt should be used in a particular process, things of that nature.

    I am sure you are all much too busy to be worrying about that sort of thing. We would like to take that concern off your plate.

    Mr. KIM. Along the same line, talking about regulation reform, I remember several years ago that a private consumer group proposed the maglev high-speed train from L.A. to Las Vegas, and that was the first time, ever put together, totally funded by private enterprises, and they found a market. There is definitely a market out there, strictly run by the private sector.

    Now, we have been subsidizing Amtrak many, many years. It looks like a bottomless pit; we have to subsidize again. And I suggested the other day that we should let the Amtrak die. In the meantime, we ought to focus on the state of our operations, such as high-speed trains.
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    Now, the reason why they kind of fell on this is because of a regulation that we impose, that the State of California imposes. That is a strict regulation. They have just had it; they couldn't go anywhere, so many regulations, so many lawsuits, so many problems they imposed on them in terms of acquiring land and environmental issues.

    Are you willing to cooperate with us, that we are doing our share of unfunded mandates, asking the State to do the same thing?

    Mr. POAT. Absolutely agree.

    Mr. PETRI. Glenn, did you have a concluding question?

    Mr. POSHARD. Mr. Chairman, if I may just have one more, and I would address this to the gentleman from California.

    Did I understand you correctly in your testimony that you said you disagreed, or you preferred that we not have demonstration projects in the surface transportation bills here, that that money come back to the States without any designation?

    Mr. POAT. The issue we have on demonstration projects is, when they are designated in the bill and that designation does not meet up with some sort of prioritization from the State and a State implementation plan, in that instance, and then no additional funds are presented for that sort of project, essentially it is a mandate. You are implementing someone's view of a project and the importance of a project, the priority of a project, over a process to which all members of the California transportation community have agreed will be the process by which such priorities are established. So we would rather see the money go back to the States.
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    We have all agreed through the ISTEA process that we want to have, you know, locals controlling the distribution of those funds. We would like to stick with that priority list. I guess the bottom line is, it is difficult to have two priority lists on projects.

    Mr. POSHARD. I just wanted to make sure that you folks understood that the policy of the committee is such that unless we do have an agreement with the State, the Department of Transportation and the State, that the projects that go in here as demonstration projects are considered to be priority projects, that we can't get them in. So that already is the system here, and I would expect that you would not have any problems with that, right?

    Mr. POAT. And I appreciate that. I had that conversation as a matter of fact a little earlier today with Congressman Horn, and so we are in agreement on that.

    Mr. POSHARD. Okay. Thank you, sir.

    Mr. PETRI. Thank you all.

    I have several questions that I would like to submit in writing for Secretary Thompson's response for the record. And otherwise, we appreciate you all bearing with us as we had what we hope is an historic press conference a little earlier and for your testimony here today. Thank you very much.

    I now call the second panel of transportation authority representatives from across the country.
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    Gentlemen, welcome. I believe we have your written testimony, and we very much appreciate your coming and testifying before us on the subject of this hearing.


    Mr. PETRI. I understand you have arranged for your order of testimony among yourselves and we would appreciate your proceeding.

    Mr. WEINRICH. Yes, Mr. Chairman. Thank you very much.

    Mr. PETRI. Excuse me. Before you do proceed, I would like to ask Mr. LaHood to recognize his Illinois witness.

    Mr. LAHOOD. Thank you, Mr. Chairman. I want to make special note of the fact that we have the distinguished Chairman of the Regional Transportation Authority from Chicago and also a former member of the Illinois General Assembly and a former seatmate of Congressman Jerry Weller.

    Congressman Weller asked me to make special note of the fact that if he were here, he like to have introduced you, Tom. He had another meeting. So it is my pleasure to welcome you to the hearing and thank you very much for coming, and we look forward to your testimony.
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    Thank you, Mr. Chairman.

    Mr. PETRI. Thank you. It is nice to know there is life after the General Assembly.

    Mr. WEINRICH. Mr. Chairman and honorable Members of the subcommittee, my name is Kurt Weinrich and I am the Director of the Regional Transportation Commission of Clark County, Nevada, or the RTC. We greatly appreciate the opportunity to testify today and offer our views on what we see as just one of the many mandates that the Federal Government places on local transit agencies. This one would be considered by us as one of the most intrusive, burdensome and out-of-date requirements, that being the Section 13(c) of the Federal Transit Act. I respectfully ask that my prepared comments be entered into the record.

    The RTC is a public transit agency created under Nevada law with responsibility for planning, developing and operating mass transportation services in Clark County, Nevada, which is seated in Las Vegas. The fixed route transit system in Clark County, known as the Citizens Area Transit, or CAT, is operated for the RTC by a private contractor that was retained through a competitive procurement process. When the RTC commenced service on the CAT system in November 1992, it represented the most significant start-up of new bus operations in the United States in the last 20 years.

    Clark County has grown from a population of about 70,000 people in the early 1960s to almost 1 million residents today with between 250,000 and 400,000 tourists on any given day. Clark County remains the fastest growing city and county in the Nation today.
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    The critical event which served as the turning point for improving transit in Clark County was the November 1990 approval of an advisory ballot question by 64 percent of the voters in Clark County which led to the enactment of a six-part tax program which provides dedicated funding revenues for transportation improvements, including public transit.

    The RTC based its decision to contract with a private operator on its belief that this approach offered the most cost-effective, efficient and rapid means for establishing a new start-up system and providing transit that taxpayers are demanding. Rather than through the creation of a large public bureaucracy, this privatization effort has proven to be enormously successful, and the RTC has subsequently established a new and expanded ADA-compliant paratransit service for the disabled and the seniors that is also operated by a private operator selected pursuant to a competitive procurement process.

    The role of 13(c) in defining the Commission's ability to perform its functions and its efforts to satisfy 13(c) requirements have been an object lesson, we feel, in meaningless Federal requirements and their operation, of the Federal bureaucracy at its worst. The Commission spent over one-and-a-half years attempting to satisfy the Department of Labor that adequate labor protections were already in place, then negotiated or attempted to negotiate labor agreements with three different unions for 13(c) provisions, then settled unfounded 13(c) claims, engaged in mediation at the Department of Labor and submitted over 600 pages of briefs and related materials to the Department of Labor.

    For all of its efforts, the RTC, after doing this for a year-and-a-half without any Federal funding being released, received its necessary 13(c) certifications and prevailed on a significant legal issue in dispute, but emerged from this incredibly cumbersome, one-sided and antiquated process quite convinced that Section 13(c) is in drastic need of at least reform.
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    The goal of Congress to have transit assistance result in effective and efficient mass transportation in this country is being thwarted regularly by the administration of 13(c), resulting in the withholding of public services from the customers of both the Commission and the Congress, the taxpaying citizens.

    We talked to transit managers and board members around the country; they all have their particular 13(c) concerns and problems. One overriding concern that most share is the problem of delay. There are absolutely no meaningful time limitations in the current statute or in the regulations as imposed by the Department of Labor. Because of these requirements that 13(c) protections must be in place before a grant can be released, and that those protections must be negotiated on a case-by-case basis with each area union, 13(c) has the obvious potential for significantly delaying the grant delivery process. By the Department of Labor's own analysis at one point in 1994, over 55 projects, totaling nearly $300 million in grant funds, have been delayed for a period of at least six months.

    On the issue of contracting out or privatization, alone, there are significant economic savings available to transit agencies that cannot—that often cannot be pursued or realized because of 13(c).

    I would like to draw my comments to a close by pointing out that, given the original policy objectives of 13(c), we submit that this section was simply—has simply outlived its usefulness. Most of the public buyout cases for which it was intended were concluded over 20 years ago. It stands as a mechanism by which Congress' intent to have Federal funds assist in implementing the ADA, implementing the Clean Air Act compliance and other various transit responsibilities, including providing for flexibility of funding in ISTEA, investment decisions, are being thwarted.
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    We note that, under ISTEA, highway projects should be competing with transit projects for local decision-making, but highway projects often are chosen over transit projects because of the shorter delay since they are not bound by 13(c).

    We would be happy to answer any questions at the appropriate time, Mr. Chairman.

    Mr. STANGL. Mr. Chairman, I am the Chairman of the MTA in New York; and I also appreciate the opportunity to be with you and your associates today. Let me just briefly tell you about the MTA. I think it is important in the context of what we are talking about.

    We are big. We serve 13 million people in a 4,000 square mile area. We have about 6,000 subway cars. We have got some 3,700 buses. We have got two of the larger commuter railroads in the country that have almost 2,000 miles of track. We also have, and I think somewhat uniquely, bridges and tunnels which are tolled and which provide funding not only to maintain those bridges and tunnels, but to support the operation and the capital investment into our transit system.

    I mention all of this only because in our area, our regional economy simply doesn't work without a complete and good transportation system. And I think that is important to remember. In fact, if our system failed, I think the Nation would truly feel it.

    We are here today because things are changing in Washington. I think the fiscal situation is going to change. Federal assistance has been a very important part of our capital investment program over the years, and we are hoping now that, as things change on the funding level, you are able to help us with some of the inefficient and I think costly mandates that are tax exempt of Federal assistance.
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    Some of the burdens I will address are based in law, some are regulation. Truthfully, some have become such a part of the landscape that even if you relieved us of them, it would be hard to do away with them, but at least they ought to be on the table so that we can make those judgments at the local level. Many of these are very beneficial to our customers, to the environment, and we recognize that.

    I would mention briefly Federal procurement guidelines. There are Buy America provisions for things of over $10,000. I can tell you that we spend a half a million dollars a year, 10 to 12 people, just dealing with that regulation. At least we ought to raise the limit to $25,000 or $50,000; or to the extent that we can, we could wall off a certain number of projects that we would attribute to Federal funding and not have to go through the Buy America on a whole host of other programs.

    I also think that the half-fare program for seniors and the disabled ought to be a local decision. If it is of such great local interest, then it ought to be paid for. It really is a question of income distribution. I happen to be for the program; I like the program. But to the extent that I think we are facing hard fiscal times, it ought to be on the table for those of us at the local level to make those decisions, as we have to make our priorities.

    You have heard about the Americans with Disability Act. I won't take you through all of our numbers. They are very large. I can tell you that we are making accessible 100 of our 469 subway stations, and if you relieved us of just a few of the burdens there, we could save about $40 million to $50 million, just on those—about $400,000 a station—that would have really no effect on its accessibility. You have heard about that from other people, and I think that I will skip over most of that.
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    We also have the paratransit, transit on demand, 24 hours a day, which is costing us about $30 million a year now. I think by 1997 we are going to be spending about $50 to $55 million a year. While we do contract it out, we have privatized it, because we think in this case privatization makes sense, it is still an extremely heavy burden.

    Random drug testing: We are in the process of testing 10 percent of the safety-related jobs right now for alcohol and drugs. That is going to go to 50 percent by mandate. And I am told that it is not statistically significant, and it is goes to cost us another $3.5 to $4 million. We don't really know why it couldn't be left at 10 percent.

    There is one thing I do want to focus on which is the Railway Labor Act. One of the oldest mandates we have inherited since taking over the failed private operations of the commuter railroads is the Railway Labor Act. We are—by dint of history, we are State taxpayer-owned, we are funded and operated by the State, and we are subject to the Federal Railway Labor Act and to the Federal Employee Liability Act.

    The bottom line on this, and I would be happy to answer questions on it, is that we pay $73 million a year right now in railroad retirement taxes. For about $28 million, we could improve the benefits that those employees get and save $50 million. The reason we don't is that we are required by Federal law to pay into railroad retirement, and that money goes right from us and our taxpayers straight into the bottom line of the private profitable railroads who have reduced their workforce, and all of the retirees are being paid for right now by the active employees. That is a very significant issue for us.

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    I also want to just comment briefly on the Federal Employee Liability Act. We have that, and the commuter railroads, instead of workmen's compensation. It is a very confrontational situation. It basically requires the employee and the employer to fight with each other, to litigate issues, rather than to settle them quickly. The only people who I think really benefit from this—and if some of you are lawyers, I apologize, but is the law profession, because the lawyers are involved in almost every single case now. And so a piece of that money, instead of reducing our costs and going into even improved benefits, is going to the legal profession.

    Let me just say that I am concerned that the Congress might find it a little easier—I hope I am wrong—to cut some of our programs than they will to provide mandate relief for us. These are tough, tough issues with an awful lot of history.

    We want to work with you. We know that we should be subject to certain Federal mandates, we should be subject to certain laws. We believe in federalism. But we think there are some things that could be changed that would not in any way harm our constituents, your constituents, our customers; would save us some money; and would make all of our lives a lot easier. We would very much like to work with you on doing some of that, and I appreciate your listening to me.

    Mr. PETRI. Thank you.

    Mr. MCCRACKEN. Thank you, Mr. Chairman, Members of the committee. I am Tom McCracken; I am Chairman of the Chicago RTA. It is a six-county region, 7 million people; we are the second largest transit system in the country.
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    We, along with New York, Philadelphia, Boston, Los Angeles and San Francisco, have formed a coalition of those cities and their chairmen for the purpose of taking our message to Washington. As some of you know, we were out here a few weeks ago and, I thought, had a very productive time. I am delighted to be back today to follow through on that first meeting.

    I am going to concentrate on the ADA, which is obviously politically explosive. However, the ADA is coming to consume more and more of scarce resources; and as anyone with a head on his shoulders knows, resources may well get scarcer before too long.

    We spend in paratransit costs in the Chicago region about $33 million a year, which is almost as much money as the region gets in Federal operating assistance. What brought us together originally, in fact, was the operating assistance issue. It isn't true for our entire region, but particularly for Chicago. It is a very important component of its total revenue picture. We, too, as with New York, are concerned that the Congress will cut that assistance, as well as capital assistance, before or without reference to the fact of any mandate relief. We don't know how easy it is going to be to address these mandates.

    I think Mr. Stangl makes a good point. Some of them are completely explosive. The ADA is a perfect example of that.

    Having been a politician myself at one time, I understand the importance of public sentiment on the subject. I have gone out to all of my newspapers, both metropolitan and suburban, and tried to share with them our concerns about this. As of 1997, we will be required to provide paratransit regardless of cost. The law specifically requires us to not take into account any budgetary constraints. We must meet all demand. We are required to provide the service on a 24-hour-a-day basis, because the City of Chicago in its mainline system provides 24-hour-a-day service.
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    Our average cost of trip regionwide for paratransit currently is $19 a ride. Federal law requires us not to charge more than twice our mainline fair, or $3, for that ride. There is no correlation between revenue or money as a means of allocating these resources and the demand for the resources. The two are completely untied.

    We have skyrocketing demand; we question whether it is always necessary. But be that as it may, we are staring down into a deep, dark whole, and the prospect of the loss of the Federal assistance, particularly at a time when the ADA has to be geared up for full compliance so soon, causes us a lot of trouble.

    Now, the devil is in the details, but let me give you one example which I think is very significant about what we could do. I have been pleasantly surprised at the degree of editorial support in the Chicago media for the idea of limiting in our railcars accessibility requirements to one car per train. We are required to gear up and buy all equipment in the future, making every single car of every single train accessible. The editorial support on that point has been pleasantly surprising. I think most people would agree that a one-car-per-train accessibility is reasonable and adequate. Our commuter line division, METRO, believes that that could save $130 million over 25 years of capital costs.

    We are talking also about a continuing requirement in the future that paratransit be provided under these conditions, on demand, 24-hour-a-day advanced reservations, no limits on the purpose of the trips or the time. That is going to be required even after our lines, our systems become fully accessible. We believe that is something that we should be looking into, possibly phasing out the paratransit once the system is accessible.
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    I will close my remarks and thank you for your consideration.

    Mr. PETRI. Thank you.

    Mr. JONES. Thank you, Mr. Chairman. I am Keith Jones from Little Rock, Arkansas; I manage Central Arkansas Transit. We have a great spectrum, I think, from big to small; and I think I represent the small transit system here. We have 70 vehicles and 150 employees.

    I would like to talk about three particular areas of Federal regulation: 13(c), Buy America and charter regulations.

    You have heard some pretty shocking and eyebrow-raising numbers about 13(c) today, and being a small system, I don't think I can get you to raise eyebrows on the amount of money we spend on 13(c), although it has been significant to us. But what I wanted to do was just to illuminate how the delay attributed to 13(c) impacts us now and may impact us in the future if we go to block grants.

    Just in 1990, our board decided to change the way that we operate the system; we the employees public employees. We applied for our Federal operating assistance under Section 9, and the local labor organization told the Department of Labor that we were no longer eligible to receive any Federal assistance because of this local decision to make the employees public employees.

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    We went from January, when we applied for funds, until November of 1990 without Federal assistance. I had to borrow money from banks to keep the system operating. We finally prevailed, but at great consternation and lack of efficiency and lack of stability for our own employees, including those represented by the labor organization.

    What I put in my written testimony—which I would like to submit for the record, and I will just briefly summarize here—is last year, a routine year where we made no changes, and in 1994, we submitted our grant application in December of 1993 because we need the money early, we depend upon the Federal operating money assistance. And early in January the Federal Transit Administration sent the applications to the Department of Labor.

    A month later, or about three weeks later, Labor sent it to the Amalgamated Transit Union asking them to concur or not to the 13(c) certification; and about a month later, the ATU told the Department of Labor, no, we don't think they should get the money under the current arrangement because they didn't tell us why they objected. It took from February until April for us to get a proposal from the ATU about what it was that they didn't like about our existing arrangement.

    Normally, we get our Federal assistance in April. It took us until May in which the Department of Labor mediated a session and eventually imposed an agreement to just get our assistance last year; and the only way I can really put it into words is that we had to have a new agreement because I had poisoned the meaning of a word that was in our existing agreement. So we took four or five months, 140 days, to negotiate a substitution for the word ''dispute.'' That is a simplification, but that is basically what it was.

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    I hope we are not going to be in the same situation this year, but I have already noticed that it took a month for the Labor Department to send the application over to the ATU, and they sent the wrong application, so it has taken two weeks of letters exchanged between the ATU and the Department of Labor to get the right application over. And they have granted the ATU another 30 days to tell us are, we going to have another situation where we renegotiate this year.

    In the future we have block grants. I am comfortable with competing in my State for a fair share of the money for transit. I think our State DOT will work with us on that. But on the other hand, they don't know a whole lot about 13(c), and if on the one hand, they can go spend money for a highway project where they know clearly what the objectives are and what Federal requirements have to do to spend the highway money, compared to going over and spending money on a transit project and being tied up for six, nine months or even longer for a transit project, that is going to hurt my ability to get a fair share for transit on the State level under the possible new scenarios.

    I will briefly talk about charter regulations. I know it is not a big efficiency matter, but it is an important, I guess, inhibition in our area. I know our mayors think that they help own our system, and they will call me up and say, we would like to take the city council on a tour of some problem areas. I say, I am sorry, even though you pay 60 percent of my operating costs, I can't take you on a trip because it looks like a charter. You need to call a private operator of which there are very few in our State.

    I think the law does not recognize local situations. In some areas you have a great supply of private operators and they need to be on an equal footing, but for public, nonprofit purposes I think we should have some relief under the charter.
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    I can only echo the requirements on Buy America. It is a horrendous recordkeeping problem. If we go and buy a $2 pack of batteries from Wal–Mart we have to ask the clerk to certify that they are for the United States and make a paper trail and keep it for 3 years. So Buy America is definitely a big problem for us, too. We are certainly in favor of the goals, but for me 5,000 would be a lot of money; for Chicago or New York, 50,000 or 100,000 might be more in keeping with the scale of operations. So we do support a threshold amount for Buy America.

    Thank you for your attention.

    Mr. PETRI. Thank you all for your testimony.

    Mr. Rahall, do you have any questions?

    Mr. RAHALL. Thank you, Mr. Chairman.

    I want to thank the panel for their testimony. It is a pleasure to see big city transit authorities such as the cities you represent to come before the subcommittee, and to hear your concerns and complaints about having to comply with 13(c), Federal Employee Protection requirements. Coming from a rural area, as I do in southern West Virginia, our largest transit provider in my congressional district is in Huntington, West Virginia, the Tri–State Transit Authority, a bus system. I have often felt it was unfair, a regulatory burden, if you will, to see my transit authority in Huntington struggle to provide bus service with these continued reductions that I am sure you hate to see, as well, in Federal operating assistance. But I must say, I never hear from my transit authority complaints about 13(c), and they wouldn't. They know that 13(c) has given them a great deal of stability in providing service and that they worked under a tremendous—a wonderful labor-management environment.
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    Yet here we have big city guys, folks who account for almost all of the Section 3 funding, and a large chunk of Section 3 funding, complaining about 13(c). So Mr. McCracken, let me ask you, because I read on the first page of your testimony that it would be unfair for the Federal Government to cut or eliminate your operating assistance without first giving you relief from all of these mandates, regulatory burdens, et cetera, et cetera. So my question is, if we address these burdens—if we address these burdens, if we relieved you of them—if we relieved you of them, would you in fact be willing to give up every cent of Federal transit money? I mean, I could certainly use the savings to help out my transit in Huntington, West Virginia with their operating expenses, and I would be glad to use it for that purpose.

    But I ask you, would you be willing to give up every cent, every cent of Federal funding if we relieved you of these burdens?

    Mr. MCCRACKEN. Some of my friends who have graduated to Congress from the State legislature warned me this question was coming. I am concerned that we—

    Mr. RAHALL. You want the money free, without any strings attached, obviously, which is a very hard environment to give money in any circumstance.

    Mr. MCCRACKEN. Well, I would say that if all of the strings are gone, I would sit down and talk about it at that time. I don't know how much is going to change in the status quo.
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    Mr. RAHALL. Well, let me move on to another question for the panel. I am not sure I got a response on that one.

    We are all hearing about the Contract With America these days. The Contract provides for this, the Contract says this, on and on and on; we march on and on and on. Let me ask you about a contract that I feel we made with the American worker in 1964; and as you know, that was a contract we made with transit employees when the Congress passed the Urban Mass Transportation Act.

    We said, with the full concurrence of the transit industry at that time—you needed financial help; call it a bailout, call it whatever we will—but we would allow Federal funds to be used to acquire transit companies and operate transit services. But at the same time we said that these actions should not worsen the transit employees' position, that the infusion of Federal funds should not lead to harming these workers' situations. That is what 13(c) is all about. It is a contract that we made in 1964 with the concurrence of the transit industry and with the concurrence of the transit workers, employees.

    Now today, after we have heaped billions of taxpayer dollars on the transit systems in this country—every one of them is subsidized, could not make it without these subsidies, if we had not reached that contract with our workers in 1964—you are saying, if I hear you right, break that contract with our workers. We have been successful; we got what we wanted out of it, now let's brick the contract and see how much more we can get out of it for free.

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    So I guess I don't have a question, but the issue is pretty clear-cut in my mind, and I just wonder how you address that concern of the American workers, employees of transit systems that perhaps greed is taking precedent over human decency in dealing with the working men and women in the transit industry.

    Anybody can answer that, or respond to it.

    Mr. STANGL. It wasn't a question, Congressman, but let me just comment briefly. It is in my testimony.

    I also believe that 13(c) is something that I would like to see modified or eliminated. We are pretty much a union town in New York. I have 63,000 employees, and with the exception of 6 or 7 percent of those employees, who are in management, they are all covered by union contracts.

    One of the concerns I have, in addition to the problems that were described by some of my colleagues here, about the delays—and those delays may be more significant for smaller systems than they are for me; because we are so big, we have a little bit more flexibility in moving things around—but it is another bite at the apple.

    We negotiate our contracts with our labor unions. Those are tough negotiations. Anything and everything can be included in those contracts. And I guess to a certain extent, this gives them another bite at the apple because we are receiving Federal operating assistance.

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    So I don't—I really, from my perspective, am not focused on this as an antilabor issue at all. I am a teamster; I worked in that sort of an environment, but I think that there are other ways to protect it, even through our contracts and through the State level, rather than through the Federal level.

    And times are changing, as you know. Times are changing. And I believe in the working person and I think that my colleagues do, but I think there may be some ways to change this that would lessen the burden and not harm the employee. We are not out to harm anybody. I am certainly not.

    Mr. JONES. Mr. Chairman, could I address that also?

    It is in our testimony also that we feel like the original contract in 1964 did pertain to the buyouts that were being done at that time, as the private transit systems were failing, and that it did accomplish its objectives and that there are collective bargaining agreements, even in our State, which is a quite different environment from New York.

    We have collective bargaining agreements and we expect those to continue. I see no connection in my own circumstance between my 13(c) dealings and any benefits to our local union members. The reason why you don't have problems in West Virginia, I believe, is due to the talents of Vickie Schaeffer in your system, who manages the Tri–State system. She is an extremely capable manager, and we probably need to learn something from her, how she gets along so well.

    Mr. RAHALL. I agree with that latter compliment.
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    Mr. PETRI. Mr. Horn, do you have any questions?

    Mr. HORN. One of the big problems, as we all know, in urban transportation is how you keep the prices low enough so people that are not well off can use the transit to get to a job and hopefully progress in their own livelihood.

    The Federal Government has made available operating money. What is your feeling on that? Would you be willing to give up that operating money, and under what conditions? Everybody around in this building is looking for money right now to either match this or that that they want to do. What is the reaction to that?

    Mr. STANGL. Well, you seem to be looking at me when—

    Mr. HORN. I am looking at all of you.

    Mr. STANGL. Okay. But I think they all—it is not a question of—I think it is fair to say that if you are going to reduce funding that was part of—I recognize nothing is forever, but was part of our long-term funding plan—and part of it, if it wasn't a contract, it was a sense of commitment when ISTEA was passed and we put this program together—then to the extent that you can reduce burdens on us, without significantly harming people, we ought to find every way we can to do that.

    What you have got here today and what you heard this morning on the first panel were some suggestions, recognizing how difficult it is. You know, I have to go back home and try to work through some of these things.
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    I have got the State cutting my operating assistance right now, I have got the city, Mayor Giuliani cutting it, I have the Congress—I have the President—I want to be hopeful about the Congress. I have the President cutting some of the operating assistance. So it is coming at us for various reasons at all levels of government.

    I believe in contracts, but a lot of contracts, if you will, are getting broken now. And it is a good time, and that is why I think this committee should be commended for looking at some of the burdens, mandates, whatever you want to call them, that were imposed on us and see if we can't reduce some of those in a way that doesn't harm people.

    We are making the case here that a lot of those mandates, if they were—if we were relieved of them, would not significantly harm people. Would it affect people? Sure. You know, decisions on money of this size have real consequences to people, and we ought to recognize that, be up front about it and do the best we can to sort of—to balance it.

    I am telling you this, that is what you do every day, that is what your job is.

    Mr. HORN. Any comments from the rest of you on this, as to how we juggle the operating money, the construction money, all of the other things; and how would you like best to receive it? I realize you would like a check and put it on a stump and we could turn our back, and maybe a lot of us basically favor that. And I was a very strong backer of revenue-sharing for 15 years before it ever happened.
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    But you know, we need to—you are the people on the firing line. But we also are the people with a 4.7 trillion—that is with a T, not a B or an M—national debt, and how do we deal with it? That is what we are grappling with, and we are going to deal with it.

    Mr. WEINRICH. Mr. Chairman, I would like to address that question on behalf of the voters of southern Nevada, who have periodically told their elected officials, through various ballot measures, that they must stand accountable for whatever government program at the local and State level they are being taxed to support.

    We have a very unique situation in Las Vegas where the RTC was able to implement a new transit system from scratch basically at a time when the community was growing very rapidly. We initially designed the system with no reliance upon Federal funds whatsoever, partly because we had very little formula funds to begin with, because there were virtually no transit operations in Las Vegas; and secondly, because of a rather common reliance in the West on doing your own thing, if you will.

    However, there were various elements in the community—in fact, throughout the State and in the State legislature—asking us, as our formula grows, grows, as our fleet size and miles traveled and the number of passengers carried grows, what are we going to do with those Federal funds that the current law allocates to our region? And the emphasis from those persons was, our taxpayers are putting money into the trust fund, into the government general fund that comes back to the Federal transit account, and they want their share back. As long as they are being taxed in southern Nevada for those purposes, they want their share.
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    Mr. HORN. Mr. Jones.

    Mr. JONES. Section 9 assistance is about 18 percent of my operating budget, so even if all of the Federal requirements were erased, it is not going to be an even trade. But if there is some serious regulatory relief at the same time that we are facing probably inevitable reductions in Federal operating assistance, we will at least have a fighting chance to operate a system that makes sense, and I will be in a better position to persuade my local taxpayers to support the operation of the system—a lot more of it.

    Right now, with some of our restrictions, which they don't understand, you know, they are not my ideas, it is a little hard to get more support locally. So we need the help if we are going to be trying to do this together.

    Mr. HORN. Mr. McCracken, any comment?

    Mr. MCCRACKEN. Just to say that you know, we all want more money. I am not shy about it. My city needs the money to get by on an annual basis. I don't know what the future is going to hold. But what I do think is going to happen is that slowly or maybe a little less slowly, this money is going to dry up. We would like the regulatory relief before that happens.

    Mr. HORN. Well, obviously one pet phrase that goes around—maybe not much happens as a result—is, what can privatization, if any, do in some of these areas that we are talking about? We heard the California Chief Deputy Director note that they are experimenting with toll roads. They are; Orange County has been doing it.
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    As a native son of California, that made me shudder. I took great pride in our freeways and always was upset when I drove in an eastern State where they had these annoyances known as toll roads where you had to put quarters in and do all the rest of it. I thought it was silly.

    But now we are getting there and it does give some people flexibility. Are there any other exciting things going on in privatization and transit that we ought to know about?

    Mr. MCCRACKEN. To address toll roads for a minute, that is the only entity in my State that is flush. Everyone else is scraping for money.

    Certainly there are. I can't quantify them in our region, no. I just don't know exactly what they would like like. A lot of the mandates would impede that inquiry, though. Right now, there are a lot disincentives to privatization. We view them as lost opportunity costs.

    Now, I am told about the Denver experience where apparently 20 percent of their system was privatized, and I guess they achieved 15 percent savings, something of that magnitude. We would like to give that a try. But other than that interest in going forward, I have difficulty putting a number on it.

    Mr. PETRI. Mr. Mica, do you have any questions?

    Mr. MICA. Thank you, Mr. Chairman.

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    First of all, I want to say that I appreciate you all coming and testifying; and since you all are recipients of a lot of the Federal funds, I do think it is important that we hear from you, particularly in light of the circumstances we find ourselves in, both at the local and the State level, and here at the Federal level, that we are running out of a limited resource, and that is taxpayer revenue that is making this whole show function.

    And since you use and are the recipients of most of that money, I think it is also important that we hear—for the first time you are going to get an open debate and some fair discussion, and maybe passage of some legislation to give you some regulatory relief.

    Now, I didn't hear anyone say, do away with all Federal regulations. Did I hear anybody say that? I don't think so. But what I think I heard as a common thread was, give us some flexibility, is that correct, to deal with some of these things.

    I also heard that, you know, if we are dealing under 1964 statutes, a hell of a lot has happened since 1964 and the world ain't the same. I remember in 1964 my dream was to make $100 a week, and that was a measure of success. But we don't live in that era anymore.

    So I have heard you say you want flexibility, you want us to look at some of these outdated laws and change them where we can take a limited number of dollars that we have at your level and our level and expand them.

    Is that correct, pretty much, just trying to get an overall picture?

    Let me ask you a question as far as the bucks that we are concerned with. I am learning a lot more as a new Member of this subcommittee. I have been on the full committee. But it is great to learn the imposition of the Federal mandates and requirements we have imposed. From the things that you have cited today, can you give me a ballpark figure of—if you had some flexibility, if we went back and looked at this, could we add another 10 percent to the pot, could we do more? I mean, what is this costing you out of your funds or the funds that we give you? Could you expand them, by what percent, as far as productive use of the money?
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    Mr. MCCRACKEN. We have some estimates, and the estimates assume total repeal and total inaction on that subject matter, neither of which is going to happen in a lot of cases.

    Mr. MICA. Right.

    Mr. MCCRACKEN. But in that hypothetical case, lumping in together the ability to use capital funds as they are currently defined for what is now defined as maintenance, although in reality is capital, we think it is over $100 million a year in Chicago.

    Mr. MICA. Which is what percent? I mean—

    Mr. MCCRACKEN. Our annual operating budget is $1.3 billion.

    Mr. MICA. So you are looking at 9, 8 to 10 percent? How about the rest of you?

    Mr. STANGL. May I just give you, not a percentage, but a number?

    We in New York, in addition to the subway and the bus system—and by the way, we operate toll bridges and tunnels which produce about a half a billion dollars in revenue that goes into our transit system; we also have two large commuter railroads. If you relieved us of the burdens of the railroad retirement system, which cost us $73 million a year, we would provide to our employees at least as good benefits, retirement benefits, for about $28 million; so we could save $45 to $50 million a year with that sort of relief.
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    We will get in operating assistance for the subways and the commuter railroads under the President's proposal, where he has got a $500 million level on operating, about 51 or 52 million—I may be off by a few million dollars—so that gives you some idea of the significance of some of these.

    Now, not all of them relate to big dollars. Some of them affect just the way we do business with people. Our Federal Employee Liability Act, we have to basically litigate with our employees over injuries; it is crazy. So we ought to be under some workmen's compensation system that would take away that sort of confrontation and fault-related system.

    Mr. MICA. So actually we could be hiring more people, you could be investing the money, so we could be expanding the public transit?

    Mr. STANGL. It is certainly possible. It is certainly possible.

    Mr. MICA. Thank you.

    Thank you, Mr. Chairman.

    Mr. PETRI. I would like to just follow up on the previous questions in one or two brief areas.

    There was considerable talk in all of your testimony, quite a bit of time spent on 13(c). Can you tell me, has this been enforced in a static way since it was enacted over 30 years ago? Has it been expanded or contracted in its scope? Could you discuss what has been going on here as it has been administered during the last generation?
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    Mr. MCCRACKEN. Yes. I certainly am not the expert, but we have been looking into it, and apparently the enforcement, according to our analysis, has expanded the scope of the Act as originally intended, which I understood to be the buyout of private operations and the protection of those private employees.

    I think maybe others on the panel could get into some detail.

    Mr. WEINRICH. Mr. Chairman, of course in Clark County, our experience directly dealing with 13(c) as a transit operating agency is just a few years old, but previously, as the grantee for Federal capital grants, we did have some dealings; and by comparison, in the early 1980s, the Commission had virtually no 13(c) issues raised with the exception of labor and its grants, whereas basically it has been an issue every time since the new system was started.

    Our perspective has been that the original focus of the Act was to protect private workers of private companies from the buyouts of those failing companies by a public entity, using Federal funds. Over the subsequent 20-or-so years, virtually every transit system involved public employees, and then it became a question of, as the public entities were either encouraged by the Federal Government or by local taxpayers to look at the private sector providing—using the free market forces of competition to bring cost efficiency to local governments and transit services, suddenly the application of 13(c) was being applied again to employees of private contractors, but contractors that weren't in financial difficulty as they were in 1964, going bankrupt, but rather healthy, competitive contractors.

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    Mr. PETRI. Thank you.


    Mr. JONES. I have been manager for 8 years and it has been a consistent problem for those 8 years. I think you are hearing about it more in the last few years, because more people are willing to speak about it. It is something that quite frankly a lot of transit managers and boards are afraid to complain about, because they don't want to be thought to be union-bashing. It is just simply, you can be against 13(c) without being against unions, and we are starting to realize that.

    Mr. PETRI. Just one fairly small point. Mr. Stangl, you mentioned in your testimony the large number of subway platforms that are being adapted to meet requirements of the Americans with Disabilities Act and how you could save money without disadvantaging anyone's access. Could you explain how—

    Mr. STANGL. Yes, sure. We struck a deal with the disabled and handicapped community in our area. We have got 469 subway stations. And they are old, they were built 70, 80, 90 years ago, they were not built to be accessible. We have agreed to make 100 of them accessible, what we call our ''key station'' program.

    One of the regulations that we have to live by is—and it is a matter of inches, and I realize that inches can be important, both the vertical and the horizontal relationship between the platform and the cars. We have old track, old roadbed that we are trying to fix; the cars can be at slightly different levels based on loading factors. If you gave us some flexibility on that issue, for example, we could save, our estimates are about $400,000 a station. That is $40 million.
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    It is not saying we won't make it accessible. All we are saying is that we would do it our way, we would do it within certain margins; and instead, we are bound by—I forget the name, it is a long name, the architectural barriers—help me out here—you know, which does some good things; and there are good reasons for a lot of these things. That is an area. That is one example.

    Mr. PETRI. Thank you very much.

    Mr. Weller has joined us and had a question of Mr. McCracken.

    Mr. WELLER. Thank you, Mr. Chairman.

    I regret that I missed some of the testimony and particularly when I see my former seatmate and friend Tom McCracken here representing the Regional Transportation Authority of Illinois. Tom, I know I enjoyed working with you in the State legislature. You were always the voice of reason and common sense and pragmatism, and I am glad to see you in the role that you are in now.

    Mr. MCCRACKEN. It depends on who was listening to that voice.

    Mr. WELLER. If you were still there, there would be more listening to your voice of reason.

    I do have one question, having read your testimony. In your testimony, you referred to the Department of Transportation's practice of issuing guidance circulars. What type of activities do these circulars address and regulate; and as a follow-up to that, do they function as guidance or suggestions, or actually are they just another form of regulation?
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    Mr. MCCRACKEN. The circulars are nominally advisory only. However, in practice, the effect can be far different.

    We just finished an audit by the Federal Government regarding the number of spare railcars in our el system in Chicago. We were criticized in the audit, and it was suggested by the auditor that $71 million in capital be withheld, and the basis for the criticism was a circular. The circular had a spare car ratio ceiling that it advised various authorities to keep under.

    Well, we had just closed down the line for a 2-year total rehabilitation project, so we had a lot of el cars sitting there. And for other reasons, unique to our system, we had more than this circular thought was wise.

    So then this report comes out, and it hits the paper—$71 million, CTA abuses Federal funding. Well, we looked into it, and it turned out that the circular said what it said, but the FTA regulations, on point, not only were not even silent; they said expressly, rail car ratios are too unique to each jurisdiction to adopt a standard ratio ceiling for. I mean, it was in black and white in the Federal regulations, yet we are criticized for not complying with the circular.

    So they are very significant, very significant, and really are promulgated with no checks, such as what you would have for laws or formal regulations.

    Mr. WELLER. Do you have any suggestions for how there could be some checks and balances on circulars?
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    Mr. MCCRACKEN. I don't know that I have any secrets, but in Illinois we had an oversight committee composed of legislators who would review regulations before they were officially adopted, and that seemed to work well; although whether that translates to such a big government—

    Mr. WELLER. Is that our joint Committee on Rules?

    Mr. MCCRACKEN. Yes. I used to serve on it and I thought it was very worthwhile. But the circulars are a problem.

    Mr. WELLER. Okay. Thank you.

    Thank you, Mr. Chairman.

    Mr. PETRI. Thank you all very much for your testimony.

    The hearing is adjourned.

    [Whereupon, at 1 p.m., the subcommittee was adjourned.]

    [Insert here.]

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(104–0 )









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FEBRUARY 8, 1995

Printed for the use of the

Committee on Transportation and infrastructure


BUD SHUSTER, Pennsylvania, Chairman

WILLIAM F. CLINGER, Jr., Pennsylvania
THOMAS E. PETRI, Wisconsin
HOWARD COBLE, North Carolina
JOHN J. DUNCAN, Jr., Tennessee
WILLIAM H. ZELIFF, Jr., New Hampshire
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BILL BAKER, California
JAY KIM, California
STEPHEN HORN, California
BOB FRANKS, New Jersey
PETER I. BLUTE, Massachusetts
JOHN L. MICA, Florida
ZACH WAMP, Tennessee
RANDY TATE, Washington
RAY LaHOOD, Illinois

NORMAN Y. MINETA, California
NICK J. RAHALL II, West Virginia
ROBERT A. BORSKI, Pennsylvania
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ROBERT E. WISE, Jr., West Virginia
JAMES A. HAYES, Louisiana
BOB CLEMENT, Tennessee
MIKE PARKER, Mississippi
ELEANOR HOLMES NORTON, District of Columbia
PAT DANNER, Missouri
JAMES E. CLYBURN, South Carolina
BOB FILNER, California

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THOMAS E. PETRI, Wisconsin, Chairman

RAY LaHOOD, Illinois, Vice Chairman
WILLIAM F. CLINGER, Jr., Pennsylvania
WILLIAM H. ZELIFF, Jr., New Hampshire
BILL BAKER, California
JAY KIM, California
STEPHEN HORN, California
BOB FRANKS, New Jersey
PETER I. BLUTE, Massachusetts
JOHN L. MICA, Florida
RANDY TATE, Washington
BUD SHUSTER, Pennsylvania
(Ex Officio)
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NICK J. RAHALL II, West Virginia
PAT DANNER, Missouri
JAMES E. CLYBURN, South Carolina
MIKE PARKER, Mississippi
BOB FILNER, California
NORMAN Y. MINETA, California
(Ex Officio)



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FEBRUARY 8, 1995

    Kerasiotes, James J., Secretary of Transportation, Commonwealth of Massachusetts, and Chairman, Massachusetts Bay Transportation Authority

    Jones, Keith, Executive Director, Central Arkansas Transit Authority, Little Rock, AR

    McCracken, Thomas J., Jr., Chairman, Regional Transportation Authority, Chicago, IL

    Poat, Andrew, Chief Deputy Director, California Department of Transportation

    Shackelford, Wayne, Commissioner, Georgia Department of Transportation, and President, American Association of State Highway and Transportation Officials

    Stangl, Peter E., Chairman and Chief Executive Officer, New York Metropolitan Authority Transportation, New York, NY

    Thompson, Charles H., Secretary, Wisconsin Department of Transportation

    Weinrich, Kurt, Director, Regional Transportation Commission of Clark County, Nevada

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    Kerasiotes, James J

    Jones, Keith

    McCracken, Thomas J. Jr

    Poat, Andrew

    Shackelford, Wayne

    Stangl, Peter E

    Thompson, Charles H

    Weinrich, Kurt


Next Hearing Segment(2)