Legislature(2005 - 2006)HOUSE FINANCE 519
04/21/2006 08:30 AM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB54 | |
| SB304 | |
| SB308 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 54 | TELECONFERENCED | |
| + | SB 304 | TELECONFERENCED | |
| + | SB 308 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE BILL NO. 304
"An Act relating to the privileges of airport parking
shuttles and to fees or charges imposed on a person who
is not a lessee or holder of a privilege to use the
property or a facility of an airport."
RYAN MAKINSTER, STAFF, SENATOR JOHN COWDERY, said he is
representing the Senate Transportation Subcommittee. Under
Alaska law, commercial vehicles that deliver people to the
airport fall into one of six general categories: limos, tour
buses, standard bus service, off-airport shuttles, off-
airport car rental shuttles and courtesy vehicles.
Depending on the vehicle's classification, a fee is charged
depending on the access to the airport. Under statute,
these fees are supposed to be reasonable and uniform for the
same class of privileges and services, and to be established
with due regard to the property and improvements used and
the expense of operation by the state. He emphasized that
the fees are to be uniform.
Mr. Makinster related that recently the Department of
Transportation proposed regulations which would charge off-
airport valet parking services a tax equal to 8 percent of
their gross revenues, or over $100,000 per year. Currently,
they are being charged a yearly rate based on the number of
shuttles they have, or about $2,500 per year. The proposed
regulations would also require a private entity without a
lease agreement to open their books to show gross sales.
The sponsor of the bill disagrees with this idea.
Mr. Makinster noted that the purpose of the bill is not to
set rates, but to clarify the law so that the rates are
reasonable and uniform and based on use, not on a percentage
of gross revenue.
Representative Hawker asked for an explanation of the fiscal
note. Mr. Makinster replied that it is a zero note. It is
not a cost to the state, but is funded through landing fees.
The airlines don't have a problem with it.
9:14:10 AM
Representative Hawker related that the current fiscal note
suggests that the fiscal burden would be shifted to the
airlines. He maintained that that is not an accurate
statement because the bill would not allow DOT or the
airport to shift the burden from the airlines, where it
currently exists, to the rental car facility. Mr. Makinster
agreed.
Representative Hawker cited in the description of the fiscal
note, "the bill would undermine changes the legislature
enacted last year to AS 02.15.090H and one to provide the
financing mechanism customer facility charge for the
Anchorage Airport rental car facility currently under
construction." He asked if the bill would undermine changes
made last year. Mr. Makinster replied that the on-airport
car rental companies would assume all costs for that unit.
The language in the fiscal note seems to be in direct
violation of the promise made last year. The reassurance
was made last year that the cost would only be absorbed by
those using the new airport rental center. Representative
Hawker suggested that the drafter of the fiscal note amend
it.
9:18:16 AM
MIKE NEELY, DIAMOND PARKING, ANCHORAGE, testified in support
of the bill. He described the facility and the land trade
and purchase involving the Municipality of Anchorage. He
pointed out that Diamond Parking owns the former Spenard
Community dump and has developed it into a facility with a
capacity to park nearly 1,200 vehicles at a cost of $12
million. Diamond Parking sells service. People park their
cars at their facility, are picked up at their car, and
transported to the airport, then picked up again when they
return. Diamond Parking is open 24 hours a day, 365 days a
year, employing 25 to 30 people, with an annual payroll of
half a million dollars. To do business at the airport,
Diamond Parking is currently required to have ramp passes
for each of the shuttle buses to drive onto airport
property. They purchase 5 annual passes at $500 each, which
is a fair rate and compares to rates charged to for similar
service.
Mr. Neely reported that in addition to the ramp pass
expense, the airport is seeking a percentage of the gross
revenue. Based on projections for 2006, this amount could
be as high as $l20,000 and would be the difference between
profit and loss. He opined that it is not fair. All other
businesses that pick up and drop off customers from off-
airport facilities are charged a flat fee. Diamond Parking
has been trying to come to an agreement with the airport.
He spoke of two other facilities, one in Salt Lake City and
one in Spokane. In Spokane a flat fee is paid. In Salt
Lake City the fee is paid on a per-trip basis. Both methods
are fair.
Mr. Neely related that Diamond Parking has proposed two
solutions, a per car fee and a per bus trip fee. Seattle,
Portland and Salt Lake City use the per bus trip fee.
Diamond Parking also proposed to install the equipment, but
both methods were flatly rejected in favor of the status quo
of 8 percent.
9:23:52 AM
DAN COFFEE, ERNOUF AND COFFEE, ANCHORAGE, concurred with Mr.
Neely's testimony. He reported that the airport's attitude
is "but for the airport there would be no off-airport
parking". He maintained that state statute says that people
will be charged commensurate with the amount of airport they
use. He disagreed that the airport is entitled to a
percentage of gross proceeds of anything that does business
with the airport. The current law needs to be followed. He
stated that airport parking already has a competitive
advantage, and has taken the easy way out by taking 8
percent of the gross profit. He requested that the
committee address this issue. He addressed the fiscal note
and the parking garage. He spoke of past ownership in a car
rental. He dispelled the fear that car rentals would move
off airport.
Representative Stoltze asked about the process for
administrative appeal. Mr. Coffee described the in-house
procedure that allows an aggrieved party to challenge a
regulation prior to going to court. So far, only a hearing
officer has been appointed and there has been no hearing.
Representative Stoltze said it is not likely to be resolved
soon.
Co-Chair Meyer mentioned the zero fiscal note by the
Department of Transportation and Public Facilities.
JOHN TORGERSON, DEPUTY COMMISSIONER FOR AVIATION, DEPARTMENT
OF TRANSPORTATION AND PUBLIC FACILITIES, reported that there
is another pending fiscal note. He stated that the
Department remains opposed to the bill. He appreciated the
amendments made by the House Transportation Committee. He
questioned the intent of Section 2.
9:33:14 AM
Co-Chair Meyer asked about the pending fiscal note. Mr.
Torgerson thought the note, which is a zero note, would be
available later today. It addresses a recent amendment.
Co-Chair Meyer reported about the 8 percent parking fee that
is under appeal. Mr. Torgerson said a hearing officer was
assigned to the case.
9:36:08 AM
REPRESENTATIVE CARL GATTO asked about the 8 percent fee as
it applies to a car agency in Wasilla. He wondered at what
distance a person is not considered renting a car from the
airport. Mr. Torgerson replied that there is no specific
distance stated in statute, but there are no fees imposed in
Wasilla.
JOHN STEINER, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF LAW,
addressed Representative Gatto's question. He related that
there is a possible fee for that distance if the car rental
agency has arranged for transportation, such as a cab. If
passengers take a cab on their own, the fee would not apply.
9:38:37 AM
Representative Hawker said he would be comfortable moving
the bill out of Committee upon the opportunity to see the
fiscal note.
Co-Chair Meyer decided to hold the bill until the afternoon.
SB 304 was heard and HELD in Committee for further
consideration.
9:39:57 AM
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