Legislature(2013 - 2014)BARNES 124

02/06/2014 01:00 PM House TRANSPORTATION


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 260 COMMERCIAL MOTOR VEHICLE EXCEPTION TELECONFERENCED
Heard & Held
*+ HB 271 APPROP: RAILROAD FEASIBILITY STUDY TELECONFERENCED
Heard & Held
           HB 260-COMMERCIAL MOTOR VEHICLE EXCEPTION                                                                        
1:28:03 PM                                                                                                                    
                                                                                                                                
CHAIR P. WILSON announced that  the final order of business would                                                               
be  HOUSE BILL  NO. 260,  "An Act  relating to  transportation of                                                               
commercial motor vehicles."                                                                                                     
                                                                                                                                
1:28:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FEIGE  moved  to  adopt  the  proposed  committee                                                               
substitute  (CS)   for  HB  260  labeled,   28-LS1155\O,  Martin,                                                               
1/22/14,  as the  working document.   There  being no  objection,                                                               
Version O was before the committee.                                                                                             
                                                                                                                                
1:29:03 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE ISAACSON, speaking as  joint prime sponsor, stated                                                               
that this bill  builds on HB 15 that passed  the legislature last                                                               
year,  which  increased  weight   restrictions  on  vehicles  for                                                               
pickups from  10,000 to 14,000  pounds.  Currently,  drivers must                                                               
hold  a commercial  driver's license  (CDL)  to operate  vehicles                                                               
26,001 pounds  and over.   This bill supports  truck dealerships,                                                               
the "upfitting"  industry, and commercial  end users  by reducing                                                               
regulations and  costs in Alaska.   Currently,  commercial trucks                                                               
are  brought  to  Alaska by  dealerships  from  assembly  plants,                                                               
"upfitted" by  three or  four Anchorage-based  manufacturers that                                                               
make  alterations to  complete the  vehicle,  and transported  to                                                               
dealers  outside Anchorage.   He  explained "upfitting",  that an                                                               
upfitter may  add a flat  bed or  a box van  to the chassis  of a                                                               
vehicle  similar  to a  Ford  F-150  or a  Ram  3300.   Once  the                                                               
upfitting is completed the vehicle becomes  too large to put on a                                                               
normal vehicle transporter, which  necessitates that a driver fly                                                               
to Anchorage  and transport  it to  the dealership  -typically in                                                               
Kenai, Prudhoe Bay, and Fairbanks - to ultimately be sold.                                                                      
                                                                                                                                
REPRESENTATIVE  ISAACSON  reiterated  that current  law  requires                                                               
drivers transporting  dealer-owned vehicle  to possess a  CDL and                                                               
medical certificate  even though the trucks  being transported to                                                               
dealers are not being used  to transport commercial or interstate                                                               
payloads.  Further,  the specific rules and regulations  of a CDL                                                               
entail  the  maintenance  of  a  logbook  and  a  physical  exam.                                                               
Additionally, the vehicle  is required to have  a U.S. Department                                                               
of Transportation decal identifying  the gross vehicle weight and                                                               
pertinent  information  and  the  owner  must  permanently  affix                                                               
safety equipment.   However,  the permanent  safety modifications                                                               
are meant to be made after the  point of sale when the vehicle is                                                               
actually put  into use.  Freeing  up the dealership to  use their                                                               
employees as drivers will reduce  the ultimate cost to the owners                                                               
and allow the  dealers to operate more  competitively.  Providing                                                               
exceptions for  driving upfitted  vehicles without  being subject                                                               
to  commercial  vehicle enforcement  reduces  the  impact on  the                                                               
state's   commercial   vehicle  enforcement   division,   thereby                                                               
allowing the  enforcement officers  to concentrate  on regulating                                                               
the commercial vehicles they are charged with overseeing.                                                                       
                                                                                                                                
1:32:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  ISAACSON explained  that Version  O includes  two                                                               
restrictions  requested  by  the DOT&PF's  weights  and  measures                                                               
section.   First, it added  language that  the driver must  be 18                                                               
years of age  or older.  Second, Version  O excluded 16-passenger                                                               
vans.                                                                                                                           
                                                                                                                                
1:33:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON  asked whether  this bill applies  only to                                                               
new vehicles.                                                                                                                   
                                                                                                                                
REPRESENTATIVE ISAACSON answered yes.                                                                                           
                                                                                                                                
1:33:18 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON  said he  does  not  see any  restriction                                                               
limiting new dealers in Version O.                                                                                              
                                                                                                                                
REPRESENTATIVE ISAACSON  answered that  Version O would  apply to                                                               
vehicles  in the  dealer's possession,  which  generally are  new                                                               
vehicles.    Typically  used  vehicles  are  bought  "as  is"  so                                                               
generally the bill will apply to new vehicles.                                                                                  
                                                                                                                                
1:34:13 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FEIGE  said the  bill  is  limited up  to  19,500                                                               
pounds  and passenger  vans  15  passengers or  less.   He  asked                                                               
whether it should be extended  to all commercial vehicles and the                                                               
reason for the limitation.                                                                                                      
                                                                                                                                
REPRESENTATIVE ISAACSON answered that this  bill met the needs of                                                               
the  dealerships, although  he is  not opposed  to expanding  the                                                               
language.  He deferred to the dealers to answer.                                                                                
                                                                                                                                
1:35:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GATTIS  asked   to  piggyback  on  Representative                                                               
Johnson's  query.   She asked  for  the downside  on adding  used                                                               
vehicles  since farmers  often buy  used vehicles  and have  them                                                               
retrofitted.                                                                                                                    
                                                                                                                                
REPRESENTATIVE ISAACSON  responded that  perhaps he had  been too                                                               
hasty with his earlier remarks so  he corrected himself.  He said                                                               
he  thinks of  the vehicles  in question  as typically  being new                                                               
vehicles; however, the  bill does permit a vehicle  in control of                                                               
a dealership  to be "upfitted."   Thus, this bill would  apply if                                                               
the person  purchased the  vehicle in one  city; the  vehicle was                                                               
modified by  upfitter in a  different city than the  dealer, [and                                                               
transported to  the dealer].   He was unsure that  this describes                                                               
the normal experience for an individual buying a "used" vehicle.                                                                
                                                                                                                                
1:37:01 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FEIGE  referred to page  1, line 12 of  Version O,                                                               
which  states in  part, "The  commercial motor  vehicle does  not                                                               
have to  be inspected  before transport  to the  dealership ...."                                                               
He  asked for  clarification  on which  inspection this  language                                                               
references.    He   wondered  if  this  is   the  inspection  the                                                               
commercial driver performs  - the walk around inspection  - or if                                                               
this is a formal inspection done by a certified shop.                                                                           
                                                                                                                                
REPRESENTATIVE  ISAACSON answered  this  language  refers to  the                                                               
specific  Department   of  Transportation  &   Public  Facilities                                                               
(DOT&PF) inspection decal  that is required to  be affixed inside                                                               
the door that identifies the  end user, the gross vehicle weight,                                                               
and a series  of other identifications.  He offered  to provide a                                                               
photo of the sticker to the committee.                                                                                          
                                                                                                                                
1:38:17 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FEIGE  suggested it might  be more useful  to cite                                                               
the specific statutes or regulation.                                                                                            
                                                                                                                                
REPRESENTATIVE ISAACSON offered to do so.                                                                                       
                                                                                                                                
1:38:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON  asked how this bill  would affect someone                                                               
desiring to upfit  a truck or motor home in  Seattle and drive it                                                               
to  Alaska.   He  acknowledged  he would  like  to  see the  work                                                               
performed in Alaska, but would like to know the implications.                                                                   
                                                                                                                                
1:39:36 PM                                                                                                                    
                                                                                                                                
BRENDA HEWITT, Staff, Representative  Doug Isaacson, Alaska State                                                               
Legislature, on  behalf of the  joint prime sponsor,  stated that                                                               
his example  would fall under  interstate commerce;  however, the                                                               
bill is aimed  at intrastate commerce since Anchorage  is the end                                                               
point.   She explained  the circumstances that  led to  the bill,                                                               
such  that  someone   would  order  a  vehicle   with  the  final                                                               
destination being Prudhoe Bay, but  the vehicle would be upfitted                                                               
and most upfitters  are currently located in Anchorage.   In this                                                               
instance the  purchase was considered to  be interstate commerce,                                                               
[which  falls   under  federal  regulations]  so   the  upfitting                                                               
couldn't be accomplished.   Under the bill, the  vehicle would be                                                               
purchased in Seattle but the end  point would be considered to be                                                               
Anchorage.   At  that point,  the vehicle  could be  upfitted and                                                               
would  be considered  intrastate  commerce.   Substantially,  the                                                               
vehicle  would  be moved  from  Anchorage  [to the  purchaser  or                                                               
dealer at the end point, such as Fairbanks or the North Slope].                                                                 
                                                                                                                                
1:40:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON  related a  scenario in  which in  which a                                                               
dealer purchases a truck in  Seattle, has it upfitted in Seattle,                                                               
transports  it  via tote  on  the  Alaska Marine  Highway  System                                                               
(AMHS), offloads it  in Whittier and then drives it  to the North                                                               
Slope.   He asked whether  he would need  a CDL to  transport the                                                               
vehicle since it would be considered interstate commerce.                                                                       
                                                                                                                                
MS. HEWITT related her understanding  that it would be considered                                                               
interstate and not covered under  the bill, but she suggested the                                                               
DOT&PF could also respond.                                                                                                      
                                                                                                                                
1:41:18 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON, in response  to a question, clarified the                                                               
vehicle would be outfitted in Seattle.                                                                                          
                                                                                                                                
REPRESENTATIVE  ISAACSON   answered  that  if  the   vehicle  was                                                               
outfitted  in Seattle  it would  fall outside  the scope  of this                                                               
bill.   He  provided an  example  of HB  260, that  it will  help                                                               
rectify an instance  in which the oil industry  purchases a fleet                                                               
of vehicles, retains  the similar chassis but needs  the back end                                                               
of the vehicles to have  utility configurations.  The "upfitting"                                                               
of  these vehicles  would occur  in Anchorage,  but the  industry                                                               
doesn't purchase the  vehicle until it arrives  at the dealership                                                               
[in  Fairbanks, Kenai,  or  the  North Slope].    Currently if  a                                                               
Fairbanks  dealer  purchases  a  vehicle, which  is  upfitted  in                                                               
Anchorage, the  dealer is subject to  regulatory requirements for                                                               
fire extinguishers,  DOT&PF inspections  - resulting  in stickers                                                               
that  identify   end  user,  gross  vehicle   weight,  and  other                                                               
information - even  though money hasn't been paid  to the dealer.                                                               
The  dealer wants  to transport  the vehicle  after upfitting  in                                                               
Anchorage to  the Fairbanks or  other location.  This  bill would                                                               
"kick  in" [and  allow this  to happen  without being  subject to                                                               
commercial vehicle regulations.]                                                                                                
                                                                                                                                
1:43:22 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON asked for  clarification on the nuances of                                                               
the  vehicle  being   upfitted  in  Anchorage.     He  asked  for                                                               
clarification on the  difference between a vehicle  that is being                                                               
upfitted  in Seattle  and one  being upfitted  in Anchorage.   He                                                               
wondered  if the  bill  would be  "running  afoul" of  interstate                                                               
commerce  by restricting  something from  coming in  from outside                                                               
[Alaska].                                                                                                                       
                                                                                                                                
REPRESENTATIVE ISAACSON  identified the important  distinction as                                                               
being the point of destination.                                                                                                 
                                                                                                                                
REPRESENTATIVE   JOHNSON   answered   the  destination   in   the                                                               
aforementioned scenario would be the dealership in Fairbanks.                                                                   
                                                                                                                                
REPRESENTATIVE ISAACSON  responded that currently if  the vehicle                                                               
is landed  in Anchorage on its  way to Fairbanks, it  would still                                                               
be considered interstate commerce.   He related his understanding                                                               
that  if it  is  landed  in Anchorage  to  be  upfitted that  the                                                               
vehicle  [ownership]  would  still rest  with  the  manufacturer.                                                               
Therefore,  the  intrastate  commerce  [laws would  apply].    He                                                               
clarified that his office worked  with the DOT&PF on the language                                                               
in Version O.                                                                                                                   
                                                                                                                                
REPRESENTATIVE  FEIGE   interjected  that   contractual  language                                                               
should identify the point of ownership changes.                                                                                 
                                                                                                                                
1:44:34 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON, referring  to  the scenario,  understood                                                               
the point of ownership would occur in Fairbanks.                                                                                
                                                                                                                                
REPRESENTATIVE ISAACSON deferred to the DOT&PF to answer.                                                                       
                                                                                                                                
1:44:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FEIGE  referred to Version  O, page 2, line  2, to                                                               
subsection (b)  which read, "A  driver transporting  a commercial                                                               
motor  vehicle for  a  motor  vehicle dealer  under  (a) of  this                                                               
section must be 18 years or older  ...."  Thus anyone 18 years or                                                               
older  can  move the  vehicle  from  the  upfitter to  the  final                                                               
destination -  the dealer's point of  sale - whether or  not they                                                               
have  a commercial  driver's license  (CDL).   He  asked for  the                                                               
current requirements.                                                                                                           
                                                                                                                                
REPRESENTATIVE ISAACSON answered  that a person would  not need a                                                               
CDL to operate vehicle under  26,001 pounds; however, that DOT&PF                                                               
could  better answer  this.   He related  his understanding  that                                                               
dealers  must technically  either use  drivers with  a CDL  or be                                                               
subject to the medical as well  as the other provisions.  He said                                                               
this bill addresses the technicality  so enforcement officers can                                                               
easily  identify  that  the  vehicle is  still  in  the  dealer's                                                               
possession, that  the vehicle  has dealer's  plates and  proof of                                                               
insurance   so  it   is  not   subject   to  commercial   vehicle                                                               
regulations.    Therefore, anyone  can  drive  the vehicle  [from                                                               
Anchorage to  the point of  sale without  needing a CDL  or being                                                               
subject to commercial vehicle enforcement].                                                                                     
                                                                                                                                
1:46:45 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FEIGE referred  to page  2, line  4 of  Version O                                                               
that pertains to transporting the  vehicle.  He asked whether the                                                               
language  could be  interpreted to  mean the  person is  actually                                                               
driving  the  vehicle  or  if  the  person  is  transporting  the                                                               
vehicles  by using  a  trailer.   He  said the  way  the bill  is                                                               
written  someone  could drive  a  semi  hauling several  vehicles                                                               
between  Anchorage  and  Fairbanks   without  needing  a  CDL  or                                                               
complying with  other requirements,  such as  being subject  to a                                                               
medical examination.                                                                                                            
                                                                                                                                
REPRESENTATIVE ISAACSON  acknowledged that is  a good point.   He                                                               
offered   to  obtain   clarification   on   whether  the   person                                                               
transporting  the vehicle  is driving  or operating  the vehicle.                                                               
He said he understood the nuance.                                                                                               
                                                                                                                                
CHAIR P. WILSON  added that some questions the  Department of Law                                                               
needs and the DOT&PF need to answer.                                                                                            
                                                                                                                                
1:48:46 PM                                                                                                                    
                                                                                                                                
DAN  SMITH,   Director,  Division  of  Measurement   Standards  &                                                               
Commercial  Vehicle Enforcement,  Department of  Transportation &                                                               
Public  Facilities  (DOT&PF),  stated  that  the  state  has  the                                                               
authority  to regulate  intrastate  commerce for  vehicles up  to                                                               
26,000 pounds.  Vehicles designed  or used to transport more than                                                               
16  passengers  automatically fall  under  the  authority of  the                                                               
Federal Motor Carrier Safety Administration (FMCSA).                                                                            
                                                                                                                                
MR.  SMITH explained  that HB  260 would  exclude those  vehicles                                                               
designed to transport  passengers.  In terms  of the inspections,                                                               
he  understood  that  this  pertains  to  the  "396.17"  periodic                                                               
inspection [required  under federal 49  C.F.R. Part 396.17].   He                                                               
stated that the  DOT&PF's weigh station inspection  can also take                                                               
the place of the periodic  inspection.  He further understood the                                                               
inspection would  not be required  for a  brand new vehicle.   In                                                               
terms of the  origin and destination, this bill  would apply only                                                               
to intrastate commerce.  For  example, if a vehicle originated in                                                               
Ohio with a destination of  Prudhoe Bay, the transaction would be                                                               
considered  interstate  commerce  and   fall  under  the  federal                                                               
definition "at  10,000 pounds."   However,  he clarified  that if                                                               
the vehicle origination  was Ohio with a destination  of the Port                                                               
of Anchorage -  and on to an  upfitter or a dealer  in Alaska, it                                                               
would be considered intrastate commerce.                                                                                        
                                                                                                                                
1:50:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   FEIGE  related   his   understanding  that   the                                                               
distinction  between interstate  and intrastate  would depend  on                                                               
where  the transfer  of  ownership  takes place.    He asked  for                                                               
clarification of the  transfer if a dealer in  Fairbanks orders a                                                               
vehicle  from a  [manufacturer].   He further  asked whether  the                                                               
transfer of  ownership would happen  when the vehicle  arrives at                                                               
the dealer,  if it accomplished  through a  contractual provision                                                               
that   specifies  when   the  ownership   transfer  between   the                                                               
manufacturer and the  dealer occurs, or if these  transfers are a                                                               
matter of convention.                                                                                                           
                                                                                                                                
CHAIR P. WILSON related her  understanding that the bill attempts                                                               
to provide  a remedy for dealers,  who wish to avoid  the expense                                                               
of  complying  with  regulations.   The  regulatory  requirements                                                               
include  specific provisions  pertaining  to fire  extinguishers;                                                               
however, when the  vehicle is sold, the buyer might  not want the                                                               
extras.  Under  the bill, the [Seattle]  dealer [or manufacturer]                                                               
has  possession.   When the  Alaska dealer  sells the  vehicle to                                                               
someone  else  in  Alaska  it would  fall  under  the  intrastate                                                               
jurisdiction so  the dealer  should not be  subject to  the extra                                                               
expense [caused by the federal regulatory requirements].                                                                        
                                                                                                                                
REPRESENTATIVE FEIGE  related his understanding that  if a dealer                                                               
purchased the chassis in Detroit  and moved it across state lines                                                               
that  it   would  fall  under  the   jurisdiction  of  interstate                                                               
commerce.                                                                                                                       
                                                                                                                                
CHAIR P. WILSON agreed that  the scenario just described would be                                                               
considered interstate  commerce until  it reaches  the dealership                                                               
in Alaska.                                                                                                                      
                                                                                                                                
1:53:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE ISAACSON  said, "To the  point of entry  if that's                                                               
where they designated it ..."                                                                                                   
                                                                                                                                
1:53:31 PM                                                                                                                    
                                                                                                                                
ANMEI  GOLDSMITH,  Assistant   Attorney  General,  Transportation                                                               
Section, Department  of Law (DOL),  said the change  in ownership                                                               
transfers  would  determine  whether the  transport  falls  under                                                               
interstate   or   intrastate   commerce.      She   agreed   with                                                               
Representative Feige that this would  most likely be addressed in                                                               
the contract between  the dealer and the manufacturer.   She said                                                               
that  under HB  260 that  transfer point  should probably  be the                                                               
Port of Anchorage.                                                                                                              
                                                                                                                                
CHAIR P. WILSON asked for further clarification.                                                                                
                                                                                                                                
1:54:37 PM                                                                                                                    
                                                                                                                                
MS. GOLDSMITH  responded that a  manufacturer builds  the vehicle                                                               
and the  manufacturer owns the  vehicle.  The  manufacturer would                                                               
sell the vehicle to the  dealership and by contract would specify                                                               
the  specific  point  when  the ownership  of  the  vehicle  will                                                               
transfer to the  dealer.  The contract  transferring ownership to                                                               
the  dealer could  specify a  day, time,  and a  place, with  the                                                               
dealership  as  the  owner.    The place  of  transfer  from  the                                                               
manufacturer  to the  dealer would  be the  Port of  Anchorage in                                                               
order  to give  the dealership  protection under  the bill.   For                                                               
example,  the   contract  could  indicate  the   manufacturer  is                                                               
shipping a vehicle to the  Port of Anchorage, with an anticipated                                                               
barge arrival  at the Port of  Anchorage on February 10  at 10:00                                                               
a.m.  The  dealership would assume ownership once  the vehicle is                                                               
offloaded  from   the  barge  and   all  the  legal   rights  and                                                               
responsibilities  of  owning  a  vehicle would  transfer  to  the                                                               
dealer.                                                                                                                         
                                                                                                                                
1:55:52 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON offered  his belief  that dealerships  do                                                               
not own  the vehicles.  He  suggested that the dealership  pays a                                                               
flooring fee  and the manufacturer  owns the vehicles  until they                                                               
are  transferred to  private individuals;  however, he  suggested                                                               
the dealerships could testify to clarify this point.                                                                            
                                                                                                                                
MS. GOLDSMITH agreed that is how  many dealerships work.  Thus in                                                               
order  for  dealerships to  get  the  protection HB  260  offers,                                                               
something may need  to be changed, either in  the way dealerships                                                               
operate  or some  language may  need  to be  added to  HB 260  to                                                               
accommodate how things normally occur.                                                                                          
                                                                                                                                
REPRESENTATIVE JOHNSON argued that he  did not think dealers will                                                               
want  to  spend  money  on  flooring.    He  thought  perhaps  an                                                               
important step is being missed,  that when something is upfitted,                                                               
the process  makes it  a custom  job and  the vehicle  has likely                                                               
already  been  purchased.    For  example,  someone  such  as  an                                                               
electric  utility  may buy  a  vehicle  under  a certain  set  of                                                               
specifications, such as requiring an  upfitter to install a lift.                                                               
He did  not think brand new  vehicles sit at the  dealership lots                                                               
that  don't  come  from  the  manufacturer.   He  did  not  think                                                               
dealerships  bring  trucks  to Alaska,  have  them  outfitted  on                                                               
specification to sell to the utilities.                                                                                         
                                                                                                                                
1:57:31 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE ISAACSON  agreed.   He deferred  to the  DOT&PF to                                                               
answer.                                                                                                                         
                                                                                                                                
REPRESENTATIVE JOHNSON turned to  his previous scenario, in which                                                               
a  vehicle was  purchased,  upfitted in  Seattle, transported  to                                                               
Anchorage as compared to purchasing  and upfitting the vehicle in                                                               
in  Anchorage.   He expressed  concern that  the bill  treats the                                                               
same  vehicle  differently across  state  lines.   He  asked  for                                                               
assurance that this doesn't violate the law.                                                                                    
                                                                                                                                
REPRESENTATIVE ISAACSON deferred to the DOL to respond.                                                                         
                                                                                                                                
REPRESENTATIVE   JOHNSON  remarked   that  he   supports  helping                                                               
Alaskans,  but  he wants  to  be  sure  the bill  doesn't  create                                                               
problems with federal law.                                                                                                      
                                                                                                                                
2:00:25 PM                                                                                                                    
                                                                                                                                
MS.  GOLDSMITH answered  that  the language  in  the bill  states                                                               
"point of  assembly," which  could be  problematic.   She thought                                                               
the  discussion today  has  assumed that  the  Port of  Anchorage                                                               
would be the  point of ownership change from  the manufacturer to                                                               
the Alaska  dealership, but  the bill  language identifies  it as                                                               
being from  "the point of assembly  of the vehicle in  this state                                                               
to a dealership in this state  ...." She suggested that the point                                                               
of assembly is likely the yard performing the upfitting.                                                                        
                                                                                                                                
CHAIR  P. WILSON  offered her  belief that  the dealerships  deal                                                               
with these circumstances all the time.                                                                                          
                                                                                                                                
2:01:27 PM                                                                                                                    
                                                                                                                                
BILL  BROWN,  President  and  General  Manager,  Bob's  Services,                                                               
agreed that the dealerships encounter this  on a daily basis.  He                                                               
related his  understanding that  the dealership  takes possession                                                               
of the vehicle  once it is at the final  transport point from the                                                               
manufacturing.   For example,  if a  dealership orders  a vehicle                                                               
shipped  to Anchorage,  the  dealership  takes responsibility  at                                                               
that point  or when the  company picks it up  from the port.   He                                                               
said,  "I  don't  think  it  is  their  responsibility  from  the                                                               
manufacturer   to   their   door,   that's   the   manufacturer's                                                               
responsibility."  He stated that  his company also encounters lot                                                               
of  vehicles in  need of  transport  that are  oversized for  the                                                               
transport industry.   It  has been costly  for the  dealership to                                                               
hire  a drive-away  company to  transport the  upfitted vehicles.                                                               
Instead, the  dealerships would like  to use their  own personnel                                                               
to do  the transport.   For  example, when a  vehicle is  sold to                                                               
ConocoPhillips  Alaska, Inc.  or another  company in  Alaska, the                                                               
buyer has specifications and the vehicles must be modified.                                                                     
                                                                                                                                
2:03:28 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FEIGE  asked where  his business  is located.   He                                                               
said he assumed that Bob's Services was an upfitter.                                                                            
                                                                                                                                
MR. BROWN answered that Bob's  Services is an upfitter located in                                                               
Anchorage.                                                                                                                      
                                                                                                                                
REPRESENTATIVE  FEIGE asked  whether  the manufacturer  maintains                                                               
ownership all the way to the  dealer's floor or if Bob's Services                                                               
transfers ownership.                                                                                                            
                                                                                                                                
MR. BROWN  explained that typically  ownership is  transferred at                                                               
the first  point of delivery.   He said that in  Mr. Angel's case                                                               
[Seekins Ford-Lincoln]  the point of  delivery would be  at Bob's                                                               
Service in  Anchorage and the  Fairbanks dealership  would assume                                                               
the freight charges to move the vehicle onward.                                                                                 
                                                                                                                                
REPRESENTATIVE  FEIGE clarified  that the  transfer of  ownership                                                               
typically occurs at the upfitter's location.                                                                                    
                                                                                                                                
MR. BROWN explained that it would  not be a transfer of ownership                                                               
but rather would  be considered a transfer  of responsibility and                                                               
the   vehicle  falls   within  the   flooring   program  of   the                                                               
manufacturer.   He said he was  fairly certain that is  the case,                                                               
that the dealership  doesn't take ownership until  they have sold                                                               
the vehicle.                                                                                                                    
                                                                                                                                
2:04:40 PM                                                                                                                    
                                                                                                                                
STEVE ANGEL,  Fleet Sales  Manager, Seekins  Ford-Lincoln, stated                                                               
that  his   job  at  Seekins  Ford-Lincoln   entails  "specking,"                                                               
ordering, and  delivering commercial  vehicles for  customers and                                                               
Seekins Ford-Lincoln's sales  lots in Fairbanks and  on the North                                                               
Slope.   He said  that some  of the  vehicles are  cabin chassis'                                                               
have been upfitted with bodies  which include boxes, flatbeds, or                                                               
service bodies that  are too large for standard  car carriers due                                                               
to the  overall dimensions of  the upfit.  The  upfitted vehicles                                                               
need  to  be   shipped  on  a  flatbed   type  trailer,  commonly                                                               
considered  an 18  wheeler, which  adds greatly  to the  dealer's                                                               
expense.   Those costs would ultimately  be passed on to  the end                                                               
user.   As a result,  this places dealers outside  Anchorage Bowl                                                               
at  a  disadvantage  pricewise   when  competing  for  commercial                                                               
business.                                                                                                                       
                                                                                                                                
MR. ANGEL said that the  majority of the businesses providing the                                                               
upfitting  services are  located in  Anchorage and  Seekins Ford-                                                               
Lincoln  has employees  pick up  and drive  completed trucks  and                                                               
vans to Fairbanks  or to Prudhoe Bay.  He  described the types of                                                               
vehicles being transported as not  being complex or equipped with                                                               
air  brakes  or  towing  trailers.    Instead,  the  vehicles  in                                                               
question  are  regular trucks  and  vans  that  due to  the  body                                                               
configuration  are considered  to be  commercial even  though not                                                               
yet licensed or titled.   These vehicles meet all height, weight,                                                               
length,  and  width  requirements  and  when  placed  in  service                                                               
commercially would  not require  a permit  to operate  in Alaska.                                                               
He  explained  that current  law  requires  vehicles over  14,000                                                               
pounds must  have a current  DOT&PF inspection.   Primarily, that                                                               
inspection consists  of an equipment  inspection, with  a placard                                                               
placed  on the  right-hand side  of the  vehicle, usually  on the                                                               
fender  or the  door.   The  placard lists  items, including  the                                                               
owner,  the  DOT  or  ICC   number,  and  gross  vehicle  weight.                                                               
Additionally, these  vehicles must  carry an  inspection document                                                               
in  the  vehicle,  which also  contributes  to  additional  cost.                                                               
Further, not all end users  are required to carry the inspections                                                               
even though  the vehicles may  exceed 14,000 pounds.   He related                                                               
his  understanding that  government entities,  such as  the city,                                                               
municipalities,  and the  state  are not  required  to have  this                                                               
placard on the door.  He  indicated that some of the vehicles are                                                               
ones not yet sold, but  are destined for Seekins Ford-Lincoln, so                                                               
the dealership  doesn't even  know the  end user;  therefore, the                                                               
dealership doesn't  have an ICC number  or other data to  make it                                                               
legal to move these vehicles.                                                                                                   
                                                                                                                                
2:08:30 PM                                                                                                                    
                                                                                                                                
CHAIR P. WILSON  asked whether each individual  vehicle is driven                                                               
or if the vehicles are transported via a flatbed.                                                                               
                                                                                                                                
MR. ANGEL  explained that Seekins Ford-Lincoln  brings some units                                                               
to their  facility in a  cabin chassis, without an  "upfit" being                                                               
performed.   In the  event a customer  wants a  particular upfit,                                                               
the dealership will  use a commercial carrier to back  haul it to                                                               
Mr. Brown's  facility or to  another upfitter in Anchorage.   The                                                               
upfitter  will perform  the  upfit  work.   He  pointed out  that                                                               
vehicles  without  any  upfitting  will fit  on  a  standard  car                                                               
carrier.  He said the issue  occurs after the upfit is completed,                                                               
since  thee  upfitted vehicles  won't  fit  on the  standard  car                                                               
carrier.   The upfitted vehicles  may be  too wide, too  high, or                                                               
too long.   He pointed out that these types  of vehicles have the                                                               
exact same steering wheel and  other configurations as a standard                                                               
pickup  truck.   The only  difference is  that instead  of having                                                               
pickup boxes, these vehicles may  have a flatbed, a service body,                                                               
or any number of similar configurations.                                                                                        
                                                                                                                                
2:10:22 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FEIGE  said it seems  that the transport  must fit                                                               
into the definition  of intrastate commerce in  order for Seekins                                                               
Ford-Lincoln to be able to take advantage of the bill.                                                                          
                                                                                                                                
Mr. ANGEL agreed.                                                                                                               
                                                                                                                                
REPRESENTATIVE FEIGE reiterated  that currently, the manufacturer                                                               
owns the vehicle until it is  sold on behalf of the manufacturer.                                                               
He  asked  whether Seekins  Ford-Lincoln  or  the end  user  took                                                               
ownership of it  at the Port of  Anchorage or if it  would fit in                                                               
the dealer's business model since it  will tie up capital and the                                                               
dealership would incur the costs.                                                                                               
                                                                                                                                
MR.  ANGEL answered  that  Seekins  Ford-Lincoln typically  takes                                                               
control  of the  vehicles at  the  upfitter or  at Seekins  Ford-                                                               
Lincoln's lot  in Fairbanks or  Deadhorse.  He explained  that is                                                               
the point at which the  dealership has control over the vehicles.                                                               
He indicated  that Seekins  Ford-Lincoln doesn't  own any  of the                                                               
vehicles on  their lot, that  the vehicles are floored  and owned                                                               
by Ford  Motor Credit.   However, the vehicles are  considered to                                                               
be  in  Seekins  Ford-Lincoln's  possession and  as  far  as  the                                                               
manufacturer  is  concerned  the dealership  is  responsible  for                                                               
them.                                                                                                                           
                                                                                                                                
REPRESENTATIVE  FEIGE replied  that  the committee  will need  to                                                               
decide  whether the  transfer of  responsibility  will allow  the                                                               
vehicles in  question to  fit into  the definition  of intrastate                                                               
commerce; otherwise the bill will not help the dealerships.                                                                     
                                                                                                                                
2:12:53 PM                                                                                                                    
                                                                                                                                
CHAIR P.  WILSON asked whether  the language could be  changed to                                                               
address the issue.                                                                                                              
                                                                                                                                
MS. GOLDSMITH answered  that she discussed this  briefly with Mr.                                                               
Smith,  DOT&PF right  now.   She said  the DOL  & DOT&PF  doesn't                                                               
think  a problem  exists the  way the  bill is  currently written                                                               
because   the  carrier   is  responsible   to  comply   with  the                                                               
regulations.    Essentially,  it  doesn't  matter  who  owns  the                                                               
vehicle  since the  person  who is  legally  responsible for  the                                                               
vehicle is required  to comply with the law.   She compared it as                                                               
being similar to  a personal vehicle that is leased.   The leased                                                               
vehicle is owned  by the car company or the  bank, but the driver                                                               
who  leases  it   is  responsible  for  the   insurance  and  any                                                               
accidents.   In  this instance,  the vehicles  would be  owned by                                                               
manufacturer, or the bank, but  once the dealership assumes legal                                                               
responsibility for the vehicles is  the point that the bill would                                                               
"kick in."   She emphasized  that full ownership is  probably not                                                               
necessary; it would just be the legal responsibility.                                                                           
                                                                                                                                
2:14:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON related  a scenario in which  he picks car                                                               
up at  an upfitter and  is subsequently  ticketed.  He  asked who                                                               
would be issued the ticket:  the individual or the dealership.                                                                  
                                                                                                                                
MS. GOLDSMITH asked for clarification  on whether he was speaking                                                               
as the dealer.                                                                                                                  
                                                                                                                                
REPRESENTATIVE  JOHNSON  answered that  in  this  scenario he  is                                                               
working for dealer  and was hired to  pick up a truck.   He asked                                                               
who would get the ticket if  the truck did have any documentation                                                               
and he was pulled over by a trooper.                                                                                            
                                                                                                                                
MS. GOLDSMITH  answered that the  driver should not get  a ticket                                                               
since the  dealer is responsible  for the vehicle and  the driver                                                               
is transporting the  upfitted vehicle from the  point of assembly                                                               
in the  state to the  dealership in the  state.  She  assumed the                                                               
vehicle has  dealer plates, proof  of registration, and  proof of                                                               
insurance.    If  the  driver  was  ticketed,  the  driver  could                                                               
probably successfully challenge the ticket, she said.                                                                           
                                                                                                                                
2:15:55 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON  said   referred  to  the  aforementioned                                                               
scenario,  but asked  Ms. Goldsmith  to  apply current  law.   He                                                               
asked whether the dealer or the driver would be ticketed.                                                                       
                                                                                                                                
MS. GOLDSMITH  answered that without  this bill the  driver would                                                               
be ticketed.                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON   offered  his   belief  this   leads  to                                                               
responsibility   and  ownership   issues   and   the  driver   is                                                               
responsible but  not the dealer.   He  was unsure the  bill would                                                               
give the Alaska firm preferential treatment.                                                                                    
                                                                                                                                
MS.  GOLDSMITH  deferred  to DOT&PF  to  answer  the  enforcement                                                               
question.                                                                                                                       
                                                                                                                                
MR.  SMITH  answered that  normally  the  DOT&PF works  with  the                                                               
operating authority.   When a commercial vehicle  is brought into                                                               
the state and the party registers  the vehicle at the Division of                                                               
Motor Vehicles (DMV), the DMV  requires the party to identify the                                                               
carrier who  is responsible for safety  of the vehicle.   He said                                                               
this encompasses  the motor carrier  and safety  regulations, and                                                               
the U.S.  DOT number  that establishes  the party  with operating                                                               
authority  for   either  passenger  or  property   carrier.    He                                                               
explained that at the roadside  inspection, it will always be the                                                               
operator who is issued any citation  for violations.  He said the                                                               
DOT&PF  would make  the inspection  at the  roadside or  during a                                                               
traffic stop.                                                                                                                   
                                                                                                                                
2:17:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE ISAACSON asked for  clarification.  He recalled an                                                               
earlier question  was whether not  offer the exemption in  HB 260                                                               
would apply to all vehicles up to 26,001 pounds in weight.                                                                      
                                                                                                                                
2:18:23 PM                                                                                                                    
                                                                                                                                
MR. ANGEL answered  that lots of times vehicles  at 26,000 pounds                                                               
are ones  equipped with air  brakes and other systems  that would                                                               
fall  under  a  requirements  of a  commercial  driver's  license                                                               
(CDL).    He   offered  that  the  bill's  intent   is  to  allow                                                               
dealerships  to  move completed  vehicles  that  are not  complex                                                               
vehicles, but  fall under commercial  definition due to  the body                                                               
type after  upfitting.   He emphasized  that he  did not  want to                                                               
avoid any  safety regulations since  he believes  the regulations                                                               
are important.   He stressed he  is not advocating that  the bill                                                               
exempt the  type of vehicle  after it's been titled  a commercial                                                               
vehicle or if  the vehicle is beyond realm of  the average person                                                               
to drive it  in a safe and conscientious manner.   He pointed out                                                               
a lot  of variables come into  play once the vehicle  goes beyond                                                               
the 19,500 pound threshold.  He  said at that point it might take                                                               
a bit more  skill to operate the vehicle  safely, particularly if                                                               
it has air brakes or other commercial configurations.                                                                           
                                                                                                                                
2:20:04 PM                                                                                                                    
                                                                                                                                
CHAIR P. WILSON offered her belief that the questions raise the                                                                 
complexity of this bill and the issues.                                                                                         
                                                                                                                                
[HB 260 was held over.]                                                                                                         
                                                                                                                                
2:21:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LYNN imagined how difficult it would be for a                                                                    
driver to explain everything that was discussed today with                                                                      
respect to the vehicles.                                                                                                        

Document Name Date/Time Subjects
HB260 sponsor statement.pdf HTRA 2/6/2014 1:00:00 PM
HB 260
CSHB 260 ver o.pdf HTRA 2/6/2014 1:00:00 PM
HB 260
Sectional on CSHB260.pdf HTRA 2/6/2014 1:00:00 PM
HB 260
HB260-DOT-MSCVE-1-31-14.pdf HTRA 2/6/2014 1:00:00 PM
HB 260
HB0260A.pdf HTRA 2/6/2014 1:00:00 PM
HB 260
HB 260 Wandler - letter of support.pdf HTRA 2/6/2014 1:00:00 PM
HB 260
HB 271 RR - Sponsor Statement.pdf HTRA 2/6/2014 1:00:00 PM
HB 271
HB0271A.pdf HTRA 2/6/2014 1:00:00 PM
HB 271
Economic Impact of a North Slope Rail Extension.pdf HTRA 2/6/2014 1:00:00 PM
HB 271
HB271_Transportation Corridor Study 1972.pdf HTRA 2/6/2014 1:00:00 PM
HB 271