Legislature(1993 - 1994)
03/03/1994 03:00 PM L&C
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE AND SENATE LABOR AND COMMERCE STANDING COMMITTEES JOINT MEETING March 3, 1994 3:00 p.m. HOUSE MEMBERS PRESENT Rep. Bill Hudson, Chairman Rep. Joe Green, Vice Chair Rep. Eldon Mulder Rep. Bill Williams Rep. Joe Sitton Rep. Brian Porter HOUSE MEMBERS ABSENT Rep. Jerry Mackie SENATE MEMBERS PRESENT Sen. Steve Rieger Sen. Judith E. Salo SENATE MEMBERS ABSENT Sen. Tim Kelly, Chairman Sen. Steve Rieger, Vice-Chairman Sen. Bert Sharp Sen. Georgianna Lincoln OTHER LEGISLATORS PRESENT Rep. Gary Davis Rep. Carl E. Moses Rep. Tom Brice Rep. Jeannette JAmes COMMITTEE CALENDAR HSCR 3: Disapproving Executive Order No. 89. PASSED OUT OF COMMITTEE *HB 295: "An Act relating to a citizens' utility board; and amending Alaska Rule of Civil Procedure 24." HEARD AND HELD IN COMMITTEE *HB 509 "An Act relating to the tax on transfers or consumption of motor fuel, and to the proceeds from the tax; and providing for an effective date." NOT HEARD (* First public hearing.) WITNESS REGISTER REP. GAIL PHILLIPS Alaska State Legislature State Capitol Juneau, Alaska 99801 Phone: (907) 465-4931 Position Statement: Prime Sponsor of HSCR 3 JACK SLAMA Teamster's Union PO Box 102092 Phone: (907) 269-4101 Position Statement: Testified in opposition to EO 89 HELVI K. SANDVIK, Deputy Commissioner Department of Transportation 3132 Channel Drive Juneau, Alaska 99801-7898 Phone: (907) 465-6973 Position Statement: Testified in opposition to HSCR 3 ROBERT EAKMAN Alaska Independent Trucking Association 200 W. 34th, Suite 863 Anchorage, Alaska 99501 Phone: Not available Position Statement: Testified in favor of HSCR 3 (testified via teleconference) PAUL FUHS, Commissioner Department of Commerce and Economic Development P.O. Box 110800 Juneau, Alaska 99811-0800 Phone: (907) 465-2500 Position Statement: Testified in support of EO 89 REP. KAY BROWN Alaska State Legislature State Capitol Juneau, Alaska 99801 Phone: (907) 465-4998 Position Statement: Prime Sponsor of HB 295 STEVE CONN, Executive Director Alaska Public Interest Research Group 601 W. 18th Avenue Anchorage, Alaska 99501 Phone: (907) 258-5523 Position Statement: Testified in support of HB 295 BOB JENKS, Executive Director Oregon Citizen's Utility (address not given) Phone: (503) 227-1984 Position Statement: Testified in favor of HB 295 (testified via teleconference) PHYLLIS TURNER, Director Citizen's Utility Board Organizing Project (address not given) Washington, D.C. Phone: (202) 387-8030 Position Statement: Testified in favor of HB 295 (testified via teleconference) THOMAS C. WILLIAMS, Director Permanent Fund Dividend Division Department of Revenue P.O. Box 110460 Juneau, Alaska 99811-0460 Phone: (907) 465-2323 Position Statement: Testified in favor of HB 295, with considerations MARK FOSTER 611 Gold St., Unit D Juneau, Alaska 99801 Phone: (907) 586-2827 Position Statement: Testified in favor of HB 295 PREVIOUS ACTION BILL: HSCR 3 SHORT TITLE: DISAPPROVING EXECUTIVE ORDER NO. 89 SPONSOR(S): REPRESENTATIVE(S) PHILLIPS,Vezey,G.Davis,Barnes, Brice,Sitton,Mulder,Finkelstein JRN-DATE JRN-PG ACTION 02/02/94 2217 (H) READ THE FIRST TIME/REFERRAL(S) 02/02/94 2217 (H) RULES 02/28/94 2549 (H) SPONSOR SUBSTITUTE INTRODUCED-REFERRALS 02/28/94 2550 (H) LABOR & COMMERCE 03/02/94 2588 (H) COSPONSOR(S): FINKELSTEIN 03/03/94 (H) L&C AT 03:00 PM CAPITOL 124 03/03/94 (S) L&C AT 03:30 PM BILL: HB 295 SHORT TITLE: CREATE CITIZENS' UTILITY BOARD, INC. SPONSOR(S): REPRESENTATIVE(S) BROWN,B.Davis,Sitton,Nordlund, Davies,Finkelstein JRN-DATE JRN-PG ACTION 04/26/93 1529 (H) READ THE FIRST TIME/REFERRAL(S) 04/26/93 1529 (H) LABOR & COMMERCE, STATE AFFAIRS, FINANCE 02/28/94 (S) RES AT 03:30 PM BUTROVICH ROOM 205 03/03/94 (H) L&C AT 03:00 PM CAPITOL 124 BILL: HB 509 SHORT TITLE: INCREASE MOTOR FUEL TAX SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR JRN-DATE JRN-PG ACTION 02/18/94 2458 (H) READ THE FIRST TIME/REFERRAL(S) 02/18/94 2458 (H) L&C, STATE AFFAIRS, FINANCE 02/18/94 2458 (H) -FISCAL NOTE (REV) 2/18/94 02/18/94 2458 (H) -2 ZERO FISCAL NOTES (DEC, DOT) 2/18/94 02/18/94 2458 (H) GOVERNOR'S TRANSMITTAL LETTER 03/03/94 (H) L&C AT 03:00 PM CAPITOL 124 ACTION NARRATIVE TAPE 94-18, SIDE A Number 001 CHAIRMAN HUDSON called the meeting to order at 3:13 p.m., stated there was a quorum present, and announced the calendar. He said the committee would be joined by the Senate to address the Sponsor Substitute for House Special Concurrent Resolution Number 3 (SSHSCR 3), and the committee would then hear HB 295, followed by HB 509. HSCR 3 - DISAPPROVING EXECUTIVE ORDER NO. 89 Number 019 REP. GAIL PHILLIPS, Prime Sponsor of HSCR 3, read the following sponsor statement: "Executive Order 89 by Governor Hickel recommends that Weights and Measures (W&M) be transferred from the Department of Commerce and Economic Development (DCED) to the Department of Transportation (DOT). After reviewing this Order, the House Transportation's Weights and Measures Subcommittee failed to find sufficient reasoning for this transfer. House Special Concurrent Resolution 3 disapproves of the transfer and reflects the findings of the W&M Subcommittee. "Hearings held in the fall of 1993 by the Weights and Measures Subcommittee found that some regulations were not being properly enforced, but these problems were mostly due to a lack of enforcement by the Department of Public Safety (Alaska State Troopers). Most of these problems have since been corrected, but at no time during these hearings was any criticism directed at DCED. "What the Subcommittee did find was that W&M has been consistently underfunded by the legislature. Due to this underfunding W&M has not had the weigh stations as often as desired. This situation will only be changed when the legislature appropriates more funds to W&M, not by transferring it to DOT. "Finally, we have been told that the State is in a position to lose $20 million in federal funding if W&M is not transferred to DOT. This is not true. In your packets you will find a copy of the FHWA Office of Motor Carrier evaluation report. After reviewing this report carefully I could not find any real concerns or major problems in our state's size and weight enforcement program. I reviewed the information provided on Oregon and Idaho's trucking enforcement programs and I feel that Alaska's program better complies with federal standards. It is important to note that it is rare that any state meets all of the requirements set out by US DOT. According to Mr. Max Piper, Director, Office of Motor Carrier in Washington, D.C., our W&M program has been approved by the US DOT. He stated that Alaska is NOT in any danger of losing any ISTEA funding. He also went on to say that Alaska complies to federal standards better than most other states. I feel the information provided to you will back up this statement. I do not see any need or reason to transfer this program to DOT. HSCR 3 will keep W&M under the supervision of DCED where it continues to work efficiently and up to federal requirements." Number 054 REP. WILLIAMS asked Chairman Hudson to explain the memorandum from Rep. Carl Moses, Chairman of the House Rules Committee. Number 057 CHAIRMAN HUDSON said Rep. Moses indicated that this joint hearing was in violation of the House rules. He said the Legislative Affairs Agency provided a legal interpretation on this matter, and he read a memorandum received from Tamara Brandt Cook. (The 2/11/94 memorandum is available in the committee file.) Chairman Hudson pointed out that there was a serious difference of opinion. He then read paragraph (3) of Rep. Moses's memorandum: "The violation of Rule 21(b) is that a joint committee has not been formed by means of the adoption of a concurrent resolution. The Rule reads in part: `A joint committee may be established only by the adoption of a concurrent resolution.' There has been no such resolution introduced to date." (The 3/3/94 memorandum is available in the committee file.) Chairman Hudson said he brought the two differing opinions before the leadership of the House. He said since he believed the committee was on solid ground he would proceed with the meeting. Number 115 JACK SLAMA, Teamster's Union, testified in opposition to Executive Order 89. He said, evidently, truckers are not represented in this issue, and it is not because they are apathetic. He said he spoke with a trucker, one of the largest in the state, who said concerning the bureaucracy he "was tired of being treated like a dog." He said this is not a union issue; trucking is a viable industry, employing a tremendous amount of people who often make good wages and have good benefits. Mr. Slama said there needs to be a process whereby the state can be an advocate of the trucking industry. He mentioned that Commissioner Campbell is smart, nice, powerful, and influential and is also part of the explanation for the trucking industry's minimal representation. He pointed out that prior administrations have not always supported this industry. In addition to this, the trucking industry competes with the Alaska Railroad, and in many cases the railroad dictates what truckers are going to be paid. He said the DOT is seeking to have more control, and there needs to be a system of checks and balances. He said the enforcement factor is protection for truckers in a totally deregulated industry. He said nothing short of enforcement will offer protection in this arena of deregulation. He asked that instead of putting a little fix on a big problem, a task force of industry peers be put together. He said that this administration has been "poor listeners." He said his attempt is to make better listeners out of Commissioner Campbell, the DOT, and hopefully the governor. Number 206 REP. MULDER stated his appreciation of Mr. Slama's attendance at the meeting. He said that as part of the budget subcommittee Rep. Phillips mentioned previously, it was enlightening to hear the truckers' position on enforcement. He asked Mr. Slama to highlight the perspective of teamsters and truckers on enforcement. MR. SLAMA said it is not a contradiction of terms for the trucking industry to be in favor of enforcement. He explained that the legitimate carriers comply with rules, federal regulations, and ensure proper maintenance of equipment. He said there is a problem with operators who are not in compliance because they know how to get around the system. He affirmed that complying with regulations costs money and the person who does not comply could care less about enforcement. REP. MULDER referred to an insinuation that truckers would prefer dealing with DCED because there is a lack of enforcement in commerce. He pointed out that responsible truckers want adequate enforcement because it encourages a level playing field. He then asked if the truckers' position was in favor of this function being transferred to the DOT. Number 241 MR. SLAMA said he did not believe the truckers wanted a transfer because they did not have confidence in the political system and transferring this to the DOT would make it more political than it is today. He said he sees this as a conflict of interest because both the DOT commissioner and Commissioner Fuhs sit on the board of the railroad. Number 257 (CHAIRMAN HUDSON noted that SEN. STEVE RIEGER and SEN. JUDITH SALO from the Senate Labor and Commerce Committee were at the meeting.) Number 261 SEN. STEVE RIEGER pointed out that the Senate Labor and Commerce Committee had previously heard Executive Order 89, although they had not heard HSCR 3. Number 268 CHAIRMAN HUDSON mentioned this was his first involvement with a joint meeting of this nature. Chairman Hudson asked Mr. Slama to summarize his position on Executive Order 89 and on HSCR 3. Number 283 MR. SLAMA reiterated that he was asking the state to be an advocate of the trucking industry; he asked that W&M not be transferred from the DCED to the DOT. He said the administration needs to commit to funding W&M and needs to incorporate participation from people who are working within the industry. He concluded his comments by repeating that people need to be better listeners. Number 294 REP. WILLIAMS referred to Mr. Slama's earlier comment and said he hoped it was not the case that truckers were being treated unfairly. He asked for further clarification on Mr. Slama's reference to the commissioners both sitting on the board of the Alaska Railroad. MR. SLAMA explained that the railroad is a direct competitor of the trucking industry and therein lies a conflict of interest. He asserted that in the past the trucking industry's complaints, requests for assistance, and requests for additional funding for compliance have "fallen on deaf ears." He acknowledged that the trucking industry is not the most polished, professional organization. He said it was his belief that one should not serve the administration and also sit on the board of directors of the Alaska Railroad. REP. WILLIAMS agreed that the Alaska Railroad is in competition with truckers. He said he did not believe the state or any government should compete with private enterprise. Number 336 HELVI SANDVIK, Deputy Commissioner, Department of Transportation, apologized for Commissioner Campbell's inability to attend the meeting. She said he would be accessible by telephone at approximately 4:00 p.m. to answer questions. She said the real reason for Executive Order 89 is not to determine whether the program is being run properly by the DCED, but rather, regardless of who is running it, to acknowledge that improvements need to be made because the issue is deterioration of the highway system. She said the state is responsible for maintaining and operating the highways and the DOT is the agency that is directly responsible for that. She explained that the DOT has been working closely with the DCED as well as the Department of Public Safety (DPS). She acknowledged that the program was not perfect, "but was in pretty good shape." She noted that it was important to improve upon the enforcement of W&M. MS. SANDVIK said the issue is a matter of efficiency. She mentioned that each of the three agencies is responsible for a particular element. She said the DCED, responsible for permitting, frequently contacts the DOT to establish the stipulations and criteria under which permits will be issued. She explained that this process could be handled more efficiently within a single agency. She said the bottom line is that the DCED is not able to catch the perpetrators, therefore, enforcement is inefficient. She said data collected from the weigh-in-motion system, a program the DOT is responsible for, is compared to data collected by the DCED to determine the effectiveness of the enforcement program. The preliminary results of the weigh- in-motion system is that identification of oversize vehicles at fixed stations has been problematic. She said the third area is the DPS's utilization of jump scales. She repeated that the DPS has been underfunded in this area. She restated that this was not an issue of DOT versus DCED, but was an issue of the most effective and efficient management of the problem. She asserted that effective management would involve consolidation of the permitting and enforcement operations. MS. SANDVIK commented on Mr. Slama's testimony and said she was unsure of specific problems involved with transferring this function to the DOT. She did not think this was an issue of the DOT wanting more power and she repeated her point that the DOT, as the agency directly responsible for the deterioration of the highways, should deal with the people driving the overload or oversize vehicles. She responded to the concern for increased administrative costs and said there was a zero fiscal note on this item. She explained that the intent would not be to lay off DCED employees, as they would be transferred to the DOT. She said the DOT would be coordinating the programs and therefore transferring people, not eliminating them. REP. GREEN asked whether problems with the weigh-in-motion system were due to the scales being closed or due to a conflict between what the scales reported and what the weigh-in-motion systems were indicating. MS. SANDVIK replied that the problems were caused by both. She said that the number of reported vehicles going through the scale houses, compared to the data collected by weigh- in-motion, indicated that not as many vehicles were identified at the fixed scale houses. She said perhaps the scales were closed, or possibly the scales were not picking up the problems that the weigh-in-motion systems were picking up. Number 465 REP. GREEN asked for further clarification about the mechanics of the system. Number 470 MS. SANDVIK explained that when a vehicle runs over the computerized system, it measures the speed, calculates the distance between axles, and measures the weight of the vehicle. She said this information is put into a computerized data base which is generated and collected by the DOT. Number 480 REP. GREEN alluded to the assertion that the DCED had insufficient personnel to keep the scales open long enough while the DOT had access to sufficient personnel. He asked if more dollars would be expended for longer scale time. Number 490 MS. SANDVIK responded that staffing would not necessarily be increased, but there would be closer coordination between weigh-in-motion personnel and people directly working the scale houses. She referred to personnel and funding resources, and said the DOT currently has more flexibility than the DCED. Number 502 REP. GREEN asked her to comment on Mr. Slama's determination that there was a conflict of interest. Number 503 MS. SANDVIK said she was not sure where Mr. Slama was coming from regarding this conflict of interest. She said although it was true that Commissioner Campbell as well as Commissioner Fuhs sat on the board of the Alaska Railroad, it seemed clear that Commissioner Campbell's focus was on the condition of Alaska's highways. She said any improvements or enforcement action necessary to manage oversize loads on trucks would relate directly to his concern for highway conditions; moreover, from her understanding, this had nothing to do with the Alaska Railroad. Number 509 (Chairman Hudson acknowledged that REP. GARY DAVIS and DEPUTY COMMISSIONER C.E. SWACKHAMMER were in the audience. He excused Sen. Steve Rieger from the meeting.) REP. MULDER commented that Rep. Green's questions about weigh-in-motion were "smack on the target." He said there was some misunderstanding "about this whole justification." He said, according to DOT's commissioner, there is a 12 percent margin of error. He explained that with a 38 thousand pound limit, and a 12 percent margin of error, there is a four thousand pound margin of error either way, which is eight thousand pounds. Rep. Mulder pointed out that the scale houses and weigh-in-motion devices are stationery, while the biggest offenders of the system are actually running between locations. He said the way to catch offenders is through DPS's enforcement on the roads; therefore, transferring W&M to Commerce would not help the situation, but DPS enforcement could make a difference. Rep. Mulder then commented on the irony of Commissioner Campbell's absence from the meeting. TAPE 94-18, SIDE B Number 001 REP. MULDER continued by saying the justification for the transfer was that the DOT would otherwise lose $20 million. He asked Ms. Sandvik if this same justification was used in the past. Number 009 MS. SANDVIK replied that she was unaware if this was used but stated that the potential exists for the Federal Highway Administration to subject the DOT to a 10 percent sanction if the DOT had an insufficient enforcement program. She observed that although the potential exists, she did not believe this enforcement action was imminent. Number 017 REP. MULDER said Ms. Sandvik was correct and reminded the committee that when this issue was brought up at the start of session, Commissioner Campbell said that if the transfer did not occur, the DOT would be out of compliance and $20 million would be lost. He referred to a letter from the commissioner, and refuted it based on information he received from the Federal Highway Administration in Juneau, the regional office in Portland, and the federal office in Washington, D.C. Rep. Mulder said he was told that W&M of Alaska not only met federal guidelines, but was doing better than most states. He suggested that the current problem was not actual, but perceptual, and he reminded the committee that the DOT's argument had changed from that of losing $20 million to an argument for increased efficiency. He disagreed with this assertion and pointed out that if more general fund dollars were allocated to the weigh stations, they would be open longer, and this would hold true even if under DOT management. He concurred with Mr. Slama that the DOT wants consolidation and power, and is, in effect saying, "Trust me, give me more power, let me set all the rules and all the enforcement mechanisms, and I will be fair, and I will also be efficient." He concluded by saying he opposed the transfer because he did not think this was a proper course of action, and furthermore a proper check and balance system is currently in existence. REP. GREEN inquired into utilizing the information from weigh-in-motion to adjust the time frames for the scales to be open. He asked if there had been any suggestion to change the hours so that, for example, the scales would be open at one o'clock a.m. rather than during mid-day. MS. SANDVIK said yes, the weigh-in-motion program was intended to complement the fixed scale program. She said the full weigh-in-motion program was planned to be operative as of 1996. She restated that the DCED had limitations, whereas the DOT felt they had access to other resources should a significant problem become apparent. Number 071 REP. GREEN said he had difficulty with what was just said. He wondered why one organization would do a better job of enforcement than another given that the DPS would still be involved with enforcement. He also asked if the weigh-in- motion data, even with a discrepancy, could be useful in determining patterns. Number 082 MS. SANDVIK restated that the difference between the organizations was the ability to devote resources to the problem. She pointed out that the DPS was not the sole entity responsible for enforcement and that enforcement was a shared responsibility. She said presumably the DOT, the DCED or the DPS could issue citations. Number 094 REP. GREEN said he would not belabor the point, but he had not as yet found a reason for transferring this function. Number 095 MS. SANDVIK said she must not have clearly articulated the DOT's problem of being directly responsible for maintaining, operating, and developing the highway structure, and yet having to rely on another agency. She said the other agency has its own issues and this particular problem was not its primary focus. She added that while it was true that the DOT has more to focus on than enforcement, it was also true that this program is very significant to DOT. She said a lot of overlap exists and DOT feels more managers are involved in the enforcement program than is necessary for an efficiently run operation. Number 110 REP. MULDER asked Ms. Sandvik if she was familiar with an organization called the Alaska Commercial Truck and Transportation Advisory Committee. He said it was a well- intentioned, informal working group comprised of parties trying to resolve problems. He pointed out that the DOT pulled out of the organization, because it did not see a viable purpose for the organization. Rep. Mulder said, "That is the kind of attitude I am expressing, Mr. Chairman." Number 128 (Chairman Hudson indicated that REP. CARL E. MOSES and REP. TOM BRICE were in the audience.) CHAIRMAN HUDSON stated that he wanted to go to the network at this time. Number 136 ROBERT EAKMAN, Alaska Independent Trucking Association, testified from Anchorage and referred to a letter dated 1/19/94 which expressed the association's position. He noted that considering the funding, W&M has done a commendable job and transferring them to the DOT would not be the best move. He said in reference to the scales being open, he has a 1/20/94 letter from W&M saying that the weigh stations were open approximately 38 percent of the time during the 1993 fiscal year. He said this was due to a definite lack of funding. He said that with the additional funding for the 1994 fiscal year, W&M intends to operate selected weigh stations for periods of 24 hours, seven days per week. He remarked that he failed to see how transferring this to the DOT would change the number of hours in the day. He said the proposal should be executed on its merits and should be substantiated by facts. He mentioned some benefits of not moving the program (indiscernible). He said the truck size, weight enforcement program, and W&M share managers and administrative personnel and there will be costs associated with the transfer. He said the current program consists of well-trained and well- managed personnel and the industry has expressed no dissatisfaction with the conduct of the program, in fact, just the opposite. He said the only dissatisfaction has been with underfunding the program and the enforcement section. He said the Federal Highway Administration has shown concern for truck size and weight enforcement laws, but has indicated that Alaska is in compliance. He pointed out that there are knowledgeable people involved in measurement and standards with years of experience pertaining to truck enforcement permit matters. He noted that DOT has a number of engineers, but he questions their knowledge of enforcement. He concluded his remarks by saying there are not enough troopers, inspectors, or workers to handle enforcement and the real problem exists with enforcement, or the lack of it. Number 230 REP. MULDER commented that it would be helpful for the committee to hear from Commissioner Fuhs. Number 238 COMMISSIONER PAUL FUHS, Department of Commerce and Economic Development, said he hoped no one expected him to argue against the administration's position and he hoped he could answer questions. He said both the governor and Pat Ryan gave clear instructions to provide strict enforcement of highway and weight standards. He said quite a few trucking companies had approached him because they were concerned with being undercut. He said until last year only 38 percent of the time was covered in weigh stations and even though those times were periodically changed, people were still getting by. He said the department asked for additional funds last year and received $300,000 for the weigh station program. He reported that the department currently provides close to 100 percent coverage of four areas, at the behest of the Federal Highway Administration. COMMISSIONER FUHS referred to secondary enforcement and pointed out that there is not enough coverage in the commercial vehicle safety instruction program due to a funding problem. He said more funds need to be allocated to DPS, as evidenced by last year's inadequate inspection of approximately 1,600 out of 44,000 commercial vehicles. He said it is completely a matter of funding, not a matter of commitment or competency. He also mentioned that the federal government wants to have programs in communities such as Valdez and Nome. He said those communities do not have adequate funds for these programs so there may be compliance problems down the road, primarily in the secondary enforcement program. Number 278 CHAIRMAN HUDSON asked if any fees cover the operating costs of weigh stations. Number 281 COMMISSIONER FUHS said fees collected from applications for oversize or overweight trucks raises about $130,000 per year. He said they do not have the statutory authority to charge fees at weigh stations. Number 285 SEN. JUDY SALO asked about money collected from fines. Upon confirmation from Commissioner Fuhs that this went to the general fund, she asked the amount. Commissioner Fuhs said he did not know but would check into it. Number 291 REP. MULDER said the industry is aware of the situation and is interested in exploring the option of a self-imposed tax, or advocating one to the legislature because they recognize the need for adequate enforcement. He asked Commissioner Fuhs if there was any basis for the insinuation that scale measurements were inaccurate. Number 299 COMMISSIONER FUHS said W&M certifies all scales in Alaska, including scales used for fish, groceries, gas pumps, or police radar guns. He said the weigh scales have to be certified twice a year. Number 307 REP. JEANNETTE JAMES prefaced her comments by saying she favors truckers and is supportive of their situation. She said most truckers do not intend to violate the law and the real offenders are the dirt and gravel haulers; she sees evidence of this on the roads in her district. Number 321 COMMISSIONER FUHS said possibly the fines could be increased for those carrying illegal loads. He emphasized that in order for the municipalities to have more people weighing trucks, there needs to be more funding available to DPS. Number 325 MR. EAKMAN interjected and said he did not mean to imply, in his earlier comment, that truckers and dirt haulers were deliberately avoiding scales because they were overweight. He meant to point out that they did not go to scales due to positioning. COMMISSIONER FUHS said generally the gravel trucks were not long-haul trucks. He explained that there is an attempt to get the gravel as close to the construction site as possible without being late. He agreed that they were not intentionally avoiding the scales. Number 346 REP. JAMES said she knows truckers and she knows there is an avoidance that occurs. Number 350 COMMISSIONER FUHS replied, "If they are driving on one of these highways, I will guarantee you that we will stop them and weigh them, 100 percent coverage." Number 351 REP. WILLIAMS asked for more information about the weigh-in- motion system. Number 355 COMMISSIONER FUHS said the equipment is not precise enough to be used for enforcement as it has a 12 percent error margin. He said the DCED allows for only 1,000 pounds over the weight, which is analogous to "getting arrested for going 55-1/2 m.p.h." Number 365 REP. WILLIAMS asked if the allowance could be considered as a helpful measure in enforcement. COMMISSIONER FUHS said this was possible. He said the information was useful to the DOT, but could not be used for enforcement. REP. WILLIAMS mentioned that even with the 12 percent margin of error, W&M was keeping the truckers moving and with this approximation, they could then be directed to a scale. COMMISSIONER FUHS said this was true in that it was useful information in identifying trends and patterns. REP. WILLIAMS asked if the DCED would use the information. COMMISSIONER FUHS said they would definitely use it. Commissioner Fuhs added that he wanted to make it clear that they support Executive Order 89. Number 389 REP. PORTER asked Commissioner Fuhs to confirm that there was an inadequate number of inspections executed. Number 390 COMMISSIONER FUHS answered this was correct. He said the DCED was required by the Federal Highway Administration to inspect vehicles for safety considerations. He reiterated that this was a matter of inadequate funding. Number 394 REP. PORTER commented that many jurisdictions refer to the private sector first and then utilize government inspectors to inspect the inspections. Number 399 COMMISSIONER FUHS said this may be the case, he did not know. He suggested that the people running the weigh stations could also perform inspections. Number 403 CHAIRMAN HUDSON noted that testimony on HSCR 3 had been completed. He referred to the signature sheet and read the following statement from that document: "The House Labor and Commerce Committee and the Senate Labor and Commerce Committee have met jointly to consider SS For House Special Concurrent Resolution 3 Disapproving Executive Order No 89. The House members have taken action to report the resolution back to the House with individual recommendations. Senate members were invited to express their individual recommendations also." Number 427 REP. MULDER moved SS for HSCR 3 with individual recommendations and accompanying zero fiscal note. Number 429 CHAIRMAN HUDSON hearing no objection, declared it was so moved. CHAIRMAN HUDSON, after some discussion of the calendar, directed the committee's attention to HB 295 and noted that HB 509 would not be addressed. HB 295 - CREATE CITIZENS' UTILITY BOARD, INC. Number 461 REP. KAY BROWN, Prime Sponsor of HB 295, said this bill would establish a voluntary citizen's utility board (CUB) for the state that would not cost the state any money. She said there used to be a program that funded a consumer advocate to appear before the Public Utilities Commission (PUC) and represent the viewpoint of consumers. She said that item was cut from the budget several years ago and there is no longer a consumer voice routinely looking into matters before the commission and making comments. She said this was an important function. She deferred to the public who had come to testify before the committee. She stated there were two amendments that she would like to see addressed. Number 477 STEVE CONN, Executive Director, Alaska Public Interest Research Group (AKPIRG), testified in strong support of HB 295. He said the bill adds Alaska to the 43 states that currently have an independent consumer advocate in matters of utilities. He said before undertaking this campaign, his group visited more than 15,000 homes to discuss utility matters, 3,000 letters of support were received, and in addition to that, he was overwhelmed and educated by the telecommunications task force that met last summer at the behest of Ramona Barnes. He recalled that Ramona Barnes spoke of the upcoming change in the relationship between AT&T and Alascom and she said, "While I am not opposed to increased competition, I believe that the potential impact of losing the rate subsidy that Alaskans currently benefit from is tremendous and therefore deserves a policy review from the legislature." He said this topic was tackled in an extraordinary manner last summer by the task force and there were many questions that arose. MR. CONN said, "All of Alaska awaits the outcome of the secret negotiations between Alascom and AT&T and there is no question that whatever the outcome, issues will require steadfast monitoring by consumers and advocacy, and of course by the legislature." He posed questions regarding nationally averaged rates for interstate and intrastate calls; regulatory rates reflective of both skilled consumer advocacy as well as market forces; protection of rural Alaska; and the provision of broad-banned access and modified satellite technology pertaining to rural areas. He said the answers to these questions will ultimately determine if Alaska finds itself on the information highway or, as the New York Times recently indicated, on the information dirt road. MR. CONN said AKPIRG's examination of the current regulatory process offered by the Alaska Public Utilities Commission (APUC) suggests that there is no special legal authority to reach beyond the record to build up a case for consumers. He said in formal cases, broad classes of consumers need legal and technical assistance. He emphasized that, unlike previous utility advocates, there is no contemplation of state subsidy because this would be membership funded. TAPE 94-19, SIDE A Number 001 MR. CONN said when consumers are active participants it appears from the experience of utilities in Oregon, Illinois, N.Y. and many other places that the commissioners are not wondering what new information might be brought to the record. He mentioned that several out-of-state people who had worked to establish CUBs had been encouraged to testify. Number 019 CHAIRMAN HUDSON interjected and said two such witnesses were currently on line and out of courtesy, the committee would hear those witnesses at this time. Number 021 BOB JENKS, Executive Director, Oregon Citizen's Utility Board, spoke via offnet from Oregon, and said he grew up in Alaska and was privileged to testify. He summarized his written comments, which were available in the packets, and said this was a way to institutionalize consumer advocacy. He said when other states, like Oregon, Washington, and Idaho formed their consumer advocacy programs about a decade ago, there were two central issues, and those issues are even more relevant today. He said the first issue is that utility matters have become increasingly technical and in resolving these issues it is critical that the residential customer and the small business customer have access to experts on technicalities in these proceedings. The second issue was the increased number of special interests participating in utility hearings. He explained that as rates have increased, businesses have found it financially beneficial to hire attorneys to fight or negotiate the rate hikes. He said Oregon CUB is unique in that it was set up by the legislature. He explained that Oregon's initiative stated the following three reasons to form a CUB: 1) To create an organization to represent consumers, 2) To give that organization the right to represent rate payers for the PUC, the courts and the legislature, and 3) It created a mechanism to allow for consumers to conveniently and easily join CUB. He pointed out that they were not trying to change the PUC process, but to contribute to it by allowing for the consumer to have a professional and competent hearing. He explained that if the Oregon PUC made a decision which was not grounded in the records, that decision would be overturned in court. Therefore, he said, the CUB helps build that record by submitting evidence which the PUC legally needs. He said that in his written statement there is a quote from the PUC to an Oregon legislative committee regarding the CUB, and essentially it says that the CUB has presented thought provoking and insightful testimony. He noted that he also included a list of some of the cases CUB has impacted and the results of those cases. MR. CONN explained that since 1987, when the CUB was created, it has been involved in five utility refunds, the most recent of which was last October. He explained the refund negotiation process between the Oregon CUB and US West, which resulted in a refund of $11.00 to every residential customer and $26.00 per line to every business customer. MR. CONN asserted that consumer representation is critical because the next few years will determine the shape of the telecommunications systems for the next thirty years. He said there are different models that could be used such as the state hiring a consumer representative, or like Washington has done, funding of consumer participation, but he believes that CUB is the most sensible approach. He explained that CUB is directly accountable to citizens who wish to join it and it is not financed by tax dollars but is funded by voluntary citizens. He added that there is very little risk in forming a CUB because if it is not successful, consumers would not continue to contributing to it. He said his opinion was that it be successful and Alaskans would see a considerable savings on their utility bills. Number 127 CHAIRMAN HUDSON asked abut the membership fee and the representation in Oregon. Number 130 MR. JENKS said membership was not a huge percentage of the total population and was approximately 20,000 members out of an estimated one million households. He said by law, the individual membership fee was set at a minimum of $5.00 and could not exceed $100.00. He stated that the average contribution received was about $20.00. Number 146 REP. PORTER asked if Mr. Jenks was familiar with the legislation under consideration because he wondered if there was a model statute on CUBs. Number 151 MR. JENKS said he thought the different approaches were all fairly similar. He stated that what was most important was the inclusion of the three fundamental points he mentioned previously which were: forming the organization, setting up a funding mechanism so citizens could join the organization, and authorizing the organization to represent consumers before the PUC. He said Alaska's legislation addresses these concerns. Number 161 PHYLLIS TURNER, Director, Citizen's Utility Board Organizing Project, testified from Washington, D.C. She acknowledged that utility companies sometimes spend hundreds of thousands of dollars of rate payer money to advocate their interests before PUCs and legislatures. She asserted that residential consumers, as a group, have a substantial interest in these issues, but lack the resources, organization, and expertise to effectively advance their position and to respond to utility company arguments. She pointed out that while large industrial companies have their own attorneys and economists representing their interests, the complexity of the process often prohibits individuals from participating at all. She explained that it was actually in the APUC's interest to have effective advocacy on behalf of the smaller rate payer rather than an informal and unprofessional approach. MS. TURNER said that beyond APUC's purview, Alaskans need expert representation in proceedings that address utility and telecommunications issues. She said Alaska is one of only seven states that does not have a utility consumer advocate within its governmental structure. She relayed membership and organizational information of consumer advocacy in other states, such as Oregon, California, Illinois, and New York. She said, like the APUC, CUB has a sunset clause, but it is not built in by legislation. She concurred with Mr. Jenks and said, if a CUB is not doing its job, people would simply stop funding it. MS. TURNER then mentioned the importance of the conflict of interest provision in HB 295 as a protective measure ensuring that CUB would not be taken over by any special interest. She pointed out that HB 295 helps to advance civic democracy and the state does not have to pay a dime. She confirmed that HB 295 is fairly typical of other CUB legislation. She said CUBs have been very effective and she gave the example of the Illinois CUB's landmark billion- dollar settlement with Commonwealth Edison. In conclusion, Ms. Turner said a CUB is essential in helping Alaskans to help themselves. Number 280 CHAIRMAN HUDSON asked if representation in other states was similar to Oregon's estimated membership of one out of 50 consumers. MS. TURNER said she did not know, but would check into it. CHAIRMAN HUDSON referred to the amendment providing for the inclusion of cable television, waste material collection, waste material disposal, and sewage and manufactured gases, and he asked if this was typical in other CUBs. Number 295 MS. TURNER replied that some CUBs were involved with cable issues and she regarded this as an important inclusion because cable is a growing concern. She said she believed involvement with waste materials was a fairly recent addition, and she remarked that the San Diego CUB, at the request of their membership, was involved in insurance issues. Number 314 REP. PORTER observed that having lived in Chicago for a year, he would like to think that Alaska does not have the regulatory problems that exist in Illinois. Number 320 THOMAS WILLIAMS, Director, Permanent Fund Dividend Division (PFD), Department of Revenue, testified in support of a CUB. He said his only concern was the provision in the bill requiring the division to include an enclosure with PFD applications. He said they have a zero fiscal note, based on the assumption that the Department of Revenue would be reimbursed by the CUB for all associated costs. He said this obviously assumes that sufficient funds would be available. MR. WILLIAMS said one approach would be to stuff an addition into the booklet. He explained that this would not be consistent with how the booklets are currently printed, as they are printed out-of-state and are then mailed directly from the printer to the various distribution sites. He said the other approach would be to print something as part of the booklet, as is currently done with the voter registration form and the advanced college tuition program. MR. WILLIAMS said more importantly than the method used, there is concern with using the dividend mailing booklet as a vehicle for distributing public information, regardless of the merits of what is being distributed. He pointed out the importance of keeping the booklet simple and concise, thereby avoiding the potential for turning it into a catalogue. He said the purpose of getting information to and from dividend applications needs to remain clear. Number 367 REP. BROWN asserted that CUB was distinguishable from other non-profits and she did not see who they would be "throwing the door open to." She asked if there was a particular group Mr. Williams had in mind. Number 376 MR. WILLIAMS said he did not have any in mind. He repeated his concern that this could set a precedent. He said the division has received numerous inquiries regarding inclusion of various items and they have historically maintained a very pointed focus and have not wanted to confuse the public. REP. MULDER commented to Ms. Brown that he worked on the voter registration issue and they did not like that either. Number 389 CHAIRMAN HUDSON asked MArk Foster for comment. Number 391 MARK FOSTER, Past Commissioner, Alaska Public Utilities Commission, said he also served as the president of the Western States Conference of Utility Commissioners which represented the 13 western states, and also as the chairman of the Western Conference Telecommunications Committee. He said that based on his experience in those capacities, it was his opinion that PUCs and legislators benefit tremendously from having a CUB because they provide an excellent point of view, and they bring evidence onto the record that would otherwise not be available. He pointed out that when coming before a utilities commission, one generally finds specialized technical and legal issues, and a CUB would enable consumers to have a focused point of view. He concluded his comments by mentioning Chugach Electrical Association's proposed acquisition of Matanuska Electrical Association. He said in such a situation, this kind of board would be very valuable. Number 421 REP. PORTER asked what responsibility CUB would have that AKPIRG does not currently provide. Number 430 MR. CONN replied that AKPIRG is funded differently and has a particular agenda and works that agenda. He said AKPIRG lacks the technical expertise to be utility advocates at this point. Number 454 REP. PORTER repeated his question and asked what would prevent AKPIRG or anyone else from forming a nonprofit organization under existing laws, charging a fee, and then representing consumers. Number 457 MR. CONN mentioned that utilization of former state mailings or mailings of regulated utilities to reach the broadest number of people needs to be done through a state vehicle. He said there were a series of technical things, including the right to appeal, that were also important. REP. PORTER asked for more information about the "intervening activity of the CUB" requiring a court rule change. MR. CONN said he understood that to obtain standing to intervene requires a court rule change of 2/3 of the legislature. REP. PORTER asked whether this issue was pivotal to the CUB having power. MR. CONN replied in the affirmative, and said the potential to intervene straight up leads to settlements. Number 473 CHAIRMAN HUDSON asked for more information about the relationship between the utilities and the CUB. He referred to the incident of APUC acting on behalf of consumers regarding the cable issue. Number 491 MR. CONN replied that it was important to offer APUC the opportunity to achieve its mandate of balancing a number of factors in a well-argued case. Number 500 MR. FOSTER added that with respect to the cable rate issue in Juneau, a considerable number of consumers testified and were quite clear in their advocacy. He said they did not have background in the legal language or in the technical financial issues that were before the commission. He said it was helpful that consumers testified and said, in effect, "our rates are too high," but this did not address the question of setting the rates at $12.00, $10.00, or $8.00 a month. He said CUBs really help with the details necessary to the decision making process. He explained that CUBs accumulate this expertise because they deal regularly with the commission, thereby learning the language and the issues. Mr. Foster said, in a broader sense, some utility commissions come to rely upon CUBs as a valuable form of outreach. Number 509 CHAIRMAN HUDSON asked what other states do, without a PFD list. Number 510 MR. FOSTER said the utility bills are a typical way of disseminating the information. Number 511 REP. BROWN said she thought the PFD would be the best list to use because of its wide distribution in Alaska. She said it would help to advertise the CUB's existence and would also invite people to participate. Number 512 REP. PORTER asked the commission's position on this. Number 513 MR. FOSTER said it was his understanding that the commission was scheduled to meet next week to determine their position on the CUB. Number 513 REP. BROWN said in the past, they have testified in favor of the function of a consumer advocate. CHAIRMAN HUDSON said he would like to hear from the APUC and would hold HB 295 in committee for another hearing. CHAIRMAN HUDSON adjourned the meeting at 5:30 p.m.