Legislature(2003 - 2004)

03/18/2003 01:37 PM House TRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
            HOUSE TRANSPORTATION STANDING COMMITTEE                                                                           
                         March 18, 2003                                                                                         
                           1:37 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Jim Holm, Co-Chair                                                                                               
Representative Beverly Masek, Co-Chair                                                                                          
Representative Hugh Fate                                                                                                        
Representative Mary Kapsner                                                                                                     
Representative Albert Kookesh                                                                                                   
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Vic Kohring                                                                                                      
Representative Cheryll Heinze                                                                                                   
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                                
Senator Donny Olson                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                              
HOUSE BILL NO. 156                                                                                                              
"An Act increasing the motor fuel tax and repealing the special                                                                 
tax rates on blended fuels; and providing for an effective                                                                      
date."                                                                                                                          
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
HOUSE BILL NO. 170                                                                                                              
"An Act increasing certain motor vehicle registration fees; and                                                                 
providing for an effective date."                                                                                               
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
HOUSE BILL NO. 173                                                                                                              
"An Act relating to a fee on studded tires; and providing for an                                                                
effective date."                                                                                                                
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
PREVIOUS ACTION                                                                                                               
                                                                                                                              
BILL: HB 156                                                                                                                  
SHORT TITLE:INCREASE MOTOR FUEL TAX                                                                                             
SPONSOR(S): RLS BY REQUEST OF THE GOVERNOR                                                                                      
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
03/05/03     0424       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
03/05/03     0424       (H)        TRA, FIN                                                                                     
03/05/03     0424       (H)        FN1: ZERO(DEC)                                                                               
03/05/03     0424       (H)        FN2: (REV)                                                                                   
03/05/03     0424       (H)        GOVERNOR'S TRANSMITTAL LETTER                                                                
03/11/03                (H)        TRA AT 2:00 PM CAPITOL 17                                                                    
03/11/03                (H)        Heard & Held                                                                                 
                                   MINUTE(TRA)                                                                                  
03/18/03                (H)        TRA AT 1:30 PM CAPITOL 17                                                                    
                                                                                                                                
BILL: HB 170                                                                                                                  
SHORT TITLE:MOTOR VEHICLE REGISTRATION FEES                                                                                     
SPONSOR(S): RLS BY REQUEST OF THE GOVERNOR                                                                                      
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
03/05/03     0444       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
03/05/03     0444       (H)        TRA, FIN                                                                                     
03/05/03     0444       (H)        FN1: (ADM)                                                                                   
03/05/03     0444       (H)        GOVERNOR'S TRANSMITTAL LETTER                                                                
03/05/03     0444       (H)        REFERRED TO TRANSPORTATION                                                                   
03/11/03                (H)        TRA AT 2:00 PM CAPITOL 17                                                                    
03/11/03                (H)        Scheduled But Not Heard                                                                      
03/18/03                (H)        TRA AT 1:30 PM CAPITOL 17                                                                    
                                                                                                                                
BILL: HB 173                                                                                                                  
SHORT TITLE:FEE FOR STUDDED TIRES                                                                                               
SPONSOR(S): RLS BY REQUEST OF THE GOVERNOR                                                                                      
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
03/05/03     0447       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
03/05/03     0447       (H)        TRA, FIN                                                                                     
03/05/03     0448       (H)        FN1: (REV)                                                                                   
03/05/03     0448       (H)        GOVERNOR'S TRANSMITTAL LETTER                                                                
03/11/03                (H)        TRA AT 2:00 PM CAPITOL 17                                                                    
03/11/03                (H)        Heard & Held                                                                                 
                                   MINUTE(TRA)                                                                                  
03/18/03                (H)        TRA AT 1:30 PM CAPITOL 17                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                              
SARAH GILBERTSON, Policy and Program Coordinator                                                                                
Alaska Municipal League (AML)                                                                                                   
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified on HB 156.                                                                                       
                                                                                                                              
ROBYNN J. WILSON, Motor Fuel Tax Program Manager                                                                                
Tax Division                                                                                                                    
Department of Revenue                                                                                                           
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions pertaining to HB 156.                                                                   
                                                                                                                                
LARRY PERSILY, Deputy Commissioner                                                                                              
Office of the Commissioner                                                                                                      
Department of Revenue                                                                                                           
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions pertaining to HB 156.                                                                   
                                                                                                                                
BARBARA COTTING, Staff                                                                                                          
to Representative Jim Holm                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  As committee aide, spoke to HB 156,                                                                        
Amendment 1; discussed the changes incorporated in Version D of                                                                 
CSHB 173.                                                                                                                       
                                                                                                                                
GEORGE LEVASSEUER, Maintenance and Operations Manager                                                                           
Southcentral District                                                                                                           
Northern Region                                                                                                                 
Department of Transportation & Public Facilities                                                                                
Valdez, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions pertaining to HB 156 and                                                                
HB 173.                                                                                                                         
                                                                                                                                
RONALD JORDAN                                                                                                                   
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  During hearing on HB 170, expressed concern                                                                
with the lack of an annual fee increase for tractor-trailers and                                                                
semi-trailers that are pulled behind a tractor.                                                                                 
                                                                                                                                
DUANE BANNOCK, Director                                                                                                         
Division of Motor Vehicles                                                                                                      
Department of Administration                                                                                                    
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  During hearing on HB 170, answered                                                                         
questions.                                                                                                                      
                                                                                                                                
DAVE SNYDER, Operator                                                                                                           
Diversified Tire                                                                                                                
Wasilla, Alaska                                                                                                                 
POSITION STATEMENT:   During discussion of  HB 173, characterized                                                               
the $10 fee as extreme.                                                                                                         
                                                                                                                                
JUDY SNYDER                                                                                                                     
Diversified Tire                                                                                                                
Wasilla, Alaska                                                                                                                 
POSITION  STATEMENT:    Testified  in opposition  to  HB  173  as                                                               
written.                                                                                                                        
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 03-11, SIDE A                                                                                                            
Number 0001                                                                                                                     
                                                                                                                                
CO-CHAIR BEVERLY  MASEK called the House  Transportation Standing                                                             
Committee meeting to  order at 1:37 p.m.   Representatives Masek,                                                               
Holm,  Fate, and  Kookesh  were  present at  the  call to  order.                                                               
Representative Kapsner  arrived as  the meeting was  in progress.                                                               
Representatives Kohring  and Heinze  were excused.   Also present                                                               
was Senator Donny Olson.                                                                                                        
                                                                                                                                
HB 156-INCREASE MOTOR FUEL TAX                                                                                                
                                                                                                                                
CO-CHAIR MASEK announced  that the first order  of business would                                                               
be HOUSE BILL NO. 156, "An  Act increasing the motor fuel tax and                                                               
repealing the special  tax rates on blended  fuels; and providing                                                               
for an effective date."                                                                                                         
                                                                                                                                
Number 0146                                                                                                                     
                                                                                                                                
SARAH   GILBERTSON,  Policy   and  Program   Coordinator,  Alaska                                                               
Municipal League (AML), provided the following testimony:                                                                       
                                                                                                                                
     As  many of  you know,  AML represents  140 communities                                                                    
     around the  state of  Alaska.   For years,  AML members                                                                    
     have supported  an increase, both in  the motor vehicle                                                                    
     fuel tax  and the  motor vehicle registration  fees, so                                                                    
     long as  these fees  are:   1) used  to fund  state and                                                                    
     municipal  highway  road  operation,  maintenance,  and                                                                    
     improvements;  and  2)  shared on  an  equitable  basis                                                                    
     between  local  and  state government  based  upon  the                                                                    
     proportion of local-versus state-maintained roads.                                                                         
                                                                                                                                
     Thus, if the gas tax is  to increase from $.08 to $.20,                                                                    
     which  is the  national  average,  AML members  believe                                                                    
     that:   1)  these funds  should be  earmarked for  road                                                                    
     operation, maintenance, and  improvements; and 2) local                                                                    
     governments  ought to  receive a  greater share  of the                                                                    
     revenues from such a tax.                                                                                                  
                                                                                                                                
     Currently,  Alaska's  local  governments  receive  less                                                                    
     that 5 percent of revenues  from state gas tax, whereas                                                                    
     local  governments in  other states  such  as Iowa  and                                                                    
     Illinois   receive   65   percent   and   59   percent,                                                                    
     respectively.  On an  average, local governments across                                                                    
     the  country   receive  approximately  31   percent  of                                                                    
     revenues from state gas taxes.   If Alaska's gas tax is                                                                    
     to  increase to  the  national average  of  $.20, at  a                                                                    
     minimum,  31 percent  of these  revenues from  Alaska's                                                                    
     gas tax  should be  distributed back to  Alaska's local                                                                    
     governments.  At a  maximum, Alaska's local governments                                                                    
     should receive  43.5 percent of state  gas tax revenues                                                                    
     because  43.5  percent  of  all  roads  in  Alaska  are                                                                    
     municipally maintained roads.                                                                                              
                                                                                                                                
     AML members  recognize that the  governor wants  to cut                                                                    
     the budget.   On  one of  these cuts  - the  25 percent                                                                    
     cut,  which is  equivalent  to a  $7.4  million cut  in                                                                    
     revenue  sharing and  safe communities  funding -  will                                                                    
     have   a   significant   impact   on   Alaska's   local                                                                    
     governments.     Having   said   that,  writing   local                                                                    
     governments  into  this  bill   to  receive  a  greater                                                                    
     percentage  of the  revenue from  gas  tax will  offset                                                                    
     that loss.  At the  same time, local government leaders                                                                    
     who  are very  skilled and  have experience  in selling                                                                    
     such increases  in fees would  be willing to  work with                                                                    
     the governor  to sell  this increase  to the  public in                                                                    
     Alaska.                                                                                                                    
                                                                                                                                
Number 0339                                                                                                                     
                                                                                                                                
CO-CHAIR HOLM expressed concern  that certain municipalities such                                                               
as the  Fairbanks Northstar  Borough do  not have  "road powers."                                                               
He said that the only areas  near Fairbanks that have road powers                                                               
are  the cities,  such as  City  of North  Pole and  the City  of                                                               
Fairbanks.   He questioned how this  would be played out  if most                                                               
of the road maintenance was provided through service areas.                                                                     
                                                                                                                                
MS.  GILBERTSON   said  using  the  revenue-sharing   formula  or                                                               
something  similar  to distribute  funds  to  all communities  in                                                               
Alaska  has been  suggested.    She said  that  hopefully all  of                                                               
Alaska's local  governments and  local communities  could benefit                                                               
from the increase.                                                                                                              
                                                                                                                                
CO-CHAIR   HOLM   said    although   first-class   boroughs   and                                                               
municipalities do  have road-service  powers and  therefore could                                                               
take  money  in and  disseminate  it,  his  concern is  with  the                                                               
second-class  boroughs  and  Bush  areas that  don't  have  road-                                                               
service powers.                                                                                                                 
                                                                                                                                
MS. GILBERTSON said  that AML would be willing to  work to see if                                                               
distribution  throughout all  of Alaska  could occur  so that  no                                                               
communities were left out.                                                                                                      
                                                                                                                                
Number 0495                                                                                                                     
                                                                                                                                
REPRESENTATIVE  KOOKESH referred  to  Ms. Gilbertson's  testimony                                                               
indicating  AML's support  as  long as  "two  things happen"  and                                                               
asked, "What happens if only one of these things happen?"                                                                       
                                                                                                                                
MS. GILBERTSON said the two  statements are directly from the AML                                                               
policy statement, which is approved by  all 140 AML members.  She                                                               
said she was  not sure of the answer  to Representative Kookesh's                                                               
question, but the AML membership could discuss it further.                                                                      
                                                                                                                                
REPRESENTATIVE  KOOKESH wondered  if  AML would  have to  express                                                               
opposition if  only one instead  of both requests  were included.                                                               
He also wondered if it  was constitutional to earmark the vehicle                                                               
fuel taxes for  a specific purpose rather than to  direct them to                                                               
the general fund.                                                                                                               
                                                                                                                                
Number 0596                                                                                                                     
                                                                                                                                
REPRESENTATIVE KAPSNER said that a  lot of rural communities such                                                               
as Bethel  and Unalaska, are part  of AML.  She  said her concern                                                               
with the increase in the motor  fuel tax is that some communities                                                               
pay more for  gasoline than other communities, and a  $.20 tax on                                                               
top of a  $5.00 gallon of gas is  a lot to ask.   She wondered if                                                               
this point had been discussed by AML's membership.                                                                              
                                                                                                                                
MS. GILBERTSON said  the two statements had been  approved by all                                                               
140 AML  members and have been  part of the policy  statement for                                                               
many years.  She stated that  although this point had not come up                                                               
in debate, she would be happy to set up further discussion.                                                                     
                                                                                                                                
Number 0673                                                                                                                     
                                                                                                                                
REPRESENTATIVE FATE  noted that the  tax on aviation  fuel, other                                                               
than  gasoline, is  three  and  two-tenths cents  a  gallon.   He                                                               
questioned what  effect this would  have on the  airline industry                                                               
and how  it would affect  the cargo  pattern at airports  both in                                                               
Anchorage and Fairbanks.                                                                                                        
                                                                                                                                
Number 0714                                                                                                                     
                                                                                                                                
ROBYNN J. WILSON,  Motor Fuel Tax Program  Manager, Tax Division,                                                               
Department of Revenue, testified that  to her knowledge, the bill                                                               
did not contain an increase in the aviation tax.                                                                                
                                                                                                                                
Number 0800                                                                                                                     
                                                                                                                                
LARRY PERSILY,  Deputy Commissioner, Office of  the Commissioner,                                                               
Department of Revenue, noted that  the legislation has nothing to                                                               
do  with aviation  or marine  fuel; it  pertains only  to highway                                                               
motor fuel.                                                                                                                     
                                                                                                                                
Number 0849                                                                                                                     
                                                                                                                                
CO-CHAIR  MASEK, after  ascertaining  that there  was no  further                                                               
public testimony, closed HB 156  to public testimony and directed                                                               
the committee to the proposed amendments for the bill.                                                                          
                                                                                                                                
Number 0920                                                                                                                     
                                                                                                                                
BARBARA COTTING,  Staff to Representative Jim  Holm, Alaska State                                                               
Legislature,   speaking   as   the  committee   aide,   explained                                                               
Amendment 1  as she  said Dennis  Poshard, of  the Department  of                                                               
Transportation &  Public Facilities (DOT&PF) had  explained it to                                                               
her.  Currently, state vehicles  have access to credit cards that                                                               
can be  used at specific  companies.  A contract  with MasterCard                                                               
is  being worked  on  by  DOT&PF so  that  persons driving  state                                                               
vehicles  can  go to  various  stations.    The problem  is  that                                                               
stations  wouldn't know  not  to charge  the  tax and  therefore,                                                               
MasterCard has agreed  to have different companies  apply for the                                                               
refund.                                                                                                                         
                                                                                                                                
Number 0971                                                                                                                     
                                                                                                                                
GEORGE   LEVASSEUER,   Maintenance    and   Operations   Manager,                                                               
Southcentral   District,    Northern   Region,    Department   of                                                               
Transportation & Public Facilities, noted  that he was the Acting                                                               
State Maintenance Engineer,  and testified that there  would be a                                                               
refund  to  government agencies,  from  MasterCard,  for the  tax                                                               
assessed on any purchase of highway motor vehicle fuel.                                                                         
                                                                                                                                
REPRESENTATIVE   KOOKESH  noted   that   Amendment  1   [proposed                                                               
Section 5] reads:   "For fuel  sold to federal, state,  and local                                                               
government  agencies".   He asked  if this  also refers  to local                                                               
government.                                                                                                                     
                                                                                                                                
MR.  LEVASSEUER  stated  that  this   would  be  the  case  if  a                                                               
government agency qualified for a tax exemption on fuel.                                                                        
                                                                                                                                
CO-CHAIR  MASEK  referred  to   the  remainder  of  the  sentence                                                               
mentioned  by Representative  Kookesh,  in which  it states  "for                                                               
official use".   She pointed  out that "official use"  would need                                                               
to be clarified before obtaining a tax credit.                                                                                  
                                                                                                                                
Number 1094                                                                                                                     
                                                                                                                                
REPRESENTATIVE KOOKESH asked  what the difference was  in using a                                                               
credit card rather than a purchase order.                                                                                       
                                                                                                                                
MR.  LEVASSEUER  replied that  in  DOT&PF,  a purchase  order  is                                                               
obtained through  the supply  section for  purchases of  a larger                                                               
amount or quantity.  For  smaller, field-type purchases, to avoid                                                               
overburdening the supply function, credit cards are used.                                                                       
                                                                                                                                
REPRESENTATIVE KOOKESH said he was  concerned with agencies other                                                               
than  DOT&PF  and suggested  that  a  provision  for the  use  of                                                               
purchase  orders  be  included,  if  there was  going  to  be  an                                                               
exemption.                                                                                                                      
                                                                                                                                
MR. PERSILY  said that he  believed purchase orders  were already                                                               
covered and  that he doesn't  think that government  entities pay                                                               
the tax.   He explained that  Amendment 1 was brought  forward by                                                               
the  Department  of  Administration's   Division  of  Finance  in                                                               
attempts to work on  a new credit card for DOT&PF  so that when a                                                               
credit card  purchase was made  in the  field, it would  be "tax-                                                               
off" so  that the state wouldn't  be charging tax to  itself.  He                                                               
said this specifically  deals with the problem  of fuel purchases                                                               
by credit  card and applies  not just to  the state, but  also to                                                               
other governmental agencies so that  credit card purchases by the                                                               
school district or municipal government would also be tax-                                                                      
exempt.                                                                                                                         
                                                                                                                                
REPRESENTATIVE KAPSNER  asked if  this specifically  had to  be a                                                               
government credit card or if it  could be something like a school                                                               
district credit card.                                                                                                           
                                                                                                                                
MR. PERSILY replied that his  understanding was that the State of                                                               
Alaska would  get the credit  card through a commercial  bank and                                                               
it would be issued to  departmental field personnel.  The account                                                               
would be a governmental account, to be used for official use.                                                                   
                                                                                                                                
REPRESENTATIVE  KOOKESH noted  that the  discussion pertained  to                                                               
federal, state,  and local  agencies and he  wanted it  on record                                                               
that focusing  on how  DOT&PF does  business is  too narrow  of a                                                               
focus.                                                                                                                          
                                                                                                                                
MR.  PERSILY  replied  that this  originally  began  because  the                                                               
state, in moving to a new  credit card system for DOT&PF, brought                                                               
up the issue.   He believed that Amendment 1  was drafted so that                                                               
it would have a broader  application, adding that it makes things                                                               
easier  on the  agencies but  also on  the credit  cards and  the                                                               
service stations.                                                                                                               
                                                                                                                                
Number 1260                                                                                                                     
                                                                                                                                
CO-CHAIR  MASEK  referred to  Amendment  1,  proposed Section  6,                                                               
which says  in part,  "on a form  prescribed by  the department",                                                               
noting that DOT&PF is not specified.                                                                                            
                                                                                                                                
MR.  PERSILY  clarified  that  "the  department"  refers  to  the                                                               
Department of Revenue and its tax code.                                                                                         
                                                                                                                                
REPRESENTATIVE  FATE  asked  how   the  checks  and  balances  of                                                               
accounting   would  be   done,   particularly   by  the   federal                                                               
government.   He asked if  each department turned  in information                                                               
regarding the amount of purchase to the Department of Revenue.                                                                  
                                                                                                                                
MR. PERSILY said he believed it was done by the taxpayer.                                                                       
                                                                                                                                
Number 1340                                                                                                                     
                                                                                                                                
MS. WILSON provided background  information, saying that federal,                                                               
state, and  local agencies  have always  been exempt  on official                                                               
use.   If  the agency  initially  pays tax  by going  to the  gas                                                               
station and  not requesting an  exemption, the  government agency                                                               
then  applies  to the  department  for  a  refund.   There  is  a                                                               
provision in  statute for a  user to get a  refund if the  use is                                                               
exempt.   She continued that  a second  scenario would be  that a                                                               
government agency could  go to a gas station and  claim, "We're a                                                               
government agency and  shouldn't have to pay tax";  in that case,                                                               
the  gas  station  has  already  paid for  the  tax  but  is  not                                                               
collecting the tax.  There is  a mechanism for the gas station to                                                               
get the refund directly from the department.                                                                                    
                                                                                                                                
MS. WILSON  continued that  the difficulty  with the  credit card                                                               
situation is that the government agency  does not want to pay the                                                               
tax,  and the  retailer, the  gas station,  has already  paid the                                                               
tax.   The credit  card company  is in the  middle, but  to date,                                                               
there has  not been a  mechanism for  the credit card  company to                                                               
get  a  refund.   This  has  presented difficulties  because  the                                                               
government agencies or  the gas stations would have  to apply for                                                               
refunds and there was unnecessary paperwork.                                                                                    
                                                                                                                                
MS. WILSON stated  that this bill is an attempt  to simplify that                                                               
process so that  the agencies can get their fuel  and not pay tax                                                               
and  the gas  stations will  not be  overburdened with  having to                                                               
apply for refunds.  The  credit card company would assimilate the                                                               
"tax-off"   purchases  and   send  the   refund  claims   to  the                                                               
department, which  would then be  paid directly.   The government                                                               
agency would not have to pay tax - which is the objective.                                                                      
                                                                                                                                
REPRESENTATIVE FATE  asked if the accounting  for each department                                                               
was done separately so that  federal receipts were not mixed with                                                               
receipts from DOT&PF, for example.                                                                                              
                                                                                                                                
MS.  WILSON explained  that any  refund claimed  by a  government                                                               
agency is  accounted for separately.   The refund claim  is filed                                                               
by that agency under its  name, and the department then evaluates                                                               
that claim.  There is a  requirement in statute for an attachment                                                               
of invoices  to show  that the  tax has been  paid, and  to avoid                                                               
duplication.   She  said if  Amendment 1  passed, the  department                                                               
would produce  regulations specific  to credit card  companies in                                                               
order  to address  the  challenges  regarding original  invoices.                                                               
She  stated that  she does  not see  a problem  with keeping  the                                                               
accounting separate and  making sure that there  are no duplicate                                                               
refunds.                                                                                                                        
                                                                                                                                
CO-CHAIR  MASEK  inquired  as  to whether  the  monies  would  be                                                               
directed to  the general fund  or would  be used as  leverage for                                                               
TEA-21 [Transportation  Equity Act for the  21st Century] funding                                                               
for highways from the federal government.                                                                                       
                                                                                                                                
Number 1562                                                                                                                     
                                                                                                                                
MR. PERSILY  replied that the estimate  is that in a  full fiscal                                                               
year, the increase to $.20 per  gallon would bring in about $41.6                                                               
million per  year.  He was  not aware of a  particular dedication                                                               
of funds and referred the question to DOT&PF.                                                                                   
                                                                                                                                
Number 1608                                                                                                                     
                                                                                                                                
REPRESENTATIVE KAPSNER asked  if unincorporated communities would                                                               
qualify.                                                                                                                        
                                                                                                                                
MR.  PERSILY commented  that if  a community  was unincorporated,                                                               
then perhaps it was not a government.                                                                                           
                                                                                                                                
REPRESENTATIVE KAPSNER explained that  there are communities that                                                               
do operate as if a government.                                                                                                  
                                                                                                                                
CO-CHAIR MASEK  suggested that the  bill for the  increased motor                                                               
fuel tax would  only affect areas that have gas  pumps at service                                                               
stations.                                                                                                                       
                                                                                                                                
REPRESENTATIVE KAPSNER  said that a  lot of the  communities that                                                               
are unincorporated  do have a gas  station with a pump.   Some of                                                               
the communities  have roads, not  highways, and a gas  station is                                                               
used.                                                                                                                           
                                                                                                                                
MS. WILSON  said this bill would  not affect whether or  not that                                                               
entity would  get an exemption.   She said that it  is a question                                                               
of whether the credit card company can get the refund.                                                                          
                                                                                                                                
Number 1727                                                                                                                     
                                                                                                                                
REPRESENTATIVE  KAPSNER asked  if a  friendly amendment  could be                                                               
added to Amendment 1 to include "unincorporated communities".                                                                   
                                                                                                                                
MR. PERSILY expressed  concern over not wanting to  alter the way                                                               
the  communities  are currently  being  treated.   He  said  that                                                               
without being  sure if  the communities  are treated  as off-road                                                               
and off-tax,  or treated as  on-road and taxable, he  wasn't sure                                                               
of supporting an amendment that might cloud that issue.                                                                         
                                                                                                                                
Number 1770                                                                                                                     
                                                                                                                                
MR.  LEVASSEUER said  if the  communities  are currently  exempt,                                                               
that exemption would apply to  the amendment as well, noting that                                                               
this might complicate  the issue.  He added that  the increase in                                                               
the user fee  is not to be used for  ATVs [all-terrain vehicles],                                                               
snow machines, boats, and motors -  it is just a highway user-fee                                                               
increase.                                                                                                                       
                                                                                                                                
REPRESENTATIVE KAPSNER said there  are governmental agencies that                                                               
have vehicles  in communities or  use the  ice road and  drive to                                                               
Bethel,  for example,  and should  qualify as  well as  the other                                                               
local, federal, and state governments.                                                                                          
                                                                                                                                
MR. LEVASSEUER said that the Department of Revenue had indicated                                                                
that with regard to usage that was not highway-related, an                                                                      
application could be made for a refund.                                                                                         
                                                                                                                                
Number 1867                                                                                                                     
                                                                                                                                
CO-CHAIR HOLM moved to adopt Amendment 1 [text provided                                                                         
previously] as written.  There being no objection, it was so                                                                    
ordered.                                                                                                                        
                                                                                                                                
Number 1882                                                                                                                     
                                                                                                                                
REPRESENTATIVE KAPSNER offered Amendment 2, labeled 23-                                                                         
GH1118\A.1,Kurtz,3/10/03, which read:                                                                                           
                                                                                                                                
     Page 1, line 9:                                                                                                            
          Delete "and"                                                                                                      
                                                                                                                                
     Page 1, line 11:                                                                                                           
          Delete "[; AND"                                                                                                       
          Insert "; and"                                                                                                        
                                                                                                                                
     Page 1, line 12, following "(4)":                                                                                          
          Insert "the tax rate on motor fuel used in a                                                                      
     motor vehicle only  on roads that are  not connected by                                                                
     land  highway or  the Alaska  marine highway  system to                                                                
     the  main road  system  of the  state,  whether or  not                                                                
     licensed to be operated on  public ways, is eight cents                                                                
     a gallon ["                                                                                                            
                                                                                                                                
     Page 3, line 8:                                                                                                            
          Delete "and"                                                                                                      
                                                                                                                                
     Page 3, line 10:                                                                                                           
          Delete "[; AND"                                                                                                       
          Insert "; and"                                                                                                        
                                                                                                                                
     Page 3, line 11, following "(4)":                                                                                          
          Insert "the tax rate on motor fuel used in a                                                                      
     motor vehicle only  on roads that are  not connected by                                                                
     land  highway or  the Alaska  marine highway  system to                                                                
     the  main road  system  of the  state,  whether or  not                                                                
     licensed to be operated on  public ways, is eight cents                                                                
     a gallon ["                                                                                                            
                                                                                                                                
Number 1926                                                                                                                     
                                                                                                                                
MR. LEVASSEUER responded  that this was the first he  had seen of                                                               
Amendment 2.                                                                                                                    
                                                                                                                                
REPRESENTATIVE KAPSNER said  she understood there to  be a verbal                                                               
understanding that  the bill wouldn't affect  communities off the                                                               
road system; Amendment 2 just puts that language on the books.                                                                  
                                                                                                                                
MR. LEVASSEUER  asked if an area  like Nome, where there  are 130                                                               
or 140  miles of road,  would be  exempt and therefore  remain at                                                               
$.08, pointing out that the  department pays for road upgrades in                                                               
that area.                                                                                                                      
                                                                                                                                
CO-CHAIR MASEK noted  that this would be statewide,  as the state                                                               
owns a lot of  roads that are not in urban  areas, and the result                                                               
would have a pretty big negative impact on the bill.                                                                            
                                                                                                                                
CO-CHAIR  HOLM asked:   If  roads  were built  and maintained  by                                                               
state money,  then wouldn't it  make sense to pay  the additional                                                               
$.12?                                                                                                                           
                                                                                                                                
MR. LEVASSEUER  said these  roads are  either built  with federal                                                               
funds and matched by state dollars, or built with state dollars.                                                                
                                                                                                                                
Number 2029                                                                                                                     
                                                                                                                                
REPRESENTATIVE  KOOKESH explained  that  the  off-road system  in                                                               
Alaska is  treated differently, and because  Angoon is considered                                                               
to be  an off-road  system, a  person can drive  on the  roads in                                                               
Angoon   without  having   a   valid   state  driver's   license.                                                               
Similarly, insurance is not a requirement.                                                                                      
                                                                                                                                
CO-CHAIR  HOLM wondered  whether,  as a  state  policy, the  road                                                               
systems  should  be  treated  differently.     He  asked  if  the                                                               
discussion was about money or about making policy changes.                                                                      
                                                                                                                                
MR. LEVASSEUER said the department's  policy and opinion would be                                                               
that  if  any of  the  roads  that  were  driven were  built  and                                                               
maintained  by federal  or state  funds, then  the $.12  increase                                                               
should apply.                                                                                                                   
                                                                                                                                
Number 2086                                                                                                                     
                                                                                                                                
REPRESENTATIVE KAPSNER  said this was a  different sentiment than                                                               
she had previously  heard, which had indicated  that the off-road                                                               
communities and  the non-state-highway  communities would  not be                                                               
affected.  She  suggested that with the  written language offered                                                               
in  Amendment  2,  the  department  was  expressing  a  different                                                               
opinion.                                                                                                                        
                                                                                                                                
MR. LEVASSEUER  responded that he  had tried  to be clear  in the                                                               
previous discussion  that this  wouldn't affect  communities that                                                               
use ATVs or four-wheelers to get  around, or use boats to run the                                                               
rivers.  He added that if  a community or an individual felt that                                                               
inclusion  was   unfair,  application   could  be  made   to  the                                                               
Department  of Revenue  for a  refund.   He  emphasized that  the                                                               
intent was  not to put  the burden on  someone who was  running a                                                               
four-wheeler between villages.                                                                                                  
                                                                                                                                
Number 2125                                                                                                                     
                                                                                                                                
MS. WILSON said that the  provision for non-highway use refers to                                                               
whether  or not  the  motor  vehicle is  licensed  to operate  on                                                               
public ways.  The department has  enforced that if the vehicle is                                                               
required  to be  licensed to  drive on  the road,  then the  full                                                               
amount of  tax would  be paid.   If it's the  sort of  road where                                                               
it's not required  to be licensed, then there is  a net $.02 that                                                               
is paid.   She clarified "net"  because up until now  it has been                                                               
$.08  as the  full rate,  and  the user  could apply  for a  $.06                                                               
refund.  She said she understood  that this bill would not change                                                               
that net amount.  She gave  the example that the net amount would                                                               
not change  for a truck  in a remote  area that didn't  require a                                                               
license in order to be driven on that road.                                                                                     
                                                                                                                                
Number 2202                                                                                                                     
                                                                                                                                
REPRESENTATIVE   KAPSNER  withdrew   Amendment  2,   saying  this                                                               
answered her question.                                                                                                          
                                                                                                                                
Number 2213                                                                                                                     
                                                                                                                                
CO-CHAIR HOLM referred  to the title of the bill,  noting that it                                                               
says "motor  fuel tax".  Because  the bill does not  refer to all                                                               
motors,  he wondered  if specifying  "vehicular  motor fuel  tax"                                                               
would be more appropriate.                                                                                                      
                                                                                                                                
CO-CHAIR MASEK  said a  possible clarification  was in  the bill,                                                               
under Section  3, where it  states:  "(2)  the motor fuel  is not                                                               
aviation fuel,  or motor fuel used  in or on watercraft;  and (3)                                                               
the internal combustion  engine is not used in  or in conjunction                                                               
with a motor vehicle licensed to be operated on public ways."                                                                   
                                                                                                                                
CO-CHAIR HOLM said he was more  inclined to think there is a need                                                               
for further specification of what the bill really does.                                                                         
                                                                                                                                
Number 2293                                                                                                                     
                                                                                                                                
MR.  LEVASSEUER  replied that  there  had  been discussion  of  a                                                               
"highway user  fee increase" and also  of this as a  tax versus a                                                               
fee.   He  explained  that  this centers  basically  on what  the                                                               
governor had said,  which is more closely  associating the "cost-                                                               
causers," which are  people who drive the state  roads, to people                                                               
who purchase  the gasoline for  the vehicles.  The  department is                                                               
spending about  $60 million per  year to repair and  maintain the                                                               
highway system.   With the $.08  tax, about $28 million  per year                                                               
is recovered.  Mr. Levasseuer  explained that in addition to [the                                                               
state's]  $60 million,  an  additional $50  million  is spent  in                                                               
federal match.  Therefore, $110  million comes out of the general                                                               
fund for  the highway program.   The  people who are  driving the                                                               
roads, the  users of the roads,  should pay the fee  to take care                                                               
of  the  roads.   Thus  this  is  a  highway user  fee  increase.                                                               
Between the $28 million that  is now collected and the additional                                                               
$41  million with  the $.12  increase,  the result  would be  $69                                                               
million.                                                                                                                        
                                                                                                                                
Number 2361                                                                                                                     
                                                                                                                                
CO-CHAIR HOLM  pointed out  that a letter  was received  from AML                                                               
referring to  an increase in  the "motor  vehicle fuel tax."   He                                                               
asked  if it  would be  more appropriate  to call  this a  "motor                                                               
vehicle fuel tax" rather than leaving it as "motor fuel tax."                                                                   
                                                                                                                                
MR. LEVASSEUER  added that  "highway" might be  added to  be more                                                               
specific.                                                                                                                       
                                                                                                                                
TAPE 03-11, SIDE B                                                                                                            
                                                                                                                                
CO-CHAIR  MASEK indicated  that  if there  were  a title  change,                                                               
there would need to be changes  throughout the bill as well.  For                                                               
example, page  4, line 18, "(1)  the tax on the  motor fuel ...",                                                               
might need to be changed to be consistent with a title change.                                                                  
                                                                                                                                
Number 2362                                                                                                                     
                                                                                                                                
MS. WILSON expressed  concern over a title change  because of the                                                               
use throughout  the chapter of the  term "motor fuel."   She said                                                               
she  was not  sure if  this  might cause  more confusion  because                                                               
"motor vehicle  tax" is not  currently included in statute.   She                                                               
said  she would  like  to  defer to  people  with more  statutory                                                               
experience.   She referred  to definitions  in [AS  43.40.100] in                                                               
which "motor  fuel" is defined.   She  also pointed out  that the                                                               
off-road section is an exception under [AS 43.40.030].                                                                          
                                                                                                                                
CO-CHAIR HOLM said his question  pertained to how motor fuel fits                                                               
in with the  tax scheme, with the discussion  being whether motor                                                               
fuel includes  aircraft fuel, marine fuel,  off-highway fuel, and                                                               
road fuel.   He wanted it  on record that this  refers to highway                                                               
taxes, pertaining to properties that  are built by and maintained                                                               
by state funds.                                                                                                                 
                                                                                                                                
REPRESENTATIVE FATE said the  clarification suggested by Co-Chair                                                               
Holm  was important  and  could be  done  either through  further                                                               
definition or  through a  new section with  intent language.   He                                                               
said he would be comfortable with either choice.                                                                                
                                                                                                                                
CO-CHAIR MASEK  said she would like  the bill drafter to  come up                                                               
with a committee substitute specifying  that the bill pertains to                                                               
highway motor vehicle fuel.                                                                                                     
                                                                                                                                
Mr. LEVASSEUER, in response to  Co-Chair Masek, confirmed that he                                                               
would be willing to work towards implementing those changes.                                                                    
                                                                                                                                
Number 2218                                                                                                                     
                                                                                                                                
CO-CHAIR MASEK indicated HB 156 would be held in committee.                                                                     
                                                                                                                                
HB 170-MOTOR VEHICLE REGISTRATION FEES                                                                                        
                                                                                                                                
CO-CHAIR MASEK  announced that the  next order of  business would                                                               
be HOUSE BILL  NO. 170, "An Act increasing  certain motor vehicle                                                               
registration fees; and providing for an effective date."                                                                        
                                                                                                                                
Number 2192                                                                                                                     
                                                                                                                                
RONALD JORDAN said  that he had no real objection  to the HB 170.                                                               
However,  he expressed  concern with  Section 4,  subsection (i),                                                               
and the lack  of an annual fee increase  for tractor-trailers and                                                               
semi-trailers that are pulled behind  a tractor, which do just as                                                               
much road  damage as studded  tires or  any other vehicle  on the                                                               
road.  There  should be a equitable balance  between the consumer                                                               
and  the State  of Alaska,  he said.   Many  states do  charge an                                                               
annual  fee for  these trailers.   If  there was  a $100  or $200                                                               
annual fee, Mr.  Jordan said he would feel  more comfortable with                                                               
any fee increases for automobiles.                                                                                              
                                                                                                                                
CO-CHAIR HOLM  related his understanding of  Mr. Jordan's concern                                                               
because he has driven trucks  with trailers and seen asphalt peel                                                               
up behind  the trailer when it's  warm outside.  He  asked if Mr.                                                               
Jordan knew what folks have been charged for that.                                                                              
                                                                                                                                
MR. JORDAN  directed attention to  Section 3,  Subsection (h)(4),                                                               
which he  interpreted to refer to  a delivery van.   He said that                                                               
an  increase in  the  fee for  trailers  and semi-trailers  would                                                               
offset some  of the  estimated $60  million of  road maintenance.                                                               
He reiterated the need for equality in this matter.                                                                             
                                                                                                                                
CO-CHAIR  HOLM  pointed  out  that   the  fee  under  Section  1,                                                               
Subsection  (b)(6), raises  the fee  for  a trailer  not used  or                                                               
maintained  for the  transportation  of persons  or property  for                                                               
hire  or  for  other  commercial  use   from  $10  to  $30.    He                                                               
acknowledged  the  disparity  and   related  that  [Mr.  Jordan's                                                               
concern] will probably have to be reviewed.                                                                                     
                                                                                                                                
Number 1967                                                                                                                     
                                                                                                                                
DUANE BANNOCK,  Director, Division of Motor  Vehicles, Department                                                               
of Administration, turned  to Mr. Jordan's concern.   Mr. Bannock                                                               
explained  that the  division's dramatically  different treatment                                                               
of commercial  trailers occurred in  1999.  That change  was part                                                               
of a  national effort to  not have states do  annual registration                                                               
on  commercial   trailers.    Mr.  Bannock   explained  that  the                                                               
International Registration  Plan (IRP)  is a program  that Alaska                                                               
is prepared to  join, although it has  not done so yet.   In 1999                                                               
Alaska,  for  all  practical   purposes,  eliminated  the  annual                                                               
registration fee.   The legislation doing  the aforementioned was                                                               
revenue-neutral and  shifted approximately $1.6 million  over all                                                               
commercial  vehicles.   Commercial  vehicles already  pay a  much                                                               
greater  cost  than  a noncommercial  vehicle  because  the  $1.6                                                               
million was  divided amongst them.   Therefore, it's fair  to say                                                               
that   the   commercial   trailers  aren't   paying   an   annual                                                               
registration  fee, but  it's  also  fair to  say  that the  truck                                                               
towing the commercial  trailer is paying what used to  be the fee                                                               
for the trailer.                                                                                                                
                                                                                                                                
CO-CHAIR HOLM replied that he  appreciated what Mr. Bannock said,                                                               
although he said he wasn't sure  he believed it because there was                                                               
no documentation to that effect.                                                                                                
                                                                                                                                
MR. BANNOCK  offered to  provide a detailed  report.   He pointed                                                               
out  that in  1998, HB  73 officially  changed the  way in  which                                                               
accounting is done  for commercial trailers.  With  regard to the                                                               
reference to  "biennial", Mr. Bannock noted  that the legislation                                                               
is drafted  in a biennial  form but that commercial  vehicles are                                                               
allowed to choose an annual registration fee.                                                                                   
                                                                                                                                
CO-CHAIR HOLM requested the historical  data that shows the shift                                                               
and specifies the  fee the commercial vehicles pay.   The problem                                                               
here is to  receive the maintenance dollars that  are related [to                                                               
the damage  caused by]  commercial transportation.   Furthermore,                                                               
he didn't  know whether Alaska's  membership or  nonmembership in                                                               
IRP was germane  to the question unless [the  state] is receiving                                                               
compensation from  the IRP that's  relative to the  damage caused                                                               
to Alaska's highways.                                                                                                           
                                                                                                                                
Number 1782                                                                                                                     
                                                                                                                                
REPRESENTATIVE  FATE turned  to  Mr. Bannock's  mention that  the                                                               
cost has been shifted from the  trailer to the tractor.  He asked                                                               
if the  commercial trailers  are no longer  licensed and  thus no                                                               
longer have a license fee.                                                                                                      
                                                                                                                                
MR.  BANNOCK answered  that commercial  trailers have  a one-time                                                               
registration or  permanent registration.   Unlike the  truck, the                                                               
tractor requires an annual or  biennial registration.  In further                                                               
response to  Representative Fate, Mr. Bannock  specified that the                                                               
one-time fee is $10 and HB 170 proposes raising that to $20.                                                                    
                                                                                                                                
REPRESENTATIVE FATE  surmised then that his  little trash trailer                                                               
that  he hauls  behind his  50-horsepower car  that he  registers                                                               
biennially at $10 costs more than a commercial trailer.                                                                         
                                                                                                                                
MR.  BANNOCK  explained  that the  aforementioned  isn't  a  good                                                               
analogy because  the 50-horsepower car is  registered biennially,                                                               
whereas the semi-truck towing the  trailer is now paying $321 per                                                               
year.                                                                                                                           
                                                                                                                                
REPRESENTATIVE  FATE  remarked  that  his  vehicle  isn't  a  50-                                                               
horsepower vehicle  but rather  it's a F-250  truck for  which he                                                               
pays quite a bit biennially.                                                                                                    
                                                                                                                                
MR. BANNOCK said that for  a pick-up truck the [registration fee]                                                               
would  be  $78 biennially.    The  $321  fee  refers to  what  is                                                               
commonly  referred to  as  a semi-truck,  a  tractor-truck, or  a                                                               
fifth-wheel trailer-truck.                                                                                                      
                                                                                                                                
Number 1663                                                                                                                     
                                                                                                                                
CO-CHAIR  HOLM  requested   that  HB  170  be   held  until  more                                                               
information  is available  with regard  to the  changes made  [in                                                               
1998]  by  HB  73  and  how  it  relates  to  the  Department  of                                                               
Transportation & Public Facilities' maintenance.                                                                                
                                                                                                                                
CO-CHAIR MASEK announced  that HB 170 would held and  taken up at                                                               
the committee's next meeting.                                                                                                   
                                                                                                                                
MR.  BANNOCK  said that  he  has  requested department  staff  to                                                               
provide  a calendar  history of  all  commercial vehicle  revenue                                                               
rates beginning in  1998, which was the last year  that an annual                                                               
registration was  collected on trailers.   He related  his belief                                                               
that  the aforementioned  will illustrate  that  the decrease  of                                                               
approximately $1.6 million in 1999  was absorbed by the remaining                                                               
commercial categories.                                                                                                          
                                                                                                                                
[HB 170 was held over.]                                                                                                         
                                                                                                                                
HB 173-FEE FOR STUDDED TIRES                                                                                                  
                                                                                                                                
CO-CHAIR MASEK announced  that the final order  of business would                                                               
be  HOUSE BILL  NO. 173,  "An Act  relating to  a fee  on studded                                                               
tires; and providing for an effective date."                                                                                    
                                                                                                                                
Number 1586                                                                                                                     
                                                                                                                                
CO-CHAIR HOLM  moved to adopt  the proposed  committee substitute                                                               
(CS)  [Version  23-GH1127\D,  Kurtz,   3/12/03]  as  the  working                                                               
document.   There being  no objection, Version  D was  before the                                                               
committee.                                                                                                                      
                                                                                                                                
Number 1558                                                                                                                     
                                                                                                                                
BARBARA COTTING,  Staff to Representative Jim  Holm, Alaska State                                                               
Legislature,  speaking  as  the committee  aide,  explained  that                                                               
Version  D,  under Section  1,  creates  a  fine for  people  who                                                               
violate  the law.   It  also  eliminates the  language "or  other                                                               
transfer"  on  page 1,  line  8.    Furthermore, it  changes  the                                                               
definition  of studded  tire to  refer  to a  motor vehicle  tire                                                               
rather than just a tire, which might refer to bicycle tires.                                                                    
                                                                                                                                
Number 1498                                                                                                                     
                                                                                                                                
DAVE SNYDER, Operator, Diversified  Tire, related his belief that                                                               
most  people aren't  likely  to  pay the  extra  $40 for  studded                                                               
tires.   He  estimated that  30-40 percent  of Alaskans  would be                                                               
more  willing  to  jeopardize  their safety  and  that  of  other                                                               
innocent drivers on  the road than to pay the  proposed fee.  Mr.                                                               
Snyder said  that he  believes the  $10 fee  per studded  tire is                                                               
extreme.  He  suggested an alternative of a $1  tax on all tires.                                                               
All tires  wear out the road  and studded tires keep  many people                                                               
safe on the road.                                                                                                               
                                                                                                                                
CO-CHAIR HOLM inquired as to the cost of siped tires.                                                                           
                                                                                                                                
MR. SNYDER  said his  facility does  a lot of  siped tires.   Mr.                                                               
Snyder  informed  the committee  that  siped  tires and  studless                                                               
winter tires don't  have the same effect on  glare ice conditions                                                               
as studded tires.   Mr. Snyder related that  he charges customers                                                               
according to the situation.  When  a tire is full of rocks, there                                                               
is a labor-intensive rock-picking session  before the tire can be                                                               
siped, and  that can cost from  $15-$20 per car tire.   For tires                                                               
without rocks, there is a fee to sipe the tire of $10 per tire.                                                                 
                                                                                                                                
CO-CHAIR HOLM  asked if  siped tires are  an alternative  in most                                                               
cases.   Co-Chair Holm  highlighted that Alaska  is one  of three                                                               
states that allow any type of studded tires.                                                                                    
                                                                                                                                
MR. SNYDER answered that in  Alaska most of the winter conditions                                                               
[justify]  the need  for studded  tires  or chains.   If  studded                                                               
tires  are  eliminated,  Mr.  Snyder  predicted  an  increase  in                                                               
accidents.  Mr. Snyder said  that his customers don't want studs,                                                               
but they need them and must have them to be safe.                                                                               
                                                                                                                                
Number 1320                                                                                                                     
                                                                                                                                
CO-CHAIR  HOLM  offered  his understanding  that  Canada  doesn't                                                               
allow  studded  tires   and  thus  he  asked  if   there  is  any                                                               
information regarding whether this  has compromised the safety of                                                               
drivers in  Canada.   He related  that in most  cases the  use of                                                               
studded  tires has  been eliminated  because of  the damage  they                                                               
create to  the highways  and that perhaps  those areas  are doing                                                               
more salting than in Alaska.   Therefore, perhaps more salting is                                                               
an option.                                                                                                                      
                                                                                                                                
Number 1285                                                                                                                     
                                                                                                                                
JUDY  SNYDER, Diversified  Tire, announced  her opposition  to HB
173 as  written.  She  related that  testing has proven  that the                                                               
use of  studded tires significantly increases  safety with regard                                                               
to braking and handling while  on icy road conditions.  Regarding                                                               
the use of  studded tires, the National  Tire Safety Organization                                                               
has mandated the use  of four studded tires if any  are used on a                                                               
vehicle.   Therefore,  HB 173  is essentially  a $40  per vehicle                                                               
fee.  She  expressed concern that such a fee  would preclude many                                                               
Alaskans  from  purchasing  studded  tires, which  could  have  a                                                               
serious negative  impact on road  safety.  If it's  determined to                                                               
be absolutely  necessary to impose  a tire surcharge,  Ms. Snyder                                                               
echoed the earlier  suggestion to charge $1 on all  tires sold in                                                               
Alaska  and thus  the  burden would  be  more evenly  distributed                                                               
among all drivers.                                                                                                              
                                                                                                                                
CO-CHAIR  MASEK, upon  determining  that no  one  else wished  to                                                               
testify, asked if there was any discussion on HB 173.                                                                           
                                                                                                                                
REPRESENTATIVE FATE said  the testimony was that  all tires exact                                                               
some wear on  highways.  He asked if there  have been any studies                                                               
with regard to the ratio of wear  from a studded tire and an all-                                                               
weather tire.                                                                                                                   
                                                                                                                                
Number 1164                                                                                                                     
                                                                                                                                
GEORGE   LEVASSEUER,   Maintenance    and   Operations   Manager,                                                               
Southcentral   District,    Northern   Region,    Department   of                                                               
Transportation  &   Public  Facilities  (DOT&PF),   informed  the                                                               
committee  that there  have been  a number  of studies  that have                                                               
reviewed  the  amount  of  wear  that  studded  tires  do.    The                                                               
department estimates that  every studded tire costs  $50 in wear.                                                               
Therefore, for  a set  of four  tires, over  the length  of their                                                               
life, there  will be $200 worth  of pavement damage.   There have                                                               
been a  number of tests  in which studded  tires were run  on one                                                               
track and  an all-weather  tire or radial  tire alongside  of it.                                                               
What was illustrated  was that there isn't  much appreciable wear                                                               
at  all  from the  standard  winter  tire  as compared  with  the                                                               
studded  tire.   Mr. Levasseuer  highlighted that  in Alaska  the                                                               
grooves in the  highway are about 55-58 inches  apart, and that's                                                               
not related to  truck wear because the width  between those tires                                                               
is about 80-82  inches.  Therefore, the grooves are  related to a                                                               
standard  passenger vehicle  equipped  with studded  tires.   The                                                               
department  estimates that  over  $5 million  a  year [worth  of]                                                               
damage is experienced from studded tires.                                                                                       
                                                                                                                                
CO-CHAIR MASEK  recalled an earlier  meeting during which  it was                                                               
noted that  the most wear  can be seen  on the Glenn  Highway and                                                               
the Seward Highway.                                                                                                             
                                                                                                                                
CO-CHAIR  HOLM  pointed out  that  the  total amount  of  revenue                                                               
[generated  by HB  173]  is about  $1,950,000.   Therefore,  [the                                                               
state] would  be subsidizing in  the amount of about  $3 million,                                                               
even with HB 173.                                                                                                               
                                                                                                                                
Number 1052                                                                                                                     
                                                                                                                                
REPRESENTATIVE KOOKESH asked if there  has been a study reviewing                                                               
the safety of studded tires versus [standard all-weather] tires.                                                                
                                                                                                                                
MR.  LEVASSEUER informed  the committee  that the  department has                                                               
done a number  of studies which show that Alaska  has clear roads                                                               
about  95 percent  of the  time in  the winter.   There  has been                                                               
review of several  factors that help with the newer  cars such as                                                               
those with  anti-lock braking systems, which  provide much better                                                               
traction in  the winter.  There  are also siped tires  as well as                                                               
radial  tires that  provide much  better traction.   Furthermore,                                                               
more  and  more   front-wheel-drive  vehicles  and  sport-utility                                                               
vehicles (SUVs) are  in use.  Mr. Levasseuer  explained that when                                                               
studded tires  came out  in the mid-1960s,  studded tires  were a                                                               
valid way  in which  to increase traction  and safety.   However,                                                               
now there  are a number of  methods being used that  make studded                                                               
tires almost obsolete on Alaska's  main arterials.  He noted that                                                               
the department has  a very aggressive maintenance  program on the                                                               
main  arterials  throughout  Southcentral  Alaska  and  Southeast                                                               
Alaska.   Furthermore, the department utilizes  a very aggressive                                                               
chemical application program with magnesium chloride.                                                                           
                                                                                                                                
Number 0942                                                                                                                     
                                                                                                                                
MR. LEVASSEUER  reiterated that Alaska  has clear roads  about 95                                                               
percent  of the  time and  said this  negates [the  need] to  use                                                               
studs on the main arterials.   He asserted that [the use of studs                                                               
on  the main  arterials]  actually decreases  the  safety of  the                                                               
traveling public  because of  the grooves  from stud  wear, which                                                               
collect water and cause the  loss of traction due to hydroplaning                                                               
and decreased visibility.  Therefore,  Mr. Levasseuer related his                                                               
belief that  there are  a number  of alternatives  available that                                                               
provide  adequate  safety on  Alaska's  main  arterials and  thus                                                               
negate the need for studded tires.                                                                                              
                                                                                                                                
REPRESENTATIVE KOOKESH said this didn't answer his question.                                                                    
                                                                                                                                
CO-CHAIR MASEK announced that HB 173 would be held over.                                                                        
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Transportation  Standing  Committee   meeting  was  adjourned  at                                                               
2:55 p.m.                                                                                                                       

Document Name Date/Time Subjects