Legislature(1995 - 1996)

03/27/1996 01:29 PM TRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
            HOUSE TRANSPORTATION STANDING COMMITTEE                            
                         March 27, 1996                                        
                           1:29 p.m.                                           
 MEMBERS PRESENT                                                               
 Representative Gary Davis, Chairman                                           
 Representative Beverly Masek, Vice Chair                                      
 Representative Tom Brice                                                      
 Representative Jerry Sanders                                                  
 Representative Bill Williams                                                  
 Representative Don Long                                                       
 MEMBERS ABSENT                                                                
 Representative Jeanette James                                                 
 OTHER HOUSE MEMBERS PRESENT                                                   
 Representative Norman Rokeberg                                                
 COMMITTEE CALENDAR                                                            
 SENATE BILL NO. 241                                                           
 "An Act relating to the use of studded tires on the Sterling                  
       - MOVED OUT OF COMMITTEE                                                
 *HOUSE BILL NO. 436                                                           
 "An Act relating to purchase and sale of mobile homes by mobile               
 home dealers or agents; to mobile home titles; and providing for an           
 effective date."                                                              
       - MOVED CSHB 436 (TRA) OUT OF COMMITTEE                                 
 CS FOR SENATE BILL NO. 86(FIN)                                                
 "An Act relating to issuance of commemorative gold rush motor                 
 vehicle license plates."                                                      
      - MOVED CSSB 86 (FIN) OUT OF COMMITTEE                                   
 HOUSE BILL NO. 543                                                            
 "An Act establishing a preference when entering into state airport            
 land leases."                                                                 
      - HEARD AND HELD                                                         
 (* First public hearing)                                                      
 PREVIOUS ACTION                                                               
 BILL:  SB 241                                                               
 SHORT TITLE: STUDDED TIRES ON STERLING HIGHWAY                                
 SPONSOR(S): SENATOR(S) TORGERSON                                              
 JRN-DATE     JRN-PG            ACTION                                         
 01/26/96      2223    (S)   READ THE FIRST TIME - REFERRAL(S)                 
 01/26/96      2223    (S)   TRANSPORTATION                                    
 02/13/96              (S)   TRA AT  1:30 PM BUTROVICH ROOM 205                
 02/13/96              (S)   MINUTE(TRA)                                       
 02/14/96      2425    (S)   TRA RPT  2DP 1NR                                  
 02/14/96      2425    (S)   FISCAL NOTE (DOT)                                 
 02/14/96      2425    (S)   ZERO FISCAL NOTE (DPS)                            
 02/14/96      2425    (S)   FIN REFERRAL ADDED                                
 03/07/96              (S)   FIN AT  9:00 AM SENATE FINANCE 532                
 03/08/96      2655    (S)   FIN RPT  7DP                                      
 03/08/96      2655    (S)   ZERO FISCAL NOTE (DOT)                            
 03/08/96      2655    (S)   PREVIOUS ZERO FN (DPS)                            
 03/13/96              (S)   RLS AT 11:00 AM FAHRENKAMP RM 203                 
 03/13/96              (S)   MINUTE(RLS)                                       
 03/18/96      2774    (S)   RULES TO CALENDAR  3/18/96                        
 03/18/96      2777    (S)   READ THE SECOND TIME                              
 03/18/96      2777    (S)   ADVANCED TO THIRD READING UNAN CONSENT            
 03/18/96      2777    (S)   READ THE THIRD TIME  SB 241                       
 03/18/96      2777    (S)   PASSED Y18 N- E2                                  
 03/18/96      2786    (S)   TRANSMITTED TO (H)                                
 03/19/96      3191    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 03/19/96      3191    (H)   TRANSPORTATION                                    
 03/27/96              (H)   TRA AT  1:00 PM CAPITOL 17                        
 BILL:  HB 436                                                               
 SHORT TITLE: MOBILE HOME DEALERS & TITLES                                     
 SPONSOR(S): REPRESENTATIVE(S) MARTIN                                          
 JRN-DATE     JRN-PG            ACTION                                         
 01/19/96      2489    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/19/96      2489    (H)   TRANSPORTATION, L&C, FINANCE                      
 03/20/96              (H)   TRA AT  1:00 PM CAPITOL 17                        
 03/27/96              (H)   TRA AT  1:00 PM CAPITOL 17                        
 BILL:  SB  86                                                               
 SPONSOR(S): SENATOR(S) SHARP,Zharoff,Green,Frank,Taylor,Halford;              
 REPRESENTATIVE(S) Mackie,Toohey                                               
 JRN-DATE     JRN-PG            ACTION                                         
 02/14/95       269    (S)   READ THE FIRST TIME - REFERRAL(S)                 
 02/14/95       269    (S)   TRA, FIN                                          
 03/02/95              (S)   TRA AT  1:30 PM BUTROVICH ROOM 205                
 03/02/95              (S)   MINUTE(TRA)                                       
 03/03/95       468    (S)   TRA RPT  CS  3DP 2NR      SAME TITLE              
 03/03/95       469    (S)   FISCAL NOTE TO SB (DPS)                           
 03/03/95       469    (S)   FISCAL NOTE TO CS (DPS)                           
 02/27/96              (S)   FIN AT  9:00 AM SENATE FINANCE 532                
 03/07/96              (S)   FIN AT  9:00 AM SENATE FINANCE 532                
 03/12/96              (S)   FIN AT  9:00 AM SENATE FINANCE 532                
 03/12/96      2707    (S)   FIN RPT  CS  5DP 2NR      NEW TITLE               
 03/13/96              (S)   RLS AT 11:00 AM FAHRENKAMP RM 203                 
 03/13/96              (S)   MINUTE(RLS)                                       
 03/14/96      2734    (S)   FISCAL NOTE TO CS (DPS)                           
 03/14/96      2737    (S)   RULES TO CALENDAR & 1 OTHER REC 3/14/96           
 03/14/96      2739    (S)   READ THE SECOND TIME                              
 03/14/96      2740    (S)   FIN  CS ADOPTED      Y11 N7 E2                    
 03/14/96      2740    (S)   ADVANCED TO THIRD READING Y18 N- E2               
 03/14/96      2741    (S)   READ THE THIRD TIME  CSSB 86(FIN)                 
 03/14/96      2741    (S)   COSPONSOR(S):  ZHAROFF, GREEN, FRANK,             
 03/14/96      2741    (S)   TAYLOR, HALFORD                                   
 03/14/96      2741    (S)   PASSED Y18 N- E2                                  
 03/14/96      2749    (S)   TRANSMITTED TO (H)                                
 03/18/96      3170    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 03/18/96      3171    (H)   TRANSPORTATION, FINANCE                           
 03/18/96      3186    (H)   CROSS SPONSOR(S): MACKIE                          
 03/25/96      3356    (H)   CROSS SPONSOR(S): TOOHEY                          
 03/27/96              (H)   TRA AT  1:00 PM CAPITOL 17                        
 BILL:  HB 543                                                               
 SPONSOR(S): TRANSPORTATION                                                    
 JRN-DATE     JRN-PG            ACTION                                         
 03/14/96      3149    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 03/14/96      3149    (H)   TRANSPORTATION                                    
 03/20/96              (H)   TRA AT  1:00 PM CAPITOL 17                        
 03/20/96              (H)   MINUTE(TRA)                                       
 03/27/96              (H)   TRA AT  1:00 PM CAPITOL 17                        
 WITNESS REGISTER                                                              
 SENATOR JOHN TORGERSON                                                        
 Alaska State Legislature                                                      
 State Capitol, Room 427                                                       
 Juneau, AK  99801                                                             
 Telephone: (907) 465-2828                                                     
 POSITION STATEMENT:  Sponsor of SB 241                                        
 TOM ANDERSON, Legislative Aide                                                
       to Representative Martin                                                
 Alaska State Legislature                                                      
 State Capitol, Room 502                                                       
 Juneau, AK  99801                                                             
 Telephone: (907) 465-3783                                                     
 POSITION STATEMENT:  Testified on HB 436                                      
 CATHERINE REARDON, Director                                                   
 Central Office                                                                
 Division of Occupational Licensing                                            
 Department of Commerce and Economic Development                               
 P.O. Box 110806                                                               
 Juneau, Alaska  99811-0806                                                    
 Telephone:  (907) 465-2534                                                    
 POSITION STATEMENT:  Testified on HB 436                                      
 SENATOR BERT SHARP                                                            
 Alaska State Legislature                                                      
 State Capitol, Room 514                                                       
 Juneau, AK  99801                                                             
 Telephone: (907) 465-3004                                                     
 POSITION STATEMENT:  Sponsor of SB 86                                         
 WENDY WOLF, Programs Manager                                                  
 Division of Tourism                                                           
 Department of Commerce and Economic Development                               
 P.O. Box 110801                                                               
 Juneau, Alaska  99811-0801                                                    
 Telephone:  (907) 465-5471                                                    
 POSITION STATEMENT:  Testified in support of SB 86                            
 JUANITA HENSLEY, Chief                                                        
 Driver Services                                                               
 Division of Motor Vehicles                                                    
 Department of Public Safety                                                   
 P.O. Box 20020                                                                
 Juneau, Alaska  99811-0020                                                    
 POSITION STATEMENT:  Testified on SB 86                                       
 KURT PARKAN, Deputy Commissioner                                              
 Office of the Commissioner                                                    
 Department of Transportation and Public Facilities                            
 3132 Channel Drive                                                            
 Juneau, Alaska  99801-7898                                                    
 Telephone:  (907) 465-6977                                                    
 POSITION STATEMENT:  Testified on CSHB 543 (TRA)                              
 ELIZABETH HICKERSON, Assistant Attorney General                               
 Transportation Section                                                        
 Civil Division                                                                
 Department of Law                                                             
 1031 West 4th Avenue, Suite 200                                               
 Anchorage, Alaska  99501-1994                                                 
 Telephone:  (907) 269-5100                                                    
 POSITION STATEMENT:  Testified on CSHB 543 (TRA)                              
 JACK BIRMINGHAM, President                                                    
 ERA Aviation                                                                  
 6160 South Airport Drive                                                      
 Anchorage, Alaska  99502                                                      
 Telephone:  (907) 248-4422                                                    
 POSITION STATEMENT:  Testified on CSHB 543 (TRA)                              
 CHARLES COLE, Attorney                                                        
 Representing Fairbanks Air Taxi Charters                                      
 406 Cushman Street                                                            
 Fairbanks, Alaska  99701                                                      
 Telephone:  (907) 452-1124                                                    
 POSITION STATEMENT:  Testified on CSHB 543                                    
 RICHARD WIEN                                                                  
 Representing 30 Fairbanks International Airport Users and Tenants             
 559 Aquila                                                                    
 Fairbanks, Alaska  99712                                                      
 Telephone:  (907) 457-7069                                                    
 POSITION STATEMENT:  Testified on CSHB 543                                    
 DIANE BARTH, Chief of Leasing                                                 
 Anchorage International Airport                                               
 Department of Transportation and Public Facilities                            
 P.O. Box 196960                                                               
 Anchorage, Alaska  99519-6960                                                 
 Telephone:  (907) 266-2525                                                    
 POSITION STATEMENT:  Testified on CSHB 543                                    
 ACTION NARRATIVE                                                              
 TAPE 96-14, SIDE A                                                            
 Number 000                                                                    
 The House Transportation Standing Committee was called to order by            
 Chairman Gary Davis at 1:29 p.m.  Members present at the call to              
 order were Representatives G. Davis, Masek, Brice and Sanders.                
 This meeting was teleconferenced to Anchorage and Fairbanks.  A               
 quorum was present.                                                           
 CHAIRMAN GARY DAVIS announce the agenda as SB 241, HB 436, CSSB 86            
 (FIN) and HB 543.                                                             
 Representative Long joined the committee meeting at 1:30 p.m.                 
 SB 241 - STUDDED TIRES ON STERLING HIGHWAY                                  
 Number 0086                                                                   
 CHAIRMAN GARY DAVIS announced the first item on the agenda was SB
 241, an act relating to the use of studded tires on the Sterling              
 SENATOR JOHN TORGERSON, sponsor of SB 241, said he introduced this            
 bill to correct a problem on the lower half of the Sterling Highway           
 which runs from Ninilchik down to Homer.  He said when the statutes           
 were formed to identify the time line for studded tires, the                  
 drafters used 60 North Latitude as the line to mark the dates for             
 studded tires.  He said this line intersects the Sterling Highway             
 at Ninilchik and created two separate dates for which studded tires           
 could be used.  He said the way the statutes exist right now, if              
 you were driving south between April 15, and May 1, you would need            
 to stop in Ninilchik and remove your studded tires, continue to               
 Homer and then on your way back you would change your tires again.            
 He said, currently, this does not take place, but it could happen             
 if the statute was enforced.                                                  
 Representative Williams joined the committee meeting at 1:31 p.m.             
 Number 0193                                                                   
 REPRESENTATIVE TOM BRICE said it was obvious that Senator Torgerson           
 did not have any financial involvement with this bill.                        
 Number 0248                                                                   
 SENATOR TORGERSON said no, and in a joking manner said the only               
 person opposed to SB 241 was the person who owned the service                 
 station in Ninilchik.  He said people are not removing their                  
 studded tires and this bill came about because of an incident with            
 public safety.  He said SB 241 would clear up the statutes before             
 any one wrote a ticket because of the tires.                                  
 Number 0269                                                                   
 REPRESENTATIVE BEVERLY MASEK clarified that a person could be                 
 ticketed for having studded tires.                                            
 Number 0299                                                                   
 SENATOR TORGERSON said you could be ticketed during the 15 day                
 period on either side of the 60 degree latitude.                              
 Number 0317                                                                   
 REPRESENTATIVE MASEK said SB 241 was a good bill and made a motion            
 to move SB 241 with zero fiscal note and individual                           
 recommendations.  Hearing no objections SB 241 was moved from the             
 House Standing Committee on Transportation.                                   
 HB 436 - MOBILE HOME DEALERS & TITLES                                       
 Number 0369                                                                   
 CHAIRMAN GARY DAVIS announced the next item on the agenda was HB
 436, an act relating to the purchase and sale of mobile homes by              
 mobile home dealers or agents; to mobile home titles; and providing           
 for an effective date.                                                        
 TOM ANDERSON, Legislative Aide to Representative Martin, said HB
 436 was in response to the Alaska Manufactured Housing Association,           
 who represent mobile home dealers and park owners throughout                  
 Alaska.  He said the association has a problem with the current               
 lack of statutory regulation for mobile home dealers.  The current            
 bill, HB 436 tries to regulate dealers and agents.  He said the               
 committee substitute for HB 436 will eliminate the regulation of              
 agents section of HB 436.                                                     
 MR. ANDERSON said, in essence, mobile home dealers are not                    
 currently regulated, licensed or bonded in the legal services view.           
 This bill establishes, under Occupational Licensing, a bonding                
 procedure up to $100,000 as well as regulatory provisions.  He said           
 it allows the Division of Motor Vehicles to title mobile homes so             
 that whether someone is selling or buying there is no confusion.              
 He read from the sponsor statement, "the problem exists often with            
 banks, and other lending institutions regarding certification of              
 title and often seller-financed sales and cash sales offer no                 
 protection to the buyer or seller."  He said HB 436 is more of a              
 consumer protective bill in the bonding, oversight and purview of             
 occupational licensing, but the authorized titling will also clean            
 up some gaps in the statutes.                                                 
 Number 0510                                                                   
 CHAIRMAN GARY DAVIS asked in discussions with the Department of               
 Motor Vehicles (DMV) and Occupational Licensing if there had been             
 any problems with HB 436.                                                     
 Number 0525                                                                   
 MR. ANDERSON referred to the committee substitute for HB 436 which            
 was drafted in response to Occupational Licensing's recommendations           
 and involve minor housekeeping elements.  He said in addition to              
 these provisions CSHB 436 eliminates the provision which would                
 license agents.                                                               
 Number 0553                                                                   
 REPRESENTATIVE BRICE said the sponsor of HB 436 made comments to              
 the over regulation in certain commercial aspects and remarked that           
 it was interesting that he was sponsoring this type of legislation.           
 Number 0620                                                                   
 CATHERINE REARDON, Director, Central Office, Division of                      
 Occupational Licensing, Department of Commerce and Economic                   
 Development, was next to testify.  She requested the effective date           
 of HB 436, located on page four, line 11, currently listed as July            
 1, 1996, be changed to January 1, 1997.  She said when there is a             
 new licensing program it is hard to get it up and running within a            
 month and the Division does not want to enforce a law that has not            
 given people ample chance with which to comply.                               
 Number 0684                                                                   
 CHAIRMAN GARY DAVIS referred to the fiscal note and said there                
 appeared to be a cost of $48,400 and revenues of $24,200.                     
 Number 0698                                                                   
 MS. REARDON said that is not what the fiscal note is attempting to            
 reflect.  She said licenses are issued for two year periods, so all           
 of the revenue comes in for one fiscal year and then the next                 
 fiscal year no revenue is received.  She said the $48,400 is for              
 fiscal year 1997 and in fiscal year 1998 you get zero which                   
 represents that cyclical pattern.                                             
 Number 0733                                                                   
 CHAIRMAN GARY DAVIS clarified that the fiscal note was revenue                
 neutral in relation to the fees.                                              
 Number 0761                                                                   
 MR. ANDERSON said the sponsor had no problem with the change of the           
 effective date in HB 436.                                                     
 Number 0772                                                                   
 REPRESENTATIVE BRICE made a motion to adopt CSHB 436 ( ), version             
 9-LS1376\C, dated March 19, 1996.  Hearing no objections CSHB 436             
 was before the House Standing Committee on Transportation.                    
 Number 0803                                                                   
 REPRESENTATIVE BRICE made a motion to adopt Amendment 1, changing             
 the effective date from "July 1, 1996" to "January 1, 1997".                  
 Hearing no objection Amendment 1 was adopted to CSHB 436 by the               
 House Standing Committee on Transportation.                                   
 Number 0834                                                                   
 REPRESENTATIVE MASEK referred to page one, line 11, regarding the             
 registration fee requirement.  She asked what type of registration            
 fee was being suggested.                                                      
 Number 0861                                                                   
 MS. REARDON said the Division of Occupational Licensing is funded             
 entirely off of licensing fees.  She said, by statute, the Division           
 is required to charge fees that cover the costs of regulating each            
 program within the Division.  She said the doctors pay for medical            
 licensing, the nurses pay for nurse licensing, and in this case the           
 mobile home dealers would be paying for the regulatory costs of               
 mobile home licensing.  She said the Division sets those fees by              
 regulation and they are adjusted up and down every two years before           
 renewals.  She said if the Division over collects, the fees are               
 lowered, if they under collect then the fees are raised.  She said            
 it is difficult to know exactly how much the Division will have to            
 charge for this program because an estimate is made as to how many            
 people will need to be licensed, how many people will be paying in            
 fees and how much activity this program will generate.  She said              
 when a new licensing program is proposed, it is an educated guess.            
 Number 0932                                                                   
 MS. REARDON said the fiscal note predicts that as many as 124                 
 individuals may seek registration under CSHB 436.  Therefore the              
 Division tried to predict how much the fees would need to be to               
 cover the fiscal note and the costs.  If the Division is correct              
 about that number, and if the Division is correct about the costs             
 it generates, then the fee would be $494 every two years.                     
 Number 0966                                                                   
 REPRESENTATIVE MASEK asked how much is being currently charged.               
 MS. REARDON said that currently the Division does not license                 
 mobile home dealers.                                                          
 Number 0978                                                                   
 REPRESENTATIVE BILL WILLIAMS made a motion to move CSHB 436 (TRA)             
 with accompanying fiscal notes and individual recommendations.                
 Hearing no objections CSHB 436 (TRA) was moved from the House                 
 Standing Committee on Transportation.                                         
 SB 86 - COMMEMORATIVE GOLD RUSH LICENSE PLATES                              
 Number 1022                                                                   
 CHAIRMAN GARY DAVIS announce the next item on the agenda was CSSB
 86 (FIN), an act relating to issuance of commemorative gold rush              
 motor vehicle license plates.                                                 
 SENATOR BERT SHARP, sponsor of CSSB 86 (FIN), said a similar bill             
 was proposed two years ago.  The old bill, HB 407, was convoluted             
 into one plate and was vetoed by the Governor because of concerns             
 expressed by the Department of Public Safety.  He said CSSB 86                
 (FIN) has moved through the Senate as a two plate bill.  He said              
 CSSB 86 (FIN) is to commemorate the period from 1994 to 2004 which            
 the legislature proclaimed as the decade of the Gold Rush                     
 Centennial for the state of Alaska.  He said CSSB 86 (FIN) would              
 issue new motor vehicle license plates.  He said the bill does not            
 uniformly mandate immediate transfer to new license plates for                
 everyone as that provision would create a fiscal note.                        
 Number 1083                                                                   
 SENATOR SHARP said SB 86 authorizes the Commissioner of Public                
 Safety in consultation with the Gold Rush Task Force and in                   
 cooperation with the designers of the state license plates to come            
 up with an acceptable Gold Rush Centennial license plate.  He said            
 CSSB 86 (FIN) was requested by the Gold Rush Centennial Task Force            
 which consists of 25 members located throughout Alaska.                       
 Number 1149                                                                   
 SENATOR SHARP referred to letters of support for CSSB 86 (FIN) from           
 all over the state and said he did not include all the letters of             
 support he had received.  He said CSSB 86 (FIN) is a way in which             
 the state can promote Alaska and the importance of the Gold Rush to           
 all Alaskans as a heritage.                                                   
 Number 1196                                                                   
 SENATOR SHARP said the license plates will be phased in gradually.            
 The new plate design will only be available after all current plate           
 stock is used.  He said when the stock is gone, newly registered              
 vehicles will receive the new license plate design and any new cars           
 coming in from the lower 48 states would get the new plates at that           
 time.  He said vehicles, who do not fit into those two categories,            
 have the option, at a nominal cost of $5.00 a set, to buy                     
 replacement plates for their automobile and participate in the                
 Centennial atmosphere with the license plates on their car.  He               
 said the state will make money, roughly $2.00 a set, on these                 
 replacement plates.  He said the fiscal note does not predict how             
 much profit will be made, but there are some estimates based on               
 other plate revenues that have been collected.  He asked the                  
 committee to consider CSSB 86 (FIN) and asked them not to get into            
 a consideration of one plate versus two plate discussion.                     
 Number 1320                                                                   
 WENDY WOLF, Programs Manager, Division of Tourism, Department of              
 Commerce and Economic Development, was next to testify.  She                  
 referred to some aspects about the Gold Rush Centennial and said              
 the Division supported CSSB 86 (FIN).                                         
 Number 1420                                                                   
 CHAIRMAN GARY DAVIS clarified that this proposed design would                 
 replace the standard Alaska plates.                                           
 SENATOR SHARP said it would gradually replace the standard plates             
 and the new Gold Rush plates would be available by the year 1998.             
 Number 1446                                                                   
 JUANITA HENSLEY, Chief, Driver Services, Division of Motor                    
 Vehicles, Department of Public Safety, was next to testify.  She              
 said the design of this Gold Rush plate will be the new plate for             
 Alaska.  She said it is DMV's plan, in order to save money, to                
 gradually issue these plates as the current stock is depleted.  She           
 said DMV has a contractual obligation that it has to meet with the            
 current license plate stock.  She said this contract is not with              
 the prisons, the contract is placed out for bid with the lowest bid           
 receiving the contract.  She said the current contract is with                
 Irwin Hopson, Incorporated in Portland, Oregon which makes the                
 current plates.  She said DMV anticipates that they would begin               
 issuing the new license plates in January of 1998.  She said, as              
 Senator Sharp indicated, any new cars coming in for registration              
 and any cars of people who are moving up from the lower 48 states             
 as well as individuals who lose their plates then they would be               
 issued the new plate.                                                         
 CHAIRMAN GARY DAVIS clarified that the earliest date would be                 
 January of 1998.                                                              
 MS. HENSLEY said the state would need to go through the design                
 process and approval of the design by state and national standards.           
 She said implementing a new license plate is not a small process.             
 Number 1552                                                                   
 REPRESENTATIVE BRICE asked why general funds were requested rather            
 than using program receipts.                                                  
 Number 1557                                                                   
 MS. HENSLEY said that is the funding mechanisms for the Department            
 of Public Safety.  She said all of the program receipts are                   
 collected and deposited directly into the general fund.  Any                  
 allocations for DMV come directly out of the general fund.                    
 Number 1610                                                                   
 REPRESENTATIVE BRICE made a motion to move SB 86 with accompanying            
 fiscal notes and individual recommendations.  Hearing no objections           
 it was so moved from the House Standing Committee on                          
 HB 543 - STATE AIRPORT LAND LEASE PREFERENCE                                
 Number 1653                                                                   
 CHAIRMAN GARY DAVIS announce the next item on the agenda was HB
 543, an act establishing a preference when entering into state                
 airport land leases.  He said HB 543 was first heard last Wednesday           
 and said a couple of meetings have been held since then to try and            
 determine how the bill should be addressed.  He said there have               
 been numerous problems in HB 543 as it tries to accommodate                   
 industry and the Attorney General's Office (AG) in regard to                  
 constitutional issues and agreeing to what should be included in              
 statute and what is addressed in regulation.  He said he has                  
 drafted a committee substitute for HB 543.                                    
 Number 1738                                                                   
 REPRESENTATIVE BRICE made a motion to adopt the work draft, CSHB
 543 (TRA), version 9-LS1769\C, dated March 27, 1996.  Hearing no              
 objection CSHB 543 (TRA) was now before the House Standing                    
 Committee on Transportation.                                                  
 CHAIRMAN GARY DAVIS said the wording that was sent over to                    
 Legislative Legal in the work draft did not return to the committee           
 with quite the same language that was sent over.                              
 Number 1778                                                                   
 KURT PARKAN, Deputy Commissioner, Office of the Commissioner,                 
 Department of Transportation and Public Facilities (DOT/PF), was              
 next to testify.  He said DOT/PF supports changes in the statutes             
 to promote stability by giving tenants an opportunity to remain at            
 their locations without forcing them into some sort of competitive            
 environment, either by right of first refusal or right of first               
 offer.  He said the interest of DOT/PF is to make sure that the               
 state promotes aviation business and gives the existing tenants               
 some comfort in knowing that they will have an opportunity to stay            
 at their lease site.                                                          
 Number 1816                                                                   
 MR. PARKAN said beyond that interest, the DOT/PF is interested in             
 making sure that whatever legislation is developed remains legally            
 defensible.  He said the Department of Law will be the state's                
 attorneys if DOT/PF goes to court to defend challenges by this                
 proposed legislation.  He said the committee and the                          
 Administration's intent is similar with regard to offering existing           
 tenants an opportunity to continue to stay at their lease sites.              
 MR. PARKAN said there is a concern about Section (d), which is the            
 section that deals with the disposition of improvements.  He said             
 this section brings in a new element that the DOT/PF had not                  
 originally discussed and might be a troubling area.  He suggested             
 that it would be better to keep the bill simple and address one               
 issue at a time.  He said the option to continue a lease could be             
 the issue that is addressed, rather than addressing the                       
 improvements issue as well.  He asked for an explanation regarding            
 the section which talks about "limited circumstances clearly                  
 defined by regulations the department may acquire ownership by                
 financing the improvements."  He said he did not understand the               
 intent of this language and questioned whether the department would           
 acquire those improvements if they were willing to buy them.                  
 MR. PARKAN said the language specifying financing is vague and that           
 the DOT/PF has various leases which have different clauses                    
 regarding the disposition of the end of the term of the lease.  He            
 said every lease has some language that references the disposition.           
 At the International Airport there is the FedEx existing lease                
 which has the clause that the improvements revert to the airport              
 and said that particular property was financed by the Alaska                  
 Industrial Development and Export Authority (AIDEA) and said the              
 DOT/PF is in the process of negotiating a new lease for expansion             
 and said he was not aware that the lease is being financed by                 
 AIDEA. He said DOT/PF is negotiating a lease which has similar                
 language regarding reversion.  The United Parcel Service (UPS) site           
 which is a growing site, it is about five years old and that lease            
 was not funded by any instrument of the state, yet it too has                 
 language which calls for the reversion of the improvements to the             
 state at the end of the lease.  He said Section (d) which refers to           
 the improvements is unclear and suggested that it should not be               
 Number 1991                                                                   
 CHAIRMAN GARY DAVIS said he retained the findings and statement of            
 purpose as opposed to a letter of intent in CSHB 543.  He said his            
 decision was based on providing all the information, up front, when           
 and if CSHB 543 goes before the House and Senate.                             
 Number 2027                                                                   
 ELIZABETH HICKERSON, Assistant Attorney General, Transportation               
 Section, Civil Division, Department of Law, was next to testify.              
 She said the charge or primary focus she was given, was to draft an           
 amendment to the statute which would provide a legally defensible             
 right for tenants, who are in good standing, to give a new lease              
 and avoid competition.  She said the reason why the Governor wanted           
 the Attorney General's Office (AG) to draft something was because             
 he found that there was a public purpose in allowing tenants in               
 good standing to continue on their leases for a new term, if in               
 fact, continuation on that lease was consistent with the needs of             
 the airport.  She said it is accepted that the airport has special            
 needs and that the state cannot tie all inches of land at an                  
 airport and still provide the service that the aviation community             
 needs.  She said, with that charge and based on the research that             
 had been done over the last couple of years and in new research               
 formed through discussions with groups of people, the AG's felt               
 that it was important to have a reasonable basis stated which is              
 located in the findings.                                                      
 Number 2097                                                                   
 MS. HICKERSON complimented the Chairman on including the findings             
 in CSHB 543.  She said keeping the findings will help the AG's if             
 they need to go to court and explain why this provision is in the             
 state's best interest.  She said the findings are based on the                
 combined review and determination by airport personnel that being             
 able to offer a tenant in good standing a new lease without                   
 competition promotes the interest of the local community, the                 
 airports and the state and has ramifications beyond the lease.  She           
 said the lease employs people, brings in money, promotes good                 
 tourism, continued tourism and other commerce.                                
 Number 2134                                                                   
 MS. HICKERSON said she is aware of the fact that the state needed             
 to be sure that they were staying within the public purpose and               
 avoid a constitutional challenge.  She said, as Mr. Parkan pointed            
 out, the Department of Law (DOL) will be required to defend this              
 statute and the DOL needs to be able to defend this and succeed in            
 that defense.  She said the last thing people need to do is to find           
 themselves tied up in litigation for years that the state does not            
 end up winning.  She said, in order to address those concerns, the            
 Governor presented a bill that has been circulated with the AG's              
 MS. HICKERSON said she had looked at the committee substitute and             
 had some general comments.  She said the title has been changed on            
 CSHB 543 and it is a very broad title, "an act relating to state              
 airport land leases."  She expressed concern about the broad                  
 language, because she hoped that with all the work that is being              
 done on CSHB 543 there does not have to be a lot of work done on              
 the bill in the Senate.  She said a broad title allows for                    
 additional revisions.                                                         
 Number 2199                                                                   
 CHAIRMAN GARY DAVIS also expressed concern with the title in CSHB
 543.  He said the title did not come back from Legislative Legal              
 Services in the manner in which it was written.  He said the                  
 original title was, "an act establishing renewal rights when                  
 entering into state airport land leases."                                     
 Number 2219                                                                   
 MS. HICKERSON said she received that title change and expressed               
 concerns regarding it.  She said establishing renewal rights is not           
 as specific as a right of first refusal, which is the direction the           
 original bill had been headed.  She said it is important for the              
 committee to be careful in mixing terminology.  She said terms such           
 as "renewal" versus "a new lease" versus an "extension" have been             
 misunderstood by courts, tenants, airports.  She said "renewal and            
 extension are intended to make renewal a new lease extension an               
 extension of years onto the existing link, there has been                     
 confusion."  To avoid that confusion in the future, she asked her             
 clients to start using the term, expired, new lease, and to make              
 sure that every one knows what is being talked about in                       
 discussions, whether we are talking about an extension or a new               
 lease.  She said renewal means different things to different                  
 people.  She said she does not like the word renewal because of the           
 confusion it creates.                                                         
 MS. HICKERSON said the other part of her concern is when entering             
 into an airport land leases and said there is less concern                    
 regarding this language.  She said the AG's understood the charge             
 to be, setting up a preference for an existing tenants in good                
 standing so that they could get a new lease under the various                 
 circumstances without having to go through a competitive process.             
 Number 2302                                                                   
 REPRESENTATIVE BRICE referred to Section 2(a) and said the first              
 sentence refers to the length of the contract periods "not                    
 exceeding 55 years with a person, municipality, or the United                 
 States".  He asked, when the state lists governmental, commercial             
 or other public purposes in context to this public space and asked            
 if this provision would preclude a private person from building a             
 private hangar which was not open to public use.                              
 Number 2338                                                                   
 MS. HICKERSON said the intent is not to preclude those types of               
 operations.  She said, in fact, if you have a copy of the                     
 Governor's preferred amendment the AG's office has modified Section           
 2, line 18, where it says, "including private plane tie down," the            
 AG's office recommends that the language be modified to read,                 
 "including private aviation use".  She said other provisions in the           
 findings were also previously altered to address non-commercial               
 use.  The AG's office believes there is a benefit not only for                
 commercial operations, but for non-commercial operations.  She said           
 to distinguish between the two is very difficult when you are                 
 talking about the public purpose and offering a tenant in good                
 standing a right for a new lease without competition because it               
 promotes the general welfare of the state.                                    
 Number 2383                                                                   
 MS. HICKERSON referred to the term, "the first offer, a right and             
 option to make a first offer this appears first in the findings,              
 paragraph six, on line three, and later on paragraph (b) on line 7            
 and line 8."  She said this language is also picked up in Section             
 3, "right and option to make a first offer".  She said this                   
 language is unclear.  She said in Alaska there is no developed law            
 on what a right of first refusal is.  She said the AG's                       
 understanding of what a right of first refusal is in order to                 
 comply with all of the constitutional requirements, the AG would              
 have to notice new leases.  At that time, if anyone else is                   
 interested, the state would offer it first to the existing tenant             
 as long as they were in good standing and continued to use it                 
 within the public interest.  She said many call this a                        
 "preference," and she cautioned about using this word.  She said if           
 a "right of first refusal" is found to be acceptable in certain               
 circumstances by the court and once again stated that when she has            
 to go to court she wants to be able to best defend this particular            
 feature.  She said she didn't know what the language means to have            
 a "right and option to make a first offer."  She said, if she were            
 to speculate, the language is not creating anything other than a              
 right to make a first offer.  This language does not address                  
 whether or not the state is going to continue a lease.                        
 TAPE 96-14, SIDE B                                                            
 Number 0000                                                                   
 MS. HICKERSON, "as so, because right of first refusal has a lengthy           
 history and acceptance in our court, we know what those procedures            
 are, and because it is used in the statutes that we have used as a            
 model, AS 38.05.073Q."  She said, since 1990, that has not been               
 challenged.  She recommended that the language be kept as "a right            
 of first refusal."                                                            
 Number 0022                                                                   
 CHAIRMAN GARY DAVIS said his impression of this language is that              
 the right of first refusal did not seem to be acceptable to some              
 because of the requirement that a third party be involved in the              
 proceedings.  He referred to Representative Rokeberg's suggestion             
 of "right of first offer" and said both terms were mentioned as,              
 hopefully, having some legal base.  He said he tried to stay away             
 from any legal term in an attempt to use plain language, but said             
 from a legal standpoint this did not appear to work.                          
 Number 0065                                                                   
 REPRESENTATIVE NORMAN ROKEBERG said by using, "right and offer to             
 make the first offer" it established a clear, and fundamental right           
 on the part of the lessee to do so.  He said the word, "option," is           
 a basic, fundamental concept in common law.  He said this concept             
 is a simplified, elementary methodology in which to implement a               
 lease extension as opposed to a renewal.                                      
 Number 0138                                                                   
 JACK BIRMINGHAM, President, ERA Aviation, testified via                       
 teleconference from Anchorage.  He expressed some frustration over            
 the fact that in a technical reading, standing alone the way this             
 bill does, it doesn't give the existing tenant anything.  He said             
 the biggest concern is that CSHB 543 implies that there is some               
 kind of third party bidding thing going on here.  He said it would            
 be a whole lot simpler if terms were used such as "renewal of the             
 existing lease" or "extending the existing lease."  He said it                
 would be clearer as to what is being granted to people.                       
 MR. BIRMINGHAM said the problem with the right of first refusal is            
 that it implied a third party bidding game.  He said both, the                
 airmen for the non-commercial enterprises and the air carriers for            
 the commercial enterprises, want an extension of the existing lease           
 on all the same terms, except for an extension of years.  He said             
 prices should not be increased or more onerous provisions be added            
 to the lease.  He said this type of language is what the group,               
 that he represents, is seeking.                                               
 Number 0223                                                                   
 CHARLES COLE, Attorney, Representing Fairbanks Air Taxi Charters,             
 testified via teleconference from Fairbanks.  He referred to                  
 Section 3(c), and he proposed that the language be simplified,                
 "that the expiration of a land lease entered into (a) of this                 
 section, the department shall first offer the holder of the                   
 existing lease, including a holdover lease the right to extend the            
 term of the existing lease for a reasonable amount of time."  He              
 said it would be a mistake to start this "right of first refusal"             
 because then one gets into the offer of a third party who knows all           
 the terms and conditions that the third party may offer, then the             
 existing lessee maybe matches those or makes alternative                      
 provisions, terms and conditions and requires the state to evaluate           
 these various conditions.  He said this creates a horrible mess and           
 that the state would tie themselves in.  He said the existing                 
 leaseholders should be granted the right to renew the term of the             
 existing lease and that CSHB 543 should be simplified to make                 
 everyone, including the state, best off.                                      
 Number 0304                                                                   
 MS. HICKERSON said there are two differences of opinion, one is               
 that CSHB 543 is talking about offering a new lease.  As Mr.                  
 Birmingham pointed out, there is a distinction between a new lease            
 and an extension.  She said you need to be very clear with the                
 language that you are dealing with.  She said an extension of a               
 year would have to be noticed.  She said the charge given to the AG           
 was to try to provide a preference for existing tenants to give a             
 new lease without competition.                                                
 Number 0357                                                                   
 MS. HICKERSON said the other difference is in regards to the "right           
 of first refusal" as compared to "right of first offer" which does            
 have any case law within the state of Alaska.  This position has              
 been discussed with the legislative attorney, Deborah Bair (ph.),             
 who is concerned that the state will find themselves in court if              
 the language, "right of first offer" is used.  She said if you were           
 going to move away from a well defined procedure, such as "right of           
 first refusal" she requested that the committee specify what that             
 procedure is going to be to avoid an argument of what that                    
 procedure would be.                                                           
 Number 0375                                                                   
 CHAIRMAN GARY DAVIS asked her if she disagreed with the wording               
 that Mr. Cole recommended.                                                    
 Number 0380                                                                   
 MS. HICKERSON said no, not for the reasons that the AG is trying to           
 support a bill that is going to withstand judicial scrutiny, so               
 that the state will not tie up further leases at state airports.              
 Number 0395                                                                   
 REPRESENTATIVE ROKEBERG referred to the addition in CSHB 543 of a             
 "first offer on a new lease" which was different language from the            
 working language.  He said this changes the concept.  He said he              
 would be comfortable with the language that Mr. Cole suggested.  He           
 said that perhaps there is no case law on general business                    
 practices because court cases have not gone to the supreme court in           
 the state of Alaska.  He said these are terms of commercial                   
 currency and legal understanding and said he used these terms for             
 25 years.                                                                     
 Number 0466                                                                   
 MR. COLE upon request gave the proposed language to CSHB 543,                 
 "after the end of the line six, lease, (indiscernible-possibly                
 lessee) and then on line seven, right strike and option, so that it           
 reads, right to.  Then strike make the first offer on a new lease             
 or and, so that it would then read, right to extend the term of the           
 existing lease."  He then said, it should be, "for, rather than               
 within."  He said you might say, "for an extended period of time,             
 reasonable is such a mushy word."                                             
 Number 0528                                                                   
 REPRESENTATIVE ROKEBERG said the extending of the time is essential           
 because it cannot be an open-ended thing.  He said the use of the             
 word, "reasonable" was included to allow the department to draft              
 regulations to implement this section.                                        
 Number 0533                                                                   
 REPRESENTATIVE DON LONG asked if the language could be faxed down             
 and was told it could be.                                                     
 CHAIRMAN GARY DAVIS said it was his intent to get CSHB 543 out of             
 committee and said he didn't think there was any way that something           
 could be moved that everyone would agree to, but wanted it to be              
 legally defensible.  He said it could be revised when it got to the           
 House floor.                                                                  
 Number 0595                                                                   
 RICHARD WIEN, Representing 30 Fairbanks International Airport Users           
 and Tenants, testified via teleconference from Fairbanks.  He said            
 prior to 1989 or 1990, the system under the current laws and                  
 regulations was working quite nicely.  He said, as came out of the            
 Blue Ribbon Commission through testimony from leasing people, there           
 was a concerted change of policy and interpretation of the                    
 regulations, the act and the constitution which has cause                     
 consternation throughout the industry including economic                      
 instability.  He said it is encouraging to see people interested in           
 resolving these issues.                                                       
 Number 0697                                                                   
 MR. WIEN said that one of the things that came out of the Blue                
 Ribbon Commission is that the current leasing staff in particular             
 and some management people are against the renewal concept.  He               
 said it would take specific wording in the legislation so that                
 there is no misunderstanding that when the rules are adopted the              
 philosophy outlined is carried out.                                           
 Number 0754                                                                   
 REPRESENTATIVE ROKEBERG asked how important it was for the                    
 legislature to address the issue of disposition of improvements.              
 MR. WIEN said it is one of the core issues.  He said the two issues           
 are the renewal of the leases and the disposition of the assets.              
 He said if you have a true right to renew a lease or extend that              
 lease, part of it is resolved, and you are probably in the                    
 position, at some point in time, as has been the rule of the past,            
 that you can sell those assets at market value because the lease              
 under the property is not under jeopardy, as it is now.  He said,             
 currently, if you cannot extend the lease or the leases are up and            
 nothing is being done with them, than you have nothing to sell.  He           
 said this has been a misconception within the Administration.  He             
 said the key is the right to renew and a clear understanding of the           
 disposition of the assets.                                                    
 Number 0811                                                                   
 MR. COLE said he was aware of someone who is planning on a several            
 million dollar investment in the Anchorage International Airport.             
 He said this person will not make that investment, if at the end of           
 the term especially if it is a short term of less than 35 years,              
 he is going to lose that investment and the related businesses.               
 Number 0848                                                                   
 CHAIRMAN GARY DAVIS asked how long that individual had a lease.               
 MR. COLE said the person did not have an existing lease, he is                
 acquiring by way of assignment, mostly vacant, unimproved ground.             
 Number 0868                                                                   
 REPRESENTATIVE ROKEBERG asked if the leasing policy was having a              
 negative effect on the development of both the Anchorage and                  
 Fairbanks International Airports as well as the rural airports in             
 the state.  He said, in the real estate industry, further                     
 development at the airports is going to be curtailed because of the           
 existing lease policies.                                                      
 Number 0890                                                                   
 MR. WIEN said that statement was true.  He said, in Fairbanks,                
 there was a lease granted, under the proposed owner's provisions,             
 and said that business is not developing until the leasing policy             
 is resolved.  He said no one is going to develop on these airports.           
 He said there are many cases where hangars cannot be sold.  He                
 referred to Mr. Cole's testimony.  He said the current lease policy           
 has the "downstream effect of gutting the equity of the aviation              
 community."  He said airplanes come and go, they wear out and                 
 depreciate and the balance sheet often appears as zero.  He said              
 the equity that is valued, from a banks perspective, is the                   
 facilities.  He said if you lose that ability to keep these                   
 facilities, the banks will not fund these improvements and said               
 there is not enough infrastructure in the state as it exists to               
 provide the capital to expand and develop.                                    
 Number 0998                                                                   
 CHAIRMAN GARY DAVIS asked for comment on Section(d).                          
 MS. HICKERSON said Section 3 has now become an "extension of an               
 existing contract" versus "offering a new lease" and said this                
 creates some additional legal concerns relating to time and the               
 preference to limit any new terms and conditions over an extended             
 period of time.  She said, from a policy point of view, there are             
 operational issues that are contained in new leases that spoke to             
 the ability to sufficiently run airports.  She said, from a legal             
 point of view, it is unclear what the time period would be.  She              
 asked if the total time available for the existing lease and the              
 extension would be limited to 55 years or would this lease continue           
 indefinitely.  She said if it continues in perpetuity, then there             
 are legal problems.                                                           
 Number 1081                                                                   
 MS. HICKERSON said, in the Governor's recommended bill, there is a            
 paragraph (d) which says any lease term offered under (c) of this             
 section may not exceed a total of 55 years when combined with a               
 prior lease term.  She said this would give more definition.  She             
 said, she understood the charge to be, how to provide a good tenant           
 an opportunity for a new lease without facing competition.  She               
 said if the committee wishes to change the new lease into an                  
 extension, then the time period for the total term be stated.  She            
 referred to paragraph (d) and said the disposition of improvements            
 is not a legal issue in concept, it is more of a policy issue and             
 the use of the airport and the flexibility which may be needed to             
 operate it.  She said there is less flexibility, if the airports              
 find their land tied up for extended periods of time.  She said               
 whether you own the improvements or you have the  ability to have             
 a greater return on your money are policy issues, not legal issues.           
 She echoed the concern over the financing terms and what that                 
 Number 1186                                                                   
 CHAIRMAN GARY DAVIS said it is not the intention to have leases in            
 perpetuity.  He said it is the intention to keep the 55 years                 
 intact unless there are some extenuating circumstances.                       
 Number 1210                                                                   
 REPRESENTATIVE BRICE asked for an explanation of the 55 year time             
 Number 1226                                                                   
 MR. PARKAN said 55 years is the length in statute now and added               
 that he did not know why that length was chosen.                              
 REPRESENTATIVE BRICE said that this 55 year period could be changed           
 Number 1280                                                                   
 CHAIRMAN GARY DAVIS agreed that this could be done.                           
 MS. HICKERSON said there are other statutes which limit lease terms           
 to 55 years.                                                                  
 Number 1339                                                                   
 CHAIRMAN GARY DAVIS referred to Section (d) which tries to                    
 delineate what will happen to the assets at the end of a lease.  He           
 said this is addressed in regulation and he was told it should not            
 be addressed in statute.  He asked if it was felt that this                   
 provision was addressed properly in regulations.                              
 Number 1364                                                                   
 DIANE BARTH, Chief of Leasing, Anchorage International Airport,               
 Department of Transportation and Public Facilities, testified via             
 teleconference from Anchorage.  She said, in response to the                  
 question, it is a legal question and that DOT/PF has been using the           
 existing regulations for a number of years to address the issue of            
 disposition of improvements.  She said the regulations give the               
 DOT/PF a number of options.                                                   
 Number 1372                                                                   
 CHAIRMAN GARY DAVIS clarified that there had been no major problems           
 with those regulations.                                                       
 Number 1382                                                                   
 MS. BARTH said there had been no major legal problems, but there              
 have been some policy issues as to how the DOT/PF should be using             
 those regulations.  She repeated that the regulations give the                
 Department a number of options.                                               
 REPRESENTATIVE ROKEBERG (indiscernible due to papers over the                 
 microphone) "existing lease language that disposition of                      
 improvements says it's to the Departments discretion and the nature           
 of the disposition would include a reversion to the state in the              
 first interest and then the regulations give the state the right to           
 reversionary interest."                                                       
 MS. BARTH said yes, the existing lease suit gives the airport the             
 right to decide if they want title to the improvements.  She said             
 the existing regulations gives us that ability, the option to                 
 include that in the language.                                                 
 CHAIRMAN GARY DAVIS expressed frustration over the inability for              
 the parties to agree on the language.                                         
 Number 1483                                                                   
 REPRESENTATIVE ROKEBERG said, the suggested changes that Mr. Cole             
 offered, are so elementary that it creates good language.  He                 
 expressed concern over whether a revisionary interest should go               
 back to the state by clear agreement in terms of the Section (d)              
 language.  He expressed concern over current policy.  He said from            
 his experience, as a representative whose district encompasses the            
 Anchorage Airport and someone with real estate experience he feels            
 CSHB 543 is a good bill.  He said, "I have never participated in my           
 business in an airport lease and I do not have now or don't intend            
 to have any relationship businesswise with the state of Alaska as             
 relates to this."                                                             
 Number 1608                                                                   
 REPRESENTATIVE BRICE said that Mr. Cole's language appears to meet            
 the intent of CSHB 543.  He suggested that private aviation                   
 language be included.  He questioned the magic of 55 years.                   
 Number 1656                                                                   
 CHAIRMAN GARY DAVIS said he, somewhat, agreed with the DOL in the             
 language of "extension of a lease," so there needs to be some time            
 element in the language.  He said there had been "two years or                
 more" language included in the original version.                              
 Number 1691                                                                   
 REPRESENTATIVE ROKEBERG said the language should be, "in a                    
 reasonable period of time", and disagreed with Mr. Cole in the                
 sense that the intention of the draft was that the arrangements be            
 concluded in a reasonable amount of time.                                     
 CHAIRMAN GARY DAVIS said the length of time is what needs to be               
 Number 1724                                                                   
 REPRESENTATIVE ROKEBERG said the length of lease is something that            
 should be bargained for between the tenant and the state.  He said            
 the bargaining length is limited by the statutory limitation of 55            
 years.  He said this is a common business practice and not                    
 something that needs to be addressed because the committee is not             
 delimitating the shortness or length of term here.  He said the               
 reason for the two year provision was that the term from the                  
 drafter used long term lease and a definition needed to be included           
 as a result.  He said this long term lease provision is not                   
 included and so it does not need to be included in CSHB 543.                  
 Number 1794                                                                   
 CHAIRMAN GARY DAVIS asked Ms. Hickerson if she considered Mr.                 
 Cole's wording an "extension" and said that the amount of time of             
 the extension needs to be specifically addressed.                             
 MS. HICKERSON said this was what she was referring to in the                  
 Governor's draft amendment, paragraph (b).  She said it could be              
 modified, but any lease term offered under (c) of this section may            
 not exceed a total of 55 years when combined with a prior lease               
 term.  She said if the bill is going to use language of an                    
 "extension" rather than a "new lease" any lease extension or                  
 extension to a lease, so that the language is understood to be                
 working within the 55 year maximum period.                                    
 CHAIRMAN GARY DAVIS asked if the language would be acceptable in              
 subsection (c) with Mr. Cole's language.                                      
 MS. HICKERSON said the Department would prefer a "new lease" versus           
 an extension of something (indiscernible due to styrofoam cup being           
 run across the table) "definition as to the total time we are                 
 looking at versus having extensions pancaked on so that they extend           
 into perpetuity, which I urge you to stay away from that challenge,           
 that is a problem area."  In regards to the wording, "offer an                
 extension to an existing lessee" she said she would like to see               
 them in writing, especially in lieu of Representative Rokeberg's              
 concern about "within a reasonable time."  She said that is clearer           
 than an offer or an option of a "first offer" and said she would              
 appreciate the opportunity to look at the language to see if it               
 would be legally defensible.                                                  
 Number 1955                                                                   
 MR. PARKAN said, generally, drafting legislation is the art of                
 compromise.  He said whether it is an extension or a new lease                
 isn't so much the issue as the issue of the 55 year total length.             
 He said the DOT/PF could probably live with an extension, but that            
 there could be problems with having leases in perpetuity.                     
 Number 2007                                                                   
 CHAIRMAN GARY DAVIS said there did not appear to be disagreement on           
 that point.                                                                   
 Number 2014                                                                   
 REPRESENTATIVE ROKEBERG said the recommendation made by Ms.                   
 Hickerson is a valid one if the cumulative 55 years were included             
 for the length.  He said the intention of the draft was to say the            
 act of extension would have to be done within a reasonable period             
 of time and did not refer to the length of term.  He said this is             
 why the additional language as suggested by Ms. Hickerson would               
 clear that up.                                                                
 Number 2062                                                                   
 CHAIRMAN GARY DAVIS said more work will be done on CSHB 543.                  
 Number 2107                                                                   
 MR. COLE suggested that at the beginning of subsection (c) language           
 be included, "not less than 30 days prior to the expiration of the            
 land lease".                                                                  
 Number 2135                                                                   
 REPRESENTATIVE ROKEBERG said 30 days is a tight time frame.                   
 Number 2162                                                                   
 MR. COLE suggested that 60 or 90 days could be used instead.                  
 Number 2168                                                                   
 REPRESENTATIVE ROKEBERG said that the time frame varies with the              
 length of term.  He said it is common in business to have 6 months            
 or one year for a long term lease.                                            
 MR. COLE said that maybe the "reasonable period of time" language             
 could be eliminated.                                                          
 REPRESENTATIVE ROKEBERG said the reasonable period of time is                 
 needed to conclude the transaction.                                           
 MR. COLE said that if a sentence were started in that fashion then            
 it would set the standard or procedure, in effect.  He said he                
 agreed with Ms. Hickerson on putting in the subsection (e) and said           
 that would clear up a lot of the problems and be beneficial.  He              
 added a lease extension offered under (c) would solve a lot of                
 As there was no further business to come before the House                     
 Transportation Standing Committee, Chairman Gary Davis adjourned              
 the meeting at 3:00 p.m.                                                      

Document Name Date/Time Subjects