Legislature(1997 - 1998)
05/10/1998 01:45 PM Senate TRA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE TRANSPORTATION COMMITTEE May 10, 1998 1:45 p.m. MEMBERS PRESENT Senator Jerry Ward, Chairman Senator Gary Wilken, Vice Chair Senator Lyda Green Senator Rick Halford MEMBERS ABSENT Senator Georgianna Lincoln COMMITTEE CALENDAR CS FOR HOUSE BILL NO. 482(TRA) am "An Act relating to registration of vehicles owned by disabled persons or persons who are 65 years of age or older; and providing for an effective date." - MOVED CSHB 482(TRA) OUT OF COMMITTEE CS FOR HOUSE BILL NO. 12(FIN) am "An Act relating to civil liability for commercial recreational activities and certain skating and cycling activities; and providing for an effective date." - MOVED SCSCSHB 12(TRA) OUT OF COMMITTEE HOUSE JOINT RESOLUTION NO. 67 Relating to renewal of the bilateral aviation agreement concerning the mandatory Anchorage stopover for Russian carriers on transpacific routes between the Russian Far East and the United States. - MOVED HJR 67 OUT OF COMMITTEE HOUSE JOINT RESOLUTION NO. 63 Relating to support for Mitchell Field Adak airport. - MOVED HJR 63 OUT OF COMMITTEE CS FOR HOUSE BILL NO. 386(FIN) "An Act relating to the financing authority, programs, operations, and projects of the Alaska Industrial Development and Export Authority; and providing for an effective date." - MOVED SCSCSHB 386(TRA) OUT OF COMMITTEE PREVIOUS SENATE ACTION HB 482 - No previous Senate committee action. HB 12 - No previous Senate committee action. HJR 63 - See Transportation minutes dated 4/30/98. HJR 67 - See Transportation minutes dated 4/30/98. HB 386 - See Transportation minutes dated 4/28/98 and 4/30/98. WITNESS REGISTER Peter Ecklund Legislative Aide to Representative Williams Alaska State Capitol Juneau, Alaska 99801-1182 POSITION STATEMENT: Testified for sponsor of HB 482 Juanita Hensley Chief, Driver Services Department of Administration P.O. Box 10200 Juneau, Alaska 99811-0200 POSITION STATEMENT: Supports HB 482 Representative Gary Davis Alaska State Capitol Juneau, Alaska 99081-1182 POSITION STATEMENT: Sponsor of HB 12 Connie Jones Municipality of Anchorage P.O. Box 196650 Anchorage, Alaska 99501 POSITION STATEMENT: Supports HB 12 Russ Winner Alaska Action Trust 900 West 5th Avenue #700 Anchorage, Alaska 99501 POSITION STATEMENT: Keith Laufer Alaska Industrial Development and Export Authority 480 West Tudor Anchorage, Alaska 99503 POSITION STATEMENT: ACTION NARRATIVE TAPE 98-11, SIDE A CHAIRMAN WARD called the Senate Transportation Committee meeting to order at 1:45 p.m. Present were Senators Green, Wilken and Chairman Ward. The first order of business before the committee was HB 482. CSHB 482(TRA) - MOTOR VEHICLE REGISTRATION Peter Ecklund, staff to Representative Williams, sponsor of HB 482, explained the bill allows senior citizens and handicapped citizens the ability to get a lifetime registration for their vehicles. At present, those citizens pay no annual fee to register one vehicle per person. Instead of requiring the participants to register the vehicle annually, they will only have to register the vehicle once. The bill will streamline the workload for the Division of Motor Vehicles (DMV), and be more convenient for participants. JUANITA HENSLEY, DMV, Department of Administration, stated HB 482 strongly supports HB 482 as it will help the 14,000 senior citizens in the state who qualify for the exemption, and the 6,000 individuals who are registered with handicap license plates. SENATOR GREEN asked if DMV issues handicap license plates for people with temporary disabilities. MS. HENSLEY explained DMV issues a temporary handicap placard for people who meet the federal requirements if a physician verifies that the person needs the temporary placard. HB 482 will not apply to those individuals. SENATOR GREEN moved CSHB 482(TRA) out of committee with individual recommendations and its zero fiscal note. There being no objection, the motion carried. HJR 63 - ADAK AIRPORT CHAIRMAN WARD read Representative Moses' sponsor statement into the record and announced his intention to hold HJR 63 in committee at this time. HJR 67 - AIR FLIGHTS RUSSIAN FAR EAST PETER ECKLUND, legislative aide to Representative Williams, stated the committee was provided with background information on the legislation at its last meeting, and that he was available to answer questions. CHAIRMAN WARD announced his intention to hold HJR 67 in committee at this time. CSHB 12(FIN) am - IMMUNITY FOR EQUINE ACTIVITIES REPRESENTATIVE GARY DAVIS, sponsor of HB 12, described the bill as follows. HB 12 establishes the responsibilities and liability of owners, operators, and users of commercial recreational activities for injuries occurring from certain skating and cycling activities. The legislation is supported by many groups. The bill was amended on the House floor to include the liabilities and responsibilities of municipal cycling and skating facilities. He informed committee members he has prepared a proposed amendment to correct technical changes that need to be made to the bill resulting from the House floor amendment. Number 131 CONNIE JONES, representing the Municipality of Anchorage (MOA), stated the MOA has been working on similar legislation for about five years and is very interested in seeing this bill pass. MOA believes this is a fair way to demonstrate the responsibilities of both the user and the operator of commercial recreational facilities. HB 12 does not entirely relieve municipalities of liability; it requires municipalities to construct and maintain a municipal skating or cycling facility in a manner that is not negligent. The Youth Commission, The Anchorage Chamber of Commerce, the Municipal Assembly, the Downtown Anchorage Association, and the municipal government support this legislation. The MOA currently has $83,000 available from bonds and an appropriation from the Assembly to build a skateboard park which it very much wants to do, but will not until this legislation passes. Number 158 RUSS WINNER, representing the Alaska Action Trust, gave the following testimony on what it views as the two aspects of HB 12: commercial recreational activity and skateboarding and cycling. The Alaska Action Trust believes this legislation is unnecessary for three reasons. First, litigation in this area is uncommon, and it is doubtful the litigation that has occurred has had any effect on the growth of the industry. Second, current Alaska law provides for allocation of fault to the plaintiff, based on his or her acceptance of the obvious risks of the activity. Third, the Legislature enacted tort reform legislation last year. That legislation contained caps on compensation for pain and suffering, non-economic damages and punitive damages, and it broadened the ability of a defendant to allocate fault to persons who are not litigants. Further protections in this area are unnecessary. The Alaska Action Trust suggests that the Legislature wait and see what effect the new tort reform legislation has on liability for injuries. The Alaska Action Trust assumes the purpose of this legislation is to reduce insurance rates for the operators of commercial recreational activities, however it is unlikely that insurance rates will be affected by HB 12. Insurance rates are set by companies on a region wide basis and the particular statutes enacted in Alaska will have little, if any, effect on insurance rates. Instead, insurance companies will look at the loss record for the region. One provision of HB 12 states that a customer of commercial recreational activities is contributorily negligent to the extent that the inherent risk of the activity causes his/her harm. The Alaska Action Trust questions whether establishing a policy that says that the user is negligent to the extent that he/she chooses to participate in the activity will result in poor public relations between this industry and tourists and visitors from out of state. MR. WINNER pointed out inconsistent and confusing language in the bill could invite litigation. Section .010 refers to liabilities to the operator for "inherent risks". Section .030 requires participants to learn about the "risks". Section .040 requires the operator to explain the "fundamental inherent risks." He questioned whether the participant is to learn about the inherent risks or a broader category of risks and whether all three types of risks are the same. Also, the bill requires participants to learn about the risks but does not explain how they are to learn, or from whom, nor does the bill address the effect on the allocation of fault if the participant does not learn. The bill imposes certain responsibilities on operators, such as explaining the fundamental inherent risks of the activity. Once again, the bill is silent as to how, and by whom, this explanation is to occur. Also, the effect of having provided an explanation is not clear, therefore litigation over the significance of that requirement could occur. This legislation appears to be special interest legislation and its constitutionality would be subject to attack for that reason. He cited the case of Turner v. Scales as a case in which the Supreme Court struck down similar special interest legislation as unconstitutional. MR. WINNER stated the skating and cycling provisions in HB 12 are similar to the Alaska's ski statutes, AS 05.35.040, but contain significant differences. The ski statute grants certain qualified immunity to ski operators only if they meet certain operational requirements. The ski operator must have an operating plan, a ski patrol, and a policy for removing reckless skiers. Number 273 CHAIRMAN WARD informed committee members that several options for HB 12 are available. The committee could adopt the original bill which only pertains to equine activities. That option will require a resolution to change the title. The second option is to work on the bill as is. Number 281 SENATOR WILKEN moved to adopt the proposed amendments prepared by Representative Davis. SENATOR GREEN asked if it would be appropriate for the committee to adopt the earlier version and bypass the need for the resolution. SENATOR WILKEN asked what version the committee is working from. CHAIRMAN WARD clarified the Senate Transportation Committee substitute in members' packets is the original bill introduced by Representative Davis and pertains to equine activities only. If committee members want to deal with the original bill, the committee will have to adopt a Senate concurrent resolution to change the title. Number 304 SENATOR WILKEN asked if CSHB 12(TRA)am (F.a version) is an active version. REPRESENTATIVE DAVIS explained that version was passed by the House. SENATOR WILKEN asked if Representative Davis' proposed amendments were to CSHB 12(TRA)am. REPRESENTATIVE DAVIS said they are. Number 312 SENATOR HALFORD commented a good portion of that bill creates an exemption from liability for a municipal entity for doing the same thing as a private entity. He asked why an exemption is justified for one and not the other. REPRESENTATIVE DAVIS replied the section relating to commercial recreational activities refers to private entities and does not include municipalities. SENATOR HALFORD asked if the general liability limitation on commercial outdoor activities would apply to a private skateboard facility. REPRESENTATIVE DAVIS said that is his understanding. SENATOR HALFORD maintained the effect of the bill will be to create an exemption for private outdoor activities and for municipal skating and cycling facilities. CHAIRMAN WARD stated that is why a title change will be necessary if the committee chooses to limit the exemption to equine activities. CHAIRMAN WARD announced the motion to adopt Representative Davis' proposed amendments was before the committee, and that he objected to that motion. SENATOR WILKEN asked Chairman Ward why he was objecting. CHAIRMAN WARD said he wanted to have a discussion as to whether the committee should adopt the original bill instead of letting CSHB 12(TRA)am be the instrument that provides public funding for insurance for a sport. Number 353 REPRESENTATIVE DAVIS clarified the proposed amendments only relate to the CSHB 12(TRA)am version, therefore if the motion carries, the committee will still have the option of addressing any version of the legislation. CHAIRMAN WARD said he was unsure whether he wanted to give any consideration at all to CSHB 12(FIN)am. He asked Representative Davis if the version of HB 12 that passed the House does what he originally intended it to do. REPRESENTATIVE DAVIS said it does, but because of the machinations of liability legislation, he tried to address a specific issue rather than a collective issue. CHAIRMAN WARD noted he would like to get HB 12 in a form that the committee is willing to pass out. SENATOR HALFORD asked Chairman Ward if he maintained his objection to adopt the Senate Transportation Committee substitute. CHAIRMAN WARD removed his objection to adopting the proposed amendments. CSHB 386(FIN) - RE AK INDUS. DEVELOP & EXPORT AUTHORITY SENATOR HALFORD moved to adopt SCSCSHB 386(TRA), version R, as the working document of the committee. SENATOR WILKEN objected. CHAIRMAN WARD explained the Anchorage International Airport project was removed from Version R because that project was contained in another piece of legislation that has already been signed by the Governor. Also, Version R increases the bonding amount by $5.5 million for the City of Whittier access project. SENATOR WILKEN noted on page 13, line 18, the word "may" was changed to "shall" which will have to be corrected. SENATOR GREEN questioned whether the word "may" should be changed throughout the bill. SENATOR WILKEN replied the word "may" should be used throughout the bill. CHAIRMAN WARD clarified that a motion to adopt Version R as the working document was before the committee. SENATOR WILKEN asked what version, other than Version R, was before the committee. CHAIRMAN WARD answered version P is the active document. SENATOR WILKEN noted version P also contains the word "shall". He removed his objection to adopting version R. CHAIRMAN WARD indicated the amount on line 9, page 13, needs to be changed from $70,000,000 to $28,000,000 for the railroad right-of- way at Denali. SENATOR GREEN moved to change the amount on line 9, page 13 from $70,000,000 to $28,000,000. Number 418 MR. JOE FIELDS, testifying via teleconference from Fairbanks, stated the version of the bill he was reading from contained $70,000,000 for the Point MacKenzie Project on page 13, line 9. CHAIRMAN WARD explained he and the Co-Chair of the Senate Finance Committee determined that $28,000,000 will accomplish the work that needs to be completed, and he clarified that the section the motion referred to pertains to the Denali railroad project. He announced the motion to reduce the amount to $28 million was adopted with no objection. SENATOR WILKEN asked Mr. Fields if he is comfortable with the $28 million for the Stampede Trail project. MR. FIELDS said he thought it was a good starting point and that the number is accurate. CHAIRMAN WARD clarified the Finance Co-Chair calculated that amount. CHAIRMAN WARD announced the public participation portion of the hearing on HB 386 was completed. SENATOR WILKEN asked to hear from a representative of AIDEA on the "shall" clause. MR. KEITH LAUFER, AIDEA, responded it has been typical for bond authorizations for the Development Finance Program to contain the word "may" because a number of statutory requirements apply to the program and must be fulfilled before bonds can be issued. The word "shall" in this context could negate the other statutory requirements and leaves the committee's intent unclear. He pointed out the word "shall" is also included in the section that pertains to the interest rate as it must be offered. As it appears, the project would be a taxable project as opposed to tax exempt, and the bill suggests there is to be an interest rate subsidy for the project, which is contrary to the normal parameters of the program. CHAIRMAN WARD asked if any of the concerns Mr. Laufer mentioned are against the law. MR. LAUFER replied the Legislature makes the law. SENATOR HALFORD asked if the difference between taxable financing and exempt financing is 1.5 percent. MR. LAUFER said it is about 2 percent. SENATOR HALFORD said in all cases, the projects are public use facilities, but the projects to be owned by AIDEA will be financed at the tax exempt rate. MR. LAUFER replied the tax rules vary as to which projects can be tax exempt. All projects under AIDEA's Development Finance Program are to be owned by the Authority, whether or not specifically stated in the bill. The approval under Section 172 requires that the Authority own it. Ownership in and of itself does not make a project tax exempt, however. Number 486 SENATOR HALFORD asked what the expected interest rate is for the DeLong Mountain project, the City of Nome project, and the Point MacKenzie project. He stated he is curious about how the interest rate computation works. MR. LAUFER answered the Authority typically looks at the rate at which it issues bonds for a project and charges a spread above that to cover the Authority's cost of operations in order to pay the dividend to the state. Under the Internal Revenue Code, ports owned by governmental entities can qualify for tax exempt financing, so for those projects, the tax exempt rate plus the appropriate spread would be applied. SENATOR HALFORD asked about the DeLong Mountain project. MR. LAUFER stated that is also a port project. SENATOR HALFORD asked if the interest rate on the other portion of the DeLong Mountain project was subsidized. MR. LAUFER said not that he was aware of, although he believed that was the first project under the program and the State gave a direct equity contribution to that project. SENATOR HALFORD said essentially, that project was financed with a subsidy. MR. LAUFER said the subsidy was not from the Authority, it was from the State. Number 482 SENATOR GREEN questioned whether project labor agreements are part of AIDEA's overall plan. MR. LAUFER stated AIDEA has never used a project labor agreement. The project proponents of the Alaska Seafood Center have elected to use a project labor agreement. They are doing the construction themselves; AIDEA has not controlled that process. AIDEA has agreed to take out their interim financing in the event that they meet a number of conditions in the building's construction, otherwise AIDEA has taken no position as to whether project labor agreements are a good idea or not. SENATOR GREEN asked whether AIDEA has the ability to impact whether companies use project labor agreements. MR. LAUFER said at this stage it does not. The only thing AIDEA has done in regard to controlling procurement was to require that the Alaska Seafood Center group use a competitive process and an Alaska bidders and products preference. With that exception, the Alaska Seafood Center group took the entire construction financing risk. If the project is not completed within budget and on time, and there is not enough money in the bank at the end of the process, AIDEA is not required to take out any financing or to purchase the building. Number 511 SENATOR GREEN asked if there is any way the Legislature could prevent that from happening in the future or whether there is a necessity to do that. MR. LAUFER said he was not aware of any necessity, and that there are always ways the Legislature can control any contracting process AIDEA goes through. He noted he understood bills pertaining to project labor agreements were going through the Legislature at one time but he was unsure of the status of those bills. SENATOR GREEN said she does not believe the Legislature should be putting money into projects that are restricted by project labor agreements. MR. LAUFER indicated AIDEA follows the state procurement process unless a project is specifically exempted, therefore any legislative changes could be directed toward that process. SENATOR HALFORD questioned whether AIDEA gives no preference for or against any stage of the approval, based on the existence or absence of a project labor agreement. MR. LAUFER said that is correct. There being no further discussion, CHAIRMAN WARD recessed the meeting to the call of the chair at 2:15 p.m. [THE FOLLOWING PORTION OF THE MEETING WAS NOT RECORDED] CHAIRMAN WARD reconvened the Senate Transportation Committee meeting at 6:55 p.m. Present were Senators Halford, Green, and Chairman Wilken. CSHB 386(FIN) - RE AK INDUS. DEVELOP & EXPORT AUTHORITY SENATOR HALFORD moved SCSCSHB 386(TRA), Version R, out of committee with individual recommendations. There being no objection, the motion carried. HJR 67 - AIR FLIGHTS RUSSIAN FAR EAST SENATOR GREEN moved HJR 67 out of committee with individual recommendations and its accompanying fiscal note. There being no objection, the motion carried. HJR 63 - ADAK AIRPORT SENATOR HALFORD moved to adopt SCSHJR 63(TRA) and pass it out of committee with individual recommendations. There being no objection, the motion carried. CSHB 12(FIN) am - IMMUNITY FOR EQUINE ACTIVITIES SENATOR GREEN moved SCSCSHB 12(TRA) out of committee with individual recommendations and its accompanying fiscal note. There being no objection, the motion carried. CHAIRMAN WARD adjourned the meeting at 6:57 p.m.
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