Legislature(1993 - 1994)
03/23/1993 03:35 PM TRA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE TRANSPORTATION COMMITTEE March 23, 1993 3:35 p.m. MEMBERS PRESENT Senator Bert Sharp, Chairman Senator Randy Phillips, Vice Chairman Senator Tim Kelly Senator Georgianna Lincoln Senator Jay Kerttula MEMBERS ABSENT All Members Present COMMITTEE CALENDAR SENATE BILL NO. 157 "An Act relating to the control of outdoor advertising." HOUSE JOINT RESOLUTION NO. 28 Supporting increased access near Mt. McKinley through establishment of a visitor activity area at Kantishna. SENATE BILL NO. 148 "An Act relating to the Alaska Railroad Corporation; and providing for an effective date." SENATE BILL NO. 167 "An Act relating to the distribution of the revenue obtained from imposition of the state tax on motor fuel used in watercraft of all descriptions; and providing for an effective date." SB 167 WAS SCHEDULED BUT NOT HEARD THIS DATE. PREVIOUS SENATE COMMITTEE ACTION SB 157 - No previous action to record. HJR 28 - No previous action to record. SB 148 - See Transportation minutes dated 3/11/93. WITNESS REGISTER Senator Steve Frank Alaska State Legislature State Capitol Building, Room 518 Juneau, Alaska 99801-1182 POSITION STATEMENT: Sponsor of SB 157. David Skidmore, Legislative Staff to Senator Frank Alaska State Legislature State Capitol Building, Room 518 Juneau, Alaska 99801-1182 POSITION STATEMENT: Answered questions on SB 157. Roger Allington, Director Division of Engineering and Operations Department of Transportation and Public Facilities 3132 Channel Drive Juneau, Alaska 99801-7898 POSITION STATEMENT: Answered questions on SB 157. Representative Tom Brice Alaska State Legislature State Capitol Building Juneau, Alaska 99801-1182 POSITION STATEMENT: Sponsor of HJR 28. Irene Morris Alaska Environmental Lobby P.O. Box 22151 Juneau, Alaska 99802 POSITION STATEMENT: Testified in opposition to HJR 28. Bob Hatfield, President and Chief Executive Officer Alaska Railroad Corporation P.O. Box 112783 Anchorage, Alaska 99511 POSITION STATEMENT: Answered questions on SB 148 Senator Drue Pearce Alaska State Legislature State Capitol Building Juneau, Alaska 99801-1182 POSITION STATEMENT: Answered questions on SB 148. ACTION NARRATIVE TAPE 93-16, SIDE A Number 001 CHAIRMAN SHARP called the Senate Transportation Committee to order at 3:35 p.m. The first order of business was SB 157 (PROHIBITED HIGHWAY ADVERTISING). SENATOR FRANK, sponsor of the measure, explained the bill is identical to legislation introduced in the House by Representative Menard. He said he has received complaints from people who aren't allowed to advertise or put up signs that would direct people to their businesses. He referred to his own situation and said DOT/PF made him remove a sign that directed people to his place of business. Senator Frank pointed out that state law is more restrictive than federal law. The federal law, commonly known as the Lady Bird Law, outlaws outdoor advertising. It does allow for exceptions in areas that are zoned for commercial or industrial use. State law doesn't contain that allowable use. The purpose of the bill is to make state law more in conformance with federal law. Senator Frank said it is important to recognize that local governments still have the authority to regulate signage and would still have that right under the proposed legislation. He introduced David Skidmore of his staff, and indicated he would give more detailed testimony. DAVID SKIDMORE, legislative staff to Senator Frank, came before the committee. SENATOR LINCOLN referred to page 1, line 6, "outdoor advertising is permitted outside the right- of-way of a state highway," and asked if that means that there are no limits in the bill on the size, content, light level, noise, etc. SENATOR FRANK said he is talking about private property and indicated that there aren't limitations. Senator Lincoln asked if the advertising could be anything that the private owner would agree to relating to size, etc. Senator Frank said he believes so. Senator Lincoln referred to page 2, line 12, and questioned the meaning of "public nuisance." Senator Frank said he doesn't know what the answer is. Senator Lincoln said according to DOT/PF's position paper they have indicated that they are neutral on the bill. She said there is a zero fiscal note and the department indicated there would be additional work for their crews. The position paper also states the department has concern with billboards being an encroachment on scenic beauty. The Division of Tourism considers the highway system to be the single largest attraction for visitors visiting the Alaska. The consequences will be that businesses located at similar highway settings will be treated differently under the law. Senator Lincoln said it is unclear to her as to whether the department supports the bill and whether a fiscal note is involved. She referred to page 2 of the fiscal note, "There is likely to be an increase in illegal signs as businesses to try to equalize their visibility with businesses located along highways where the relaxed advertising standards would apply." Senator Lincoln said the position of the department isn't clear. SENATOR FRANK said currently the department spends money telling people to take down their signs. They also spend money taking signs down. Businesses along the highway have expressed frustration that they can't advertise their business or direct someone to their business. It is inconvenient for the traveling public that is trying to find a place of business. Senator Frank said he doesn't know what the department's position is as they do seem to be vague. He said it isn't his intent not to have restrictions. Senator Frank said he hopes that during the committee process a reasonable set of restrictions can be developed which would help businesses along the highway and, at the same time, not result in some of the onerous undesirable billboard advertising. CHAIRMAN SHARP said there are still remaining mandates and restrictions on certain category roads throughout Alaska. He said it is his understanding that signs will be allowed on private land in areas not prohibited by the federal government. SENATOR FRANK said he would work with the committee to try and write amendments to accomplish the purpose but not open it up to an undesirable situation. DAVID SKIDMORE, legislative staff to Senator Frank, said the legislation would repeal the statutory basis for Alaska's comprehensive prohibition of roadside outdoor advertising. The intent is to bring state law in conformance with federal law. Currently, Alaska statute provides that all outdoor roadside advertising is prohibited except as provided in AS 19.25.105. The statute provides that such advertising is prohibited within 660 feet of the nearest edge of the right- of-way along an interstate, primary, or secondary highway except for the following types of signs: (1) Official signs and notices; (2) Signs advertising property sale or lease; (3) Landmark signs, school signs, and advertising on bus benches and shelters. Mr. Skidmore said current federal law, Title 23 of the U.S. Code Section 131, prohibits most outdoor advertising along interstate and primary highways while secondary highways are not regulated by the federal government. However, with regard to the interstate and primary highways, there are two significant exceptions. Section 131 of Title 23 provides that, "signs may be erected and maintained within 660 feet of the nearest edge of the right-of-way within areas adjacent to an interstate and primary systems which are zoned industrial or commercial under authority of state law or in unzoned commercial or industrial areas as may be determined by agreement between the several states and the secretary." Mr. Skidmore said the reference to unzoned areas will apply where the land use pattern fits the designation of industrial or commercial. He referred to unzoned commercial and industrial activity and pointed out that according to Jeff Ottesen, Chief Right- of-Way agent for DOT/PF, one business enterprise would create an area eligible for off premise outdoor advertising. Federal law does allow for exceptions in commercial and industrial areas along interstate and primary highways, but does not regulate such activity along secondary highways. Mr. Skidmore said there has been some confusion as to which highways would be effected by the bill as the 1991 Intermodel Surface Transportation Efficiency Act (ISTEA) did away with the interstate, primary, and secondary highway classification system and replaced it with a national highway system. He noted the federal government does plan to continue to utilize the same highway classification scheme in dealing solely with outdoor advertising for those highways which were classified as interstate or primary at the date of passage of ISTEA. Section 10.46 of ISTEA did amend federal law to stipulate that most new signs may not be erected along highways that are designated scenic byways under a state program. That means if and when DOT/PF does establish a scenic highway road system in Alaska, those positions which are made up of highways that were classified interstate or primary as of the passage of ISTEA, will not be subject to the industrial commercial signage exception. Mr. Skidmore explained that there are three potential results of SB 157. The first is secondary highways would be released from state restrictions on outdoor advertising. Second, signs could be erected and maintained in areas zoned industrial or commercial along interstate or primary highways. Third, unzoned areas in which commercial or industrial activity takes place would also apparently have the ability to erect and maintain signs. This would facilitate efforts by roadside businesses to make their presence and location known to highway travelers. Number 316 SENATOR RANDY PHILLIPS asked Roger Allington why the state law is so much more restrictive than federal law. ROGER ALLINGTON, Director, Division of Engineering and Operations, DOT/PF, said he doesn't know the answer. He said at the present time the state has an agreement with the Federal Highway Administration that dates back to 1968. SENATOR LINCOLN asked Mr. Allington why the position paper is neutral to the legislation. Mr. Allington said he thinks that probably there are mixed emotions within DOT/PF, officially and individually. He said he believes that there are some legitimate reasons for outdoor advertising signs, but on the other hand, many of us have seen areas, such as Highway 101 out of Los Angeles where you can't see the hill because of all the signs along the right-of-way. Mr. Allington said the department believes that it is public policy position that the legislature needs to address. There being not further testimony, CHAIRMAN SHARP asked that Senator Lincoln's office work with Senator Frank's office on the concerns of the legislation. Number 355 The next order of business to come before the Senate Transportation Committee was HJR 28 (SUPPORT KANTISHNA AREA TOURISM DEVELOPMENT), sponsored by Representative Tom Brice. REPRESENTATIVE BRICE explained that HJR 28 requests the National Park Service to establish a rail utility corridor between the Healy area and the Kantishna mining district. It endorses the idea of private sector development of a railway into the Kantishna area as a tourism operation. SENATOR LINCOLN questioned why there is a zero fiscal note when a new park is being built. Representative Brice referred to page 2, line 15, "FURTHER RESOLVED that appropriate state agencies should work with the National Park Service and interested members of the public and private sectors to thoroughly investigate the potential of establishing a rail utility corridor to Kantishna in which the private sector could construct and operate a transportation system and other facilities that would serve the public needs." He said the resolution supports the private sector in accomplishing the rail utility corridor. Number 393 IRENE MORRIS, representing the Alaska Environmental Lobby, testified against HJR 28. She said during this time of severe state and federal budget cuts, the cost of a potential corridor cannot economically be justified. Ms. Morris said the Denali Access Task Force, in its November 1991 Report, found that the level of business activity, new businesses, visitation, and mining did not justify additional access. The same report concluded a new road is not justifiable for park purposes, wildlife, economics, or visitor services. The National Park Service has been buying private inholdings in Kantishna and is opposed to new commercial construction. Ms. Morris said HJR 28 also suggests that the private sector could build a rail utility corridor into Kantishna. Currently, DOT/PF has not evaluated the cost of such a railway system. Road construction estimates were over $80 million in 1992 and a rail corridor would be even more expensive. Ms. Morris continued to give testimony against HJR 28. Number 417 There being no further testimony, SENATOR KELLY moved that HJR 28 pass out of the Senate Transportation Committee with individual recommendations. SENATOR RANDY PHILLIPS objected for the purpose of stating that people like to see the area in its natural state and that is what attracts people. The railroad would detract from the very thing that the people are trying to see in the first place. He said he would put his own recommendation in the committee report. SENATOR KERTTULA said if the right-of-way is acquired for the facility the right-of-way should be limited for this particular use. CHAIRMAN SHARP said the way he reads the resolution is that it is restricted to railroad access only. He asked if there was objection to Senator Kelly's motion. Hearing no objection, the HJR 28 moved out of the Senate Transportation Committee. Number 475 The next order of business was SB 148 (ALASKA RAILROAD CORPORATION). SENATOR KERTTULA gave committee members some information regarding the corporation. CHAIRMAN SHARP asked Mr. Hatfield if he had any comments. BOB HATFIELD, President and Chief Executive Officer, Alaska Railroad Corporation, indicated the committee members has the corporation's position paper. He said he would highlight some of the corporation's concerns relating to SB 148. Mr. Hatfield said he is troubled by the sense of urgency surrounding the bill and questions the need for such urgency. The state law that created the Alaska Railroad took four years to write and pass, which doesn't include the time spent with the federal government which allowed the Transfer Act to begin. The Alaska Railroad Corporation Act was considered by and debated in both chambers of the twelfth and thirteenth legislatures headed by both Republicans and Democrats. The bill was also reviewed officially and unofficially by an array of industry, civic groups, and government bodies to ensure that the best possible environment would be created for such a delicate business as a railroad. There is now a bill, which is in its third week of existence, that would make sweeping changes to the Corporation Act. To date, the only public testimony that has been heard by the Senate Transportation Committee is that given by a union employee, several members of one interest group, and himself. Mr. Hatfield said he is troubled by some of the contents in the bill. Federal law mandates that the Alaska Railroad Corporation be entitled to engage in all business opportunities available to comparable railroads. State law dictates that the corporation be allowed to conduct its business consistent with that federal law. State law further dictates that the corporation be self sustaining while prudently operating a railroad in accordance with sound business practices. He said in his view, there is a very good reason for the provisions in the two laws that created the Alaska Railroad Corporation. Mr. Hatfield said all the study and debate that went into the creation of the railroad uncovers the fact that railroads need to use all assets available to them in order to remain viable and competitive. Undue restrictions of their activities can bring them down. Mr. Hatfield said SB 148, in its present form, would cause the legislature to have to approve the capital budget for the Alaska Railroad Corporation each year. It would also make it difficult of the corporation to effect large scale emergency repairs to docks, buildings, and right-of-ways without sacrificing all other investments for that year and, perhaps subsequent years. SB 148 would prohibit the Alaska Railroad Corporation from taking advantage of attractive deals for acquisition of equipment when they arrive. The bill would put tremendous pressure on the corporation to increase revenues solely for the purpose of avoiding leasing or borrowing. Mr. Hatfield said traditionally in the transportation industry, revenues are increased either by increasing or lowering rates according to market conditions. It would force the corporation to apply to the legislature to subsidize various aspects of their business such as the Hurricane Turn and the Whittier Shuttle and others that aren't currently compensatory to avoid borrowing. Mr. Hatfield said it may cause the corporation to charge municipalities and other public entities fair market value for permits and leases in order to make up for revenue shortfalls that could be caused by some aspects of the legislation. It further would provide a disincentive for bankers or other financial institutions, to lend to the corporation for capital projects for fear that all or a portion of that does not have the proper legislative approval. There may be other unintended results that cannot be adequately be addressed at this point due to the haste of which the legislation is being considered. Mr. Hatfield said it is troubling to the corporation that there is a phrase which limits them to railroad and railroad related transportation services in the state. He said the phrase "limited to railroad and railroad related transportation services in the state" can be interpreted to mean "no leasing of real estate for any purpose, no drayage service, no marketing in sales offices in the lower 48, no true rates for points off of the Alaska Railroad Corporation property, no warehousing or trans load services could be conducted outside of the state, no charitable fund raising activities, sponsorships..." Mr. Hatfield said one final result is that it was and still is the intent of the legislation that created the Alaska Railroad Corporation to sell the property at some point. If the property isn't kept at its highest and best order and if the corporation is not competitively viable as a railroad property, any chance that may exist for the sale of the property, if at the time seems the appropriate thing to do, would probably be lessened rather than heightened by the legislation. Mr. Hatfield said currently the corporation has not considered any suggested amendments as there are some confusing aspects surrounding the legislation in that originally when discussions have occurred with the Finance Committee and others, the primary concern seems to be that the Alaska Railroad Corporation had taken a participatory interest in a hotel in Anchorage. The thought was that the corporation may be doing that again in Fairbanks. He said they are in the process of addressing that issue. Mr. Hatfield said that the corporation was hoping to do is, thorough the committee process, is perhaps to get a clear idea of what results are intended from the legislation so that they could perhaps suggest particular amendments if it is appropriate. TAPE 93-16, SIDE B SENATOR RANDY PHILLIPS said the Alaska Railroad Corporation, the Alaska Housing Corporation, the Student Loan Program, and AIDA have to walk that fine line between private and public. He said for the last two days he asked for a page by page -line by line suggestions from the Alaska Railroad Corporation. Most of those requests were denied. He said the railroad is not a privately held corporation. State statutes say the definition of a "corporation" is "a public corporation and is an instrumentally of the state within the Department of Commerce and Economic Development." He said it was unfortunate that his request was denied. SENATOR KERTTULA said he thinks it is a very short time to expect a detailed response to each and every suggestible amendment. He said there is a time that the railroad has to report and should report, but said he doesn't believe it is the same as the function of the other departments. Senator Randy Phillips said he doesn't see a difference between the Alaska Railroad Corporation, Alaska Housing Corporation, AIDA, or the Student Loan Program. All of them are quasi/private agencies. There was continued discussion regarding requesting information from different agencies and policy issues. Number 052 SENATOR LINCOLN referred to page 7, line 19, and said it requests that the corporation must come to the legislature as the legislature must approve action. She asked what happens when the legislature isn't in session. MR. SKIDMORE said he supposes it would be up to the committee to either draft a provision for a procedure that the railroad would follow in the interim or amend the bill to say the provision doesn't apply. SENATOR DRUE PEARCE referred to the language in the bill and said the corporation can't issue bonds or convey its entire interest in land or incur debt except for the acquisition and maintenance of rolling stock and bonds and debt incurred through a short-term, less than one year, line of credit. The railroad would have to do exactly the same thing that other agencies of the state do. They have to plan a head for major purchases. If they weren't able to come to the legislature during the legislative session, they would have to come before the legislature during the next session. SENATOR LINCOLN inquired as to whether the corporation would be able to purchase a car. Senator Pearce said the cars are railroad rolling stock and they wouldn't count. She referred to page 7, lines 27 through 28, and said you can incur debt that does not apply to rolling stock. She said railroad cars can be purchased. Mr. Hatfield said the locomotives are not rolling stock nor are locomotive cranes, etc. He said rolling stock is a term of art. It refers to a group of freight or passenger cars and railroad cars only. He said as he interprets the bill, the corporation would not be able to acquire locomotives when they come on the market. Further, should there be damage to one of their docks, they might be able to get it fixed but they wouldn't be able to borrow money directly for that. Mr. Hatfield said the corporation is a corporation meant to be self-sustaining. There was continued discussion regarding the term "rolling stock." CHAIRMAN SHARP said he thinks it is his intention and an obligation of the committee to weigh the testimony and make decisions on proposed amendments. He noted the bill has a Senate Finance referral. Chairman Sharp said it is intention to hold the legislation until the following Tuesday. He encouraged that the committee members bring suggested amendments to the next hearing and noted he will take public testimony. SENATOR LINCOLN suggested appointing a subcommittee to devise language to bring back to the Transportation Committee. SENATOR KERTTULA indicated concern with creating inhouse competition. SENATOR RANDY PHILLIPS asked that the Alaska Railroad Corporation supply the committee with page by page - line by line suggestions. CHAIRMAN SHARP said he believes that there are several areas of the bill that need serious review and consideration. He said he would check with committee members to possibly have a work session over the weekend. He indicated the bill would be heard again the following Tuesday. Number 133 Chairman Sharp adjourned the Senate Transportation Committee at 4:52 p.m.