Legislature(2003 - 2004)

03/11/2003 02:13 PM TRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
            SENATE TRANSPORTATION STANDING COMMITTEE                                                                          
                         March 11, 2003                                                                                         
                           2:13 p.m.                                                                                            
TAPE(S) 03-8                                                                                                                  
MEMBERS PRESENT                                                                                                               
Senator John Cowdery, Chair                                                                                                     
Senator Thomas Wagoner, Vice Chair                                                                                              
Senator Donny Olson                                                                                                             
MEMBERS ABSENT                                                                                                                
Senator Gene Therriault                                                                                                         
Senator Georgianna Lincoln                                                                                                      
COMMITTEE CALENDAR                                                                                                            
CS FOR HOUSE CONCURRENT RESOLUTION NO. 2(MLV) am                                                                                
Relating to the extension of the Alaska Railroad to Fort Greely                                                                 
to serve the anti-ballistic missile launch facility.                                                                            
     MOVED SCS CSHCR 2(CRA) OUT OF COMMITTEE                                                                                    
SENATE BILL NO. 103                                                                                                             
"An Act increasing certain motor vehicle registration fees; and                                                                 
providing for an effective date."                                                                                               
     HEARD AND HELD                                                                                                             
SENATE BILL NO. 106                                                                                                             
"An Act relating to a fee on studded tires; and providing for an                                                                
effective date."                                                                                                                
     MOVED CSSB 106(TRA) OUT OF COMMITTEE                                                                                       
SENATE BILL NO. 112                                                                                                             
"An Act increasing the motor fuel tax and repealing the special                                                                 
tax rates on blended fuels; and providing for an effective                                                                      
     SCHEDULED BUT NOT HEARD                                                                                                    
SENATE BILL NO. 31                                                                                                              
"An Act relating to a railroad utility corridor for extension of                                                                
the Alaska Railroad to Canada and to extension of the Alaska                                                                    
Railroad to connect with the North American railroad system."                                                                   
     BILL HEARING POSTPONED TO March 18, 2003                                                                                   
PREVIOUS ACTION                                                                                                               
SB 103 - No previous action to record.                                                                                          
SB 106 - No previous action to record.                                                                                          
HCR 2 - See Community and Regional Affairs minutes dated 2/26/03                                                                
     and 3/5/03.                                                                                                                
WITNESS REGISTER                                                                                                              
Father Tom Moffatt                                                                                                              
Staff to Representative Lynn                                                                                                    
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Presented HCR 2 for the sponsor                                                                          
Ms. Wendy Lindskoog                                                                                                             
Alaska Railroad Corporation                                                                                                     
PO Box 107500                                                                                                                   
Anchorage, AK 99510-7500                                                                                                        
POSITION STATEMENT:  Stated support for HCR 2                                                                                 
Mr. Pat Gamble                                                                                                                  
Alaska Railroad Corporation                                                                                                     
PO Box 107500                                                                                                                   
Anchorage, AK 99510-7500                                                                                                        
POSITION STATEMENT:  Stated support for HCR 2                                                                                 
Mr. James Snyder                                                                                                                
Fairbanks, AK                                                                                                                   
POSITION STATEMENT:  Opposed to HCR 2                                                                                         
Dwayne Bannock                                                                                                                  
Division of Motor Vehicles                                                                                                      
Department of Administration                                                                                                    
PO Box 110200                                                                                                                   
Juneau, AK  99811-0200                                                                                                          
POSITION STATEMENT:  Explained the provisions of SB 103                                                                       
Mr. Kevin Jardell                                                                                                               
Department of Administration                                                                                                    
PO Box 110200                                                                                                                   
Juneau, AK  99811-0200                                                                                                          
POSITION STATEMENT:  Introduced SB 103 for the Administration                                                                 
Mr. Richard Schmitz                                                                                                             
Staff to Senator Cowdery                                                                                                        
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Presented SB 106                                                                                         
Mr. Dennis Nottingham                                                                                                           
Peratrovich, Nottingham, and Drage, Inc.                                                                                        
1506 West 36th Ave.                                                                                                             
Anchorage, AK 99503                                                                                                             
POSITION STATEMENT:  Supported SB 106                                                                                         
Mr. John MacKinnon                                                                                                              
Department of Transportation &                                                                                                  
  Public Facilities                                                                                                             
3132 Channel Dr.                                                                                                                
Juneau, AK  99801-7898                                                                                                          
POSITION STATEMENT:  Testified on SB 106                                                                                      
Mr. Larry Persily                                                                                                               
Department of Revenue                                                                                                           
PO Box 110400                                                                                                                   
Juneau, AK  99811-0400                                                                                                          
POSITION STATEMENT:  Answered questions on SB 106                                                                             
ACTION NARRATIVE                                                                                                              
TAPE 03-8, SIDE A                                                                                                             
CHAIR  JOHN COWDERY  called  the  Senate Transportation  Standing                                                             
Committee  meeting  to order  at  2:13  p.m. Senators  Olson  and                                                               
Cowdery  were   present  and  Senator  Wagoner   arrived  shortly                                                               
thereafter.  The  first order  of  business  to come  before  the                                                               
committee was HCR 2.                                                                                                            
       HCR 2-EXTEND RAILROAD TO FT. GREELY/DELTA JUNCTION                                                                   
FATHER TOM MOFFATT, staff to  Representative Bob Lynn, sponsor of                                                               
HCR 2,  explained HCR 2 is  a resolution in support  of extending                                                               
the Alaska  Railroad for approximately  70 miles from  North Pole                                                               
to the  new missile defense site  at Fort Greeley. HCR  2 was co-                                                               
sponsored by 25 House members.  Member packets contain letters of                                                               
support  from  General  Pat  Gamble,   President  of  the  Alaska                                                               
Railroad  Corporation  (ARRC);  General  Craig  Campbell,  Alaska                                                               
Adjutant General; Debbie Joslin,  national committee woman of the                                                               
majority  party;  and  former Representative  Jeanette  James  of                                                               
North  Pole. HCR  2 passed  the House  with a  37 to  1 vote.  An                                                               
extension of  the railroad  would help  support and  maintain the                                                               
missile site, which is critical  to national homeland defense and                                                               
homeland security  in Alaska. The  railroad extension  would also                                                               
help support  the mining industry and  agricultural operations in                                                               
the area  and increase  economic development  from North  Pole to                                                               
Delta Junction. It also puts  the Alaska railroad 70 miles closer                                                               
to a connection with the  Canadian railway system for an eventual                                                               
extension to the Lower 48.                                                                                                      
FATHER  MOFFATT   said  because  HCR   2  is  a   resolution,  no                                                               
appropriations   are   required   by   its   passage,   nor   are                                                               
environmental studies. HCR 2 does,  however, put the Twenty-third                                                               
Alaska  State Legislature  on  record in  support  of a  railroad                                                               
extension. He pointed  out that Governor Murkowski  set forth the                                                               
rail extension  as one  of his  goals in his  state of  the state                                                               
address on January 23.                                                                                                          
MS. WENDY  LINDSKOOG, Director of External  Affairs, ARRC, stated                                                               
support for  HCR 2 in  its initial form  and for the  most recent                                                               
committee substitute  (CS), which expands  the scope in  terms of                                                               
the different  types of revenue  available to support  a railroad                                                               
extension:   military  activities,   resource  development,   and                                                               
CHAIR  COWDERY  asked  if other  legislation  was  introduced  to                                                               
address right-of-way issues.                                                                                                    
MS. LINDSKOOG said it has.                                                                                                      
SENATOR OLSON  asked for  a description  of the  current industry                                                               
standards for  a railroad right-of-way  and what it would  be for                                                               
the extension.                                                                                                                  
MR.  PAT GAMBLE,  Executive Director  of  ARRC, informed  members                                                               
that the  industry standards  are not  the measurement  that ARRC                                                               
wants  to  use. It  wants  to  use  the  standard that  has  been                                                               
successful  for the  Alaska railroad,  which is  a 200-foot,  fee                                                               
simple  right-of-way  plus  additional  lands  that  provide  for                                                               
quarries and maintenance areas.  He said this particular corridor                                                               
is one  quarter of the distance  to the Canadian border  so it is                                                               
being  considered  as  an Alaskan  transportation,  utility,  and                                                               
communication corridor,  as well  as a railroad  right-of-way. He                                                               
commented, "The determination  of the width of  that corridor has                                                               
to be  generous enough  to serve several  masters here."  He said                                                               
several discussions  have taken place on  this subject, including                                                               
a discussion  on innovative ways  to divide the corridor  so that                                                               
the  railroad   right-of-way  would  be  within   a  wider  state                                                               
corridor.  He noted  that Alaska's  standard 200-foot  fee simple                                                               
right-of-way has served  the railroad well because  it allows for                                                               
future expansion  to build  tracks and to  make sure  that access                                                               
across  rights-of-way is  done with  proper  attention to  safety                                                               
SENATOR  OLSON said  his understanding  is  that the  anticipated                                                               
right-of-way for  a major  portion of the  corridor is  200 feet,                                                               
but there will be a  combination right-of-way for other portions.                                                               
He asked how wide the combination right-of-way would be.                                                                        
MR. GAMBLE said he has heard a  width range from 200 feet to one-                                                               
quarter  mile. However,  500  feet  is the  number  that is  most                                                               
frequently used for the corridor  itself. He said he believes the                                                               
width of the corridor will be  controlled, to some degree, by the                                                               
SENATOR OLSON noted that one-quarter mile is 1,300 feet wide.                                                                   
MR. GAMBLE  said ARRC is not  saying it needs a  one-quarter mile                                                               
corridor. The  need for the  corridor itself  is a state  need to                                                               
accommodate transportation,  a pipeline,  fiber optic  cable, and                                                               
underground communication systems.                                                                                              
SENATOR OLSON  asked whether  the impacted  communities commented                                                               
and what  their positions  are. He  pointed out  he didn't  see a                                                               
letter of support from Delta Junction.                                                                                          
MR. GAMBLE said  ARRC has received no correspondence  from any of                                                               
the impacted communities.                                                                                                       
SENATOR OLSON asked Father Moffatt to address that question.                                                                    
FATHER  MOFFATT told  members that  Representative Lynn's  office                                                               
has  had contact  with those  communities through  Representative                                                               
Harris,  who represents  the impacted  communities.  He said  the                                                               
communities support  the proposal, although they  have not stated                                                               
their positions in writing.                                                                                                     
SENATOR OLSON asked if the  military submitted a written position                                                               
on SCS CSHCR 2(CRA).                                                                                                            
FATHER MOFFATT said that Adjutant  General Campbell has testified                                                               
in support of the resolution at all previous committee hearings.                                                                
SENATOR OLSON noted Adjutant General  Campbell is affiliated with                                                               
a state  department, not the  federal government. He said  he was                                                               
looking for  a letter from the  person in charge of  the military                                                               
FATHER MOFFATT said Representative Lynn  has been in contact with                                                               
the  cantonment commander  who indicated  the extension  would be                                                               
beneficial,  but that  commander  is a  field  grade officer.  He                                                               
pointed  out  that   by  the  time  the   railroad  extension  is                                                               
completed, the  heavy construction of  the missile site  would be                                                               
completed. The Department  of Defense has no  objection and would                                                               
not normally lobby for such things.                                                                                             
CHAIR COWDERY  pointed out this  is a resolution to  show unified                                                               
support of a railroad extension so it is conceptual.                                                                            
SENATOR  OLSON  said  he  wondered  why  the  committee  has  not                                                               
received any documentation in support  of the resolution from the                                                               
entities that will be impacted.                                                                                                 
CHAIR COWDERY said  that documentation would come  forward with a                                                               
railroad bill.                                                                                                                  
SENATOR OLSON stated,  "I find it interesting that  it comes from                                                               
a representative that doesn't necessarily represent that area."                                                                 
FATHER MOFFATT pointed out that  Representative Lynn has a strong                                                               
military background  and is the  chair of the House  Committee on                                                               
Military and Veterans Affairs.                                                                                                  
CHAIR  COWDERY  said  that  although the  voters  of  a  specific                                                               
district elect legislators, they represent the entire state.                                                                    
2:30 p.m.                                                                                                                     
SENATOR OLSON  said the railroad  has operated "in the  black" in                                                               
the  past and  he wondered  how this  extension might  impact the                                                               
railroad operations in general in regard to profitability.                                                                      
MR. GAMBLE said  that question is uppermost on  ARRC's mind. ARRC                                                               
does not  have all of the  answers it needs from  the military to                                                               
determine what level  of support would be  required. For example,                                                               
would  mail support  for contractors  and the  National Guard  be                                                               
necessary? Other  supports have not  been considered yet  and may                                                               
provide additional revenue opportunities  for the railroad to pay                                                               
for the  operations and maintenance  of the line. He  pointed out                                                               
the capital  costs are extensive. He  added that he is  not aware                                                               
of  the  costs associated  with  building  the military  base  or                                                               
expanding  existing bases  and believes  those subjects  are ripe                                                               
for further discussion and analysis.                                                                                            
CHAIR COWDERY took public testimony.                                                                                            
MR. JAMES  SNYDER told  members he has  watched booms,  busts and                                                               
boondoggles as a  Fairbanks resident since 1959  and he considers                                                               
the railroad  extension to be  a boondoggle. He does  not believe                                                               
any railroad  has run in the  black in North America  since 1950.                                                               
He  said a  railroad extension  through Canada  would affect  the                                                               
trucking and  barge industries in  Alaska. He believes  the state                                                               
should  not compete  with private  industry,  which has  invested                                                               
millions in this  state. He said the U. S.  Department of Defense                                                               
should build the rail extension if it wants one.                                                                                
CHAIR COWDERY  pointed out this  legislation is a  resolution and                                                               
has no  cost associated with  it. He then announced  that Senator                                                               
Wagoner joined the committee some time ago.                                                                                     
SENATOR  WAGONER  moved  SCS CSHCR  2(CRA)  from  committee  with                                                               
individual   recommendations.  Without   objection,  the   motion                                                               
2:38 p.m.                                                                                                                     
             SB 103-MOTOR VEHICLE REGISTRATION FEES                                                                         
CHAIR COWDERY announced  the committee would take up  SB 103, but                                                               
he did not  plan to pass the bill out  of committee today because                                                               
several  people   wanted  to  testify   on  the  bill   and  were                                                               
unavailable today. He asked Mr. Jardell to present the bill.                                                                    
MR. KEVIN  JARDELL, Assistant Commissioner  of the  Department of                                                               
Administration  (DOA),  explained  that  SB  103  establishes  an                                                               
increase in  vehicle registration fees.  DOA believes it  is time                                                               
to re-evaluate  and update user  fees. He said Mr.  Duane Bannock                                                               
was available to testify via teleconference.                                                                                    
MR. DUANE  BANNOCK, Director  of the  Division of  Motor Vehicles                                                               
(DMV),  DOA,  told  members  SB  103 would  update  some  of  the                                                               
standards  on the  books since  1970. Since  that time,  only two                                                               
small increases  in registration fees  have occurred. He  and the                                                               
deputy director researched  the fees in all 49  states to compare                                                               
them   with  Alaska's   fees.  While   some  states   have  lower                                                               
registration  fees, it  was  difficult to  track  down the  total                                                               
amount  of  fees those  states  collect  through other  types  of                                                               
taxes.  Clearly, the  fees  in SB  103 are  still  less than  the                                                               
nationwide standard.                                                                                                            
CHAIR  COWDERY  asked Mr.  Bannock  to  address the  increase  in                                                               
registration fees for the semi-trailers and "big rigs."                                                                         
MR. BANNOCK  said Section 4 on  page 3 is specific  to commercial                                                               
trailers. Typically  that would be  a container type  of trailer,                                                               
but  specifically it  is  any trailer,  whether  a small  flatbed                                                               
trailer registered  commercially or a 40-foot  container. He said                                                               
several  years   ago  all   50  states   did  away   with  annual                                                               
registration of  commercial trailers  and established  a one-time                                                               
permanent registration. SB 103 calls  for a one-time fee, but the                                                               
fee will be $20 instead of  $10. Currently, about 10,000 of these                                                               
trailers  are  on  the  ground.  DMV  projects  about  1,000  new                                                               
trailers will  be registered  in Alaska [next  year] and  pay the                                                               
$20 one-time fee.                                                                                                               
CHAIR  COWDERY asked  if  the fee  has anything  to  do with  the                                                               
licensing of those trailers.                                                                                                    
MR.  BANNOCK  said  for all  practical  purposes,  licensing  and                                                               
registering  mean the  same  thing. Therefore,  a  person with  a                                                               
commercial  trailer will  get license  plates  with the  one-time                                                               
payment.  Those plates  will not  have to  be renewed  year after                                                               
CHAIR  COWDERY  asked  if  the Legislature  amended  the  law  to                                                               
increase the  tractor fees but  lowered the trailer fees  four or                                                               
five years ago.                                                                                                                 
MR. BANNOCK  said the  last major  change took  place in  1998 at                                                               
which time  legislation was enacted that  eliminated $1.6 million                                                               
worth of  commercial trailer registration  fees and  charged that                                                               
amount equally amongst all registered commercial vehicles.                                                                      
CHAIR COWDERY  asked Mr. Bannock  how DMV  approaches registering                                                               
vehicles with foreign licenses.                                                                                                 
MR. BANNOCK  said a trip  permit fee  for the tractor  portion of                                                               
the truck is charged but that is not addressed in SB 103.                                                                       
SENATOR OLSON  said it  is his  understanding that  vehicles used                                                               
for commercial  purposes are considered to  be revenue generating                                                               
and  are  charged more.  He  asked  why commercial  trailers  are                                                               
charged  a $20  registration fee  in Section  4 while  in Section                                                               
1(b)(6), the fee is higher for  "a trailer not used or maintained                                                               
for the  transportation of  persons or property  for hire  or for                                                               
other commercial use, including...a boat trailer."                                                                              
MR. BANNOCK  said the  boat trailer  registration that  will cost                                                               
$30 every  two years is  most likely  attached to a  pickup truck                                                               
that  right  now costs  $78  to  register  every two  years.  The                                                               
container trailer is  a one-time $10 fee.  That container trailer                                                               
is attached  to a semi-tractor  that pays $300 to  register every                                                               
year. He  explained that  when the  state stopped  collecting the                                                               
$1.6 million on  commercial trailers, those fees  were shifted to                                                               
all vehicles registered  commercially. The state had  no net loss                                                               
in revenue.                                                                                                                     
MR.  JARDELL told  members  that  policy was  set  by an  earlier                                                               
legislature. DOA  has not addressed  that policy, but is  open to                                                               
input  from   committee  members.  He   said  SB  103   does  not                                                               
restructure the fees.                                                                                                           
CHAIR COWDERY pointed  out that SB 103 would  impact an Anchorage                                                               
company,  K&W, by  charging  an additional  $20,000  per year  to                                                               
register K&W's trailers.  He said a lot of the  trailers travel a                                                               
very short  distance. He then  asked if a  non-commercial trailer                                                               
owner could register a trailer for up to five years at one time.                                                                
MR. BANNOCK said the registration  for non-commercial vehicles is                                                               
SENATOR WAGONER asked  Mr. Bannock if he compared the  fees in SB
103  to the  fees in  other  northwestern states.  He noted  that                                                               
Washington State  used to  base registration  fees on  value, but                                                               
now uses a set fee.                                                                                                             
MR.  BANNOCK repeated  that  he looked  at the  fees  for all  49                                                               
states. The  State of  Oregon is the  least expensive  state; its                                                               
automobile  registration fee  is $15  per year.  He said  fees to                                                               
register a  two-year old  gasoline powered  car with  an original                                                               
retail  price of  $25,000 and  a  current value  of $15,000  were                                                               
compared and they range from $15 to $412.                                                                                       
CHAIR  COWDERY asked  about  the fee  for  privately owned  motor                                                               
MR.  BANNOCK said  a motor  home  is currently  categorized as  a                                                               
personal, non-commercial  passenger automobile.  SB 103  does not                                                               
change that category. The fee  is $68 for a two-year registration                                                               
for any class of  motor home, the same as the  fee for a personal                                                               
SENATOR OLSON asked  if DMV has discussed the  licensing of four-                                                               
MR. BANNOCK said  not in association with SB 103.  He pointed out                                                               
that  DMV is  responsible  for collecting  registration fees  for                                                               
snow  machines and  motorcycles.  However,  all terrain  vehicles                                                               
(ATVs) have not been addressed.                                                                                                 
SENATOR OLSON  clarified that he  wants to know  whether trailers                                                               
hauled by ATVs have to be  registered, especially if they have to                                                               
travel on  an improvised trail.  He said he received  phone calls                                                               
from constituents who want to  know whether they will be required                                                               
to license an ATV trailer or  a sled being hauled by a registered                                                               
snow machine.                                                                                                                   
MR. BANNOCK said  DMV has no interest in  licensing trailers that                                                               
are being hauled behind ATVs or snow machines.                                                                                  
CHAIR  COWDERY repeated  that  he  planned to  hold  the bill  in                                                               
committee to hear more public testimony.                                                                                        
                     SB 106-FEES FOR TIRES                                                                                  
MR.  RICHARD SCHMITZ,  staff to  Senator Cowdery,  explained that                                                               
the purpose  of SB  106 is to  enact a $10  fee on  every studded                                                               
snow tire to offset the extra  cost of repairing road damage done                                                               
by studded snow tires. He said  studded snow tires do not improve                                                               
traction in  many winter driving  conditions. An  Anchorage study                                                               
showed  that 52  percent of  drivers use  studded snow  tires, of                                                               
which 31 percent  use lightweight studs. Studded  tire use peaked                                                               
in 1996, at  80 percent, and one million passes  of studded tires                                                               
wore road surface one inch.  He showed members photos of pavement                                                               
failure in Anchorage  as the result of studded snow  tire use. He                                                               
said that  for the sake of  safety, road damage must  be repaired                                                               
quickly because rutted roads trap  water, cause hydroplaning, and                                                               
trap  snow,  which turns  to  ice.  Studded tires  increase  fuel                                                               
consumption  and stopping  distance on  wet or  dry pavement  and                                                               
provide a false sense of security after 5,000 miles of use.                                                                     
MR. SCHMITZ said  that studded snow tires do  improve traction in                                                               
many winter  driving scenarios. However, many  non-studded winter                                                               
tires  offer traction  equal  or better  to  studded tires.  Some                                                               
states now ban studded tires. About  $6 million per year is spent                                                               
resurfacing roads  in Anchorage,  which equals about  $20,000 per                                                               
lane, per  mile. SB 106 also  increases the fee for  driving with                                                               
studded tires out of season.                                                                                                    
TAPE 03-8, SIDE B                                                                                                             
CHAIR COWDERY  noted that,  according to  a University  of Alaska                                                               
study, about  50 percent  of drivers use  studded snow  tires. Of                                                               
those  drivers,  about  98  percent drive  on  dry  pavement.  He                                                               
pointed out  that SB 106 definitely  creates a user fee.  He then                                                               
asked Mr. Nottingham to testify.                                                                                                
MR.  DENNIS NOTTINGHAM,  President of  Peratrovich, Nottingham  &                                                               
Drage, Inc.,  told members he is  a long time resident  of Alaska                                                               
and has  watched the roads  deteriorate exponentially  with time.                                                               
He  appreciates   the  committee   taking  up  this   issue.  The                                                               
Department of  Transportation and  Public Facilities  (DOTPF) has                                                               
conducted  numerous studies  to find  alternative ways  to reduce                                                               
road damage,  such as bringing  in expensive  aggregate. However,                                                               
the  fact of  the  matter is  that tire  rubber  and treads  have                                                               
improved to  the point  that he  has not  used studded  tires for                                                               
many years.  The cost  of road  damage from  studded tire  use is                                                               
difficult to estimate but he has  heard a high number of $200 per                                                               
car. He  said that studded  snow tires  do provide for  a shorter                                                               
stopping  distance, but  only up  to 5,000  miles of  use so  the                                                               
safety issue is  not as great as people think.  He said that half                                                               
of the  drivers are causing  all of the  damage to the  roads. He                                                               
believes if  people want to  use studded tires, they  should pay.                                                               
The other  50 percent  who are willing  to pursue  new technology                                                               
would not have to pay and the roads would be better for that.                                                                   
MR. NOTTINGHAM  said that  when registering  a vehicle  every two                                                               
years,  it would  be easy  to get  a license  plate sticker  that                                                               
entitles the  use of  studded tires. The  fine for  using studded                                                               
tires out of  season should be very high because  many people are                                                               
destroying the roads by using studded tires year-round.                                                                         
3:10 p.m.                                                                                                                     
SENATOR OLSON  asked if there  is any advantage to  using studded                                                               
tires after  5,000 miles of use  and whether studs could  be worn                                                               
to the point that they have no adverse effect on the pavement.                                                                  
MR. NOTTINGHAM  said he believes  damage is a function  of speed.                                                               
The studs  still have  an effect  on the pavement  when a  car is                                                               
driven faster.                                                                                                                  
SENATOR OLSON asked Mr. Nottingham if  he favors a ban on studded                                                               
MR. NOTTINGHAM said he believes  in allowing people to make their                                                               
own choice  and to pay for  that choice. He said  when this topic                                                               
came  up in  the  past,  the issue  of  liability  was raised  if                                                               
studded tires are  outlawed and someone has an  accident and sues                                                               
the state.                                                                                                                      
SENATOR  WAGONER said  he is  not concerned  about the  liability                                                               
issue, but he  is concerned about the $5 million  worth of damage                                                               
each year.  The revenue from  a fee  on studded tires  would only                                                               
bring in $2 million, while banning  the use of studded snow tires                                                               
would  save  $3 million.  He  believes  studded snow  tires  give                                                               
people  a  false  sense  of security  and  cause  more  accidents                                                               
because people  drive faster. He suggested  holding more hearings                                                               
on banning the use of studded snow tires.                                                                                       
CHAIR  COWDERY   noted  that  lightweight  studs   still  contain                                                               
tungsten  steel, which  is what  hits the  pavement and  does the                                                               
MR.  JOHN MACKINNON,  Deputy Commissioner  of  DOTPF, provided  a                                                               
visual aid to illustrate the depth  of the ruts caused by studded                                                               
tire use.                                                                                                                       
SENATOR WAGONER asked how many years  it took to do the damage to                                                               
the road in the picture.                                                                                                        
MR. MACKINNON did not know.                                                                                                     
CHAIR COWDERY said he would  like DOTPF to provide information on                                                               
the different  asphalt mixes and  their life spans. He  noted the                                                               
pavement on  some of  the streets in  Anchorage, such  as Ingram,                                                               
has  held up  for seven  years  while other  streets have  needed                                                               
overlays every two years.                                                                                                       
MR. MACKINNON  said one  problem in  Alaska is  the lack  of hard                                                               
aggregate  sources. Recently,  Egan Drive  in Juneau  was repaved                                                               
with  aggregate barged  in  from Haines.  That  aggregate made  a                                                               
tremendous  difference.  Another problem  is  the  desire to  use                                                               
asphalt from  state oil fields.  That asphalt  is not as  hard as                                                               
imported asphalt.  He pointed out  the studded tire fee  would be                                                               
collected at  the source at  the time  the studs are  inserted in                                                               
the  tire, not  when  the  tire is  purchased.  Based on  DOTPF's                                                               
projection, the  surcharge would  raise an  extra $2  million per                                                               
year. Businesses would  be allowed to retain five  percent of the                                                               
surcharge up to $300 per  month to cover expenses. The Department                                                               
of  Revenue  estimates its  cost  to  administer the  program  at                                                               
$50,000 per  year. He  said studies have  shown that  one studded                                                               
tire causes about  $50 worth of damage during the  useful life of                                                               
that  tire. Since  Alaska  spends  over $5  million  per year  to                                                               
repair  ruts  caused by  studded  tires,  he  believes it  is  in                                                               
Alaska's best interest  to explore sources of  hard aggregate and                                                               
transport costs.                                                                                                                
CHAIR COWDERY  pointed out  that five or  six states  have banned                                                               
the use of studded snow tires.                                                                                                  
MR. MACKINNON said  when studded tires were  an effective driving                                                               
aid  when they  were  first  introduced in  the  1950s or  1960s.                                                               
However, a  variety of  other innovations  have resulted  in more                                                               
effective safety  measures, such  as anti-lock brakes,  all wheel                                                               
drive, and better tires. In  addition, DOTPF and the municipality                                                               
maintenance programs  have resulted in  less ice build up  on the                                                               
roads. Studies  have shown that  95 percent of the  time, studded                                                               
tires are  hitting bare pavement.  He asked committee  members to                                                               
support SB 106.                                                                                                                 
CHAIR  COWDERY noted  he  spoke to  trucking  companies that  use                                                               
chains rather  than studs on  trucks; they sipe (ph)  their tires                                                               
to increase traction on ice. He  asked if DOTPF uses studded snow                                                               
tires on its vehicles.                                                                                                          
MR. MACKINNON said no.                                                                                                          
SENATOR  WAGONER said  the troopers  use studded  snow tires.  He                                                               
then pointed  out that at $10  per tire, the cost  of damage that                                                               
is not  recovered would be  $160 per  vehicle if the  vehicle has                                                               
four studded  tires. He  asked the cost  of shipping  asphalt and                                                               
aggregate into the state versus using local products.                                                                           
MR. MACKINNON said it would depend  on the location of the paving                                                               
project. It  is not  difficult to  ship aggregate  into Southeast                                                               
Alaska  from the  Puget Sound  area. Asphalt  in the  Interior is                                                               
from that area.  He said DOTPF could look at  the cost benefit of                                                               
using different asphalt mixes and part aggregate.                                                                               
CHAIR COWDERY presented  a committee substitute (CS)  for SB 106,                                                               
version H.                                                                                                                      
SENATOR  WAGONER  moved  to  adopt version  H  as  the  committee                                                               
substitute. Without objection, the motion carried.                                                                              
MR. MACKINNON  explained the  difference between  the CS  and the                                                               
original  bill is  a  fine increase  for  violating the  seasonal                                                               
restriction on studded tires.                                                                                                   
SENATOR OLSON  asked if the  fee would  be collected at  the time                                                               
the studs are inserted into the tire.                                                                                           
MR. MACKINNON said that is correct.                                                                                             
SENATOR OLSON said  companies would have an  inventory of studded                                                               
tires that they have paid the fee for.                                                                                          
MR.  MACKINNON  explained the  tires  are  not sold  with  studs;                                                               
buyers opt to have studs inserted.                                                                                              
SENATOR  OLSON  asked  how  to  guarantee  these  fees  would  be                                                               
designated  for  road  maintenance  as  opposed  to  other  DOTPF                                                               
CHAIR COWDERY said  the money would go into the  general fund and                                                               
the legislature would appropriate it.                                                                                           
MR.  LARRY  PERSILY, Deputy  Commissioner  of  the Department  of                                                               
Revenue, told members  the $10 per tire fee would  show up on the                                                               
invoice and  once a  month that  money would  be remitted  to the                                                               
state. Retailers  would be allowed  to keep five percent,  not to                                                               
exceed $300 per month, for  collecting and remitting the fee. The                                                               
fee  only  applies  to  retail  sales  of  new  tires  for  motor                                                               
vehicles. He  added the  CS exempts tires  sold to  local, state,                                                               
and federal agencies.                                                                                                           
SENATOR  WAGONER said  since there  is no  way to  dedicate those                                                               
funds, the  department would have  to provide an estimate  of the                                                               
amount received to the Finance Committee.                                                                                       
MR.  PERSILY  said that  is  correct  and  although there  is  no                                                               
legally binding  dedication of funds,  there is the  moral pledge                                                               
of  the   legislature  to  appropriate  the   funds  for  highway                                                               
maintenance. He suggested two small changes to the CS:                                                                          
     On line 8, page 1, delete the words "or other transfer for                                                                 
     consideration" to clarify that the state is not looking to                                                                 
     tax garage sale tires.                                                                                                     
     On line 13, page 2, insert "motor vehicle" in front of                                                                     
     "tire" to clarify that this legislation does not apply to                                                                  
     bicycle tires.                                                                                                             
CHAIR COWDERY  said he believes  that tire companies will  have a                                                               
run on  non-studded tires next  year. He  said this fee  is small                                                               
compared to the extra cost of studs and tire changes.                                                                           
SENATOR WAGONER moved  to adopt the proposed changes  and to move                                                               
CSSB 106(TRA) to the next committee of referral.                                                                                
CHAIR  COWDERY asked  for unanimous  consent. Without  objection,                                                               
CSSB 106(TRA) moved from committee.                                                                                             
CHAIR COWDERY announced he would hear  SB 112 at the next meeting                                                               
and adjourned the meeting at 3:30 p.m.                                                                                          

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