Legislature(1997 - 1998)
05/10/1998 01:45 PM Senate TRA
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* first hearing in first committee of referral
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+ teleconferenced
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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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