HOUSE FINANCE COMMITTEE FEBRUARY 21, 1997 1:40 P.M. TAPE HFC 97 - 36, Side 1, #000 - end. TAPE HFC 97 - 36, Side 2, #000 - end. TAPE HFC 97 - 37, Side 1, #000 - end. TAPE HFC 97 - 37, Side 2, #000 - #398. CALL TO ORDER Co-Chair Gene Therriault called the House Finance Committee meeting to order at 1:40 P.M. PRESENT Co-Chair Hanley Representative Kelly Co-Chair Therriault Representative Kohring Representative Davies Representative Martin Representative Davis Representative Moses Representative Foster Representative Grussendorf Representative Mulder was not present for the meeting. ALSO PRESENT Senator Lyda Green; Representative Jeannette James; Dugan Petty, Director, Division of General Services, Department of Administration; Duane French, (Testified via teleconference), Washington, D.C.; Janey Wineinger, Staff, Senator Lyda Green; Boyd Brownfield, Deputy Commissioner, Department of Transportation and Public Facilities; Tom Garrett, Director, Division of Tourism, Department of Commerce and Economic Development; Jody Kennedy, Volunteer, Alaska Environmental Lobby (AEL), Juneau; Cliff Eames, (Testified via teleconference), Alaska Center for the Environment, Anchorage; Priscilla Gregg, (Testified via teleconference), Valdez; David Lee, (Testified via teleconference), Valdez; Wes Wallace, (Testified via teleconference), Wasilla; Ted Smith (Testified via teleconference), Wasilla. SUMMARY HB 18 An Act extending to certain partnerships and corporations the 10 percent procurement preference currently given to certain sole proprietorships who are Alaska bidders and owned by persons with disabilities. HB 18 was reported out of Committee with a "do pass" recommendation and with a fiscal note by the 1 Department of Administration dated 1/29/97 and with a zero fiscal note by the Department of Education. SB 56 An Act relating to tourist oriented directional signs that are 90 inches in width and 18 inches in height, relating to penalties for violations related to outdoor advertising, and annulling a regulation of the Department of Transportation and Public Facilities. HCS CS SB 56 (FIN) was reported out of Committee with a "do pass" recommendation and with a fiscal note by the Department of Transportation and Public Facilities dated 1/29/97. HOUSE BILL 18 "An Act extending to certain partnerships and corporations the 10 percent procurement preference currently given to certain sole proprietorships who are Alaska bidders and owned by persons with disabilities." REPRESENTATIVE JEANNETTE JAMES pointed out that HB 18 would allow 100% disabled owned corporations and partnerships to be eligible for disabled bidder preferences. She stated that current law allows disabled owned sole proprietorships to take advantage of certain disabled bidder preferences. Equal protection under the law requires all like situations to be treated fairly and equally. Representative James continued, current law discriminates against disabled owned corporations and partnerships, allowing sole proprietorships. Representative James explained how the past legislation was vetoed in error. Gary Hayden, Alaska Marine Highway, Department of Transportation and Public Facilities (DOT&PF) had added an amendment to the legislation which created a conflict between the two agencies, thus, causing the Governor to veto the legislation. Representative J. Davies clarified that the bill had not been vetoed in error, instead, it had been amended in error. DUGAN PETTY, DIRECTOR, DIVISION OF GENERAL SERVICES, DEPARTMENT OF ADMINISTRATION, testified that the Department of Administration supports the proposed legislation. The bill would correct an inequity which was established in law, allowing only the sole proprietorship to take advantage of the preference for the disabled community. A partnership would not be able to take advantage of that nor would a corporation. 2 Mr. Petty addressed Representative Martin's concern regarding the application of the legislation. He advised that last year the Legislature had passed an extensive bill on procurement. One of the provisions of the bill currently is law, which outlines the procedure to qualify for the preference. That was a loop hole and the Department has endeavored to close the gap. DUANE FRENCH, (TESTIFIED VIA TELECONFERENCE), WASHINGTON, D.C., spoke in support of HB 18. He reiterated that passage of the legislation would allow for partnerships, completely owned by people with disabilities the opportunity to take advantage of the bidder's preference. Representative J. Davies asked how many corporations currently in existence would fall under the terms of the bill. Mr. French did not know, although, he felt that it would provide an opportunity for people in that category. He predicted that there would not be a rush of applications. Representative Martin MOVED to report HB 18 out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. HB 18 was reported out of Committee with a "do pass" recommendation and with a fiscal note by the Department of Administration dated 1/29/97 and a zero fiscal note by the Department of Education. SENATE BILL 56 "An Act relating to tourist oriented directional signs that are 90 inches in width and 18 inches in height, relating to penalties for violations related to outdoor advertising, and annulling a regulation of the Department of Transportation and Public Facilities." JANEY WINEINGER, STAFF, SENATOR LYDA GREEN, stated that SB 56 would amend Alaska Statute, Tile 19 to allow certain restricted exceptions to current outdoor advertising law in order to better serve the traveling public and provide increased opportunity for Alaskan businesses. SB 56 would establish a category of outdoor advertising for business entities of significant interest to the traveling public and would allow their placement in zoned/unzoned commercial or industrial areas along a state highway, subject to stringent restrictions. Ms. Wineinger continued, SB 56 would provide these 3 directional signs to be consistent with format and size standards established by the Department of Transportation and Public Facilities (DOT&PF) and would limit their placement as to proximity to the business, thereby, further mitigating any potential impact on the scenery visible from Alaska's highways. The provisions of SB 56 would codify in statute the existing DOT&PF Tourist Oriented Directional Signs (TODS) program and clarify language providing municipal authority to enact by ordinance standards for directional signs adopted by the DOT&PF or standards more restrictive than those provided by the measure. Ms. Wineinger concluded, passage of SB 56 would provide long sought assistance to Alaska businesses dependent on trade with the traveling public as well as enhance the State's ability to be user-friendly for its tourists, further promoting a responsive visitor industry. She urged the Committee's support. Representative John Davies pointed out that DOT&PF is currently running an experimental program and that they have a task force working on these issues. He questioned the need for the legislation. Ms. Wineinger stressed that to date there is no finality on action taken by the task force. Representative J. Davies informed her of a memo report dated 1/15/97 generated from the task force. That group has considered the problem and has made recommendations to the Governor regarding the concern. Representative J. Davies referenced a memo from Legislative Council regarding the status of the experimental program. He again questioned the need for the proposed legislation. Ms. Wineinger referenced a statutory clause which provided authority to the Department to have the signs placed. Representative J. Davies countered that the Department now has the authority to implement the experimental program as an operational program with regulations to be adopted. He stated that was the purpose of the task force given their statutory authority under federal and State standards. Representative Grussendorf referenced the fiscal note, which indicated that no other states allow placement of official directional signs on private property because of the difficulties in controlling and enforcing sign placement in those areas. Ms. Wineinger disclosed that through support from the Federal Highway Authority (FHA), three other states have implemented the action. BOYD BROWNFIELD, DEPUTY COMMISSIONER, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES (DOT&PF), spoke to the 4 proposed legislation. The Administration has stressed that SB 56 would be harmful to the State. The action will establish a potential for the proliferation of outdoor signs along highways, thus, degrading the natural beauty and historic sights of Alaska as seen from our highway. He pointed out that it has been said that our public road system is Alaska's single, largest tourist attraction. The proposed legislation would end that quality. Mr. Brownfield commented that Alaska's signage program was patterned after a federal initiative called the Tourist Oriented Directional Signs (TODS) program, designed to provide business identification and directional information for businesses. The program allows signs to be located within the highway row. Mr. Brownfield provided Committee members a model sign of the largest size, 18" x 6'. Last Fall, DOT&PF, Division of Tourism and representatives from the tourism industry held a series of public meetings to discuss where TODS signs fail to provide adequate signage. Two specific issues surfaced: * Businesses along a major highway want to be able to advertise a mile or two in advance of their location. TODS does not allow advance signage along a major highway if the business is in full view of the highway. * Businesses within a city would like TODS signs in city limits. TODS signs are for rural settings where the majority of the land is not sub-divided. In Alaska, that is defined as a city having less than five thousand residents. Mr. Brownfield stated that DOT&PF is incorporating logo signs and drafting regulations to include "advanced" signage and signs within cities and municipalities which have a population of five thousand residents or more. Those regulations will be ready for public review by February 26, 1997, and the new regulations will be adopted by April 15, 1997. Mr. Brownfield testified on the effect of SB 56 on the program. Present State law prohibits the erection of signs outside the state row or private land. The legislation would open the door for signs to be erected on private land along Alaska's highway system which are either zoned as commercial or industrial-use or unzoned but used for commercial or industrial purposes. The Administration strongly opposes the change in the law. The change would establish a new category of signs off-row, 5 on private lands, which the Department has no jurisdiction over. Enforcement would be difficult with significant costs stemming from legal and administrative issues. He continued, the change could jeopardize up to 10% of our federal Intermodel Surface Transportation Efficiency Act (ISTEA) funds. Mr. Brownfield specified that the Department can not provide effective control of the erection and maintenance of signs off-row. He stressed that with current resources, the Department can barely handle on-row enforcement. The bill recommends that a sign be no greater than 18" X 90". The row ranges from 100' to 300' in width. Generally, on a major highway, the row is 300', whereas, on secondary roads, it can be 100' to 150'. Mr. Brownfield suggested that the signs would be unreadable at the distance recommended for them to be effective. He reiterated that an 18" x 90" sign would be unreadable at that distance. Also, given the circumstances, the Department would be faced with processing the off-row signs, leaving little choice but to not grant or issue approval for erection of those signs. (Tape Change HFC 97-36, Side 2). Representative J. Davies inquired why a sign would be placed 150' off the road. Mr. Brownfield replied that when the sign is placed on private property, there exists a right-of- way of 300'. The sign could not be adequately read and would present a safety problem. It is the responsibility and obligation of the Department to protect the safety and welfare of the public. Allowing a sign to be installed like that, knowing in advance that it can not be adequately read would impose a safety problem leaving the Department in a negative position. Mr. Brownfield stated that SB 56 would be the first step to the proliferation of more and bigger signs. The bill would reduce the penalty for such an offense from a misdemeanor to a simple violation. A misdemeanor carries with it an accumulative increased seriousness to multi-offenses by an offender. He suggested that change would deliver a "powerful" message to the public. Reducing the penalty clearly sends the wrong message that somehow the size and number of signs along the highways is not important. Mr. Brownfield summarized, the Administration uses an effective signage system which meets most business needs. The Department has identified weaknesses in their program and is taking positive steps to cure those concerns. Regulations are being drafted and will be ready for public review by February 26th, 1997. 6 Mr. Brownfield stressed that SB 56 does not address weakness in the system. The legislation would create a category which puts signs on private land over which the State has no jurisdiction. It would jeopardize 10% of ISTEA funding, amounting to $22 million dollars, and would serve as the first step toward more and bigger signs. Mr. Brownfield urged Committee members not to pass the proposed legislation but instead to weigh the consequences. Representative Kelly questioned the criteria used to place a sign in the right-of-way. Mr. Brownfield responded that an application would be made with a $100 dollar application fee. The Department would be responsible to check the installation procedure and placement. The applicant would be responsible for the sign. SB 56 would take the sized sign and would post it on private property up to 150' off the highway. The Department would be responsible for any signs off the right-of-way and back 660' feet through an existing agreement with the federal government. Representative Martin thought the Department's argument was exceptionally "fear" based. Mr. Brownfield argued that the Department would not want to put up a sign which could not be read. He emphasized that the Department is responsible for highway safety. SB 56 would not stop anything; it would proliferate signs further outside the highway. Co-Chair Therriault referenced Page 3, Section 4: "The Department shall maintain the location of directional signs within a right-of-way". He advised that the Department could "turn down" a person applying for sign posting. Representative J. Davies asked what specifics the regulations would cover. Mr. Brownfield replied that the regulations would cover all signage issues and would address concerns brought forth by the task force. Co-Chair Hanley asked how signage positions would be determined under current law. Mr. Brownfield replied that it was first come, first serve. Six signs would be allowed at an intersection approach, no more than four on the same pedestal. He added, this type situation would provide a good reason to create a "kiosk". Co-Chair Hanley asked if the bill passed, would the Department be able to limit the number of signs. Mr. Brownfield noted that the Department would have that authority and that the size of a sign would be governed by the TODS program. Co-Chair Hanley commented on the reduction of the penalty. 7 He noted that as a misdemeanor, the offense would not likely be prosecuted. He believed that a fine of $1 thousand dollars would be a more effective deterrent. Co-Chair Hanley suggested that the legislation could provide the Department more flexibility than anticipated, indicating that regulations are always more stringent than people think they should be. Co-Chair Therriault asked if the State would be allowed to use federal funds for the kiosk area. Mr. Brownfield commented that the existing right-a-way approval would be determined by the Federal Highway Association. He did not know if that action could be approved. Representative G. Davis asked if the Department felt they had enough statutory authority to implement the TODS program. Mr. Brownfield responded that the Department does have the authorization to establish a TODS system. Representative G. Davis agreed with Representative Hanley concerning the penalty associated with sign problems, although, warned that the regulations would be implementing the specifics of the legislation. He pointed out that the Department does have control over the regulations, although, does not have control over the statutes. He suggested that concerns of the Department should be addressed in the statutes. Mr. Brownfield pointed out that regulations require distance between the groups of signs. In response to Representative Therriault's query, Mr. Brownfield stated that there does exist a category of signs which include services available in the community. CLIFF EAMES, (TESTIFIED VIA TELECONFERENCE), ALASKA CENTER FOR THE ENVIRONMENT, ANCHORAGE, testified in opposition to the proposed legislation. He suggested that the bill was not necessary given the proposed regulations that the Department submits. He suggested that massive numbers of signs would interfere with the State's scenic beauty. PRISCILLA GREGG, (TESTIFIED VIA TELECONFERENCE), VALDEZ, asked how the legislation would affect signs currently on private property advertising private businesses. Co-Chair Therriault indicated that there would be no impact there. Mr. Brownfield agreed. DAVID LEE, (TESTIFIED VIA TELECONFERENCE), VALDEZ, questioned the impact of the legislation on an off premise or out-of-town sign. Mr. Brownfield replied that business owners are allowed to put their signs on the business premises. (Tape Change HFC 97-37, Side 1). 8 WES WALLACE, (TESTIFIED VIA TELECONFERENCE), WASILLA, spoke to the proposed legislation and his personal problems with the TODS program affecting the placement of signage. Representative Grussendorf noted that Mr. Wallace would continue to have the same problems with passage of the proposed legislation. TED SMITH, (TESTIFIED VIA TELECONFERENCE), WASILLA, urged passage of the proposed legislation. He stated that the legislation would implement recommendations made by the Citizens Advisory Committee formed ten years ago to create the TODS regulations. He disagreed that many new signs would pop up throughout the State. TOM GARRETT, DIRECTOR, DIVISION OF TOURISM, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, explained that he was involved with the Governor's task force to determine the problems which exist throughout the State regarding signage. He spoke to the regulations which were a product of that task force. During the meetings of the task force, it was clear that Alaskan businesses did not understand current regulations regarding the posting of signs. He thought that there had been a break-down of communication regarding business options for signage. In recognition of that, the Division of Tourism, will be disseminating to Alaskan businesses a guide explaining the regulations. The goal of the Division is to have signage in place for those business that want it by Summer, 1997. Mr. Garrett spoke to the citizen advisory group's concerns regarding the legislation. This group wants signage and the Administration is currently addressing those concerns. JODY KENNEDY, VOLUNTEER, ALASKA ENVIRONMENTAL LOBBY (AEL), JUNEAU, stated that the Lobby opposes the legislation. She reiterated that the bill is not necessary. The Department is currently working on a program to provide signs to benefit business owners. She added that the bill would impose a size restriction of eighteen inches in height and ninety inches in width, creating signs difficult to read at highway speeds. Ms. Kennedy concluded, the bill would make it more difficult to enforce a sign regulation through the penalty reduction. In response to Co-Chair Hanley's query, Ms. Kennedy noted that the Lobby is in favor of the regulations as proposed by the Department. Co-Chair Hanley clarified that with the federal regulations in place, it would be difficult for legislators to increase signage size in the future. 9 Representative J. Davies pointed out that the maximum size under the Federal Highway Administration regulations would be a 650 square feet sign with a maximum height of 20' and a maximum length of 50'. He stressed that would be the size of a bill board. Mr. Brownfield elaborated, when signs are posted outside of the right-of-way and are placed in the area which is zero to 650' back, they are no longer considered federal directional signals. A TODS sign is a directional sign and a federal law allows signs to be posted in those areas. Representative Grussendorf mentioned that the enforcement costs of the penalties would be costs associated with doing business. He stressed that $1,000 dollars would not be enough of a deterrent for a business to adhere to the law of the regulations. Representative Kohring announced his support of the proposed legislation, commenting that it would promote small business growth and development. He recommended that the bill should contain verbiage which would eliminate the State's authority in the process. He stressed that local authority should have the ultimate jurisdiction. He inquired what risk could jeopardize federal dollars. Mr. Brownfield replied that the Department could not effectively monitor enforcement outside the right-of-way with current allocations. Ten percent of the ISTEA funds could be held back if the program was not administered effectively. The Department abides by local ordinances. Co-Chair Therriault reviewed the fiscal note, questioning if the allocation was warranted. Mr. Brownfield replied that the fiscal note represents the costs to the Department to implement the legislation. Regulations would need to be prepared and set in place. Co-Chair Hanley asked if this year's budget included a proposed increase for the TODS program. Mr. Brownfield was not aware of an increased request. Co-Chair Hanley mentioned that the Department's budget could be cut $10 thousand dollars as regulations will have been prepared. He commented that the regulations will be completed and that they could be used for the proposed legislation. Mr. Brownfield reiterated, placing the bill into law will perpetuate more signs, and that the $10.5 thousand dollar request for personal services was menial. Representative J. Davies MOVED to adopt Amendment #1. [Attachment #1]. Co-Chair Therriault OBJECTED for purposes of discussion. Representative J. Davies spoke to the amendment stating that it would allow for the possibility of 10 a narrower width along the roadside and placement of a smaller sign. The amendment would authorize an upper limit of sized signs. SENATOR LYDA GREEN spoke against Amendment #1. She noted the extensive review and study that had gone into preparation of the legislation. Co-Chair Therriault asked if mileage signs were standard size regardless of the message they advertised. Mr. Brownfield stated that they are a standard size and that size depends on the information the signs contains; he added there is a maximum size. Representative G. Davis suggested that the amendment provided an option for making a sign. He believed that would be a beneficial option to the legislation. Co-Chair Therriault noted that Amendment #1 would create a title change which would require a resolution. Representative J. Davies asked if it would be possible to leave the title alone and only change the body of the legislation in Section inclusive" than what is actually in the bill and that sometimes portions of the bill are deleted, although, continue to remain in the title. He suggested that perhaps the body could be changed without affecting the title and if that were the case, he offered to provide a "friendly" amendment to remove the first section of the amendment, deleting the reference to Page #1. Co-Chair Therriault thought that there could be a problem with the way the amendment was written. Representative J. Davies MOVED the change to Amendment #1. There being NO OBJECTION to the "friendly" amendment, the change to Amendment #1 was adopted. Senator Green voiced support of the change and noted that she would support Amendment #1 as amended. (Tape Change HFC 97-37, Side 2). Co-Chair Therriault WITHDREW the OBJECTION to the amended Amendment #1. There being NO further OBJECTION, Amendment Representative J. Davies MOVED to adopt Amendment #2, striking Sections #5 and #6 from the bill. Representative G. Davis OBJECTED. Representative J. Davies state that the penalty should not be changed. Mr. Brownfield was not aware of a misdemeanor conviction. Co-Chair Hanley emphasized that more funds would be generated if there was a violation charge rather than proof of criminal intent. Representative G. Davis agreed, suggesting that the violation would be 11 plenty, especially when the business would be faced with the possibility of the sign being removed. Representative Grussendorf countered that the penalty was not intended to be a revenue producer. He stated that the penalty section does not fit well with the remainder of the proposed legislation. Representative G. Davis recommended that all legislation which reduces impact to the Court System should be supported. A roll call vote was taken on the MOTION. IN FAVOR: Grussendorf, Moses, J. Davies OPPOSED: Foster, Kelly, Kohring, Martin, G. Davis, Therriault Representatives Hanley and Mulder were not present for the vote. The MOTION FAILED (3-6). Representative J. Davies MOVED to amend Section #5, Line "$1000" dollars to "$5000" dollars. Representative Martin OBJECTED. A roll call vote was taken on the MOTION. IN FAVOR: Grussendorf, Moses, J. Davies OPPOSED: Kelly, Kohring, Martin, G. Davis, Foster, Therriault Representatives Hanley and Mulder were not present for the vote. The MOTION FAILED (3-6). Representative J. Davies MOVED to strike Section #7. Co- Chair Therriault OBJECTED. Representative J. Davies reminded members that the Department is currently in the process of adopting regulations. He suggested that it would be better to implement regulations when passed, rather than when indicated in the legislation. Senator Green countered, the experimental policy has been in place since 1987. The Department has not put anything in statute which regulates the concerns. She added, the task force which was appointed last year, will not have anything available until late Fall, 1997. She stated that the legislation is long overdue and needs to be in place for the coming tourist season. Representative J. Davies repeated that a report provided by the task force is available. The Department is issuing a 12 comprehensive set of regulations next week, which will be adopted in April, 1997. Representative G. Davis reminded Committee members that the Department is opposed to this section of the legislation. He indicated that it would be a "shame" to overlook the work of the Department. He suggested a "meeting" of the two groups and agreed with the amendment, reiterating that there are regulations being adopted which may coincide with the intent of the bill. Senator Green declared that without Section #7, the rest of the bill is "for-not and without value". She believed that the Department had all the authority they needed to implement the bill. Representative G. Davis asked if the bill was passed, would it need regulations to be implemented, asking why annul something which needs to be addressed. Co-Chair Therriault clarified that the "annulment" was the "prohibition". The regulations will be allowed. Representative J. Davies disagreed. A roll call vote was taken on the MOTION. IN FAVOR: Moses, J. Davies, Grussendorf OPPOSED: Kelly, Kohring, Martin, G. Davis, Foster, Therriault Representatives Hanley and Mulder were not present for the vote. The MOTION FAILED (3-6). Representative J. Davies MOVED to incorporate a new Section September 1, 1997. Representative Martin OBJECTED. Representative Martin thought that the amendment would create a time hazard for placing signs for this summer's tourism needs. Senator Green noted that the impact would prohibit any outdoor signage until September, 1997. Representative J. Davies explained the reason he proposed the date, would be to grant the Department time to get the other regulations in place. He believed that they would delete the need for further regulations. The Department has guaranteed the Committee that the regulations would be "taken care of". Representative Kelly pointed out that the amendment would create the need for a title change. Representative J. Davies WITHDREW the MOTION to move the amendment. There being NO OBJECTION, it was withdrawn. Representative Foster MOVED to report HCS CS SB 56 (FIN) out of Committee with individual recommendations and with the 13 accompanying fiscal note. Representative J. Davies OBJECTED. He pointed out that he did not object to the intent of the bill, but did object to the prematurity of the legislation as regulations are being completed by the task force and will be in place by this summer's tourist season. He emphasized that the legislation is no necessary. Representative Kohring disagreed, noting that the bill would help small businesses; he supported the proliferation of more signage. He suggested that the only concern he saw, was that the bill would not go "far" enough. A roll call vote was taken on the MOTION. IN FAVOR: Martin, G. Davis, Foster, Kelly, Kohring, Therriault. OPPOSED: Moses, J. Davies, Grussendorf Representatives Hanley and Mulder were not present for the vote. The MOTION PASSED (6-3). HCS CS SB 56 (FIN) was reported out of Committee with a "do pass" recommendation and with a fiscal note by the Department of Transportation and Public Facilities dated 1/29/97. ADJOURNMENT The meeting adjourned at 4:15 P.M. 14