ALASKA STATE LEGISLATURE  HOUSE TRANSPORTATION STANDING COMMITTEE  February 7, 2013 1:06 p.m. MEMBERS PRESENT Representative Eric Feige Representative Lynn Gattis Representative Craig Johnson Representative Bob Lynn Representative Jonathan Kreiss-Tomkins MEMBERS ABSENT  Representative Peggy Wilson, Chair Representative Doug Isaacson, Vice Chair COMMITTEE CALENDAR  HOUSE BILL NO. 19 "An Act relating to permanent motor vehicle registration; relating to the registration fee for noncommercial trailers and to the motor vehicle tax for trailers; and providing for an effective date." - HEARD & HELD HOUSE BILL NO. 15 "An Act relating to commercial motor vehicle requirements." - MOVED HB 15 OUT OF COMMITTEE PREVIOUS COMMITTEE ACTION  BILL: HB 19 SHORT TITLE: PERM. MOT. VEH. REGISTRATION/TRAILERS SPONSOR(s): REPRESENTATIVE(s) STOLTZE, KELLER 01/16/13 (H) PREFILE RELEASED 1/7/13 01/16/13 (H) READ THE FIRST TIME - REFERRALS 01/16/13 (H) TRA, FIN 02/07/13 (H) TRA AT 1:00 PM BARNES 124 BILL: HB 15 SHORT TITLE: COMMERCIAL MOTOR VEHICLE REQUIREMENTS SPONSOR(s): REPRESENTATIVE(s) KELLER, ISAACSON 01/16/13 (H) PREFILE RELEASED 1/7/13 01/16/13 (H) READ THE FIRST TIME - REFERRALS 01/16/13 (H) TRA 02/07/13 (H) TRA AT 1:00 PM BARNES 124 WITNESS REGISTER REPRESENTATIVE BILL STOLTZE Alaska State Legislature Juneau, Alaska POSITION STATEMENT: Presented HB 19, as a joint prime sponsor of the bill. DARRELL BREESE, Staff Representative Bill Stoltze Alaska State Legislature Juneau, Alaska POSITION STATEMENT: Testified and answered questions on behalf of Representative Bill Stoltze, joint prime sponsor of HB 19. KATHIE WASSERMAN, Executive Director Alaska Municipal League (AML) Juneau, Alaska POSITION STATEMENT: Testified during the discussion of HB 19 AMY ERICKSON, Director Division of Motor Vehicles (DMV) Department of Administration (DOA) Anchorage, Alaska POSITION STATEMENT: Testified and answered questions during the discussion of HB 19. REPRESENTATIVE WES KELLER Alaska State Legislature Juneau, Alaska POSITION STATEMENT: Testified and answered questions as prime sponsor of HB 15. JIM POUND, Staff Representative Wes Keller Alaska State Legislature Juneau, Alaska POSITION STATEMENT: Testified on behalf of the sponsor, Representative Wes Keller on HB 15. REX YOUNG, Chief Commercial Vehicle Enforcement, Anchorage Office Division of Measurement Standards & Commercial Vehicle Enforcement (MSCVE) Department of Transportation & Public Facilities (DOT&PF) Anchorage, Alaska POSITION STATEMENT: Testified and answered questions during the discussion of HB 15. DAN SMITH, Director Anchorage Office, Division of Measurement Standards & Commercial Vehicle Enforcement (MSCVE) Department of Transportation & Public Facilities (DOT&PF) Anchorage, Alaska POSITION STATEMENT: Testified in support of HB 15. AVES THOMPSON, Executive Director Alaska Trucking Association, Inc. (ATA) Anchorage, Alaska POSITION STATEMENT: Testified during the discussion of HB 15. MIKE MOELLER, Director Trucking CPD ALASKA LLC Wasilla, Alaska POSITION STATEMENT: Testified in support of HB 15. ACTION NARRATIVE 1:06:25 PM REPRESENTATIVE FEIGE called the House Transportation Standing Committee meeting to order at 1:06 p.m. He indicated he would be chairing today's hearing since the Chair and Vice Chair are absent. Representatives Johnson, Gattis, Kreiss-Tomkins, Lynn and Feige were present at the call to order. HB 19-PERM. MOT. VEH. REGISTRATION/TRAILERS  1:07:17 PM REPRESENTATIVE FEIGE announced that the first order of business would be HB 19, HOUSE BILL NO. 19, "An Act relating to permanent motor vehicle registration; relating to the registration fee for noncommercial trailers and to the motor vehicle tax for trailers; and providing for an effective date." 1:07:50 PM REPRESENTATIVE BILL STOLTZE, Alaska State Legislature, related that a bill similar to HB 19 was heard last year. Last year, he said he asked to have the bill sent back to committee for more deliberations to address issues. He said he believes in the committee process. He stated HB 19 would provide owners the convenience of being able to register their trailer once and receive a permanent registration. He stated that his constituents prefer not to deal with government on a regular basis. Further, HB 19 would also address an equity issue since commercial trailers have a favorable tax treatment compared to non-commercial trailers. This bill would also allow for permanent registration of personal-use motor vehicles older than eight years. 1:10:31 PM REPRESENTATIVE STOLTZE acknowledged that the eight-year figure was arbitrary, but after vehicles reach a certain age it seems reasonable the person should have the option for permanent registration. Further, this option became available with the dismantling the Inspection and Maintenance (IM) program. He explained that the Municipality of Anchorage's emissions testing affected Matanuska-Susitna commuters, but the removal of the IM program now allows for the possibility of permanent registration. He related some fiscal issues still exist with HB 19. He characterized the IM program and two-year registration as revenue generators for the Department of Administration. Not all fiscal issues have been resolved, such that even today a revised fiscal note was issued to remove some assumptions the department used. He suggested that committee members can make a determination on the fiscal implications as the committee considers policy issues; however, he cautioned members to be skeptical of assumptions made by departments, which rely upon revenues. He surmised members could decide whether these revenues belong in the state's pocket, or their constituents' pockets, which he characterized as being a common sense issue. Under HB 19, the permanent registration program would be optional for individuals. Additionally, the community can decide whether to collect revenues so a local option is included. He understood "Talk Radio" in Southcentral Alaska has been pretty charged up about this issue. Even though he has not promoted this publicity, the issue grew from spontaneous comments by constituents and as a representative he was responsive to their needs. 1:14:08 PM REPRESENTATIVE GATTIS disclosed she owns two vehicles that would fall under the category of vehicles being older than eight years old. She has also received numerous calls and e-mails from constituents who support the concept in HB 19. She said she also owns commercial trailers that she only registers once. She related she also has snowmachine trailers, and while she does pay the fees, she admitted she doesn't always get the tags adhered to the trailer on a timely basis. She reiterated many constituents have the same issue. REPRESENTATIVE STOLTZE disclosed that he has also owns an old boat trailer and an old truck. REPRESENTATIVE LYNN says his personal vehicles are all over eight years old and he also owns a vacation trailer over two years old. REPRESENTATIVE FEIGE remarked that people are busy and to have to register vehicles every two years is time consuming and generates little revenue. He asked, "Why not just register it once and be done with it? It certainly is a legitimate point." 1:17:05 PM REPRESENTATIVE LYNN suggested he likely pays less for registration since he is a senior citizen. He asked whether vehicle registration for seniors is available for vehicles eight years or older under the bill. REPRESENTATIVE STOLTZE deferred to the Division of Motor Vehicles (DMV) to answer. He recalled that seniors are entitled to one vehicle exemption. 1:17:49 PM REPRESENTATIVE KREISS-TOMKINS said he read a letter from the Alaska Municipal League (AML). He recalled she commented on revisions to a bill last year that led to the AML to withdraw its opposition and be neutral on the bill. He asked whether the sponsor could speak to the revised provisions. REPRESENTATIVE STOLTZE answered the revised bill included a well-defined local option. He suggested the AML may still have some concerns, although he was unsure. 1:18:46 PM DARRELL BREESE, Staff, Representative Bill Stoltze, Alaska State Legislature, on behalf of the bill sponsor, referred to one concern that AML had last year, which was that municipalities would not be able to collect motor vehicle registration taxes (MVRT) at the time of registration. However, changes to last year's bill, which is also reflected in HB 19, would allow municipalities to set a MVRT for vehicles registered permanent registration. He briefly described the process municipalities would use, including that local government would pass an ordinance to allow it to collect MVRT for vehicles registered permanently or for non-commercial trailers. 1:20:09 PM MR. BREESE stated Section 2 of HB 19 would allow vehicle owners an option to obtain a permanent vehicle registration for vehicles that are eight years or older or to continue to register their vehicle biennially. Owners would pay the DMV fees based on the vehicle age and other factors, plus a one-time $25 fee for permanent registration. He suggested the DMV would likely add a box on registration forms for permanent registration, as well as supply a tab, sticker, or plate for permanent registration. MR. BREESE reported that currently seniors are allowed a single motor vehicle registration exemption. He turned to proposed Section 3 of the bill and explained that a senior citizen would need to decide whether to pay the $25 for permanent exemption or apply for the senior exemption from the DMV. He reiterated that this section does not set out a specific exemption for seniors; however, if he was a senior, he would likely choose the senior citizen exemption but to do so would mean registering the vehicle biennially. 1:23:14 PM MR. BREESE pointed out that Section 4 refers to non-commercial trailers, such as recreational trailers, boats, snowmachines horse trailers. This proposed section would allow the non- commercial trailer owner to pay the $30 fee, plus a $25 fee for permanent registration which is an option. He pointed out the two-year registration is still allowed. MR. BREESE said while the language is not necessary for the bill, Section 5 was left in the statutes allow municipalities the option to implement any IM program if the program is reinstated. 1:24:59 PM MR. BREESE explained that Section 6 would set out the base rate for the MVRT. He referred to the change on page 4, line 9, to an option for any permanent vehicle registration tax imposed by municipalities. Currently municipalities have the authority to set a MVRT, but not all municipalities do so. He recalled 16 communities currently have a MVRT with varying rates and a listing of these communities is in members' packets titled, "MVRT Collections by Community." In fact, the MVRT is a municipal tax and not a state tax, he said. Currently the DMV collects the MVRT for municipalities and retains an eight percent fee to collect the tax. 1:26:26 PM REPRESENTATIVE GATTIS understood the person has an option to apply for permanent registration. She asked whether the permanent registration is transferable. MR. BREESE answered no. He explained that sales are treated like any other vehicle sale. 1:27:20 PM MR. BREESE referred to Section 7, and to page 4, lines 22-23 of HB 19. He explained that only one registration tax may be collected. Under proposed Sections 8-9, the state cannot collect more than $100 in MVRT for vehicles with permanent registration. Thus, if Matanuska-Susitna Borough (MSB) set the MVRT at $300, the maximum amount the DMV would collect is $100 and the MSB would need to collect the $300 MVRT. MR. BREESE turned to Section 8, which highlights that municipalities can set a MVRT as they see fit. The sponsor discovered while working with AML last year that collecting the MVRT could be a burden to some municipalities and since he did not wish to adversely impact municipalities, the bill allows local government to establish its own MVRT rate. In doing so, local governments would establish the proposed MVRT tax by ordinance, which would also allow communities to obtain input from residents. MR. BREESE stated, as mentioned earlier, Section 9 would establish that the DMV would not collect more than $100; however, this provision is not a cap, but would simply transfer the responsibility to collect any MVRT greater than $100 to municipalities or cities that impose the tax. 1:30:29 PM REPRESENTATIVE KREISS-TOMKINS asked for the clarification on the intent of Section 9. MR. BREESE responded that the sponsor's intent is to keep taxes low. Further, some confusion exists on whether the MVRT is a state or municipal tax and this section would address this by identifying the MVRT as a local tax imposed by a municipality or a city and not the state. 1:31:27 PM REPRESENTATIVE KREISS-TOMKINS asked how many municipalities have taxes greater than $100, if any. MR. BREESE referred to a list in members' packets, titled "MVRT Collections by Community." He explained that once a non- commercial vehicle reaches eight year in age, the DMV fees flatten out. He pointed out the only community that charges more than $100 is Unalaska and Dutch Harbor, which sets the MVRT at $116, while the remaining communities MVRT rate is $100 or less. REPRESENTATIVE FEIGE clarified this bill refers to the MVRT and not to a property tax. 1:33:12 PM REPRESENTATIVE KREISS-TOMKINS referred to the sponsor statement which read, "Permanent registration will result in a cost savings for Alaskans." He suggested this would translate to tax relief and not necessarily to cost savings. MR. BREESE deferred to DMV to attest to any cost savings for the state; however, he thought most vehicles are registered on-line. Any cost savings for Alaskans would accrue after two years since the permanent registration is a one-time fee of $25 fee rather than the current biennial tax. Thus these vehicle owners would no longer have to pay fees for the remaining time they own the vehicle, he said. 1:34:31 PM KATHIE WASSERMAN, Executive Director, Alaska Municipal League (AML), reported the AML is currently neutral on HB 19. She said the AML is awaiting reports from the 16 municipalities on the financial impacts for each community. She offered her belief most municipalities currently use the MVRT fees for road maintenance or junk car removal. 1:35:45 PM REPRESENTATIVE JOHNSON asked whether the DMV would issue a special tag so owners would avoid tickets. 1:36:43 PM AMY ERICKSON, Director, Division of Motor Vehicles (DMV), Department of Administration (DOA), stated that if a permanent registration fee is implemented the DMV would issue an orange tag, which would be distinguished from other tags. In further response to Representative Johnson, she answered it would be a tag and not a special plate. In response to another question, she answered that the DMV's revenues total approximately $70 million. She clarified that the DMV's revenues are approximately $70 million and their expenses total approximately $17 million. 1:38:06 PM REPRESENTATIVE JOHNSON asked how many people renew online as opposed to in person registration. MS. ERICKSON answered that approximately 11 percent of registrations are done in house and the rest are renewed online. REPRESENTATIVE JOHNSON asked if certain staff were dedicated to online versus in house. MS. ERICKSON answered that the DMV does not dedicate staff specifically to conduct online or in house transactions. In further response to a question she agreed that the DMV staff rotates and is not dedicated to performing one function. 1:39:28 PM REPRESENTATIVE JOHNSON asked whether anything would prevent the Municipality of Anchorage (MOA) from setting up a substantially higher MVRT. MS. ERICKSON answered that nothing in the bill would prohibit the MOA from setting a higher MVRT. REPRESENTATIVE JOHNSON questioned whether the bill should have a cap. REPRESENTATIVE FEIGE indicated public testimony would be kept open on HB 19. [HB 19 was held over.] HB 15-COMMERCIAL MOTOR VEHICLE REQUIREMENTS    1:41:02 PM REPRESENTATIVE FEIGE announced that the final order of business would be HOUSE BILL NO. 15, "An Act relating to commercial motor vehicle requirements." The committee took an at-ease from 1:41 p.m. to 1:42 p.m. 1:42:26 PM REPRESENTATIVE WES KELLER, Alaska State Legislature, characterized HB 15 as a pro-business bill. He said the National Federation of Independent Businesses (NFIB), the Alaska Trucking Association, the DMV, and the Department of Transportation & Public Facilities (DOT&PF) like the bill. A similar bill nearly passed the legislature last year and that HB 15 is a good bill with lots of support. He stated that the bill would reduce some regulations to a certain category of trucks - the one-ton truck, the 35 series, the 350 series, 3500 series, and small step vans. This bill would remove these vehicles from being defined as commercial vehicles and it would increase the gross vehicle weight rating (GVWR) restriction from 10,000 to 14,000 pounds. 1:45:13 PM JIM POUND, Staff, Representative Wes Keller, Alaska State Legislature, on behalf of the bill sponsor, reiterated that this bill would update Alaska's statutes. In 1999, when these statutes were written, one-ton pickups were lighter in weight. He reiterated that increasing the weight requirements for commercial vehicles will remove one-ton pickups and similar vehicles from the category of commercial vehicles. He explained that commercial vehicle drivers are subject to certain requirements, including testing, insurance, and medical requirements, such as obtaining annual exams. For example, commercial drivers currently operate pilot vehicles. He recalled one letter in members' packets indicated that the bill may also reduce wear and tear on roads since a one-ton dual wheel vehicle has less impact on roads than a single rear axle vehicle does. 1:46:45 PM MR. POUND referred to Section 1 of HB 15, which would amend AS 19.10.060 and primarily relates to insurance and limits insurance necessary to operate a vehicle less than 14,000 pounds. Section 2 would eliminate duplicate language found in state and federal regulations, noting the DOT&PF could address this in more detail. He stated that Section 3 defines commercial motor vehicles. 1:47:47 PM REPRESENTATIVE FEIGE asked whether the change would increase the limit for commercial vehicles from 10,000 to 14,000 pounds. MR. POUND answered yes. In further response, he responded he understood that 10,000 pounds was standard was adopted to correspond to a one-ton truck but over the years these vehicles have gotten heavier and larger. 1:48:26 PM REPRESENTATIVE GATTIS disclosed she uses a one-ton truck and also a one-ton snowplow. She asked whether he could speak to a farm or agricultural exemption. MR. POUND answered that farm vehicles are exempt in another section of statutes and farm vehicles are not considered commercial vehicles in terms of this bill. 1:49:09 PM REPRESENTATIVE FEIGE referred to page 2, line 7, and to page 3, line 4 of the bill. He asked the reason to delete the language related to transport of hazardous material. MR. POUND understood it was duplicate language between the state and federal language and is not needed. In further response to a question he agreed it was duplicative language. REPRESENTATIVE FEIGE asked whether drivers operating a vehicle for commercial purposes to transport hazardous materials must comply with federal law in terms of placards and other requirements. MR. POUND answered yes, that is his understanding since hazardous materials transport falls under federal requirements. 1:50:22 PM REPRESENTATIVE FEIGE asked whether someone could get the impression the state doesn't regulate hazardous material transportation. MR. POUND answered that hazardous materials is under the total control of the federal government. He surmised the court would say ignorance is not an excuse if someone were to read the state statutes and interpret [that transportation of hazardous materials was unregulated]. 1:51:00 PM REX YOUNG, Chief, Commercial Vehicle Enforcement, Anchorage Office, Division of Measurement Standards & Commercial Vehicle Enforcement(MSCVE), Department of Transportation & Public Facilities (DOT&PF), introduced himself. 1:51:42 PM REPRESENTATIVE FEIGE asked whether the department has any opposition to the bill. MR. YOUNG answered that HB 15 is an excellent idea. Currently, a person under 19 years of age cannot drive a commercial vehicle, yet this type of vehicle can be driven with a class B drivers' license. Therefore, classifying these vehicles as commercial vehicles will keep a contractor's son from being able to get into the business. 1:52:21 PM REPRESENTATIVE JOHNSON referred to page 1, line 8-10 of HB 15, to the deleted language, which read, "AND THAT ARE NECESSARY TO AVOID LOSS OR WITHHOLDING OF FEDERAL HIGHWAY MONEY]." He asked whether this causes any problems for the department. MR. YOUNG answered no. He said the state has been sued several times, that the current language is contradictory to other parts of AS 19, in which the DOT&PF can write regulations to manage and control the highways. He explained that people use the aforementioned language as an argument in court to say the DOT&PF has too many regulations. He related it has literally cost the department hundreds of thousands of dollars. 1:53:20 PM DAN SMITH, Director, Anchorage Office, Division of Measurement Standards & Commercial Vehicle Enforcement (MSCVE), Department of Transportation & Public Facilities (DOT&PF), stated that the division supports changing the definition of a commercial vehicle from 10,000 to 14,000 pounds. The change would remove the regulatory burden on businesses that have been categorized as carriers operating commercial motor vehicles. He explained that vehicles have gotten larger and incidental use of these vehicles or combination of vehicles over 10,000 pounds now meets the definition of a commercial vehicle. He urged members to support HB 15. 1:54:39 PM REPRESENTATIVE JOHNSON asked about combination of vehicles. MR. SMITH responded an officer must determine if a vehicle is commercial vehicle or a non-commercial vehicle for enforcement purposes. Thus, either the gross vehicle weight rating (GVWR) or the combination of both vehicles when a vehicle is coupled to another vehicle is used to make that determination. 1:55:28 PM AVES THOMPSON, Executive Director, Alaska Trucking Association, Inc. (ATA) stated that the ATA is a statewide organization representing the interests of its nearly 200 member companies from Barrow to Ketchikan. He said that freight movement represents a large chunk of Alaska's economy and impacts all of us each and every day. He also said, "The simple truth is, that if you got it a truck brought it." As vehicles have grown larger they now fall into the definition of intrastate motor vehicles that have historically not been considered commercial vehicles, such as pickup trucks, small step vans, small trailers and other similar vehicles. He reported one of the ATA's legislative priorities is to change the statutory definition of an intrastate commercial vehicle to reduce the regulatory burden on small business and HB 15 accomplishes that purpose. This bill would raise the weight threshold on intrastate commercial vehicles from 10,000 to 14,000 pounds gross vehicle weight rating (GVWR) for the purpose of vehicle regulation and inspection. MR. THOMPSON said this change would assist small contractor, carpenters, service providers, and small delivery vehicles and pilot cars. In fact, pickup trucks and small vans are getting larger and heavier and are bumping up over the 10,000 GVWR, becoming by definition a commercial vehicle for inspection and safety regulation purposes. He referred to photos provided in members' packets. He identified pilot cars as the vehicles that accompany oversize loads to serve as an extension of the warning system for the oversize load. He emphasized these pilot cars are almost always used in intrastate commerce and would fall under this bill. MR. THOMPSON informed members that when a vehicle is over 10,000 pounds the driver must obtain a biannual medical certification, complete daily vehicle inspection reports, perform annual inspections, stop at all open weigh stations, and be subject to roadside inspections. Additionally, the employer must maintain a set of driver qualification files and submit annual updates to the DOT&PF to ensure compliance. He stated vehicles over the 10,000 GVWR are subject to federal regulations that have been adopted into the Alaska administrative code. Passage of HB 15 would exclude vehicles that are no more than 14,000 GVWR from unnecessary regulation; however it does not change the commercial status of intrastate vehicles for purposes of registration with the DMV. Therefore HB 15 has no fiscal impact on the state. He offered his belief these vehicles - 10,000 to 14,000 GVWR - do not need this level of scrutiny as typically these vehicles are operated in a limited geographical area and are not subject to wear and tear that other larger commercial vehicles experience. He concluded that the ATA urges members to act favorably on this bill. 1:59:04 PM MIKE MOELLER, Director, Trucking, CPD ALASKA LLC (CPD Alaska), stated that CPD Alaska, the petroleum distribution system operates statewide to deliver petroleum products. He said he is here today to speak in support of HB 15. This bill would update the statutory description of commercial vehicles, taking into account that modern vehicles are built cleaner and with greater safety considerations for their use than older vehicles. Under the bill, CPD Alaska LLC would no longer have to have personnel who drive the F-50 size trucks certified by the DOT&PF. He characterized this class of truck as a heavy-duty pickup truck. Many small businesses have been adversely affected by the DOT&PF requirements and must transfer staff from all over Alaska to Anchorage for physicals that are otherwise unnecessary. Further, these businesses must provide additional equipment and manpower to initiate and maintain records for driver qualification files for staff that does not deliver petroleum products or drive commercial vehicles as part of their normal duties. He emphasized that the additional transportation and personnel costs weigh heavily into the overall cost to operate businesses in rural Alaska. These additional costs are ultimately passed on to the customer, he said. Customers would also benefit, such as those living in McGrath with home heating fuel costs at $7.26 per gallon or in Iliamna at $7.58 per gallon, in particular, during the coldest months of the year. MR. MOELLER said, in addition to the onerous requirements placed on organizations, such as CPD Alaska, the regulations as currently written place an added strain on the Alaska commercial motor vehicle resources. He suggested these costs should be spent to oversee large commercial vehicles rather than on large pickup trucks that could easily be owned and operated by noncommercial licensed individuals with valid drivers' licenses. He urged members to support HB 15. 2:02:23 PM REPRESENTATIVE FEIGE asked for clarification on the previous name for CPD Alaska. MR. MOELLER answered that CPD Alaska was previously Crowley Petroleum Distribution. 2:02:46 PM REPRESENTATIVE FEIGE, after first determining no one else wished to testify, closed public testimony on HB 15. 2:03:14 PM REPRESENTATIVE JOHNSON moved to report HB 15 out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, HB 15 was reported from the House Transportation Standing Committee. 2:04:04 PM ADJOURNMENT  There being no further business before the committee, the House Transportation Standing Committee meeting was adjourned at 2:04 p.m.