Legislature(1997 - 1998)
03/09/1998 01:45 PM House FIN
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HOUSE BILL NO. 404
"An Act relating to the regulation of commercial
vehicles; relating to the temporary registration of
out-of-state commercial vehicles; relating to
registration fees for commercial vehicles; and
providing for an effective date."
REPRESENTATIVE BILL WILLIAMS, SPONSOR, testified in support
of HB 404. He noted that the purpose of HB 404 is to
improve efficiency at the Division of Motor Vehicles and to
improve efficiency and safety of freight movement into, out
of, and within Alaska. Adoption of HB 404 would also allow
the State to participate in the International Registration
Plan.
Representative Williams maintained that the current state
commercial vehicle inspection law is unworkable. The bill
proposes to conform the inspection program to inspection
criteria found in the Federal Motor Carrier Safety
Regulations.
Representative Williams added that HB 404 would also
increase temporary fees for out-of-state trucks that operate
in Alaska from $50 dollars to $350. He asserted that this
would bring Alaskan fees in line with fees charged by other
states and provinces issuing temporary permits. Revenue
generated from this fee may be appropriated to operate weigh
stations and commercial vehicle safety programs.
Representative Williams observed that HB 404 would eliminate
the requirement for annual registration of commercial
trailers. The fees collected from the registration of
commercial trailers would be transferred to the cost of
registration of commercial vehicles, or 'power units'. He
pointed out that the bill is revenue neutral. The change is
required if Alaska wants to become part of the International
Registration Plan, which allows for a simplified method of
prorating fees to other jurisdictions in which Alaska
commercial vehicles operate, and vice versa. The state and
industry will gain substantial efficiencies by not having to
issue and physically tag 20,000 commercial trailers
annually.
Representative William emphasized that House Bill 404 would
create efficiencies in government and the private sector,
and create a safer transportation environment.
Representative Davies asked if there were any safety
implications in respect to inspections that would not be
done in the future.
JUANITA HENSLEY, LEGISLATIVE LIAISON, DIVISION OF MOTOR
VEHICLES, DEPARTMENT OF PUBLIC SAFETY spoke in support of HB
404. The legislation would create efficiencies for the
Division of Motor Vehicles. The Division would not be
required to register 18,000 commercial trailers a year.
Trailers would be registered once for a lifetime fee.
Future fees would be transferred to the power units. The
Division of Motor Vehicles does not inspect trailers for
safety. Inspections are performed at weigh stations and
through the Motor Carriers Safety Assistance Program.
Co-Chair Hanley referred to page 1, lines 6 - 9. Ms.
Hensley clarified that the section refers to proof of
commercial vehicle insurance.
Ms. Hensley observed that commercial vehicles carry $700
thousand dollars in insurance. Members questioned the
difference between commercial vehicle and a vehicle for
which securities are required. Ms. Hensley could not
respond.
Representative Mulder referred to page 3. line 8. Ms.
Hensley explained that a towed vehicle is the same as a
combination of motor vehicles and is still a power unit and
a trailer.
DENNIS POSHARD, LEGISLATIVE LIAISON, DEPARTMENT OF
TRANSPORTATION AND PUBLIC FACILITIES explained that the
definition on page 3, line 8 conforms to the federal
definition. The definition does not include vehicles that
were not previously covered.
In response to a question by Representative Davies, Mr.
Poshard noted that section 20 would require a one-time
registration fee of $10 dollars per trailer. Section 18
also incorporates the change.
In response to a question by Representative Mulder, Mr.
Poshard noted that AS 28.10.152 pertains to out-of-state
vehicles that are not registered in Alaska.
AVES THOMPSON, DIVISION OF MEASUREMENT STANDARDS AND
COMMERCIAL VEHICLE ENFORCEMENT, DEPARTMENT OF TRANSPORTATION
AND PUBLIC FACILITIES, ANCHORAGE explained that AS
19.10.300(a) pertains to:
"A commercial motor vehicle or a person that carries
freight in a motor vehicle for commercial purposes or a
person who rents or leases a motor vehicle for the use
of another to carry freight should procure and maintain
security in the following minimal amount..."
Mr. Thompson noted that the statute distinguishes between
the vehicle and a rented or leased vehicle. Insurance is
needed in both cases.
Co-Chair Hanley observed that the section is confusing. He
noted that it is based on both commercial purposes and
renting or leasing for freight.
Mr. Thompson noted that the Division fully supports the
legislation.
HARRY MCDONALD, ANCHORAGE testified in support of the
legislation. He noted the importance of increasing
temporary licenses for out-of-state trucks. Most out-of-
state trucks do business without paying any fees. He
observed that there is a commitment to keep the Tok scale
open all the time. He noted that he is with a local state
trucking company. He pointed out that the private sector
would save from not having to track trailers for annual
registration.
Representative Davies referred to the definition of
commercial vehicle. He questioned if a commercial motor
vehicle can be a towed vehicle, which implies that it
doesn't have a motor.
In response to a question by Representative Davies, Mr.
McDonald clarified that safety inspections are separate to
licensing. Safety inspections would still be required
annually on the trailers.
Co-Chair Therriault asked if there are many instances where
a person who only owned a truck would have the expense of
someone else's trailer. Mr. Thompson noted that anyone who
is pulling a trailer is either being paid by someone to pull
it or pulling it for hire. He felt that it would come out
even in the end.
Co-Chair Hanley referred to AS 19.10.300(a). Mr. Thompson
noted that 26,000 pounds is the weight a vehicle requires a
commercial license to drive, unless it has hazardous
materials. A commercial license is required for any vehicle
that is carrying hazardous materials, regardless of weight.
FRANK DILLON, EXECUTIVE VICE PRESIDENT, ALASKA TRUCKING
ASSOCIATION, INC. explained that the commercial vehicle
licensing law looks at commercial vehicles in terms of the
operator's license to drive with a weight threshold of
26,000 pounds. The language on page 3, "self propelled or
towed" makes sure that when the trailer is released from the
further definition of registration that they are still under
safety requirements for the purpose of commercial motor
vehicles. The intention is that trailers are still
considered commercial vehicles and required to follow
inspection laws. He observed that the dollies that connect
sets of trailers together are considered vehicles even
though they cannot go anywhere on their own. For the
purpose of insurance, definition, and commerce a trailer is
considered a vehicle, not a motor vehicle. He maintained
that the legislation clarifies and narrows the scope of
existing statute, so that it is more understandable and
enforceable than existing statute.
Mr. Dillon noted that the legislation requires proof of
insurance. He observed that changes were carefully made to
prevent unintended consequences. The intention is to give
more authority to weight station operators to do truck
inspections. He stressed that persons who weigh trucks
would be able to inspect them and put them out of service if
they are found to be unsafe. The merger of the Commercial
Vehicle Unit and the Division of Measurements and Standards
into the Department of Transportation and Public Facilities,
which took place by executive order last year, was a step in
this direction. The legislation further refines the
authority. He noted that resources for inspections are
still lacking.
Mr. Dillon stressed that the legislation would authorize the
practice of self-inspections. On the road inspections would
still take place. One federal standard would apply.
Inspections can also take place at a professional shop.
Companies that employ professional mechanics can do
inspections in house. Current statute prohibits self-
inspections, but has not been enforced.
Mr. Dillon noted that fees would be increased for out-of-
state trucks. He observed that the Tok weigh station is
open less than 40 percent of the time. A lot of trucks that
come into the state do not register in the state of Alaska.
If they do stop at Tok they have the choice of buying a $10
or $50 dollar permit. The legislation would require a $350
dollar 30 day renewable permit. He maintained that the fee
is in line with what other states charge. He observed that
$300 - $500 thousand dollars in additional fees would be
collected from out-of-state trucks. The legislation
contains intent language stating that this money may be
appropriated for use at weigh stations.
Mr. Dillon pointed out that annual registration of
commercial trailers would be eliminated. There is no safety
inspection attached to registration. Registration can be
done electronically. The legislation takes the revenue that
is collected on trailers and transfers it to corresponding
weights in the power unit area. Fees for smaller trailers
are transferred to smaller trucks. Fees for larger trailers
would be transferred to larger trucks and tractors. The
cost increase would range from $30 to $100 dollars annually.
He maintained that the fee would be offset through the
economic process and negotiations. More than 90 percent of
Alaska's freight comes in on trailers. The Division of
Motor Vehicles would save approximately 20,000 transactions.
The change only refers to commercial vehicle use.
Mr. Dillon referred to sections 18 and 19. He noted that
license fees are paid annually or biennially. He did not
think that increases in fees would place a hardship on
anyone's business. He acknowledged that individuals that
only own a truck would not see an economic benefit from the
legislation. He pointed out that the change in trailer
registration would benefit interstate commerce. He
maintained that there would be increased efficiencies way
through the entire state economy.
(Tape Change, HFC 98 -59, Side 1)
In response to a question by Representative Moses, Mr.
Dillon noted that an owner operator in Anchorage who pays an
increased fee of $30 dollars, grosses between $50 and $80
thousand dollars a year in 8 months. He did not think a
$30 dollar increase would be a burden. There would be a
maximum increase of $100 dollars per tractor.
Mr. Dillon clarified that trailers owned and operated by Sea
Land are registered in the state of Alaska. Out-of-state
trailers would be subject to a $350 dollar fee. He asserted
that the fee is not excessive. He noted that Alaska has
fewer requirements and lower fees for interstate commerce
than other states. He pointed out that owners would have
the option of licensing their vehicles in Alaska.
Mr. Dillon emphasized that the entire shift in revenue is
approximately $1.6 million dollars in a $7 billion dollar
economy. He reiterated that the legislation will gain
substantial efficiencies.
Mr. McDonald agreed that all of the Sea Land trailers are
registered in Alaska. He observed that the main impact of
the fee would be on trucks coming across the border.
PETER BLANAS, LINE DRIVER, TEAMSTERS UNION, ANCHORAGE
testified in support of HB 404. He emphasized that the
legislation would charge out-of-state fees for trucks
entering Alaska. He maintained that the number of out-of-
state trucks have increased and are taking work away from
Alaskans. He maintained that outside operators pay almost
no fees. He spoke in support of full-time operation of
state scales. He stressed that lack of enforcement is a
factor in vehicle accidents. Scale operators also appraise
drivers in regards to driving conditions and summon help in
emergencies. Money collected from outside operators could
be used to fund the Department of Transportation and Public
Facilities' inspection program. He only received one truck
inspection in the last four years. He noted that the
inspection was at his own request.
WILLIAM GATES, OWNER OPERATOR, SEA LAND, ANCHORAGE spoke in
support of the HB 404. He emphasized the need for safety
checks and full-time operation of the Tok weigh station. He
noted that the Tok weigh station is not open at night or on
the weekends. He stated that he could support the
additional $100 dollar licensing fee in order to ensure that
the inspection teams and weigh stations have sufficient
funding.
BARBARA HUFF TUCKNESS, DIRECTOR, LEGISLATIVE AND
GOVERNMENTAL AFFAIRS, TEAMSTERS LOCAL 959 testified in
support of HB 404. She referred to a letter by Jerry Hood,
Secretary-Treasurer, Teamsters Local 959 to Co-Chair
Therriault, dated 3/6/98. She stated that their first
concern is that the weigh stations be operational 24 hours a
day, seven days a week. She maintained that weigh stations
are open no more than 30 percent of the time. She asserted
that trucks are not being inspected in a safe manner. She
anticipated that some of the revenues generated by the
legislation would go toward continued funding of the weigh
stations.
Representative Davies asked if money needs to be
appropriated to open the weigh stations so that the money
can be collected.
Mr. Thompson clarified that the Tok weigh station was opened
24 hours, seven days a week during part of April and all of
May 1997. He stated that the proceeds from the legislation
would be used to fund weigh station operations and
commercial vehicle safety inspections. Tok would be
operated 24 hours a day, seven days a week. He noted that
expected revenues would be jeopardized if the Tok weigh
station is not fully operational.
Mr. Dillon clarified that trailers will only pay $10 dollars
for registration. Only power units would pay $350 dollars
for registration.
Mr. Thompson emphasized that the legislation solves some
very vexing problems through private sector/government
cooperation.
Representative Davies provided members with Amendment 1
(copy on file). The amendment would further clarify the
definition of commercial vehicles. He observed that he
might pursue the amendment at a later date.
Representative Davies provided members with Amendment 2
(copy on file). He explained that the amendment would add a
new section. The amendment is at the request of the
Department of Administration, Division of Motor Vehicles.
Ms. Hensley explained that the amendment would add a new
section 18. The amendment would allow non commercial
trailers to be registered with a one-time fee. The trailer
would not have to be reregistered unless it is sold. The
amendment would cover snow machine, boat trailers, house
trailers, box trailers, baggage trailers, and utility
trailers. She observed that the fee could be set by the
Legislature. The amendment calls for a $50 dollar fee. She
observed that 78,839 trailers were registered in 1997. She
observed that these trailers would only have to be
registered once more unless they were sold. She emphasized
that the amendment would add to the Division's efficiency.
The trailers could be registered through the mail. A
registration sticker would be issued for the lifetime of the
trailer.
Ms. Hensley clarified that trailers are currently registered
biennially for $10 dollars. The lifetime registration is
transferred to the new owner when the trailer is sold. The
new owner would only have to pay a transfer fee. Ms.
Hensley maintained that the seller would recoup the cost of
the trailer's registration.
Representative Kelly pointed out that the purpose of the
legislation is to regulate commercial trailers and vehicles.
The amendment is outside of the legislation's intent. Ms.
Hensley observed that the amendment is the result of
efficiency measures recommended by a reengineering team of
the public and private sectors.
Co-Chair Therriault questioned the financial impact of the
lifetime $50 dollar fee. Ms. Hensley observed that a $50
dollar fee spread over two years would be approximately $1.9
million dollars for each of the two years. She estimated
that 7,000 vehicles would be registered after the initial
two-year registration. Co-Chair Therriault observed that
revenues would be negatively affected in the out years.
Representative Davies pointed out that there would be
savings from a reduction of transactions. Ms. Hensley
stressed that the Department would like to move employees
from backroom operations to the front counter, in order to
reduce waiting lines at Division of Motor Vehicle counters
to no longer than 15 minutes. She noted that some areas
have waiting times of greater than 2 hours.
In response to a question by noted that transactions cost
the Division between $105 to $5 dollars each. Co-Chair
Hanley observed that 70,000 trailer registrations would be
reduced annually. He estimated that there would be a $350
thousand dollar savings as the result of the legislation.
Ms. Hensley requested that the Division of Motor Vehicles be
held harmless in order to meet their service goals.
Co-Chair Hanley pointed out that the savings would not
appear until after the two-year registration period. Co-
Chair Hanley spoke in support of the proposal.
Representative Davies stated that he would be more
supportive if the savings were rebated to the people making
the registration. He spoke in support of reducing the
registration fee.
Co-Chair Therriault pointed out that registration is based
on a 10-year life span. He suggested that trailers would
last longer than 10 years.
Representative Davis questioned if lifetime registration
could be presented as a voluntary option. Co-Chair Hanley
spoke against combining options.
Representative William stated that he supported the
amendment's concept, but requested that the issue be
addressed separately.
Representative Davis WITHDREW Amendment 2.
Representative Foster MOVED to report CSHB 404 (TRA) out of
Committee with the accompanying fiscal notes. There being NO
OBJECTION, it was so ordered.
ADJOURNMENT
The meeting adjourned at 4:00 p.m.
House Finance Committee 12 3/9/98
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