03/25/2003 01:32 PM House TRA

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* first hearing in first committee of referral
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ALASKA STATE LEGISLATURE HOUSE TRANSPORTATION STANDING COMMITTEE March 25, 2003 1:32 p.m. MEMBERS PRESENT Representative Jim Holm, Co-Chair Representative Beverly Masek, Co-Chair Representative Hugh Fate Representative Vic Kohring Representative Dan Ogg Representative Mary Kapsner Representative Albert Kookesh MEMBERS ABSENT All members present COMMITTEE CALENDAR SENATE BILL NO. 77 "An Act naming the William Ransom Wood Centennial Bridge in Fairbanks." - MOVED SB 77 OUT OF COMMITTEE CS FOR SENATE CONCURRENT RESOLUTION NO. 1(FIN) Relating to economic development generated by new road construction and to the design and construction of the Hot Springs Loop Road to connect Chena Hot Springs and Circle Hot Springs, of a highway along the Bradfield/Iskut Rivers transportation corridor, of the Knik Arm Crossing, of a road from Iliamna Bay to Pile Bay, and of other roads and highways. - MOVED HCS CSSCR 1(TRA) OUT OF COMMITTEE HOUSE BILL NO. 173 "An Act relating to a fee on studded tires; and providing for an effective date." - HEARD AND HELD HOUSE BILL NO. 156 "An Act increasing the motor fuel tax and repealing the special tax rates on blended fuels; and providing for an effective date." - SCHEDULED BUT NOT HEARD HOUSE BILL NO. 170 "An Act increasing certain motor vehicle registration fees; and providing for an effective date." - SCHEDULED BUT NOT HEARD PREVIOUS ACTION BILL: SB 77 SHORT TITLE:WILLIAM RANSOM WOOD CENTENNIAL BRIDGE SPONSOR(S): SENATOR(S) WILKEN Jrn-Date Jrn-Page Action 02/19/03 0227 (S) READ THE FIRST TIME - REFERRALS 02/19/03 0227 (S) STA 03/06/03 (S) STA AT 3:30 PM BELTZ 211 03/06/03 (S) Moved Out of Committee 03/06/03 (S) MINUTE(STA) 03/10/03 0448 (S) STA RPT 3DP 03/10/03 0448 (S) DP: STEVENS G, COWDERY, DYSON 03/10/03 0448 (S) FN1: ZERO(DOT) 03/12/03 0475 (S) RULES TO CALENDAR 3/12/2003 03/12/03 0476 (S) READ THE SECOND TIME 03/12/03 0476 (S) ADVANCED TO THIRD READING UNAN CONSENT 03/12/03 0476 (S) READ THE THIRD TIME SB 77 03/12/03 0476 (S) PASSED Y19 N- E1 03/12/03 0480 (S) TRANSMITTED TO (H) 03/12/03 0480 (S) VERSION: SB 77 03/14/03 0531 (H) READ THE FIRST TIME - REFERRALS 03/14/03 0531 (H) TRA 03/14/03 0548 (H) CROSS SPONSOR(S): FATE, STOLTZE 03/19/03 0591 (H) TRA REFERRAL WAIVED 03/19/03 0596 (H) CROSS SPONSOR(S): LYNN 03/24/03 0621 (H) RETURNED TO TRA COMMITTEE 03/25/03 (H) TRA AT 1:30 PM CAPITOL 17 BILL: SCR 1 SHORT TITLE:SUPPORT ROADS/HOT SPRINGS LOOP ROAD SPONSOR(S): SENATOR(S) WILKEN Jrn-Date Jrn-Page Action 01/21/03 0012 (S) READ THE FIRST TIME - REFERRALS

01/21/03 0012 (S) Committee 2NR Committee MINUTE(TRA) 532 Committee HOFFMAN, STEVENS G, GREEN RECONSIDERATION READING N2 E1 A1 REFERRALS BILL: HB SHORT TITLE:FEE FOR STUDDED TIRES SPONSOR(S): RLS BY REQUEST OF THE GOVERNOR Jrn-Date Jrn-Page Action REFERRALS MINUTE(TRA) WITNESS REGISTER TIM LAMKIN, Staff to Senator Gary Wilken Alaska State Legislature Juneau, Alaska POSITION STATEMENT: Presented sponsor statement for SCR 1. CHUCK McGEE, U.S. Representative for Ugigrip Denver, Colorado POSITION STATEMENT: Testified in opposition to SB [Contains discussion of 77, meeting [on March 11, 2003]. Number 0181 TIM LAMKIN, Staff to Senator Gary Wilken, Alaska State Legislature, presented SCR CO-CHAIR HOLM announced that the next order of business would be CS FOR SENATE CONCURRENT RESOLUTION NO. 1(FIN), Relating to economic development generated by new road construction and to the design and construction of the Hot Springs Loop Road to connect Chena Hot Springs and Circle Hot Springs, of a highway along the Bradfield/Iskut Rivers transportation corridor, of the Knik Arm Crossing, of a road from Iliamna Bay to Pile Bay, and of other roads and highways. Number 0410 SENATOR GARY WILKEN, Alaska State Legislature, sponsor began his testimony by saying he wanted the committee to consider what is possible in Alaska if there is courage to look ahead and build roads that would benefit residents, visitors, and entrepreneurs interested in developing land that is touched or accessed by the proposed roads. He said there are six roads that have been proposed for consideration and/or evaluation in this resolution. Senator Wilken began his PowerPoint presentation with a map of the proposed Hot Springs Loop Road, and oriented the committee by pointing out locations such as Chena Hot Springs, Circle Hot Springs, Fairbanks, the Steese National Conservation Area, Circle, and the Yukon River access. He said the loop road would connect Chena Hot Springs, a well- developed year-round tourist resort, to Circle Hot Springs; the trip could then become a two- or three-day trip in which one night is spent at each location. SENATOR WILKEN continued with a map of the second of the six proposed roads, the Bradfield/Iskut River Transportation Corridor. He oriented the committee to locations such as Wrangell and the Cassiar Highway. He said "this little piece of road" bypasses thousands of miles and connects Alaska with the [rest of the] world through the Alcan Highway and provides an alternate route from the road that goes through Skagway and Haines. He said there would be one tunnel, and instead of the flow going north, the flow would come south through the Alcan Highway. SENATOR WILKEN proceeded to describe the third proposed road, the Knik Arm Crossing. He noted that many people are already familiar with this project, and said that this is a billion- dollar project that opens up areas in the Anchorage area for development. SENATOR WILKEN went on to describe the proposed Pile Bay Road, pointing out Homer on the map, and saying that the project would provide fishermen access to two different fisheries. He told the members that the Department of Transportation & Public Facilities (DOT&PF) has a good presentation on this project, and explained that this road would require a couple of bridges and involves some "nasty stretches." However, it opens up the area to residents, and the commercial fishing industry, and it would also be a great drive for tourists. He added that it is about SENATOR WILKEN then showed a slide of the proposed 15-mile Donlin Creek Road, and pointed out the Kuskokwim River and Donlin Creek. He told members that there are gold resources and other minerals in that area and, a generation from now, it will transform the Southwestern area of Alaska, which is in need of industrial development. He said the way he sees it, this is, comparatively speaking, a road to Fort Knox [mine] which, by providing access, would be of benefit. Number 0864 SENATOR WILKEN completed his presentation with the proposed sixth road; the 2.5-mile Rock Creek Access Road near Nome. He said the road leads across the peninsula to a gold mining area. SENATOR WILKEN reiterated that there is a common thread running through all of the proposed six roads that are included 1. "1) Do they benefit the existing population? 2) Do they provide opportunity for tourists? 3) Do they allow development of the roads that they provide access to, or are they contiguous?" CO-CHAIR MASEK thanked Senator Wilken for the maps provided [as a PowerPoint presentation and in the committee packets] and for the presentation of the proposed roads projects. She asked if SCR 1 whom the resolution would be forwarded. SENATOR WILKEN replied that although this had not been addressed, the list would be the "standard distribution list," from the President on down. CO-CHAIR MASEK wondered about the feasibility of the Hot Springs Loop Road, noting that the terrain near Chena Hot Springs was hilly, and the area includes a lot of wetlands. SENATOR WILKEN said that the road does not go quite to Chena Hot Springs, but is within 5 or 10 miles of [Chena] Hot Springs. He said there is a preliminary run - there are some R.S. 2477 trails through the area that are available, if "we assert them." He said, "The topography appears to accept a road, with normal road-building possibilities." Senator Wilken noted that a study was done in the 1980s on this project. Number 1027 REPRESENTATIVE OGG offered an amendment regarding a road that would open up the west side of Kodiak Island. He said this road would be of benefit to residents in the area, would contribute to increased tourism, and should also support the fisheries industry - thereby meeting the three criteria that Senator Wilken referred to earlier. The written amendment read [original punctuation provided]: p.4 Line 8, ADD: FURTHER RESOLVED that the Alaska State Legislature supports the completion of the identified needed improvements prioritized by the Alaska DOT STIP program for the realignment, reconstruction and providing of hard surface to Anton Larsen Bay Road on Kodiak Island. REPRESENTATIVE FATE said he understands the amendment and that there are other roads being proposed throughout the state that are short and connect villages in rural Alaska. He questioned whether this amendment would entertain other similar proposals, or if it pertained to this specific road. Representative Fate asked if this project had already been surveyed, proposed, or was in need of funding. He asked Representative Ogg for further clarifying information. REPRESENTATIVE OGG said the road does exist; however, it is in very poor shape and is in need of funding. REPRESENTATIVE FATE said he was speaking to the concurrent resolution as well as to the amendment. He said the roads that were included in SCR needs and did not pertain to roads that have already been funded or earmarked, or where the design had been completed. He questioned the appropriateness of incorporating this amendment into SCR 1. SENATOR WILKEN said the intent of the CSSCR Standing Committee. The committee took an at-ease at 2:10 p.m. HB CO-CHAIR HOLM announced that the next order of business would be HOUSE BILL NO. 173, "An Act relating to a fee on studded tires; and providing for an effective date." [A proposed committee substitute (CS), Version 23-GH1127\D, Kurtz, 3/12/03, had been adopted on 3/18/03.] Number 1731 CHUCK McGEE, U.S. Representative for Ugigrip, testified in opposition to HB manufacturer. He referred to written materials submitted to the committee and then provided the following testimony: Ugigrip is in opposition to HB He told the members that he has heard the argument that studless tires perform as well as studded tires and said in some cases they do. The problem is that the cost of studless tires is $40 to $60 higher than the cost of the studded tires. The majority of the public does not buy [studless tires] now because they cost a lot more and because they are concerned with their safety in driving with a studless tire. He pointed out that the highways get smoother with use from the lack of studded tires, which makes roads more dangerous. Mr. Easley mentioned the ruts in the roads and said he is not convinced that these ruts are caused from studded tires; he believes they may be caused by the regular high traffic volume. He questioned whether the state has done any studies on this and explained that there are examples of road surfaces that were surfaced in the spring and have ruts in the summertime, prior to studded tire use. For example, Fifth Avenue in Anchorage in 1997 or 1998 and the Seward Highway in 1999 to 2000 [were surfaced in the spring and had ruts in the summer], he said. MR. EASLEY asked the members if this bill is being put through as a fee so the public cannot vote on it and shoot it down because citizens do not want new taxes. In closing, Mr. Easley told the members that he is all for preserving the roads, but to have to charge $88 for a snow-tire changeover is absurd, and he believes there must be another way. He said he has a report called "The Options Of Reducing Stud Related Pavement Wear," dated September 1996, by the Department of Transportation & Public Facilities, and told the members the findings are very interesting. The state's own report indicates that lightweight studs offers the same stopping protection as older, heavier studs and lasts just as long. Another finding in the study shows that requiring the use of the lighter-weight studs can reduce pavement wear up to 50 percent. The use of stone, asphalt, and concrete mix, which contains a higher percentage of course aggregate, can reduce wear up to 25 percent to 50 percent. CO-CHAIR HOLM asked Mr. Easley if he is in favor or opposed to the bill, and if he believes tires will not sell if this bill is passed. MR. EASLEY responded that he is not in favor of the bill. He asked if this fee would be charged every time a customer came in to have his or her tires changed. CO-CHAIR HOLM clarified that point, saying that the fee is only charged on new tires. Number 1894 BRYAN McMAHAN, American Tire Warehouse, testified in opposition to HB 173. because he believes it is poorly written. He said he wonders what the point of the legislation is. Mr. McMahan told the members there are conflicting reports on the extent of damage done by studded tires on the road surfaces. One report shows that the damage is caused by snow-and-ice removal vehicles that are equipped with steel grader blades that are bouncing, chipping, and sparking as they move along. He said he believes there are better ways to raise money for the state than to pass laws that unfairly penalize a group of vehicle owners who are trying to equip their vehicles so they can drive as safely as possible. He recommended a $50 to $100 road-use fee that could be collected when the vehicle is registered, with no exceptions. He suggested another option: implement a statewide sales tax that reaches all consumers, military, vacation travelers, and visitors. Mr. McMahan told the committee he believes the policy of burdening the business and property owners has gone on too long. In closing, he said he supports other methods of revenue generation, but not a studded tire fee. Number 1784 JANENE SIKKINK, American Tire Warehouse, testified in opposition to HB 173. a lifelong Alaskan, business owner, homeowner, and employee of American Tire Warehouse. She said she is opposed to because she is opposed to singling out one group of citizens to bear the burden of revenue collection. Ms. Sikkink said the fee is way too high and not proportional to an individual's purchase. It does not capture individuals who bring in studded tires on their vehicles from other states. She said since the local, state, and federal government is exempted from this fee, the tax would not reach those who are creating the greatest damage to the roadways. Ms. Sikkink pointed out that this fee in some cases requires consumers to pay up to 25 percent in a tax for a purchase to ensure their safety. She said she agrees with the previous speaker that a statewide sales tax should be levied at 2 percent or 3 percent. MS. SIKKINK told the members that she believes American Tire Warehouse will be perceived negatively by its customers because it will be forced to collect money [taxes]. She pointed out that the $1,200 fee the company would be allowed to keep each year would not account for the lost revenue in tire sales and studding, or the loss of goodwill from its customers. Another point she wanted to make is that some individuals will put the tires on themselves, and in doing so incorrectly, could cause a lot of accidents, raise the cost of insurance, and not achieve what the committee is intending. Ms. Sikkink closed her comments by saying she is opposed to HB 173. meeting [House Transportation Standing Committee, March 18, and Operations Manager, Southcentral District, Northern Region, Department of Transportation & Public Facilities], who spoke right after him, gave the members incorrect information. This concerns him, he said, because he is hearing the information provided being repeated as though it is accurate. One point he mentioned about a machine that tests for studded tire wear should not be considered accurate because the machine is faulty. Mr. Snyder expressed his desire to be a tire dealer, not a tax collector. He also questioned the notion that $2 million would be raised by implementing this fee, but he said he believes there are a lot of Alaskans out there that will not pay the fee and the result will be that a lot of people's safety will be jeopardized. Number 1259 BRUNO WESSEL testified in opposition to HB He told the members that he has reviewed the proposed committee substitute and is satisfied that it addresses both the governor's intent and the necessary changes to enable the Department of Revenue to efficiently administer the fee. Commissioner Corbus told the members that HB requested further clarification by asking if the question is the effectiveness of charging a $2.50 fee every time studded tires are installed on a vehicle. REPRESENTATIVE FATE asked if there had been any studies on using a small fee per studded tire instead of the $10 fee that would be imposed at the point of sale. MR. MacKINNON responded that it becomes a practical issue on collecting [the fee]. He pointed out that it is difficult to evade paying the fee when studs are installed in a tire. It is difficult for individuals to install studs in their own garage because it takes particularly specialized equipment. However, individuals can install their own tires when the tire is already on rims; then it is just a matter of taking one tire off and putting the other tire on. It would be a very difficult mechanism to put a fee in place to collect every time studs are put on a vehicle. REPRESENTATIVE FATE commented that he was just informed that the speaker who mentioned a reduced fee [$2.50 per tire] was referring to all tires, not just studded tires. He said he believes that people would be willing to pay a small fee. Representative Fate said he believes collecting the fees would not be difficult, but setting up the process might be more difficult. He told the committee he believes that there has not been any evaluation of a lower fee on tires. CO-CHAIR HOLM noted there are two types of studs, steel studs and lightweight studs. He asked if it is possible that those who produce or install the studs will change from the lightweight studs to the steel studs because of the additional fee. MR. MacKINNON replied that as he understands it, lightweight studs are more expensive to buy than the heavy-weight [steel] studs. He said he doubted that would happen because of the cost factor. One of the major tire dealers in the state uses lighter-weight studs because they believe it is a better product and less damaging to the roads. CO-CHAIR HOLM commented that in 1999, Co-Chair Masek had had a bill that would require tire manufacturers to use only lightweight studs. He asked if that bill would be beneficial to the program. MR. MacKINNON responded that would help, because it would reduce the tire wear on the highways to a small degree. He explained that studded tire wear is a function of velocity or speed of the vehicle and weight of the vehicle. On higher-speed roads where there is typically more vehicle traffic, there is much greater wear. Mr. MacKinnon added that the other bill would help, but this bill actually provides revenue to the state to offset the cost of the damage done to roads. Number 0356 REPRESENTATIVE KOHRING expressed his appreciation of the administration's efforts to raise money, even though he disagrees with this as a tax issue. He said he is concerned about the administration's efforts to implement taxes when last fall there were campaign pledges of no new taxes. Representative Kohring said he will work with the administration to cut bureaucracy in other areas. REPRESENTATIVE OGG asked about the language in the bill that refers to exempting local, state, and federal agencies from this fee. He asked if this is a statutory requirement, and he asked why the federal government is included in the exemption [page 2, lines 5-6]. COMMISSIONER CORBUS responded that one branch of government cannot tax another branch of government. Number 0154 CO-CHAIR HOLM announced that public testimony is closed, and the bill will be held until the next meeting of the House Transportation Standing Committee. ADJOURNMENT There being no further business before the committee, the House Transportation Standing Committee meeting was adjourned at 2:58 p.m.

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