Legislature(1993 - 1994)
03/23/1993 03:35 PM Senate TRA
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SENATE TRANSPORTATION COMMITTEE
March 23, 1993
3:35 p.m.
MEMBERS PRESENT
Senator Bert Sharp, Chairman
Senator Randy Phillips, Vice Chairman
Senator Tim Kelly
Senator Georgianna Lincoln
Senator Jay Kerttula
MEMBERS ABSENT
All Members Present
COMMITTEE CALENDAR
SENATE BILL NO. 157
"An Act relating to the control of outdoor advertising."
HOUSE JOINT RESOLUTION NO. 28
Supporting increased access near Mt. McKinley through
establishment of a visitor activity area at Kantishna.
SENATE BILL NO. 148
"An Act relating to the Alaska Railroad Corporation; and
providing for an effective date."
SENATE BILL NO. 167
"An Act relating to the distribution of the revenue obtained
from imposition of the state tax on motor fuel used in
watercraft of all descriptions; and providing for an
effective date."
SB 167 WAS SCHEDULED BUT NOT HEARD THIS DATE.
PREVIOUS SENATE COMMITTEE ACTION
SB 157 - No previous action to record.
HJR 28 - No previous action to record.
SB 148 - See Transportation minutes dated 3/11/93.
WITNESS REGISTER
Senator Steve Frank
Alaska State Legislature
State Capitol Building, Room 518
Juneau, Alaska 99801-1182
POSITION STATEMENT: Sponsor of SB 157.
David Skidmore, Legislative Staff
to Senator Frank
Alaska State Legislature
State Capitol Building, Room 518
Juneau, Alaska 99801-1182
POSITION STATEMENT: Answered questions on SB 157.
Roger Allington, Director
Division of Engineering and Operations
Department of Transportation and Public Facilities
3132 Channel Drive
Juneau, Alaska 99801-7898
POSITION STATEMENT: Answered questions on SB 157.
Representative Tom Brice
Alaska State Legislature
State Capitol Building
Juneau, Alaska 99801-1182
POSITION STATEMENT: Sponsor of HJR 28.
Irene Morris
Alaska Environmental Lobby
P.O. Box 22151
Juneau, Alaska 99802
POSITION STATEMENT: Testified in opposition to HJR 28.
Bob Hatfield, President and
Chief Executive Officer
Alaska Railroad Corporation
P.O. Box 112783
Anchorage, Alaska 99511
POSITION STATEMENT: Answered questions on SB 148
Senator Drue Pearce
Alaska State Legislature
State Capitol Building
Juneau, Alaska 99801-1182
POSITION STATEMENT: Answered questions on SB 148.
ACTION NARRATIVE
TAPE 93-16, SIDE A
Number 001
CHAIRMAN SHARP called the Senate Transportation Committee to
order at 3:35 p.m.
The first order of business was SB 157 (PROHIBITED HIGHWAY
ADVERTISING). SENATOR FRANK, sponsor of the measure,
explained the bill is identical to legislation introduced in
the House by Representative Menard. He said he has received
complaints from people who aren't allowed to advertise or
put up signs that would direct people to their businesses.
He referred to his own situation and said DOT/PF made him
remove a sign that directed people to his place of business.
Senator Frank pointed out that state law is more restrictive
than federal law. The federal law, commonly known as the
Lady Bird Law, outlaws outdoor advertising. It does allow
for exceptions in areas that are zoned for commercial or
industrial use. State law doesn't contain that allowable
use. The purpose of the bill is to make state law more in
conformance with federal law. Senator Frank said it is
important to recognize that local governments still have the
authority to regulate signage and would still have that
right under the proposed legislation. He introduced David
Skidmore of his staff, and indicated he would give more
detailed testimony.
DAVID SKIDMORE, legislative staff to Senator Frank, came
before the committee. SENATOR LINCOLN referred to page 1,
line 6, "outdoor advertising is permitted outside the right-
of-way of a state highway," and asked if that means that
there are no limits in the bill on the size, content, light
level, noise, etc. SENATOR FRANK said he is talking about
private property and indicated that there aren't
limitations. Senator Lincoln asked if the advertising could
be anything that the private owner would agree to relating
to size, etc. Senator Frank said he believes so. Senator
Lincoln referred to page 2, line 12, and questioned the
meaning of "public nuisance." Senator Frank said he doesn't
know what the answer is.
Senator Lincoln said according to DOT/PF's position paper
they have indicated that they are neutral on the bill. She
said there is a zero fiscal note and the department
indicated there would be additional work for their crews.
The position paper also states the department has concern
with billboards being an encroachment on scenic beauty. The
Division of Tourism considers the highway system to be the
single largest attraction for visitors visiting the Alaska.
The consequences will be that businesses located at similar
highway settings will be treated differently under the law.
Senator Lincoln said it is unclear to her as to whether the
department supports the bill and whether a fiscal note is
involved. She referred to page 2 of the fiscal note, "There
is likely to be an increase in illegal signs as businesses
to try to equalize their visibility with businesses located
along highways where the relaxed advertising standards would
apply." Senator Lincoln said the position of the department
isn't clear. SENATOR FRANK said currently the department
spends money telling people to take down their signs. They
also spend money taking signs down. Businesses along the
highway have expressed frustration that they can't advertise
their business or direct someone to their business. It is
inconvenient for the traveling public that is trying to find
a place of business. Senator Frank said he doesn't know
what the department's position is as they do seem to be
vague. He said it isn't his intent not to have
restrictions. Senator Frank said he hopes that during the
committee process a reasonable set of restrictions can be
developed which would help businesses along the highway and,
at the same time, not result in some of the onerous
undesirable billboard advertising.
CHAIRMAN SHARP said there are still remaining mandates and
restrictions on certain category roads throughout Alaska.
He said it is his understanding that signs will be allowed
on private land in areas not prohibited by the federal
government. SENATOR FRANK said he would work with the
committee to try and write amendments to accomplish the
purpose but not open it up to an undesirable situation.
DAVID SKIDMORE, legislative staff to Senator Frank, said the
legislation would repeal the statutory basis for Alaska's
comprehensive prohibition of roadside outdoor advertising.
The intent is to bring state law in conformance with federal
law. Currently, Alaska statute provides that all outdoor
roadside advertising is prohibited except as provided in AS
19.25.105. The statute provides that such advertising is
prohibited within 660 feet of the nearest edge of the right-
of-way along an interstate, primary, or secondary highway
except for the following types of signs: (1) Official signs
and notices; (2) Signs advertising property sale or lease;
(3) Landmark signs, school signs, and advertising on bus
benches and shelters. Mr. Skidmore said current federal
law, Title 23 of the U.S. Code Section 131, prohibits most
outdoor advertising along interstate and primary highways
while secondary highways are not regulated by the federal
government. However, with regard to the interstate and
primary highways, there are two significant exceptions.
Section 131 of Title 23 provides that, "signs may be erected
and maintained within 660 feet of the nearest edge of the
right-of-way within areas adjacent to an interstate and
primary systems which are zoned industrial or commercial
under authority of state law or in unzoned commercial or
industrial areas as may be determined by agreement between
the several states and the secretary." Mr. Skidmore said
the reference to unzoned areas will apply where the land use
pattern fits the designation of industrial or commercial.
He referred to unzoned commercial and industrial activity
and pointed out that according to Jeff Ottesen, Chief Right-
of-Way agent for DOT/PF, one business enterprise would
create an area eligible for off premise outdoor advertising.
Federal law does allow for exceptions in commercial and
industrial areas along interstate and primary highways, but
does not regulate such activity along secondary highways.
Mr. Skidmore said there has been some confusion as to which
highways would be effected by the bill as the 1991
Intermodel Surface Transportation Efficiency Act (ISTEA) did
away with the interstate, primary, and secondary highway
classification system and replaced it with a national
highway system. He noted the federal government does plan
to continue to utilize the same highway classification
scheme in dealing solely with outdoor advertising for those
highways which were classified as interstate or primary at
the date of passage of ISTEA. Section 10.46 of ISTEA did
amend federal law to stipulate that most new signs may not
be erected along highways that are designated scenic byways
under a state program. That means if and when DOT/PF does
establish a scenic highway road system in Alaska, those
positions which are made up of highways that were classified
interstate or primary as of the passage of ISTEA, will not
be subject to the industrial commercial signage exception.
Mr. Skidmore explained that there are three potential
results of SB 157. The first is secondary highways would be
released from state restrictions on outdoor advertising.
Second, signs could be erected and maintained in areas zoned
industrial or commercial along interstate or primary
highways. Third, unzoned areas in which commercial or
industrial activity takes place would also apparently have
the ability to erect and maintain signs. This would
facilitate efforts by roadside businesses to make their
presence and location known to highway travelers.
Number 316
SENATOR RANDY PHILLIPS asked Roger Allington why the state
law is so much more restrictive than federal law. ROGER
ALLINGTON, Director, Division of Engineering and Operations,
DOT/PF, said he doesn't know the answer. He said at the
present time the state has an agreement with the Federal
Highway Administration that dates back to 1968.
SENATOR LINCOLN asked Mr. Allington why the position paper
is neutral to the legislation. Mr. Allington said he thinks
that probably there are mixed emotions within DOT/PF,
officially and individually. He said he believes that there
are some legitimate reasons for outdoor advertising signs,
but on the other hand, many of us have seen areas, such as
Highway 101 out of Los Angeles where you can't see the hill
because of all the signs along the right-of-way. Mr.
Allington said the department believes that it is public
policy position that the legislature needs to address.
There being not further testimony, CHAIRMAN SHARP asked that
Senator Lincoln's office work with Senator Frank's office on
the concerns of the legislation.
Number 355
The next order of business to come before the Senate
Transportation Committee was HJR 28 (SUPPORT KANTISHNA AREA
TOURISM DEVELOPMENT), sponsored by Representative Tom Brice.
REPRESENTATIVE BRICE explained that HJR 28 requests the
National Park Service to establish a rail utility corridor
between the Healy area and the Kantishna mining district.
It endorses the idea of private sector development of a
railway into the Kantishna area as a tourism operation.
SENATOR LINCOLN questioned why there is a zero fiscal note
when a new park is being built. Representative Brice
referred to page 2, line 15, "FURTHER RESOLVED that
appropriate state agencies should work with the National
Park Service and interested members of the public and
private sectors to thoroughly investigate the potential of
establishing a rail utility corridor to Kantishna in which
the private sector could construct and operate a
transportation system and other facilities that would serve
the public needs." He said the resolution supports the
private sector in accomplishing the rail utility corridor.
Number 393
IRENE MORRIS, representing the Alaska Environmental Lobby,
testified against HJR 28. She said during this time of
severe state and federal budget cuts, the cost of a
potential corridor cannot economically be justified. Ms.
Morris said the Denali Access Task Force, in its November
1991 Report, found that the level of business activity, new
businesses, visitation, and mining did not justify
additional access. The same report concluded a new road is
not justifiable for park purposes, wildlife, economics, or
visitor services. The National Park Service has been buying
private inholdings in Kantishna and is opposed to new
commercial construction. Ms. Morris said HJR 28 also
suggests that the private sector could build a rail utility
corridor into Kantishna. Currently, DOT/PF has not
evaluated the cost of such a railway system. Road
construction estimates were over $80 million in 1992 and a
rail corridor would be even more expensive. Ms. Morris
continued to give testimony against HJR 28.
Number 417
There being no further testimony, SENATOR KELLY moved that
HJR 28 pass out of the Senate Transportation Committee with
individual recommendations. SENATOR RANDY PHILLIPS objected
for the purpose of stating that people like to see the area
in its natural state and that is what attracts people. The
railroad would detract from the very thing that the people
are trying to see in the first place. He said he would put
his own recommendation in the committee report.
SENATOR KERTTULA said if the right-of-way is acquired for
the facility the right-of-way should be limited for this
particular use. CHAIRMAN SHARP said the way he reads the
resolution is that it is restricted to railroad access only.
He asked if there was objection to Senator Kelly's motion.
Hearing no objection, the HJR 28 moved out of the Senate
Transportation Committee.
Number 475
The next order of business was SB 148 (ALASKA RAILROAD
CORPORATION). SENATOR KERTTULA gave committee members some
information regarding the corporation. CHAIRMAN SHARP asked
Mr. Hatfield if he had any comments. BOB HATFIELD,
President and Chief Executive Officer, Alaska Railroad
Corporation, indicated the committee members has the
corporation's position paper. He said he would highlight
some of the corporation's concerns relating to SB 148. Mr.
Hatfield said he is troubled by the sense of urgency
surrounding the bill and questions the need for such
urgency. The state law that created the Alaska Railroad
took four years to write and pass, which doesn't include the
time spent with the federal government which allowed the
Transfer Act to begin. The Alaska Railroad Corporation Act
was considered by and debated in both chambers of the
twelfth and thirteenth legislatures headed by both
Republicans and Democrats. The bill was also reviewed
officially and unofficially by an array of industry, civic
groups, and government bodies to ensure that the best
possible environment would be created for such a delicate
business as a railroad. There is now a bill, which is in
its third week of existence, that would make sweeping
changes to the Corporation Act. To date, the only public
testimony that has been heard by the Senate Transportation
Committee is that given by a union employee, several members
of one interest group, and himself. Mr. Hatfield said he is
troubled by some of the contents in the bill. Federal law
mandates that the Alaska Railroad Corporation be entitled to
engage in all business opportunities available to comparable
railroads. State law dictates that the corporation be
allowed to conduct its business consistent with that federal
law. State law further dictates that the corporation be
self sustaining while prudently operating a railroad in
accordance with sound business practices. He said in his
view, there is a very good reason for the provisions in the
two laws that created the Alaska Railroad Corporation. Mr.
Hatfield said all the study and debate that went into the
creation of the railroad uncovers the fact that railroads
need to use all assets available to them in order to remain
viable and competitive. Undue restrictions of their
activities can bring them down.
Mr. Hatfield said SB 148, in its present form, would cause
the legislature to have to approve the capital budget for
the Alaska Railroad Corporation each year. It would also
make it difficult of the corporation to effect large scale
emergency repairs to docks, buildings, and right-of-ways
without sacrificing all other investments for that year and,
perhaps subsequent years. SB 148 would prohibit the Alaska
Railroad Corporation from taking advantage of attractive
deals for acquisition of equipment when they arrive. The
bill would put tremendous pressure on the corporation to
increase revenues solely for the purpose of avoiding leasing
or borrowing. Mr. Hatfield said traditionally in the
transportation industry, revenues are increased either by
increasing or lowering rates according to market conditions.
It would force the corporation to apply to the legislature
to subsidize various aspects of their business such as the
Hurricane Turn and the Whittier Shuttle and others that
aren't currently compensatory to avoid borrowing. Mr.
Hatfield said it may cause the corporation to charge
municipalities and other public entities fair market value
for permits and leases in order to make up for revenue
shortfalls that could be caused by some aspects of the
legislation. It further would provide a disincentive for
bankers or other financial institutions, to lend to the
corporation for capital projects for fear that all or a
portion of that does not have the proper legislative
approval. There may be other unintended results that cannot
be adequately be addressed at this point due to the haste of
which the legislation is being considered.
Mr. Hatfield said it is troubling to the corporation that
there is a phrase which limits them to railroad and railroad
related transportation services in the state. He said the
phrase "limited to railroad and railroad related
transportation services in the state" can be interpreted to
mean "no leasing of real estate for any purpose, no drayage
service, no marketing in sales offices in the lower 48, no
true rates for points off of the Alaska Railroad Corporation
property, no warehousing or trans load services could be
conducted outside of the state, no charitable fund raising
activities, sponsorships..." Mr. Hatfield said one final
result is that it was and still is the intent of the
legislation that created the Alaska Railroad Corporation to
sell the property at some point. If the property isn't kept
at its highest and best order and if the corporation is not
competitively viable as a railroad property, any chance that
may exist for the sale of the property, if at the time seems
the appropriate thing to do, would probably be lessened
rather than heightened by the legislation.
Mr. Hatfield said currently the corporation has not
considered any suggested amendments as there are some
confusing aspects surrounding the legislation in that
originally when discussions have occurred with the Finance
Committee and others, the primary concern seems to be that
the Alaska Railroad Corporation had taken a participatory
interest in a hotel in Anchorage. The thought was that the
corporation may be doing that again in Fairbanks. He said
they are in the process of addressing that issue. Mr.
Hatfield said that the corporation was hoping to do is,
thorough the committee process, is perhaps to get a clear
idea of what results are intended from the legislation so
that they could perhaps suggest particular amendments if it
is appropriate.
TAPE 93-16, SIDE B
SENATOR RANDY PHILLIPS said the Alaska Railroad Corporation,
the Alaska Housing Corporation, the Student Loan Program,
and AIDA have to walk that fine line between private and
public. He said for the last two days he asked for a page
by page -line by line suggestions from the Alaska Railroad
Corporation. Most of those requests were denied. He said
the railroad is not a privately held corporation. State
statutes say the definition of a "corporation" is "a public
corporation and is an instrumentally of the state within the
Department of Commerce and Economic Development." He said
it was unfortunate that his request was denied.
SENATOR KERTTULA said he thinks it is a very short time to
expect a detailed response to each and every suggestible
amendment. He said there is a time that the railroad has to
report and should report, but said he doesn't believe it is
the same as the function of the other departments. Senator
Randy Phillips said he doesn't see a difference between the
Alaska Railroad Corporation, Alaska Housing Corporation,
AIDA, or the Student Loan Program. All of them are
quasi/private agencies. There was continued discussion
regarding requesting information from different agencies and
policy issues.
Number 052
SENATOR LINCOLN referred to page 7, line 19, and said it
requests that the corporation must come to the legislature
as the legislature must approve action. She asked what
happens when the legislature isn't in session.
MR. SKIDMORE said he supposes it would be up to the
committee to either draft a provision for a procedure that
the railroad would follow in the interim or amend the bill
to say the provision doesn't apply.
SENATOR DRUE PEARCE referred to the language in the bill and
said the corporation can't issue bonds or convey its entire
interest in land or incur debt except for the acquisition
and maintenance of rolling stock and bonds and debt incurred
through a short-term, less than one year, line of credit.
The railroad would have to do exactly the same thing that
other agencies of the state do. They have to plan a head
for major purchases. If they weren't able to come to the
legislature during the legislative session, they would have
to come before the legislature during the next session.
SENATOR LINCOLN inquired as to whether the corporation would
be able to purchase a car. Senator Pearce said the cars are
railroad rolling stock and they wouldn't count. She
referred to page 7, lines 27 through 28, and said you can
incur debt that does not apply to rolling stock. She said
railroad cars can be purchased.
Mr. Hatfield said the locomotives are not rolling stock nor
are locomotive cranes, etc. He said rolling stock is a term
of art. It refers to a group of freight or passenger cars
and railroad cars only. He said as he interprets the bill,
the corporation would not be able to acquire locomotives
when they come on the market. Further, should there be
damage to one of their docks, they might be able to get it
fixed but they wouldn't be able to borrow money directly for
that. Mr. Hatfield said the corporation is a corporation
meant to be self-sustaining. There was continued discussion
regarding the term "rolling stock."
CHAIRMAN SHARP said he thinks it is his intention and an
obligation of the committee to weigh the testimony and make
decisions on proposed amendments. He noted the bill has a
Senate Finance referral. Chairman Sharp said it is
intention to hold the legislation until the following
Tuesday. He encouraged that the committee members bring
suggested amendments to the next hearing and noted he will
take public testimony.
SENATOR LINCOLN suggested appointing a subcommittee to
devise language to bring back to the Transportation
Committee.
SENATOR KERTTULA indicated concern with creating inhouse
competition.
SENATOR RANDY PHILLIPS asked that the Alaska Railroad
Corporation supply the committee with page by page - line by
line suggestions.
CHAIRMAN SHARP said he believes that there are several areas
of the bill that need serious review and consideration. He
said he would check with committee members to possibly have
a work session over the weekend. He indicated the bill
would be heard again the following Tuesday.
Number 133
Chairman Sharp adjourned the Senate Transportation Committee
at 4:52 p.m.
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