Legislature(1993 - 1994)
03/31/1994 03:38 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 31, 1994
3:38 p.m.
MEMBERS PRESENT
Senator Bert Sharp, Chair
Senator Tim Kelly
Senator Jay Kerttula
MEMBERS ABSENT
Senator Randy Phillips, Vice Chair
Senator Georgianna Lincoln
COMMITTEE CALENDAR
SENATE BILL NO. 327
"An Act amending the motor fuel tax to establish a different tax
levy on residual fuel oil used in and on watercraft; and providing
for an effective date."
SENATE BILL NO. 343
"An Act relating to the operation of courtesy cars at certain
airports."
SENATE RESOLUTION NO. 4
Requesting the federal government to reduce automobile emissions
inspections in Alaska to every two years.
SENATE BILL NO. 227
"An Act relating to terminal rental adjustment clauses for motor
vehicles and trailers."
CS FOR HOUSE BILL NO. 407(STA)
"An Act relating to issuance of commemorative gold rush motor
vehicle license plates; and providing for an effective date."
PREVIOUS SENATE COMMITTEE ACTION
SB 327 - See Transportation minutes dated 3/10/94.
SB 343 - No previous senate committee action.
SR 4 - No previous senate committee action.
SB 227 - See State Affairs minutes dated 2/16/94 and Labor &
Commerce minutes dated 3/10/94.
HB 407 - No previous senate committee action.
WITNESS REGISTER
Gary Paxton, City Administrator
City & Borough of Sitka
304 Lake Street, Sitka, AK 99835¶747-3294
POSITION STATEMENT: in favor of SB 327
Jim Burns, Senior Vice President
Marketing
Petro Marine Services
3111 C St., Suite 500, Anchorage, AK 99503¶562-5000
POSITION STATEMENT: in favor of SB 327
Dan Coffey, Co-Owner
Dollar Rent-a-Car
207 E. Northern Lights, #200, Anchorage, AK 99503¶274-3385
POSITION STATEMENT: in favor of SB 343
Helvi K. Sandvik, Deputy Commissioner
Department of Transportation & Public Facilities
3132 Channel Drive, Juneau, AK 99801-7898¶465-6973
POSITION STATEMENT: opposes SB 327
Gary Zimmerman
Alaskan Rent-a-Car, Inc.,
Avis
P.O. Box 190028, Anchorage, AK 99519¶243-4300
POSITION STATEMENT: opposes SB 343
Glenn Holdahl
Hertz Corporation
4555 Int'l Airport Rd., Anchorage, AK 99502¶243-3376
POSITION STATEMENT: opposes SB 343
Teresa Winter
Budget Rent-a-Car
2580 W. 50th Ave., Anchorage, AK 99502¶243-6750
POSITION STATEMENT: opposes SB 343
Bernie Smith
Tesoro Alaska Petroleum Company
P.O. Box 3369, Kenai, AK 99611¶776-8191
POSITION STATEMENT: in favor of SB 327
Leonard Verrelli, Chief
Air Quality Management Section
Department of Environmental Conservation
410 Willoughby Ave., Suite 105, Juneau, AK 99801-1795¶465-5100
POSITION STATEMENT: testified on SR 4
ACTION NARRATIVE
TAPE 94-10, SIDE A
Number 001
CHAIRMAN SHARP calls the Senate Transportation Committee meeting to
order at 3:38 p.m.
Number 006
CHAIRMAN SHARP brings up SB 327 (TAX ON RESIDUAL MARINE FUEL OIL)
as the first order of business before the Senate Transportation
Committee and notes the presence of a proposed committee
substitute.
Number 021
SENATOR KERTTULA makes a motion to adopt the CSSB 237(TRA) in lieu
of the original bill.
Number 023
CHAIRMAN SHARP acknowledges the motion and says it will be approved
when the committee has a quorum. The chairman calls Mr. Paxton to
testify and asks Mr. Paxton if he has the committee substitute in
front of him.
Number 030
GARY PAXTON, City Administrator for the City & Borough of Sitka,
testifying from Sitka, replies he does have the cs in front of him.
Mr. Paxton states he submitted a letter to the committee on behalf
of the City & Borough of Sitka. Mr. Paxton highlights several
aspects of that letter.
SENATOR KERTTULA asks Mr. Paxton how much local tax the City &
Borough of Sitka will add if the legislature reduces the state tax.
Number 078
MR. PAXTON replies the intention of the City & Borough of Sitka is
not to add a local tax, except for the local sales tax. There is
a cap on the local sales tax of 1,000$.
Number 085
CHAIRMAN SHARP thanks Mr. Paxton for his testimony and calls the
next witness.
Number 088
JIM BURNS, Senior Vice President for Marketing, Petro Marine
Service (PMS), testifying from Anchorage, states he has testified
previously on SB 327 and supports the committee substitute. Mr.
Burns says he would be happy to answer any questions committee
members might have.
Number 095
CHAIRMAN SHARP asks if there are any questions for Mr. Burns.
Hearing none, the chairman refers people to the sectional analysis
of the cs for explanation of the changes to the bill. The cs
guarantees that the state will continue to receive the present
amount of revenue of 205,000$ before the tax is reduced from 5
cents to 1 cent. It would be done on a refundable basis by the
Department of Revenue. The bill defines passenger watercraft and
residual fuel oil. It also establishes an immediate effective date
and a sunset date of June 30, 1998. Those are the primary changes
that were desired by the committee at the last meeting. The
chairman asks if anyone else wishes to testify.
SENATOR KERTTULA makes a motion to discharge CSSB 327(TRA) from the
Senate Transportation Committee.
CHAIRMAN SHARP says the bill will be moved when the committee gets
a quorum. In the meantime, the bill will be set aside.
Number 115
CHAIRMAN SHARP brings up SB 343 (COURTESY CARS OPERATED AT
AIRPORTS) as the next order of business before the Senate
Transportation Committee meeting. The chairman calls the first
witness.
Number 127
DAN COFFEY, Co-Owner, Dollar Rent-a-Car, testifying from Anchorage,
states Dollar Rent-a-Car supports SB 343. Mr. Coffey supports the
changes being worked on in the house legislation, which would state
the department would not be able to impose a charge or a fee based
on the revenue of a business located outside the terminal area
which operates a courtesy car. Dollar Rent-a-Car supports those
changes because they think a tax of 8% of the gross revenue of
their business from the airport is a confiscatory rate of taxation.
For comparison, in-terminal rental agencies receive a counter,
covered parking for rental vehicles, uncovered parking, and all the
benefits associated with being on-terminal for a fee of
approximately 9.1% of their gross revenues. For only a 1.1% higher
fee, the in-airport agencies receive disproportionately higher
benefits. The off-airport rental agencies would not be opposed to
a permitting system or a fee system, if it were imposed relative to
the benefits received. We view SB 343 as an effort by the airport
and the on-airport agencies to protect their turf.
MR. COFFEY states the airport is, unfortunately, looking towards
small business to make up their revenue shortfall, and is doing it
in a manner which is very onerous to the small business operator.
Number 198
CHAIRMAN SHARP asks if there are any questions for Mr. Coffey from
committee members. Hearing none, the chairman calls a
representative from the Department of Transportation & Public
Facilities (DOT) to testify.
Number 212
HELVI SANDVIK, Deputy Commissioner, Department of Transportation,
states she is representing the airports in this particular case.
Ms. Sandvik states DOT has submitted a position paper and a zero
fiscal note on SB 343. In reanalyzing SB 343, Ms. Sandvik has
concluded that there will probably be a slight fiscal impact of
about 6,000$ per year to collect the fees with an initial start-up
cost of about 25,000$. DOT is opposed to the bill, primarily
because they believe it interferes with the airports responsibility
to assess fees to those companies that derive a benefit from the
airport.
MS. SANDVIK states this issue has been upheld in every court of
law, including the United States Supreme Court that this is a fee,
and is distinct from a tax. Her basic understanding of the
distinction, as determined by the U.S. Supreme Court, is that a tax
applies to revenues that would be thrown into the general fund,
whereas a fee, as in this particular case, would go into the
International Airport Revenue Fund for payment of the maintenance
and operations of the airport or public facility.
Number 232
MS. SANDVIK states SB 343 would essentially expand the definition
of a courtesy car to include car rental vehicles that pick up
customers at the airport. Across the country there has been
significant competition by off-airport agencies. She believes it
is inappropriate to say that the benefit derived by off-airport
operators is limited to the curb where they pick up customers.
They do advertise in the airport. Currently, there is a 25$ per
year permit fee assessed to courtesy vehicles. That fee is paid by
all courtesy vehicles, airport, car rental agencies, etcetera.
Number 263
CHAIRMAN SHARP asks Ms. Sandvik if there will be room for an
expanded number of car rental agencies to bid and receive on-
airport counter space.
MS. SANDVIK replies the Anchorage Airport is expanding from six
counter spaces to seven for the next bid period. There is room in
the airport to expand the counter space, but DOT does not believe
it would be appropriate to create space to fill all the demand.
Ms. Sandvik thinks it would be appropriate to delay the creation of
more space at least a year or two, because it comes into play with
a competitive environment.
Number 274
CHAIRMAN SHARP asks Ms. Sandvik if the present on-airport rental
agencies pay the same percentage of gross revenues.
MS. SANDVIK responds they do not. It is her understanding the
amount is based on a sliding scale according to their level of
business. She is not familiar with the details. She trusts Mr.
Coffey's figure of an average amount being about 9.1% of gross
revenue.
Number 281
CHAIRMAN SHARP asks if there is any indication how many agencies
plan to submit bids for counter space during the next bid period.
MS. SANDVIK replies DOT's assessment of demand is that the seven
counter spaces will adequately address those companies interested
in bidding for on-airport space in Anchorage. She will add that
the Fairbanks counter spaces were up for bid recently, and there is
now a vacant counter space there because a rental agency that was
formerly on airport, chose to move off-airport during the last
bidding period.
Number 295
CHAIRMAN SHARP asks how the sliding scale works.
MS. SANDVIK responds there is a lesser fee for off-airport
agencies, and DOT intends to impose a fee of 8% of gross revenues.
That is directly applied to those passengers the agencies pick up
at the airport. The off-airport agencies will need to distinguish
between business originating from the airport, and business
originating from another source.
Number 301
SENATOR SHARP asks if there are further questions from committee
members. The chairman announces he does not intend to move SB 343
from committee until he can see what work was done on the subject
in the house. The chairman calls the next witness.
Number 313
GARY ZIMMERMAN, Alaskan Rent-a-Car Inc., which is the Alaska
franchise for Avis, testifying from Anchorage, reads a prepared
statement.
Number 351
SENATOR KELLY asks Mr. Zimmerman if Avis pays rent for counter
space and or parking spaces.
Number 354
MR. ZIMMERMAN responds that they do pay rent for their space on a
sliding scale of a percentage of their revenue, and also pay a fee
for counter space based on square footage. For parking space, it
is 55$ per space per month.
SENATOR KELLY asks if Mr. Zimmerman pays a separate rental fee for
the space in the airport building.
MR. ZIMMERMAN replies they do pay a rental fee separate from the
percentage of their gross revenue that they pay to the airport.
The on-airport rental agencies are basically paying three different
fees.
SENATOR KELLY asks Mr. Zimmerman if it wouldn't be advantageous,
with all the fees his company has to pay to the airport, to move
off airport.
Number 365
MR. ZIMMERMAN responds his company does not feel it would be
advantageous to be off airport.
CHAIRMAN SHARP thanks Mr Zimmerman for his testimony and calls the
next witness.
Number 373
GLENN HOLDAHL, Representative for Hertz Corporation, testifying
from Anchorage, reads a prepared statement.
SENATOR KERTTULA adds that airports are not entirely self-
supporting and do get considerable government subsidies.
Number 413
CHAIRMAN SHARP asks if there are any questions for Mr. Holdahl.
Hearing none, he calls the next witness.
Number 415
TERESA WINTER, Budget Rent-a-Car, testifying from Anchorage, states
Budget Rent-a-Car is opposed to SB 343. Budget feels that the
airport generates customers for off-airport rental agencies, and
they should pay a fee for that. It is unfair for on-airport
agencies.
Number 420
CHAIRMAN SHARP thanks Ms. Winter for her testimony and notes there
is no one else who wishes to testify.
Number 427
SENATOR KELLY makes an observation that when he rents a car in
Anchorage, he goes directly to the airport rental agencies, and
never goes to an off-airport agency. It is easier for him to do
so.
SENATOR KERTTULA adds he also rents only from on-airport agencies.
Number 433
CHAIRMAN SHARP thanks people for their testimony and announces the
committee will hold SB 343 to work on possible amendments.
Number 435
CHAIRMAN SHARP brings SB 327 (TAX ON RESIDUAL MARINE FUEL OIL) back
up before the Senate Transportation Committee and notes there is a
motion pending for adoption of the committee substitute (cs).
CHAIRMAN SHARP, hearing no objection to the adoption of the cs,
notes it has been adopted in lieu of the original bill.
CHAIRMAN SHARP calls Mr. Smith to testify.
Number 447
BERNIE SMITH, Tesoro Alaska Petroleum Company, testifying from
Soldotna, states Tesoro does support SB 327. It will be good for
the economy of the Kenai Peninsula. That concludes Mr. Smith's
testimony; he would be happy to answer any questions.
Number 452
CHAIRMAN SHARP thanks Mr. Smith. The chairman comments he thinks
the bill will do two things: open the door for selling more
residual fuel, and still guarantee the state revenue.
SENATOR KERTTULA makes a motion to discharge SB 327 from the Senate
Transportation Committee with individual recommendations.
Number 458
CHAIRMAN SHARP, hearing no objection, orders SB 327 released from
committee with individual recommendations.
Number 459
CHAIRMAN SHARP brings up SR 4 (MOTOR VEHICLE EMISSION INSPECTION)
as the next order of business before the Senate Transportation
Committee. The chairman calls a representative from the prime
sponsor's office to testify.
Number 463
MICHAEL FINKELSTEIN, Aide, Senator Donley, reads the sponsor
statement on SR 4.
Number 480
SENATOR KERTTULA comments SR 4 makes sense to him.
Number 487
SENATOR KELLY asks if there isn't a requirement in California to
put an emissions control package on new cars sold in the state. He
wonders if the California figures might not be applicable to
Alaska.
Number 490
SENATOR KERTTULA thinks it might make sense anyway to not burden
the system with inspections every year.
Number 494
CHAIRMAN SHARP asks if there are any more questions for Mr.
Finkelstein. Hearing none, he calls a representative from the
Department of Environmental Conservation to testify.
Number 500
LEONARD VERRELLI, Chief, Air Quality Management Section, Department
of Environmental Conservation (DEC) says SR 4 conflicts with plans
submitted by Anchorage and Fairbanks to the Environmental
Protection Agency (EPA). Anchorage and Fairbanks' programs are
based on a stringency factor that requires that the automobiles be
checked annually. SR 4 would be construed by EPA as a relaxation
to the applications submitted just days ago.
MR. VERRELLI states that two year emissions testing programs are
not without controversy, and California is not the bellwether of
emissions testing programs for Alaska. DEC does not recommend
passing this resolution unless it is modified in some way so that
it appears to be credible as far as Anchorage and Fairbanks'
proposals to meet emissions reduction criteria.
Number 525
MR. VERRELLI also says he begs to differ with the sponsor's
assertion that vehicle emissions would stay in calibration for two
years. The EPA has tested hundreds of thousands of tests, and nine
months to a year is probably the maximum that a car will stay in
tune. Newer cars are getting better, but the majority of cars in
Alaska are still elderly. SR 4 could be strengthened to offer the
EPA something in exchange for a two-year emissions test. But that
would put a burden on Anchorage and Fairbanks to come up with
strategies which may be onerous to meet the reductions.
Number 534
SENATOR KERTTULA notes SR 4 is just a simple resolution, so it does
not have the strength of a formal conveyance.
MR. VERRELLI says he just wants the committee to be aware that
SR 4 does conflict with the proposals submitted to the EPA by
Anchorage and Fairbanks.
Number 541
SENATOR KELLY asks Mr. Verrelli that, if the EPA was to allow two
year emissions testing, Anchorage and Fairbanks wouldn't take
advantage of that.
MR. VERRELLI replies that the EPA couldn't authorize two year
registration or inspections at this point in time, unless both
Anchorage and Fairbanks did something to replace the reductions
that are gained by the one year inspection program.
Number 545
SENATOR KELLY asks if SR 4 is asking the federal government to go
from one year inspections to two year inspections.
Several people answer that is correct.
SENATOR KELLY states, if that change is made, then Anchorage and
Fairbanks would no longer be required to have inspections every
year.
MR. VERRELLI responds that, without an annual registration, there
would not be enough credit for Anchorage and Fairbanks to meet the
required air quality standards.
Number 553
SENATOR KERTTULA suggests that, by deleting lines 14 and 15 on page
one, SR 4 might not be in conflict with the proposals just
submitted to the EPA by Anchorage and Fairbanks. Senator Kerttula
proposes an amendment to delete that language.
CHAIRMAN SHARP, hearing no objection, notes that Senator Kerttula's
amendment has been adopted. The chairman asks the pleasure of the
committee.
Number 564
SENATOR KERTTULA makes a motion to discharge SR 4 from the Senate
Transportation Committee with individual recommendations.
Number 566
CHAIRMAN SHARP, hearing no objection, orders SR 4 released from
committee with individual recommendations.
Number 568
CHAIRMAN SHARP brings up SB 227 (MOTOR VEHICLE RENTAL TERMS) as the
next item of business before the Senate Transportation Committee.
SENATOR KERTTULA, the prime sponsor of SB 227, calls one of his
aides to testify.
Number 573
BILL KELDER, Aide to Senator Kerttula, reads the sponsor statement
for SB 227. Mr. Kelder states no one has spoken in opposition to
the bill so far. He believes it will enhance commerce. SB 227 has
zero fiscal notes. Twenty states already have similar statutes in
place. The absence of this law has created some confusion in the
courts as to where the assets belong in a bankruptcy case.
TAPE 94-10, SIDE B
Number 594
CHAIRMAN SHARP asks if there are any questions. Hearing none, he
asks the pleasure of the committee.
Number 593
SENATOR KERTTULA makes a motion to discharge SB 227 from the Senate
Transportation Committee with individual recommendations.
Number 591
CHAIRMAN SHARP, hearing no objection, orders SB 227 released from
committee with individual recommendations.
Number 589
CHAIRMAN SHARP brings up HB 407 (COMMEMORATIVE GOLD RUSH LICENSE
PLATES) as the next order of business before the Senate
Transportation Committee.
Number 587
SENATOR KELLY makes a motion to discharge HB 407 from the Senate
Transportation Committee with individual recommendations.
Number 586
CHAIRMAN SHARP, hearing no objection, orders HB 407 released from
committee with individual recommendations.
Number 582
CHAIRMAN SHARP adjourns the Senate Transportation Committee at 4:26
p.m.
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