HB 176-EXPERIMENTAL VEHICLE PLATES  2:11:42 PM CHAIR P. WILSON announced that the first order of business would be HOUSE BILL NO. 176, "An Act relating to experimental vehicles." 2:12:22 PM REPRESENTATIVE ISAACSON moved to adopt the proposed committee substitute (CS) for HB 176, Version U [labeled 28-LS0674\U, Strasbaugh, 3/18/13] as the working document. [Version U was before the committee. 2:12:47 PM REPRESENTATIVE STEVE THOMPSON, Alaska State Legislature, speaking as sponsor of HB 176, stated that this bill is badly needed in the state. He recalled that about 10 years ago, while he was mayor in Fairbanks, he was trying to get a test track for winter testing of manufacturers of vehicles. He discovered large numbers of worldwide car manufacturers were using Interior Alaska for cold-weather testing, although most people did not know the testing was occurring since the cars were disguised. He characterized auto manufacturer's testing as a pretty good sized industry. He reported three people in Fairbanks told him they test drive every winter in Fairbanks for different manufacturers. Volkswagen Group of America, Inc. (VWGoA) brought up test vehicles last winter, but needed to re-test and VWGoA the DMV indicated the vehicles would need to be titled and licensed since temporary licenses were not available for test vehicles. This bill would authorize license plates for up to 36 months to allow winter testing programs to occur. He offered his belief that the test driving is an important economic development driver that uses local mechanics, garages, warehouses, and drivers. 2:15:21 PM JANE PIERSON, Staff, Representative Steve Thompson, Alaska State Legislature, on behalf of the sponsor, Representative Steve Thompson, stated this bill would give statutory authority for experimental vehicle plates to be issued by the Division of Motor Vehicles (DMV) to manufacturers or distributors for a 12- month period, with the ability for the license to be renewed for additional 12-month periods, for a maximum of 36 months. She clarified that this authority will be restricted to manufacturing or distributors and not just an individual who has built an experimental vehicle in a garage. When the vehicles leave Alaska they are relocated or destroyed since these vehicles cannot be titled due to their experimental nature. The bill would amend AS 28.10.181 related to registration of unique and special vehicles to be used for special purposes, and would create a special license plate the purposes of cold-weather experimental vehicles. She reiterated that this is a good economic driver for Interior Alaska. 2:17:10 PM REPRESENTATIVE LYNN asked whether other type of testing can be done. MS. PIERSON answered that according to DMV currently there isn't any other testing is going on in Alaska. She deferred to the department to expand on this. REPRESENTATIVE LYNN said perhaps other types of testing should be happening. MS. PIERSON answered that the sponsor would not have any problem with expanding the scope of the bill; however, she would like DMV to respond in case it raises any issues for the department. 2:18:31 PM REPRESENTATIVE ISAACSON offered his support for HB 176. He understood that Minnesota is the only other state currently offering cold-weather testing. He reported that Minnesota charges $50 for first four license plates and $35 for each one thereafter. The plates expire each December 31 without any prorated fees. He asked for a comparison in DMV's fees in Minnesota and Alaska. 2:19:54 PM SHELLY MELLOT, Deputy Director, Director's Office, Division of Motor Vehicles (DMV), Department of Administration (DOA), stated that DMV currently charges $90 for annual registration fees since the fees fall under commercial vehicle rates. In response to Representative Lynn's previous question, she said the department did not have any issue with going beyond cold-weather testing. The DMV has visited the facility and currently the testing is limited to cold-weather testing; however, the department does not have an issue with removing cold-weather from the bill. 2:20:53 PM REPRESENTATIVE ISAACSON asked whether the $90 covers a three year period per vehicle. MS. MELLOT answered the fee is every 12 months. REPRESENTATIVE ISAACSON understood that Alaska's DMV fees would be higher than the ones Minnesota charges. He asked whether the DMV sets the fee structure. MS. MELLOT indicated the legislature sets the fees under AS 28.10.421, noting these vehicles are considered commercial vehicles. REPRESENTATIVE ISAACSON asked whether a special category such as a vehicle testing category could be done in this bill. 2:22:12 PM REPRESENTATIVE P. WILSON asked for clarification on the effect of removing "cold-weather" and whether that would allow the department to be more flexible with respect to experimental vehicle testing. MS. MELLOT answered yes; that the change would be more flexible. 2:22:42 PM ALLISON EARHART, Attorney, Volkswagen Group of America, Inc. (VWGoA) stated that VWGoA is the parent company of the Volkswagen operations in the U.S. She offered VWGoA's support for this bill. She stated she is an in-house attorney for VWGOA and she specializes in licensing matters. She offered that HB 176 would allow VWGoA to continue to perform its cold-weather testing in Alaska. She summarized that VWGoA typically tests its vehicles in Alaska and apply for a one-year registration in order to do so; however, with more stringent EPA standards it has become necessary to bring the vehicles back for subsequent years for additional testing; however, the DMV does not have any provision available to allow for additional testing in subsequent years. 2:24:08 PM REPRESENTATIVE ISAACSON understood this bill would be adequate, but perhaps removing "cold-weather" would allow other experimental vehicle testing; however, perhaps the committee should not worry about adjusting fees at this time. He asked whether this would be adequate to keep VWGoA in business in Alaska. MS. EARHART answered yes. 2:24:47 PM JIM DODSON, President, Fairbanks Economic Development Corporation (FEDC) stated that FEDC has been promoting cold- weather testing for more than 20 years. He characterized it as a growing industry that creates jobs and helps to diversify the economy in Interior Alaska and in the state. He reported the FEDC has partnered with the City of Valdez and the community of Big Delta to attract the cold-weather automotive industry in Alaska to do their cold-weather testing. Today at least four car manufacturers have been performing cold-weather testing in Fairbanks. The FEDC has advertised Fairbanks as the most accessible, reliable, and affordable place in the nation to do cold-weather testing. This industry creates more than 200 jobs annually in Fairbanks and it is a growing industry. In fact, it represents an industry that the state has not had to invest money to attract. The state has the natural weather to attract cold-weather testing. He urged members to support HB 176 as it is rewritten. 2:26:13 PM REPRESENTATIVE GATTIS asked whether Fairbanks is the least expensive place in the nation to do the testing. MR. DODSON answered that one factor is the accessibility and reliability of cold-weather. For example, a manufacturer may go to Minnesota to perform tests, but if cold-weather doesn't materialize, the company has lost the opportunity to conduct testing. CHAIR P. WILSON remarked she lived in Tok for four years and she recalled experiencing 78 below zero degree weather without a wind-chill factor. 2:27:22 PM JULIE EMSLIE, Project Manager, Cold-weather Testing, Fairbanks Economic Development Corporation (FEDC) Fairbanks Economic Development Corporation (FEDC), stated that everyone thinks of Alaska, especially Interior Alaska, as being cold. She said that Interior Alaska experiences consistent cold-weather conditions which are difficult to find anywhere else in the world. She explained that the weather, combined with the facilities and vibrant service industry has become a prime location for companies to cold-weather test its products. This testing brings significant, positive impacts to the community of Fairbanks. She estimated that cold-weather testing generates $500 million annually for the local economy. She pointed out that the automotive testing industry heavily utilizes Interior Alaska for cold-weather testing. In fact, it was recently brought to the FEDC's attention that some of the local automotive testing companies have encountered issues with Alaska's current vehicle titling and registration regulations. As previously stated, this has largely becoming problematic due to changes in federal regulations on emissions. She said that Alaska's current laws are incompatible with what the car testing companies need to do to perform their work. She offered her belief that HB 176 offers a solution to this problem and the bill would remove the barrier to automotive testing, but will also not infringe on the DMV's mission, as well. 2:29:19 PM REPRESENTATIVE LYNN asked whether the cold-weather testing will change emission systems and if any provision allows for experimental types of emission systems. In response to a question, he repeated his question and clarified that one emission system may perform better in the cold than others. He wondered if an alternative system might run afoul of emissions testing in Alaska, although he acknowledged he was uncertain about emissions. MS. MELLOT answered that she is not aware of all the types of testing being done. She recalled that part of the reason to perform testing beyond 12 months was due to the requirement by the EPA for longer periods of emissions testing. CHAIR P. WILSON pointed out she is somewhat familiar, recalling it has something to do with the types of gasoline used. She further recalled Alaska has been working on a [federal] exemption. She suggested that it might be necessary to revisit [emissions]. 2:31:39 PM REPRESENTATIVE KREISS-TOMKINS wondered how Fairbanks was partnering with Valdez on cold-weather testing. MS. EMSLIE answered it relates to snow levels since Valdez receives lots of snow whereas Fairbanks does not so Fairbanks has partnered with Valdez to accommodate all of the cold-weather testing needs. She stated that [Valdez] has also attended trade shows and the FEDC can also refer companies to Valdez who are primarily interested in testing vehicles [in snow conditions]. REPRESENTATIVE KREISS-TOMKINS was curious if any other ways exist to make Alaska's bad weather economical. 2:32:57 PM CHAIR P. WILSON, after first determining no one else wished to testify, closed public testimony on HB 176. 2:33:08 PM REPRESENTATIVE ISAACSON made a motion to adopt Conceptual Amendment 1, to remove "cold-weather" on page 1, lines 6, 7, and 11 of HB 176. REPRESENTATIVE FEIGE objected for purpose of discussion. CHAIR P. WILSON recapped the reason for Conceptual Amendment 1, which is to expand the bill to allow for additional vehicle testing. She advised that the DMV and the VWGoA did not anticipate any issues arising by taking out "cold-weather." REPRESENTATIVE FEIGE removed his objection. There being no further objection, Conceptual Amendment 1 was adopted. 2:34:12 PM REPRESENTATIVE ISAACSON moved to report the proposed committee substitute (CS) for HB 176, labeled [28-LS0674\U, Strasbaugh, 3/18/13], as amended, out of committee with individual recommendations and the accompanying zero fiscal note. There being no further objection, the CSHB 176(TRA) was reported from the House Transportation Standing Committee. The committee took a brief at-ease.