SENATE BILL NO. 50 "An Act relating to fees for the sale or installation of studded tires; and providing for an effective date." 2:16:58 PM SENATOR CATHY GIESSEL, SPONSOR, explained the legislation. 2:20:07 PM KARI NORE, STAFF, SENATOR GIESSEL, discussed the Sectional Analysis (copy on file): Section 1: Amends AS 43.97.025(b) This section amends the current statute in 3 ways. It first increases the studded tire user fee from $5 to $50, it reduces the weight of studs that fall under this fee from 1.1 grams to 0.5 grams. It also ensures that all tires sold through online retailers for use in Alaska are subject to this fee. Section 2: Adds a new subsection under AS 43.98.025 This section creates a new subsection (i) to establish legislative intent that the funds generated from this fee will be directed back to the Department of Transportation for the repair and maintenance of state maintained roads. It does not create a dedicated fund. Section 3: Adds a new section into the uncodified law of the State of Alaska This section outlines that the act will apply to all tire sales and stud installations on or after the effective date. Section 4: Effective Date This Act would take effect on July 1, 2017. MARK NEIDHOLD, CHIEF, DESIGN AND CONSTRUCTION STANDARDS, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES, discussed the presentation, "Studded Tire Presentation" (copy on file). Mr. Neidhold looked at slide 2, "State Highway System subject to Studded Tire Damage": • Pavement Ruts: Longitudinal depressions in the wheel paths • High Traffic Volume, High Speed Roads are more prone to Studded Tire Damage Examples include: • Glenn Highway (Anchorage area) • Seward Highway (Anchorage area) • Minnesota Drive (Anchorage) • Egan Drive (Juneau) Mr. Neidhold highlighted slide 3, "Rutting Evidence caused by Studded Tire." He stated that the slide showed typical road wear from studded tires on passenger vehicles. Vice-Chair Bishop noted that the width of the ruts looked like the width of a truck. He stressed that some of those trucks used studded tires in the winter. Mr. Neidhold replied that, typically, the larger trucks did not use studs, but used chains. The intent of the slide was to show that it was narrower than commercial vehicles. Vice-Chair Bishop noted that some of the wear was caused by trucks. Senator Dunleavy queried the number of vehicles that used studs versus vehicles that used chains. Mr. Neidhold agreed to provide that information. 2:25:28 PM MIKE SAN ANGELO, STATEWIDE MATERIALS ENGINEER, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES, ANCHORAGE (via teleconference), did not believe that the effect of the ruts was not because of the base material due to heavy loads. He stated that it was found that the rut was due to removal of the surface of the road. He remarked that there were previous pavements that would alter due to poor construction of roads. Co-Chair MacKinnon wondered whether the chains had caused some of the rutting. Senator Dunleavy queried the number of vehicles that used studs versus vehicles that used chains. Mr. San Angelo replied that he did not know that information. Senator Dunleavy queried the studies on damage with chains versus studs. Mr. San Angelo replied that there were no studies in Alaska. He remarked that Parks Highway had mostly truck traffic, and the pavements were lasting up to 25 years on that highway. The distress on that highway was not rutting, but rather cracking distress. Senator Dunleavy wondered whether there were fees for chains. Mr. San Angelo responded that he did not know about fees. 2:30:20 PM Mr. Neidhold looked at slide 4, "Pavement Sampling Eagle River Loop Road 13,000+ vehicles/day July 29, 2008." He noted that the bottom surface of the slabs did not show deflection. Mr. Neidhold addressed slide 5, "Eagle River Loop Road 13,000+ vehicles/day July 29, 2008." He noted that there was not a "shoving of material" out of the center area. Mr. Neidhold discussed slide 6, "US Restrictions and Permissions." He stated that the slide showed other state's policies. Mr. Neidhold addressed slide 7, "Safety and Environmental Issues": • Ruts become a Safety Hazard to the travelling public: • Icy road: Ice or snow in ruts causes addition loss of traction • Dry road: Difficulty steering and changing lanes • Wet road: Hydroplaning potential due to water in ruts • Studded tire use on bare pavement generates dust, posing risk to human health • Based on this human health risk, Japan banned studded tires in 1990 Mr. Neidhold looked at slide 8, "Addressing Rut Damage": • Rut Repair Trigger: Rut depth of ½inch triggers a project to address rut repair; usually a 2year turnaround to bidready plans • Typical Fix: MillandFill in travel lanes • Hard Aggregate Policy: Stipulates the use of hard aggregate in the asphalt mix when the traffic volume exceeds 5,000 vehicles per lane in areas prone to stud use • Potential fixes, i.e., Microsurfacing, a mix of aggregate, polymerized asphalt, and water that is used to fill the ruts using special paving equipment. Road is open to traffic in ~2 hours. Mr. Neidhold addressed slide 9, "Winter Driving": • Automobile Technology Improvements • Allwheel drive • ABS braking • Tire Technology Improvements • Tire composition and tread • Studless tires, e.g., XIce®, Blizzak™ • Better allseason tires • Limited range of conditions in which studded tires outperform alternatives 2:35:46 PM STEVEN WORTHAM, ALYESKA TIRES, KENAI (via teleconference), spoke to some concerns about the bill. He stated that studless tires had not been proven to be as good as studded tires. He stressed that, in certain conditions, studded tires outperform studless tires, especially in the first and last thirty feet between starting and stopping. He felt that it could be the difference between life and death for certain people. He feared that the results of the fees would be the government picking winners and losers. He felt that the tax disproportionately affected lower income families. 2:39:28 PM FRANKLIN WORTHAM, OWNER, ALYESKA TIRES, KENAI (via teleconference), echoed the comments of Mr. S. Wortham. He stressed that there was ordering that had already occurred, so the tax could cause a loss of revenue. Co-Chair MacKinnon wondered whether there was a rebate from the state to collect the tax. Mr. F. Wortham replied that there was a 5 percent rebate, or $900 per quarter. 2:42:37 PM BONNIE SNYDER, SELF, MATSU (via teleconference), spoke against the legislation. She felt that the restriction would decrease safety. 2:45:17 PM VANESSA DEBACH, SELF, MATSU (via teleconference), spoke against the legislation. 2:47:15 PM JUDY SNYDER, OWNER, DIVERSIFIED TIRE, MATSU (via teleconference), spoke against the legislation. 2:50:18 PM ALFRED MEYER, MEYERS MUFFLER CITY, ANCHORAGE (via teleconference), opposed the bill. 2:53:11 PM JEFF PASCO, SELF, NINILCHIK (via teleconference), testified against the bill. 2:53:57 PM ROBERT LOONEY, SELF, CRAIG (via teleconference), spoke against the bill. 2:55:47 PM LARRY OPPERMAN, SELF, SOLDOTNA (via teleconference), testified against the bill. Senator Micciche wondered how many winters that a new set of studded tires could endure. Mr. Opperman replied that he typically switched his tires in the season, and that his tires could last five or six years. 3:00:56 PM DAVE HANSON, SELF, ANCHORAGE (via teleconference), testified against the legislation. 3:03:55 PM RICHARD NORDNESS, EXECUTIVE DIRECTOR, NORTHWEST TIRES DEALERS ASSOCIATION, WASHINGTON (via teleconference), opposed the bill. 3:07:10 PM GARRY WESSEL, BRUNO WESSEL, INC., NEW YORK (via teleconference), spoke against the bill. Co-Chair MacKinnon CLOSED public testimony. 3:10:23 PM Senator Dunleavy wondered whether there would be ruts in the roads without studded tires. Mr. Neidhold replied that there would still be some ruts, but the ruts would not be as significant without studded tires. Senator Dunleavy queried the cause of the ruts with no studs. Mr. Neidhold replied that ruts could be caused by shoving. Senator Dunleavy wondered whether heavy vehicles could cause ruts. Mr. Neidhold responded in the affirmative. Co-Chair MacKinnon surmised that friction and speed could contribute to rutting. Mr. Neidhold agreed. Senator Micciche recalled a study that compared a studded tire and regular tire in a circular pattern. He wondered whether the state performed that study. Mr. Neidhold deferred to Mr. San Angelo. Mr. San Angelo replied that the document was online for the legislation. He explained that the design of the roads in Alaska was meant to prevent rutting. He remarked that a rutting failure due to shoving or heavy loads that the roads were designed to prevent. Senator Micciche wondered how the studies were not anecdotal. He wondered whether there was as study comparing asphalts that had been exposed to studded and nonstudded tires. Mr. San Angelo replied that studded tires were allowed in Alaska, so it was difficult to separate the data set. 3:18:30 PM MIKE LESSMAN, LEGISLATIVE LIAISON, ALASKA DEPARTMENT OF PUBLIC SAFETY, felt that Senator Micciche was referring to a 2004 study from the University of Alaska Anchorage, and agreed to provide that information. Senator Micciche queried the annual cost of the per mile costs that were associated with studded tire wear on the roads. Mr. Lessman replied that the average cost was approximately $500,000 per lane mile for the repair for the studded tire wear. Co-Chair MacKinnon queried the how the department would handle the increased fee. 3:20:52 PM BRANDON SPANOS, DEPUTY DIRECTOR, TAX DIVISION, DEPARTMENT OF REVENUE, ANCHORAGE (via teleconference), replied that there was a bill in congress that would allow states to tax online sales. He stated that, currently, a company selling online must have a taxable nexus in the state. Co-Chair MacKinnon wondered whether the Department of Revenue (DOR) had any online agreements for tax collection. Mr. Spanos replied that there were no online sales taxes in the state, other than the tire fee. Co-Chair MacKinnon queried any assertions on the balance between the weight and shipment costs; versus sales inside the state. She recalled comments about the legislation creating and "unfair playing field." Mr. Spanos replied that there was no cost analysis for the shipping cost of tires purchased online. Co-Chair MacKinnon announced that the amendments were due Monday by 5pm, and that the following day's meeting would be canceled. She discussed the following week's schedule. SB 50 was HEARD and HELD in committee for further consideration.