HOUSE LABOR AND COMMERCE STANDING COMMITTEE March 29, 1999 3:25 p.m. MEMBERS PRESENT Representative Norman Rokeberg, Chairman Representative Andrew Halcro, Vice Chairman Representative Jerry Sanders Representative Lisa Murkowski Representative John Harris Representative Sharon Cissna MEMBERS ABSENT Representative Tom Brice COMMITTEE CALENDAR HOUSE BILL NO. 127 "An Act relating to the sale of studded tires; and providing for an effective date." - MOVED CSHB 127(L&C) OUT OF COMMITTEE * HOUSE BILL NO. 61 "An Act relating to an exemption from the requirement for payment for overtime under a voluntary written agreement for certain employees in the airline industry; and providing for an effective date." - MOVED HB 61 OUT OF COMMITTEE (* First public hearing) PREVIOUS ACTION BILL: HB 127 SHORT TITLE: LIMIT WEIGHT OF STUDS USED ON TIRES SPONSOR(S): REPRESENTATIVES(S) MASEK Jrn-Date Jrn-Page Action 3/05/99 368 (H) READ THE FIRST TIME - REFERRAL(S) 3/05/99 368 (H) TRA, L&C 3/18/99 (H) TRA AT 1:00 PM CAPITOL 17 3/18/99 (H) MOVED OUT OF COMMITTEE 3/19/99 511 (H) TRA RPT 5DP 1NR 3/19/99 511 (H) DP: HUDSON, KEMPLEN, COWDERY, HALCRO 3/19/99 511 (H) MASEK; NR: SANDERS 3/19/99 511 (H) ZERO FISCAL NOTE (DOT) 3/19/99 511 (H) REFERRED TO LABOR & COMMERCE 3/29/99 (H) L&C AT 3:15 PM CAPITOL 17 BILL: HB 61 SHORT TITLE: OVERTIME WAGE EXEMPTION AIRLINE EMPLOYEES SPONSOR(S): REPRESENTATIVES(S) HALCRO Jrn-Date Jrn-Page Action 1/22/99 68 (H) READ THE FIRST TIME - REFERRAL(S) 1/22/99 68 (H) LABOR & COMMERCE 3/29/99 (H) L&C AT 3:15 PM CAPITOL 17 WITNESS REGISTER TED DEATS, Researcher for Representative Beverly Masek Alaska State Legislature Capitol Building, Room 432 Juneau, Alaska 99801 Telephone: (907) 465-2679 POSITION STATEMENT: Presented HB 127 for the bill sponsor. SAM KITO III, Chairman Legislative Liaison Committee Alaska Professional Design Council 6420 East Northern Lights Boulevard, Number 7-E Anchorage, Alaska 99504 Telephone: (907) 338-5486 POSITION STATEMENT: Testified in support of HB 127. TONY BARTER, Statewide Materials Engineer Division of Statewide Design and Engineering Services Department of Transportation and Public Facilities Anchorage, Alaska 99507-1225 Telephone: (907) 269-6230 POSITION STATEMENT: Answered questions regarding HB 127. GARY WESSEL, President Bruno Wessel, Incorporated 300 Long Beach Boulevard Stratford, Connecticut 06615 Telephone: (203) 380-2524 POSITION STATEMENT: Testified in support of HB 127 as manufacturer of tire studs, provided information. DENNIS POSHARD, Legislative Liaison/Special Assistant Office of the Commissioner Department of Transportation and Public Facilities 3132 Channel Drive Juneau, Alaska 99801-7898 Telephone: (907) 465-3904 POSITION STATEMENT: Testified in support of HB 127. JAMES M. JOHNSON, President Johnson's Tire Service Incorporated 3330 Denali Street Anchorage, Alaska 99503 Telephone: (907) 561-1414 POSITION STATEMENT: Testified in support of HB 127. MATT SEIDLER, Owner Alaska Tire Service 2330 East 88th Avenue Anchorage, Alaska 99507 Telephone: (907) 344-6288 POSITION STATEMENT: Addressed question to Mr. Wessel during HB 127 hearing. JANET SEITZ, Legislative Assistant to Representative Norman Rokeberg Alaska State Legislature Capitol Building, Room 24 Juneau, Alaska 99801 Telephone: (907) 465-4968 POSITION STATEMENT: Explained Version H committee substitute for HB 127 as aide to the House Labor and Commerce Standing Committee. JONATHON LACK, Legislative Assistant to Representative Andrew Halcro Alaska State Legislature Capitol Building, Room 418 Juneau, Alaska 99801 Telephone: (907) 465-4939 POSITION STATEMENT: Presented HB 61 for the bill sponsor. MICHELLE BUCKMASTER 1205 Hollywood Drive, Number 600 Anchorage, Alaska 99501 Telephone: (907) 276-4364 POSITION STATEMENT: Testified in support of HB 61. DWIGHT PERKINS, Deputy Commissioner Department of Labor P.O. Box 21149 Juneau, Alaska 99802-1149 Telephone: (907) 465-2700 POSITION STATEMENT: Provided department positions on HB 61 and possible Version G committee substitute for HB 61. ACTION NARRATIVE TAPE 99-30, SIDE A Number 0001 CHAIRMAN NORMAN ROKEBERG called the House Labor and Commerce Standing Committee meeting to order at 3:25 p.m. Members present at the call to order were Representatives Rokeberg, Halcro, Sanders, Murkowski and Harris. Representative Cissna arrived at 3:26 p.m. Chairman Rokeberg circulated the committee's advancement of the name of Ed Flanagan as commissioner of the Department of Labor for signature. The chairman noted the motion had been made at the committee's previous meeting [March 19, 1999] but the document had been held for more members' signatures. He indicated a signature on the document would not be an endorsement; the confirmation would be taken up by the full joint body of the legislature. HB 127 - LIMIT WEIGHT OF STUDS USED ON TIRES Number 0169 CHAIRMAN ROKEBERG announced the committee would address HB 127, "An Act relating to the sale of studded tires; and providing for an effective date." He invited the sponsor's representative forward. Number 0190 TED DEATS, Researcher for Representative Beverly Masek, Alaska State Legislature, came forward to present HB 127. The purpose of HB 127 is to require installation of lightweight studs in new passenger studded snow tires. It is a point-of-sale legislation that will grandfather in all studded tires currently in use. The law would take effect July 1, 2000, which would allow companies time to prepare their inventory. According to the Department of Transportation and Public Facilities (DOT-PF), $5 million worth of stud-related road wear is done each year to Alaska's highways. Many Alaskan roads have severe ruts which cause hydroplaning and loss of control. One of the ways to reduce this road wear is by requiring the use of lightweight studs in snow tires. The reasoning is that as the tire spins at 55 miles per hour, the stud strikes the road with a certain amount of force. Mr. Deats indicated the heavier the stud, the more striking force. Number 0292 MR. DEATS stated the majority of rutting on Alaska's high-volume roads is caused by passenger studded tires, rather than heavy truck studded tires. These aluminum and lightweight studs will cost $1 to $2 more in material per tire. However, HB 127 should be seen as a bill to reduce wear on Alaska's roads, not as a bill to ban steel tire studs. Both lightweight and conventional tire studs are steel tire studs. Tire studs are a two-part item; the inner pin of hardened carbide steel is what provides the traction on the road. An outer casing of aluminum or steel holds the pin in the tire. Both types of studs are engineered to wear at the same rate as the tire, and are claimed to provide three to four winters' worth of traction. Tests in Finland and Sweden have shown there is no appreciable difference in the traction characteristics of the two [types of] studs. Mr. Deats urged the committee to pass the legislation as a way to reduce wear on Alaska's roads and maintain safe driving surfaces throughout the state. Witnesses to testify are: the Alaska Profession Design Council (APDC) which asked Representative Masek to sponsor the bill, a tire company already selling tires with the lightweight studs, and one of the primary Alaska and Northwest tire stud suppliers. Number 0440 REPRESENTATIVE CISSNA mentioned she has heard the lighter-weight studs do not work as well with antilocking [ABS] brakes. MR. DEATS replied he is not aware of this issue but one of the speakers might be. Number 0505 SAM KITO III, Chairman, Legislative Liaison Committee, Alaska Professional Design Council, testified via teleconference from Anchorage in support of HB 127. The Alaska Professional Design Council is a consortium of professional societies representing architects, engineers, land surveyors, building code officials and landscape architects. He stated, "Ten member organizations, a combined membership of over 1,400 and represent approximately 5,000 licensed professionals." The Alaska Professional Design Council addresses issues of concern to the various design professions through workshops, seminars, ad hoc and standing committees, and governmental task forces. One of the priorities of this year's legislative committee is to work toward passage of legislation mandating the sale of only lightweight studded tires. The APDC proposal is before the committee as HB 127. Mr. Kito indicated the APDC's collective desire is to foster an environment where Alaska is not reacting to damage to its roads or loss of its facilities by continually deferring maintenance. Deferred maintenance may not appear to be directly related to studded tires but there is a connection. In the effort to encourage the legislature to pass HB 127, APDC is encouraging a proactive step towards taking care of Alaska's assets. Number 0592 MR. KITO noted the state of Alaska is battling with severe roadway wear. Everyone has seen and driven in the ruts in the state's major roadways. Studies completed by DOT-PF indicate there are three factors which, when addressed, will significantly decrease road wear on Alaska's highways. 1) The utilization of a stone mastic asphalt mix. 2) Utilization of harder aggregate or rock material in pavement. 3) Encouraging the use of lightweight studded tires. The Department of Transportation and Public Facilities is currently utilizing stone mastic asphalt mix design; it is investigating, and has located, some possible sources of harder aggregate material. The third component in reduction of stud-related road wear is the use of lightweight studded tires. This use can decrease the wear and rutting of Alaskan roads by decreasing the striking force of each stud. The Alaska Professional Design Council is interested in this issue for two basic reasons. 1) To advocate safety on Alaska's roadways. APDC believes the rutted roadways pose safety hazards to the motoring public if left unrepaired. 2) To encourage preventative maintenance of Alaska's road infrastructure. While connecting direct savings to decreasing wear on Alaska's roadways would be extremely difficult, APDC believes that by engaging in this type of preventative maintenance, the state is bound to free up an undetermined amount of federal construction funding that will then be available for other projects. The Alaska Professional Design Council believes this is an important preventative maintenance issue and they would like to encourage all members of the committee to support the legislation's passage. Number 0696 CHAIRMAN ROKEBERG asked what kind of scientific and engineering background and studies the design council has for its position. MR. KITO referred the question to DOT-PF, commenting that numerous studies have been done, predominantly in Scandinavia. Mr. Kito mentioned Tony Barter of DOT-PF is available via teleconference. CHAIRMAN ROKEBERG rhetorically questioned whether that meant the committee would have to rely on the department again for technical information, not the private sector. He requested Mr. Barter's testimony. Number 0778 TONY BARTER, Statewide Materials Engineer, Division of Statewide Design and Engineering Services, Department of Transportation and Public Facilities, spoke via teleconference from Anchorage. He stated he did not have any prepared testimony; he is available to answer questions as a technical representative of the department. Number 0822 GARY WESSEL, President, Bruno Wessel, Incorporated, testified next via teleconference off-network from New York in support of HB 127. He noted Bruno Wessel is one of the major suppliers of tire studs and related equipment in North America. He indicated his company tries to be involved in anything concerning its products. Mr. Wessel said Mr. Barter has done quite a bit of research regarding the road wear characteristics from the Nordic countries. Bruno Wessel is there simply to answer any questions regarding studs and related equipment: deliveries, inventories, pricing issues, et cetera. Mr. Wessel stated they are in support of HB 127; anything reducing road wear related problems due to tire studs, hopefully reducing road maintenance costs, will certainly be a benefit to the state of Alaska and, hopefully, other states using tire studs. Regarding the ABS [antilock brake systems] brake question, ABS brakes do not reduce the performance of tire studs, either steel or aluminum, to his company's knowledge. Mr. Wessel noted there have been quite a few studies done. He indicated Jim Johnson of Johnson's Tire Service, one of the larger Alaskan tire dealers, has been using aluminum studs for approximately four years and would be able to provide information about his customers' response if he is available. Number 0929 REPRESENTATIVE HARRIS questioned if any studies have been done about the life span of an aluminum stud versus a steel stud. He asked the anticipated life of the stud on a tire with aluminum studs versus a tire with steel studs on an average Alaskan winter. MR. WESSEL replied the average life of the stud should be the same whether it is aluminum or steel if the stud is properly inserted into the tire. The actual life of a tire varies depending the individual's driving characteristics, vehicle type and weight, and amount of driving. The stud basically wears with the snow tire itself. If the snow tire is going to last two to three seasons then the studs should last two to three seasons. There should really be no wear difference between the aluminum and steel stud. Number 1017 CHAIRMAN ROKEBERG asked Mr. Wessel if his company supplied all different varieties of studs. MR. WESSEL indicated it does. In North America the number one stud is a standard steel stud that has been used for the last 30 years. Stud manufacturing has improved quite a bit over that time, just as tires and roads have improved. In North America Bruno Wessel sells steel studs, some aluminum studs, and Mr. Wessel noted there is now a modified steel stud. This could be called a lightweight steel stud. He indicated there are currently three levels of tire studs: 1) the standard steel stud, 2) a slightly lighter modified steel stud, 3) a considerably lighter aluminum stud. He commented the carbide insert is the same. They also have plastic studs but these are not used very often in North America. CHAIRMAN ROKEBERG confirmed the name of Mr. Wessel's company. The chairman asked what the company's North American market share is. MR. WESSEL replied probably 70 to 75 percent. In answer to the chairman's inquiries, Mr. Wessel noted his company is not publicly traded and is located in Stratford, Connecticut. Number 1126 CHAIRMAN ROKEBERG mentioned HB 127 contains a stud specification by weight. The chairman mentioned existing state statute or regulation [AS 28.35.155(b)] has a 1/4-inch protrusion factor; other states have different protrusion factors down to a .04-inch protrusion. MR. WESSEL said the normal standard of measurement in tires is thirty-secondths of an inch. He questioned whether they were referring to the distance the stud protrudes from the tire. He noted a 1/4-inch protrusion would be significant, and, for some tire studs, it would be the entire stud length. Normally the protrusion is 1/32 to 2/32 of an inch out of a tire. Mr. Wessel indicated the carbide tip of the stud is really the only thing doing any work; the body of the stud should wear out very quickly to equal that of the rubber around it. CHAIRMAN ROKEBERG referred to a state-by-state chart in the bill packet titled, "Studded Tire Use as of April 10, 1998." The chart seems to indicate there is variability in allowed protrusion from state to state - 3/32-inch plus or minus, or 1/16-inch - and Alaska has a 1/4-inch protrusion. The chairman asked the length of a normal stud. Number 1211 MR. WESSEL replied studs are measured in millimeters (mm) but he can also give thirty-secondths of an inch. He stated, "The average stud - the 80 percent of the market - is a[n] 11 millimeter [mm] which is a 12/32 (indisc.) and it's about a quarter of an inch ... I'm sorry, maybe about a half an inch. CHAIRMAN ROKEBERG commented, then, Mr. Wessel's testimony is that the protrusion of the stud from the tire is usually only 1/32 or 2/32 of an inch. He asked about a specific recommendation. MR. WESSEL mentioned a guideline of the proper studding method which basically shows a side-view diagram of a tire with three studs: one correct, one too deep, one protruding too far. The true protrusion of a tire stud from the rubber should only be the small carbide tip in the middle. The body of the stud should be flush with the rubber around it. CHAIRMAN ROKEBERG mentioned limitations in other states on the percentage of coverage area, such as 3 percent of the total tire contact surface. He asked what this means. MR. WESSEL replied he was not sure, indicating he was not familiar with the document the chairman was reviewing. Mr. Wessel commented most states basically have time limitations on tire studs and there is not really much enforcement on the protrusion of the stud; if a stud sticks out too far, it is going to fall out anyway. Therefore, if a stud has not been inserted properly, by the time it starts to wear out the stud will fall out. Number 1314 CHAIRMAN ROKEBERG commented the document he is reviewing is a very good chart; it even says studs are allowed in the Mauna Kea Reserve in Hawaii. The chairman questioned if they recommended that only a certain number studs be inserted into a tire of a particular size, or if is there a specific spacing, or how this is done. MR. WESSEL responded the rubber manufacturers mainly determine how many studs go into a tire. The average tire has approximately 90 studs; the studs go down the left and right sides of the tire and are spaced about one inch apart. The desired configuration is to have three or four tire studs making contact on the ground at one time if the vehicle is in a slide condition. However, the stud manufacturer does not determine the number of studs that go into a tire. Cooper tires average about 75 studs per tire, last year's Firestone tires averaged about 126 studs per tire, Gislaved, from Sweden, averages about 115 studs per tire. The number of studs per tire varies depending on the manufacturer. CHAIRMAN ROKEBERG said it seems logical the Cooper tire with 75 studs would have less wear on the roadways than the Firestone tire with 126. Number 1395 MR. WESSEL answered absolutely; it would also perform less in the related conditions. CHAIRMAN ROKEBERG questioned, then, if he purchased a tire that would take the maximum number studs and asked that 125 or 150 1.3-gram studs be inserted, wouldn't the numbers of studs have as much to do with it as the amount of protrusion or weight of the stud? MR. WESSEL replied not really. He wished he could provide the complicated mathematical equation which they have at their office. He mentioned perhaps Mr. Barter could assist there. The equation to calculate the impact on the road is extensive, and it really has nothing to do with the volume of studs as far as they understand it. They basically look at the weight, and with the centrifugal force; that is how it comes down and impacts the ground. One would assume that more studs in the tire would increase road wear, but he does not know if that is necessarily true. Mr. Wessel said he has not read a study saying that. Number 1459 CHAIRMAN ROKEBERG asked the cost of the 1.3-gram aluminum stud versus the 1.6-gram steel stud. MR. WESSEL answered studs are purchased boxes of 1,000 at a time. The average price of tire studs in Alaska is about $25/1,000 for steel studs and about $35/1,000 for aluminum studs. This increases the cost to a tire dealer about $1 per tire. In response to the chairman's question if that is based on 90 studs per tire, Mr. Wessel replied it is based on 100 studs per tire. CHAIRMAN ROKEBERG confirmed Mr. Wessel's company is an "OEM" [original equipment manufacturer] supplier to the tire manufacturers. The chairman questioned whether most tires sold in the United States are sold with steel studs. MR. WESSEL replied most are. However, Michelin and Firestone both purchase aluminum studs. CHAIRMAN ROKEBERG questioned that there would be fewer brands for Alaskan consumers to choose from if this legislation is passed unless the tire manufacturers change their manufacturing "specs" [specifications] to meet the Alaskan market. Number 1536 MR. WESSEL answered no. The tire manufacturer does not specify what tire stud will be used; most tires studding is actually done in the field. Michelin and Firestone have contracts with Sam's Club Membership Warehouse, for example, and some of the larger warehouses that want to buy tires ready to go right off the shelf. A typical Alaskan tire dealer like Johnson's Tire Service will begin studding tires in June to build up an inventory. Since the tire dealers are responsible for studding most tires and they basically decide which stud will be used, this would not reduce the consumer's choice of tires at all. Number 1604 DENNIS POSHARD, Legislative Liaison/Special Assistant, Office of the Commissioner, Department of Transportation and Public Facilities, came forward in Juneau to testify in support of HB 127. He brought some samples of different types of tire studs - plastic, aluminum and steel - labeled with their weights. Mr. Poshard stated to the committee, using his prepared materials as the basis for his remarks: "A little background first: Studded tires were first developed and used in Finland in 1959. By the winter of 1963, studded tires were being used in all 50 states. As early as 1972, the State of Alaska Department of Highways released a report outlining the problems of studded tire use on Alaska roads. The department estimates that studded tires cause approximately $5 million damage to Alaska roads annually. This is damage that, some of which the department repairs, and much of which gets added to our deferred maintenance backlog. "The use of studded tires and the relationship to road wear is a subject of comprehensive international interest - over the last 30 years the Scandinavian countries have spent over $50 million researching this topic. "In 1995 and 1996 the department did an extensive review of the Scandinavian research and released a report titled, "Options for Reducing Stud-Related Pavement Wear." And I think you all have a copy in your packet. To summarize briefly, that study had 3 recommendations for reducing stud wear: number 1) the use of stone mastic asphalt [SMA], number 2) using harder, more durable aggregates in the pavement mix, and number 3) was requiring use of lightweight studs. "First, stone mastic asphalt. The department has begun using stone mastic asphalt in the Anchorage area. This type of asphalt contains a higher percentage of coarse aggregates and has been shown to reduce pavement wear by 25 to 50 percent. It's a much more expensive asphalt and use to date has been limited to the Anchorage area where traffic counts make it economically feasible. The Department plans to continue to increase the use of SMA-type pavements." Number 1714 "The second recommendation was harder, more durable aggregates because they provide much better wear resistance. First, let me say that Scandinavia, which has been working on this issue for 30 years, has determined that only 2 to 4 percent of their available aggregate materials meet the standard for stone mastic asphalt pavement mix to resist studded tire wear. In Alaska, we're comparatively in our geologic infancy when it comes to identifying good materials sites. To date, the department has found three sites with acceptable materials: 1) is the Chistochina, 2) is Black Rapids and 3) is near Cantwell. We have shipped in materials from the Cantwell site for the test projects in the Anchorage area. "The third recommendation from the report was the use of lightweight studs - mandating the use of the lightweight studs. The use of lightweight studs can decrease pavement wear by up to 50 percent. To explain why this is the case, if you have the report in front of you ... on page 12 there's a chart that shows the energy that is in the use of a stud. And the energy that does the most damage is the energy in the dynamic hit and the energy in the after-scratch. That's what does the most damage. Harkening back to your physics classes, or to the Transportation Committee [House Transportation Standing Committee] a couple of weeks ago [March 18, 1999], I brought out the fact that Energy = 1/2 Mass times Velocity squared. When you look at that equation there's only two variables that we can change to reduce the energy, or the wear on the roads, ... mass and velocity. Assuming that we don't want to lower the speed limit to 30 mile-per-hour [mph] on all of our roads, we need to focus on the mass, or the weight of the stud. By reducing the weight of the studs we can reduce the energy and the wear on our roads. This can be done, as you've heard, without reducing the effectiveness of the studded tires. "In conclusion, the department is supportive of this legislation as a safety measure and as a way of reducing the annual damage done to Alaska's roads." MR. POSHARD said he would be happy to answer any questions and indicated Mr. Barter, the department's expert on tire studs, is also available in Anchorage. He asked Mr. Barter to address the previous question on Alaska law regarding tire stud protrusion, and possibly also the number of studs in a tire versus the weight of the studs in terms of roadway damage. Number 1851 MR. BARTER answered that the length of the stud and the protrusion from the tire is related to the performance characteristics. Mr. Barter noted he thinks Mr. Wessel also addressed number of studs per tire. The variance being seen is based on the size of the tire, a 13-inch tire versus a 15-inch. The predominant passenger tire is in the 13-inch to 14-inch range. Mr. Barter commented, therefore, they were running on the lower side of 75 to 90 studs per tire. The number of studs installed in the tire is based on the tire manufacturer who pre-molds the tire with the tread pattern; this determines the quantity of studs that will be installed. Another key component of the aluminum studs is that the technology has improved to the point where a component called "Duralcan (ph)" is being added. He indicated this strengthens the stud and improves durability. REPRESENTATIVE MURKOWSKI referred to information in the bill packet discussing that much of the roadway damage cause by studs comes in the shoulder seasons. She asked Mr. Poshard what efforts DOT-PF makes to educate people to change their tires so that this type of wear does not occur once the roads are dry. Additionally, Representative Murkowski asked if that could be used to ameliorate some of the problem. Number 1940 MR. POSHARD answered that, in the past, the department acted to alert car owners and tire stud users of the existing state law prohibiting studded tire use after certain dates. He believes these dates are April 15 for those living below 60 degrees of latitude and May 15 for those living above 60 degrees. Mr. Poshard mentioned a radio commercial from the department with "Click and Clack" [Tom and Ray Magliozzi, hosts of the "Car Talk" radio program] reminding Alaska tire stud users to remove their studs by the required date. The department has taken other measures, and will continue this. He indicated this year the department may be planning to ask the local law enforcement agencies to assist with enforcement for a short period of time after the removal date. The department will also probably do another public information campaign this year. REPRESENTATIVE MURKOWSKI noted the existing law requiring removal of studded tires by a certain date, but she commented the weather in any given year may not require studded tire use all the way to that removal date. Mentioning the procrastination tendency, she thinks there needs to be a more concerted effort to inform people the longer they keep their studded tires on, the more damage they may be causing to the road. She indicated people should do the right thing by removing their studded tires early in this situation. Representative Murkowski commented she never hears that message. Number 2046 MR. POSHARD agreed that is a good point and will consider doing that. In the past, the department's efforts have focused on making sure people switch their tires by the deadline. REPRESENTATIVE SANDERS asked how many passenger vehicles are on the roads in Alaska. MR. POSHARD indicated Mr. Barter might have some information, but he did not know that figure. MR. BARTER stated he did not know the exact number of passenger vehicles, but he can relate the percentage of vehicles using studded tires if that is of interest. In the Anchorage market the department periodically runs parking lot surveys, evaluating 500 vehicles at a time. At the peak of the season, about 50 percent of the passenger vehicles will have studded tires. REPRESENTATIVE SANDERS questioned, though, that they did not have any idea of the number of passenger vehicles in the state. MR. BARTER replied he does not know the registered vehicle count. MR. POSHARD offered to try to obtain that information for Representative Sanders from the Division of Motor Vehicles. Number 2112 REPRESENTATIVE SANDERS said his reason for asking is because $2 a tire may not sound like very much money. However, if, for instance, there are 500,000 cars on the road and 50 percent are using studded tires, that is $2 million dollars a year, which is effectively a tax on transportation. Representative Sanders commented he remembered the House Transportation Standing Committee testimony was that there was not going to be any fiscal note, that there was not going to be any savings. He added, "So if there's no savings we're just -- the people who are driving on the roads are just forking out another $2 million dollars ...." MR. POSHARD responded he thinks, as was heard in the House Transportation Standing Committee and on the department's fiscal note, the department projects the use of the lighter-weight studs would reduce the amount of damage being done to Alaska's roads. They approximate about 40 percent, or $2 million per year, less in damage. He would say currently most of that is winding up on the department's deferred maintenance backlog. Therefore, there is a benefit to the public, even if it is not a direct budgetary benefit in terms of general fund savings. Mr. Poshard respectfully indicated he thinks the cost to the consumer would be less than $2 million annually because a certain percentage of passenger cars probably already have lightweight studs and a good set of snow tires should last more than one year. Number 2204 REPRESENTATIVE HARRIS commented Representative Sanders had brought up a good point. Representative Harris stated, "Your executive summary here says that you believe you spend about $5 million dollars a year on ... stud-related pavement damage, at least you attribute it to stud-related pavement damage, and then you're saying that you would save about, I think you just said two and a half million dollars (indisc.). Something doesn't - something doesn't quite come together there." Representative Harris commented the department's executive summary states both lightweight and conventional studs use the same carbon-tungsten end for traction. Noting if that is the case, he questioned if just that much difference in weight pounding the road over a period of time at the speed creates the added damage. MR. POSHARD addressed Representative Harris' first question: there would still be stud-related damage even using lightweight studs, but the amount of stud-related damage would be reduced. He said the department estimated it would reduce the $5 million dollar annual damage by about $2 million annually. In response to Representative Harris' second question, Mr. Poshard said essentially the weight of the stud is the only difference. The carbon-tungsten tip is the same in the examples he distributed, whether the studs are plastic, aluminum or steel. The tip is what provides the traction performance. Really, it is only the difference in the weight of the stud, in terms of the difference between the stud types. REPRESENTATIVE HARRIS asked, then, is he to assume that what DOT-PF would really like to see is the elimination of studded tires completely. He asked if that would save the department the most amount of money. Number 2301 MR. POSHARD replied that is not a correct assumption. The department recognizes there is a safety factor to lightweight studs. For example, several of the Scandinavian countries researched require the use of studded tires with lightweight studs on vehicles for insurance and safety purposes. Heavier weight studs have been completely outlawed. The department recognizes there is a benefit to using studs, but it does not see a difference in effectiveness between lightweight studs and steel studs. REPRESENTATIVE HALCRO mentioned the presentation Mr. Poshard had given in the House Transportation Standing Committee. Representative Halcro said he was struck in particular by a comment made by Representative Hudson after adjournment. He related that Representative Hudson had said he had steel studs and, if they were banned, he would just continue using his until he had to replace them. Representative Halcro asked if the department had considered the possibility retailers might create concern in consumers to purchase steel studs before July 1, 2000 [the legislation's effective date]. He commented on a huge retail sales rush on these studded tires, noting, then, the department would not see a return on this legislation for a while. MR. POSHARD replied this question might be better addressed to the sponsor. He noted outlawing the sale would delay the full benefit to some degree, as opposed to outlawing use altogether, but he thinks this is probably a better way to implement the law for Alaskan consumers. Number 2427 REPRESENTATIVE HARRIS asked Mr. Poshard if the department would have someone checking with all the tire sales people to make sure they are complying with the law, if this goes into effect. MR. POSHARD answered the department does not have any plans for this. He noted, though, there are a limited number of tire sales places in the state. Mr. Poshard indicated he thought it would be likely that a competitor would let the appropriate agency know, for enforcement measures, if steel tire studs sales were outlawed but someone continued to sell them. REPRESENTATIVE HARRIS indicated he wanted to ensure this legislation would not add department staff. MR. WESSEL commented, as a supplier of tire studs, there are truly only two people in North America who supply tire studs to the tire dealer network. If Alaska passes this law, they would simply not be selling steel studs to Alaska. Getting steel studs to Alaska is not one of the most convenient things to do; Mr. Wessel commented they are always concerned with their freight costs, so they would make sure the product going up into the area would be aluminum studs. He indicated about the only way steel studs would get to Alaska would be if someone was willing to spend a lot of extra money to purchase the studs out-of-state and then barge them up. Number 2499 REPRESENTATIVE HALCRO addressed Mr. Wessel, "Let me ask you, with 75 percent of the stud market..." [TESTIMONY INTERRUPTED BY TAPE CHANGE] [From tape log notes: 'a lot of feedback from (retailers?) ... presentation in Transportation'] TAPE 99-31, SIDE B Number 0001 REPRESENTATIVE HALCRO continued, "... (indisc.) who were opposed to this legislation, and I'm gonna read you a quote and I just want to get your feedback. This one particular retailer said, 'We saw the carbide tips just smashed right down into the casing of the stud.' Have you heard this from your retailers at all? ... Is this an aversion to buying lightweight studs?" Number 0018 MR. WESSEL answered he believes that is a dealer, for whatever reason, voicing an opposition with no facts. A pin pushing down into the body of a stud is possible, it is also possible on a steel stud. It only means it is a defective stud. He recalls five or fewer phone calls regarding something of that nature in the last ten years. Mr. Wessel indicated he did not think an Alaskan tire dealer who had not used aluminum studs could really comment on the studs' performance without testing the studs themselves. He noted Jim Johnson is the only Alaskan tire dealer using aluminum studs on a high volume and regular basis, and he would certainly be the person to speak to the consumer response towards the lightweight studs. CHAIRMAN ROKEBERG confirmed Mr. Johnson is online. The chairman further confirmed Mr. Poshard has a copy of an article on highways from Fortune magazine provided by the committee aide ["Industrial Management & Technology - Smoother, Sturdier, High-Tech Highways" by Stuart F. Brown, Fortune magazine, 12/21/98]. Number 0088 JAMES M. JOHNSON, President, Johnson's Tire Service Incorporated, testified next via teleconference from Anchorage. He said he is present to assist or answer any questions concerning the use of lightweight studs. Johnson's Tire Service has been using this type of stud since 1994. CHAIRMAN ROKEBERG noted he understood the testimony earlier was that 13-inch to 14-inch tires were the norm. He questioned whether it wasn't true that the move was to lower-profile 15 and 16-inch tires. MR. JOHNSON replied he thinks the mix is almost 50/50 now. CHAIRMAN ROKEBERG questioned, though, that the trend is to bigger tires. MR. JOHNSON agreed, but noted that does not mean the tire contains more studs. In response to the chairman's request, he explained the manufacturer molds the stud hole in the tire during the manufacturing process. His company uses an average of approximately 100 studs per tire. Number 0136 CHAIRMAN ROKEBERG questioned that the manufacturer predetermines the number of studs which can be installed. MR. JOHNSON indicated the placement of the studs for maximum traction and longevity is all done by computer. He agreed that a very small 13-inch tire would have fewer stud holes than a large 15-inch or 16-inch tire, but the number is pretty close. 100 studs per tire is a very good average. REPRESENTATIVE HALCRO asked if Mr. Johnson had heard his (Representative Halcro's) question to Mr. Wessel concerning the day after the House Transportation Standing Committee meeting. MR. JOHNSON replied he could discuss that and a few other things. Johnson's Tire Service has been using the lightweight environmental stud since 1994. The usage of this stud came through the March 1994 Winter Cities meeting. They heard the testimony of "VTI (ph)" experts and engineers from Finland and Sweden, and went to Bruno Wessel inquiring about this environment-friendly stud because they thought it was a good idea. Bruno Wessel provided them with a lot of studs to choose from, and, luckily, Mr. Johnson noted, they chose the best stud. It is ranked number one; Johnson's Tire Service has been using it since 1994. The first year they put it in approximately half their tires and studded the other half with steel studs because they were concerned about the consumer trusting the lightweight stud. The next year they went to the lightweight stud 100 percent at their retail level. Mr. Johnson commented if the benefits of the lightweight stud are explained to the consumer, and the consumer is assured that the longevity and traction are the same, the consumer will buy the environment-friendly stud. Number 0227 REPRESENTATIVE HALCRO asked if Mr. Johnson had seen anything from his customers like the situation described in the article, "'We saw the carbide tips just smash right down into the casing of the stud.'" MR. JOHNSON answered in the negative. He indicated when Johnson's Tire Service began this lightweight stud in 1994, they closely examined the tires coming off vehicles in the spring. The company has a very large share of the market and if the consumer is unhappy with the performance or longevity of the stud, the consumer simply is not going to buy the studs again. Mr. Johnson said his company's sales continue to increase year after year, so the consumers are very pleased with the environmental stud his company is using at least. There are many different grades of studs, including lightweight studs. Mr. Johnson emphasized his company chose the best. CHAIRMAN ROKEBERG asked what the best is. MR. JOHNSON replied it is a stud his company is purchasing from Bruno Wessel. The studs are expensive, but, again, his company has taken the route to provide an environmental stud which they think is the right thing to do to reduce road wear and save taxes. CHAIRMAN ROKEBERG asked the weight of the stud. MR. JOHNSON answered 1.1 [grams]. They also use .9 gram stud developed by Nokia in Finland. Mr. Johnson emphasized that the lighter weight does not mean traction or longevity is going to be decreased. Number 0303 CHAIRMAN ROKEBERG asked about the protrusion. MR. JOHNSON replied each manufacturer gives a list of tire offering sizes and specify what size stud to use in their literature. Perhaps five choices - 11 [mm], 12, 13, 15 or 16 - might be given. He noted, "The recommendation is to follow the manufacturer's recommendational stud length, and we do that - we adhere to that 100 percent." If a specific size [tire] calls for a 12 [mm] stud, that is what Johnson's uses. Mr. Johnson indicated if the wrong size stud is inserted into a tire, the stud will not hold and the longevity of the tire will be decreased dramatically. CHAIRMAN ROKEBERG asked about the legislation's 1.3 gram maximum weight and a type of tire requiring a longer protrusion or stud, noting the weight is limited. MR. JOHNSON answered, "The magic number, the one we use, is the one -- that's where the largest volume is. As you go up into a, say a 15 or 16, that's gonna be increased slightly, but all the studs we would use - whether it's a 12, 13, 15, or 16 - would meet the 1.3. weight requirements." In response to the chairman's question about the diameter increasing with a longer stud, Mr. Johnson noted the diameter is the same; only the length is longer, which slightly increases the weight of the stud. Mr. Johnson reiterated the 1.3 [gram] would meet all requirements. He commented, "It is very difficult to say, okay, all 13s will take 1-1 [1.1], all number 15s will take 1-2 [1.2], and I think a 1-3 [1.3] is an average and you should not exceed that." Number 0402 CHAIRMAN ROKEBERG asked what keeps this legislation from being the Johnson's Tire Service bill versus its competitors. MR. JOHNSON said that with or without the bill, his company has been selling these studs since 1994. They have not increased their prices even though the studs cost them about a $1 more per tire than what the standard steel studs cost their competitors; the labor costs are the same for steel studs or lightweight studs. Mr. Johnson asked if the chairman's question was the reason why Johnson's Tire Service is using lightweight studs instead of steel. CHAIRMAN ROKEBERG answered in the negative. He indicated he was asking why this wouldn't give Johnson's Tire Service a competitive advantage. MR. JOHNSON replied his company would just go to another level, another step. Consumers will not walk out of their stores because they only have lightweight studs. He noted a previous question, "I think someone mentioned a question that if people knew that ... the steel studs were gonna be banned they would have a run on studs. I disagree with that totally. ... The consumer, you know, they -- if you can assure them the same quality, same longevity, same traction, and ... even if they cost a little bit more, the consumers are concerned about the environment just like everybody else." CHAIRMAN ROKEBERG repeated his question was what makes this bill not advantageous to Mr. Johnson's company. The chairman noted it seems to him this legislation would give Mr. Johnson's company a competitive advantage because it has been selling the lightweight studs. Number 0485 MR. JOHNSON said he somewhat disagrees. He indicated this legislation could work against them. Mr. Johnson indicated they are using the environment-friendly nature of the lightweight stud as a selling feature, and they have a very large market share, but could lose this selling feature because the guy down the street would be able to make the same claim. However, he thinks it boils down to [the fact that] consumers buy from dealers who provide them quality and service equally. He is for this bill; his company has been using the studs for five years; the consumers love them. The legislation might affect them in some way, but he expressed his interest in protecting the environment. REPRESENTATIVE MURKOWSKI referred to Representative Halcro's quoting of the March 19, 1999, Anchorage Daily News article in the bill packet regarding the problem with the aluminum stud. Her understanding is that Mr. Johnson is selling the best lightweight aluminum stud. Representative Murkowski questioned whether the quality of stud she might buy from Johnson's Tire Center selling a Bruno Wessel stud might be different from the 1.3 [gram] aluminum stud she might buy from COSTCO Wholesale Corporation. MR. JOHNSON answered yes. There are a lot of lightweight studs available in different grades and qualities. The choice of stud is up to the tire dealer. Johnson's Tire Service is paying a lot of money for the studs they buy, but they're receiving quality in return. Whether or not an independent tire dealer would want to spend the additional money to get the best stud is a question Mr. Johnson cannot answer; the choice is up to the dealer. He thinks the additional cost is the main reason Alaskan tire dealers have not gone to the lightweight studs. Number 0633 CHAIRMAN ROKEBERG asked: 1) Does Mr. Johnson buy his studs from Bruno Wessel? 2) Are there other suppliers of quality studs? MR. JOHNSON replied his company has been buying studs from Bruno Wessel since 1982, indicating his company has never had a reason to consider changing or even looking somewhere else. CHAIRMAN ROKEBERG asked Mr. Wessel if he had competitors for these lightweight studs. MR. WESSEL replied they did. CHAIRMAN ROKEBERG confirmed Bruno Wessel did not have a corner on the market for lightweight studs, asking to make sure the company did not have an exclusive agreement with Nokia or anything like that. MR. WESSEL noted there are about five tire stud manufacturers world-wide. Only two are really capable of handling the quantity requirements for the world. The other manufacturers are smaller, specializing in different types and shapes of studs, each with its market niche. About 400 different types of studs are made. For example, studs are made for horseshoes, shoes, and Zamboni ice machines. Number 0738 CHAIRMAN ROKEBERG noted he has always been a skeptic about Alaskan roads; he questioned Mr. Poshard if the Alaska is one of the 45 states using the WesTrack and Superpave [superior-performing asphalt pavements] procedures. MR. POSHARD deferred the question to Mr. Barter because of Mr. Barter's involvement in research and materials. CHAIRMAN ROKEBERG referred to the December 21, 1998, Fortune magazine article ["Industrial Management & Technology - Smoother, Sturdier, High-Tech Highways"] in the bill packet that describes the WesTrack, a 1.8 mile oval located near Carson City, Nevada. The WesTrack contains 26 different asphalt recipes and is a cooperative venture. The chairman asked Mr. Barter if he is aware of this project. MR. BARTER answered in the affirmative. The Alaska Department of Transportation and Public Facilities is a cooperative sponsor in the pooled funds; Alaska helped finance part of the research taking place there through the Federal Highway Administration. CHAIRMAN ROKEBERG noted, "In the executive summary it says about 50 percent of the wear could be laid down to the -- is it just the ... stone mastic mix, or is it the hard aggregate? And the studs, there seems to be various percentages granted." He commented there seems to be no mention of the road base; the chairman questioned Mr. Barter about that being a major factor in Alaska. Number 0806 MR. BARTER replied in that regard one is into the displacement type rutting - a totally different phenomena. That is where the structural capability of the road bed embankment will not carry the additional weight of the heavier vehicles. CHAIRMAN ROKEBERG questioned, then, that the aggregate and the various other types of fill materials do not have an impact on the standard passenger car type rutting, or even commercial vehicle rutting. MR. BARTER responded that the quality of the aggregate is a very significant component. This is where they start talking about the hard, durable aggregates. In Alaska, the glacial deposits are (indisc.) random valleys, so the deposits are very sorted and mixed. Technically speaking, Alaska has a soft rock in comparison to what it could have. Mr. Barter referred to the research mentioned earlier: DOT-PF has identified three other sources and started its experiments last season with the hard rock out of the Cantwell area. The department is not building full depth pavement with it; it is just trying to armor-coat or "black-coat" the surface so it is more resistant to the studded tire impact. Mr. Barter commented it is a grinding action, not a shoving or pushing type action. CHAIRMAN ROKEBERG asked if there were further questions of DOT-PF. There being none, he asked if anyone else wished to testify on HB 127. Number 0886 MATT SEIDLER, Owner, Alaska Tire Service, testified next via teleconference from Anchorage. Mr. Seidler stated he had a question for Mr. Wessel. He noted some of the northwestern states, Washington and Oregon, have had lightweight stud laws in effect before, and he asked if this had been reversed or if those states had had problems with the same legislation before the committee. MR. WESSEL indicated the issue has been raised in "Tire Talk," the trade magazine (indisc.) the Northwest. Mr. Wessel said the state of Oregon was the first state to pass a law regarding lightweight studs. This law set a 1.1 gram requirement [limit]. There were problems the first year with about 3 percent of the tires studded. However, Mr. Wessel noted they could provide quite a bit of data showing most of those problems were related to installation of the tire stud. Mr. Wessel indicated the aluminum tire studs have been used worldwide and there have been no reversals of laws in any area where aluminum studs are used. He clarified that Oregon had modified its law, increasing the requirement [limit] to 1.5 grams. CHAIRMAN ROKEBERG confirmed there was no further testimony on HB 127, closing the public hearing. He invited Ms. Seitz forward to explain the Version H proposed committee substitute (CS). Number 1001 JANET SEITZ, Legislative Assistant to Representative Norman Rokeberg, Alaska State Legislature, came forward as aide to the House Labor and Commerce Standing Committee to explain a possible committee substitute (CS) for HB 127, Version H. Version H, labeled 1-LS0567\H, Ford, 3/25/99, was drafted by Mike Ford, Legislative Counsel, Legislative Legal and Research Services, Legislative Affairs Agency, to address the concern expressed in the municipality's [Municipality of Anchorage] letter about emergency vehicles. In response to the chairman's question, Ms. Seitz indicated Representative Masek's office is aware of the possible CS. MR. DEATS added, in response to the chairman's question, that Representative Masek's office has no objection. MS. SEITZ explained the change in the CS, indicating subsection (1) of Version H reads: (1) "commercial motor vehicle" means a vehicle described in AS 19.10.399(1)(A)-(C); MS. SEITZ noted the difference from the original bill is the addition of "(1)(A)-(C)". Ms. Seitz indicated and confirmed emergency vehicles, school buses, fire equipment, and farm vehicles, as well as other commercial vehicles, would be excluded from the provisions of the legislation. Number 1114 REPRESENTATIVE HALCRO made a motion to adopt Version H as the proposed committee substitute for HB 127. There being no objection, it was so ordered. CHAIRMAN ROKEBERG confirmed there was no further discussion of HB 127. Number 1133 REPRESENTATIVE HALCRO made a motion to move CSHB 127 out of committee with individual recommendations and the attached zero fiscal note. There being no objections, CSHB 127(L&C) moved out of the House Labor and Commerce Standing Committee. HB 61 - OVERTIME WAGE EXEMPTION AIRLINE EMPLOYEES Number 1183 CHAIRMAN ROKEBERG announced the committee's next order of business is HB 61, "An Act relating to an exemption from the requirement for payment for overtime under a voluntary written agreement for certain employees in the airline industry; and providing for an effective date." He invited the sponsor's representative forward. Number 1195 JONATHON LACK, Legislative Assistant to Representative Andrew Halcro, Alaska State Legislature, came forward to present HB 61. He noted Representative Halcro is offering HB 61, which was introduced the previous legislative session as HB 389. House Bill 389 moved out of the House Labor and Commerce Standing Committee but did not make it to the House floor because it was introduced late in the session. Mr. Lack explained HB 61 is intended to allow airline employees to trade workdays with each other without invoking overtime pay requirements for their employers. Under current Alaska Statute, a substitute employee who works a shift for another employee must be paid overtime if that substitute employee has already worked 8 hours in the same workday or 40 hours in the same workweek. Employees currently enjoy shift-trading so they can attend special events for their children, take longer weekend trips, and travel. This legislation is necessary because Alaska is the only western state with a daily overtime requirement. Shift-trading is very common nationwide throughout the airline industry. Usually it is done informally, with the employer's tacit approval, and HB 61 would legitimize the custom in the industry. Mr. Lack, noting the committee was running short on time, made himself available for questions and said Michelle Buckmaster is also available in Anchorage to testify in favor of the legislation. CHAIRMAN ROKEBERG asked Mr. Lack to quickly list for the record the letters of support for the legislation in the bill packet. Number 1288 MR. LACK commented there are letters of support from Alaska Airlines, ERA Aviation and the Alaska Air Carriers Association, as well as a resolution of support from the Alaska Air Carriers Association. There is a letter of support for the previous session's HB 389 from Peninsula Airways, Incorporated [d.b.a. PenAir]. There are letters of support from a number of airline employees. Mr. Lack said the bill packet also contains petition format support forms from various airline employees including ERA Aviation, United Airlines counter and airfreight staff, United Airlines ramp agents, and Delta Airlines. REPRESENTATIVE HARRIS asked Mr. Lack if they had received any comments from the Department of Labor. Number 1379 MR. LACK noted Mr. Perkins [Deputy Commissioner, Department of Labor] had been present earlier but had to leave to attend a "Finance Subcommittee" meeting. Mr. Lack said Mr. Perkins has indicated the department and the Administration do not oppose the intent of this legislation as written. REPRESENTATIVE MURKOWSKI commented a couple of the letters in the packet are in support but they express the desire that the flexible work hour be included. She questioned, "I notice that it specifically does not include, and that's why you're asking for this additional exemption. What's going on there?" MR. LACK indicated he thinks there possibly may have just been a misunderstanding and that is why the letters include flexible work hour. He noted the state of Alaska already has provision for people to work four 10-hour shifts for their employers. They simply have to sign up for that and it has to be approved by the Department of Labor. The legislation before the committee would allow shift trading within the same work period, either an 8-hour period or a 40-hour workweek. Mr. Lack stated he believes this is what the letter's authors are speaking of when they talk about flexible shifts. Number 1449 REPRESENTATIVE MURKOWSKI said, then, the exemptions set out in subsections (13) and (14) in statute [AS 23.10.060(d)] do not currently cover the miscellaneous airline employees. MR. LACK answered no, they do not. REPRESENTATIVE MURKOWSKI asked why. MR. LACK indicated he does not know, he has been told by legislative counsel that those exemptions do not cover these employees. CHAIRMAN ROKEBERG questioned if it has anything to do with whether they are under a labor agreement. REPRESENTATIVE MURKOWSKI reviewed subsections (13) and (14). [AS 23.10.060(d)(13) and (14) read: (13) work performed by an employee under a flexible work hour plan if the plan is included as part of a collective bargaining agreement; (14) work performed by an employee under a voluntary flexible work hour plan if (A) the employee and the employer have signed a written agreement and the written agreement has been filed with the department; and (B) the department has issued a certificate approving the plan that states the work is for 40 hours a week and not more than 10 hours a day; for work over 40 hours a week or 10 hours a day under a flexible work hour plan not included as part of a collective bargaining agreement, compensation at the rate of one and one-half times the regular rate of pay shall be paid for the overtime;] Number 1515 MR. LACK indicated he understands it is currently possible for the employee and the union to negotiate whether or not to have flexible time rules. He noted that is allowed, but non-union airlines do not have this luxury because they're not part of a collective bargaining agreement. CHAIRMAN ROKEBERG said he remembers this provision very well, stating, "That is, if you have a collective bargaining (indisc.) if you have a flex-work plan that's already bargained for -- but if not, you have to have an approved plan." The chairman indicated this is for a flexible work plan hour, normally providing for a four 10-hour day work week. He noted it is a formalized process which has to be approved. REPRESENTATIVE HALCRO indicated the shift-trading practice has been going on for a very long time. The problem lies with Alaska's daily overtime requirement. A lot of airlines have told their employees that they can't allow the employees to trade shifts until this is resolved in statute and the airlines are protected. Representative Halcro noted a large part of working in the airline industry is the ability to trade shifts. He indicated this practice is done in every state and the legislation is just a means of legitimizing the practice in Alaska. CHAIRMAN ROKEBERG announced the committee would take Ms. Buckmaster's testimony. Number 1636 MICHELLE BUCKMASTER testified via teleconference from Anchorage in support of HB 61. She spoke mainly from a prepared statement: "Mr. Chairman, members of the committee, ... I am a customer service representative for United Airlines in Anchorage, Alaska. I am here on behalf of numerous airline employees who are from various airlines here in the state of Alaska. I would like to thank you for giving me the opportunity to give my testimony. Unfortunately there may not be too many people here today because of the short notice of this hearing, so I am speaking on behalf of quite a few people. I am here in regard to HB 61, which I hope will be passed through ... this legislation [legislature] this year. As you are aware, the states of Washington and Hawaii passed a similar bill last year. "In May of 1997 United Airlines informed us employees in Alaska that because of the labor laws in our state, the trade policy in company regulations would no longer pertain to us. The trade policy is a significant benefit to us as employees as well as all airline employees in the state of Alaska. "The airline industry ... is an industry that spends 24 hours a day, 7 days a week, 52 weeks a year in promoting and supporting the economic growth of our state through tourism, conventions, sporting events and numerous other activities. The trade policy is a valuable benefit and tool to its employees who would otherwise miss out on precious time with their family, observance of religious holidays, educational opportunities, summer vacations and extra income for those who require it. "In an industry where competition is always a priority, as we know, we have come together to make a change that will benefit and create a win-win situation for all airline employees." Number 1737 "Over the past two years employees from several airlines have worked together to encourage implementation of this bill. As you are aware, last year [you] received numerous phone calls and letters from concerned airline employees; this still holds true today and the support is here. I faxed you Friday a (indisc.) petition I had sent to airlines to have signed in support of this bill, just to show you a little support this and that we still stand behind our word. Unfortunately today Doug Orcutt who works for Alaska Airlines, the largest airline in Alaska, has a previous engagement in Washington, D.C. I talked with him and he reassured me of the full support from Alaska Airlines employees. He is a ramp serviceman here in Anchorage. There has been a great deal of grassroots support for this legislation. I would like to remind you that this is on a volunteer basis by employees, making their own choice. This will not invoke overtime pay requirements. This will ... ["not" stated on tape and in written statement] give individual workers the freedom to schedule specific time off or to make extra earnings without invoking overtime. Therefore you will have happier, more productive, more dedicated employees in a highly traveled state." "To give you an example: Employee A works 40 hours a week, Friday/Saturday off. Employee A would like to have an extra day off, Thursday, so he can have a long weekend fishing. Employee B works 20 hours a week, Wednesday/Thursday off. He would like to work for Employee A on Thursday to get the extra hours and money, however he only receives straight-time pay on (indisc.) volunteer basis. If the company needs him to work extra hours on (indisc.) day or his day off and he is eligible for the overtime, then he would receive (indisc.) the applicable overtime rate. Let's not get confused that the overtime that the company needs you to work is (indisc.) totally separate issue (indisc.) assumption. Another example is Employee B needs an extra day off. He needs Saturday, he is running the Mayors Marathon here in Anchorage. Employee A will work for him that Saturday on a volunteer basis and only receives straight-time pay even though he exceeds his forty hours in a work week and/or 8 hours in a day, he only receives his straight-time pay. However, if his company needs him to work the overtime or calls him in needs of his service, he is eligible then for the applicable overtime rate. As you see this does not hurt anyone, the company or the employee. They both meet their needs. "In closing, Mr. Chairman, members of the committee, we understand and respect that the labor laws are here to protect us. However, this particular law which may be a protection in your eyes has eliminated a benefit in ours here in Alaska. Therefore, here I am on behalf of these employees to request the amendment we have brought before you not only be passed, but in a timely manner be passed. This is a very valuable benefit to us, and throughout the country with United Airlines as well as many other airlines. I am here again to support HB 61 along with several other airline employees. Thank you again for your time." Number 1946 CHAIRMAN ROKEBERG stated the committee appreciated Ms. Buckmaster's efforts. He invited Mr. Perkins forward. Number 1978 DWIGHT PERKINS, Deputy Commissioner, Department of Labor, came forward to testify on HB 61. He noted the department has historically opposed these types of legislation because the department feels they weaken overtime requirements for employers. However, Mr. Perkins indicated the department feels HB 61's voluntary written agreement between the employer and employee provides a safeguard for the employee against being coerced by the employer to voluntarily work when the employee really does not want to. The benefits the employees received from the airlines kind of make up for "the sometimes pay that they may not receive on the paycheck," so this is a benefit the employees would lose if this is not changed. Mr. Perkins also indicated the employers do have a possibly strong liability out there and the department understands the employers' need and desire to add this exemption. He stated the department does not oppose this legislation. CHAIRMAN ROKEBERG commented to Mr. Perkins there is also a possible CS [labeled 1-LS0335\G, Cramer, 3/19/99] which deletes the written contract. He asked for the department's position on this CS. Number 2160 MR. PERKINS answered the department supports HB 61, Version A, as he has testified. However, the department would have some concern, and probably not be able to give its non-opposition to the bill, if the CS was to be adopted. The written agreement provides some sort of safeguard for the employee and does ensure the employee voluntarily agreed to the shift change. Mr. Perkins indicated he thinks the employer would want to have that as well to protect them against possible claims of unpaid overtime from an employee. CHAIRMAN ROKEBERG asked, for the record, if the voluntary written agreement would be between the employer and employee, and asked how that would work as a practical matter regarding Department of Labor enforcement. MR. PERKINS responded that if a wage claim was brought to the department, the department would ask the employer for supporting documentation and the employer would produce the written agreement. Mr. Perkins referred to subsection (d)(18)(D) of HB 61, which reads: * Section 1. AS 23.10.060(d) is amended by adding a new paragraph to read: (18) work performed by an employee under a voluntary written agreement addressing the trading of work shifts among employees if ... (D) the trading agreement states that the employee is not entitled to receive overtime for any hours worked by the employee when the employee voluntarily works those hours under a shift trading practice under which the employee has the opportunity, in the same or other work weeks, to reduce hours worked by voluntarily offering a shift for trade or reassignment. MR. PERKINS stated he believes it is a good safeguard for both employer and employee, and it is a workable solution. NUMBER 2333 CHAIRMAN ROKEBERG, confirming there were no questions for Mr. Perkins and that no one else wished to testify on HB 61, announced the public hearing was closed. The chairman commented he was familiar with the practice of shift trading from his work experience in 1966 and 1967 as a transportation agent for Northwest Airlines and a customer service representative for Alaska Airlines. He noted the practice is longstanding and has almost completely no bearing on labor practices. Chairman Rokeberg indicated HB 61 merely legitimizes this customary practice. He thanked organized labor for not opposing the legislation and the Department of Labor for its non-opposition. The chairman indicated he wished Mr. Lack to explain why the verbiage in subsection(18)(A) is necessary. He understands it, but wishes the explanation to be on the record. [Subsection (A) reads: (A) the employee is employed by an air carrier subject to subchapter II of the Railway Labor Act (45 U.S.C. 181-188), including employment as a customer service representative;] Number 2486 MR. LACK replied, "Mr. Chairman, to answer your question, the reason we -- it's put in the Railway Labor Act and defined as who are ... employees of an air carrier under that Act is because the Act specifically allow..." [SOME TESTIMONY LOST DUE TO BRIEF TAPE MALFUNCTION DURING TAPE CHANGE. A REQUEST WAS MADE TO THE CHAIRMAN TO RESTATE HIS QUESTION SO MR. LACK'S ANSWER COULD BE FULLY RECORDED. A VERY BRIEF AT-EASE WAS TAKEN DURING THE TAPE MALFUNCTION.] TAPE 99-32, SIDE A Number 0001 CHAIRMAN ROKEBERG stated, "For the record, could you answer why including employment as a customer service representative is stipulated in the bill." MR. LACK answered, "Mr. Chairman, it is redundant including customer service representative. However, because ... the federal Railway Labor Act does include all employees of the air carrier unless they're involved in the mining of coal. So it is redundant, however there was some concern by people, apparently last year, that customer service agents might not be included under the federal Act." CHAIRMAN ROKEBERG confirmed Mr. Lack had read the minutes from the last session. The chairman recalled there had been a reason but could not remember exactly why. He asked Mr. Lack to follow up on this with Representative John Cowdery [sponsor of the previous session's HB 389], noting the committee did not like to have surplus wordage and definitely wanted to avoid redundancy. Number 0097 REPRESENTATIVE HALCRO indicated the initial version of HB 389, the bill introduced the previous session, did not contain that provision but the version brought back before the committee after work with organized labor had that language added [Note: Representative Halcro's testimony mentioned the creation of "kind of a work subcommittee" for HB 389; HB 389 was not formally assigned to a subcommittee]. CHAIRMAN ROKEBERG confirmed there was no further discussion. He indicated both he and Representative Halcro represent the area encompassing Anchorage International Airport and he does not think this is a conflict of interest. The chairman commented there are some 10,000 jobs at that airport; the airport is very important to the economy of Anchorage and the state of Alaska. Number 0172 REPRESENTATIVE MURKOWSKI clarified that the sponsor had withdrawn the possible CS. CHAIRMAN ROKEBERG noted the written contract was being retained. Number 0206 REPRESENTATIVE MURKOWSKI made a motion to move HB 61 out of committee with the zero fiscal note and individual recommendations. There being no objection, HB 61 moved out of the House Labor and Commerce Standing Committee. Number 0222 CHAIRMAN ROKEBERG announced the March 31, 1999, House Labor and Commerce Committee meeting would be cancelled. ADJOURNMENT Number 0257 CHAIRMAN ROKEBERG adjourned the House Labor and Commerce Standing Committee meeting at 5:04 p.m.