SENATE TRANSPORTATION March 28, 1995 1:45 p.m. MEMBERS PRESENT Senator Steve Rieger, Chairman Senator Lyda Green Senator Al Adams Senator Georgianna Lincoln MEMBERS ABSENT Senator Robin Taylor, Vice Chair COMMITTEE CALENDAR SENATE BILL NO. 64 "An Act relating to the dissolution of the Alaska Railroad Corporation and providing for a successor corporation; and providing for an effective date." SENATE BILL NO. 28 "An Act repealing an additional fee for motor vehicle registration not conducted by mail and limiting motor vehicle emissions inspection to once every two years." PREVIOUS SENATE ACTION SB 64 - See Senate Transportation minutes dated 2/9/95 and 3/23/95. SB 28 - No previous action to record. WITNESS REGISTER James Armstrong, Staff Senator Donley State Capitol Juneau, Alaska 99801-1182 POSITION STATEMENT: Offered information regarding SB 28. Senator Donley State Capitol Juneau, Alaska 99801-1182 POSITION STATEMENT: Prime sponsor of SB 28. Ron King, Acting Chief Air Quality Management Section Department of Environmental Conservation 410 Willoughby Avenue, Suite 105 Juneau, Alaska 99801 POSITION STATEMENT: Offered additional information. ACTION NARRATIVE TAPE 95-7, SIDE A SB 64 CONVERT AK RR TO PRIVATE CORPORATION  Number 002 CHAIRMAN RIEGER called the Senate Transportation meeting to order at 1:45 p.m. He introduced SB 64 as the first order of business before the committee. He explained that the Utermohle, version M, CS eliminated the reference to the $25 per share par value. This CS also rewords the concurrence of other parties which was part of the language discussed in reference to assigning contracts to a successor corporation. SENATOR GREEN moved that the Utermohle, version M, CS be adopted in lieu of the original bill. Hearing no objection, the CS was before the committee for consideration. CHAIRMAN RIEGER recognized Senator Adam's concerns regarding another CS, but preferred not to move that version out. He said that Senator Adams was welcome to move that version. That version could be used if the current CS has problems. SENATOR ADAMS stated that his version was better than the current CS. He explained that his version would eliminate an asset that should be privatized. He agreed not to offer his CS, but he informed the Chair that he would oppose the movement of the bill from committee until a majority of the Majority members are present. SENATOR LINCOLN felt that the bill should be held. CHAIRMAN RIEGER agreed to hold SB 64 until a future meeting. SB 28 MOTOR VEHICLE REG FEE/EMISS'N INSPECTIONS  Number 051 CHAIRMAN RIEGER introduced SB 28 as the next order of business before the committee. SENATOR ADAMS asked from whose sponsor substitute they would work. JAMES ARMSTRONG, staff to Senator Donley, explained that the sponsor substitute was a work draft which was never offered. SENATOR ADAMS moved that CS 9-LSO256\F be adopted. CHAIRMAN RIEGER objected in order to clarify if Senator Adams wanted to adopt the CS for working purposes or move it out of committee. SENATOR ADAMS clarified that he wanted to adopt the CS for working purposes. CHAIRMAN RIEGER removed his objection and the CS was before the committee. SENATOR GREEN asked if the language "an area designated by the Department of Environmental Conservation" in Section 1 was in the original bill. SENATOR DONLEY, prime sponsor of SB 28, explained that the goal of SB 28 is to move from annual testing to biannual testing. By changing to a biannual registration and testing program, the system has to be "tweeked" in order to remain in compliance with federal requirements. The proposed CS allows the department more latitude in some areas while tightening other areas. Many other states have this biannual system. SENATOR ADAMS inquired as to the federal requirements for emission control and the amount of money the state receives for providing those services. SENATOR DONLEY said that it is tied to the state's federal highway funds. The requirements specify the number of noncompliance days before a community must initiate procedures to clean their air. There are alternatives to emission testing, although emission testing seems to be the most successful program in gaining compliance. Senator Donley stated that without this program, the federal government would not give the state funds. Number 137 RON KING, the Acting Chief for the Air Quality Management Section in the Department of Environmental Conservation, explained that Alaska annually receives between $175 million to $250 million in appropriations for federal highway systems. If the state fails to achieve the standard or implement control measures, the federal government can penalize the state through the sanction of highway funds. He pointed out that the federal government cannot penalize projects that are for safety or part of an adopted air quality control program. Initially the penalty would occur inside a nonatainment area which refers to the Municipality of Anchorage and the Fairbanks North Star Borough in this case. If the area has failed to take corrective action after two years, the federal government can expand the penalties or sanctions statewide. SENATOR ADAMS asked if the biannual testing would create a loss of funds. RON KING stated that if the program remains as stringent as the current program, the inspection can be done biannually. However, there are provisions that must be present in order to ensure that the program is as stringent. Mr. King expressed some potential concerns with the bill. The department is working on a fiscal note and an analysis of the bill. SENATOR ADAMS asked why the fees were increased from $75 to $200. SENATOR DONLEY explained that the fees increased due to the fact that people would be registering their car every two years. Senator Donley noted that there is also an increase in the deterrent for the penalty for noncompliance, from $75 to $200. RON KING pointed out that currently the department can only treat a violation of these regulations as a Class A misdemeanor which is punishable by up to one year in jail and up to $5,000. This would require going to Superior Court for a bailable offense. SENATOR ADAMS noted that the repeal regarding mailing in motor vehicle registration results in a loss in revenue. He was under the impression that the Department of Revenue needed the extra revenue in order to keep the staff in place which is a concern. If one of those parts is eliminated, the $1.1 million could be used as program receipts to continue the service in motor vehicle registration. SENATOR DONLEY indicated that the Department of Motor Vehicles (DMV) generates more program receipts than they are allowed to use in their operations. He acknowledged that SB 28 has two elements: repealing the $10 fee and the biannual testing. Either provision could stand alone. He said that he supported both measures independently or together. Number 209 SENATOR LINCOLN supported the elimination of the $10 fee. In areas such as Cordova, in order to receive a title promptly, they must go in to the DMV to register their vehicle. If they have to mail in their registration, the mail must travel from Cordova to Anchorage and back which is not beneficial. She expressed concern regarding the language on page 1, lines 5-9 which refers to the motor vehicle owner providing "the transferee with a current and valid emissions inspection." Rural residents often purchase a used vehicle in an urban area and then ship that vehicle to an area where emissions testing is not required. She suggested that "new" be inserted before "owner" on page 1, line 5 in order to address the situation previously described. RON KING clarified that the language was intended to refer to the current owner. If the current owner resided in the Municipality of Anchorage, the owner would be required to have the vehicle inspected whereas a owner located in Cordova would not be required to have the vehicle inspected. The current owner if in an area that required emissions inspection would have to provide the person buying the car with a certificate of inspection. SENATOR LINCOLN said that was unnecessary because if the buyer is going into an area that does not require testing then there is no need for the present owner to do that. RON KING pointed out that there is a problem with vehicles being registered outside an area in which testing is required and then coming back into the testing area. The persons buying those vehicles have purchased vehicles with thousands of dollars of tampering. In order to eliminate that, the inspection is required if the vehicle resides in an area which requires that emissions inspection. Therefore, the buyer would know that they are purchasing it clean and they are not faced with repair bills. CHAIRMAN RIEGER concurred with Senator Lincoln's concerns regarding someone, outside of a testing area, purchasing a vehicle with the intention of staying in that area. Splitting the bill and eliminating the reduction of the $10 fee may be appropriate; the latter portion has a negative $1.1 million fiscal note. There being no further business before the committee, the meeting adjourned at 2:00 p.m.