SENATE TRANSPORTATION COMMITTEE April 26, 1996 3:51 p.m. MEMBERS PRESENT Senator Steve Rieger, Chairman Senator Robin Taylor, Vice Chair Senator Lyda Green Senator Al Adams Senator Georgianna Lincoln MEMBERS ABSENT All members present COMMITTEE CALENDAR CS FOR HOUSE BILL NO. 517(TRA)(title am) "An Act relating to motor vehicle records and hearings of the Department of Public Safety; increasing the period under which a person may drive a motor vehicle under a temporary permit; relating to ownership of certain abandoned motor vehicles; relating to suspension or revocation of a motor vehicle registration or special permit; relating to renewal of a driver's license by mail; relating to procedures applicable to administrative revocation of a driver's license; relating to commercial driver training schools; increasing the property damage amounts for proof of financial responsibility and proof of motor vehicle eligibility in order to lawfully operate a motor vehicle in the state; amending the definition of `commercial motor vehicle'; relating to prohibited operation of a commercial motor vehicle and to disqualification from driving a commercial motor vehicle; relating to certain notifications in accidents involving property damage; relating to motor vehicle registration procedures; and providing for an effective date." HOUSE JOINT RESOLUTION NO. 65 Relating to proposed Federal Aviation Administration regulations establishing crew member flight time limitations. CS FOR HOUSE BILL NO. 526(FIN) am "An Act relating to the financing authority, programs, operations, and projects of the Alaska Industrial Development and Export Authority; providing an exemption from the procurement code for certain projects of the authority; and providing for an effective date." PREVIOUS SENATE COMMITTEE ACTION HB 517 - No previous action to record. HJR 65 - No previous action to record. HB 526 - See Senate Transportation minutes dated 4/16/96, 4/23/96. WITNESS REGISTER Juanita Hensley, Chief of Driver Services Division of Motor Vehicles Department of Public Safety P.O. Box 20020 Juneau, AK 99811-0020 POSITION STATEMENT: Offered information on CSHB 517(TRA) Representative Gary Davis, Chair House Transportation Committee State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Testified in support of HJR 65 Keith Laufer, Assistant Attorney General Governmental Affairs Section Department of Law 1031 W. 4th Ave., Suite 200 Anchorage, AK 99501-1994 POSITION STATEMENT: Offered information on CSHB 526(FIN) am Randy Simmons Alaska Industrial Development & Export Authority 480 W. Tudor Road Anchorage, AK 99503-6690 POSITION STATEMENT: Offered information on CSHB 526(FIN) am ACTION NARRATIVE TAPE 96-19, SIDE A Number 001 CSHB 517(TRA)(title am) MOTOR VEHICLES: REGULATION & INSURANCE  CHAIRMAN RIEGER called the Senate Transportation Committee meeting to order at 3:51 p.m., and brought CSHB 517(TRA)(title am) before the committee as the first order of business. Number 008 JUANITA HENSLEY, Division of Motor Vehicles (DMV), Department of Public Safety, said most Alaskans need a driver's license in order to carry on their daily routine and they have stood in line waiting to take care of business that requires them to physically visit DMV. HB 517 will make it easier for the Department of Public Safety to serve the public by simplifying procedures for obtaining a driver's license by removing exceptions to the renewal by mail-in program. Also, current law requires a person involved in an accident resulting in $500 or more in damage to property to report the accident to local police or the Alaska State Troopers for investigation. This amount was set in 1977 and present value of the slightest scrape can cost that much to repair; this bill raises that amount to $1,500. The legislation also provides for administrative hearings to be held by telephone in most instances to avoid costly travel. It allows the Department of Public Safety to keep its records electronically and provides that certified copies of those electronically stored records are admissible in courts and administrative proceedings. It also allows a temporary permit to be issued by a car dealer to be valid for 60 days rather than 30 days to give the dealer and the Department of Public Safety more time to take care of the necessary paper work. HB 517 also provides for compliance of the Code of Federal Regulations, Title 49, the Federal Motor Carrier Safety Act Program grant requirements, and item 22 of the Commercial Vehicle Safety Act 49 CFR parts 383, 390 and 391 dealing with disqualifying a commercial driver for an out-of-service violation. It makes house keeping changes for compliance purposes. Failure to adopt the provisions of 49 CFR may result in a 5 percent sanction of federal highway monies and the Federal Motor Carrier Safety Assistance Program Grant (MCSAP) funding. Concluding her overview, Ms. Hensley noted she had provided the committee with a sectional analysis and she would respond to questions. Number 048 SENATOR ADAMS asked Ms. Hensley to address the repeal of two statutes having to do with the staggering of vehicle registration. MS. HENSLEY explained that in 1978 the department went from all the vehicles having to be registered in January of the year to staggering registration for all vehicles, except for commercial vehicles. This will repeal the fact that the department would have to register commercial vehicles every January and allow them to stagger those registrations as they do now with other vehicles. Number 071 SENATOR RIEGER referred to Section 5, relating to claim of ownership by private property owner, and asked what the law is now in the absence of this section as far as when an abandoned vehicle reverts to the owner of the real estate. MS. HENSLEY responded that before an individual could obtain a title to get a vehicle removed from the property, he would have to go through a bonding situation or obtain a lien against the vehicle for like a storage lien, as well as go through a bonding provision even though the car has been abandoned on their property for a lengthy period of time. SENATOR RIEGER asked the reason for the three-year provision in the section, which, he added seems awfully long. MS. HENSLEY explained that amendment was made at the request of Senator Torgerson, and the department did not object to it. Number 140 There being no further testimony on CSHB 517(TRA)(title am), SENATOR RIEGER asked for the pleasure of the committee. SENATOR GREEN moved CSHB 517(TRA)(title am) be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. Number 151 HJR 65 FAA REGULATIONS ON CREW FLIGHT TIME  CHAIRMAN RIEGER brought HJR 65, sponsored by the House Transportation Committee, before the committee as the next order of business. REPRESENTATIVE GARY DAVIS, Chairman of the House Transportation Committee, explained the Federal Aviation Administration (FAA) has proposed regulations which are going to severely limit air taxi operators' flight time. The proposed regulations would limit the amount of weekly and monthly hours that a pilot can fly by limiting them to only 32 hours of flight time in any seven consecutive calendar days or 100 hours in any calendar month. This issue is causing great concern, not only at the state level, but at the federal level as well where Alaska's congressional delegation is attempting to exempt Alaska from these regulations. There has been testimony to indicate that almost all air taxi operators in the state fly in excess of these hours, so this severely limits the existing operations in the state. HJR 65 requests that Alaska be exempt from the proposed regulations. Number 190 SENATOR GREEN commented that 100 hours in a calendar month is extraordinarily short, and she asked if there has been any testimony relating to the number of hours an individual can safely fly an aircraft. REPRESENTATIVE DAVIS replied that there hasn't been any testimony or research on that issue, but the resolution indicates that the committee feels the current operations are operating safely, and whatever restrictions they currently have are adequate. Number 209 There being no further questions or testimony on HJR 65, CHAIRMAN RIEGER asked for the pleasure of the committee. SENATOR GREEN moved HJR 65 pass out of committee with individual recommendations. Hearing no objection, it was so ordered. Number 213 CSHB 526(FIN) am AIDEA OPERATIONS/PROJECTS/LOANS  CHAIRMAN RIEGER brought CSHB 526(FIN) am before the committee. He advised that since the last meeting on the bill the Alaska Industrial Development & Export Authority (AIDEA) has provided language, which are two different approaches to address the concern about the $10 million authorization. Number 227 SENATOR GREEN inquired which version of the bill the suggested languages applied to. KEITH LAUFER, Assistant Attorney General Governmental Affairs Section, Department of Law, clarified he drafted them off of the version that came over from the House, CSHB 526(FIN) am. Mr. Laufer explained that in response to some of the concerns raised by the chairman, they have provided for a sunset of ADIEA's bonding authorization similar to the sunset that went into effect on July 1, 1995. Both versions of the suggested language before the committee accomplish that. The second issue the chairman was concerned about had to do with a limitation on ADIEA's ability to bond for its loan participation program. The version which reads "bonding authorization amendment" provides for a limitation on AIDEA's ability to issue bonds in order to fund participation loans under its participation program, if those bonds would exceed $10 million. Number 254 RANDY SIMMONS of the Alaska Industrial Development & Export Authority, added that under the bonding authorization, the suggested language that does not have the $10 million limitation for loan participation bonds, there still is in AIDEA statutes a limitation for loan participation, so they could not do a loan participation over $10 million without coming to the legislature for authorization. It further states that they couldn't do a bond over $10 million. As an example, he said if they had two loan participations in one year that were $8 million a piece, normally what they would do to save money was issue one bond. They would group those together and issue one bond for $16 million. Under the bonding authorization, they could do that. Under the bonding authorization amendments, they could not; they would have to issue two $8 million bonds. Number 280 CHAIRMAN RIEGER commented that on that issue he is more comfortable with the existing language, with the exception of adding a sunset provision. He said another issue that was raised was on the interest rate on loan participations, and he asked for an explanation of suggested draft language provided by AIDEA. KEITH LAUFER explained that elsewhere in statute and being amended in the bill are the two provisions that provide for interest rates on loan participations when AIDEA issues both taxable, in one case, or tax exempt bonds in the other case. At the last committee meeting some questions were raised about the interest rate that AIDEA would charge on loans that are not funded with newly issued bonds, but, instead, funded out of AIDEA's own funds or equity without issuing bonds. The amendment provides the methodology that AIDEA uses to set its interest rates on loan participations funded out of equity. First, a determination is made whether tax exempt or taxable bonds could be used for the issue. In other words, certain types of loans can be funded with tax exempt bonds and, in that case, they would set the interest rate using the cost of funds based on the rate that would be available to AIDEA if they were to sell tax exempt bonds. In the other case, they use the taxable bond rights. Number 309 CHAIRMAN RIEGER suggested modifying that language when it's in final draft to say that the interest rate shall be determined by regulation, but not lower than what Mr. Laufer had described. MR. LAUFER and MR. SIMMONS responded that they would not have a problem with his suggested modification. Number 315 CHAIRMAN RIEGER then directed attention to language he had drafted, which is a shortened version of the conditions on the Delong Mountain Transportation System (Red Dog project), to accommodate some of the concerns of Senator Adams. It deletes from an earlier draft of the bill the requirement for a 6.5 percent floor on the rate of return. It also edits the language in b(2) to make it clear that the original return on the original investment is one deal, and the additional return on the additional investment is a different deal as far as making sure that the return is commensurate with the risk. He said number 3 is something that may still be an issue; however, it no longer reads that the toll- schedule may be periodically adjusted, but it is permissive that the original toll schedule could be crafted in any way that the parties negotiate. RANDY SIMMONS and SENATOR ADAMS stated they had no problem with the change in number 3. Number 350 CHAIRMAN RIEGER noted the Senate State Affairs version did not provide for the guarantee of interest to apply on the Small Business Guarantee Program, and he asked if the committee thought that should be added back in or whether that program should have a sunset. SENATOR TAYLOR asked why the provision was deleted in Senate State Affairs. RANDY SIMMONS responded there wasn't a lot of debate on the issue, and he could not speak as to what the concerns might have been of the senators at that time. However, he thought it might be a concern of why AIDEA would want to guarantee interest once there was a default. He added it is something that is generally in most loan programs, and, if a loan were to go into default, they would give a period of 90 days to guarantee the interest on their portion until that loan can be basically sold by the bank. AIDEA doesn't consider it a real problem from their standpoint because the interest is going to be fairly insignificant if it happens, and, even though their program hasn't been used that much so far, they've only had one default on any of the $3 million worth of loans issued so far. Number 397 SENATOR LINCOLN commented that it says it is for the time and in the manner established by the authority by regulation, so it doesn't seem to be a paragraph that would be detrimental. Number 430 After further discussion, CHAIRMAN REIGER stated the consensus of the committee was to add back in language limiting the interest guarantee to no more than 90 days. Number 434 SENATOR TAYLOR suggested modifying existing language that is already within the bill that updates what the current cost would be of the Bradfield Road project. This is just to provide the opportunity that if in fact it can be developed, that there already is legislative authorization in place to go forward with it. CHAIRMAN RIEGER asked if AIDEA has a position on this project and if this would work. RANDY SIMMONS answered that they have not looked at this and he really could not speak to it without looking at it first. He did point out that original authorization for the project was in the Department of Transportation; however, if it is a feasible project, AIDEA will be happy to look at it. If the project were to happen within the next couple of years they would not need this because they have a two-year statute of limitation. If it were left out of the bill and in that two-year period it became a viable project, it could either be done by conduit financing or specific statutory legislation or authorization could be provided under their program. If it is revenue bonds, AIDEA would not need the authority, but if it's under their development finance, it's a different type of bonding and ADIEA would need the authority. SENATOR TAYLOR asked if AIDEA could make a deal without this amendment. RANDY SIMMONS answered they could if the project were going to be financed by conduit financing. SENATOR TAYLOR said he wants AIDEA to have the greatest authority possible so that when someone comes to them with a project that is feasible, they can move forward with some dispatch at that point. RANDY SIMMONS said he didn't want to speak against the Bradfield project because AIDEA just doesn't know anything about it. Their normal process is to work with a developer beforehand to see if a project is fairly viable just from the start, without having to go through the full feasibility study. Then AIDEA would ask for authorization just as they have done with Red Dog, etc. Number 546 SENATOR TAYLOR said part of the concern is that there is a minimum of probably a two-year EIS, there is a national concern in that it will require an international crossing, which takes a considerable period of time, and if there isn't the authorization to move forward on the project upfront, it just further slows everything down. Number 570 CHAIRMAN RIEGER asked if there have been any further developments in the proposal regarding the bulk unloading facility that was testified to at the last hearing. REPRESENTATIVE NAVARRE said he spoke to Representative Kott's staff who informed him that the representative's position has not changed with respect to the amendment, although Representative Kott informed him he was leaving it up to the chairman of the Senate Transportation Committee. Number 580 CHAIRMAN RIEGER stated it was his intention to have a committee substitute drafted for consideration at the next meeting so that final action can be taken on the proposed amendments and the bill can be moved out of committee. He feels the committee is fairly close on all the issues with the exception of the additional bond authorization project. There being no further business to come before the committee, the meeting was adjourned at 4:40 p.m.