SENATE TRANSPORTATION COMMITTEE March 24, 1998 1:40 p.m. MEMBERS PRESENT Senator Jerry Ward, Chairman Senator Gary Wilken, Vice Chair Senator Lyda Green Senator Rick Halford Senator Georgianna Lincoln MEMBERS ABSENT None COMMITTEE CALENDAR SENATE BILL NO. 298 "An Act relating to the regulation of commercial vehicles; relating to the temporary registration of out-of-state commercial vehicles; relating to registration fees for commercial vehicles; and providing for an effective date." PASSED CSSB 298(TRANS) OUT OF COMMITTEE PREVIOUS SENATE ACTION SB 298 - No previous Senate committee action. WITNESS REGISTER Lydia Jones Senate Transportation Committee Aide Alaska State Capitol Juneau, Alaska 99801-1182 POSITION STATEMENT: Read sponsor statement for SB 298 Frank Dillon Alaska Truckers' Association 3443 Minnesota Drive Anchorage, Alaska POSITION STATEMENT: Testified in support of CSSB 298 Juanita Hensley, Chief Driver Services Division of Motor Vehicles Department of Administration P.O. Box 10200 Juneau, Alaska 99811-0200 POSITION STATEMENT: Testified in support of CSSB 298 Peter Blanis No address available POSITION STATEMENT: Supports CSSB 298 Dean McKenzie, President Alaska West Express 660 Ocean Dock Rd. Anchorage, Alaska POSITION STATEMENT: Supports CSSB 298 Ted French Teamsters Local 959 6540 Imlack Way Anchorage, Alaska POSITION STATEMENT: Supports CSSB 298 Mr. Bill Deaver Anchorage, Alaska POSITION STATEMENT: Supports CSSB 298 Mr. Aves Thompson Division of Measurement Standards and Commerical Vehicle Enforcement Department of Transportation and Public Facilities 12050 Industry Way Anchorage, Alaska 99515-3512 POSITION STATEMENT: Answered questions about CSSB 298 Mr. Dennis Poshard Special Assistant Department of Transportation and Public Facilities 3132 Channel Drive Juneau, Alaska 99801-7898 POSITION STATEMENT: Supports CSSB 298 ACTION NARRATIVE TAPE 98-6, SIDE A SB 298 - REGULATION OF COMMERCIAL VEHICLES CHAIRMAN WARD called the Senate Transportation Committee meeting to order at 1:40 p.m. Senators Green, Lincoln, Halford and Ward were present. CHAIRMAN WARD informed committee members a committee substitute for SB 298 had been prepared. SENATOR GREEN moved to adopt CSSB 298 as the working document of the committee. There being no objection, the motion carried. LYDIA JONES, Senate Transportation Committee aide, read the sponsor statement, which is summarized as follows. SB 298 will improve efficiency at the Division of Motor Vehicles (DMV) and the efficiency and safety of freight movement into, out of, and within, Alaska. SB 298 increases temporary fees from $50 to $350 for out- of-state vehicles that wish to operate in Alaska. The measure also eliminates the requirement for annual registration of commercial trailers. The bill is revenue neutral, and its passage will allow the State to participate in the International Registration Plan (IRP). The committee substitute contains two changes to the original bill. The first change, on page 7, decreases the temporary registration period from 60 to 30 days. The second change adds a new section that institutes a one-time registration fee of $10 upon initial registration for a trailer or semi-trailer. This section of the bill was inadvertently omitted from the original version. Number 079 MR. FRANK DILLON, Executive Vice President of the Alaska Trucking Association (ATA), stated strong support for CSSB 298 and made the following comments. This bill is the result of a lot of hard work, effort, discussion and compromise on the part of several state agencies and a variety of highway users. CSSB 298 is supported by highway transportation company owners and by the Teamsters Local 959. MR. DILLON explained the key elements of the bill as follows. First, commercial vehicle drivers will be required to show proof of insurance. Second, the bill contains language that allows for the adoption of the Federal Motor Vehicle Safety Programs criteria for annual truck inspections. This criteria has been in use through regulation for the past seven years in Alaska. It is a good system that has dramatically reduced the number of out-of-service violations for Alaska equipment operated on highways. The same system is accepted in Canada and the "Lower 48" and currently is being implemented in Mexico. The Alaska statute, approved in 1986, has never been implemented or funded, and if it were, it would not make the highways safer. CSSB 298 also increases the temporary registration fee for out-of-state trucks. This fee would be applied to trucks not licensed in Alaska that operate from a foreign jurisdiction and deliver or pick up freight in Alaska. The current fee is a modest $10 to $50 and no active enforcement occurs. Truck drivers have been able to come into the State and operate for an entire hauling season during the summer for $50. The $350 fee is in line with fees charged in other states, and the bill will limit the time period to 30 days which will allow enough time to deliver and pick up freight, but not enough time to take business away from local truckers. MR. DILLON explained the next major change eliminates the requirement to put annual tags on trailing equipment. This applies to towed equipment or commercial vehicle trailers of all sizes, of which there are approximately 20,000. The purpose of the annual registration has been to collect the registration fee. In order to keep SB 298 revenue neutral, the bill will take, from each weight class of those trailers, the fees that are currently collected, and transfer them to the corresponding weight classes of power units. The power vehicle registration fee will increase from a minimum of $30 per year for the lighter equipment, to a maximum of $100 for heavy tractor equipment. Alaska will continue to have the lowest registration costs for power units in the United States. This approach will allow Alaska to participate in the IRP. The IRP has been in existence for approximately 15 years throughout the United States and Canada and is an ongoing effort to get all of the states and provinces operating from the same prorating agreement. Currently 46 states and six provinces and territories are involved. The prorating agreement will replace all past reciprocity agreements that Alaska operated under. Truck equipment is very mobile and without reciprocity, every jurisdiction it passes through would collect full registration costs. It is a nightmare for the trucking industry to try to track equipment, to keep stickers on equipment, and to keep up with different agreements between different jurisdictions. Alaska is one of the few states that has not taken steps to get into the IRP. DMV has been stymied in that regard because of the required annual trailer registration fee. MR. DILLON concluded by saying the ATA believes CSSB 298 is a well crafted piece of legislation that serves the interests of the State and industry through efficiencies. The bill does nothing to denigrate the safety of vehicles on the highway. The ATA hopes that the additional funds, as much as $500,000, collected from out- of-state trucks operating in Alaska in the future, can be applied to keeping the weigh stations open, thereby helping to ensure that incoming trucks are safe and legal. Number 185 SENATOR WARD asked Mr. Dillon what problems are created by the closure of the Tok weigh station. MR. DILLON said that trucks literally wait on the Canadian side of the border until the Tok weigh station closes for breaks or for the evening, to come into the State. More than two dozens trucks were observed in one evening coming in after the station closed. Most of those truckers are avoiding the scale because their trucks are loaded to standards not allowed in the State of Alaska, or because they have mechanical, insurance or paperwork problems they are not prepared to deal with. Mr. Dillon pointed out Alaska is the only state in the Union that does not have a 24 hour highway port of entry station. He emphasized that the secondary function of the scales is to ensure that the weights are legal which is particularly critical on the Alcan Highway from Tok to Fairbanks. That stretch of road is not particularly strong due to the fact that it is built on permafrost; therefore, strict compliance with the weight restrictions is very important. Number 209 SENATOR WILKEN asked Mr. Dillon if $500,000 will be the net benefit realized if Alaska joins the IRP. MR. DILLON replied $500,000 is the amount anticipated to be collected from trucks entering the State. SENATOR WILKEN questioned whether Alaska will be a net benefactor of the IRP because of its low population. MR. DILLON replied the ATA is anticipating that it will, and to that effect, the State recently acquired a $30,000 federal grant to study the IRP's cost benefit and implementation in the State. Until the study is complete, there is no way to know. Mr. Dillon added that the simple elimination of the trailer registration requirement does not mean Alaska has to join the IRP, but it is required if Alaska chooses to do so. Alaska was one of the founding states of the IRP in the early 1980's but it eventually dropped its membership for a variety of reasons. Two years ago DOTPF and the industry collectively decided to reactivate the membership. Last September, the IRP executive committee rejected Alaska's reactivation application on the grounds that Alaska has the trailer registration in place. SENATOR WILKEN asked Mr. Dillon to elaborate on the note he sent to committee members regarding the elimination of 20,000 transactions at DMV annually which would save about $100,000. MR. DILLON stated that after speaking with Jay Dulaney of DMV, he estimated that DMV transactions range from approximately $5 to $8 each. The $100,000 amount is based on the lower end of the range. He added that his estimate of revenue generated by out-of-state trucks is also conservative. BILL DEAVER, General Manager of Sealand, and President of the ATA, testified via teleconference and made the following remarks in support of CSSB 298. The ATA has determined that improved safety programs need to be established in Alaska. DOTPF has only three inspectors on the roads at any given time during the course of the year. CSSB 298 will allow DOTPF to place inspectors at weigh stations around the State. During 1997, weigh stations were only open 38 percent of the time. The Alaska trucking industry is a professionally run and operated business with a good safety record and some of the most skilled drivers in all of North America. CSSB 298 will help ensure that commercial vehicles are in full compliance with government requirements. Only 30 percent of commercial vehicles crossing the border are Alaska registered vehicles. The ATA would like to see the temporary registration fees, generated at the border, used to fund the vehicle weighing inspection programs within the State. According to last year's numbers, the total revenue generated would be just over $1 million. The "over-the-road" business coming from the "Lower 48" and Canada is a growing business in the State of Alaska. The Alcan is a safe road, and is important to the North Slope and general commerce coming into Anchorage and Fairbanks. As traffic increases over time, the IRP program can be more important to the State of Alaska. Number 300 PETER BLANIS, a Teamster line driver, testified in favor of CSSB 298 via teleconference because CSSB 298 will be beneficial to Alaska and to the trucking industry for several reasons. First, CSSB 298 will charge a fee for out-of-state trucks entering Alaska, the number of which is increasing dramatically. Utilizing Alaska's infrastructure and taking work from Alaskans and Alaska businesses, these outside operators do not pay hardly any fees, which is inconsistent with most other states and provinces. Fees charged to outside operators could be appropriated to DOTPF programs that are in line with truck safety and enforcement. Full time operation of weigh stations is in the public interest for several reasons. One, a driver's log book must coincide with his/her scale time which is logged into the State scale computer. If a scale is closed, the driver is free to run a trip, or multiple trips, anyway he/she likes. Lack of such enforcement is one of the biggest contributing factors in fatigue-related accidents. Second, drivers often head out on trips not knowing the weather and road conditions that lay ahead. Very often the only indication of trouble comes from the scale operator. Scale operators not only warn drivers of adverse driving conditions, but they also have the ability to summon help in an emergency. Third, fees collected from outside operators might also be available to fund the DOTPF inspection program which currently leaves much to be desired. He received one full-scale truck inspection in the last four years, and only because he requested it. In conclusion, the most important aspect of CSSB 298 is that outside operators, who reap the benefit of hauling Alaska's resources, will be required to shoulder some of the costs related to that benefit. Number 346 DEAN MCKENZIE, President of Alaska West Express, agreed with previous speakers' testimony. He stated Alaska West Express supports all three aspects of the bill: the safety inspection, the IRP, and the registration aspect. Not only will the State and the industry benefit from this bill, but the motoring public will also benefit from the creation of a safer transportation environment. TED FRENCH, a Teamster truck driver, stated his support for CSSB 298. He believes passage of this bill will create a more level playing field for the trucking community in Alaska. No business minds paying its fair share of taxes, but right now, Alaska businesses cannot compete with outside interests that are taking advantage of the trucking industry by not having to pay an equal share for using Alaska's highway system. In addition, outside truckers are not always inspected for safety by Alaska's weigh stations. He urged committee members to allocate funding for this bill for the safety of the general public, as well as the trucking industry. He also urged the committee to staff state maintenance stations with personnel seven days per week, 24 hours per day in the winter. Number 384 AVES THOMPSON, Chief of Weights and Measures of the Division of Measurement Standards and Commercial Vehicle Enforcement, DOTPF, noted he was available to answer questions. JUANITA HENSLEY, Chief of DMV, Department of Administration, offered to answer any questions committee members have, and she noted DMV has worked very hard with the ATA, the Teamsters Union, DOTPF, and all other industry representatives interested, to ensure that all participants support this bill. SENATOR HALFORD asked how the inspection requirements will apply to trucks in off-system locations not connected to a main road system, such as Bethel. MS. HENSLEY deferred to Mr. Thompson. MR. THOMPSON replied that commercial vehicle inspectors will travel to various locations throughout the State. DOTPF has a very small inspection staff at this time. Those inspectors have travelled to Bethel, Dillingham, and places in Southeast Alaska however, at the present time, routine inspections are not possible. Number 422 SENATOR HALFORD commented if the bill requires annual inspections, but no one is in the area to conduct them, the bill places an impossible requirement on the vehicle owner. MR. THOMPSON replied federal regulations contain provisions for self-inspection which satisfy the annual inspection requirement. Number 430 SENATOR LINCOLN asked Ms. Hensley if she agreed that the $10 one- time assessment fee for commercial trailers will result in the elimination of 20,000 DMV transactions each year and a savings of more than $100,000. MS. HENSLEY answered that in 1997, DMV registered 18,268 commercial trailers. DMV would be taking the commercial trailer registrations and tacking them on to the power units that haul those vehicles. Even though 18,000 transactions in which the owner will have to come to DMV and stand in line will be eliminated, those registrations will be processed on a power unit registration either on an annual or biannual basis. Commercial vehicle owners have the option of registering on an annual or biannual basis. DMV will still have to register trailers coming into the State that have never been registered before, so CSSB 298 may not actually save the State $100,000. DMV staff, who process the "back end" stuff in a dealer fleet unit, would be available at the front counter, eliminating long lines at DMV. SENATOR LINCOLN asked why the registration fee for all other commercial vehicles on page 7 was not increased to more than $10.00. MS. HENSLEY said the "other commercial vehicles" include carriers hauling snowmobiles for snowmobile retailers in the State and similar vehicles. The $350 fee applies to out-of-state individuals who are not registered. Those individuals can either buy a $350 permit to operate in Alaska for 30 days, or pay the current registration fee to operate their vehicle in the State year round. Number 464 SENATOR LINCOLN asked what kind of commercial vehicle Section 14(d) would apply to. MS. HENSLEY replied it is any vehicle being used for commercial purposes. SENATOR HALFORD asked if that would specifically include the carriage of one's own property for a commercial business. MS. HENSLEY said it would. SENATOR LINCOLN asked if the $10 fee is not necessarily for out-of- state commercial vehicles. MR. DILLON explained that Section 14(d)1-3 applies only to out-of- state licensed vehicles. He explained a number of commercial vehicles coming into Alaska are not truck tractors, or trailers, such as a small guide service delivery van entering Alaska from the Yukon. No one felt those people should have to pay a $350 fee to come into Alaska because they are not really in the transportation business, the commercial vehicle is just a part of their business. He pointed out this section only applies to vehicles not licensed in the State. SENATOR LINCOLN asked the number of vehicles the $10 fee would apply to. MR. DILLON commented that number is difficult to determine because the weigh stations are not staffed at all times to count how many vehicles cross the border. The purpose of this provision is to ensure that a fee on trailers is collected. A tractor would cost $350, the trailer would cost $10. Mr. Dillon commented, "This is not necessarily designed because you have a threshold requirement for stopping at the weigh stations anyway for commercial vehicles, to the very light stuff. They may not, in fact, have to pay anything to come into the State and they may need no mechanism for catching those people at all." Number 490 SENATOR LINCOLN said she raised that issue because $10 does not seem like a great deal of money to be paying for a commercial vehicle considering the amount of paperwork that the registration will require, especially in light of the fact that DMV will save $100,000 by eliminating 20,000 transactions. MS. HENSLEY noted DMV will not be processing these registrations. DMV plans to negotiate with DOTPF to have the scale house staff process this work because DMV does not want to have to be open at 2:00 a.m. to issue temporary registrations when trucks cross the border at Tok. Number 502 SENATOR WILKEN asked why the fiscal note does not show the $100,000 savings. MR. DILLON clarified the elimination of transactions at DMV provides an efficiency that does not necessarily translate into dollar savings. DMV is particularly underfunded in some areas and cannot provide the kind of customer service that people expect. This bill will free up DMV staff, shorten customer lines, and make the system more efficient without costing the state any more money. He stated he should not have implied that a direct savings would occur. The savings will come in the form of making the system more efficient by relieving workers of 20,000 transactions. Number 524 SENATOR WILKEN stated he appreciates the fact that ATA wants to help DMV, but the fiscal note should reflect what CSSB 298 does to DMV's budget. He asked Ms. Hensley if $80,000 to $100,000 will be saved because of the elimination of 18,000 registrations. MS. HENSLEY explained there may not be 18,000 commercial vehicle trailers being registered, however 39,000 commercial trucks and 2,500 buses will continue to have to be registered. The fees will still be collected for the 18,000 trailers but they will be transferred to the power units so there will still be work associated with this bill. She said it will eliminate some transactions, but at this point, she could not estimate how many. SENATOR WILKEN stated there will be 18,000 fewer trailers to license when this bill goes into effect, so it should cost less. He repeated that the fiscal note does not reflect the savings generated by this type of legislation. MS. HENSLEY replied she did not project the savings because at this point she does not know what those savings will be. She explained the fiscal note shows a positive $15,500 because DMV cannot get straight-across fees from the trailers to the power units. SENATOR WILKEN noted Mr. Dillon suggested the savings would amount to approximately $5 per transaction, and each transaction takes approximately 15 minutes. He said he thinks DMV could come up with a number and hoped DMV would submit a new fiscal note. He did not think it is fair to the people of the State to say it will cost more to do less. DENNIS POSHARD, Special Assistant to DOTPF, stated that DOTPF staff worked very closely with DMV, the Teamsters, and the ATA to develop this piece of legislation, and it is very supportive of it. There being no further testimony on CSSB 298, SENATOR HALFORD moved the bill from committee with individual recommendations and its accompanying fiscal note. There being no objection, the motion carried. CHAIRMAN WARD adjourned the meeting at 2:25 p.m.