Legislature(2003 - 2004)

04/01/2003 09:02 AM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
     CS FOR SENATE BILL NO. 106(TRA)                                                                                            
     "An Act relating to studded tires; and providing for an                                                                    
     effective date."                                                                                                           
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Co-Chair  Wilken explained  this bill "imposes  a ten dollar  fee on                                                            
retail sales of studded tires in Alaska."                                                                                       
GEORGE LAVASSEUR,  Acting State Maintenance Engineer,  Office of the                                                            
Commissioner,  Department  of Transportation  and Public  Facilities                                                            
testified this  bill would impose the $10 surcharge  on the purchase                                                            
of all studded tires beginning  July 1, 2003. He cited Department of                                                            
Revenue  estimates  this would  generate  approximately  $2  million                                                            
annually  and would  cost approximately  $50,000  to administer.  He                                                            
noted  businesses  collecting this  surcharge  would  be allowed  to                                                            
retain  five-percent  of  the  surcharge,  up to  $1,000,  to  cover                                                            
Mr. Lavasseur  commented that many  drivers use studded tires  as an                                                            
aid  to winter  driving  to improve  traction  on icy  surfaces.  He                                                            
shared that  an analysis of Alaska  winter driving conditions  found                                                            
that primary roads  with highest traffic roads are  covered with ice                                                            
or snow only about five-percent  of the time. The remaining "studded                                                            
tire season" he reported that pavements are bare and/or dry.                                                                    
Mr. Lavasseur instructed  that pavement in Alaska wears at a rate of                                                            
".3 inches  per million  studded tire passes,"  which he  translated                                                            
"we lose  about a  dump truck full  of asphalt"  every four  million                                                            
cars with studded  tires traveling over a mile of  roadway. He added                                                            
that each  studded  tire causes  approximately $50  worth of  damage                                                            
over its  life. He informed  that the Department  of Transportation                                                             
and Public Facilities expends  over $5 million annual to repair ruts                                                            
caused by studded tires.                                                                                                        
Mr. Lavasseur  directed  attention to  a photograph  and stated  the                                                            
condition of the road depicted  is typical of "what we're seeing" in                                                            
portions of Southcentral Alaska, as well as in Juneau.                                                                          
Senator Bunde  relayed that he has heard that this  damage caused by                                                            
studded tires does not  occur on roadways in Interior Alaska. He had                                                            
been  told   this  is  due  to  the   usage  of  different   asphalt                                                            
Mr.  Lavasseur  attributed  the lesser-studded   tire wear  to  less                                                            
vehicle  traffic  and  different  weather   conditions  in  Interior                                                            
Alaska. He  stated that more  icepack is  present on Interior  roads                                                            
during a larger percentage of time.                                                                                             
Senator Bunde  asked if the  different damage  rates are in  any way                                                            
related to the materials and application methods used.                                                                          
Mr.  Lavasseur   answered  it  is  not  related.  He   stressed  the                                                            
Department is  "doing several things" to attempt to  improve asphalt                                                            
performance.  He admitted  that the  asphalt used  in Alaska,  which                                                            
originates  as  North  Slope  crude  oil, is  soft.  He  listed  the                                                            
additives  to strengthen the  asphalt, including  the use of  larger                                                            
and harder rock material  imbedded in the asphalt. He qualified that                                                            
rock in Alaska is very  soft due to the areas geological newness. He                                                            
listed the two hard rock  sources in Alaska, one at Cantwell and the                                                            
other near  Haines and informed  of the high  cost to transport  the                                                            
hard rock to the road sites.                                                                                                    
Mr. Lavasseur  gave the Egan Expressway in Juneau  as an example and                                                            
detailed the project utilizing  materials from Haines and Washington                                                            
State.  He remarked  this project  is "holding  up  quite well."  He                                                            
spoke  to the  difficulty  in  locating  hard  rock sources  in  the                                                            
interior regions of the State.                                                                                                  
Senator Bunde  asked if it has therefore been determined  that it is                                                            
less expensive to repave the road than to import hard rock.                                                                     
Mr.  Lavasseur  replied  that  no studies  have  been  conducted  to                                                            
research  this matter; however  the "economy"  in utilizing  Alaskan                                                            
hard rock is  "very important" to  the refiners in Alaska.  He added                                                            
that it is expensive to  barge hard rock into the State. He informed                                                            
that the Department is  initiating a project to ascertain the amount                                                            
of hard rock in the area near Cantwell.                                                                                         
Senator  Bunde interpreted  the  witness'  testimony  to state  that                                                            
roads in Alaska are "softer"  due to the intent to subsidize asphalt                                                            
production from North Slope crude oil.                                                                                          
Mr.  Lavasseur  countered  that  "a  combination   of  factors"  are                                                            
responsible. He  stated that the Department is "fixing"  the Alaskan                                                            
asphalt utilizing modified asphalt.                                                                                             
SENATOR JOHN  COWDERY told of studies  conducted on certain  streets                                                            
in Anchorage,  which  show minimal  development of  ruts due  to the                                                            
addition of rubber and other materials to the asphalt.                                                                          
Mr. Lavasseur  added that speed also  impacts the wear of  pavement.                                                            
Senator   Cowdery  indicated   the   cost  per   studded  tires   is                                                            
approximately  $11 more per tire than  non-studded tires.  He opined                                                            
that "lightweight"  studded  tires hit  the pavement  with the  same                                                            
force and cause  the same amount of damage. He then  told of an "ice                                                            
tire"  developed  in Finland  that  could  be  utilized year-round.                                                             
Although  the cost of  these tires  is higher,  he asserted  options                                                            
other than studded tires are available.                                                                                         
Co-Chair  Wilken drew  attention to  a packet  of the "lightweight"                                                             
studs, which he would share with Committee members.                                                                             
Senator Taylor spoke of  cement roads in Wrangell and the process of                                                            
two-inch overlays  of asphalt on other  roads. He compared  the wear                                                            
on both  road types  and questioned  why cement  is not more  widely                                                            
Mr. Lavasseur  replied that Portland cement is excellent  for use in                                                            
areas with a stable  base. However, in areas with  unstable bases he                                                            
stated the  cement cracks, noting  that most of Southcentral  Alaska                                                            
has an unstable base due to freezing and thawing.                                                                               
Senator  Taylor  challenged  that the  base  of Egan  Expressway  is                                                            
stable. He  asked if the Anchorage  area roads were "that  unstable"                                                            
that cement pavement would be unviable.                                                                                         
Mr. Lavasseur answered yes.                                                                                                     
Senator Taylor suggested  chains would cause greater damage to roads                                                            
then studded tires.                                                                                                             
Mr.  Lavasseur   detailed  "an  aggressive   chemical  program"   of                                                            
magnesium chloride utilized  in Southcentral Alaska to keep roads as                                                            
ice free as possible throughout the winter.                                                                                     
Senator Cowdery  asked the witness to compare damage  caused by cars                                                            
versus trucks.                                                                                                                  
Mr. Lavasseur  listed  the width of  cars versus  trucks noting  the                                                            
width  of the  ruts  match the  width of  mid-size  passenger  cars,                                                            
indicating the majority of the damage is caused by cars.                                                                        
Mr. Lavasseur then showed  a photo of a lightweight studded tire. He                                                            
described how  the ruts are caused  and reported that for  every one                                                            
million passes,  approximately  one-tenth of  an inch of roadway  is                                                            
eroded. He stated that  with the 40,000 vehicles traveling the Glenn                                                            
Highway daily, the damage  accumulates in a short period of time and                                                            
the road must be repaired every two to three years.                                                                             
Mr. Lavasseur stressed  that the ruts cause hydroplaning when filled                                                            
with rainwater, and also  hamper the visibility of drivers traveling                                                            
behind a vehicle riding  in a rut as the water sprays. He furthered.                                                            
Senator  Taylor asked  if differential  exists between  the wear  of                                                            
cement and asphalt.                                                                                                             
Mr. Lavasseur  told  of his  experiences  in the  1960s with  cement                                                            
roads  in the  State  of Minnesota.  He  stated that  studded  tires                                                            
caused  significant damage  to the  cement roads  and therefore  the                                                            
cement roads were discontinued.                                                                                                 
BILL CORBUS, Commissioner,  Department of Revenue,  read a statement                                                            
into the record as follows.                                                                                                     
     The  Governor  and  I very  much  appreciate  this Committee's                                                             
     consideration  of  this important  legislation.  As you may  be                                                            
     aware,  the companion  bill, House Bill  173 was substantially                                                             
     changed  in the  House Transportation  Committee  last week  to                                                            
     apply  a $2 fee on all  tires. The Governor  is not opposed  to                                                            
     the changes contained in CS HB 173.                                                                                        
     Why  is this legislation  necessary? SB  106 is a critical  and                                                            
     necessary  element of the Governor's overall  budget investment                                                            
     plan and investment  plan for FY 2004 and he recently submitted                                                            
     it to you for your  consideration. Governor Murkowski's primary                                                            
     mission  is to  build  a robust  growing economy  and  generate                                                            
     sufficient  State revenue  to fund programs  and services  that                                                            
     Alaskans  need  and  expect.  Passage  of SB  106  will  ensure                                                            
     increased  State  revenues   and  may  prevent  elimination  or                                                            
     diminution of other important programs and services.                                                                       
     What  this legislation  will accomplish.  SB 106 will  attach a                                                            
     fee of $10 per studded  tire sold in Alaska to begin in July 1,                                                            
     2003. Businesses,  including tire dealers, service stations and                                                            
     garages  will fill out  monthly reports  of studded tire  sales                                                            
     and  remit the  fees to the  Department  of Revenue  containing                                                            
      five percent of the fees not to exceed $300 per month.                                                                    
     Anticipated  additional  revenue  to  the  State of  Alaska  is                                                            
     approximately $2 million.  The amendment contained in CS HB 173                                                            
     to apply a $2 fee  to all tires is expected to generate revenue                                                            
     of approximately $2.5 million.                                                                                             
     Impact on Alaskan  businesses. Although Alaskan businesses will                                                            
     be called  upon to collect  and remit  the fees, SB 106  allows                                                            
     studded  tire sellers to retain  their administrative  costs up                                                            
     to five percent,  not exceeding $300 per month.  I believe this                                                            
     allowance is fair.                                                                                                         
     In conclusion the  fee of $10 per studded tire is necessary and                                                            
     essential  to the Governor's  spending and investment  plan for                                                            
     Alaska.  The Department  of Revenue  can  and will efficiently                                                             
     administer  the fee  as discussed  in the  Department's  fiscal                                                            
     note. I urge and appreciate  your serious consideration of this                                                            
     legislation  and ask that  you pass it  out of Committee  today                                                            
     with your support for enactment this session.                                                                              
Senator  Bunde voiced  concern  about the  volume  of paperwork  and                                                            
asked if quarterly reports have been considered.                                                                                
Mr. Corbus was unsure if  this had been considered and indicated the                                                            
Department would not oppose a quarterly reporting method.                                                                       
Senator  Taylor asked  if the  intent is  to dedicate  the  revenues                                                            
generated by the fee to highway maintenance or repairs.                                                                         
Co-Chair Wilken  answered the revenues  would be deposited  into the                                                            
State general fund.                                                                                                             
JIM  JOHNSON,  President,   Johnson  Tire  Service,   testified  via                                                            
teleconference  from an offnet location in Anchorage  and referenced                                                            
his written testimony [copy  on file]. He told of testimony given by                                                            
physicians and  engineers serving on the Swedish Road  and Transport                                                            
Research  Institute  (VIT) at  the 1994  Winter  Cities Conference,                                                             
attesting to the increased  deaths and property damage that would be                                                            
caused by a  discontinuance of studded  tires. As a result  of these                                                            
findings, he  informed that the VIT  participated in development  of                                                            
lightweight  environmental   studs  weighing   1.1  grams  and  also                                                            
recommended  better  road construction,   particularly  to the  road                                                            
base.  He relayed  that the  VIT charged  the Alaska  Department  of                                                            
Transportation and Public  Facilities with building "terrible roads"                                                            
and recommended  the  use of the  lightweight  studded tires,  which                                                            
would  minimize  damage.  He  stated  that  his  company  introduced                                                            
environmental  lightweight  studs  to North  America in  1994 in  an                                                            
attempt to be "good corporate citizens".                                                                                        
Mr. Johnson opined  that the damage caused by studded  tires is less                                                            
significant than  claimed by others and pointed out  that the annual                                                            
cost of  $5 million to  repair roads has  not increased since  1993,                                                            
which he calculated  would have increased over time  without the use                                                            
of the  newer lightweight  studded tires. He  claimed the damage  is                                                            
the result  of poor quality road base,  which is not rectified  with                                                            
Mr. Johnson charged that  this legislation would impact lower income                                                            
residents, who  might not be able to afford the $40  additional cost                                                            
to purchase studded  tires. He reported, "Studded  tires is the most                                                            
proven  safety  device  that is  known  to man."  He  attested  that                                                            
although ice  tires, also known as  "friction" tires, have  improved                                                            
driving safety,  they do  not compare to  the starting and  stopping                                                            
ability and the  length of wear of studded tires.  He questioned why                                                            
lightweight  studded tires  were not mandated  rather than  the fees                                                            
for  all  studded  tires  proposed  in  legislation.   He  suggested                                                            
assessing a $2  fee for all tire purchases and utilize  the revenues                                                            
for better  road construction.  He  predicted that  if better  roads                                                            
were constructed  damage would decrease by 30 percent,  and mandated                                                            
use of lightweight  studs would decrease road damage  by 15 percent.                                                            
Mr. Johnson  remarked this legislation  would benefit no  party, and                                                            
the  issue was  creating  revenue  rather than  the  use of  studded                                                            
tires.  He remarked,  "If you're  going to  tax safety,  you have  a                                                            
Senator Cowdery  referenced a study  conducted by the University  of                                                            
Alaska and asked  if the use of studded tires has  resulted in a per                                                            
capita decline in the number of accidents.                                                                                      
Mr. Johnson  did not  know, but  emphasized that  if motorists  were                                                            
discouraged from  purchasing studded tires, fatalities  and property                                                            
damage would increase  and more sand, gravel and chemicals  would be                                                            
required to provide better traction on roads.                                                                                   
Senator  Cowdery asked  the number  of states  with similar  weather                                                            
conditions to Alaska that ban studded tire use.                                                                                 
Mr. Johnson listed Wisconsin  and Minnesota, but pointed out that no                                                            
bans  have been  issued  since 1975  and that  studded  tire use  is                                                            
permitted  on emergency  vehicles.  He  stressed that  injury  rates                                                            
"skyrocketed" when the bans were implemented.                                                                                   
Senator Cowdery asked about bans on studded tire use in Canada.                                                                 
Mr. Johnson  that use of studded tires  is permitted in Canada  with                                                            
the exception of Toronto.                                                                                                       
Senator B. Stevens  asked if the witness has reviewed  the committee                                                            
substitute for HB 173,  which would impose a $2 fee for the purchase                                                            
of all tires.                                                                                                                   
Mr. Johnson supported that bill.                                                                                                
Senator  B.  Stevens  took  issue  with   the  assertion  that  more                                                            
accidents  would occur. He  stated that he  has driven in the  State                                                            
his entire life, never  with studded tires and has had no accidents.                                                            
He questioned the applicability  of the statistics showing increased                                                            
accidents  in Wisconsin  and Minnesota  following  the studded  tire                                                            
ban, suggesting  that winter conditions  over the time period  could                                                            
have been more severe than average.                                                                                             
Mr. Johnson and Senator B. Stevens debated the issue.                                                                           
CHUCK MCGEE,  United States  representative  for Ugigrip,  testified                                                            
via teleconference  from  an offnet  location in  opposition to  the                                                            
bill.  He told  about the  lightweight  tire studs  manufactured  by                                                            
Ugigrip and  other manufacturers,  which have been proven  to reduce                                                            
road  wear.  He  attested   to  the  better  braking   and  traction                                                            
capabilities  of studded tires, citing  the Swedish VTI studies.  He                                                            
stated  that  any cost  increase  would  cause  drivers to  not  use                                                            
studded tires.  He spoke to the benefits of the newer  studs and the                                                            
lesser damage caused by them.                                                                                                   
RICHARD  NORDNESS,   Executive  Director,  Northwest   Tire  Dealers                                                            
Association,  testified via teleconference  from offnet site  in the                                                            
state  of Washington  in  opposition  to  the  bill. He  stated  the                                                            
Association's  position that  studded tires  is an important  safety                                                            
feature for  Alaskan residents. He  remarked that a $10 per  studded                                                            
tire fee would  be have a negative impact on winter  driving safety,                                                            
as many  motorists  could not  afford the  $40 total  and that  many                                                            
drivers would chose to not purchase the tires.                                                                                  
Mr. Nordness also opposed  tire dealers acting as tax collectors. He                                                            
told of  efforts  in conjunction  with legislatures  in Washington,                                                             
Oregon to promote the use of lightweight studs.                                                                                 
Co-Chair Green clarified  the Association represents tire dealers in                                                            
the states of Alaska, Oregon and Washington.                                                                                    
Mr. Nordness affirmed.                                                                                                          
Co-Chair Green  asked if the Association  conducted a comparison  of                                                            
the  licensing and  taxation  of vehicles  registered  in the  three                                                            
Mr.  Nordness  replied  the  Association   had  not  conducted  such                                                            
Co-Chair Green  predicted the total licensing and  taxation cost for                                                            
vehicles is significantly less in Alaska.                                                                                       
Senator Bunde  asked if studded  tires are  permitted in Oregon  and                                                            
Mr. Nordness answered they are.                                                                                                 
SFC 03 # 37, Side B 09:49 AM                                                                                                    
BRUNO WESSEL,  Bruno Wessel Inc.,  Member, National Safety  Council,                                                            
and Member,  Scandinavian Tire and  Rim Organization, testified  via                                                            
teleconference  from an offnet location  in Sarasota, Florida,  told                                                            
of his experiences as an  importer of tire studs since the 1960s. He                                                            
opposed this  bill, as some motorists  could not afford the  tax. He                                                            
disputed  the excuse  that  ice is  only  present on  roadways  five                                                            
percent of the  year, arguing that in Minnesota it  was learned this                                                            
was the time that 90 percent of accidents occurred.                                                                             
Mr. Wessel spoke to the  ineffectiveness of overlaying roads because                                                            
the  ruts  return  rapidly.  He stressed  that  the  roads  must  be                                                            
"milled",  or  ground  out,  before  being  relayed.  He  referenced                                                            
"government  studies" that  found that one  truck is equal  to 6,000                                                            
car passes.                                                                                                                     
Mr. Wessel also  spoke of the VTI and reiterated that  findings that                                                            
reduced studded  tire use would increase  accidents and fatalities.                                                             
He  asserted  that   studded  tires  have  "the  added   benefit  of                                                            
roughening  road  and roughening  the  ice," which  provides  better                                                            
traction for vehicles without studded tires.                                                                                    
Senator Cowdery commented  he has observed vehicles in Alaska's body                                                            
shops for repair that had studded snow tires.                                                                                   
Mr.  Wessel emphasized  that  although  some vehicles  with  studded                                                            
tires would  be involved  in accidents,  they would  be less  likely                                                            
than  vehicles without  studded  tires. He  informed that  he was  a                                                            
delegate at  the Winter Cities Conference  in 1994 and has  traveled                                                            
to Alaska on several occasions.                                                                                                 
CLINT QUIGGLE testified  via teleconference from Mat-Su as a private                                                            
citizen about his 36 years  "in the tire business" and in opposition                                                            
to  this  bill. He  suggested  the  focus  is on  tax  revenue,  but                                                            
stressed the  safety issue. He stressed  that studded tires  prevent                                                            
accidents  and save  lives, particularly  on ice  covered roads.  He                                                            
predicted that because  some motorists could not afford the tax they                                                            
would continue  to drive with old  studded tires or without  studded                                                            
Senator  Cowdery  asked  if  witness agreed  the  average  cost  per                                                            
studded tire is $11 higher than for non-studded tires.                                                                          
Mr. Quiggle  responded the amount  varies from $10 to $12  per tire.                                                            
Senator Cowdery asked if  the witness had experience with ice tires.                                                            
Mr. Quiggle  reported that after driving  with studded tires  for 30                                                            
years,  he experimented  with  ice  tires this  year.  He liked  the                                                            
tires, but  stressed that in the event  the vehicle slides,  the ice                                                            
tires respond significantly slower than studded tires.                                                                          
Senator Cowdery indicated  most modern cars have an ABS brake system                                                            
and he told  of his driving experience  with ice tires on  the hills                                                            
in Juneau.                                                                                                                      
HANNELE  ZUBECK,   Associate  Professor,   School  of  Engineering,                                                             
University  of Alaska-Anchorage, testified  via teleconference  from                                                            
Kenai about a  study she conducted on the social-economical  impacts                                                            
of  studded tire  use  in Alaska.  The  preliminary  report,  titled                                                            
"Socio-Economic  Effects  of Studded  Tire  Use in  Alaska:  Interim                                                            
Executive Summary-March  10, 2003" is on file. Her recommendation is                                                            
that a $10 fee  per studded tire would encourage the  use of driving                                                            
with old studded tires,  which may not provide adequate traction but                                                            
would instill  driver confidence. She predicted this  would increase                                                            
the accident rate.  She furthered the same impact  would result if a                                                            
$2 fee  were imposed  on the sale  of all tires,  as proposed  in HB
173. She suggested  a higher fee for  the conventional heavy  studs,                                                            
which would encourage  drivers to select lightweight  studs and have                                                            
less impact on the State's economy.                                                                                             
Ms.  Zubeck addressed  the  matter of  soft asphalt  informing  that                                                            
hardening  the asphalt  is  possible;  however, cracking  and  other                                                            
problems  would  occur. She  stated  that  aggregate is  the  actual                                                            
Ms. Zubeck listed  the states that currently ban the  use of studded                                                            
tires  and  noted  Illinois   is the  only   state  where  icy  road                                                            
conditions are present.                                                                                                         
Senator Taylor  asked the witness  repeat of the conclusions  of the                                                            
preliminary report.                                                                                                             
Ms. Zubeck  detailed the findings  of the studies, in comparison  to                                                            
data  learned from  research  conducted in  Sweden  and Norway.  She                                                            
qualified that  the annual estimated  damage amount of $5  in Alaska                                                            
is inaccurate and should be reevaluated.                                                                                        
Ms. Zubeck  testified that studded  tire use reduces accident  rates                                                            
and  that reducing  studded  tire  use would  increase  the  overall                                                            
costs, despite  savings in  road maintenance  and revenue  generated                                                            
from the studded tire fee.                                                                                                      
Senator  Taylor appreciated  the University  of Alaska's efforts  on                                                            
this matter.                                                                                                                    
Senator  Cowdery asked  if the ruts  caused by  studded tires  are a                                                            
safety issue as well.                                                                                                           
Ms. Zubeck answered, "absolutely".  She noted the absence of studies                                                            
of  summertime accidents,  as  most  studies concentrate  on  winter                                                            
accidents.  She remarked  that that information  on hydroplaning  is                                                            
important to collect and analyze.                                                                                               
Senator B. Stevens  referenced certain information  contained in the                                                            
section  of the  preliminary  report relating  to  pavement wear  as                                                            
        · Traffic conditions (decrease wear by decreasing traffic                                                               
          volume and proportion of studded tires, decreasing winter                                                             
           speed limits and increasing lane widths); and                                                                        
        · Weather conditions (decrease wear by keeping the road                                                                 
          surface dry).                                                                                                         
Senator B. Stevens commented  that the Legislature does not have the                                                            
authority  or ability  to decrease  traffic and  keep road  surfaces                                                            
Ms. Zubeck clarified that  salting the roads would assist in keeping                                                            
them dry and that  subsidized pubic transportation  could reduce the                                                            
amount of traffic  in urban areas.  She noted that parking  costs in                                                            
Helsinki, Finland  are high and that with the availability  of "park                                                            
and ride" and other public  transportation programs, vehicle traffic                                                            
into the city has been reduced.                                                                                                 
ROGER  BURNS   testified  via  teleconference   from  Fairbanks   in                                                            
reference to the VTI report  and a State of Alaska report, AK-RD-96-                                                            
1, issued in  1996 [copies on file].  He commented on the  amount of                                                            
anecdotal  testimony about  road conditions.  He reiterated  earlier                                                            
testimony that "putting  consumers in harm's way" for the purpose of                                                            
collecting $2 million in  taxes is "unconscionable". Since this is a                                                            
revenue  source  proposal   rather  than  a  matter  of  safety,  he                                                            
supported the house bill  plan to impose a $2 fee on the purchase of                                                            
all new tires, as it would  raise $2.5 million per year. He asserted                                                            
that all  studies show that  studded tires  reduce accidents  and he                                                            
opined that  purchasers should chose  tires based on the  conditions                                                            
of the roads they  drive. He noted that the roads  in Fairbanks have                                                            
ice and snow more often than roads in other parts of the State.                                                                 
Senator Bunde  affirmed the witness  supports a tax on the  purchase                                                            
of all tires.                                                                                                                   
Senator  Taylor associated  himself with the  previous speaker  that                                                            
the purpose  of this bill is to generate  funds. He noted  the funds                                                            
would not be dedicated  for road maintenance. He supported the house                                                            
bill  proposal  to add  a  tax to  the sale  of  all new  tires.  He                                                            
suggested  it would  remove the  arguments for  and against  studded                                                            
tires, which should be addressed in separate legislation.                                                                       
Senator  Taylor offered  a motion  to amend  SB 106  to reflect  the                                                            
language contained  in CS HB 173 to  impose a $2 fee on the  sale of                                                            
all new tires [This conceptual amendment was not numbered].                                                                     
Co-Chair Wilken  requested the motion be removed to  all a committee                                                            
substitute to be drafted for Committee review.                                                                                  
Senator  Taylor   agreed  and  the  motion  was  WITHDRAWN   without                                                            
Senator Bunde  indicated he would  offer amendments for the  purpose                                                            
of discussion,  although  he did not  intend action  to be taken  at                                                            
this meeting.                                                                                                                   
Amendment  #2: This amendment  deletes "studded"  from the  title of                                                            
the committee substitute. The amended title reads as follows.                                                                   
     "An  Act relating  to  tires; and  providing  for an  effective                                                            
This amendment  also eliminates the proposed $10 fee  imposed on the                                                            
retail  sale of studded  tires  and imposes  a fee  of $2.50 on  the                                                            
retail sale of all motor vehicle tires.                                                                                         
This  amendment also  deletes  the language  in  Sec. 43.98.025(b),                                                             
relating  to a $10  fee for  the installation  of studs  on a  motor                                                            
vehicle license, and inserts new language to read as follows.                                                                   
          (b) In addition to the fee imposed under (a) of this                                                                  
     section,  a fee of $5 a tire  is imposed on the retail  sale of                                                            
     tires  studded with metal  studs or  spikes weighing more  than                                                            
     1.1 grams  each embedded in the  periphery of the tire  surface                                                            
     and protruding beyond  the tread surface of the tire, or on the                                                            
     installation  for a fee of metal studs or spikes  weighing more                                                            
     than 1.1 grams each on a motor vehicle tire in the state.                                                                  
Senator Bunde moved for adoption of the amendment.                                                                              
Co-Chair Wilken objected for discussion.                                                                                        
Senator Bunde spoke to  the amendment. He recommended a fee of $2.50                                                            
for each  tire rather than  $2 proposed in  the house bill  based on                                                            
conversations  with  retailers  indicating  that because  tires  are                                                            
usually sold in  sets of four, the $10 total fee would  be easier to                                                            
Senator  Bunde removed  his motion  to adopt  the amendment  without                                                            
objection and Amendment #2 was WITHDRAWN.                                                                                       
Amendment  #3:  This conceptual  amendment  changes  the  remittance                                                            
period  for submission  of the collected  fees by  retailers  to the                                                            
State  from monthly  to  quarterly.  The  amended language  of  Sec.                                                            
43.98.025(d) reads as follows.                                                                                                  
          (d) A seller shall collect the fee from the purchaser. A                                                              
     seller  shall  file  a  return  on a  form  prescribed  by  the                                                            
     department  and remit the fee collected to the  department on a                                                            
     quarterly basis of the sale or installation.                                                                               
Senator Bunde moved for adoption.                                                                                               
Senator  Bunde removed  his  motion to  adopt Amendment  #3  without                                                            
objection and the amendment was WITHDRAWN.                                                                                      
Co-Chair   Wilken   requested   members   submit   suggestions   for                                                            
incorporation into a committee  substitute and ordered the bill HELD                                                            
in Committee.                                                                                                                   
Co-Chair  Wilken understood  that Department  of Transportation  and                                                            
Public  Facilities  vehicles  are  exempt  from  weight  limits.  He                                                            
requested Mr. Lavasseur to provide an explanation on the matter.                                                                

Document Name Date/Time Subjects