EXCUSED:

Chairman Ingram indicated administrative rules for the State Tax
Commission and the Idaho State Police would be reviewed today. He
turned the gavel to Vice-Chair Keough who conducted the rules review
hearing.

Randy Nilson, Tax Policy Specialist for the State Tax Commission,
reviewed Docket Number 35-0105-0301, (IDAPA 35), Rule 270, that is
being amended to clarify which motor fuel users who have single storage
tanks cannot use the pro-ration method granted in Subsection 170.05 of
that rule. It will also remove reference to 26,000 pounds maximum gross
weight and list which motor fuels users who do not qualify to use the
proration method because of other record-keeping requirements.

Vice-Chair Keough turn the gavel back to Chairman Ingram.

Capt. Lamont Johnston, Commercial Vehicle Safety, Idaho State Police,
reviewed Motor Carrier Rules with the Committee. Docket Number 11-1301-0201 (IDAPA 11) will add the Adoption of Registration Enforcement;
Part 356 – Authority to Serve a Particular Section – Construction; Part 365
– How to Apply Operating Authority; Part 387 – Financial Responsibility.
The rule will also update the Code of Federal Regulations to correctly
show volume October 1, 2002. Docket Number 11-1301-0201 (IDAPA
11) incorporates by reference a version of 39 CFR Parts 393 and 395,

effective January 4, 2004, governing commercial vehicle load securement
and driver hours of service, respectively.

Vice-Chair Keough returned the gavel to Chairman Ingram.

Representatives Present: Chairman Wood, Vice Chair Ridinger, Kellogg,
McKague, Smith (24), Bedke, Bauer, Skippen, Wills, Shepherd, Douglas

EXCUSED:

Representatives Roberts, Cannon, Cuddy

Rep. Skippen reported on an MHTA meeting she attended November 9-11, 2003, in Las Vegas, Nevada. Others from Idaho attending were Chair
Wood, Alan Frew from the Idaho Transportation Department, Capt.
Lamont Johnston from Idaho State Police, and Paul Sudmeier from the
Idaho Trucking Association. The following states are members of MHTA:
Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Oregon,
Washington, and Wyoming. The purpose of the meeting was to allow
communication between the states to achieve uniformity for the
transportation industry. States were given the opportunity to discuss
issues within their own states, to share ideas, and to learn about new
technology. Idaho could be affected by food bioterrorism and rules
concerning the agriculture exemption from hours of service. An agency
within U. S. DOT issued a proposed rule stating that poultry, livestock and
feed grains are not commodities. Rep. Skippen voiced concerned that
such definitions need to be in the law rather than issued by rule and she
plans to introduce legislation to that effect.

Edwin E. Huddleson, III, a commercial attorney from Washington, D.C.,
representing the American Automotive Leasing Association, Enterprise
Leasing of Idaho, and the Equipment Leasing Association, introduced RS
13674. He explained that this legislation would clarify that motor vehicle
fleet leasing contracts that contain Terminal Rental Adjustment Clause
(TRAC) provisions are true leases for state and bankruptcy law purposes.
The clause permits an upward or downward adjustment of rent to make
up for any difference between the projected value of a vehicle and the
actual value upon lease termination. The objective of TRAC vehicle
leases is to provide a financial incentive for the lessee/user, who is the
party to the transaction best able to control the maintenance of the vehicle
and to keep the vehicle in good repair. TRAC vehicle leasing is limited by
federal tax law to commercial business and does not involve leasing to
consumers. A handout is attached to the minutes.

Idaho Transportation Department

Amy Smith, Idaho Transportation services Manager, said SB 1064 (2003)
amended Section 49-520, Idaho Code, eliminating the requirement to use
certified mail when sending a revocation of vehicle registration. The
change was effective July 1, 2003. The rule is being amended to comply
with those changes, with the same effective date.

Alan Frew, Port of Entry Operations Officer for ITD, indicated SB 1064
(2003) amended Section 49-1010, Idaho Code, allowing trailers used in
the transport of implements of husbandry to be exempt from over-width
permitting requirements. The change was effective July 1, 2003. The
rule is being amended to comply with those changes, with the same
effective date.

Alan Frew, Port of Entry Operations Officer for ITD, indicated the change
increases the maximum vehicle length of 105 feet overall to 115 and
clarifies that all permitted Longer Combination Vehicles (LCV’s) (except
triple combinations) are required to have the off-track form completed as
part of the permitting requirements. The rule also clarifies the operating
and reporting requirements for those vehicles participating in the pilot
project.

Lance Johnson, a traffic engineer for ITD, explained this rule updates the
incorporation by reference, adopting the most recent publication of the
MUTCD, including Revision Number 1, dated December 28, 2001, and
identifies 19 specific exceptions. The exceptions are necessary to bring
the MUTCD in line with Idaho Code, correct errors, and accommodate the
operations of ITD and local transportation agencies. The exceptions have
been approved by the FHWA and Local Highway Technical Assistance
Council.

Jonathan Lenhart, a utility/railroad engineer for ITD, indicated the rule-making adds new sections and removes language already in the
incorporated document. The document incorporated by reference has
been updated with input from the affected parties and has been reviewed
and approved by the utility companies and FHWA. It retains the basic
information but reorganizes and reformats the content in a more user-friendly style. Internal procedural information was moved into a staff
manual. Some guidelines were made less restrictive to provide more
flexibility in issuing permits to the utility providers.

Greg Laragan, Assistant Chief Engineer/Operations for ITD, indicated
that HB 231 (2003) effective July 1, 2003, incorporates the provisions of
IDAPA 39.03.46 into Idaho Code, eliminating the need for this rule.

Steve Holland, a staff engineering assistant for ITD stated that changes
to the rule included removal of the gold star as the only allowable traffic
accident memorial; new guidelines for fabrication and placement of traffic
accident memorials; includes a prov/ision for removal of non-conforming
memorials; requires for notification of adjacent property owners before
placement, includes guidelines for safety of the participants when on the
state highway system. This action will bring the rule into compliance with
changes to Section 49-1316, Idaho Code, Senate Bill 1137 (2003),
effective July 1, 2001.

EXCUSED:

Senator Bailey moved that the minutes of Thursday, January 22, 2004, be
accepted as written. The motion was seconded by Senator Marley and
approved by voice vote.

In the future, people’s patterns are not going to change; surface
transportation will still need to be provided throughout Idaho and that
transportation will have to be inter-modal in its nature. It will require hard
work, using money diligently to provide the types of services people
demand. One of the visions that the Idaho Transportation Board has
established is connecting the state because it will help the economy;
there are major projects in progress throughout Idaho. There have been
more than 1,800 highway improvement projects and 55 new bridges
funded. Also transit funding has expanded mobility for Idahoans, and

airport projects have improved runways, operations and security. ITD is
interested in mobility for all of Idaho not just urban areas.

When asked what the Idaho Legislature could do when it was mentioned
that the Forest Service is trying to close four backcountry air strips (a
decision being appealed by ITD), Mr. Winder suggested that the
Legislature introduce a joint resolution specific to the appeal process.
Senator Bailey will work with the House to introduce that legislation.

Mr. Winder reviewed many services provided for motorists and truckers.
ITD partners with counties to register more than 10 million vehicles, to
complete 3 million title transactions, and to issue 1.8 million driver’s
licenses and identification cards. ITD also is involved in helping promote
tourism and economic development especially in rural areas within Idaho.
There are 3 new metropolitan planning organizations (MPO’s) bringing the
number to six; these local-planning organizations prioritize their projects
which makes it more efficient for ITD to determine where money should
be spent. ITD also works closely with citizens, city, county and state
leadership, and holds public information meetings and hearings.

He reminded the Committee about a 1995-94 legislative task force that
dealt with ITD efficiency measures. Since that time there has been a 62%
increase in federal funds while the workforce has increased only 1%.
That was accomplished through privatization, employees accepting more
responsibility, and giving modest merit increases based on savings within
the Department. ITD has implemented over 60 efficiency measures
saving $4.2 million in one-time savings and another $1.6 million in on-going savings. Those savings were accomplished by reducing ground
maintenance, grant administration, the dispatch system was combined
with the state dispatch system savings 14 full time positions. The
Department has ongoing efficiency measures evaluation and a quality
assurance team that meets regularly. ITD continues to look at safety
measures; i.e., use of seat belts, high-accident areas, and aggressive
driving, etc. ITD supports the 3 “E” program: enforcement, engineering,
and education.

The Idaho Transportation Board has established a 25-year vision with the
assistance of others. Dave Ekern, ITD’s new Director, will discuss the
Department’s future.

ITD is engaged in transforming transportation in this country and this
state. From 1956 to 1992 the single focus was building the 42,000 mile
interstate system across the United States. The transportation community
was then challenged to find another mission. Today transportation has
four dimensions: international in its scope, inter-modal and integrated in
its form, intelligent in character, and inclusive in its service.
Transportation agencies are not just building organizations as they were
in the early days. Transportation must come to the table with a new mix
of products and services­things beyond highway construction that include
information for customers. The use of technology must be increased; i.e.,
computer-aided design, automatic vehicle location, etc. Partnerships and
inter-agency alliances must be relied on; private sector relationships must
be redefined; workforce skills must be reshaped and upgraded,
transportation projects will need to rely on innovative financing. In the
future transportation professionals will not be just traditional engineers; it
will require a new mix ­ a person who is customer focused, innovative in
reducing barriers, technologically savvy, and entrepreneurial in attitude.

Transportation professionals are now focusing on three major topics: 1)
leadership through planning and performance (understanding what the
customer wants, turning that into performance measures, and reporting
it), 2) program delivery (delivering programs more efficiently, more
effectively, on time, in budget), and 3) systems operations and
management.

The transportation department in the Twentieth Century was
characterized as public works focused, project focused, focused only on
specific jurisdictional responsibility, worked the traditional hours of 8:00
am to 5:00 pm, did business “as usual,” and did it “our way.” In the
Twenty-First Century the transportation department will be focused on
mobility (outcomes), customer-oriented, system-focused, “24×7” service,
proactive, performance-driven, and focused around partnerships.

Since the new Director was hired last summer, the Idaho Transportation
Department has been looking at what should be done short-term and
long-term (in the next 30 years). To date ITD has determined Idahoans
want ITD to become 1) more active in helping solve area-wide
transportation problems (not strictly focused in corridors in geographic
and jurisdictional areas); 2) focus on managing and operating the system
(to provide new services, deal with congestion, and improve safety; 3)
preserve transportation options including airports, transit, and critical
corridors; 4) focus on financing and investment for the future (finding new
and different ways to finance needed transportation priorities without
raising taxes).

There are 4 main things Idahoans want in transportation’s long-term
future: 1) multi-modal systems that gives them choices, 2) a system that
preserves the quality of life they have come to expect that respects their
history and protects their environment, 3) be engaged in the decision-making business, and 4) want to achieve transportation within the bounds
of reasonable funding.

The foundation is solid, there is a good history, and it is important to build
on what has been learned. The challenges are numerous. Safety is a
priority, the Department needs to understand the transportation system as
a tool for growth, strengthen community involvement programs, provide
statewide access to public transportation, improve Idaho’s airport system,
use innovative financing tools for growth, and lastly and a very key point,
each project delivered needs to be an asset to the community,
environmentally compatible, the best in engineering and construction
excellence, and delivered on time and in budget. Considering the above
challenges, the executive team will focus on the following four areas in
the next three years: 1) improving program and service delivery,
improving safety and security, enhancing system operations, and
supporting Idaho’s economic health. In looking to the future, the progress
will be challenging because good progress has already been made to
date. It will require a partnership with the Transportation Board, the
Legislature and the Governor to define those steps.

Solutions to transit are not accomplished by a single entity suggesting a
change; today customers want multi-modal choices. The goal is to bring
agencies and customers together to talk about what makes the multi-modal choices usable. The core of transportation problem-solving is
awareness of the problem, engagement with agencies to find the right
range of solutions, and then obtaining funding to solve the problem – that
is what partnerships are about.

Solving problems in the future will require a balanced set of solutions,
using technology to operate systems different from in the past, with
alternative choices.

EXCUSED:

Chuck Winder, Idaho Transportation Board Chairman, introduced
representatives from the following five boards and commissions who
consult with and advise the Idaho Transportation Department. Each
representative will give a brief overview of his group.

Scott Patrick, a member of the Aeronautics Advisory Board, said his
Board consists of five members appointed by the Governor, subject to
Senate confirmation. The other Board members are Chairman Rodger
Sorensen, Bob Hoff, Kathy Miller, and Bill Parish (whose term just
expired; Mr. Parish will continue serving until a new person is appointed
this year). The key issue the Aeronautics Advisory Board is currently
involved with is the Forest Service’s closure of four backcountry airports.
That decision is being appealed.

Grant Peterson, Jr., Chairman of the Automobile Dealers Advisory
Board, explained that the Governor appoints eight members for 3-year
terms. The Board meets a minimum of three times a year and consists of
five licensed new vehicle dealers, two licensed used vehicle dealers and
Mr. Peterson who represents the recreational vehicle industry. his Board
assists and advises the Idaho Transportation Department on how to make
the auto industry better and more efficient and includes the administration
and enforcement of the Motor Vehicle Dealer and Salesman Licensing
Act. The Board works with the auto industry when legislation is needed
on various issues. Last year a law was passed restricting the use of
dealer plates. Currently there is an in-dealership program being piloted
so consumers can register their vehicles through auto dealerships rather
than making additional trips to the county assessor offices. One of the
issues the Board is currently working on is providing identification cards
for sales people in order to prevent identity theft.

Jim Pline, a Commission member, explained that the Director of the
Idaho Transportation Department appoints not more than 15 members to
four-year terms. Two of the 15 members are the Chairmen of the Senate
and House Transportation Committees. The ITD Director or his designee
acts as chairman; currently Larry Vincent serves as Chairman. The
Traffic Safety Commission meets in Boise three times each year.

The Commission’s responsibility is to review traffic safety problems,
develop effective plans for additional local-state cooperative activities,
recommend programs to receive federal aid for highway safety, and
recommend future traffic accident prevention activities. Current key
issues the Commission deals with are impaired driving and aggressive
driving, occupant protection, youthful drivers, bicycle and motorcycle
safety, EMS, and traffic records. The Commission operates under a 3-year plan looking at accident occurrence within Idaho and projects
relating to those issues. The staff of the Office of Highway Safety works
on specific program areas; Mary Hunter works with restraint systems
(seat belts) and other staff members work on impaired driving, graduated
license system, etc. Idaho seatbelt usage is up to about 65-70% usage
after 30 years of trying to educate the public on the issue.

Jerry Whitehead, a member of the Motor Carrier Advisory Committee,
explained that the Committee consists of 12 members serving staggered
3-year terms. They are a diverse group representing all areas of the
state. Mr. Whitehead is the only non-trucking member who represents
truck and trailer manufacturers. MCAC meets 3 or 4 times per year. The
Committee’s responsibility is to review proposed regulations, statutes and
general issues relating to motor carrier matters. Current issues MCAC is
working on include asking the federal government to lift the freeze on
state highways, expanded routes for heavier trucks, the U. S. Patriot Act,
reciprocity agreements with other states, registration and operating costs,
and the hours of service issue. MCAC expects there will be more trucks
on the nation’s highways because trucks will run shorter hours due to the
hours of service change. He listed as accomplishments the one-stop
shop concept, MCAC’s support for the reorganization of the ports of entry
that moved control to the Idaho Transportation Department, and the
Committee’s help in making some of Idaho’s routes/highways safer for
truckers. In the future, MCAC would like the Legislature to use people on
the committee as a resource because they have a lot of talent and
knowledge regarding the industry.

General Jim Brooks, Vice Chairman of the Public Transportation
Advisory Council, reported the Council is composed of six members who
serve 3-year terms; they are appointed by the Idaho Transportation Board
and meet 3 to 5 times each year. Each of the six Transportation Districts
is represented. PTAC annually reviews all grant applications for public
transportation funding throughout the state and then makes
recommendations to the Idaho Transportation Board on the granting of all
federal funds and the state funds used for public transportation services.
The great challenges public transportation faces today (since people think
mobility is a right not a luxury) are threefold: 1) Idaho is becoming more
urbanized and there is a need for transit systems; 2) in rural areas as
people age, they want to stay in those rural areas; and 3) funding is a big
issue. Twice the Legislature has said in some reports that a “stable, long-term funding base for public transportation should be identified.” There is
currently an effort to do that. PTAC works with Larry Falkner who is the
Administrator of the Division of Public Transportation for ITD. Mr. Falkner
has 3 grant managers, each assigned 2 districts. PTAC works with those
staff people.

When questioned about another advisory committee, Charlie Rountree,
Administrator of the Division of Transportation, ITD, explained that the
purpose of the Enhancement Advisory Committee (EAC) was to review
Transportation Enhancement Program applications and recommend
projects to ITD. It is a $4 million statewide program. The members of
EAC are staff people from other agencies typically headquartered in the
Boise area.

Future Senate Transportation Committee meetings will review other
boards and committees who work with the Idaho Transportation
Department.

Chuck Winder, Chairman of the Idaho Transportation Board,
expressed thanks and appreciation to all of those who serve in
advisory capacities and share their wisdom and knowledge with the
Idaho Transportation Board and the Idaho Transportation
Department.

Dave Ekern, Director of the Idaho Transportation Department asked
Charlie Rountree to address the Committee briefly concerning the status
of the federal highway reauthorization bill.

Charlie Rountree, Administrator of the Division of Transportation
Planning for the Idaho Transportation Department, reported that the
reauthorization bill has been approved by the Senate Committee and is
going to the Senate floor for a vote. The bill will be held until the Senate
Finance Committee figures out how to fund the bill; the Senate Banking
Committee also has to act on a transit portion of the bill. The Senate bill
involves $255 billion for highways over the next six years which would
impact Idaho by $1.7 billion dollars or an increase of 35.5% for the 6-year
period. The House has a bill in committee but it has not been voted on
yet. If Congress does not pass the reauthorization bill by the end of
February, it is hoped they will extend TEA-21 so Idaho can continue to
fund federal programs within the state.

Dave Ekern, ITD Director, previewed the FY05 budget request summary
(Governor’s recommendations) with the Committee, a copy is held in the
Senate Transportation Committee office. Mr. Ekern said the proposed
budget is built around no anticipated funding increases and the
recognition of anticipated federal aid at the TEA-21 levels which are built
into the budget request. The base FY05 budget totals $425,910,300 with
1,833.5 full-time employees and an additional $1,066,000 in program
enhancements. The recommended distribution of the $425,910,300 is
broken down into the following 8 categories. Contract construction
amounts to 56.7% or $241,599,800 of the budget with 100% of that
amount being paid to private contractors and includes more than 300
projects including 15 bridge projects, 79 lane miles of improvements,
1,141 lane miles of paving, 47 safety and operations projects, 86 design
and right-of-way projects, and 128 local highway projects. Highway
operations represents 30.6% or $130,491,000 of the $425 million budget
request with $74.5 million paid in labor (57%), $14 million in equipment
(11%), and $42 million in materials (32%). A motor vehicles budget of
4.2% or $17,693,600; a public transportation budget of 1.0% or
$4,217,100; an aeronautics budget of 0.8% or $3,416,800; and the
remaining three areas of planning, administrative services and capital
facilities represents 5.8% or $28,492,000.

Total Idaho transportation funding amounts to $715,600,000 with $$282.4
million coming from federal funds, $326.1 million from state funds, and
$107.1 million from local funds.

Mr. Ekern reminded the Committee that ITD’s mission is to provide high-quality, cost-effective transportation systems that are safe, reliable, and
responsive for the economical and efficient movement of people and
products.

(two votes)

Approved

39-0247-0301 be approved. The motion was seconded by Senator
Marley.

Nay: Senator Bailey

Absent: Senators Geddes, Brandt

Approved

EXCUSED:

Senators Stegner and Bailey co-sponsored RS 13734C1 that would
allow the placement of political signs on rights-of-way 30 days before until
3 days after statewide primary and general elections, subject to current
restrictions. Last year the Idaho Transportation Department had a written
policy allowing this action; this proposed bill puts that written policy into
statute. Signs are not allowed on the interstate highway system.

Senator Pearce explained that RS 13700 would repeal Section 62-307,
Idaho Code, to give counties the same ability cities have to negotiate
directly with railroads without having to go through the Idaho
Transportation Department.

Denise Brennan, Executive Director of the Idaho Automobile Dealers
Association, introduced RS 13556 that would allow neighborhood electric
vehicles to be licensed and titled for operation on certain public roads.

Ed Pemble, Drivers Services for the Idaho Transportation Department,
explained that RS 13495 would clarify several sections of Idaho Code
regarding driver’s license requirements, suspensions, disqualifications,
and revocations. He called attention to a couple of those changes. The
proposed legislation would codify the current practice to provide
notification of sex offender registration requirements to individuals who
have moved to Idaho from another state when they apply for an
identification card. Another change occurred because of SB 1078 in 2003
which authorized a licensed physician’s assistant and a licensed
advanced practice professional nurse to certify permanent disabilities for
driver’s licenses purposes (license plates and placards). All other
changes are non-substantive in nature and have no fiscal impact.

Ed Pemble, Drivers Services for the Idaho Transportation Department,
introduced RS 13500C2 that would revise requirements for commercial
driver’s licenses (CDL) and transporters of hazardous materials regarding
the hazmat endorsement to conform with the new federal law. The
proposed legislation would require applicants for a CDL hazmat
endorsement to undergo a security background records check and
receive clearance from the Federal Transportation Security Administration
prior to issuance of a license with a hazmat endorsement. The
requirement would apply to all first-time applicants and to those who
renew or come from another state (even though they have the hazmat
endorsement from the other state). It also adds a requirement that
hazardous materials endorsement applicants provide proof of U. S.
citizenship or proof of lawful permanent U. S. residence and a valid
Federal Bureau of Citizenship and Immigration Services alien registration
number at the time of application. It removes the option of having a
hazardous materials endorsement on an instruction permit. The
legislation is needed to keep Idaho’s CDL program in substantial
compliance with federal requirements; otherwise, there would be a loss of
federal funding. The current implementation date is April 1, 2004, but ITD
has requested an extension to December 1, 2004 because TSA is still
working on the procedure details. The database holding all of this
information will not be available to ITD; the Department will only be
informed of the applicant’s pass/fail status. Implementation costs might
be covered by the federal government through a grant program but that
information has not been provided to date.

Senator Werk introduced RS 13897C1, a bill he is co-sponsoring with
Rep. Miller, that would provide funds for a Safe Routes to School grant
program using a portion of existing funds in the Idaho Transportation
Railroad Grade Crossing Protection Fund to be renamed the Public
Safety and Protection Fund. The proposed legislation provides that one-third of the annual allocation but not less than $85,000 would be reserved
for this program. The Idaho Transportation Department (ITD) would
establish criteria for the grants that would be based on demonstrated
need and potential for reducing child injuries and fatalities. ITD estimates
it would cost $29,000 annually to fund a part-time grant administrator for
the Safe Routes to School program.

Stuart Davis, Executive Director, Idaho Association of Highway Districts,
explained that RS 13762C1 would amend Section 18-3908, Idaho Code,
to allow a period of 24 hours from the time of written notification by
governmental authority for the rectification of any highway flooding before
criminal charges are brought against the violator.

Stuart Davis, Executive Director, Idaho Association of Highway Districts,
indicated that RS 13773C1 provides additional powers and duties to
highway district commissioners, provides ordinance authority, and also
provides for contents of ordinances. It also provides that in the case of a
highway district that shares jurisdiction over the secondary highways

within a county, the county clerk shall be the keeper of the ordinances
passed by the highway districts that are within the county.

RS 13775C1

RS 13863

Dissolution of Highway Districts; provides alternatives/exceptions

Inverse Condemnation; process for resolution of claims

Stuart Davis, Executive Director, Idaho Association of Highway Districts,
the sponsor of RS 13774C1, RS 13775C1 and RS 13863, requested that
the proposed bills be returned to him.

Com’l Driving

Schools Program

Raegan Comperud, a lobbyist for the Idaho Association of Professional
Driving Businesses, introduced the following two Association officers who
explained their program and some of the problems they have encountered
with statutes and rules governing their organization. They operate under
rules and regulations of the State Department of Education. Twenty-six of
Idaho’s 36 driving schools are members of this Association. Dave
Eiguren, the Association’s Vice President, will have some closing remarks
after the Department of Education presentation.

Mike Ryals, President, Idaho Association of Professional Driving
Businesses, indicated he has 32 years of drivers training experience, 12
years as a commercial driving business owner. He has a Masters Degree
in Secondary School Administration. Since 1998 when ITD moved to the
third party testing program, he has been a state skills tester for drivers
licensing.

His association feels there have been some unreasonable attempts by the
Department of Education to micro-manage commercial driving schools.
As regulations began to change a couple of years ago, commercial driving
businesses determined that Idaho Code needed to be changed if they
were to survive as businesses; they are not employees of the State or
public schools. Commercial schools receive their revenue from tuition
paid by students and adults for services they offer which include flexibility,
smaller classes and individualized instruction. Association members are
businesses offering a service.

Mr. Ryals discussed the following 8 areas (refer to Section 49-2102, Idaho
Code) that are of concern to his association membership: (1) Specific
regulations regarding equipment used, (2) Sources of instruction, (3) the
requirement to provide previous records of the businesses and their
instructors, (4) providing a schedule of fees, (5) providing financial
statements for their businesses, 6) character and reputation evaluations
for operators, 7) providing personal and employment records, and 8)
certification issues. Certification is particularly a problem for public school
instructors who want to work for commercial driving businesses but they
are required to certify for a second time. The Association questions why
public schools pay $30.00 for a driver’s training permit while commercial
driving schools pay $10.00 for the permit.

The Association would like to have its members’ credibility and input
acknowledged since they are driver education professionals; they want to
be regulated by a business friendly agency. It has been suggested to the
Association that perhaps the appropriate agency to regulate them would
be the Idaho Transportation Department. A copy of Mr. Ryals’ testimony
is attached to the minutes.

Dwight Dickey, owner of the Sun Valley Driving School, submitted the
attached written testimony detailing problems he has experienced. He
supports transferring responsibility for private driver education businesses
from the Department of Education to the Idaho Transportation Dept.

Jolynne Cavener, Secretary of the Idaho Association of Professional
Driving Businesses, has been in the driver education business four years;
prior to that she spent over 20 years in the banking business. She said
she cannot run her business and meet the market’s needs because of
some Department of Education rules and regulations. She gave the
following examples: homeschoolers who have more flexible schedules
than public school students, students who want to finish the program in 30
days during the school year, and classroom specifications that cannot be
met because she teaches in a room rented from a senior citizen’s center.
Another problem for her that was written as a “deficiency” on her first
Department of Education evaluation was allowing one student to drive
alone in the vehicle (at the parents’ request) when she had more than four
students in the classroom. Her association has been trying to work with
the Department of Education for over two years to get some of the rules
changed but, to date, nothing has happened. Association members are
losing business because they cannot meet their clients’ needs.

Dept. of Education
Drivers Ed
Program

Elizabeth (Beth) Weaver, Driver Education Specialist, Idaho Department
of Education, provided the committee with information on the driver
education program administered by the Department of Education, noted
curriculum improvements, discussed program support and then talked
about some of the problems.

Idaho’s licensing age is 17 unless students complete a driver education
course and the Graduated Driver Licensing (GDL) law requirements that
allow them to drive at age 15. Current course requirements require 30
hours in the classroom, 6 hours of observation in a vehicle, and 6 hours of
behind-the-wheel driving over no less than 42 days; however, public
schools can offer a 30-day course during the summer. In 2003, 17,500
students completed drivers education; 12,800 or 73% took the course
through public schools and 4,700 or 27% took the course through
commercial schools. In the public schools it costs an average of $224.00
per student to take driver’s ed with the student paying an average of
$77.49 and the school districts being reimbursed an average of $106.000
­ maximum reimbursement is $110. Because costs continue to increase,
a bill has been introduced this session to increase the reimbursement to

school districts to $125 per student. Currently there are 417 public school
teachers and 66 commercial school teachers who teach drivers
education.

In 1999, it was the intent of the Driver Education Steering Committee to
have the same teen driver training standards for public and commercial
school programs so rule changes were proposed to raise the standards.
Some commercial schools opposed the draft rules in 2002 so they
currently operate under the 1996 rules. Public schools operate under
rules approved by the Legislature in 2003.

Ms. Weaver listed the following problem areas. The State Department of
Education (SDE) is charged with licensing driving schools but does not
have clear authority to regulate commercial driving schools including the
revocation of licenses for those schools that repeatedly and willingly
violate Idaho statutes and rules. Further, SDE does not have the
resources to bring violators into compliance. Also, there continues to be
resistance by commercial schools to adopt uniform teen driver training
standards.

Public and commercial driver education programs need to work
cooperatively together for the safety of all concerned. The State
Department of Education is not opposed to an effort by the commercial
driving schools to move the licensing and regulation of commercial driving
schools to the Idaho Transportation Department. A copy of Ms. Weaver’s
presentation is attached to the minutes.

The Association feels that its members do not receive any assistance
from the Department of Education in helping to change the statutes.
When they have tried to discuss concerns and problems with SDE, the
members seem to be ignored. Mr. Eiguren reiterated that it was not his
Association’s idea to request being moved to the Idaho Transportation
Department. The Association wants to get some statutes changed and
thinks the direction should be to move commercial driving schools under
the regulatory authority of the Idaho Transportation Department.

Mo Detmar, Administrator for the Division of Motor Vehicles for the Idaho
Transportation Department, indicated there were obvious differences of
opinion, but a common thread running through the discussion indicated
everyone is concerned about safety. ITD does not have a position at this
time but would like to see an effort made to improve the driver education
program to improve safety. Mr. Detmar expressed caution about making
a move from one regulatory agency to another before the entire matter is
thoroughly reviewed. He suggested that a study committee look into the
situation before the Legislature convenes next year.

Senator Geddes informed those present that statutes can be changed
and people can prevail on committees in the Legislature to help with that
effort. Rules review is a public process and rules can be negotiated as
well. He encouraged those present to become involved in that process.

EXCUSED:

Mo Detmar, Administrator of the Division of Motor Vehicles, Idaho
Department of Transportation, indicated this final report completes the
legislative study comparing the old weight distance/use fee truck
registration system with the new registration system created by the repeal
of weight distance tax procedures in October, 2001. He reminded the
Committee that the weight distance tax was enacted in 1951 and revised
periodically until 1981; since that time there were only minor changes until
February 22, 2000, when Judge McLaughlin issued his decision based on
the American Trucking Association lawsuit. The Court found that Section
49-434-9, Idaho Code, (the weight distance tax) was unfair to out-of-state
trucking firms. Weight distance is a tax on commercial or large trucks
based on the loaded maximum registered scale weight of the combination
of vehicles; i.e., the weight of the truck multiplied by mill rate or cents per
mile driven for a given registration period to arrive at the fees due. The
weight distance tax (sometimes referred to as use fee tax) was collected
after miles were driven as compared to the typical registration fee
programs that are paid prior to driving the vehicle.

The settlement negotiations from the decision resulted in a registration
system change. As a byproduct of that change, the Legislature requested
annual reports concerning the revenue stream to the Highway Distribution
Account from the new truck registration system from 2001 through 2004.
To manage that reporting, the University of Idaho through the National
Institute of Advanced Transportation Technologies (NIATT) was hired as
an independent consultant whose charge was to complete a study
comparing the old weight distance/use fee system with the new
registration-based system and report their final findings to the 2004
Legislature. This report meets that obligation.

The report will (1) analyze and compare Idaho’s former and current truck
tax system, (2) examine the impacts on intra- and inter-state truck
operations, (3) evaluate economic and administrative impacts on affected
taxpayers, and (4) provide recommendations. Mr. Detmar introduced Dr.
Ken Casavant who will lead the discussion and Dr. Eric Jessup, an
assistant professor in the Department of Agriculture and Resource
Economics, Washington State University who has specialized in
transportation modeling and analytical research.

Since background information on the issue was covered by Mr. Detmar,
Dr. Casavant discussed revenue impacts from the new truck tax system,
focused on Idaho-based firms (changes by vehicle weight categories),
compared the old/new systems on taxpayer (trucking firms) cost of
operation, and compared the old/new system on dollar per ton mile. He
also discussed revenue neutrality, looking at the potential existence of
any shortfall but also looked at the pre-payment magnitude that is part of
the data collection. He also discussed the enforcement/evasion issue,
and possible restructuring of the tax system, as well as the use of
temporary trip permits ­ what he sees and how businesses are using that
as an avenue to make good economic decisions. Finally
recommendations will be offered as suggested by NIATT and the Idaho
Legislature.

He discussed revenue generation which indicates from 1999 to 2003,
looking at the foreign versus Idaho carriers impact, over time the foreign
payments have decreased by $8.2 million and local in-state payments
have increased by $3.6 million, so Idaho-based firms are carrying more of
the impact than they were earlier which was the mission of the lawsuit.
Perhaps some of the reasons the foreign payments have gone down is
because quarterly reporting has been allowed in-state, payment by
registration, a decrease in truck numbers, and an increase in the use of
temporary permits. Why the decrease? The available data, as far as
gross domestic product for the state of Idaho, suggests there is a
flattening but not a decrease in economic activity. One must look at the
distribution ­ look at individual sectors. Those sectors experiencing GDP
growth were agriculture, retail trade, real estate, health services,
transportation and public utilities while manufacturing, durable goods,
industrial equipment, chemicals, and lumber/wood products experienced
a GDP decline. Truck-based industries are on both sides of the ledger
which would suggest the GDP was fairly stable and a decrease in
revenue could be the result of the change in the registration system itself.

Looking specifically at Idaho-based trucks from 1999 to 2003, there was
an increase in revenue of over 27% (Idaho calls it revenue, truckers call it
payments and user fees). Looking at revenue distribution by vehicle
weight category and size of truck, the 80,000 pound vehicles provide the
largest source of revenue (a 36.72% increase) followed by vehicles in the
50,000 to 80,000 pound category (29% increase). The number of
registered Idaho vehicles has decreased almost 15% from 1999 to 2003.
There is an increase in revenue occurring, spread out over fewer trucks.
The smallest decrease in Idaho registered trucks was in the large
commercial vehicles over 80,000 pounds (7.25%), the largest decrease in
registered vehicles (19.98%) was in the 50,000 to 80,000 pound range.
As these changes have been occurring, the annual vehicle miles of travel
(AVMT) per year has been slowing; in the last four years, the average
increase has been slightly less than 1% and for the last 20 years, it has
increased about 5%. (AVMT is a rough indicator of the consumption of
the infrastructure.) So there has been a continued increase in the use of
the road in producing benefits to Idaho, but the increase is slowing over
time.

The study also looked at the following economic and administrative
impacts of the new system: impacts per ton mile, cost of operation per
mile, break-even mileage (old vs. new system), industry impacts, and
some administrative impacts for the Idaho Transportation Department.
Under the new system, trucks in either the 80,000 or 106,000 permitted
GVW categories with high-mileage (120,000 miles) end up with decreases
of 37% and 33%, respectively. Trucks in those same GVW categories
with low mileage (12,000 miles) have increases of 120% and 135%
respectively, in fees being paid by trucks. So those high-mileage vehicles
end up with a decrease in break-even costs. In looking at the
registration fees as a percent of total cost of operation under the new
system, 80,000 GVW, low-mileage vehicles (12,000 miles) experienced
an increased change of 139% while high-mileage vehicles in the same
category had a decreased change of 41%. The 106,000 GVW low-mileage vehicles (12,000 miles) experienced a 151% change (increase),
while the high-mileage (120,000 miles) had a decreased change of 50%
as a percent to total cost of operation. The new system allows a decrease
in registration fees as far as a percent of total cost of operation which
makes sense because registration fees have been designed as fixed and
if a person “runs the heck out of a truck,” he is going to lower the impact
of the registration fee on the truck itself. When looking at registration fees
and gas tax combined, doing the same analysis, the direction of change is
the same but is significantly less of an impact. So the lower mileage fees
have a positive impact as far as the cost of operation increasing, but the
high mileage fees are about a breakeven (the analysis says it is a -1%).
The result when combining the gas tax and the registration tax, there is
little or no impact on the high-mileage firms but an increase, but a lot
smaller, on the low-mileage firms.

Regarding registration tax costs per mile, analyses of what the differences
are by mileage, under the old and new systems, showed the break-even
point at 75,000 miles per year. Under the old system, it cost 4.49 cents
per mile and under the new system it costs 4.50 cents per mile. However,
if the mileage is 12,000 miles per year it could add up to a 104% increase;
or if the mileage is 120,000 per year, there would be a decrease of 38%.
Another characteristic (problem) with the existing system which could be
an incentive for under-reporting can be explained by the following
example: at 7,500 miles, the cost (rate per mile) figures out to be 6.4
cents. At the start of the next tier (7,501 miles), the rate jumps to 14.7
cents per mile, so there is a lot of incentive not to report that extra mile or
two. At 50,000 miles the cost is 4.6 cents and at 50,001, the cost jumps
to 6.7 cents per mile. These are challenges with tiered registration
systems that have large jumps from tier to tier. (The same situation
occurs in many other states.)

To summarize the economic impacts: (1) high-mileage firms gain as a
result of the new system because they experience decreases in costs, on
both ton-mile and total cost of operation basis. (2) when considering the
gas tax, increases are significantly less for low-mileage firms, and
decreases are smaller for high-mileage firms. (3) Firms above 75,000
annual miles gain under the new system and those under that mileage
feel an impact in the increased cost per mile. (4) A University of Idaho
pilot study on grains showed that little or no modal shifts would occur as a
result of being shifted between rail/truck or truck/barge as a result of
increases. Relative to the rest of the world, the Idaho grain industry did
not lose competitiveness, so there was no shifting competitiveness
between modes. As far as economic impacts, that particular study
indicated that competitiveness has not been drastically affected.

Those involved in the study spent a considerable amount of time looking
at revenue neutrality. In looking at the record and talking to those
involved, revenue neutrality became an accepted goal of participants in
the settlement; it was negotiated at the $41.3 million level – that was
revenue neutral relative to the prior versus the new system. The April,
2000, settlement stated, “The $41.3 million equals the approximate
amount of use fee revenue anticipated to be collected by the State in
Fiscal Year 2001.” The $41.3 million figure has become an operative
value and a goal and analysis has been done toward that.

Regarding the revenue analysis itself, a table was displayed to indicate
what the revenue neutral category would be in the years 2001, 2002, and
2003 and is identified as $41.3 million each year. The actual revenue
realized in that time was $64.5 million for 2001, $46.3 million for 2002,
and $38.8 million for 2003. Looking at revenue neutral as far as a
shortfall, in 2001 there was $23.2 million above the revenue neutral, $5.0
million in 2002, and in 2003 when the weight distance was taken out there
is a $2.5 million shortfall relative to the $41.3 million. To date, there is
only one year’s data, there is some indication the shortfall does exist in
2003. But as economists, Drs. Casavant and Jessup, looked at the $41.3
million and, assuming that amount was balanced relative to cost of
operating the infrastructure, cost of rebuilding, etc., the figure is at least
close to the CPI. They have some construction indices rather than the
CPI that might be more relevant to this analysis that is being accumulated
right now. Looking at the CPI growth over those years, by the year 2003
that $38.8 million becomes $42.9. It might be reasonable, based on the
fact that in 1997, $41.3 million was realized. Dr. Casavant feels that is a
conservative estimate at this time. The net result of that is when one
looks at revenue neutrality with a CPI, there is a prepayment amount of
$23.4 million that is above the existing, but in the year of 2003, there is a
revenue shortfall of $4.1 million identified.

In summarizing the revenue issue: (1) the policy change of collecting at
the beginning of the year versus the end of the year did have an impact.
When truckers were put in the same position as automobiles and other
vehicles (pay at time of registration), it did have an impact on revenue.
(2) the existing data does not allow for a definitive answer at this time.
There has only been one year (2003) ­ where he thinks the noise of
change has been cleared up and that suggests that there may be a
revenue shortfall but it is a one-year sample. No economist nor academic
would say that becomes the answer – but it is an indication.

(3) Based on that, it appears that a $2.5 – $4.1 shortfall below revenue
neutrality may be occurring.

Dr. Casavant discussed some other related issues of importance to the
state of Idaho, truckers and policymakers. (1) Regarding enforcement
and evasion implications, there are incentives to under-report now, but
there were incentives to under-report previously. But previously, it was
based on mileage that had occurred rather than projecting into the future
what might happen. There is a slight weakness associated with that.
There is the possibility that the degree of enforcement has declined
because they investigated the number of personnel administratively
auditing this and that has decreased over time – a very cost-effective
move. Out-of-staters are no longer audited. That suggests the control or
amount of knowledge known is probably less than before. It is not known
if those reporting are declaring all of their mileage, but it is known that out-of-staters are no longer audited and Idaho is concentrating on Idaho-based firms. Administrative expenses have decreased for ITD – that is a
good thing as long as it is known what it costs in foregone revenue.

(2) There was an increase in temporary trip permits between 2002 and
2003 or a 20% increase. But both of those years are significantly down
from the previous year of 2001. The data would indicate that truckers for
a couple of years were trying to figure out what was happening — they
were trying to figure out what should they pay in the future, where should
they license their vehicles, if they had a fleet of five vehicles should they
only license four now and hold the fifth one back or should they use
temporary trip permits to meet the demands of the market. The good
news about this is that businesses are making rational economic
decisions. From the point of agriculture and forest products where there
is high seasonality, these folks may be responding to market demand.
They are there to provide a service but they are going to keep that truck
from being registered all the time. That is the implication and it may
suggest why truck registrations are down. The numbers are not definite
but it is a logical deduction. (3) Another related issue is potential
restructuring. The data being collected are incomplete because they are
captured, in most cases, by category rather than the actual experience of
the firm. The trucker knows why he puts the truck in a particular category
but collection of that data is incomplete at this time so economists cannot
be precise in the analysis. The International Registration Plan (IRP)
Agreement favors firms with high mileage out of state. If truckers travel
120,000 miles nationally, they get to pay at the high-mileage rate, which is
low per mile even though they only travel 10,000 miles in the state. So a
local trucker traveling 10,000 miles in the state pays a lot more than that
IRP vehicle that travels the same amount of miles but gets to register at
the 120,000 rate. Dr. Casavant also offered the point that there is some
administrative savings from the fact that every state takes care of itself so
there may be some administrative savings to the state of Idaho and other
states that might make it worthwhile. It is not yet known but it is a
potential issue. Another related issue is that low-mileage firms do absorb
significant impact – that has implications for registration, evasion and for
temporary permits. That will be determined over time. The last potential
restructuring issue is that the current fee structure does not incorporate
accepted highway impact/damage functions. The fee does not
specifically include the differing impacts when there are things like a fat
truck versus a skinny truck (a heavily loaded vehicle versus a lightly
loaded vehicle). He discussed a chart that shows that as the weight of the
vehicle is increased the damage or consumption to the road increases
exponentially. The large vehicle has a different stress factor, different
impact, and some would say, a different economic impact on the state.
The existing system is not responsive and does not reflect some of that.

Dr. Casavant concluded with the following recommendations.

(1) Regarding data collected, they would like to see actual experiences
collected if at all possible. When audits are done, the odometers are
checked, the information is recorded, but the information is never brought
together where all can see specifically what is happening. He
encouraged those in charge to look at foreign versus Idaho IRPs and
versus the Idaho Full Fee. The little bit of analysis offered here is from a
sample done by the ITD. That information needs to be made available to
policymakers and to ITD as implementors of the policy.

2) Some concerns about enforcement and evasion were identified. It is
not enough to say that “we need to enforce more” or “they are evading a
lot.” He suggested that costs and benefits be looked at at different
enforcement levels. Is revenue being lost? Are costs for truckers being
increased as the enforcement level increases? There should be some
understanding of that relationship.

3) Regarding a revenue-neutrality oriented system restructuring, there is
no question that an existing fee is more efficient from an economist’s
point of view than a flat fee. A flat fee is like a smorgasbord versus
individual pricing. When one pays per item, the costs and benefits of
every item are considered. A weight distance tax offers that ability and a
flat fee does not.

4) The question of equity as far as individual low-mileage vs. high-mileage
firms, there is an incentive for evasion.

5) Regarding impact on pavements, the study has identified a divergence
between what appears to be the consumption or impact on the highway

versus the existing registration system. Higher weight vehicles are not,
evidentally, bearing the brunt that they lay on the pavement itself. That is
something that legislatively needs to be handled.

6) Regarding administrative impacts, instead of seeing enforcement
versus equity considerations, it would be easy to look at what the benefits
of increased administration/data collection/enforcement might be relative

to revenue and equity considerations between high-mileage and low-mileage, high weight and low weight vehicles.

7) The temporary permit could be a good economic tool available to
truckers as they try to provide the service that Idaho industries need. It
could be incorporated into Idaho’s structure as it is, but right now those
doing this study are not sure what the use impacts are and are not sure
what the revenue impacts might be. There is currently only that little bit
of data as far as it was used a lot earlier which decreased significantly in
2002 and then increased by 20% in 2003. Truckers and motor vehicle
operators are learning how to work with the system in responding to their
customers’ needs. The role of temporary permits may have implications
for revenue generation and also for service to the industries.

8) It would be beneficial for Idaho to undertake a comprehensive
evaluation, to do an equity comparison to surrounding states fee
structure as to structure, implementation and impact on competition.
Idaho should know what the competition is for the truckers in other states,
and what the competition is among the sectors whether it is grain,
livestock, or forest products. Other states are competitors and it would
make sense to take a good look at Idaho’s system and see how it relates
to the other systems, both learning from theirs and seeing if a competitive
imbalance is being created. Indications are that is not the case, but Idaho
needs to know what the surrounding states are doing.

Questions directed to Dr. Casavant

Q: Senator Keough asked what Dr. Casavant’s involvement in the
ATA lawsuit was.

A: He was an expert witness for the American Trucking Association.

Q: Who was contacted or did you just use ITD audits for your analysis
or did you contact trucking firms?

A: We used the audits and we used information provided by Doug
Benson (ITD).

Q: (Page 12 graph on decrease in truck numbers) part of that you
covered could potentially be happening in people managing their
fleets with temporary permits and not registering under the normal
system, but I suspect, and maybe you would know, if some of that
was lost to economic factors. Can you balance the shortfall in
revenues produced against the loss of trucking companies. Do
you do that type of analysis at all?

A: We can do that. The total amount paid by the Idaho-based trucker
increased. We don’t have it here, so that increased, even though
the number of trucks was decreasing. That would suggest that the
revenue per remaining truck was increasing over time.

Q: Page 12 graph – those are all negative numbers – what does that
mean?

A: There are still trucks in those categories but this graph was
designed to show, given the decrease in total that occurred, where
it occurred. It suggests that there was a decrease of 7% in the
large ones, almost 20% in the second category. So that graph is
designed to say that of the decrease in vehicle numbers, this is
where it occurred.

Q: The concept of revenue neutrality – that was a snapshot at one
point in time that was a negotiated settlement. Does it make
sense in your mind to continue striving for revenue neutrality when
we no longer have that system? We have a new system. Are we
to continue as a policy body to look at that point in time, and carry
that forward as some measurement as how we should structure
our system. Or should we say that happened then and here we
are today, and move forward?

A: We accepted that as a given. That was a revenue neutrality
figure and we did some analysis relative to that. Over time at least
the CPI is an appropriate way to indicate either the cost of new
construction (we are still trying to find some construction) so that
the concept can hold. That is a policy decision but the number
chosen should probably be sensitive over time to cost of
construction and vehicle miles traveled. One is consumption of
the road and the other is cost of rebuilding the road. These two
together, when one looked at the average vehicle miles traveled,
was close to 1% when we did calculate it and it didn’t show any
change. In the future, if the annual vehicle miles continues to
increase, that reflects use of the roads. Increasing it by the CPI or
a construction index indicates what revenue needs to be to attain
the same service to those who need the infrastructure. So I would
say at least those two would be appropriate to consider.

Q: Senator Little asked Dr. Casavant if he were to diagnose the
future, what the safety regulations would do to the average miles
traveled? Will there be enough drivers? There have been quite a
few protests that this is going to have a significant impact. Have
you analyzed where you think that’s going to be?

A: There haven’t been definitive studies done yet, but there is no
question that hours of operation are going to affect the costs for
the labor component of that truck. If the truck is on a trip and has
to sit, then the truck cannot achieve the same mileage that it had
before. So it is expected that both labor cost and annual mileage
achieved will decrease over time. So what does that do? It is
going to raise the cost.

Q: And lower the average miles traveled? I’m confused about actual
miles traveled. If you used audits, don’t the audits have the actual
miles traveled? What’s the problem with “trueing up” those
numbers?

A: We did not get involved in the actual audit numbers from last year.
What we had was the reporting as far as revenue and the annual
mileage. The exact audit data was not part of this.

Q: If you had that, couldn’t you check out the hypothesis? Maybe
there wasn’t a hypothesis – that they were under reporting
mileage.

A: It is a hypothesis. If we had those, the answer is yes. We did not
present it today, but the number of citations has slightly increased.
We have such a short window of information that I can’t say that is
a definitive statement that they are under reporting and then
getting caught. But we do know that with the number of audits –every 3 to 5 years someone might get audited–there might be
information to go in there and really test that. That is a good point,
something we have not done.

Q: Regarding the reduction in registration in small trucks, I know for a
fact when we repealed the personal property tax on farm
equipment, some of that equipment was licensed. Licensing was
cheaper than the personal property tax in some counties. With the
repeal of personal tax some of those registrations went away and
therefore those vehicles disappeared even though they are still out
there. I wondered on that end of the scale, on the 18,000 pound
and lighter trucks, if that wasn’t part of that falloff because that
would have been within the window of your study.

A: It easily could have been. It is not something we looked into or
had the information for. But I’ll agree.

Questions directed to Mo Detmar from ITD

Q/A: Mr. Detmar wanted to answer a question posed in JFAC a few
days ago by Senator Calabretta who asked what the current
revenue looked like for FY04. Understand we only have 6 months
in, but it appears by projections, we will come in at about $39.2
million. Again, that is projecting 6 months with 6 months actual.

Q: Senator Little asked what that means to those not sitting on the
JFAC? Above? Below?

A: FY03 was $38.8 million, so $39.2 further substantiates that we do
have a flattening of the system; in other words, we are getting a
stronger picture of what this system will deliver.

Q: Senator Ingram asked if the actual number of trucks in Idaho has
declined? Have we gained or lost truck drivers in Idaho? What is it
going to cost our shippers in Idaho? Are we going to be able to
compete, like shipping to the coast, or are we going to be beat out
again by the people in Oregon, Canada, and other places
servicing the same markets we do? It is one thing to be closest to
the market but if we can’t service them because of pricing that is a
problem. Are we getting into that area, or where are we?

A: We have certainly seen lesser Idaho-based trucks in Idaho. So
we have less trucks, less Idaho trucks, running on our roads
today. That is an absolute. This report shows that and our
information shows that. The amount of drivers, I have no clue
about that. I certainly can tell you our commercial drivers licensing
program is not decreasing. Maybe one of these gentlemen could
handle the question better than I. A program was created that I
was involved with to give some options or opportunities for the
trucker to make a valid budget business decision on why he would
register 5 trucks even though he owns six. It gives people an
opportunity to manage their fleets. There are some opportunities
there for someone to decide what to do when he runs against one
of the schedules. He can decide when he is about to hit 20,000
miles if he wants to continue running longer and go to the 25,000
tier where the rate or per mile cost of operating that truck goes up.
Or he can decide to let one vehicle sit and buy another truck, or
maybe bring that one vehicle on the fleet that he had not used. So
there is an opportunity to manage the fleet.

Q: The reason I am asking that question is because there is the
combination of fixed and variable costs involved. When you take
the fixed costs and allocate them across a number of miles, it is
one thing, and then you add the variable costs of fuel taxes and
other expenses. I am wondering if we are forcing some of our
people who traditionally run trucks into an operating ratio where
they are losing money and it is cheaper to take a carrier like
Snyders to put their products on because Snyders is willing to bid
theirs for anything covering variable costs so they can get their
trucks back home. I don’t think our truckers are second rate to
anybody, but I’m worried about the fact that if we’re losing trucks,
they may get rid of the ones that have market value to us and
leave us with an older fleet that needs more care and attention.
We would be forced out of the market and if we don’t have
adequate transportation we are not going to have economic
developments we are hoping for to get our products to market.
What are your thoughts on that?

Dr. Casavant answered the question.

A: Mr. Chairman, I think you put your finger on something that we
don’t know the answer to yet. A lot of the restructuring is not just
here, but in the U.S. whether it is hours of operation or something
else. Remember the double nickel – there was an increase in
labor costs because the trucker was not able to get the mileage
and productivity out of the vehicle because there were a lot of
unintended consequences. I don’t know if Snyder and others will
ever be able to compete with the personal service and
responsiveness of the Idaho-based trucker. But I do know that it
could make it more difficult for the Idaho-based trucker to compete
against those other carriers. I cannot suggest what the outcome
will be; but there is going to be a tightness as you suggest.

Q: Senator Calabretta asked to what degree the general driver
subsidizes the damage the trucks do to the highway for that
economic benefit.

A: Idaho has done cost responsibility studies over the years and I
think the general finding was that revenues from trucks quite
closely approximate the cost of providing for highways. There was
some divergence between the sizes of trucking and who was
paying what. He will make that information available.

Question answered by Mo Detmar, ITD.

Q: Senator Keough asked Mr. Detmar to clarify his statement about
this being the final report. This final report talked about the degree
of enforcement having declined and that we are not auditing our
state firms. Could you address those elements.

A: In reference to final report, this is one of three reports the
Legislature asked us to do at the end of the weight distance and
going into a new system. In other words some folks were nervous
about what it would do and how it would impact, etc. So we made
a report the first year, and last year you may recall, we had some
difficulty with it, and truly did not make an official report, and this
being the third year or 2004 when the report is due. That is why I
am suggesting it is the final report, at least on that project and that
window of time that we are asked to report. Some comments on
the audit scenario and the issue of enforcement changes. You
have heard me talk about downsizing and the transfer of our motor
carrier audits from ITD to the State Tax Commission. It is true that
we have less auditors now. I would suggest that there may be a
few less audits done because of this, but I would suggest there is
a great deal of efficiency being gained.

I think it is pertinent you know how collections were going with our
auditors. For many years on weight distance, we were retrieving
in the neighborhood $3 to $1 in weight distance and it continued to
drop to less than $1 with the new system. In other words, we were
not returning the money which brought the suggestion that we
might spend less money, chasing less money. You can’t give up
your audit program because you have to have a presence to
maintain some level of comfort. So we did downsize.

The fact that we don’ t audit out of state is absolutely true. It is
only true to the fact that Idaho employees or auditors do not go out
of state to audit. Those trucks are being audited by the base state
jurisdiction much as our auditors here are doing audits for other
states. You might think that I would be more interested in
collecting Idaho dollars, but we have a strong allegiance across
the country to do these things to keep things in balance. So I think
it is fair to stay that we are still doing a reasonably good job of
auditing.

Q: Senator Ingram related that when he was working at Boise
Cascade, the company had about 400 trucks in several different
types of fleets (private carrier, corporate ownership and also
contracted with contract carriers). In BCC’s private fleet there
were 7 or 8 combinations of trucks (that would run in Idaho only,
another group in north Idaho that would run in Idaho and
Washington, and another in Washington, Oregon and Idaho),
different combinations and mileage that we prorated out to keep
track of all this information and to minimize the expenses being
paid. We utilized the trucks to the best of our ability so we could
compete with the legitimate common carriers that were in those
areas. Are we still facing this with a lot of our motor carriers now?
Are they still struggling to do this? Are they block buying these
things? Are we seeing these trucks leaving our state and
registering in other states? Do you know what is happening that
might cause some of these changes?

A: Your question is, could BCC or other companies still operate with
several different looking fleets. Yes they do. You build your
trucking base by fleets, by groups of like vehicles that are running
in like jurisdictions. Yes they can still do that. Are we losing
trucks because of that? I am not sure. We see that we are down
in trucks.

2:50 p.m.

Representatives Present: Chair Wood, Vice Chair Ridinger,
Representatives Kellogg, McKague, Smith, Roberts, Bauer, Cannon,
Skippen, Wills, Shepherd, Douglas

EXCUSED:

Senator Brandt, the sponsor of RS 13693, requested that the proposed
legislation be returned to him.

Senator Bailey introduced RS 14021 requesting Congress to introduce
legislation to preserve access to and the historic use of backcountry
airstrips on currently-owned federal lands and any future federal
acquisition of lands. The Forest Service has taken management action
that renders four backcountry airstrips unserviceable and closes another
airstrip. The State of Idaho has appealed the management action.

Senator Ingram explained that RS 14009 would establish the Idaho
School Transportation Safety Awareness License Plate Program and
create the Pupil Transportation Support Program.

Roy Eiguren, an attorney with Givens Pursley who represents ValleyRide
on public transportation issues, said this final report is the most
comprehensive report ever completed on public transportation in Idaho.
Public transportation is a statewide issue ­ rural and urban. The purpose
of this meeting is to present the final report, engage in a dialogue relative
to the public transportation system in Idaho, and recommend options for
consideration. Public transportation will play a more significant role in the
future because of increased congestion on roadways, the need for more
efficient use of energy and demands on extending the useful life of
roadways. It is essential to provide transportation to a growing number of
Idaho citizens who are unable to operate motor vehicles and will become
public transportation dependent. Six metropolitan areas in Idaho were
designated urbanized making them eligible for urban federal transit funds.

In the summer of 2003 a steering committee put together the task force
known as the Idaho Task Force on Public Transportation which included
the following organizations: Association of Idaho Cities, the Idaho
Association of Chambers of Commerce, the Kootenai Metropolitan
Planning Association, the Idaho Association of Counties, the Idaho
Association of Highway Districts, transportation providers and regional
transportation agencies. The Task Force members are Chairman Lee
Staker, Roger Chase, Ron Binggeli, Teri Sackman, Tom LaPointe, Rich
Petersen, Rick Yzaguirre, Glenn Miles, Stuart Davis, Bob Flowers, Terry
Crawford, Charles Rountree, Jim Brooks, and Joe Herring and Steve
Purvis. The Interagency Working Group on Public Transportation (IWG)
is a collaborator with the Task Force, providing input and advice.

The Task Force was charged with 1) documenting private and public
funds (federal, state, and local) spent on public transportation in Idaho, 2)
documenting an inventory of existing public transportation services,

3) identifying transportation links (park and ride, rail, transit, commuter
services, air), and overlapping and duplicated services, 4) determining
options for coordination, and 5) recommending legislative changes as well
as identifying funding sources.

Idaho transit agencies are funded mainly by federal dollars and local
matching money from individual governments. There are six sources for
public transportation funding in Idaho: the Federal Transit Administration,
Medicaid, Idaho Department of Transportation, Idaho Department of
Education, local funds, and others (Health and Welfare, Head Start,
Vocational Rehabilitation, and Department of Labor). In 2002, the total
contributions amounted to $91,876,046.

Kelli Fairless, the Director of ValleyRide, said not only is the state
diverse but ValleyRides’ service area which includes Ada and Canyon
counties is also diverse. Over the past several years ValleyRide has
engaged the public in a variety of public outreach settings including:
government leaders, business community, citizens, and consumers. They
have held interviews, focus groups, public meetings, hearings, and
surveys. Through these efforts they have touched thousands of Ada and
Canyon citizens. The public 1) would like to see enhanced services,

2) are concerned about air quality and congestion, and access to services
by seniors and persons with disabilities, 3) would like to see better
marketing and public education, and for ValleyRide to build on successes
like good vanpool programs and the park-and-ride program. ValleyRide’s
strategic priorities are to promote services though education, build
community partnerships, enhance existing services and maximize existing
resources, secure stable funding, and develop a rail strategy.

Ron Binggeli, the Public Transit Director for the City of Pocatello, said
their public transportation system started in the 1970’s and came under
the city’s direction in 1982. There is increasing demand for public
transportation so they need local options in order to reduce demand on
the city’s general fund. Their organizational structure is through inter-government agreements. Their service area includes Bannock, Bingham,
Franklin, Power and Caribou counties. They are currently involved in an
IAG 4-county coordination pilot program in Highway District 5. They have
annual boardings of about 500,000. Their funding sources are the
Federal Transit Administration, Medicaid, and the city of Pocatello.
Medicaid is currently the only means they have for local matching funds.
In the last few years, their door-to-door service for people with disabilities
has increased faster than their fixed-route service. They have over 400
people who are certified with transportation disabilities and those services
must be provided with very little flexibility. They would like to provide
services to those in outlying areas but are limited because of funding.

Terry Crawford, the Transit Manager for Ketchum-Sun Valley, briefly
discussed public transportation in Blaine County. He represents the
Ketchum-Sun Valley Transit Authority which was the first regional transit
authority in Idaho. They do have a funding source, own 10 buses, and a
maintenance facility with 4 housing units. From their local option tax they
collect over $1,000,000 annually ($400,000 coming from Ketchum and
$300,000 from Sun Valley). They operate their transit system 7 days a
week. They need to service the south valley area but their charter limits
them to operate only in Ketchum and Sun Valley.

Roy Eiguren said there is a large and unmet need for public
transportation throughout various parts of Idaho both urban and rural.
The status of Idaho statutes is that the jurisdiction with the authority to
provide public transportation services lacks the authority to fund those
services. Idaho needs to provide a mechanism for funding at the local
level. There also needs to be action at the federal level to change
funding terms and conditions. In addition the Task Force would like
Medicaid to change its terms and conditions of funding and the amount of
funding. They would like to have an interim legislative committee analyze
this report.

The Task Force considered 10 funding options to provide local (city,
county and regional) funding for public transportation. After extensive
debate within the Task Force as well as at a series of regional meetings
held throughout the state, the Task Force concluded that the two most
appropriate options to recommend to the Legislature were the personal
property tax on vehicles and the title transfer fee. Those options should
not be implemented without a local option vote of affected citizens.

Joe Herring, Executive Director, Region IV Development Agency,
discussed the situation in the Twin Falls area. Because of plant closings,
the Burley area is experiencing high unemployment but in the Twin Falls
area there are job openings. His agency’s challenge is to provide public
transportation so people from Burley can take advantage of employment
opportunities in the Twin Falls and Jerome areas.

Roy Eiguren, said the report is a complete comprehensive analysis of the
needs of the state. Idaho is unique because of its geography and
population. Public transportation needs in Idaho are not being met
because of a lack of funding at the local level.

Steve Purvis, representing the city of Boise, said he has a rapidly
growing area. Boise works closely with ValleyRide who relies on money
from the city to operate. They would like to expand services to meet
increasing needs. Boise also needs more ability to deal with some of the
issues facing them; they need help economically and with air quality
issues. He encouraged the Committee to support legislation that would
allow them taxing options subject to voter approval.

The meeting adjourned at 2:45 p.m.

EXCUSED:

S 1272 was returned to the sponsor, Senator Pearce.

Denise Brennan, Executive Director, Idaho Automobile Dealers
Association, explained that S 1273 would allow Neighborhood Electric
Vehicles (NEV’s) to be licensed and titled for operation on streets where
the posted speed limit is 35 miles per hour or less. A person operating a
low-speed vehicle must have a valid driver’s license. By definition a “low-speed” vehicle is any four-wheeled electric vehicle with speeds between
20 and 25 miles per hour and complies with the federal safety standards
established in 49 C.F.R. 571.500. Where applicable, low-speed vehicles
will be recognized as “alternative fueled vehicles, electric vehicles, or zero
emission vehicles.” There is only one NEV dealer franchise within the
state located in Coeur d’Alene.

These three entities have reduced their level of service to Idaho. The
state cannot wait several years for those organizations to respond on
consultation and coordination of projects. TEA-21 did allow federal
transportation dollars to be used for salaries to pay federal agencies for
support staff. The Idaho Transportation Board reluctantly agreed to do
that in order to expedite project development. Through those federal
funds, Idaho pays for one staff member for each of the three agencies
listed above. That amount totals approximately $400,000 per year and
includes salary, benefits, traveling and other expenses, training of the
staff person as well as the cost of that person training ITD staff, etc.
Those three designated staff people work within specific requirements.
Idaho’s involvement with NOA occurs because NOA is responsible for all
fish listed on the federal endangered species list for Idaho (like the
salmon). When asked how much money is currently on hold pending a
decision by one of these three agencies, Mr. Rountree was not sure but
knew about three years ago it amounted to about $40-$50 million for all
agencies for all projects. There are a number of projects on hold for
various environmental issues (historic, cultural, social, water, etc.) not just
for these three agencies. Mr. Rountree indicated he would provide the
Committee with the most recent information available.

The Rail Advisory Committee was established in the early 1990’s for
railroad rehabilitation projects when there were funds available for those
projects. Since 1995 the Rail Advisory group has not functioned.

When asked, Mr. Rountree indicated the T-2 Center (rather than ITRTF)
has undertaken the study of asset management looking primarily at the
local system; LHTAC is also involved in the asset management issue. He
thinks ITRTF’s future involvement might be directed by what happens with
the federal reauthorization bill. The Idaho Transportation Department
continues to meet at least on a quarterly basis with the organizations
involved in the Task Force.

Joe Haynes, Administrator for the Local Highway Technical Assistance
Council, summarized that LHTAC was created by the Legislature in 1994
to assist local highway jurisdictions with utilizing available resources for
maintenance and construction of Idaho’s local highway system in an
efficient and effective manner. The Council’s members are local elected
officials from throughout Idaho, three members each from cities,
counties, and highway districts. He reviewed three (of several) things the
Council has the authority to do: 1) develop uniform standards and
procedures that can be recommended to member jurisdictions, 2) make
recommendations to the Idaho Transportation Board for the distribution
and prioritization of federal funds for local highway projects, and 3) assist
the Legislature by providing research and data relating to transportation
matters affecting local highway jurisdictions within Idaho. He discussed
some reports the Council has submitted to the Legislature and pointed out
some publications and manuals they have written. He also discussed
some of the programs LHTAC provides project selection and
administration for: the Local Federal-aid Incentive Program/STP Urban
and Rural, Local Rural Highway Investment Program, Local Federal-aid
Bridge Program and the Asset Management Project. Regarding asset
management, he said they are using software developed by the Utah T-2
Center. The T-2 Center in Idaho is helping collect data and manipulation
of that data will be done by LHTAC.

There are now 33,000 miles of local roads in Idaho and 288 local highway
jurisdictions. His office has a good working relationship with federal and
state government agencies as well as tribal governments and the Bureau
of Indian Affairs.

The local highway system is made up of roads, bridges, and railroad
crossings. Of the 33,250 miles of local highway miles, 5,366 are eligible
for federal aid. The local system is adding about 200-300 miles per year.
As of 2003 there were 2,283 bridges and 1,275 railroad crossings in local
highway jurisdictions.

Regarding local highway jurisdiction funding, of all the money the locals
have on hand at any one time, about 30% is carried forward into the next
year and is primarily obligated for maintenance and capital improvement
projects. Cost responsibility indicates how local highway jurisdictions are
doing in funding their highway system. In Idaho user fees (registration
and fuel tax) amount to 49.9% (The typical model indicates about 70%
should come from user fees.) Idaho non-user fees amount to 50.1%.
This means local highway jurisdictions are underfunded with user fees.
Regarding expenditures for local highway jurisdictions, 9.5% was spent
on administration, 42.9% of revenues was spent on construction and
rehabilitation, and 46.8% was spent on maintenance. The local highway
jurisdictions spent 99.2% of their revenue.

Future challenges include preserving the system, upgrading for safety and
performance, and training local elected officials and their 1,900
employees.

At the Chairman’s request, Mr. Keely discussed the needs assessment
process. He reminded the Committee that the first recommendation of the
Idaho Transportation Resource Task Force (ITRTF) submitted to the
Legislature in March of 2003 was to examine the needs assessment
methods used to assess transportation needs, especially for local
highway jurisdictions. LHTAC felt it was the Council’s responsibility to
come up with a cost effective way of doing that. LHTAC wrote a
whitepaper in the summer of 2003 proposing a “needs assessment
methods” for local highway jurisdictions and concluded that agreement
was necessary that the proposed approach was acceptable to establish
an on-going method. The paper was circulated in the fall of 2003 and
initial verbal responses were that the proposed approach had merit.

LHTAC realized it would not be able to get up-to-date in-depth, detailed
information about local highway systems (like information the Council
received from a 1995 study). So the Council focused on asset
management; it is a software which will define the current condition, the
useful life, and how much of an investment it will take to change that.
LHTAC’s people have worked to incorporate the assessment needs
process into the Road Scholar program. If people have a better
understanding of how to evaluate and spend money, they will do a more
efficient job.

It is imperative that there is agreement on how to supply information to the
Legislature so legislators will be able to make informed decisions on
spending resources in the future. LHTAC will continue to work with ITD,
the Legislative Services office, and the Division of Financial Management
to clarify interests, to develop approaches and to develop estimated cost
and benefits for each approach. LHTAC will complete a write-up of
interests and the assessment approaches considered valid along with
approximate costs. His office will report those findings to the Legislature
next year.

EXCUSED:

Senators Stegner and Bailey are co-sponsors of S 1271. Senator
Stegner introduced S 1271 which would authorize the placement of
certain political signs on highway rights-of-way 30 days before and until 3
days after a statewide primary or general election, subject to current
restrictions. This legislation will codify what is currently being practiced.
The interstate highway system is exempted. This bill will provide
uniformity throughout the state; in the past, some local jurisdictions were
not allowing signs to be posted on highway rights-of-way.

Senator Bailey presented S 1224 that establishes an Idaho veteran
motorcycle license plate program to allow veterans with motorcycles to
express their esprit de corps and assist in the funding of maintenance and
operation for the new Idaho Veteran Cemetery to be dedicated later this
summer. There are approximately 140,000 veterans in Idaho; only
veterans will be allowed to purchase this special plate. $10 of each initial
or renewal fee will go to the state highway fund and $15 of the initial fee
or $5 of renewal fee will go to the Veteran’s Cemetery maintenance fund.

As in the past, when future requests are received for specialty
plates, the license plate sponsors will be expected to pay all up-front
costs of the plate program.

Richard (Dick) Juengling, IWG Chairman, said the IWG was established
by state statute to analyze public transportation needs, identify areas for
coordination and to develop strategies for eliminating procedural and
regulatory barriers to coordination at the state level. The group is also
charged with promoting cooperation and collaboration among
transportation systems. He introduced the following IWG members who
were in attendance: Larry Falkner, ITD; Randy May, Idaho Dept. of Health
and Welfare; and Rodney McKnight, Idaho Department of Education. He
defined public transportation as services open and available to the
general public, anyone may ride, and usually there is a standard fare paid.
Client transportation is arranged transportation for clients of a specific
health and human service or educational program where an agency pays
for transportation services; criteria, regulations, and restrictions typically
apply. IWG deals mostly with client transportation issues where the cost
of the service is paid for by an agency.

IWG has three projects in Idaho: Pocatello Regional Transit Four-County
Regional Demonstration Project, the Magic Valley Initiative, and the North
Central Idaho Rural Access project.

Throughout the region the system is effectively taking on a coordination
role and is becoming the one-stop shop for public transit both for state
agencies and the senior, disabled and general public users. This project
can be replicated throughout Idaho.

EXCUSED:

Rod McKnight, presented S 1311 which would create the Pupil
Transportation Support Program fund, provide money for the fund and
provide for use of the money. The legislation would also establish the
Idaho School Transportation Safety Awareness License Plate program. It
would defray costs associated with Idaho’s oversight of the statewide
pupil transportation support program.

The familiar image of the yellow school bus serves as an emblem of
education in Idaho. During FY02 approximately 2,643 public school
buses traveled an estimated 28.6 million miles to transport 249,136
children to and from school and school-related activities. In a 2002 report,
the National Research Council of the National Academy of Sciences,
indicated that about 800 school-aged children are killed in motor vehicle
crashes during normal school travel hours and about 20 (or two percent)
are school bus related. In the past, public service announcements
promoted school safety but exposure to the ads was limited. With this bill,
a school transportation safety awareness license plate would serve as a
persistent reminder to the motoring public that stopping for school buses
during loading and unloading procedures is mandated by statute. The
funds from the license plate would be used 1) to develop a curriculum
about safe routes to school, 2) to promote and integrate health, fitness,
traffic relief, environmental and student safety education and awareness,
and 3) to help teach students the importance of using safety skills when
traveling to and from school and to launch driver safety campaigns.

Stuart Davis, Executive Director of the Idaho Association of Highway
Districts, presented S 1286 which provides that a person may not be
charged under the provisions of flooding a highway if the flooding from a
sprinkler or other water conveyance system is the result of mechanical
failure, wind or other climatic conditions or other circumstances that
cannot be controlled provided that violations are corrected within 24 hours
after written notification by a governmental authority. Mr. Davis indicated
the Idaho Water Users wanted to amend the bill to make sure the present
language does not impede the progress of agriculture and he
recommended that S 1287 be sent to the amending order.

Stuart Davis, Executive Director of the Idaho Association of Highway
Districts, explained that S 1287 would allow a highway district board of
commissioners to pass ordinances pursuant to Section 40-1310A, Idaho
Code. If a highway district shares jurisdiction over the secondary
highways within a county, then the county clerk would keep the
ordinances passed by the highway district(s) located within the county.
The proposed legislation would allow highway district commissioners to
better regulate their highway systems. Mr. Davis recommended that

S 1287 be sent to the amending order to insert more restrictive language
so the only ordinances commissioners could pass would specifically
relate to speed limits, weight limits and height and length of vehicles.

Ed Pemble, Drivers Services, Division of Motor Vehicles, Idaho
Transportation Department, explained that S 1274 will clean up and clarify
several sections of Idaho Code applying to driver’s license requirements,
suspensions, disqualifications and revocations. It will also require sheriffs
to provide written notification of sex-offender registration requirements to
out-of-state applicants for identification cards. Further, it would authorize
licensed physicians’ assistants and licensed advanced-

practice nurses to certify permanent disability for driver’s license
purposes.

Ed Pemble, Drivers Services, Division of Motor Vehicles, Idaho
Transportation Department, explained that S 1275 would revise
requirements for commercial driver licenses and transporters of
hazardous materials requiring a hazardous materials (hazmat)
endorsement, bringing Idaho law into conformance with the new federal
requirements. The proposed legislation prohibits issuing, renewing,
transferring or upgrading a commercial driver’s license with a hazardous
materials endorsement unless the U. S. Department of Justice has first
conducted a background records check of the applicant, and the
Transportation Security Administration has determined that the applicant
does not pose a security risk warranting denial of the hazardous materials
endorsement. An applicant for a hazardous materials endorsement must
be a U. S. citizen or be an alien classified as a lawful permanent resident
of the United States with a valid Bureau of Citizenship and Immigration
Services (BCIS) alien registration number. The bill also states that the
Idaho Transportation Department shall not issue a hazardous material
endorsement on any instruction permit. Mr. Pemble handed out a list of
disqualifying crimes (felonies) that was specifically designed to identify
those most likely to endanger the nation’s transportation network.

Susan Eastlake, President of the Idaho Association of Highway Districts,
said her association is governed by a 15-member board of directors, and
employs a full-time executive director, and one part time office assistant.
The Association represents its members at the Idaho legislature, at the
federal level, and also assists members with a variety of individual issues.
She introduced the following highway district commissioners: Clark
Kauffman, Filer Highway District; Ralph Gant, Nampa Highway District,
Ralph Little, Canyon Highway District #4; Olene Warr, Raft River
Highway District; and Lynn Humphreys, Post Falls Highway District.

The 64 Idaho highway districts are special taxing districts responsible for
maintaining approximately 12,000 miles of secondary roads in Idaho.
There is one countywide highway district (Ada County) and it maintains
highway responsibility for all highways in the county, including the city
systems. The 63 smaller districts do not have responsibility over city
highways. Highway district commissioners are elected to four-year terms.
All 64 highway districts have at least a part-time clerk and road foreman
who is responsible for the day-to-day operations of the district. The
commissioners of a highway district have exclusive general supervision
and jurisdiction over all highways and public rights-of-way within their
highway system with full power to construct, maintain, repair, acquire,
purchase and improve all highways within their highway system. Districts
also maintain 30% of the local railroad crossings, and 39% of the bridges
in Idaho.

Highway districts are funded from two principal sources: 1) user fees are
revenues from vehicle registration and fuel taxes, distributed through the
State Highway Account and 2) property taxes. Additional sources of
funding include a share of sales tax revenue, a special vehicle registration
fee, the creation of Local Improvement Districts, federal transportation
funds, and a few other revenue sources. Impact fees for highway projects
are in use only by Ada County Highway District. Highway districts have
suffered from the economic slowdown in recent years and the districts
have a difficult challenge in budgeting as costs increase and revenues
decline.

EXCUSED:

Former Senator Bruce Sweeney received a Gubernatorial
reappointment to the Idaho Transportation Board for a term commencing
January 31, 2004 and expiring January 31, 2010, subject to Senate
confirmation. He served in the U. S. Air Force for three years as a pilot
after he graduated from college; he started his own business in 1957. He
served in the Idaho House of Representatives and Senate, retiring in
1998. Later the same year, he was appointed to the Idaho Transportation
Board. While still in the Senate, he opposed increasing the ITD Board to
7 members because of the possibility of regionalism but was pleased to
report that has not occurred. The Board members work as a team; they
are very pleased with Dave Ekern, the new ITD Director. He said the
Board is concerned because ITD is losing valuable employees to cities
and counties due to pay issues. ITD is now contracting 70% to 80% of
engineering services outside the Department and the Board feels ITD
needs to do more inhouse.

Senator Ingram introduced H 540 which provides that a transaction
involving a motor vehicle or trailer does not create a sale or security
interest merely because the transaction includes a terminal rental
adjustment clause. The proposed legislation will clarify that motor vehicle
fleet leasing contracts that contain Terminal Rental Adjustment Clause
(TRAC) provisions are true leases and should be accorded the same
treatment in the area of bankruptcy that currently exists in the area

of federal taxation. This bill will make Idaho law consistent with the
majority of other states’ laws.

Representative Naccarato explained that H 480 would establish an
historic Lewiston license plate to recognize Lewiston’s role in Idaho
history as the first territorial capitol. The revenue generated from the sale
of license plates will be used to promote historical preservation under the
guidance of the Lewiston Historical Preservation Commission. The city of
Lewiston will apply revenues to educational, economical, and outreach
components to provide for speakers, presenters, and education programs
teaching Idaho history in grades K-12. It will also provide for identification
and interpretation of historic buildings, and further provide for matching
funds for historic preservation such as loans and grants.

Senator Werk introduced S 1285 that will provide funds for a Safe Routes
to School grant program using a portion of existing funds in the Idaho
Transportation Railroad Grade Crossing Protection Fund. A statewide
Safe Routes to School program will encourage children to walk to school
resulting in a reduction in public school transportation costs, relieve traffic
congestion in neighborhoods and near schools, and alleviate unsafe
conditions near public schools. With this proposed legislation, one-third
of the annual allocation but not less than $85,000 would be put in the
Railroad Grade Crossing Protection Fund to be renamed the Public
Safety and Protection Fund. The fiscal impact is estimated to be $29,000
annually to fund a part-time grant administrator for the Safe Routes to
School program.

Senator Werk discussed 1) some statistics outlining the critical nature of
the safe routes problem, 2) an overview of the process in developing an
alternative to S 1285, 3) an outline of the Safe Routes to School program,
and 4) had people testify about the difficulties faced in walking or biking to
school safely. He acknowledged the outstanding job Operation Lifesaver
has done in improving safety associated with railroads in Idaho.
Operation Lifesaver representatives are concerned about any loss of
funds from the railroad protection fund; they have assisted in the process
of trying to find alternative funding for the Safe Routes to School (SR2S)
program. ITD has also been involved in the effort to locate alternative
fund sources for SR2S. He believes an agreement has been worked out
with the Idaho Transportation Department 1) to assess the SR2S needs in
the state, 2) to bring together all of the stakeholders to develop an SR2S
program, 3) to evaluate and identify both state and federal funding
sources, and 4) to construct a framework for taking advantage of Safe
Routes to School funds, some of which could come from the pending
federal transportation reauthorization bill. A copy of his testimony is
attached to the minutes.

Sarah Davis, Ashley Stoltz, Hannah Peters, Cody Stone, Sam Kime, and
Dakkota Terres. Copies of their testimonies are attached. Riley Johncox,
a first grade student at McKinley, also spoke.

She also shared the following. Since 1994 in Ada County when local
neighborhoods want sidewalks, they are asked to sign petitions stating
that they will dedicate the rights-of-way, if any are needed (or dedicate
temporary easements if needed) to do construction. ACHD has had great
success because people have been willing/volunteering rights-of-way in
order to get sidewalks installed. She believes when the projects are
moved to arterial and collector systems that the business community will
do the same thing. People understand the benefits of adding sidewalks
for safety and increased property values.

EXCUSED:

Senator Keough moved that the minutes of Thursday, February 26, 2004,
be accepted as written. The motion was seconded by Senator Bailey
and approved by voice vote.

S 1275 was held from Tuesday, February 24, 2004, in order to review the
commodities that appear on the hazardous materials list. It was noted
there is an exemption on Page 8 for those involved in the agricultural
industry which satisfied a concern of some Committee members. (Page 8
is attached to the minutes.)

Due to Senator McWilliams’ absence, HJM 15 will be heard on Thursday,
March 4, 2004.

Senator Marley presented S 1395 that will establish an Idaho Freemason
license plate program. The funds will be used exclusively for supporting
charitable activities.

Motion

Senator Calabretta expressed the following concerns with S 1395. She
always votes no on special plates but beyond that, unike all other license
plates, the money derived from sales of the Freemason license plate will
not stay in Idaho. Her last concern is that having special license plates is
not a right but a privilege and opportunity afforded groups. She
questioned whether it was appropriate for groups that have clear
segregation of membership be allowed to have the benefit of
government’s privilege.

on Substitute
Motion

Nays: Keough, Brandt, Bailey, Marley

Absent: McWilliams

On a 4-4-1 vote, the motion died.

on Original
Motion

Nays: Geddes, Little, Calabretta

Absent: McWilliams

On a 5-3-1 vote, the motion passed to send S 1395 to the
Floor with a Do Pass recommendation.

Steve Bywater, Deputy Attorney General representing the Idaho
Transportation Department (ITD), explained that H 473 will provide an
administrative remedy for resolving disputes for a losing bidder to contest
a contract offer. There is a proposed amendment to the bill suggested by
the Associated General Contractors that would change the language
“lowest and best bidder” to “lowest responsible bidder.” Because many
state highway projects are time sensitive, it is in the best interest of both
the contractors and the ITD to obtain prompt, impartial decisions when
there is a dispute.

Mo Detmar, representing the Division of Motor Vehicles for the Idaho
Transportation Department, explained that H 474 would transfer motor
carrier audit functions from the Idaho Transportation Department to the
State Tax Commission. The audit function is currently being transferred
using a Memorandum of Understanding for FY 04. Legislation is needed
to permanently transfer four auditors and one half-time clerical position to
the State Tax Commission along with the appropriation for related
expenses.

Ted Spangler or Dan John, representing the State Tax Commission,
presented H 475 which amends the motor fuels tax statutes to clarify
when refunds are payable on fuel used in all-terrain vehicles (ATV) not
required to be licensed or to have a recreational permit. The effect is to
eliminate the difference between three-wheel and four-wheel ATVs.
Currently fuel used in three-wheel ATVs is taxable but the tax on fuel
used in four-wheel ATVs (if not licensed) can be refunded.

Ron Shepard, Motorcycle Safety, Bureau of Finance and Transportation
for the State Department of Education, gave a powerpoint presentation on
the Idaho Skills Training Advantage of Riders (STAR) program which was
created in 1994. Funding comes from a $1.00 charge per driver’s license.
There are two training courses: novice ($75 tuition) and experienced ($40
tuition); 1,781 students were trained in 2003. He briefly discussed
challenges the STAR program is facing with staff, training locations, and
resources. The state owns 79 motorcyles and also uses another 44 that
are on loan from local dealerships. It costs $200 to train each person, but
the riders are only charged $75.00. He feels the program has been a
success since fatalities have decreased by 40% and, for those under 21
years of age, injuries and fatalities are down 63%. A copy of his power-point presentation is attached to the minutes.

EXCUSED:

Presentation

Mr. Moreno reported that there are many efforts with regard to transportation. He
pointed out the rumble strips on the highways to reduce fatalities and injuries;
construction projects being worked on during the night or the roadways closed
entirely in order to provide faster repairs and less congestion. He then pointed
out that they are starting to implement the “511” telephone number for nation-wide
access to road conditions.

Mr. Moreno shared that the Stewardship program has 17 employees including
support staff and added that they comply with EPA, BLM, Fish and Wildlife as well
as other entities. He explained that funds are 80% Federal and 20% from State,
Locals, and other sources. He pointed out that the western states have a lot of
federal land so the states actually fall under the “sliding scale” where they can
receive up to 92% from Federal funds.

Mr. Moreno reported that Congress is working on the “Safe T” legislation and
stated that the department has requested $255 billion for a six-year project. He
added that the Senate is looking at $318 billion with the House expecting $375
billion.

She reported that she has 6 people in her office and introduced
Transportation Assistant Robert Swanson.

Ms. Macias explained that the Port of Entry in Idaho has 12 facilities and
added that their number one goal is to reduce motor carrier crashes. She
then explained the steps that she goes through when auditing a carrier
and reported that each carrier must carry $750,000 in insurance for
general commodities, $1 million for hazardous materials, and $5 million for
passenger carriers. She also added that they look at controlled substance
abuse, medical certificates, and other documents.

She explained that the State Police regulates the Intrastate carriage if a
carrier only travels within the state, but stated that if a carrier crosses the
state line, then the Federal division regulates them. She then directed the
attention of the committee to the little blue card that was included with the
handouts regarding the hours of service.

She concluded by saying that they also regulate hazardous material
haulers within the state as well.

Senator Bailey stated that he has no problem with the concept, but asked
about Section 2 regarding the “misdemeanor” and asked why it was so
high. Representative Wood replied that we are talking about lives and
the creation of serious accidents. Senator Bailey asked how accidents
could be created since one light is changed to green while the other light is
changed to red. Representative Wood answered that if one is used
during rush hour traffic, it disrupts the timing of the signals and gridlock
could ensue.

Senator Bailey asked why the Department of Transportation, City and
County would be authorized to have one of these if only an emergency
vehicle is defined by code. Representative Wood replied that some of
the vehicles in these agencies are authorized as emergency vehicles
because they keep the traffic lights working and are vulnerable to being
hit. Senator Bailey noted that currently the only ones using these are fire
trucks, and ambulances and added that not even police have these. He
asked why this allows others to use these since the purpose is to change
the lights for an emergency. Representative Wood responded that they
would only use one if they were out there repairing a light. Senator
Bailey asked why the Department of Transportation would ever need one.
Mr. Craig Quintana with ACHD replied that they don’t use one at any of
their facilities but added that others might be using them. Representative
Wood recounted a time when an overpass was being repaired in her
district and noted the need for changing the lights during that repair
process. Mr. Chuck Winder, Chairman of the Board of Transportation
commented that the Department does respond to accidents and assist the
ISP with traffic control.

Senator Bailey commented that he is concerned that if this were passed,
we would be seeing tow trucks wanting them and the emergency light
being moved into a non-emergency vehicle. Representative Wood
responded that the State of Washington has already passed this and
added that the Federal Government is making a move to ban them. She
explained that this is only going to outlaw a citizen from using one.

H 684

Senator Marley asked what is “idling”. Representative Ridinger replied
that it is when a truck driver leaves the engine running for hours while he
is having dinner. He added that this could include cement trucks, feed
trucks, PTO and others.

Senator Little asked about Section 4 regarding “snow”. Representative
Roberts replied that it was language that was pulled from the top of the
bill.

Senator Keough asked about lines 27 ­ 29 and asked if he had the
definition of the “agricultural commodity”. Senator McWilliams replied
that the law for poultry, livestock and feed grain includes the definition.

Senator Little asked if potatoes are covered. Senator McWilliams stated
that they are not included in this and added that dairy isn’t either.

Senator Keough pointed out that the SOP talks about establishing a
single district at 10%, but that we need 10% from each sub district.
Representative Smith replied that this requires disenchantment to go to
each of the districts. Senator Keough asked if this type of thing was just
struck down with the Steward Initiative. Representative Smith answered
that it had been revised once and added that there were three different
Attorney General opinions where the Attorney General found nothing
wrong with it.

Senator Geddes noted that he has seen little opposition to it and asked if
there was anyone opposing it. Representative Smith replied that
Representative Moyle led the charge against it in the House. Senator
Geddes commented that he is concerned that the 25 signatures is too
small, but added that the 10% is too big and asked if all the parties agreed
to this number. Representative Smith answered that 10% is too small
when you are talking about dissolution of the largest agency in the State of
Idaho.

Senator Brandt asked how many times have there been attempts with the
25 signatures to dissolve the district. Representative Smith answered
that he is only aware of one time with the ACHD.

Senator Little asked if an amendment to this code would help or hinder
other counties. Representative Smith replied that he didn’t think it would
affect other counties.

Senator Keough stated that the SOP wasn’t specific, but added that the
law book does mirror this legislation.

Mr. Chuck Winder, Chairman of the Board for the Idaho Transportation
Department testified as a private citizen. He stated that the 25 signatures
are way too low and added that this is an improvement. He pointed out
that the County Commissioners don’t have to have elections right now. He
commented that if the relationship doesn’t get better, there are people who
will get those 10% in signatures.

Senator McWilliams asked Mr. Winder to speak of the efforts of the
highway district to increase the relationship with the public. Mr. Winder
stated that the districts and communities needed better communication
with better customer service and how to deal with the public. He pointed
out that the highway district is improving the relationship with the
commissioners, the mayor, and other neighborhood associations.

Senator Brandt asked what a qualified elector noted on lines 14 and 15
was. Representative Smith replied that it is a registered voter.

Mr. John Franden, President of the ACHD Commission testified that the
highway district is multi-faceted in constituency and added that they spend
a great deal of time on how to best serve that constituency. He reported
that the district had been working on customer service training but added
that they chose not to continue on with the program when the
dissolutionment process began because of appearances. He further
added that they had hired a consulting group to help train the staff.

Mr. Franden explained that the 25 signatures was originally established
for small districts and added that the cost of addressing the
dissolutionment was phenomenal. He pointed out that without this
change, this situation could come up more and more if the district is not
doing what the people want. He stated that there needs to be stability in
the highway district.

Senator Keough noted that they are working hard on public relations with
the builders and pointed out that she has received email messages from
contractors who oppose this because they feel that 25 is not enough but
the 10% is too high. Mr. Franden replied that the building contractors
were in support of not allowing dissolutionment.

Senator McWilliams asked what they are doing with due process. Mr.
Franden replied that in the past 13 years they have only had 4 times when
a contractor had a dispute with the hearing process. He added that they
are working on a fair process to be the best and most equitable for all
involved.

Mr. Michael Gifford, Executive Director of the Idaho Association of
General Contractors testified that his group consists of 900 members
ranging from road to commercial contractors. He stated that they sent a
letter in opposition last week and explained that they have had issues with
the due process on contract claims. He reported that they met with the
district last night and reached an agreement that will be written two weeks
from yesterday. Because of this, he stated that they no longer oppose the
bill. Chairman Ingram commented that he has 23 letters and asked if
those individuals were members of his organization. Mr. Gifford replied
that they are members, but since the meeting last night, they all no longer
oppose the bill.

Mr. Rod Beck testified in opposition of the bill by directing the attention of
the committee to a letter in the packets from Commissioner Fred Tillman.
He asked if this legislation was necessary and what would happen if it
didn’t pass. He answered that there would be no problems and nothing
would happen. He asked if the bill was good for Ada County, why is it not
good for Canyon County or Twin Falls County. He stated that if the public
comes up with a petition, then they will only get a hearing anyway. He
pointed out that this has only happened one time in 33 years and that the
law restricts the occurrence to once per any given year. He added that
there are more negatives than positives if this passes.

Mr. Beck commented that since the 45 signatures were brought in, the
district has improved operations and hired a consultant so the process has
brought a positive outcome. He reported that this bill will require over
16,000 signatures on the petition with the only result being dissolutionment
and asked why are we taking away one avenue for a hearing with the
commissioners.

Chairman Ingram remarked that the commissioners did vote to put
dissolutionment on the ballot and that it would apply to the entire state in
order to give citizens a grievance avenue. He stated that in order to form
the highway district, it took a 10% petition for the county commissioners to
call for a questions for consolidation, yet doesn’t carve out the
commissioners. He reported that the Attorney General had not opined on
the Constitutionality and added that the U S District Court had made a
provision. He pointed out that under 40-1806, the hours are set from 1:00
to 7:00 and are not the same as the hours for a general election.

Representative Smith pointed out that the consequences are nothing
unless the people start using it with regularity. He suggested that this
“hammer” theory got the attention of the ACHD and commented that a
recall would too.

Chairman Ingram stated that he would include his 23 letters in with the
minutes.

Motion

on Substitute
Motion

Nays: Ingram, Bailey, McWilliams, Marley, Calabretta

Absent: Geddes

On a 3-5-1 vote, the motion died.

on Original
Motion

Nays: Little

Absent: Geddes

On a 7-1-1 vote, the motion passed to send H 654 to the
Floor with a Do Pass recommendation. Senators Ingram and
Bunderson will carry on the floor.

The committee adjourned at 3:25 p.m.

EXCUSED:

Senator Bunderson said that Idaho has an emerging crisis due to
gridlock congestion on many of Idaho’s state and local highways having a
negative effect on commerce, economic development, and air quality.
The road infrastructure throughout the state is critical to economic
development. Steve Allred, Director of the Department of Environmental
Quality (DEQ), has indicated the Treasure Valley has a high risk of non-attainment which will have serious consequences by slowing or shutting
down growth. Coming out of non-attainment is a long, arduous process.
There are problems in other areas of the state as well.

The Idaho Transportation Board allocates funds they receive amounting
to about $440 million annually with half coming from federal fuel taxes and
the remainder coming from state fuel taxes and registration fees.

The question is how to solve these problems without raising fuel taxes or
impacting the general fund. Senator Bunderson explained that

this proposed legislation would go a long way to solving those problems.
S 1436 would give the Idaho Transportation Board a limited
management tool for providing needed cash flow to pay for road
infrastructure projects. Up to 25% of Idaho’s annual distribution of
federal fuel taxes could be dedicated to pay for qualified road projects.
The use of federal fuel tax revenue is authorized under a federal law
known as Grant Anticipation Revenue Vehicles (GARVEE bonds).

To explain further, a GARVEE bond is a federally-authorized debt-financing instrument that allows the use of the state’s future annual
apportionments from the Federal Highway Administration (FHWA) to
pay debt service and related financing costs. Projects funded with
proceeds from a GARVEE bond are subject to the same requirements as
other federal aid-projects with the exception of the reimbursement
process. The cost reimbursement of projects funded with GARVEE
bonds occurs when debt service is due. The GARVEE financing
mechanism generates up-front capital for highway projects at competitive
rates and enables a state to construct a project earlier than using
traditional pay-as-you-go grant resources. With projects in place sooner,
costs are lower due to inflation savings, and the public realizes safety and
economic benefits.

This legislation would authorize the Idaho Housing and Finance
Association (IHFA) to issue bonds approved by the Idaho
Transportation Board and to manage the issuance and servicing of
the bonds. The ITD Board determined using IHFA would be the least
costly option because IHFA already has trained personnel and systems
to handle the workload. S 1436 would amend the IHFA enabling
statute to authorize its participation. In addition, local highway
jurisdictions could, at their discretion, piggyback participation using up to
25% of their federal tax revenues.

When asked about how long legislators have been researching the
GARVEE bond issue, Senator Bunderson said the Governor has been
considering this issue for over a year. Senator Ingram also indicated
some legislators independently considered this type of bonding when they
attended the Multi-State Highway Transportation meeting last year. A
copy of a white paper dated March 9, 2004, that Senator Bunderson
distributed to the Committee is attached to the minutes.

1) A letter from Senator Bunderson on September 12, 2003, to Clair
Bowman, Executive Director of COMPASS requesting a transportation
infrastructure map of the Treasure Valley.

2) A November 28, 2003 letter from Senator Bunderson to Julie Pipal
from the Idaho Transportation Department regarding funding alternatives
for construction of state roads and bridges necessary for economic
development.

3) A Task Force meeting held January 23, 2004, with the following
people in attendance: Senators Bunderson and Ingram; Joe Haynes and
Byron Keely, LHTAC; Charlie Rountree, Dave Ekern, Steve Bywater, Julie
Pipal all from ITD; Tony Poinelli, IAC; Brian Whitlock and Kathy Ruffalo,
Governor’s Office; Eric Milstead, LSO; Ken Harward and Leon Duce, AIC;
Jane Gorsuch, IFA; and Stuart Davis, IAHD.

4) A letter dated January 29, 2004, from Julie Pipal to Byron Keely
distributing minutes of the meeting held January 23, 2004.

5) A January 29, 2004 letter from Senator Bunderson to Clair Bowman,
Executive Director of COMPASS, regarding long-range vision –
transportation infrastructure needs map of the Treasure Valley.

6) January 30, 2004 GARVEE bond meeting

7) February 4, 2004, GARVEE bond meeting

8) February 11, 2004 GARVEE bond meeting

9) March 1, 2004 GARVEE bond meeting

10) March 9, 2004 meeting of the Senate Transportation Committee
where S 1436 (GARVEE bond) was discussed in Committee.

These meetings involved professional people who have spent many hours
discussing the GARVEE bond issue.

There is a very simple legal structure that provides for the Federal
Highway reimbursement funds to go into the State Highway Account and
provide for ongoing appropriation of sufficient funds from the federal
portion of funds in the State Highway Account to pay the bonded
indebtedness and also a continuing appropriation of the bond proceeds
as they are received for the projects the Idaho Transportation Board
designates. Then, there is additional language in the Idaho Housing
statutes which give them authority to issue transportation bonds.

He said the Idaho Transportation Board must certify by resolution that any
given bond issue is within the 25% limitation; i.e., no more than 25% of
anticipated federal revenues can be committed to debt service on these
bonds. The resolution would be submitted to the Idaho Housing and
Finance Association before a bond issue is approved. The 25% figure is
based on any consecutive 12-month period in the preceding 24- month
period; whatever the lowest figure is, it would be 25% of that amount.

The Idaho Transportation Board is aware of S 1436, has been kept
informed of the process and supports it. Chuck Winder, Chairman of the
Idaho Transportation Board, served on the Governor’s Blue Ribbon
Commission that recommended this issue be investigated. Mr. Bywater
said GARVEE bonding is a tool the ITD Board would like to use. Senator

Bunderson confirmed that Mr. Winder also told him the ITD Board
supports this legislation.

IHFA has an excellent staff that is prepared to do this issuance in a very
cost-effective manner. He estimates IHFA’s costs would be somewhere
less than 5 basis points. His objective would be to simply cover costs, it
would not be a profit-making opportunity.

Senator Geddes asked if the Idaho Transportation Department would
have to increase staff should more construction money be available
through GARVEE bonding. Ms. Pipal replied that this type of bonding
using only up to 25% of federal funds available would be a tool that ITD
could use. The ITD Board would decide priority of funding on handling
additional projects as it does now.

He also expressed the following concerns about S 1436:

1) Instead of taking a measured approach to create bonding authority
under ITD, S 1436 circumvents that need by going to IHFA to issue
bonds. He wondered if Idaho Code, Section 67-6201 was the proper
place to insert such language.

2) The authority to identify projects is granted to the ITD Board, with little
explanation of how project selection would work.

3) There is a concern about paving problems away with paper.

4) There is also concern about committing federal dollars to debt service
on bonds.

5) The GARVEE bond concept needs to be sold to the state and its
citizens and not rushed through at the end of the legislative session.

Mr. Carlson believes the issue has many possibilities that warrant future
discussion. He urged the Committee to hold the bill. A copy of his
testimony is attached to the minutes.

In looking at this bill, it is perpetually funded and continuously
appropriated. Other bonding proposals come before the Joint Finance
and Appropriations Committee (JFAC) and are reviewed annually. There
is continuous oversight by the Legislature. With S 1436, the Legislature
would not review projects. In the life of a typical bond it could require
going to the federal government for three reauthorizations. Twenty-five
percent today may or may not be 25% in the future. Idaho has been
fortunate to be a donee state where the state receives more money than it
generates. Urban states that give Idaho money (through the
reauthorization bill) are fighting to keep those funds in their own states.
He questioned how that mechanism would actually work if the state were
committed to a certain amount of money annually for a long period of
time, perhaps 18 years. He wondered how this funding would deal with
local governments. There needs to be more information available about
the details of how the program would work.

His clients generate a substantial portion of the money being talked
about, they are the people paying the bill, and they have not been
involved in the discussions. Even though he might be in support of the bill
in the future, he is opposed to

S 1436 at this time. With additional input, allowing his association
members the opportunity to educate themselves, finding out what the
long-term ramifications are, and trying to get a better idea of where this
tremendous change in policy is going to lead the state of Idaho, minds
could be changed.

He is very supportive of a good road system but truckers are paying the
bill and they have not been a part of the process to date. He urged the
Committee to hold the bill.

There are serious questions about some definitions in the bill. He also
feels there should be parameters regarding the maximum amount that
could be bonded with one piece of legislation.

While there are attractive parts to the bonding concept, it is a complex
process that IACI members do not understand. The IACI Public Affairs
Committee members had numerous questions. Who would be
responsible for Idaho’s bond? How much bonding is safe and secure?
Would the impact of that bonding effort be on the bond market in Idaho
forever? If you bond to build, how are the projects to be maintained in the
future and with what financial resources? What about judicial
confirmation? In diverting a portion of federal funds available to the state
for transportation needs, how will that affect the other transportation
needs in Idaho? His committee does not know the answers and has not
had the opportunity to ask questions and have them answered. They
need to know what implications the bill will have on the state.

He urged the Committee to hold the bill. IACI would like to participate in
future discussions regarding S 1436. The concept may be a very good

idea but IACI currently does not have enough information available to
support the legislation.

Roy Eiguren is an attorney in private practice representing ValleyRide
which is a regional transportation authority that operates public
transportation in Ada and Canyon counties. The purpose of S 1422 is to
clarify that regional public transportation authorities are exempt from
taxation and to ensure that as political subdivisions of the state of Idaho,
regional public transportation authorities are treated like other political
subdivisions of the state of Idaho. He explained that S 1422 had a couple
of technical errors so it will need to be sent to the amending order.

EXCUSED:

Business

Chairman Ingram also distributed copies showing all presentations made
to the Committee in 2003 and 2004. The presentations were in addition
to all bills discussed and acted on by the Committee. Copies of the
reports are attached to the minutes.