Legislature(2021 - 2022)BARNES 124
04/13/2021 08:00 AM COMMUNITY & REGIONAL AFFAIRS
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HB 137-MOTOR VEHICLE OFFICES 8:36:43 AM CO-CHAIR HANNAN announced that the final order of business would be HOUSE BILL NO. 137, "An Act requiring the Department of Administration to maintain and operate certain offices that provide services related to motor vehicles; and providing for an effective date." [Before the committee was CSHB 137(STA).] 8:36:52 AM REPRESENTATIVE ZACK FIELDS, Alaska State Legislature, as prime sponsor, presented HB 137, with the aid of a PowerPoint presentation [hard copy included in the committee packet]. He first talked about information shown on slides 2-4. He said CSHB 137(STA) would require the Department of Administration (DOA) to keep existing offices of the Division of Motor Vehicles (DMV) open in communities of 850 people or more. He indicated that although he supports the idea of the DMV exploring new areas that may benefit from a new DMV office, that is beyond the scope of the proposed legislation. He opined that DMV offices provide a critical public service that allows commercial transportation throughout the state by providing commercial driver's licenses (CDLs). REPRESENTATIVE FIELDS noted that [as shown on slide 5], there are privatized offices contracted to provide some but not all of the services available through a DMV office, but he said he wants to ensure all services remain available in the communities where they are currently offered, not only in larger communities. He said this is an issue of equity. He named services that can be provided only via the DMV: issuance of driver's licenses; renewal of driver's licenses for seniors over the age of 69; and issuance of CDLs. While, in theory, there are other tests that can be done by privatized or other providers, it can be less efficient and cost-effective for Alaska consumers than getting those services through a DMV office. 8:40:10 AM REPRESENTATIVE FIELDS pointed to slide 6, which illustrates the long distances people in various communities would have to drive if their DMV offices were closed. As shown on slides 7 and 8, he discussed the challenges of driving certain routes in Alaska, such as the mountain pass to get out of Valdez, which can be treacherous during winter. As covered on slide 9, he said not everyone has access to Internet in Alaska. Slide 10 shows side- by-side comparisons of the cost of services at a DMV office versus via a private provider, illustrating that it is more economical to purchase these services from the DMV. Representative Fields opined it is unfair to take away the ability of Alaskans to go to a DMV office, thus doubling the cost of services. 8:43:28 AM REPRESENTATIVE FIELDS, as shown on slide 11, stated that the DMV pays for itself through its fees. 8:44:50 AM REPRESENTATIVE PATKOTAK asked why the DMV field service locations in downtown Anchorage and in Nome were shown on slide 11 as not available ("N/A") [in terms of revenue]. REPRESENTATIVE FIELDS deferred to Ms. Javier of the Legislative Finance Division. 8:45:37 AM SABRINA JAVIER, Fiscal Analyst, Legislative Finance Division, explained that that was just information that "would not pull up" when she ran an ad hoc report for the bill sponsor. 8:46:08 AM REPRESENTATIVE MCCABE indicated he had found different results on the numbers when including the "PCNs." He offered an example. He said it appeared as though the statistics provided by the bill sponsor show the DMV as "wildly profitable" while according to what he sees - "not so much." REPRESENTATIVE FIELDS deferred to Ms. Javier since she had created the chart on slide 11. 8:47:39 AM CO-CHAIR HANNAN told Ms. Javier that the committee would like to know what fiscal year the data is from, and she noted that Representative McCabe had pulled PCN data from that data. 8:47:52 AM MS. JAVIER responded that when Representative McCabe's staff had requested this data, she had pulled the personal services data from the numbers. She offered her understanding that what Representative McCabe had received were "just the amounts for personal services" and "not the entire picture." REPRESENTATIVE MCCABE observed [the three columns of the chart on slide 11] were: "revenue," "expenditures and encumbrances," and "difference." He indicated that when he had asked for a personal services category, it resulted in a significant difference in profit or return. He offered his understanding that the expenditures in the Delta office equated to five people making $20,000 or less a year, and he said he thinks something is wrong with the numbers. CO-CHAIR HANNAN pointed out that Representative McCabe was asking questions based on data he had received but which was not in the committee's possession. MS. JAVIER, in response to Co-Chair Hannan, recollected the data she had procured for the bill sponsor was from fiscal year 2016 (FY 16) through FY 20. She clarified that these numbers are not concrete, and she could get more concrete numbers from the department. She clarified for Representative McCabe that the numbers she had given him were only for personal services and were not compared with the cost of revenues. 8:52:51 AM REPRESENTATIVE HANNAN suggested having information on the record. She asked whether the category of expenditures and encumbrances, on the slide provided by Representative Fields, would include personal services. 8:54:22 AM The committee took a brief at-ease at 8:54 a.m. 8:54:59 AM CO-CHAIR HANNAN announced that further clarification would be sought regarding the data Representative McCabe possessed, and then it would be presented to the entire committee. 8:55:11 AM REPRESENTATIVE FIELDS returned to the PowerPoint and touched on the topic on slide 12, which read as follows [original punctuation provided]: Shifting cost burdens deepen divides: -Rural Alaska faces higher costs in healthcare, gasoline, & fewer options for utilities such as Internet. -Driving 100+ miles (each way) for service is an additional tax. -Private DMV partners have no regulations or controls over pricing for mandatory services. The Department has method to control costs, fees, or additional charges. -For communities where a private partner were to be the only option, residents must either pay up front or through additional costs such as driving 70-100 miles for key services. -Internet is not always an option for everyone or every service. REPRESENTATIVE FIELDS, in conclusion of his presentation, drew attention to the information on slide 13, which read as follows [original punctuation provided]: "In our poll, Seniors of Alaska found overwhelming support amongst our members to support HB 137 and retain affordable, safe options for Seniors in their local communities. 96.5% overall favored keeping their local DMV, and some locales had 100% of members supported this critical public service for seniors." -Seniors of Alaska 8:56:03 AM REPRESENTATIVE PRAX asked Representative Fields to confirm whether HB 137 would require all communities with populations larger than 850 to have a DMV office. REPRESENTATIVE FIELDS clarified it would be that those communities of 850 or more, which currently have a DMV office, retain those offices. He said the structure of the bill is focused on equity. REPRESENTATIVE PRAX noted that in terms of equity, there are communities with that population threshold that do not have a DMV office. REPRESENTATIVE FIELDS said he supports the addition of DMV locations and would be willing to work with Representative Prax and consider an amendment to achieve this in a rational way. 8:58:08 AM REPRESENTATIVE MCCABE observed that Yakutat, Glenn Allen, and Anderson, Alaska have DMV offices currently and populations of fewer than 850. He asked if the proposed legislation would result in those offices being closed. REPRESENTATIVE FIELDS answered that HB 137 does not direct the department to close DMV offices at locations that are under any certain population threshold, and the administration has not proposed closing those DMV offices. He said the committee could decide to lower the threshold to 300; all that matters is that the threshold is consistent, he purported. He explained he had chosen the number 850 to keep the DMV offices open that were under threat of closure. REPRESENTATIVE MCCABE offered his understanding that the outgoing commissioner had recommended not closing down the DMV offices. He said he received a call from a constituent, who runs a facility in Palmer, Alaska, that issues CDLs, who is concerned the proposed legislation would prevent him/her from doing that. He said vehicle transfers and permanent registrations do not need to be done at the DMV. Out of about a dozen reasons to go to a DMV office, he offered his understanding that only about 5 of them require the DMV office visit. He said the bill seems to be anti-private business, and he said it seems to him a bad idea to tie the hands of the administration in how it must do business. 9:01:38 AM REPRESENTATIVE FIELDS responded that he does not believe HB 137 would hurt "UMVs." He noted in his district there is a DMV and multiple UMVs, which are more convenient for some people. He said he supports people having the choice. In response to Co- Chair Hannan, he said while he does not know what the initials in "UMV" stand for, it is a private partner that contracts with the DMV to provide certain services. He suggested his staff might know what each letter represents. He explained he had listed that which only the UMV provide, in terms of services. 9:02:58 AM TRISTAN WALSH, Staff, Representative Zack Fields, Alaska State Legislature, explained that UMV is just a name for the largest contractor with the DMV; there are other contractors. REPRESENTATIVE FIELDS noted that Representative McCabe had questioned the necessity of this legislation given the legislature had addressed this issue in its budget process. He said there have been other issues where there is an administrative proposal, a legislative response, and things get "ironed out in one of several ways." He gave examples. He said with the exit of the last commissioner and the current administrative stance on the DMV issue, he feels HB 137 should continue to be advanced to protect public services. 9:05:34 AM REPRESENTATIVE MCCABE asked whether one of the reasons for HB 137 is to protect jobs. REPRESENTATIVE FIELDS replied that he had mentioned jobs in terms of people driving to and from work as it relates to locations of DMV offices. REPRESENTATIVE MCCABE recollected hearing a pharmacist testify before the previous committee of referral that he was more qualified to give an eye test than was someone at the DMV. REPRESENTATIVE FIELDS pointed out that if a DMV is eliminated from a community that does not offer another means to obtain an eye test, then the person may have to find a different way to get the test, and that alternative may be more expensive. 9:07:50 AM MR. WALSH added that the Department of Labor & Workforce Development (DLWD) had estimated the cost of an eye test [from an medical doctor] was approximately $230. REPRESENTATIVE FIELDS reiterated the advantages of getting services from the DMV. 9:08:25 AM CO-CHAIR SCHRAGE said he supports the intent of the bill to retain access to DMV services for seniors, Alaskans in rural communities, and others but expressed concern about the fiscal note. He read [the first sentence of the fiscal analysis from the fiscal note with identifier HB 137-DOA-DMV-4-8-21, included in the committee packet], which read as follows: This bill removes the ability to close a State operated Division of Motor Vehicles (DMV) office in communities that have 850 or more citizens irrespective of need, economic conditions, demand for services, facility considerations, cost to the state, staffing provisions, technological advances, changes to the industry, or other unforeseen conditions. CO-CHAIR SCHRAGE said he worries the proposed legislation would put restraints on DOA irrespective of changes that might occur in the next five to ten years. He asked the bill sponsor to comment. REPRESENTATIVE FIELDS responded that he thinks the fiscal note is unusual. He explained that HB 137 would maintain existing services of the DMV; therefore, the fiscal note should be zero. He offered his understanding that the administration looked at not closing facilities as resulting in an increase in costs. He stated, "It's just not the way we've ever done fiscal notes before." He said another issue is to ask to what extent the legislature should weigh in on public services and to what extent it should "leave it to the agency." He said his general approach is to leave things to the agency unless it proposes something with which the legislature does not agree. He said he does not agree that it is reasonable to close any of the DMVs the administration proposed for closure; therefore, he looked for a way to preserve public services without micromanaging the department. He acknowledged that change would happen in the future but encouraged legislating now while recognizing issues will need to be addressed again in the future. 9:11:59 AM REPRESENTATIVE PRAX specified that "the people" pay for the DMV. He asked if the DMV fees are intended to cover just the cost of issuing "the license or the certificates or whatever." REPRESENTATIVE FIELDS remarked that numbers show the DMV "more than pays for itself over the years"; therefore, it would be reasonable to question whether fees could be lowered. However, he deferred to the department to answer whether it is the mission of the department to cover costs or return money to the state. REPRESENTATIVE PRAX suggested the increase in electronic transactions "would reduce the demand for a physical presence at the office." He reasoned that in that case, the services offered could take place in any state agency office. He said [HB 137] seems overly constricting. REPRESENTATIVE FIELDS noted that the proposed bill would allow flexibility to make transactions through other offices or local government. 9:14:56 AM REPRESENTATIVE DRUMMOND derived from the aforementioned fiscal note that the DMV currently contributes to the state's general fund (GF), and passage of HB 137 would result in "a decrease of DMV's contribution to the general fund." She asked if ordinarily the fiscal note gets "argued out" by the House Finance Committee [when it is the last committee of referral]. REPRESENTATIVE FIELDS responded yes. 9:16:09 AM CO-CHAIR HANNAN announced the committee would hear invited testimony. 9:16:19 AM PETER ZUYUS, Executive Director, Seniors of Alaska, testified in support of HB 137. He said Seniors of Alaska has expressed its concern about the negative effects that closure of DMV office locations will have on the following populations: seniors, disabled, rural, lower income, and Native Alaskans. He noted that a House Finance subcommittee voted unanimously to restore budgets cuts proposed by DOA that would have cut the following DMV office locations: Homer, Delta Junction, Valdez, Eagle River, Tok, and Haines. He pointed out that although restored in the FY 22 budget, these locations still could be closed at will by the department. He said HB 137 would remove the ability for arbitrary closure and restore legislative approval for any rural state DMV office closure. He expressed that the rural DMV office is a core service, and the proposed legislation would keep that service intact. MR. ZUYUS highlighted that HB 137 does not mention private partnership awards; it gives legislative authority to oversee any potential closure; closure of a rural DMV could occur with legislative approval. He said private partnerships increase costs of services. He warned that closure of rural DMVs could leave the state vulnerable to multi-million dollar federal lawsuit action for violation of the federal Elder Justice Act of 2010. He said the former commissioner of DOA had testified that the proposed closures were selected because rural residents would cause the least backlash and the communities were lucrative for private partnership. He said there was no mention of the negative economic impact to those communities that closures would create. He noted there have been three DOA commissioners in the last three years, which has not provided stability for rural communities that count on their local DMV for state services. He said HB 137 would remove arbitrary decisions made by unelected state workers - decisions that could affect rural Alaska communities; it is a nonpartisan bill that would help all Alaska communities. 9:20:14 AM MR. ZUYUS, in response to Representative McCabe, offered information about Seniors of Alaska. He said it is a 501(c)(4) organization with a viewership of 7,000. 9:22:50 AM NONA SAFRA, testified in support of HB 137. She noted that although she has a role as advocate for seniors and those with disabilities, her testimony today is as an Alaska elder. She said closure of DMVs in rural Alaska would leave many who are mandated to appear at DMVs in person paying unregulated arbitrary "convenience fees" at privatized offices [contracted through the DMV] over and above the regulated state fees. She said the commissioner's authority to close DMVs at will does not best represent Alaskans as it is based on quantitative, not qualitative, data. MS. SAFRA shared her experience as a caregiver for elders who require a Real ID to travel to the Lower 48 for medical care, either driving hundreds of miles in bad conditions to get to the closest DMV or suffering the financial burden of paying higher fees at a contracted UMV. In terms of technology being a solution, she noted that many of the 238,000 Alaskans in rural areas have broadband issues, lack Internet connectivity, and may not have the computers, e-mail addresses, or credit cards necessary to complete on-line transactions and create electronic signatures. Ms. Safra asked legislators to represent all constituents by passing HB 137 to ensure access for all to meet state mandated DMV requirements. 9:27:12 AM JOE MICHEL, Executive Director, Alaska Trucking Association, thanked the bill sponsor for clarifying under CSHB 137(STA) the relationship that private partners have with the DMV. He explained that he was wearing two hats: one was as a private partner with the DMV and as a representative of the commercial operators that would be affected by DMV closures. He said the Alaska Trucking Association (ATA) is concerned about the ability of its rural operators to comply with the regulations that federal agencies put on the industry, and that that ability would be affected by the DMV closures. He offered to answer questions from the committee. 9:28:46 AM REPRESENTATIVE MCCABE asked Mr. Michel to expound the federal regulations for which he uses the DMV to comply. MR. MICHEL answered the requirements of registration, which are more complex for commercial drivers. REPRESENTATIVE MCCABE said he has registered a commercial vehicle and does not recall having to go physically to a DMV office. MR. MICHEL indicated that DMV transactions are done at ATA, and there are two additional pieces of paper that are submitted to the DMV. He mentioned "getting plates that fall off of vehicles" being more easily done by going into a DMV office rather than waiting 6-8 weeks to receive them in the mail. He expressed the main concern is that avenues be left open for the trucking industry to be able to comply with the regulations. He concluded, "Now that the bill clarifies the private partnership versus the DMVs, we're happy that ... there's as many options available for our industry to comply with the regulations that are placed on us." 9:32:34 AM CO-CHAIR HANNAN opened public testimony on HB 137. After ascertaining that there was no one who wished to testify, she closed public testimony. 9:33:12 AM REPRESENTATIVE PRAX requested that the director of the DMV describe the services related to commercial vehicles that are provided by the DMV offices and the measure of inconvenience that would result from the smaller offices being closed. JEFFREY SCHMITZ, Director, Division of Motor Vehicles, Department of Administration, said he could provide a list for the committee. 9:34:02 AM CO-CHAIR HANNAN asked what services are available through the variety of private contracted partners. She said she had heard that some cannot provide CDLs while others can. MR. SCHMITZ said he could include that information in the forthcoming list. CO-CHAIR HANNAN asked whether the DMV is expecting an uptick in REAL ID applications. MR. SCHMITZ replied that the short answer is yes, particularly because it is within six months of the October 1 deadline. He noted that 200,000 Alaskans have already obtained their REAL IDs. 9:37:48 AM REPRESENTATIVE PRAX asked whether the DMV is the only authorized issuer of REAL IDs. MR. SCHMITZ answered that all of the DMV's third-party providers can issue REAL IDs. 9:39:02 AM REPRESENTATIVE MCCARTY asked a series of questions related to the REAL ID and the federal passport. MR. SCHMITZ, in response to Representative McCarty, said the REAL ID is a federal mandate, the deadline for which is currently October 1, 2021, although having been delayed a few times already, it could be delayed again. He said the U.S. Post Office, while offering U.S. passports, cannot issue REAL IDs. He confirmed that if a DMV were shut down, a U.S. Post Office could provide a federally compliant passport, which would allow its official carrier to board a plane, for example, although it is not a REAL ID. REPRESENTATIVE FIELDS clarified for Representative McCarty that not all U.S. Post Offices issue passports. He said the DMV has mapped out where all the passport-issuing U.S. Post Office facilities are in Alaska, as well as where all the DMV offices are located. He said this information could be provided to the committee. 9:41:59 AM CO-CHAIR HANNAN remarked that while both the REAL ID and U.S. passport are federally compliant, it may be easier for someone who does not already have a driver's license to obtain a passport than to get a REAL ID. 9:43:14 AM MR. SCHMITZ distinguished the difference between a REAL ID driver's license and identification card - both federally compliant under the REAL ID Act. 9:43:44 AM CO-CHAIR HANNAN thanked the sponsor and testifiers. [HB 137 was held over.]