Legislature(2001 - 2002)
04/02/2002 01:56 PM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE BILL NO. 344 An Act increasing fees for driver's licenses, instruction permits, and identification cards; and providing for an effective date. LINDA SYLVESTER, STAFF, REPRESENTATIVE PETE KOTT, HB 344 was introduced by the House Rules Committee at the request of the Division of Motor Vehicles. Passage of HB 344 does two things: Œ Fees for non-commercial drivers licenses and ID cards will increase by $5.00. Learner's permits will increase by $10. Considering the approximate 180,000 original issues and renewals processed annually, the increase translates into an additional $750,000 to $900,000 per year. Also, Œ The fee increase enables DMV to implement a conversion to a digital license system. The Division seeks $500,000 to implement the IT system to support the digital system. They already have the capital funding for the equipment. Ms. Sylvester read a prepared statement: Alaska is one of 3 remaining states that has yet to abandon the Polaroid system. By moving beyond 1950's era technology, Alaska steps up efforts to insure the integrity of this nation's individual identification system. Since September 11, considerable attention has focused on the integrity of this system. Keep in mind that the driver's license and ID cards are considered "breeder" documents. Once in hand they can be parlayed into other documents like airplane tickets, passports, checking accounts, fire arms permits, credit cards, among others. Just like that, a new or false identity is set up. The driver's license is the cornerstone of the identity theft phenomenon. Last year, this little problem resulted in losses of over $7 billion dollars. Less glamorous but indicative of a larger "day to day" problem for the restricted sales industry is underage kids fraudulently obtaining or manufacturing id's. You'll notice resolutions from the Municipality of Anchorage and from Alcohol Retail Beverage Association and a letter in support from CHARR that speak to that issue. The driver's license is far more than evidence that you passed your road test. It has become a critical component to our society's security both personal & financial. As such the government has a HUGE responsibility to ensure the integrity of that system. Think about how Alaska lives up to that responsibility. The license you carry in your pocket relies on technology that is unchanged since 1954. Think of the ways one might fraudulently obtain a license. It takes two documents with your name on it to get a duplicate license. No photo identification is required. Someone could steal mail, walk into a DMV office and potentially walk out with a license with someone else's identifying information is now matched to their photo. Right now, DMV lacks the ability to keep an electronic image of the individual. That means they can get that person's checking account, credit card, etc., etc., etc. Another creative idea was shared by a staffer for a Finance Committee member. In college, their friend, commercial art major created a large poster of an exact replica of an Alaska Driver's license. He had people stand in front, in front of the 'yellow curtain' and took a Polaroid snapshot, laminated it and a driver's license was created. Alaska's license is uniquely old fashioned. I've heard anecdotal stories about bars or airlines balking at accepting them because it looks too low tech, too homemade. The license is a dinosaur. Other problems: Alaska's DMV cannot electronically transmit a copy of the driver's license nor can they retain an electronic image. If you are traveling, have your wallet what would you do? DMV can only manufacture a duplicate license with an empty space where your photo should be. If your not there in person to have your picture taken, no picture exists. This is a crisis for a traveling Alaskan negotiating their way through the tough as nails security and airport agents in the nation's airports. If Alaska had a digital license, a completely intact, functional duplicate license could be expressed to the sorry traveler. If nothing I've said has impressed you with the importance of converting to the digital drivers license system, I've got one more compelling reason for your consideration. Last year the Polaroid filed for Chapter 11 bankruptcy. In February at the American Association of Motor Vehicle Administrators was informed that Chapter 7 Bankruptcy was likely to follow. Chapter 7 meaning selling off of the business assets. Once digital cameras hit the consumer market, the end of Polaroid photography became a foregone conclusion. Already, the cameras used by DMV are no longer manufactured. It is just a matter of time before the film can no longer be purchased either. MARY MARSHBURN, DIRECTOR, DIVISION OF MOTOR VEHICLES, ANCHORAGE, testified via teleconference in support of the legislation. She observed that Alaska is one of three remaining states that does not use digital licensing. The passage of HB 344 would help to move forward for a much- needed change in the Alaska system. She observed that Alaska uses a manual process with preprinted forms, which are laminated. All of the items are subject to theft, fraud and alteration, though she did not think it would be as simple as indicated by the previous testifier. Within the past four-months, five individuals have been arrested for fraudulent attempt to alter or obtain a license. Computer generation are significantly more difficult to alter or replicate. There are no preprinted forms, pouches or photos. Computer generation allows more complex and secure features on the license. A digital picture is stored and used to verify identity for renewal or law enforcement. She concluded that digital licenses would benefit consumers. It is more difficult to alter and more secure. If a current license were lost it could not be replaced with a picture if the holder were out of state. Digital licenses could be reprinted and sent to the consumer. She noted that there is wide support among law enforcement agencies and industry. She addressed the fiscal notes, which would provide $500 thousand dollars in capital funds for system development testing and deployment. Funding would support integration of the database, license generation and data issuance, image storage capture, and storage of the transmission for law enforcement use. It would also test the system and deploy it statewide, integrate with other users, and provide support software. Alaska currently has over the counter licensing issuance. She spoke to centralizing the function. Pictures would be taken at the Division of Motor Vehicles, which would take the picture and application, but the license would be mailed from a central facility. TAPE HFC 02 - 73, Side A Ms. Marshburn stated that centralization would be more expensive than over the counter issuance. Personnel costs would be the biggest factors. There would be a $5 dollar increase to the license and duplication fees. Instruction permits would be increased by $10 dollars. Fees in Alaska are currently at the low end of the national scale; raising the fee would bring Alaskan fees to the middle to low end. The Division does not recommend raising commercial licensing fees. The last increase to drivers licensing fees was 10 or more years ago and they think the increase is reasonable. Licenses should remain affordable to maintain safety and encourage licensing. Representative John Davies asked if there would be an increment to maintain accuracy. Ms. Marshburn emphasized that they currently require proof of birth and proof of identity. Previous photos can be retrieved when there are questions, but they are not instantly recallable. Representative Lancaster questioned if the Division looked into any technologies other than Polaroid. Ms. Marshburn observed that Polaroid would be eligible to bid, but she thought that it was likely that another vendor would receive the bid. Representative Lancaster referred to national identification cards. Ms. Marshburn noted that discussions on national identity cards envision a single card issued by a single agency, such as the federal Department of Transportation. Improving state licensing could help defer the issue of a national identity card. Representative Hudson questioned if the renewal would have to occur at a division office. Ms. Marshburn observed that there would be no changes in the basic process of issuing or renewing licensing. Individuals would still be eligible for renewal by mail after the initial five-year period. In response to a question by Co-Chair Williams, Ms Marshburn explained that the Division estimates $900 thousand dollars in revenue would be generated with the increase of licenses. The Division is asking for $500 thousand dollars to be appropriated to develop the system. Representative John Davies MOVED to report CSHB 344 (STA) out of Committee with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. CSHB 344 (STA) was REPORTED out of Committee with a "do pass" recommendation and with previously published fiscal note: ADM (#1).