Legislature(2001 - 2002)

04/02/2002 01:56 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= 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:                                                                                                                         
                                                                                                                                
   ΠFees 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,                                                                          
                                                                                                                                
   ΠThe 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).                                                                                                                 

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