Legislature(2001 - 2002)
02/21/2001 01:10 PM House RES
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HB 63 - ELECTRONIC FISH & GAME LICENSURE Number 2517 CO-CHAIR SCALZI turned to the next order of business HOUSE BILL NO. 63, "An Act relating to electronic application for and issuance of licenses, permits, and tags issued by the Department of Fish and Game; relating to violations regarding a license, permit, or tag applied for or issued electronically; and providing for an effective date." He announced that HB 63 would be held for a week, because one of the House Resources Standing Committee members was working on some amendments. He said that the bill would be open for discussion only, but no action would be taken on it in today's meeting. Co-Chair Scalzi thanked speaker Kevin Brooks for the overview he gave in the House Special Committee on Fisheries and for being present to speak. Number 2446 KEVIN BROOKS, Director, Division of Administrative Services, Department of Fish & Game (ADF&G), testified in support of HB 63. He said that the bill may sound familiar to some of the committee members; it was heard last year as HB 164. Mr. Brooks proceeded to give a description of the electronic fish and game licensing process. MR. BROOKS explained that in the last 18 months or so, ADF&G has introduced an internet system which allows the public to go online on ADF&G's web site and purchase a fish and game license. The process is as follows: The applicant signs on, on the Internet, uses a credit card to pay, and within a day or two ADF&G sends the applicant a license through the mail, which the applicant will receive in 7 to 14 days. MR. BROOKS described the program as successful, saying that in the first year, over 8,000 items sold over the Internet, which brought in a revenue of over $700,000. The public likes the "user friendliness" of the system and the option it provides; however, they would like to be able to have instant access to the license through this method, rather than waiting for it to arrive by mail. Mr. Brooks said that the challenge for ADF&G is figuring out how to issue the license electronically. He added that ADF&G has checked to see how other states handle their licensing, narrowing its inquiries down to the western states that mirror the types of hunting and fishing opportunities found in Alaska. MR. BROOKS backtracked to tell the House Resources Standing Committee about three things ADF&G uses as "overriding sideboards" when it takes on a licensing project. First, ADF&G wants to make improvements that are "an enhancement to public service". Second, ADF&G wants to make sure that there is an open line of communication between itself and Department of Public Safety personnel and those involved in fish & wildlife protection, so that any decisions made involving licensing will not negatively impact enforcement efforts. Third, ADF&G doesn't want to do anything that might diminish its revenue and hurt its own fund. MR. BROOKS noted that when ADF&G looked at its sales after the first year, it found that many nonresidents were taking advantage of the opportunity to plan ahead and purchase their fishing and hunting licenses online. He surmised that the system works well for nonresidents because they are planning their trips in advance; however, the Alaska resident often wants to hunt or fish at the last minute, with no store open in which to buy a license. In order to address this problem, ADF&G has come up with a "paperless" concept that is used in some other states. Mr. Brooks said: I think it's Georgia that uses a number, it's a "smart number." Part of it's randomly generated. Part of it is encrypted to identify someone's gender or weight or hair color, or some other identifying characteristic, [which] might be included in that sequence of numbers. MR. BROOKS stated that people who obtain paperless licenses would have to carry picture identification with them. A number and identification would be sufficient for enforcement. Currently there is no requirement for people to carry anything other than a hunting or fishing license. MR. BROOKS explained that there is work to do to initiate a paperless process of issuing fishing and hunting licenses, but "the statutes as written contemplate a paper process." He stated that the technology is available for ADF&G to "move into an electronic arena." Furthermore, ADF&G has written into HB 63 "that it would require a best-interest finding on the part of [the] commissioner of Fish & Game and [the] commissioner of Public Safety, and a concurrence of Public Safety that anything that [ADF&G does] is not going to adversely affect them." He asked the House Resources Standing Committee to endorse HB 63, to enable ADF&G to continue looking for ways to improve this process and respond to the requests of the public. Number 2145 REPRESENTATIVE KAPSNER asked if electronic licensing would preclude stores from selling licenses or would decrease administrative help to those stores. She noted that not everyone has access to a computer. MR. BROOKS answered that ADF&G has always looked at the electronic process as complementary to the existing vendor process, and an option for anyone who wants to take advantage of it. He cited that ADF&G works with about 1,500 vendors and sells 700,000 pieces of stock. He said there would always be people in stores selling licenses. Number 2102 REPRESENTATIVE FATE noted that there would be a $3 increase in fees to cover the cost of administration. He asked Mr. Brooks, "Will this change how fee structures of licenses may be made, or is this $3 ... the only fee structure that will be changed?" MR. BROOKS responded that that question had resulted in an amendment in HB 164 last year. He stated: Currently, through the vendor compensation process, we pay a dollar per item sold and 5 percent of the co- sale. For instance, if someone buys a fishing license with a king salmon stamp, we would pay $2 in vendor [compensation] - additional vendor [compensation] - plus 5 percent of $25, which is a buck and a quarter. So that transaction translates to $3.25 in vendor compensation paid on ... that purchase. And so we came up with the $3 as [a] close approximation of that. As it currently stands on our Internet sales, we don't pay any vendor [compensation]. We don't pay ... ourselves vendor compensation. So the entire sale goes into the fish and game fund for future appropriation by this body. What we've found, though, in other states, they've done competitive solicitation, where they've hired a third-party vendor ... to handle this process for them and then they'd charge a transaction fee. ... They would not get the vendor [compensation]; they would get a per transaction fee. And that's what the $3 was meant to do. But it would only occur ... through a third-party contract. And as it currently stands, we're writing this with state employees and so it really doesn't apply, ... the direction we're going, but it is something that other states have done, and so we've kind of mirrored ... what other states are doing. Number 1990 REPRESENTATIVE FATE asked Mr. Brooks to confirm that the transaction fee is the only change in the fee structure in HB 63 and that HB 63 would not enable any future changes outside of that transaction fee. MR. BROOKS answered yes, and added that the transaction fee would only be on "these electronic kinds of purchases." Number 1965 REPRESENTATIVE KERTTULA asked how much money ADF&G gets from vendor fees. MR. BROOKS repeated that it is $1 per item and 5 percent of the sale. In response to other questions by Representative Kerttula, Mr. Brooks said that the $3 would not be added on top of the already existing vendor fee, but would be instead of that. If ADF&G were to make a contract with a third party, it would not sign [the third party] up as a vendor. The $3 per transaction would be the compensation. Mr. Brooks stated that under the state procurement code, ADF&G would have to competitively solicit that. In order to clarify the need for the $3 fee for a process that is done electronically, Mr. Brooks said: I'll give you another drastic example: A nonresident hunter comes up here and spends a couple thousand dollars on some big game tags. We could easily spend a hundred dollars on commission on that transaction, and this would limit it to $3. MR. BROOKS added that some states add on a "surcharge" because the ability to apply online for a hunting or fishing license is viewed as a convenience. He affirmed that the cost of the license would not increase. REPRESENTATIVE KERTTULA mentioned language in the bill referring to the requirement of the applicant to carry identification, found on page 2, line 17, in Section 2. She asked what the penalties would be for someone who disobeyed that agreement. MR. BROOKS replied that ADF&G has discussed that issue with enforcement, and the answer is that if that person was fishing with a number, yet was carrying no identification, he/she would be fishing illegally. Number 1814 CO-CHAIR MASEK asked what is being done with all the money [from licensing] that is being put into the ADF&G fund. MR. BROOKS answered: All revenue from the sale of fish and game licenses - last year [it] was nearly $23 million - goes into the fund and is subject to appropriation by this body. So it's in the Division of Sport Fish and the Division of Wildlife Conservation's budget [that] you see those fish and game fund dollars show up in the operating budget. And it's subject to your appropriation that that happens. MR. BROOKS, in response to a follow-up question by Co-Chair Masek, stated: To generate $23 million, we pay approximately $2 million a year in vendor compensation. Those are the big numbers. To the extent that we sell these licenses ourselves through the Internet or some other process like that, we'll forego paying a portion of that vendor compensation. For instance, on the 8,000 licenses we sold last year, we sold over $700,000 in revenue. Five percent of that was with $35,000, another $8,000 in additional vendor [compensation], because we pay a dollar per item sold. So, over $40-45,000 that we would have normally paid in vendor compensation stayed in the fish and game fund for future appropriation by this body. And so to the extent that the state sells licenses, ... there's foregone commissions paid [that stay] in the fish and game fund for resource management or other things that you deem appropriate. On the flip side of that, we've had a few vendors come up and say, "Well, you're going to take all our business," and really, I ... personally don't see that happening. The vendors that we talk to - and ... we have 1,500 of them statewide - probably have 80 percent of our sales occurring with 20 percent of those vendors; it's what we call our "80:20 rule." So we have ... a handful of big vendors that do a majority of the sales and then a lot of smaller ones that we rely heavily on to get license sales out in very remote areas of the state. I don't ever see that going away. I think it's always going to be a partnership, a highbred system, if you will, where we can take advantage of technology but also heavily rely on these sales that occur over the counter in stores. The other thing we've heard, as a follow-up to that, is no one's getting rich off vendor [compensation]. I mean, we spent $2 million a year, and that's a lot of money. Some of the big chain stores, Fred Meyers, Carrs, and things like that are -- corporations are making money on that, but they make their money on outfitting hunters and fishers coming through the door. And so, to that end ... we have some projects on the drawing board where maybe we put a kiosk in the store, or a person could come in and do a self-serve on their license purchase, and then they're still in there shopping in the store. ... We want to approach some things like that with some of our bigger vendors, maybe do a pilot project, things like that. So, we have a lot of ideas out there and we listen to our vendors, we do surveys with them ... . CO-CHAIR MASEK asked if some of the funding was put back into "studies" or "improving resource." MR. BROOKS answered yes. In response to a follow-up question from Co-Chair Masek, he said that ADF&G is very interested in hunting opportunities. He mentioned a finance subcommittee meeting and "performance measures" in the budget, such as percentage of hunters. He estimated that 20 percent of Alaskan residents between the ages of 16 and 59 hunt, and, therefore, need to buy a license. Mr. Brooks said ADF&G wants to continue reaching out to those who hunt and fish by offering hunting and angling education programs, as well as opportunity. He said that there are more people [hunting in Alaska] now than ten years ago. CO-CHAIR MASEK said that she is glad to have Mr. Brooks' last statement on record and she would like to work with ADF&G and the House Resources Standing Committee on "the game aspect." She emphasized the importance of assuring a continued flow of revenue by providing ample opportunity for the public to hunt and fish. She recommended looking at the hunting programs set up by other states, which she said are more sophisticated in some areas than Alaska's. Number 1407 REPRESENTATIVE CHENAULT referred back to Mr. Brooks' previous statement regarding cost savings - the estimated $45,000 in commissions for the 8,000 transactions made through "one of the vendors." He questioned whether there really is a cost savings, since there is someone paid to do all the paperwork involved. MR. BROOKS replied that there are some specific, measurable savings. For instance, ADF&G has clerical staff in the licensing program, and the number of employees on that staff has not been increased with the implementation of this electronic process. When a person goes online, the information he or she provides automatically goes into ADF&G's database. He estimated that ADF&G currently spends "six figures" on data capturing the licenses. He said, "Oftentimes those same people [who] 'data capture' our licenses finish our busy season and go to work for [the Alaska] permanent fund." Mr. Brooks added that ADF&G would not do anything to negatively impact the fund, saying, "Even in a break-even scenario, if [ADF&G] thought [it] was reaching out and making customer service better and easier for people to access government, I think there'd still be some positive benefit there." Number 1253 REPRESENTATIVE McGUIRE asked Mr. Brooks if he was familiar with [HB 48], which passed out of [the House Resources Standing Committee] and would exempt the requirement for social security numbers [on hunting or sport fishing licenses]. She asked Mr. Brooks if that would be incorporated into [HB 63] as well. MR. BROOKS answered yes. He said [if HB 63 is adopted], ADF&G would send out a letter to all its vendors letting them know that the social security field on the application is optional. He remarked that it is ironic that ADF&G has made it easier for online applicants by offering to "populate the field" for them if they fill in their name and social security number. REPRESENTATIVE McGUIRE said: I like the concept of it. I guess I wonder if we're putting the cart before the horse, because what you're asking us to do in this bill is to give you the ability to establish a system for doing it, and then you're going to come back and obtain concurrence from the commissioner of public safety, but you're not going to come back and obtain concurrence from the legislature. And the reason I ask is because I'm on the [Administrative] Regulation Review Committee, so we deal with these problems all the time, where we pass a bill and we think it means "X" and then the regulations are written, or the plan's carried out in a way that we never intended it to be. ... I guess I just wonder whether or not we should have a little better idea of exactly how the plan will work first and then ... pass a bill that implements that system, because of these points of concern, ... the social security and other things. And has that been looked at? MR. BROOKS replied that ADF&G takes all those things into [account]. He said [the change in social security requirement] would apply, whether the application is on paper or is electronic. REPRESENTATIVE McGUIRE asked Mr. Brooks why ADF&G couldn't start studying the new plan now, without having to wait for legislation to pass. MR. BROOKS responded by telling Representative McGuire that ADF&G is already looking at systems used by other states. He mentioned the "smart number" concept again. He said: We could do that, but we could lose another year just in implementing, to have to come back and say, "OK, we've got all this in place and now we want to go ahead. But we're not talking about a fundamental change through a licensing program, in my opinion. It's offering one more option of how you can buy this thing. And we will operate directly from the statutes; all of our fees are set in the statutes. We don't even issue regulations on administering the licenses. REPRESENTATIVE McGUIRE cited [sub]section (d), page 2, line 29, which read: The commissioner of fish and game and the Department of Public Safety may adopt regulations to interpret or implement their respective duties in this section. She concluded that there is room for regulatory authority. Number 0999 CO-CHAIR SCALZI thanked Mr. Brooks for his testimony and asked him to provide the House Resources Standing Committee with a one-page synopsis of some of the opportunities of the last ten years and into the future for hunters and fishermen. He made reference to the issue that's been discussed about the decline in the number of Kenai residents who buy fishing licenses. He questioned whether ADF&G might have a plan to "sweeten the deal for residents." MR. BROOKS confirmed that Co-Chair Scalzi was talking about hunting and fishing opportunities. He said he would talk to Kelly Hepler [Director, Division of Sport Fish, ADF&G] and Wayne Regelin [Director, Division of Wildlife Conservation, ADF&G] and follow up on that request. [HB 63 was held over.]
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