Legislature(1995 - 1996)
03/20/1995 01:12 PM TRA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HTRA - 03/20/95 HB 210 - PRIVATE MOTOR VEHICLE LICENSING/TESTING Number 017 REPRESENTATIVE AL VEZEY, Sponsor, introduced HB 210 and stated HB 210 would mandate that the state set up a system where motor vehicle and driver license services could be provided to members of the public by private sector agencies. He explained HB 210 was a comprehensive bill and costs the state nothing. He explained all the costs are borne by the private agencies. He indicated it was designed so the state could not write regulations making it cost prohibitive for an agent to want to provide this service. He explained the regulations have been imposed into the statute. He indicated there were 29 other states using private agencies to provide this service to the public. He stated it was past time for Alaska to look into using private agencies. He explained HB 210 was a complex bill. He stated one of his major concerns was the maintaining of the quality of information and services to the public. He stated there were certain requirements for the qualifications. He acknowledged there were representatives from the Division of Motor Vehicles (DMV) with positive suggestions regarding HB 210. He noted the DMV was independently exploring similar areas. Number 064 CHAIRMAN DAVIS asked if there were any questions. Chairman Davis asked if the Alaska DMV currently had contract offices. REPRESENTATIVE VEZEY stated he was not aware of DMV's current structure as far as the contract office. He stated the difference seemed to lie with who the employees work for and not so much where the offices are located. He said he was not aware of any DMV services being issued by any agency other than state employees. CHAIRMAN DAVIS commented that this is one of those, "Why didn't I think of that" issues and acknowledged the DMV felt the same way. Number 088 JUANITA HENSLEY, Chief, Driver Services, Division of Motor Vehicles (DMV), Department of Public Safety (DPS), explained that the DMV currently has 13 contract agents that they contract with the police departments throughout the state to perform the functions of the DMV. She stated the reason the DMV utilizes the police departments as opposed to regular "public" sector is the computer systems and the access available to them. She stated they have national as well as international data base systems that have to be updated. She indicated the police department already has their computers in place, so there is no additional cost for setting them up. She mentioned the police department is paid according to the volume of work they do which currently is fairly small. She made reference to a statement she requested to present and noted the DMV was in the process of looking at various alternatives in offering the public some assistance and to reduce lines at the DMV as well as any complaints. Number 122 CHAIRMAN DAVIS stated for the record that Representative Masek arrived at 1:12 p.m. MS. HENSLEY continued to explain that HB 210 mandated the DMV to contract out or privatize most of the DMV's functions. She noted that "privatization supporter claims that the viable method of addressing the declining budget and it is a major progressive step in conducting government business." She commented on what may seem like progress may not necessarily be progress and exemplified this comment by explaining a state that widely used privatization for DMV functions. She indicated the state had only three DMV offices with in state employees for the largest cities, and the functions in more than 20 other locations were contracted out. MS. HENSLEY continued to explain, even in the cities with the state offices there were multi-contract service providers. She indicated this was a form of privatization on a large scale as is currently being proposed by HB 210. She said the system was not without problems. She indicated the functions of the DMV were so many and diverse that it was difficult to fit them into a large scale enforcement contract. She stated that much of the DMV management time was spent on contract administration training rather than developing new programs. She said the contract agents established their own procedures rather than following a standard procedure so that requirements to obtain a driver license or vehicle title varied from city to city. MS. HENSLEY noted because of privacy issues or technology restraints, the contract agents did not have computer access, thus creating a three to six month wait for titles and licenses to be processed by a central office rather than an instant issue procedure Alaska currently enjoys. She mentioned the contracts were lucrative, so many agents were awarded the contracts that possibly should have been held by other people. She indicated the contracts were costly and reduced revenue from being returned to the state. She noted these problems rose to such a level that the legislature demanded a change and created a "strong state DMV" with a mandate to replace contract agents, improve service and reduce cost. She explained this mandate was accomplished over a five year period as contract agents were replaced with state offices, which were funded by costs previously paid by the contracts. She explained the contract agents retained only small locations where the contract costs were lower than that for having a state employee in that particular location. She mentioned all state offices were connected to the main computer system so delays in issuing titles, registrations and licenses were eliminated. She said this example of privatization was tried and the legislature demanded the change. MS. HENSLEY stated the situation she just described occurred in Alaska in the 1970s. She explained the state of Alaska has tried privatization with poor results and cautioned against recreating the mistakes of the past. She explained many of the mistakes in the past can be avoided and noted that privatization is not applicable to all service problems. Ms. Hensley indicated that in most cases it would be more costly to the state of Alaska, whether it comes from state revenue or contract costs for the citizens of the state of Alaska. She indicated that the DMV is not opposed to the privatization of some of the functions of the DMV. She explained when looking at the DMV's track record, they're initiating various "pilot projects" such as an emissions station (IM) in Anchorage where, when a person comes into the station for their IM inspection certificate they have the option of renewing their registration at that time. She added there are plans for opening other IM stations in Anchorage and Fairbanks. She stated there were other areas being considered for IM stations such as Kiosks, through the automatic teller machine (ATM) renewal process. She explained the "hold back" with the ATM renewal process is the fact the state is not equipped to pay the credit card fees required. She added, the processing fee for the credit cards range from 1.5 percent to 7.0 percent and DMV does not have the revenue to do this. Ms. Hensley requested the committee to go over some amendments proposed by the DMV for HB 210. Number 199 CHAIRMAN DAVIS asked if there were any questions of Ms. Hensley. He asked Ms. Hensley about past operations of the DMV within the state, and did she have any expectations with a more computer literate society today versus in the 70s. MS. HENSLEY indicated with the computer checkpoints, there is the potential for greater audit control over computer literacy problems. She indicated one of the requirements of HB 210 provides for an agent to obtain a 95 percent error free and 5 percent error factor. She stated currently, DMV's contract agents being the police departments have an error factor of 40 percent and includes a lot of oversight and a great deal of errors made by the contracting agents. She emphasized the need for a hold on the contract agents in order to possibly restrain the amount of money they receive, stated by their contract when having an error factor as high as they do. She regretted this subject was not addressed in HB 210. She explained it is time consuming to correct all their errors even though it provides a service. MS. HENSLEY noted the DMV contracted with the Skagway police department, Department of Public Safety, at North Slope Borough, Petersburg, Wrangell, Craig, Cordova and Seward police departments. She mentioned Homer has a DMV employee, and Glennallen has Alaska state trooper employees, Nome and Talkeetna have a DMV employee which is paid half-time by the DMV and the other half by the state troopers (ST). She stated there use to be more sites such as Galena and Nenana, but due to an extremely high error factor and the volume of work in those areas they, were not awarded new contracts. She stated they have the option of using mail service or going in to the facilities. CHAIRMAN DAVIS stated for the record that Representative Eileen MacLean arrived at 1:20 p.m. REPRESENTATIVE JEANNETTE JAMES stated as much of government that can be privatized, the better, for numerous reasons and money is one of them. She stated she had been in contact with the department regarding the DMV office in Fairbanks. She indicated the DMV actually seemed to make more money than it spends. Number 225 MS. HENSLEY acknowledged Representative James was correct and explained that the DMV collects approximately $34 million of state revenue each year and the DMV's budget is $8.3 million a year. REPRESENTATIVE JAMES stated her concerns on attempting to figure out what should be privatized and what ought not to be, however, the other problem she noted of great concern by the public is the complaints of being mistreated not solely because they do not receive what they want, but also people complaining that they have been treated rudely. She noted that in Fairbanks there is a lot of work being done to improve these situations. She asked if computers were all networked into similar systems enabling them to gain access to the same information. MS. HENSLEY said, yes providing they pass the background investigation that is required in order to obtain access to the national data bases. REPRESENTATIVE JAMES asked would it not be possible for a private industry to have assigned personnel or a "bonding" for those personnel for less errors or greater mistakes. MS. HENSLEY stated HB 210 did not allow for any bonding at this point. She stated she did discuss this issue with the sponsor for some sort of bonding mechanism that should be available so the state does not lose interest off the revenues that are collected. She stated, currently during 1994 when looking at just the DMV field office functions performed, it cost the state approximately $2.83 for every transaction. She stated if one looks at all the functions that the DMV does, it costs the state approximately $5 per transaction. She felt that in this instance the state government has been frugal because there is a great number of people processed through their field offices and she noted the lines at the DMV are longer than they would like them to be and no one should have to stand in line longer than 5 to 20 minutes. She expressed concerns she had with the bill as it allows up to $7.50 per transaction for the contract agent to collect. She made reference to another section in the bill which will address these concerns. She explained, if there is a contract agent that is doing strictly renewal registrations in Anchorage for example, they process over 100 transactions a day, renewal registrations are all this agent is contracted to do. She noted if they do 100 transactions a day, their collectable fees would be $750 a day, this equals $180,000 a year that the agent would be able to obtain from this. She stated her DMV field office personnel is funded at approximately $37,000 a year. She explained she was not eluding to not privatizing certain functions and agreed that some should. Ms. Hensley remarked, the citizens of Alaska may be paying more than what they have to pay for the DMV and noted if the DMV was funded properly or even if alternative areas of funding were looked at, the DMV would be able to reduce some of their costs and people would be receiving the services they are paying for. Number 323 REPRESENTATIVE JAMES asked Ms. Hensley if the DMV had an error factor statewide as to what that error factor is by the office. MS. HENSLEY said she did not have that information with her but would make it available, and stated the error factor of the DMV was not as high as 40 percent. She explained, the DMV employees are evaluated on their error factor as well as the amount of work produced in a day. REPRESENTATIVE JAMES noted that from her past experiences in office work, that to measure an error factor is easy to do when some one else makes an error, but when we make it, there tends to be more oversight and people can sometimes catch their own mistakes later. Representative James inquired as to the possibility of this not occurring if that person was contracted but would if they were a state employee. REPRESENTATIVE EILEEN MACLEAN asked how HB 210 would impact the commercial driver licenses (CDL). MS. HENSLEY explained HB 210 would allow the DMV to contract with individuals in administering the CDLs. REPRESENTATIVE MACLEAN asked how HB 210 would impact the rural areas of Alaska, where they do not have the offices available. She made reference to the following sections of HB 210; page 3, line 11, indicating "maintain at each approved third party location, for at least one year." She also made reference to page 3, line 24, and lines 30 and 31, and lines 12 and 13 on page 4 as to the impact on rural Alaska. MS. HENSLEY explained, all driver license documents are confidential by statute. Ms. Hensley added, all documents must be held in a secure environment if copies of the documents are to be kept for one year and added, this concern needs to be addressed in HB 210 . She said if the committee would like, she would go through HB 210 and address concerns of the DMV and/or the committee's. CHAIRMAN DAVIS agreed to go through HB 210. Number 369 MS. HENSLEY referred to page 1 of the bill and explained there should be an amendment to include snow machine registrations, authorized under Title 5, she added it should also include the authorization of identification cards (IDs), authorized under Title 18 and any additional functions authorized under Title 28. She referred to the vehicle records and noted there is a $5 charge per copy. She added trip permits and temporary permits when purchasing a new car all should be addressed in Section 1 of HB 210. CHAIRMAN DAVIS asked if Representative Vezey would approach the committee table in order to respond to any questions. He asked if the functions Ms. Hensley referred to were all standard functions currently being done, and asked if it was the intent of Representative Vezey to have the DMV take over all functions that are currently provided. REPRESENTATIVE VEZEY stated it would not be to take over, but to allow delegation of the functions. CHAIRMAN DAVIS asked if there would be objection to the inclusion of Ids and snow mobile registration. REPRESENTATIVE VEZEY stated he would not object to the inclusion of Ids and snow mobile registration. Number 403 REPRESENTATIVE MACLEAN asked if all terrain vehicles (ATV) would be included under the snow machine registration. MS. HENSLEY stated ATVs are not subject to vehicle registration as snow machines are with a registration sticker. REPRESENTATIVE VEZEY stated he was not sure about the requirements for registration of a snow machine. MS. HENSLEY stated snow machines are required to be registered, but hard to enforce. REPRESENTATIVE JAMES inquired as to the requirements of registration on mobile homes. MS. HENSLEY explained two years ago, the section of law regarding the registration of mobile homes was repealed and last year the legislature decided it was something they needed and developed a mandate that mobile homes "must be" registered as opposed to the wording "may be" registered in the state of Alaska. REPRESENTATIVE JAMES asked if they were mentioned in HB 210 REPRESENTATIVE VEZEY indicated they were not included in this bill. MS. HENSLEY stated mobile homes are covered under Title 28 under the Registration and Titling provision and are included in the certification of agent registrars. She continued to explain, that page 2, line 9, stated this section mandates that the DMV shall utilize third party agents. She added the DMV prefers the wording "may utilize" rather than "shall utilize" (third party agents.) She stated it may not be economically feasible for the DMV to contract with someone doing 10 transactions a month as opposed to someone completing 40 transactions a month. CHAIRMAN DAVIS suggested the possibility of the wording "shall unless not economically feasible" with regards to Ms. Hensley's comments. MS. HENSLEY stated it was not the intent of the DMV to eliminate contract agents. She said she was not clear as to the wording "individual" whether this meant company or contractors currently working with the DMV. REPRESENTATIVE VEZEY explained the statutory definition of an "individual" indicates any entity that has legal standing. He stated he believed it was stated in Title (indisc). CHAIRMAN DAVIS stated this was discussed in a previous State Affairs Committee meeting. Number 445 REPRESENTATIVE JAMES asked for clarification on who was not considered an "individual." REPRESENTATIVE DAVIS suggested anyone you contracted with would be eligible. REPRESENTATIVE VEZEY explained the intent is very broad and is not limited to "nonprofits or for-profits," corporations, partnership, individuals, natural persons. REPRESENTATIVE MACLEAN requested the statute for clarification on the term "individual." CHAIRMAN DAVIS explained there will probably be a subcommittee formed on HB 210 to go over topics such as that. Number 460 MS. HENSLEY referred to the bottom of page 2, there needs to be an additional paragraph regarding fingerprinting, criminal history and any criteria for denial of certification based on certification of the records. She added this is in statute and the DMV will not be adopting regulations for that, so there is a need for certain criteria a person must meet. She stated the National Criminal Investigation Computer (NCIC) and the FBI records for driving records, CDL (indisc.) are all interchanged within the DMV's system. She noted a person cannot be convicted of a felony within ten years or a misdemeanor within five. REPRESENTATIVE JAMES indicated the language of HB 210 did not seem to present an option for the "individual" to hire additional people. She asked the sponsor if there was a provision for people to be hired, and would they have to meet the same qualifications as the "point person." CHAIRMAN DAVIS added this was a concern he had as well with the recommendation made by the DMV. He asked was it the intent of the DMV to allow access to the computer system and was this in statute. MS. HENSLEY stated it was the intent of the DMV to try and establish some sort of mechanism to where if the person is unable to meet the criteria establish by the NCIC or the FBI, then they will not have access to those records. She stated vehicle registration files are different. If a person only had access to that particular function it would be different, but when a person inquires about driver licensing, the driver record and criminal record are interchanged. Number 486 REPRESENTATIVE VEZEY commented it was not his intent to provide access to the NCIC system or any other computer data base. He stated they were vendors similar to fishing and hunting licenses. He explained they only need access to the necessary information to carry out those particular functions. He indicated they have not spelled out all the details and have left some flexibility to the department. He stated these individuals may never need to access any of the computer information and just transmit to a centralized location for processing. He stated by law, there is access to limited information on the files. MS. HENSLEY commented if the intent is to alleviate some of the long lines at the DMV, "DMV has real time on-line for a person to obtain their title and/or driver license on the spot." She indicated to alleviate a central processing point, the DMV would be counter-productive. She stated it would require more personnel sitting in an office, updating information and trying to get it mailed out to people. She stated concern regarding page 3, line 4, with the term, "all applicable requirements of law." She felt a requirement should be added to require an agent, examiner or registrar to have a current Alaska business license, meet all Americans with Disabilities Act (ADA) building, zoning and fire codes. She referred to line 9, needing to be addressed which states driver license documents are all confidential. She added, currently the DMV commission agents do not keep copies of driver's license applications, rather they are mailed in on a weekly basis. She indicated one copy goes with their accounting documents and the other hard copy goes directly to her office for microfilming and is incorporated into the individual's driving record. REPRESENTATIVE VEZEY emphasized the importance of understanding early on there are three classes of individuals: Agents, registrars and examiners. He explained an agent has certain duties excluding driver's license examiners. He stated there are requirements for registrars and examiners and stated this bill was long and complicated by virtue of the subject he noted, Section 28.12.030 only deals with third party agents. REPRESENTATIVE MACLEAN asked why the driver's license documents have to be kept confidential? Number 543 MS. HENSLEY stated currently there is a requirement in the President's Crime Bill which passed last year requiring motor vehicle registration and information to be confidential. She stated this was required by law until 1997. She said driver's license information has always been confidential. She stated the record contained a complete history of the individual's driving records. REPRESENTATIVE JAMES inquired as to the status of the bill regarding motor vehicles. MS. HENSLEY stated HB 110 is the bill Representative James was referring to and is currently in front of the legislature to have the state motor vehicle registration file in compliance with the Federal Crime bill that passed the privatization of motor vehicle records. She referred to line 12, "transmit the documents to the department by the 15th of each month." She explained if there is a contract with an agent that processes 200 driver's license applications a month, that is a tremendous amount to review. She proposed the deletion of "by the 15th of each month" and insert "as determined by contract." She suggested the possibility of having a contract agent not having the volume of work to transmit every week, but there may be some contract agents where you want the documents on a daily basis. CHAIRMAN DAVIS commented on some areas receiving too much work at one time within a month. MS. HENSLEY referred to line 13, after the word "subsection", insert, "and reports required by the department" and delete, "for the previous months licensing and titling registration." She proposed to delete, "24 hours" and insert "seven days" on line 17. She explained if a person should fail their skills test, 24 hours is not a long enough period of time for them to learn how to drive. She explained, currently if a person fails the road skills test one day, then they may retake the road skills test the following week. She said it was a $15 fee to take the road test and this could add up if every 24 hours they were attempting to take the road test. She then referred to line 22, and proposed after the word "all" insert "initial and advanced training courses." Ms. Hensley referred to line 23 and proposed the deletion of "the department may not require more than eight hours of training or other instruction in a calendar year." CHAIRMAN DAVIS asked if there were some aspects of the training that requires more time than others? MS. HENSLEY said yes and explained, currently DMV belongs to the American Association of Motor Vehicles Administrators Certified Driver Examiner program which requires 40 hours of training per year and for a Commercial Driver License (CDL) examiner, it requires an additional 40 hours of training. She mentioned there are currently 25 other states belonging to this program. She explained the examiner is nationally recognized for the training, and stated this helped the examiner if they went to another state that is a certified driver examiner state, they would have some preference for hiring due to the fact they have been previously trained and meet the necessary criteria. Number 550 REPRESENTATIVE JAMES asked if this pertained to examiners only, or if agents and registrars were included as well, and was this examining the 40 hours of training? MS. HENSLEY stated there is a need for training for registration and is as equally important as driver examiner training. She stated there are situations where there is a contract agent, such as one of the police departments, that do everything. REPRESENTATIVE VEZEY explained they set up three classes of individuals: Agents, who are in charge of motor vehicle services and examinations; registrars in charge of motor vehicle services and do not meet all the requirements under this section being discussed now; and examiners in charge of motor vehicle licensing examination and issuance. Agents accomplish both duties, registrars are responsible for only motor vehicle services and examiners are responsible for driver license services. CHAIRMAN DAVIS asked under the Association of Motor Vehicles Administrators, does the DMV include all employees or are there varying levels of employees that the DMV wants to have a certain level of certification. He indicated there seems to be two different types of structures; the existing structure and the proposed structure. MS. HENSLEY noted when looking at this from a DMV standpoint, all of the DMV's employees would qualify as agents and would need all the required training, not only for the vehicle registration titling but also for the driver license. She explained they receive this training and complete it, and obtain their certified driver examiner certificate after they have been employed a year. CHAIRMAN DAVIS asked Representative Vezey if his intentions were to make changes to the way things are done now. Number 641 REPRESENTATIVE VEZEY stated yes, but not necessarily to the extent that the DMV would interpret. He stated this was not necessarily the final form. He stated one of the first things they wanted to accomplish is to set up a class of registrars, motor vehicle vendors, if you would, who would not meet the same requirements just mentioned. He stated there was no way they would not have access to classified information, for lack of a better word. He continued, these (indisc.) an automobile dealer... TAPE 95-9, SIDE B Number 000 REPRESENTATIVE VEZEY continued (indisc.) what would be an appropriate number for training and stated we do not want to end up in a situation where we require 120 hours of training, and an automobile dealer will not look favorably on providing the service and can't afford the overhead. He stated they are just looking for a reasonable number. Number 019 REPRESENTATIVE JAMES asked if they have to go out of state for this training and is it required annually. MS. HENSLEY stated it was an annual 40 hours of training. Ms. Hensley stated she had a meeting with Representative Vezey prior to this meeting and discussed the fact that public safety employees are considered class one employees, and on certain holidays during the year public safety employees have to work when everyone else has off. She stated that the DMV utilizes those holidays for training days. She added there is a portion of those 40 hours that is strictly book training. She indicated some of the training is accomplished through correspondence means and reiterated 40 hours of training was required. Number 037 CHAIRMAN DAVIS suggested due to the extent of work required on HB 210, it would be more productive to set up a subcommittee with himself, members of the committee, Representative Vezey and the DMV. Chairman Davis stated he wanted to designate Representative Brice in order to have a minority member on the Committee.