Legislature(2001 - 2002)
05/01/2002 09:49 AM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
CS FOR HOUSE BILL NO. 344(STA) "An Act increasing fees for driver's licenses, instruction permits, and identification cards; and providing for an effective date." This was the first hearing for this bill in the Senate Finance Committee. LINDA SYLVESTER, Staff to Representative Pete Kott, Chair of the House Rules Committee, testified this bill was introduced at the request of the Division of Motor Vehicles. She informed this legislation would increase fees for noncommercial driver licenses from $15 to $20, and learner's permits by $10, as well as increase the fees for identification cards. She stated the bill would also enable the Division of Motor Vehicles to implement a conversion to a digital license system, noting the Division requests $500,000 to implement the IT component to support the digital system. She assured this appropriation would be offset by fee increases, which would generate between $750,000 and $900,000 per year. Ms. Sylvester pointed out an inaccuracy in Section 1(a) on page 1, lines 11 and 12, which reads as follows. (3) Alaska is one of four remaining states that has yet to convert from 1950s era technology to digital driver licenses and personal identification cards. Ms. Sylvester informed that since this bill was introduced, the other three states have made the conversion and Alaska remains the only state still operating with the outdated technology. Ms. Sylvester stressed that the current Polaroid system, which has remained virtually unchanged since 1954, operates manually and is "uniquely susceptible" to fraud. She assured that by updating the technology, the integrity of the nation's personal identification system would be improved. She spoke of discussions occurring following the terrorism incidents of September 11, 2001, regarding the security of the identification system. She stated that these discussions have resulted in an emphasis in strengthening the states' systems. She emphasized that states have a responsibility for the integrity of identification systems. Ms. Sylvester stressed that obtaining a driver license signifies more than passage of a driving examination, given the reliance on these documents for identification for security and financial reasons. She characterized Alaska's driver licenses and identification chards as "breeder documents", explaining that once in hand, airline tickets, passports, checking accounts, firearm permits, credit cards, etc., could be parlayed. She remarked that driver licenses are a key component of the theft identity "phenomenon," which resulted in a loss of $7 billion the previous year. She furthered that fraudulent manufacturing and use of Alaska identification cards for certain purchases by underage users is another problem. Ms. Sylvester detailed the simple way to obtain a duplicate or fraudulent driver license, and shared anecdotal stories. This included a college student with an enlarged "picture" of a driver license in which a person could pose for a photograph standing in front of a yellow curtain covering the photo section of the driver license; the photograph of the person and the picture of the license would then be laminated, thus producing a realistic, but fraudulent driver license. Ms. Sylvester also spoke to difficulties of Alaska residents in utilizing their Alaska identification while traveling outside the State, explaining that the identification is sometimes not accepted because it "looks too hokey." She furthered that the Division is unable to issue replacement photo driver licenses to Alaskans in the event their identification is lost or stolen during travel because the Division does not maintain photographs. She qualified that identification that does not include a photo is available, however, airline security and other venues often require photo identification. Ms. Sylvester noted that the State's current identification system relies on Polaroid for equipment and supplies and informed that the company filed for Chapter 11 bankruptcy protection in October 2001 and that Chapter 7 bankruptcy protection is likely to follow. She stated that the company's identification system has since been sold to a company that serves 37 other states with identification systems. She stated that replacement cameras for the current system are no longer available and that film would be unavailable at the end of the calendar year as well. Senator Ward asked if any states currently utilize private contractors to fully operate their driver license and identification programs using privately owned equipment. MARY MARSHBURN, Director, Division of Motor Vehicles, Department of Administration was unaware of any states that contract for these services. She told of "turnkey" systems available, but emphasized these are primarily used for private security systems. Senator Ward understood the state of Vermont might utilize a private contractor. Ms. Marshburn was unsure. Senator Ward wanted to research the matter of operations in Vermont before making a decision to support this legislation. Senator Hoffman asked if the Division could acquire and install the new equipment to be operational by the July 1, 2002 effective date of this bill. Ms. Marshburn answered no, and explained the effective date applies to the date the fees would be increased fees to garner the necessary funding to begin process to begin the conversion process to a digital system. She informed 18 months would be required before the new system is operational. Senator Hoffman asked if licenses would continue to be valid until the printed expiration date. Ms. Marshburn affirmed. She anticipated that many people would choose to renew before the expiration date given the greater protection against fraud. Senator Hoffman asked if an additional fee would be imposed for early renewal. Ms. Marshburn replied that the current fee for obtaining a duplicate of an unexpired license would be levied. Senator Olson asked that amount. Ms. Marshburn answered $10. Ms. Marshburn then explained the current Polaroid system, which is somewhat difficult to alter or replicate, although significantly easier than a digital system. She pointed out for Senator Leman's benefit that engineering students tend to be the most inspired to attempt to alter or create fraudulent identification. Ms. Marshburn described the digital license technology that would be used for production of licenses and identification as well as for data storage. She informed the new licenses and identifications would not require subtraction of birth dates from the current year to determine the age of the holder. She furthered that licenses for holders under the age of 21 would be oriented horizontally rather than vertically to allow for ready recognition. Senator Olson asked about the process to obtain a duplicate driver license if the original is lost while traveling out of State. Ms. Marshburn responded it is not possible to produce a duplicate license if the holder is not present. She detailed the current system of two photographs taken, with one placed on the face of the license or identification and the other forwarded to the Department of Public Safety. She stated that in the event of a lost or stolen license, the Division could research the driving history of the holder and verify that a valid driver license does exist for that holder then fax that information to the holder. However, she noted this does not verify that the holder of this document is the person claimed, as no photograph is included. Senator Hoffman asked if it is possible to hold two licenses. He was told that possessing more than one is punishable with a $25,000 fine. Ms. Marshburn was unaware of the fine system. She shared that she obtained a State of Alaska identification card to utilize while traveling. She therefore is less likely to lose her driver license. Senator Hoffman commented that $25,000 was a large amount for such an offense. Senator Leman supported the conversion to digital licenses. He was concerned about the ease of altering current licenses. He was also concerned about the cost involved with such a conversion. However, he agreed the funding mechanism proposed in this legislation is acceptable. Senator Leman noted the Division had indicated to him a request to amend language contained in the intent section of the bill. Ms. Marshburn remarked that the change should not be made. Senator Leman "moved to report committee substitution House Bill 344 from Committee with individual recommendations and the accompanying fiscal notes." Co-Chair Donley requested a "definitive written answer" to Senator Hoffman's question about the possession of more than one driver license. Without objection CS HB 344 (STA) MOVED from Committee with accompanying $500,000 fiscal note #1 from the Department of Administration, dated 2/20/02.