Legislature(2001 - 2002)

05/01/2002 09:49 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= 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                                                            
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                                                            
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                                                            
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                                                            
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                                                                 
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.                                                                                                  

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