Legislature(2013 - 2014)SENATE FINANCE 532

03/03/2014 05:00 PM FINANCE


Download Mp3. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SJR 21 CONST. AM: MEMBERSHIP OF JUDICIAL COUNCIL TELECONFERENCED
Heard & Held
+ SB 127 VEHICLE TRANSACTION AGENTS TELECONFERENCED
Moved SB 127 Out of Committee
+ SB 169 STATEWIDE IMMUNIZATION PROGRAM TELECONFERENCED
Scheduled But Not Heard
+ Bills Previously Heard/Scheduled TELECONFERENCED
                 SENATE FINANCE COMMITTEE                                                                                       
                       March 3, 2014                                                                                            
                         5:05 p.m.                                                                                              
                                                                                                                                
                                                                                                                                
5:05:41 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Meyer  called the Senate Finance  Committee meeting                                                                    
to order at 5:05 p.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Kevin Meyer, Co-Chair                                                                                                   
Senator Anna Fairclough, Vice-Chair                                                                                             
Senator Click Bishop                                                                                                            
Senator Mike Dunleavy                                                                                                           
Senator Lyman Hoffman                                                                                                           
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Pete Kelly, Co-Chair                                                                                                    
Senator Donny Olson                                                                                                             
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Heather Shadduck,  Staff, Senator  Pete Kelly;  Nancy Meade,                                                                    
General  Council,  Alaska  Court System;  Susanne  DiPietro,                                                                    
Alaska Alaska Judicial Council;  Mr. Walter Carpeneti, self,                                                                    
Juneau;  Senator   Cathy  Giessel;  Forrest   Wolfe,  Staff,                                                                    
Senator Giessel.                                                                                                                
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Alison Arians,  Self, Anchorage; Daniel  Cheyettee, Sealaska                                                                    
Federation  of  Natives,   Anchorage;  David  Landry,  Self,                                                                    
Anchorage;  George  Pierce,  Self,  Kasilof;  Amy  Erickson,                                                                    
Director,   Division  of   Motor  Vehicles,   Department  of                                                                    
Administration;  Tim  Toth,   Vice  President,  Alaska  Auto                                                                    
Dealers  Association, Anchorage;  Troy  Jarvis, Alaska  Auto                                                                    
Dealers  Association,  Anchorage;  Melissa  Cucullu,  Alaska                                                                    
Tags  and Titles,  Wasilla; Aves  Thompson, Alaska  Trucking                                                                    
Association, Anchorage.                                                                                                         
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
                                                                                                                                
SJR 21    CONST. AM: MEMBERSHIP OF ALASKA JUDICIAL COUNCIL                                                                      
                                                                                                                                
          SJR 21 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
SB 127    VEHICLE TRANSACTION AGENTS                                                                                            
                                                                                                                                
          SB 127 was REPORTED out of committee with a "do                                                                       
          pass" recommendation and with one new fiscal note                                                                     
          from Department of Administration.                                                                                    
                                                                                                                                
SB 169    STATEWIDE IMMUNIZATION PROGRAM                                                                                        
                                                                                                                                
          SB 169 was SCHEDULED but not HEARD.                                                                                   
                                                                                                                                
5:06:04 PM                                                                                                                    
                                                                                                                                
SENATE JOINT RESOLUTION NO. 21                                                                                                
                                                                                                                                
     Proposing amendments  to the Constitution of  the State                                                                    
     of  Alaska to  increase the  number of  members on  the                                                                    
     Alaska  Judicial Council  and relating  to the  initial                                                                    
     terms of  new members appointed to  the Alaska Judicial                                                                    
     Council.                                                                                                                   
                                                                                                                                
5:06:39 PM                                                                                                                    
                                                                                                                                
HEATHER SHADDUCK, STAFF, SENATOR  PETE KELLY, introduced the                                                                    
bill. She explained that the  bill placed the constitutional                                                                    
amendment  to the  state voters  if passed.  She stated  the                                                                    
goal of  adding more public  members to the  Alaska Judicial                                                                    
Council.  She  pointed  out  that  the  Alaska  Constitution                                                                    
stated  that three  attorney members  would be  appointed by                                                                    
the  bar association  to the  Alaska Judicial  Council along                                                                    
with three non-attorney members.  The members were appointed                                                                    
by  the  governor  and confirmed  by  the  legislature.  She                                                                    
mentioned  article 4,  section 8  which stated  that members                                                                    
"shall  be  appointed  for  6 year  terms  by  the  governor                                                                    
subject to  confirmation and vacancies  shall be  filled for                                                                    
the unexpired term  in a like manner  and appointments shall                                                                    
be made  with due  consideration to area  representation and                                                                    
without regard to a political affiliation."                                                                                     
                                                                                                                                
Ms.  Shadduck  informed  the committee  that  Senator  Kelly                                                                    
wished to  see more  public members  on the  Alaska Judicial                                                                    
Council because the goal of  area representation had not yet                                                                    
been reached.  The historical makeup of  the Alaska Judicial                                                                    
Council  included attorneys  from  four  locations: 14  from                                                                    
Fairbanks,  12 from  Anchorage, 10  from Juneau  and 3  from                                                                    
Ketchikan. The public members originated  from the same four                                                                    
cities.  Senator Kelly  hoped  to  reach regional  diversity                                                                    
across the  state. Additionally, current practice  allowed a                                                                    
tie to  be broken by  the Alaska Supreme Court  justice. She                                                                    
noted that Senator  Kelly viewed the practice  as a conflict                                                                    
of interest.  She pointed out  the last two years  from June                                                                    
22,  2012  through October  10,  2013,  when the  last  five                                                                    
attorney/non-attorney  vote   splits  occurred.   All  three                                                                    
public members voted to send a  name on to the governor, but                                                                    
the Chief Justice  sided with the attorney  members to avoid                                                                    
sending the  name.  Two  of the  votes were for  the Supreme                                                                    
Court.                                                                                                                          
                                                                                                                                
5:10:09 PM                                                                                                                    
                                                                                                                                
Ms. Shadduck explained that the  CS allowed three additional                                                                    
public members to serve on  the Alaska Judicial Council as a                                                                    
compromise adopted  by the  Senate Judiciary  Committee. She                                                                    
stated that the odd number  of members would help to prevent                                                                    
soliciting an  opinion from the  Chief Justice in  the event                                                                    
of a tie.                                                                                                                       
                                                                                                                                
Co-Chair Meyer  opined that he  was sensitive to  the notion                                                                    
of  conflict  of interest  as  presented  in Ms.  Shadduck's                                                                    
testimony.  He  disagreed  that  the  Chief  Justice  had  a                                                                    
conflict  of   interest.  He  agreed   with  the   need  for                                                                    
additional public  input in the  process. He  wondered about                                                                    
utilizing 4 public  members and 3 attorney  members to limit                                                                    
the amount  of members and  save the state money  for travel                                                                    
expenses.                                                                                                                       
                                                                                                                                
Ms.  Shadduck replied  that the  constitution demanded  area                                                                    
representation for the appointments.  With only three public                                                                    
members,  proper  representation  of  Alaska's  regions  was                                                                    
impossible.                                                                                                                     
                                                                                                                                
Senator Hoffman opined that more members would be optimal.                                                                      
                                                                                                                                
Co-Chair Meyer asked about more members from Bethel.                                                                            
                                                                                                                                
Senator Hoffman replied that Bethel  had not yet contributed                                                                    
a member to the Alaska Judicial Council.                                                                                        
                                                                                                                                
Ms.  Shadduck   agreed  and  commented  that   the  idea  of                                                                    
representation  by  judicial  district  had  been  explored,                                                                    
since  Fairbanks was  in the  fourth judicial  district with                                                                    
Bethel.                                                                                                                         
                                                                                                                                
5:12:39 PM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer asked  how often  the Chief  Justice had  to                                                                    
vote.                                                                                                                           
                                                                                                                                
Ms. Shadduck replied that the  Chief Justice voted 68 times;                                                                    
15 times when attorneys and non-attorneys split their vote.                                                                     
                                                                                                                                
Vice-Chair Fairclough  believed that an  increased frequency                                                                    
in  participation of  the  Chief Justice  was  noted in  the                                                                    
recent past; leading  to the interpretation of  a problem of                                                                    
frequency.                                                                                                                      
                                                                                                                                
Ms.  Shadduck  concurred.  She  noted  that  the  last  five                                                                    
attorney and non-attorney  splits resulted in a  vote for an                                                                    
attorney by the Chief Justice.                                                                                                  
                                                                                                                                
5:13:44 PM                                                                                                                    
                                                                                                                                
Senator Dunleavy asked about the fiscal note.                                                                                   
                                                                                                                                
Ms. Shadduck replied that the  updated fiscal note reflected                                                                    
a  cost   of  approximately  $1500  or   $12  thousand.  The                                                                    
estimates  were reduced  from the  original  request of  $32                                                                    
thousand.                                                                                                                       
                                                                                                                                
Co-Chair  Meyer  pointed out  the  updated  fiscal note.  He                                                                    
stated that  the expansion would increase  the travel costs.                                                                    
He   OPENED   public   testimony.   He   stressed   that   a                                                                    
constitutional amendment weighed heavily in importance.                                                                         
                                                                                                                                
5:15:29 PM                                                                                                                    
                                                                                                                                
NANCY MEADE,  GENERAL COUNCIL,  ALASKA COURT  SYSTEM, stated                                                                    
that the  Alaska Court System  rarely defined a  position on                                                                    
proposed legislation.  A bill  would be  opposed only  if it                                                                    
impacted a  core aspect  of the  judicial branch.  The Court                                                                    
System  opposed  SJR 21  for  that  reason. The  court  only                                                                    
opposed  a bill  at  the express  direction  of the  Supreme                                                                    
Court.  She  pointed  out  that   the  judicial  branch  was                                                                    
comprised of  three entities: the  court system,  the Alaska                                                                    
Judicial  Council and  the Commission  on Judicial  Conduct.                                                                    
She stated  that the court  system was  used interchangeably                                                                    
with  the judicial  branch because  the  other two  entities                                                                    
were relatively  small. The court  system was  separate from                                                                    
the  council, yet  depended on  the work  of the  council in                                                                    
screening  applicants  for  judicial  positions  and  making                                                                    
recommendations  in  judicial  retention. The  court  system                                                                    
required  qualified  judges  for   the  maintenance  of  the                                                                    
public's  trust and  confidence. She  testified against  the                                                                    
resolution because the court system  relied on the council's                                                                    
work.                                                                                                                           
                                                                                                                                
5:17:44 PM                                                                                                                    
                                                                                                                                
Ms. Meade  noted that  the resolution  had the  potential to                                                                    
change the judicial  screening process significantly despite                                                                    
its 50  years of  proven effectiveness. The  current council                                                                    
would select  the most qualified  applicants based  on their                                                                    
merit.  Merit selection  of judges  was considered  the gold                                                                    
standard across the  country. The judges were  chosen as the                                                                    
best professionals in their field.                                                                                              
                                                                                                                                
Ms. Meade  addressed points made  by Senator  Kelly's staff.                                                                    
The  council's diversity  issue was  supported by  the court                                                                    
system. If  a proposal demanded or  required additional area                                                                    
representation  or  diversity  among  council  members,  the                                                                    
court system would  not oppose the change.  The court system                                                                    
attempted to  attract diverse applicants  to the  bench with                                                                    
methods such as outreach and education.                                                                                         
                                                                                                                                
Ms. Meade  stated her problem  with the proposed  balance of                                                                    
the  council. The  court system  believed  that the  current                                                                    
makeup of the council  chosen by the constitutional founders                                                                    
with three  attorneys and three  public members  worked well                                                                    
by allowing for the balance  of differing views. The balance                                                                    
assured  that  no  one  group   had  a  greater  voice.  The                                                                    
attorneys likely  had a greater understanding  of the skills                                                                    
required to be  a judge. The lay members  had valuable views                                                                    
related to  communication and  character of  applicants. She                                                                    
stated that  both types of  opinions were valuable  during a                                                                    
screening  process. She  stressed that  the balance  between                                                                    
attorney and  non-attorney members was crucial.  A consensus                                                                    
would be better obtained with a balance.                                                                                        
                                                                                                                                
5:20:50 PM                                                                                                                    
                                                                                                                                
Ms. Meade believed that the  bill could lead to selection on                                                                    
basis  other than  pure merit.  She stated  that the  Alaska                                                                    
Court System opined  that the bench was  strong with lawyers                                                                    
that  were the  best in  their  field. She  argued that  the                                                                    
balance forced the  council to act on a  consensus basis and                                                                    
listen  to the  views  of  the other  group.  The bench  was                                                                    
viewed as strong  with lawyers that were deemed  the best in                                                                    
their field.                                                                                                                    
                                                                                                                                
5:24:03 PM                                                                                                                    
                                                                                                                                
Ms. Meade  offered to answer  questions. She  mentioned over                                                                    
1100 votes with splits 68 times.  Only 15 of the splits were                                                                    
divided evenly among attorney  and non-attorney members. She                                                                    
agreed that  5 out of 200  votes occurred in a  row over the                                                                    
last several  years where the  attorneys and  public members                                                                    
were split and  the Chief Justice voted  with the attorneys.                                                                    
She stated that  the numbers in comparison  were very small.                                                                    
Out of the  four votes, two were for the  same applicant who                                                                    
applied  twice.  She argued  that  the  votes could  not  be                                                                    
considered  a  trend or  sign  of  council dysfunction.  She                                                                    
noted  that  unanimous voting  occurred  80  percent of  the                                                                    
time.                                                                                                                           
                                                                                                                                
Co-Chair  Meyer  understood  the  concern  that  the  public                                                                    
members may not  have to listen to the  attorneys. He stated                                                                    
that the Chief Justice was also an attorney.                                                                                    
                                                                                                                                
Ms. Meade  replied that while  differing views  existed, the                                                                    
vast  majority  of  the times,  votes  were  unanimous.  She                                                                    
believed that  the data proved  that public  member's voices                                                                    
were indeed heard.                                                                                                              
                                                                                                                                
5:25:51 PM                                                                                                                    
                                                                                                                                
Vice-Chair Fairclough  asked if the Supreme  Court requested                                                                    
that the Alaska Court System oppose the bill.                                                                                   
                                                                                                                                
Ms. Meade replied yes.                                                                                                          
                                                                                                                                
Vice-chair Fairclough  asked if  the Supreme  Court decision                                                                    
was divided or unanimous.                                                                                                       
                                                                                                                                
Ms. Meade replied unanimous.                                                                                                    
                                                                                                                                
Senator Hoffman  asked about the  potential for a  system in                                                                    
which neither  party was disenfranchised. He  wondered about                                                                    
the process of the Chief  Justice making the final selection                                                                    
in  the  event  of  a  tie.  He  stated  that  without  that                                                                    
practice,  the lay  members and  attorneys would  have equal                                                                    
opportunity for candidate selection.                                                                                            
                                                                                                                                
Ms.  Meade agreed  with  the Senator.  She  stated that  the                                                                    
balance could be maintained with the Senator's suggestion.                                                                      
                                                                                                                                
5:27:37 PM                                                                                                                    
                                                                                                                                
SUSANNE   DIPIETRO,   EXECUTIVE  DIRECTOR,   ALASKA   ALASKA                                                                    
JUDICIAL  COUNCIL   testified  about  the   council's  merit                                                                    
selection  and  retention  system. The  council  served  two                                                                    
functions.  The  council  members  screened  applicants  for                                                                    
judicial nominations  and sent them  on to the  governor for                                                                    
his appointment.  The council also evaluated  sitting judges                                                                    
and  provided information  to the  voters about  the judge's                                                                    
performance for retention  evaluations. The founders created                                                                    
the  methods  of  selection and  retention  of  judges.  Two                                                                    
methods   of  selection   were  established:   election  and                                                                    
gubernatorial  appointment.  The merit  selection  procedure                                                                    
allowed involvement  from all branches; the  Alaska Judicial                                                                    
Council screened on merit and  sent names on to the governor                                                                    
who  then appointed  the  selected  candidate. The  election                                                                    
occurred  later  when the  judge  stood  for retention.  The                                                                    
concern about  public involvement was addressed  in light of                                                                    
the  fact that  the  voters were  directly  involved in  the                                                                    
retention of the judges.                                                                                                        
                                                                                                                                
Ms.  DiPietro mentioned  public  involvement  as related  to                                                                    
diversity  on  the  Alaska   Judicial  Council.  The  Alaska                                                                    
Judicial  Council was  among 38  states  employing the  same                                                                    
type  of  merit  selection  for judges.  She  mentioned  the                                                                    
practices of  press releases  and comment  solicitation from                                                                    
members of  the public. The  council published the  names of                                                                    
applicants, which was not done  by the majority of selection                                                                    
committees.  When   bar  survey  evaluations   arrived,  the                                                                    
council made them public. Many  of the practices were unique                                                                    
to  the Alaskan  selection agency.  Alaska Judicial  Council                                                                    
members  traveled to  the vacancies  when the  time came  to                                                                    
interview  applicants. She  stated that  multiple interviews                                                                    
occurred in Bethel in tandem  with a public hearing prior to                                                                    
the  vote   or  interview.   The  purpose  was   to  solicit                                                                    
information  directly   from  townspeople  to   gather  data                                                                    
regarding community preferences.                                                                                                
                                                                                                                                
5:31:59 PM                                                                                                                    
                                                                                                                                
Ms.  DiPietro discussed  the deliberation  process with  the                                                                    
council. She noted that the  process was not public, but the                                                                    
vote  was.  The interviews  could  occur  in public  if  the                                                                    
applicants  wished.  She  mentioned the  upcoming  Anchorage                                                                    
Superior  Court vacancy  where three  of the  six applicants                                                                    
wished  to   have  public   interviews.  She   conveyed  the                                                                    
collegial   nature  of   the   interview  and   deliberation                                                                    
processes; each  council member was  called upon to  ask the                                                                    
questions  of  the  candidate and  provide  reviews  of  the                                                                    
merits of each candidate.                                                                                                       
                                                                                                                                
5:34:57 PM                                                                                                                    
                                                                                                                                
Ms.   DiPietro  discussed   the  chart:   "Alaska  Judiciary                                                                    
Council, Judicial Nomination over  time" (copy on file). She                                                                    
emphasized  that the  council  members had  a  high rate  of                                                                    
agreement  with  applicant  selection.  She  noted  that  62                                                                    
percent of votes  were unanimous. Another 19  percent of the                                                                    
time,  only  one  person  had  a  different  vote  from  the                                                                    
majority.  She  explained  that  attorney/non-attorney  vote                                                                    
splits leading  to a vote  from the Chief Justice  were rare                                                                    
with 68 votes  out of 1100, which she deemed  as a very high                                                                    
rate  of  agreement.  She  added   that  the  Chief  Justice                                                                    
traditionally  voted   to  send  additional  names   to  the                                                                    
governor (73 percent of the time).                                                                                              
                                                                                                                                
Ms. DiPietro  pointed out that  the council  often presented                                                                    
more  than the  minimum of  two names  for the  governor (62                                                                    
percent). She  mentioned that the selections  in Bethel were                                                                    
often  for  minimal  applicants; oftentimes  only  two.  She                                                                    
highlighted the  importance of  the data  in the  chart. The                                                                    
trends were made  obvious. Less than 6 percent  of the total                                                                    
votes  were shown  to be  attorney/non-attorney splits  over                                                                    
the last  two years. She  noted that the council  was busier                                                                    
in  the  last two  years  than  at  any  other time  in  its                                                                    
history.                                                                                                                        
                                                                                                                                
5:36:55 PM                                                                                                                    
                                                                                                                                
Ms.  Dipietro  discussed  the attorney  versus  non-attorney                                                                    
members.  She  pointed out  the  merit  selection system  in                                                                    
other states.  She informed the committee  that the majority                                                                    
of  states (18)  had  even  splits of  attorney/non-attorney                                                                    
members.  She  mentioned  five  states  with  more  attorney                                                                    
members,   but  four   of  the   five  had   the  additional                                                                    
requirement that  no more than  half of either group  may be                                                                    
of  the same  political party.  Alaska's system  was without                                                                    
regard to  political affiliation.  The other  states created                                                                    
balance  by   prohibiting  a  majority  of   people  in  one                                                                    
political party.                                                                                                                
                                                                                                                                
Ms.  Dipietro quoted  the founders  from the  Constitutional                                                                    
Convention, "the whole  theory of the Missouri  Plan is that                                                                    
in substance,  a select and  professional group  licensed by                                                                    
the  state can  best determine  the qualifications  of their                                                                    
brothers." She  noted that the  select group was  the Alaska                                                                    
Bar  Association, which  was created  by the  legislature by                                                                    
statute.  Another quote,  "the intent  of the  Missouri Plan                                                                    
was  in substance  to give  a  predominance of  the vote  to                                                                    
professional men who  knew the foibles, the  defects and the                                                                    
qualifications of their brothers,  it is unquestionably true                                                                    
that in every  trade and every profession, the  men who know                                                                    
their brother  careers the best  are the men engaged  in the                                                                    
same type of occupation." Lastly  she quoted, "the theory on                                                                    
the  lay members  on the  confirmation,  they represent  the                                                                    
public   and  they   represent  the   predominant  political                                                                    
thought, the  theory on the  lawyer members of  the council,                                                                    
they represent  the profession, they  represent a  desire to                                                                    
have the best judges on the benches."                                                                                           
                                                                                                                                
Co-Chair Meyer appreciated the data in the charts.                                                                              
                                                                                                                                
5:39:30 PM                                                                                                                    
                                                                                                                                
MR. WALTER  CARPENETI, SELF, JUNEAU,  gave a  brief personal                                                                    
history. He testified  as a former judge that  there was not                                                                    
a demonstrated need for a  change in the constitution, which                                                                    
had served  the state  well for 55  years. He  believed that                                                                    
the  system balanced  the  competing  interests in  judicial                                                                    
selection and he saw a  number of problems with the proposed                                                                    
legislation. He  mentioned a letter  to the  Senate Judicial                                                                    
Committee (copy  on file) related  to the problems  with the                                                                    
proposal.                                                                                                                       
                                                                                                                                
Mr.  Carpeneti discussed  the state's  constitution and  its                                                                    
wide administration.  He served  as Chief Justice  for three                                                                    
years  and   attended  multiple  national   conferences.  He                                                                    
reported  that Alaska's  method  of  judicial selection  was                                                                    
widely   lauded   by   judges  around   the   country.   The                                                                    
constitution was amended infrequently  and only done so with                                                                    
great  need.   He  did   not  see  a   need  to   amend  the                                                                    
constitution.  He  appreciated  the  presentation  from  Ms.                                                                    
Shadduck  stating two  reasons to  change the  constitution.                                                                    
The first was to  increase geographic representation and the                                                                    
second  was the  perceived  conflict position  of the  Chief                                                                    
Justice when called upon to vote.                                                                                               
                                                                                                                                
Mr.   Carpeneti   acknowledged   that  the   governor   made                                                                    
appointments with due  regard for geographic representation.                                                                    
He  suggested that  a problem  may  exist in  the method  in                                                                    
which the appointments were executed  versus an issue in the                                                                    
constitution  itself.  He  did  not  see  how  the  proposed                                                                    
legislation  would alter  the  existing  process. He  argued                                                                    
that  the  legislation  failed   to  address  the  issue  of                                                                    
geographic representation.                                                                                                      
                                                                                                                                
Mr.  Carpeneti   discussed  the  argument  that   the  Chief                                                                    
Justice's vote constituted a conflict  of interest. He broke                                                                    
ties rarely during  his time as Chief Justice,  but he never                                                                    
felt a  conflict position. He  mentioned one  occasion where                                                                    
he  cast a  vote where  the applicant  was a  Superior Court                                                                    
judge. He  could not  see an opportunity  for a  conflict of                                                                    
interest.  He stressed  that the  conflict was  not attorney                                                                    
versus non-attorney. He noted over  1100 votes over the last                                                                    
30  years where  1  percent of  the time  a  split vote  was                                                                    
broken  by the  Chief  Justice. He  urged  the committee  to                                                                    
refrain from amending the constitution  for a recent history                                                                    
comprised of very few votes.                                                                                                    
                                                                                                                                
5:46:34 PM                                                                                                                    
                                                                                                                                
Mr. Carpeneti discussed the need  to send the best candidate                                                                    
to the  governor. He cautioned the  committee about amending                                                                    
the  constitution that  produced  a judiciary  that was  the                                                                    
envy  of other  states.  The Alaska  judiciary  was not  the                                                                    
subject   of  scandal,   corruption,  kick-backs   or  other                                                                    
problems seen in more  politically selected judiciaries. The                                                                    
focus  of the  bill  was  narrow, and  he  worried that  the                                                                    
proposed changes would not benefit the state.                                                                                   
                                                                                                                                
Mr. Carpeneti stated  that he served as a  council member in                                                                    
the early 1980s.  He concluded then, that Alaska  had a two-                                                                    
step process with  a merit/political plan. He  used the term                                                                    
political   as  it   related  to   policy  and   its  proper                                                                    
formulation. He  stated that the merit  portion included the                                                                    
Alaska  Judicial  Council who  polled  every  lawyer in  the                                                                    
state  including  judges  that the  applicants  appeared  in                                                                    
front of  and lawyers on  the other side of  specific cases.                                                                    
The council  requested a writing sample,  credit reports and                                                                    
criminal  records.  Candidates  were  rated  on  competence,                                                                    
intellect,  temperament, integrity  and  fairness. At  least                                                                    
two names must be submitted by the council.                                                                                     
                                                                                                                                
Mr. Carpeneti  noted that  the governor  was elected  by the                                                                    
people  and  would  account   for  the  candidate's  general                                                                    
philosophy and their approach to  problems. He worried about                                                                    
an  unbalanced proposal  as it  ran the  risk of  losing the                                                                    
merit aspect  of the process.  He opined that Article  IV of                                                                    
the constitution  served the state  well over the  years. He                                                                    
urged caution in changing the system.                                                                                           
                                                                                                                                
5:51:10 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Fairclough  recalled  that eight  states  had  a                                                                    
system similar  to Alaska's.  She asked  to know  more about                                                                    
the predominate systems.                                                                                                        
                                                                                                                                
Mr. Carpeneti replied that he  was poorly informed about the                                                                    
process in  other states. He  noted that  approximately half                                                                    
of  the   states  with  merit-based  election   systems  had                                                                    
commissions  that were  evenly split  between attorneys  and                                                                    
non-attorneys. He stated  that he had not  felt compelled to                                                                    
research other  state's systems  because Alaska's  worked so                                                                    
well.                                                                                                                           
                                                                                                                                
Vice-Chair Fairclough  corrected that 38 states  had similar                                                                    
systems to Alaska's.                                                                                                            
                                                                                                                                
Co-Chair  Meyer limited  public  testimony to  two to  three                                                                    
minutes.                                                                                                                        
                                                                                                                                
5:52:51 PM                                                                                                                    
                                                                                                                                
ALISON   ARIANS,   SELF,  ANCHORAGE   (via   teleconference)                                                                    
testified  as a  small-business  owner against  SJR 21.  She                                                                    
stated that she  appreciated efficiency, limited bureaucracy                                                                    
and  expert  advice. She  agreed  with  the process  of  the                                                                    
Alaska  Judicial  Council  and opined  that  adding  members                                                                    
would increase the  travel budgets. She stated  that she was                                                                    
comfortable  with  attorneys  evaluating  their  peers.  She                                                                    
respected the opinion  of the Chief Justice if  needed for a                                                                    
vote.  She stated  that  the citizen  members  of the  group                                                                    
deserved credit  for their ability  to make  good decisions.                                                                    
She cited  that only 15  out of  1100 votes resulted  in the                                                                    
Chief  Justice siding  with the  attorney group  against the                                                                    
public  members. She  spoke about  her volunteer  work as  a                                                                    
guardian  ad litem  for children.  She wanted  to feel  sure                                                                    
that she would vote for well-qualified judges.                                                                                  
                                                                                                                                
5:54:52 PM                                                                                                                    
                                                                                                                                
DANIEL CHEYETTEE, SEALASKA  FEDERATION OF NATIVES, ANCHORAGE                                                                    
(via  teleconference),   testified  in  opposition   to  the                                                                    
legislation.  He  echoed  reasons for  the  opposition  from                                                                    
prior testifiers.  While his  group would  like to  see more                                                                    
Alaska natives  on the  bench as  members of  the judiciary,                                                                    
the  solution  would  be to  encourage  native  Alaskans  to                                                                    
attend law  school and become judges.  The Alaska Federation                                                                    
of Natives  (AFN) believed that the  current Alaska Judicial                                                                    
Council  system worked  well. He  mentioned the  state court                                                                    
system  with  multiple  talented and  respected  judges.  He                                                                    
disagreed with  the effort to  change the system.  He worked                                                                    
as  an attorney  and  noted the  incredible time  commitment                                                                    
offered  by  members  of the  Alaska  Judicial  Council.  He                                                                    
feared that  an increase  in the size  of the  council would                                                                    
require  too  great  a  commitment   from  the  members.  He                                                                    
suggested  that  the  proposed expansion  might  lead  to  a                                                                    
system with less responsibility.                                                                                                
                                                                                                                                
5:58:43 PM                                                                                                                    
                                                                                                                                
DAVID   LANDRY,   SELF,   ANCHORAGE   (via   teleconference)                                                                    
testified against SJR  21. He explained that he  worked as a                                                                    
small-business general  contractor. He stated  opposition to                                                                    
the  resolution because  of  the  devaluing of  professional                                                                    
opinion exhibited  in the  bill. He  assumed that  each case                                                                    
presented before  a judge had  an attorney with  an opposing                                                                    
side of an issue or  lawsuit. He believed that the attorneys                                                                    
operated  as business  people  without monolithic  political                                                                    
views. He mentioned his own  practice of seeking advice from                                                                    
other  contractors about  his peers  for  the most  valuable                                                                    
business  partners. He  stressed the  importance of  the Bar                                                                    
Association in the  selection of judges. He  argued that the                                                                    
resolution was a solution in search of a problem.                                                                               
                                                                                                                                
6:01:44 PM                                                                                                                    
                                                                                                                                
GEORGE PIERCE, SELF,  KASILOF (via teleconference) testified                                                                    
in opposition to the legislation.  He opposed the resolution                                                                    
because the current  system worked so well.  He commented on                                                                    
the data  presented and noted  that 15 instances of  a Chief                                                                    
Justice  voting in  favor  of attorneys  did  not mandate  a                                                                    
constitutional change.  He stated that the  bill would allow                                                                    
the  governor  to  have  control   of  the  Alaska  Judicial                                                                    
Council, which  would provide the opportunity  for political                                                                    
seeding.  He noted  the lack  of  evidence for  the need  to                                                                    
change  the system.  He  stressed the  lack  of evidence  of                                                                    
discrimination  in the  votes. He  found it  concerning that                                                                    
the judges would  be selected by the governor  versus by the                                                                    
people.   He  argued   against   the  need   to  amend   the                                                                    
constitution.                                                                                                                   
                                                                                                                                
6:04:12 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer  CLOSED public testimony.  He asked  how long                                                                    
the members were appointed.                                                                                                     
                                                                                                                                
Ms.  Shadduck replied  that members  were appointed  for six                                                                    
years with staggered terms.                                                                                                     
                                                                                                                                
Co-Chair  Meyer discussed  the concern  that a  conservative                                                                    
governor could appoint conservative members and vice versa.                                                                     
                                                                                                                                
Ms. Shadduck replied that the  terms would be staggered when                                                                    
additional members were added via the resolution.                                                                               
                                                                                                                                
Vice-Chair  Fairclough asked  if the  bill would  change the                                                                    
vote of the people for judicial retention.                                                                                      
                                                                                                                                
Ms.  Shadduck replied  that the  resolution did  not address                                                                    
the  judicial retention  election process.  She pointed  out                                                                    
that  the public  currently  had a  voice  when judges  were                                                                    
already appointed. The resolution  would allow for a greater                                                                    
public voice in the beginning of the selection process.                                                                         
                                                                                                                                
SJR  21  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
SENATE BILL NO. 127                                                                                                           
                                                                                                                                
     "An Act authorizing  the commissioner of administration                                                                    
     to  enter into  agreements with  agents to  perform for                                                                    
     compensation certain transactions  related to vehicles;                                                                    
     relating to  the duties of those  agents; and providing                                                                    
     for an effective date."                                                                                                    
                                                                                                                                
6:06:46 PM                                                                                                                    
                                                                                                                                
SENATOR CATHY GIESSEL, introduced  the bill. She stated that                                                                    
the  bill  was  simple.  She explained  that  the  bill  was                                                                    
modeled  after   a  business  partnership  in   Alaska.  She                                                                    
mentioned  the  business  arrangement  involved  in  selling                                                                    
hunting and  fishing licenses in  retail stores  through the                                                                    
Department  of Fish  and  Game, which  she  compared to  the                                                                    
proposal in  SB 127. The  businesses retained 15  percent of                                                                    
the fee paid  for the license. The business  partners sold a                                                                    
vast  majority of  licenses saving  the  state in  personnel                                                                    
costs.  She stated  that SB  127 applied  the same  business                                                                    
model to the Division of Motor Vehicles.                                                                                        
                                                                                                                                
Senator  Hoffman believed  that the  Department of  Fish and                                                                    
Game agents received a 5 percent fee.                                                                                           
                                                                                                                                
Senator Giessel appreciated the correction.                                                                                     
                                                                                                                                
Senator Hoffman  asked why the  Department of Fish  and Game                                                                    
and  the  Division of  Motor  Vehicles  (DMV) would  receive                                                                    
different percentages of the fees.                                                                                              
                                                                                                                                
Senator  Giessel  replied  that  she would  have  her  staff                                                                    
provide the legislation's details.                                                                                              
                                                                                                                                
6:10:31 PM                                                                                                                    
                                                                                                                                
FORREST WOLFE, STAFF, SENATOR  GIESSEL, stressed that visits                                                                    
to  the  DMV  were  often unpalatable  as  they  required  a                                                                    
sacrifice of time from a  person's work day. In the interest                                                                    
of reducing  public cost  in lost time  and wages,  the bill                                                                    
was  introduced. Advanced  Business Partnerships  (ABP) were                                                                    
created  and  contracted  to  perform  certain  transactions                                                                    
statutorily  mandated to  DMV, outsourcing  certain services                                                                    
to the  private sector.  The business offered  citizens more                                                                    
locations  to receive  DMV  services  and expanded  business                                                                    
hours so  that citizens would  not be required  to sacrifice                                                                    
their  work day  for  a visit  to the  DMV.  He stated  that                                                                    
businesses  offering the  services received  no compensation                                                                    
from the  state, while incurring  costs associated  with the                                                                    
transactions, including  credit card fees and  purchasing of                                                                    
equipment and supplies.                                                                                                         
                                                                                                                                
Mr.  Wolfe  explained  that SB  127  allowed  businesses  to                                                                    
retain 15 percent of the  fees to cover administrative costs                                                                    
for the transactions conducted. The  concept was used by the                                                                    
Department of Fish  and Game to allow  private businesses to                                                                    
sell and issue hunting  and fishing licenses while retaining                                                                    
a percentage  of the proceeds.  In 2013, the  private sector                                                                    
sold  approximately five  times  the number  of hunting  and                                                                    
fishing licenses  as the  Department of  Fish and  Game. The                                                                    
bill  would result  in  a  reduction in  the  size of  state                                                                    
government.  The   15  percent  retained  by   the  business                                                                    
partners  was actually  reinvested  in the  economy and  the                                                                    
private sector that  brought in 26 percent  of DMV's current                                                                    
revenue.                                                                                                                        
                                                                                                                                
Mr. Wolfe  informed the  committee that  allowing businesses                                                                    
to  retain  the  percentage  to  offset  costs  provided  an                                                                    
incentive for  businesses to  offer additional  services. In                                                                    
the  interest  of  reducing  the   size  of  government  and                                                                    
increasing efficiency, strategies like  SB 127 would provide                                                                    
an effective way to reduce  government through an innovative                                                                    
use of the  private sector. The Department of  Fish and Game                                                                    
found  the  process  of  working  with  the  private  sector                                                                    
effective for the  sales of licenses and  tags. He responded                                                                    
to  Senator Hoffman's  question by  stating that  15 percent                                                                    
was  more appropriate  than  5  due to  the  higher cost  of                                                                    
equipment  and supplies  required for  provision of  the DMV                                                                    
services.                                                                                                                       
                                                                                                                                
6:14:18 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer  stated that  the he  had used  the satellite                                                                    
offices  discussed  in  the  testimony  and  found  them  to                                                                    
increase convenience. He noted  that the cost would increase                                                                    
by 25 percent  for the department without the  option of the                                                                    
satellite offices.                                                                                                              
                                                                                                                                
Mr.  Wolfe  replied that  the  transactions  in the  private                                                                    
sector  represented   the  work  of  approximately   32  DMV                                                                    
employees.  He  stated  that more  incentive  allowed  by  a                                                                    
greater  retention  of fees  could  increase  the amount  of                                                                    
business conducted in the private sector.                                                                                       
                                                                                                                                
6:15:53 PM                                                                                                                    
                                                                                                                                
Vice-Chair Fairclough  asked if  the bill  allowed a  fee in                                                                    
addition  to what  the state  would pay  for the  individual                                                                    
organization.                                                                                                                   
                                                                                                                                
Senator  Giessel replied  no,  the bill  had  no mandate  or                                                                    
comment related to  a fee. She stated that  the public would                                                                    
be more  inclined to  choose the  service if  a fee  was not                                                                    
incurred.  A  fee  for administrative  costs  was  currently                                                                    
charged. She was  unsure about the charge  of the additional                                                                    
fee; the question  would be answered by  the private sector.                                                                    
She imagined that fees would  decrease if the private sector                                                                    
was able to retain 15 percent to cover overhead.                                                                                
                                                                                                                                
6:17:00 PM                                                                                                                    
                                                                                                                                
Vice-Chair Fairclough  wished to  ensure that  the consumers                                                                    
benefited  from  the  credit   offered  by  the  state.  She                                                                    
supported  the bill  and its  concept. She  asked about  the                                                                    
fees  collected   from  municipalities   for  administrative                                                                    
overhead.                                                                                                                       
                                                                                                                                
Mr. Wolfe  replied 8  percent was  collected as  a municipal                                                                    
tax.                                                                                                                            
                                                                                                                                
Senator  Giessel  clarified  that  DMV  collected  municipal                                                                    
taxes  and  retained  8 percent.  A  similar  situation  was                                                                    
proposed in  the legislation via  the business  partners and                                                                    
DMV.                                                                                                                            
                                                                                                                                
Vice-Chair  Fairclough wondered  about the  15 percent  cost                                                                    
recovery  plus  the  fee to  consumers.  She  mentioned  the                                                                    
fiscal note  and the cost  of approximately $2  million. She                                                                    
wished to  understand the investment in  the private sector.                                                                    
She  pointed out  that  the  businesses received  additional                                                                    
benefit  from  providing  the  service  in  the  convenience                                                                    
offered to their customers.                                                                                                     
                                                                                                                                
Senator  Giessel discussed  that  private business  partners                                                                    
utilized the  license tag, collected  the municipal  tax and                                                                    
presented the  money to  DMV. The  division then  retained 8                                                                    
percent of the  municipal tax forwarded on.  She stated that                                                                    
DMV did  not sell the tag,  yet retained the 8  percent as a                                                                    
middle-man.                                                                                                                     
                                                                                                                                
6:20:07 PM                                                                                                                    
                                                                                                                                
AMY   ERICKSON,  DIRECTOR,   DIVISION  OF   MOTOR  VEHICLES,                                                                    
DEPARTMENT    OF   ADMINISTRATION    (via   teleconference),                                                                    
discussed the  business partnerships related to  license and                                                                    
title registration  transactions since the early  2000s. The                                                                    
partnerships  were comprised  of  DMV services  storefronts,                                                                    
car and  snow machine dealerships, credit  unions and banks;                                                                    
all of  which were eligible to  collect up to 15  percent of                                                                    
DMV  proceeds if  the legislation  was  enacted. She  stated                                                                    
that DMV provided  the supplies needed to  conduct title and                                                                    
registration  transactions including  license plates,  month                                                                    
and year tabs,  forms, commercial, noncommercial, motorcycle                                                                    
driver manuals and handicap placards, all free of charge.                                                                       
                                                                                                                                
Ms.  Erickson  mentioned that  the  DMV  also provided  free                                                                    
training  and  free access  to  its  database. The  business                                                                    
partners charged  fees for services that  were not regulated                                                                    
or disclosed to  the division. She stated  that the business                                                                    
partners  comprised   approximately  26  percent   of  DMV's                                                                    
revenues;  the  businesses  did not  function  autonomously.                                                                    
Each DMV had three  separate components for completion prior                                                                    
to   close-out.  The   initial   transaction  included   the                                                                    
collection of fees;  the second included an  audit to verify                                                                    
receipt of  all required information. The  third transaction                                                                    
included  the reconciliation  process,  which verified  that                                                                    
all monies were received and placed into fee codes.                                                                             
                                                                                                                                
Ms.  Erickson explained  that DMV  had a  seven-person staff                                                                    
dedicated  to  supporting  the everyday  operations  of  the                                                                    
business   partners.  The   staff  spent   hours  reviewing,                                                                    
approving and correcting documents.  When errors were found,                                                                    
the  division  used  its  resources  to  resolve  them.  The                                                                    
business partners  were paid regardless  of the  accuracy of                                                                    
their transactions.                                                                                                             
                                                                                                                                
Ms. Ericson pointed to the  fiscal note. She stated that the                                                                    
division  presented  a less  expensive  note  in the  Senate                                                                    
State Affairs Committee. Initially  it was believed that the                                                                    
bill  applied to  the eleven  business  partners serving  as                                                                    
storefronts  for the  services, but  the legislation  indeed                                                                    
extended to the auto  dealerships and financial institutions                                                                    
leading to  the revenue loss  shown in the fiscal  note. She                                                                    
mentioned the  idea of modeling  the fish and game  fees who                                                                    
was prohibited from adding a  service fee. The fees obtained                                                                    
by  the Department  of Fish  and  Game were  from the  state                                                                    
alone, which was  5 percent for the fee or  25 cents for the                                                                    
license,  whichever   were  greater.  The   department  also                                                                    
received compensation  of $50  per year  or $1  per license,                                                                    
whichever was greater.                                                                                                          
                                                                                                                                
6:22:55 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer asked if the division supported the bill.                                                                        
                                                                                                                                
Ms.  Erickson   replied  that  the  administration   had  no                                                                    
position  on the  bill. She  expressed  her availability  to                                                                    
answer questions.                                                                                                               
                                                                                                                                
Co-Chair Meyer asked if the  satellite offices were an asset                                                                    
or a hindrance.                                                                                                                 
                                                                                                                                
Ms. Erickson  replied the satellite  offices were  mostly an                                                                    
asset. She highlighted the  convenience provided to Alaskans                                                                    
related to location and volume.  She noted that lines at the                                                                    
DMV   offices  would   be  longer   without  the   satellite                                                                    
operations.                                                                                                                     
                                                                                                                                
Co-Chair Meyer  clarified that  the satellite  offices saved                                                                    
the  division  money,  time  and  staff  while  providing  a                                                                    
convenience to Alaskans.                                                                                                        
                                                                                                                                
Ms. Erickson agreed.                                                                                                            
                                                                                                                                
Co-Chair  Meyer appreciated  that  one  DMV office  remained                                                                    
open until six o'clock in Anchorage.                                                                                            
                                                                                                                                
Ms. Erickson stated  that two additional DMV  offices in the                                                                    
Anchorage area were also open until six o'clock.                                                                                
                                                                                                                                
6:24:38 PM                                                                                                                    
                                                                                                                                
Vice-Chair Fairclough  understood that no  incentive existed                                                                    
for accuracy on the part of the businesses.                                                                                     
                                                                                                                                
Ms. Erickson replied that more  frequent errors were made by                                                                    
the businesses partners than by the DMV employees.                                                                              
                                                                                                                                
Vice-Chair   Fairclough   asked   if   the   partners   were                                                                    
cooperative with the division.                                                                                                  
                                                                                                                                
Ms. Erickson  replied that the  division had  the obligation                                                                    
to fix the errors. She  mentioned one problematic error made                                                                    
by a  satellite business that  landed in the  Alaska Supreme                                                                    
Court.                                                                                                                          
                                                                                                                                
6:25:42 PM                                                                                                                    
                                                                                                                                
Senator Bishop  requested a written  copy of  her testimony.                                                                    
He asked if  any of the satellite providers  were located in                                                                    
rural Alaska.                                                                                                                   
                                                                                                                                
Ms.  Erickson replied  that Kenai  and North  Pole were  the                                                                    
most rural locations.                                                                                                           
                                                                                                                                
Senator Bishop pointed out that  the Tok DMV office remained                                                                    
open until 9:00 pm in the summer.                                                                                               
                                                                                                                                
6:26:30 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer  asked if Ms. Erickson  would provide written                                                                    
testimony to Senator Bishop.                                                                                                    
                                                                                                                                
Ms. Erickson agreed.                                                                                                            
                                                                                                                                
6:26:50 PM                                                                                                                    
                                                                                                                                
TIM TOTH,  VICE PRESIDENT, ALASKA AUTO  DEALERS ASSOCIATION,                                                                    
ANCHORAGE  (via  teleconference)  testified about  the  auto                                                                    
industry's part  in the  proposed legislation.  He discussed                                                                    
the  expense  of   the  bill.  He  noted   that  the  larger                                                                    
dealerships  required  additional  employees  for  full-time                                                                    
efforts  related  to  DMV  services. He  was  unaware  of  a                                                                    
franchised dealer  charging extra fees to  the customer. The                                                                    
dealer  absorbed   all  labor  costs  associated   with  the                                                                    
service.  He  noted  that  DMV provided  one  week  of  free                                                                    
training  for  the  dealerships.  He  noted  the  difficulty                                                                    
filling  the  positions in  his  office.  Some dealers  were                                                                    
unable  to  handle the  volume  in  their offices  and  were                                                                    
forced  to  hire  storefront DMV  units  for  an  additional                                                                    
charge.  Some   dealerships  processed  3000  to   6000  DMV                                                                    
transactions  per year  at an  annual cost  of approximately                                                                    
$75,000.                                                                                                                        
                                                                                                                                
6:30:29 PM                                                                                                                    
                                                                                                                                
Vice-Chair Fairclough  asked if Mr.  Toth had access  to DMV                                                                    
records.                                                                                                                        
                                                                                                                                
Mr.  Toth replied  that he  logged into  the DMV  website to                                                                    
access their  records. He stated that  the employee training                                                                    
was offered at a DMV office.                                                                                                    
                                                                                                                                
6:31:06 PM                                                                                                                    
                                                                                                                                
TROY  JARVIS,  ALASKA  AUTO DEALERS  ASSOCIATION,  ANCHORAGE                                                                    
(via  teleconference)  testified  that the  service  at  DMV                                                                    
offices was  poor 12  years ago  when the  division proposed                                                                    
the idea of  partnerships with the dealers.   He stated that                                                                    
his  business  agreed  to  partner   with  the  division  to                                                                    
increase customer service for  both the dealer customers and                                                                    
the  retail customers.  He stated  that  the process  worked                                                                    
well  for  10 years  at  no  expense  to the  state.  Dealer                                                                    
expenses  had risen  while margins  decreased over  the last                                                                    
five years.  He suggested that the  state had responsibility                                                                    
to  help  the businesses  offset  expenses.  He provided  an                                                                    
example  of a  business's  payroll expenses  related to  DMV                                                                    
services.                                                                                                                       
                                                                                                                                
6:34:09 PM                                                                                                                    
                                                                                                                                
MELISSA  CUCULLU,  ALASKA  TAGS  AND  TITLES,  WASILLA  (via                                                                    
teleconference), testified that  11 privately owned business                                                                    
partners  in   Alaska  during  the  2012-2013   fiscal  year                                                                    
processed  an excess  of 193,000  transactions on  behalf of                                                                    
the DMV.  She stated  that the  private sector  provided the                                                                    
staffing,   facilities,  required   technology  and   office                                                                    
supplies   to  process   the  transactions   that  generated                                                                    
millions of  dollars in  revenue for  the state.  She stated                                                                    
that  the legislation  would allow  Alaskan-owned businesses                                                                    
to hire additional employees and  provide extended hours for                                                                    
the creation  of greater options for  Alaskan residents. She                                                                    
stressed that  SB 127  addressed the  issue of  fairness for                                                                    
Alaskan residents, the private sector and state government.                                                                     
                                                                                                                                
6:35:33 PM                                                                                                                    
                                                                                                                                
AVES THOMPSON,  ALASKA TRUCKING ASSOCIATION,  ANCHORAGE (via                                                                    
teleconference),  testified in  support of  the legislation.                                                                    
He stated that his  association was a statewide organization                                                                    
representing  the  interests  of  approximately  200  member                                                                    
companies   from  Barrow   to  Ketchikan.   The  association                                                                    
operated  as  a  DMV  business partner  issuing  titles  and                                                                    
registrations along  with additional DMV services.  He noted                                                                    
that his association provided the  services to their members                                                                    
and  to  members  of the  general  public.  The  association                                                                    
members benefitted from the partnership  in time and savings                                                                    
and   convenience.  The   general   public  shared   similar                                                                    
benefits. He  noted that the  association charged  a service                                                                    
fee for each  transaction. He pointed out  that the business                                                                    
partners were contractually obligated  to post their service                                                                    
fees for  customer awareness. He  stated that the  fees were                                                                    
also disclosed  to DMV  and had  been requested  recently by                                                                    
the division.                                                                                                                   
                                                                                                                                
Mr.   Thompson   discussed   the  expenses   incurred   when                                                                    
conducting  DMV  business  including bank  and  credit  card                                                                    
fees.  Compensation for  services  became an  issue for  the                                                                    
association as  business increased. He noted  that the costs                                                                    
increased  and the  association processed  more than  11,000                                                                    
transactions in 2013 generating  revenue of $1.6 million for                                                                    
the state. He noted that  local taxes were passed through to                                                                    
DMV; the  association therefore  generated revenue  for both                                                                    
the  state  and  municipalities.   He  calculated  that  the                                                                    
association generated  approximately $1.1 million in  in fee                                                                    
revenue for DMV. He stated  that Alaskans would benefit from                                                                    
the  proposed  legislation.  He  believed  that  the  amount                                                                    
proposed in the fiscal note would  not cover the cost of DMV                                                                    
operations in the absence of the business partnerships.                                                                         
                                                                                                                                
6:39:23 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer asked about the  higher rate of errors in the                                                                    
satellite offices.                                                                                                              
                                                                                                                                
Mr. Thompson  replied that  a few  errors were  committed by                                                                    
the association, but he felt  that the error rate was within                                                                    
acceptable  limits. He  mentioned a  couple of  incidents of                                                                    
more  serious  errors,  but the  contractual  obligation  to                                                                    
cooperate  with   DMV  regarding  the  errors   allowed  the                                                                    
association to take responsibility.                                                                                             
                                                                                                                                
Co-Chair Meyer CLOSED public testimony.                                                                                         
                                                                                                                                
6:41:03 PM                                                                                                                    
                                                                                                                                
Senator Bishop  referred to the sponsor  statement. He noted                                                                    
personal use of a satellite  office for DMV services, but he                                                                    
wondered  if a  driver's license  could be  obtained through                                                                    
the business partnership.                                                                                                       
                                                                                                                                
Mr. Wolfe replied no.                                                                                                           
                                                                                                                                
Senator Bishop  asked if the  statement referred  to license                                                                    
plates.                                                                                                                         
                                                                                                                                
Mr. Wolfe answered in the affirmative.                                                                                          
                                                                                                                                
6:42:06 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer  understood that  the satellite  offices were                                                                    
an asset  to the division.  He asked  if the error  rate was                                                                    
within acceptable limits.                                                                                                       
                                                                                                                                
Ms.  Erickson responded  that the  division worked  directly                                                                    
with those  businesses operating  outside of  the acceptable                                                                    
error  limit.  She  stated  that  the  case  of  the  Alaska                                                                    
Trucking Association  led to a voluntary  discontinuation of                                                                    
some of the services offered  by the business for DMV. Those                                                                    
transactions were  often prone  to errors. She  credited the                                                                    
association  for making  the wise  decision. She  noted that                                                                    
the  quicker  transactions  involved  vehicle  renewals  and                                                                    
straight title transactions.  Complex transactions were best                                                                    
left to the experts at DMV offices.                                                                                             
                                                                                                                                
Co-Chair Meyer asked about the fiscal note.                                                                                     
                                                                                                                                
Ms. Erickson had  no further comments related  to the fiscal                                                                    
note.                                                                                                                           
                                                                                                                                
Co-Chair  Meyer  asked if  the  new  amount was  the  $1.979                                                                    
million.                                                                                                                        
                                                                                                                                
Ms.  Erickson spoke  to the  motor vehicle  registration tax                                                                    
collected  by the  division. She  stated  that the  division                                                                    
allowed for  the collection of  the municipal tax.  When the                                                                    
registration  renewal notices  were sent  to Alaskans,  they                                                                    
came  in  to  renew  registration  and  the  collection  was                                                                    
provided to  the municipality.  She did  not agree  with the                                                                    
proposal that  the business partners would  retain 8 percent                                                                    
because  they would  not distribute  the  tax, the  division                                                                    
would.                                                                                                                          
                                                                                                                                
6:44:39 PM                                                                                                                    
                                                                                                                                
Senator Giessel agreed that the  8 percent was collected and                                                                    
passed to the municipality;  the business partners would not                                                                    
retain the money. She appreciated  the gravity of the fiscal                                                                    
note. She  stated that  32 employees  would be  necessary to                                                                    
replace  the private  business  partnership  efforts in  the                                                                    
division,  which  was  calculated  at  approximately  $1.976                                                                    
million annually.  She mentioned that she  interacted with a                                                                    
constituent in Cooper Landing related to a misspelled name.                                                                     
                                                                                                                                
Co-Chair Meyer agreed  that the bill could  be classified as                                                                    
cost-neutral.                                                                                                                   
                                                                                                                                
Vice-Chair  Fairclough  MOVED  to   REPORT  SB  127  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal note.                                                                                                       
                                                                                                                                
SB 127 was REPORTED out of committee with a "do pass"                                                                           
recommendation and with one new fiscal note from Department                                                                     
of Administration.                                                                                                              
                                                                                                                                
SB 169 was SCHEDULED but not HEARD.                                                                                             
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
6:51:31 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 6:48 p.m.                                                                                          
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects
Historical Roster of AJC members.pdf SFIN 3/3/2014 5:00:00 PM
SJR 21
SJR 21 - Judicial Merit Selection Charts.pdf SFIN 3/3/2014 5:00:00 PM
SJR 21
SJR 21 - Judicial Selection Map.pdf SFIN 3/3/2014 5:00:00 PM
SJR 21
SJR 21 - Kathleen Miller's Letter to Legislature re AJC 2-20-14.pdf SFIN 3/3/2014 5:00:00 PM
SJR 21
SJR 21 AJC. BYLAWS.pdf SFIN 3/3/2014 5:00:00 PM
SJR 21
SJR 21 ARTICLE.IV.pdf SFIN 3/3/2014 5:00:00 PM
SJR 21
SJR 21 Sponsor Statement.pdf SFIN 3/3/2014 5:00:00 PM
SJR 21
SB 127 Explanation of Changes.pdf SFIN 3/3/2014 5:00:00 PM
SB 127
SB 127 Sponsor Statement.pdf SFIN 3/3/2014 5:00:00 PM
SB 127
CSSB 169HSS Sectional Analysis.pdf SFIN 3/3/2014 5:00:00 PM
SB 169
SB 169 changes vsn O to Y.pdf SFIN 3/3/2014 5:00:00 PM
SB 169
SB 169 Historic vaccine photo.pdf SFIN 3/3/2014 5:00:00 PM
SB 169
SB 169 Support all.pdf SFIN 3/3/2014 5:00:00 PM
SB 169
SB169 FAQ.pdf SFIN 3/3/2014 5:00:00 PM
SB 169
SB169 Sponsor Statement FIN.pdf SFIN 3/3/2014 5:00:00 PM
SB 169
SB169 Vaccines In AK short vsn (2).pptx SFIN 3/3/2014 5:00:00 PM
SB 169
SJR 21 - Summary of Changes.pdf SFIN 3/3/2014 5:00:00 PM
SJR 21
SJR 21 TESTIMONY OF DAVID JENSEN.pdf SFIN 3/3/2014 5:00:00 PM
SJR 21
SB 169 Historic vaccine photo.pdf SFIN 3/3/2014 5:00:00 PM
SB 169
SB169CS(HSS)-DHSS-EPI-02-27-14.pdf SFIN 3/3/2014 5:00:00 PM
SB 169
SB169CS(HSS)-DHSS-HCMS-02-27-14.pdf SFIN 3/3/2014 5:00:00 PM
SB 169
SB169CS(HSS)-DHSS-VAA-02-27-14.pdf SFIN 3/3/2014 5:00:00 PM
SB 169
SJR 21 Kreitzer support .docx SFIN 3/3/2014 5:00:00 PM
SJR 21
SJR21 AK Judicial Council Members-voting info.- duties.pdf SFIN 3/3/2014 5:00:00 PM
SJR 21
SB127-DOA-DMV-02-18-2014.pdf SFIN 3/3/2014 5:00:00 PM
SB 127
SJR21 AFN Resolution.pdf SFIN 3/3/2014 5:00:00 PM
SJR 21
SJR21 AK Judicial Council Voting Stats..pdf SFIN 3/3/2014 5:00:00 PM
SJR 21
SB 169 Support Cmmsn Aging.pdf SFIN 3/3/2014 5:00:00 PM
SB 169
SB169 AK_BIO PhRMA Testimony SB 169 Mar2014 v2.docx SFIN 3/3/2014 5:00:00 PM
SB 169
SJR021CS(JUD)-AJC-2-28-14.pdf SFIN 3/3/2014 5:00:00 PM
SJR 21
SJR 21 opposition - Bundy.pdf SFIN 3/3/2014 5:00:00 PM
SJR 21