Legislature(2001 - 2002)

04/23/2002 03:45 PM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
          HB 344-INCREASE DRIVER'S LICENSE/PERMIT FEES                                                                      
MS. SYLVESTER said  that HB 344 was introduced by  the House Rules                                                              
Committee at the request of the Division  of Motor Vehicles (DMV).                                                              
HB 344 increases  the fees for  drivers' licenses and ID  cards by                                                              
$5.00  and  learners'  permits  by  $10.00.    It  allows  DMV  to                                                              
implement  a conversion  to a digital  drivers' licensing  system.                                                              
Examples of  what a drivers' license  might look like were  in the                                                              
packets.   She pointed  out that the  information on  the drivers'                                                              
licenses is  stipulated in  statute and this  bill would  not have                                                              
any impact on that.  The back of  the license would have a barcode                                                              
that would allow the police to scan  and protect the licensee from                                                              
having their private details broadcast.                                                                                         
She said the  fee increase would  go into the General Fund  and is                                                              
expected to increase  revenues by $750,000 to $900,000.   The cost                                                              
of implementing the  conversion is expected to  be $500,000, which                                                              
is for the computer  systems only.  DMV already has  the funds for                                                              
the equipment.                                                                                                                  
She said  that Alaska is one  of the three remaining  states still                                                              
using  the  old  Polaroid  personal  identification  system.    By                                                              
converting,  Alaska  will  step  up  its  efforts  to  ensure  the                                                              
integrity  of  this  nation's  individual  identification  system.                                                              
Since September  11, there  has been focus  on the need  to harden                                                              
the drivers'  license  system as  a security measure.   There  was                                                              
discussion about  switching to  a national identification  system,                                                              
but that idea was  abandoned.  However, there is  still a need for                                                              
increased security  and Alaska's  identification system is  a weak                                                              
point.   She explained  that  the ID card  is considered  to  be a                                                              
"breeder  document," which  can be parlayed  into other  documents                                                              
such as  airline tickets,  passports, checking accounts,  firearms                                                              
permits,  credit  cards,  etc.     The  drivers'  license  is  the                                                              
cornerstone of  the identity theft  phenomenon, which  resulted in                                                              
$7 billion in losses last year.                                                                                                 
She  said another  problem  with the  current  system is  underage                                                              
individuals obtaining  or manufacturing fraudulent  identification                                                              
cards.    The  packet  contains   resolutions  and  comments  from                                                              
restricted  sales individuals  who support  the conversion  of the                                                              
MS. SYLVESTER  explained that  the drivers'  license has  become a                                                              
critical component  in our society's  security, both  personal and                                                              
financial.   The State  of Alaska has  a responsibility  to ensure                                                              
the integrity  of that system.   Yet there  is a lot  of anecdotal                                                              
information   about   how   the  identification   cards   can   be                                                              
fraudulently obtained.   DMV doesn't  have the ability to  pull up                                                              
photographs.    Someone  can easily  steal  your  Social  Security                                                              
Number  or  mail and  go  into the  DMV  and  if they  match  your                                                              
biometric data,  they can walk out  with your identification.   If                                                              
you travel  and you lose  your license or  have it stolen,  DMV is                                                              
also  unable  to  replace  your   lost  identification  with  your                                                              
photograph.   This makes it very  difficult to get back  to Alaska                                                              
without one of  the only proofs that the airline  will consider as                                                              
an identification form.                                                                                                         
She said Polaroid  is in Chapter 11 bankruptcy and  has sold their                                                              
personal  identification business  to a  company called  Digimark,                                                              
who will only supply  Alaska with film until the  end of the year.                                                              
The other two states that still use  the Polaroid system, Oklahoma                                                              
and Rhode Island, have already put  out RFP's for digital systems.                                                              
This will  also impair  Alaska's ability  to get  commercial-grade                                                              
Polaroid film.   She said that when digital cameras  came onto the                                                              
market,  it was  the  death knell  of  the old  Polaroid  drivers'                                                              
license system.                                                                                                                 
CHAIRMAN THERRIAULT asked Mary Marshburn to speak.                                                                              
MS. MARY  MARSHBURN, Director of  DMV, said that when  DMV started                                                              
pursuing  a  digital  system, there  were  seven  "photo  states,"                                                              
meaning states that  still use the instant photograph  process. At                                                              
the  beginning  of  the  session, there  were  only  three  "photo                                                              
states."  Now Alaska is the only  state without even a RFP out for                                                              
services for a digital licensing system.                                                                                        
She  said  the  current  system  is  a  manual  process;  it  uses                                                              
preprinted  forms, instant  photographs and  a laminated  security                                                              
pouch.  It  is subject to  theft, fraud and alteration.   Security                                                              
is  the  biggest advantage  to  a  digital  system.   It  is  more                                                              
difficult  to  alter   or  replicate  because  it   does  not  use                                                              
preprinted forms  or pouches or  instant photos.   The information                                                              
is computer generated and fused onto  a chip.  Computer generation                                                              
and  flexibility  enables  DMV  to place  more  and  more  complex                                                              
security features into the license.   The photo can be stored on a                                                              
server, which  allows DMV  personnel to access  it to  verify your                                                              
identity the next time you need a license or when you travel.                                                                   
MS. MARSHBURN  said the biggest  benefactor of a  conversion would                                                              
be law enforcement. HB 344 enjoys  the support of law enforcement,                                                              
including  the  Alaska  State Troopers  and  the  Municipality  of                                                              
Anchorage Police  Department, which is computerizing  its cars and                                                              
are looking  forward to the change.   Alcohol and  tobacco sellers                                                              
are also in support  of HB 344 because a new system  can help them                                                              
with their underage problem.                                                                                                    
CHAIRMAN  THERRIAULT asked  if  people regularly  came  up to  the                                                              
counter at DMV to commit license fraud and alteration.                                                                          
MS. MARSHBURN said  that in the past four months  in one Anchorage                                                              
office alone they have had five arrests.                                                                                        
CHAIRMAN THERRIAULT  asked if there  would be an embedded  chip or                                                              
just a barcode.                                                                                                                 
MS. MARSHBURN  said that  although the disc  upon which  the image                                                              
and license data is fused is referred  to as a "chip," it is not a                                                              
"chip" as we think of a computer chip.                                                                                          
CHAIRMAN  THERRIAULT  asked  whether  the  barcode  contained  the                                                              
information  or if  it  contained the  license  number that  would                                                              
access the information through the computer system.                                                                             
MS.  MARSHBURN asked  if  he was  looking at  the  example in  the                                                              
CHAIRMAN THERRIAULT said yes.                                                                                                   
MS.  MARSHBURN said  that the  barcode  would contain  all of  the                                                              
information  required  by law,  such  as  name, address,  date  of                                                              
birth,  sex,  hair,  eyes  and  weight,  along  with  any  driving                                                              
restrictions, but not the Social Security Number.                                                                               
CHAIRMAN  THERRIAULT   pointed  out  that  the   underage  license                                                              
examples  in the packet  were laid  out vertically.   He  asked if                                                              
this was the intention of DMV to do this.                                                                                       
MS.  MARSHBURN  said she  was  excited  to  have the  licenses  be                                                              
formatted that  way.  DMV  wants to keep  the adult licenses  in a                                                              
horizontal format and the underage  licenses in a vertical format.                                                              
It helps everyone  who has to deal with the age  group.  She noted                                                              
that the  vertical license  says "under 21  until" along  the top.                                                              
With the  current system, the  alcohol or tobacco  salesperson has                                                              
to look  at the  birth date and  calculate the  age, which  can be                                                              
difficult and time  consuming.  Using the "under  21 until" system                                                              
would be much easier for them.                                                                                                  
CHAIRMAN THERRIAULT  asked if there  were other questions  for Ms.                                                              
Marshburn from the  committee members.  He asked  if Del Smith had                                                              
comments or if he was just there to answer questions.                                                                           
DEPUTY COMMISSIONER  DEL SMITH, Department of Public  Safety, said                                                              
he was there to answer questions.                                                                                               
SENATOR PHILLIPS  asked if  Social Security  Numbers were  off the                                                              
drivers' license now.                                                                                                           
MS. MARSHBURN  said they were.   As of last year,  Social Security                                                              
Numbers were  not allowed  on the face  of the drivers'  licenses,                                                              
nor would they be in the barcode.                                                                                               
CHAIRMAN  THERRIAULT pointed  out  that the  increased fees  would                                                              
cause  increased  revenues  of $900,000  and  the  contractual  IT                                                              
system cost would be $500,000 the first year.                                                                                   
SENATOR   PHILLIPS  asked   Ms.  Marshburn   if  DMV  would   take                                                              
responsibility for the fees being  raised and not tell complaining                                                              
customers that the Legislature did this.                                                                                        
MS. MARSHBURN  said yes.   The fees are  equal to $1.00  per year,                                                              
and they  were last raised  eleven years ago.   She has  no qualms                                                              
saying it is well worth it.                                                                                                     
SENATOR  PHILLIPS said  he'd been  through this  before where  the                                                              
employees said the Legislature did it.                                                                                          
MS. MARSHBURN promised that wouldn't happen.                                                                                    
CHAIRMAN THERRIAULT asked if there  was anyone else that wished to                                                              
testify on HB 344.  There was no  one.  He asked if there were any                                                              
amendments from committee members.                                                                                              
SENATOR  BETTYE DAVIS  moved  to pass  CS HB  334  (STA) from  the                                                              
committee  with individual  recommendations  and the  accompanying                                                              
fiscal note.                                                                                                                    
CHAIRMAN THERRIAULT asked if there were any objections.                                                                         
CSHB 334(STA) moved  from committee with attached  fiscal note and                                                              
individual recommendations.                                                                                                     

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