Legislature(2021 - 2022)BARNES 124

04/13/2021 08:00 AM House COMMUNITY & REGIONAL AFFAIRS

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                    ALASKA STATE LEGISLATURE                                                                                  
    HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE                                                                   
                         April 13, 2021                                                                                         
                           8:02 a.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Representative Sara Hannan, Co-Chair                                                                                            
Representative Calvin Schrage, Co-Chair                                                                                         
Representative Josiah Patkotak, Vice Chair                                                                                      
Representative Harriet Drummond                                                                                                 
Representative Mike Prax                                                                                                        
Representative Ken McCarty                                                                                                      
Representative Kevin McCabe                                                                                                     
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                            
HOUSE BILL NO. 163                                                                                                              
"An Act relating to vehicle title applications."                                                                                
     - HEARD & HELD                                                                                                             
HOUSE BILL NO. 137                                                                                                              
"An Act requiring the Department of Administration to maintain                                                                  
and operate certain offices that provide services related to                                                                    
motor vehicles; and providing for an effective date."                                                                           
     - HEARD & HELD                                                                                                             
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: HB 163                                                                                                                  
SHORT TITLE: FORM OF SIGNATURE ON VEHICLE TITLE                                                                                 
SPONSOR(s): REPRESENTATIVE(s) SCHRAGE                                                                                           
04/05/21       (H)       READ THE FIRST TIME - REFERRALS                                                                        
04/05/21       (H)       CRA, STA                                                                                               
04/13/21       (H)       CRA AT 8:00 AM BARNES 124                                                                              
BILL: HB 137                                                                                                                  
SHORT TITLE: MOTOR VEHICLE OFFICES                                                                                              
SPONSOR(s): REPRESENTATIVE(s) FIELDS                                                                                            
03/17/21       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/17/21       (H)       STA, CRA                                                                                               
03/30/21       (H)       STA AT 3:00 PM GRUENBERG 120                                                                           
03/30/21       (H)       Heard & Held                                                                                           
03/30/21       (H)       MINUTE(STA)                                                                                            
04/06/21       (H)       STA AT 3:00 PM GRUENBERG 120                                                                           
04/06/21       (H)       Moved CSHB 137(STA) Out of Committee                                                                   
04/06/21       (H)       MINUTE(STA)                                                                                            
04/07/21       (H)       STA RPT CS(STA) NT 2DP 2DNP 2NR                                                                        
04/07/21       (H)       DP: CLAMAN, STORY                                                                                      
04/07/21       (H)       DNP: KAUFMAN, EASTMAN                                                                                  
04/07/21       (H)       NR: TARR, KREISS-TOMKINS                                                                               
04/13/21       (H)       CRA AT 8:00 AM BARNES 124                                                                              
WITNESS REGISTER                                                                                                              
LAUREN MACVAY, President/CEO                                                                                                    
True North Federal Credit Union                                                                                                 
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified during the hearing on HB 163.                                                                  
JEFFREY SCHMITZ, Director                                                                                                       
Division of Motor Vehicles                                                                                                      
Department of Administration                                                                                                    
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified during the hearing on HB 163 and                                                               
answered questions during the hearing on HB 137.                                                                                
REPRESENTATIVE ZACK FIELDS                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  As prime sponsor, presented HB 137 with the                                                              
aid of a PowerPoint presentation.                                                                                               
SABRINA JAVIER, Fiscal Analyst                                                                                                  
Legislative Finance Division                                                                                                    
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions during the hearing on HB
TRISTAN WALSH, Staff                                                                                                            
Representative Zack Fields                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Provided information during the hearing on                                                               
HB 137 on behalf of Representative Fields, prime sponsor.                                                                       
PETER ZUYUS, Executive Director                                                                                                 
Seniors of Alaska                                                                                                               
Homer, Alaska                                                                                                                   
POSITION STATEMENT:  Testified in support of HB 137.                                                                          
NONA SAFRA                                                                                                                      
Homer, Alaska                                                                                                                   
POSITION STATEMENT:  Testified in support of HB 137.                                                                          
JOE MICHEL, Executive Director                                                                                                  
Alaska Trucking Association                                                                                                     
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified during the hearing on HB 137.                                                                  
ACTION NARRATIVE                                                                                                              
8:02:20 AM                                                                                                                    
CO-CHAIR  SARA HANNAN  called the  House  Community and  Regional                                                             
Affairs  Standing  Committee  meeting   to  order  at  8:02  a.m.                                                               
Representatives McCarty,  McCabe, Drummond, Schrage,  and Hammond                                                               
were present at the call  to order.  Representatives Patkotak and                                                               
Prax arrived as the meeting was in progress.                                                                                    
           HB 163-FORM OF SIGNATURE ON VEHICLE TITLE                                                                        
8:03:08 AM                                                                                                                    
CO-CHAIR HANNAN announced that the  first order of business would                                                               
be  HOUSE  BILL  NO.  163,  "An Act  relating  to  vehicle  title                                                               
8:03:40 AM                                                                                                                    
CO-CHAIR  SCHRAGE,   as  prime   sponsor,  offered   the  sponsor                                                               
statement   for  HB   163,  which   read  as   follows  [original                                                               
punctuation provided]:                                                                                                          
     House Bill  163 eliminates the current  requirement for                                                                    
     ink  signatures on  applications for  titles and  title                                                                    
     transfers within  the Department of Motor  Vehicles. HB
     163  gives  flexibility  to  the  DMV  to  begin  using                                                                    
     electronic signatures.  HB 163  does not force  the use                                                                    
     of electronic  signatures. AS 28.10.211(b)  states that                                                                    
     "applications  for  title  or transfer  of  title  must                                                                    
     contain the signature in ink  of the owner, or if there                                                                    
     is  more than  one owner,  the signature  in ink  of at                                                                    
     least  one of  the owners  and the  name of  each owner                                                                    
     stated in  the conjunctive  or in the  disjunctive." HB
     163 deletes  the words "in  ink" in both  places. Under                                                                    
     the  Uniform Electronic  Transactions Act  of 2004  (AS                                                                    
     09.80.010-09.80.195) electronic  signatures satisfy the                                                                    
     general  definition  of  a signature  unless  otherwise                                                                    
     prohibited.  Since   the  current   statute  explicitly                                                                    
     requires "ink"  signatures for title  applications, the                                                                    
     DMV cannot  accept electronic  signatures. HB  163 will                                                                    
     give  the  Department  the latitude  to  determine  for                                                                    
     itself if  it wants to accept  electronic signatures in                                                                    
     the cases  of title  transfers and  title applications.                                                                    
     Covid  has taught  us  that  electronic signatures  can                                                                    
     provide  extra convenience  to  Alaskans  in remote  or                                                                    
     rural  parts of  the  state and  can provide  long-term                                                                    
     efficiencies for the DMV.                                                                                                  
8:06:25 AM                                                                                                                    
LAUREN MACVAY,  President/CEO, True  North Federal  Credit Union,                                                               
stated that True  North Federal Credit Union tries  to make doing                                                               
business easier  for its members,  and [requiring a  signature in                                                               
ink  rather  than  electronically] is  problematic.    Electronic                                                               
capabilities have  been a boon,  especially during  the pandemic.                                                               
The impediment  to online  transactions has  been in  title work.                                                               
She predicted  the change proposed  under HB 163 would  result in                                                               
more  efficient services  with far  fewer delays  for the  credit                                                               
union's members.                                                                                                                
8:09:57 AM                                                                                                                    
JEFFREY   SCHMITZ,   Director,   Division  of   Motor   Vehicles,                                                               
Department  of Administration  (DOA),  stated that  HB 163  would                                                               
remove  an impediment  faced by  the Division  of Motor  Vehicles                                                               
(DMV) by  no longer requiring  signatures in  ink on titles.   He                                                               
said   the  proposed   bill  would   allow  the   DMV  to   begin                                                               
conversations  with banks,  car dealerships,  and other  entities                                                               
that deal  with titles to  change the way the  division addresses                                                               
titles.  He  noted there are other states in  the Union that have                                                               
implemented electronic  titling and  signatures.  All  the states                                                               
have  "caveats to  how it  currently  works," he  remarked.   For                                                               
example,  [the  use  of  electronic   titles]  is  only  for  new                                                               
vehicles.   In Arizona, the  [paperless] transaction can  be done                                                               
person to person.  Texas has a  good model, he said.  Mr. Schmitz                                                               
stated that  HB 163 would allow  Alaskans to "throw their  hat in                                                               
the  ring,  to  see how  this  would  work  and  vet this."    He                                                               
indicated there would be work needed  to define all the places in                                                               
statute that  describe [signature  certification].   He expressed                                                               
excitement about  this being  the beginning of  a change  and the                                                               
opportunity to assess  what this will cost and how  long it would                                                               
take to implement.                                                                                                              
8:13:44 AM                                                                                                                    
REPRESENTATIVE  MCCABE  noted  there  are  other  instances  when                                                               
people  must go  in person  to the  DMV, and  he questioned  what                                                               
would  happen  if all  transactions  were  changed to  electronic                                                               
MR. SCHMITZ  responded that that  is possible, but  cautioned not                                                               
to make  safety too much of  a convenience for patrons.   He said                                                               
there are certain  reasons for requiring drivers to  come in, for                                                               
example  to  get take  their  driver's  test.   Nevertheless,  he                                                               
acknowledged that many  of the systems within the  DMV are moving                                                               
toward electronic  measures, and he  said there is no  reason not                                                               
to  look  for  additional  efficiencies  while  making  safety  a                                                               
priority.  In response to a  follow-up question, he said he could                                                               
provide  the committee  with a  list of  other transactions  that                                                               
could be electronic  [if statute relating to  them were changed].                                                               
He relayed  that earlier in the  year, the DMV was  involved with                                                               
its "law  officers" to  determine where  in statute  changes were                                                               
needed,  and he  remarked that  mostly  it is  wherever the  word                                                               
"certificate" appears.   He said  "minor word-crafting"  would be                                                               
necessary   to   allow  patrons   to   interact   with  the   DMV                                                               
8:17:24 AM                                                                                                                    
CO-CHAIR  SCHRAGE characterized  HB 163  as a  step in  the right                                                               
direction toward  providing flexibility  to the  DMV, businesses,                                                               
and  consumers.   He  said  he would  look  for opportunities  to                                                               
[expand opportunities for online  transactions] and would like to                                                               
see the  list [of transactions  with DMV that require  patrons to                                                               
appear in person].                                                                                                              
8:17:48 AM                                                                                                                    
REPRESENTATIVE PRAX asked  Mr. Schmitz if he knew  why some other                                                               
states  allowing limited  electronic transactions  were "hesitant                                                               
to  just  let  everything  happen  on  line  with  an  electronic                                                               
MR.  SCHMITZ  answered  that  he   does  not  know  the  specific                                                               
restrictions  of  platforms being  built  in  other states.    He                                                               
talked  about having  interoperability  between all  states.   He                                                               
suggested budgets may  be limited in other states or  they may be                                                               
trying a pilot  program to ensure the system works  properly.  He                                                               
said the  idea of going  electronic has been discussed  since the                                                               
1990s, but  it is not until  the last few years  that states have                                                               
been  able to  implement the  standards involved.   He  mentioned                                                               
there  is  a  national  working   group,  with  which  Alaska  is                                                               
involved,  that is  establishing standards  for electronic  title                                                               
("e-title") solutions.                                                                                                          
REPRESENTATIVE   PRAX    suggested   that   the    concerns   are                                                               
administrative rather than concern for the security of titles.                                                                  
MR. SCHMITZ responded  yes.  He added that he  believes these are                                                               
first steps in "a phased approach."                                                                                             
8:21:33 AM                                                                                                                    
REPRESENTATIVE  MCCARTY asked  what the  DMV would  do to  ensure                                                               
that the  person signing electronically  is who he/she  claims to                                                               
CO-CHAIR SCHRAGE  pointed out  that currently  a person  can sign                                                               
electronically for a loan but not  for the title.  He pointed out                                                               
that  even a  signature written  by  someone in  person could  be                                                               
forged.  He  said HB 163 would bring the  signature from physical                                                               
to digital.                                                                                                                     
MR. SCHMITZ  indicated those  questions are  yet to  be answered,                                                               
but said  the perception  is that a  consumer to  consumer portal                                                               
would be  built.   He mentioned Venmo,  where money  is exchanged                                                               
electronically, and  he said there  are many models  available by                                                               
which   transparency    can   be   ensured    during   electronic                                                               
transactions.    He  said  there would  certainly  be  a  vetting                                                               
REPRESENTATIVE MCCARTY shared that he  is selling property and is                                                               
required  to provide  a notarized  signature  in ink.   He  again                                                               
expressed  concern that  Alaskans  are protected  from those  who                                                               
would attempt fraud.                                                                                                            
8:26:42 AM                                                                                                                    
MS.  MACVAY, in  response to  a  request from  the bill  sponsor,                                                               
talked about the  means by which True North  Federal Credit Union                                                               
keeps  its  members'  accounts   secure  when  utilizing  digital                                                               
transaction  methods.     She  mentioned   identity  verification                                                               
questions  and   comparison  of  driver's  license   photos  with                                                               
optically  captured images.    She  said artificial  intelligence                                                               
(AI) technology is involving rapidly.   She imparted that the law                                                               
that would  allow an electronic  notary went into  effect January                                                               
1,  2021, and  the infrastructure  to support  that law  is being                                                               
worked on to "catch up."                                                                                                        
8:28:12 AM                                                                                                                    
REPRESENTATIVE MCCABE asked Mr. Schmitz,  "How many 'PCNs' do you                                                               
think it'll save in the future?"                                                                                                
MR.  SCHMITZ  answered  that  is  difficult  to  say,  since  the                                                               
division is  just beginning to  determine how this will  work and                                                               
how it  will save  the department  money.  He  said not  having a                                                               
clerk  at  the  front  counter processing  paperwork  will  "save                                                               
time."   He mentioned backroom  auditing to ensure the  system is                                                               
working.  He  said the division would know more  after looking at                                                               
the business flow and process  and receiving feedback from all of                                                               
its stakeholders.  He indicated  that there could be cost-savings                                                               
long term  for the state  because there will be  fewer hardcopies                                                               
of documents made.                                                                                                              
8:30:39 AM                                                                                                                    
REPRESENTATIVE  DRUMMOND said,  "Be careful  what you  wish for."                                                               
She talked about  the Municipality of Anchorage  spending about a                                                               
year to  prepare for  vote by  mail ballots  and said  there were                                                               
about 62,000 ballots submitted by  mail.  She emphasized the work                                                               
involved and offered her understand  that the amount of fraud was                                                               
miniscule.  She  shared that she is refinancing  her mortgage and                                                               
has  been  told  most  all  of  the  transactions  will  be  done                                                               
electronically.   She said she  is glad  to see the  state moving                                                               
forward in increasing convenience to Alaska consumers.                                                                          
8:32:42 AM                                                                                                                    
CO-CHAIR HANNAN  asked whether the registration  of vehicles must                                                               
be done in person.                                                                                                              
MR. SCHMITZ answered no, it can be done electronically.                                                                         
CO-CHAIR  HANNAN mused  that she  had never  financed a  car; her                                                               
purchases have all  been title transfers in  parking lot, handing                                                               
over "a stack  of twenties."  She  mentioned getting registration                                                               
and  insurance can  be done  on  line and  said the  title "is  a                                                               
limiting gate."   She  reflected that there  would be  a solution                                                               
"not too far off."                                                                                                              
8:34:02 AM                                                                                                                    
CO-CHAIR  HANNAN  opened  public  testimony on  HB  163.    After                                                               
ascertaining that  there was  no one who  wished to  testify, she                                                               
closed public testimony.                                                                                                        
CO-CHAIR HANNAN announced that HB 163 was held over.                                                                            
8:35:32 AM                                                                                                                    
The committee took an at-ease from 8:35 a.m. to 8:36 a.m.                                                                       
                  HB 137-MOTOR VEHICLE OFFICES                                                                              
8:36:43 AM                                                                                                                    
CO-CHAIR HANNAN announced that the  final order of business would                                                               
be  HOUSE BILL  NO.  137,  "An Act  requiring  the Department  of                                                               
Administration  to  maintain  and operate  certain  offices  that                                                               
provide services related to motor  vehicles; and providing for an                                                               
effective date."  [Before the committee was CSHB 137(STA).]                                                                     
8:36:52 AM                                                                                                                    
REPRESENTATIVE ZACK  FIELDS, Alaska  State Legislature,  as prime                                                               
sponsor,  presented  HB  137,  with   the  aid  of  a  PowerPoint                                                               
presentation [hard  copy included in  the committee packet].   He                                                               
first  talked about  information shown  on slides  2-4.   He said                                                               
CSHB  137(STA) would  require  the  Department of  Administration                                                               
(DOA) to keep existing offices  of the Division of Motor Vehicles                                                               
(DMV) open  in communities of 850  people or more.   He indicated                                                               
that  although he  supports the  idea  of the  DMV exploring  new                                                               
areas that may benefit from a  new DMV office, that is beyond the                                                               
scope of  the proposed legislation.   He opined that  DMV offices                                                               
provide  a   critical  public  service  that   allows  commercial                                                               
transportation  throughout  the  state  by  providing  commercial                                                               
driver's licenses (CDLs).                                                                                                       
REPRESENTATIVE FIELDS  noted that  [as shown  on slide  5], there                                                               
are privatized offices contracted to  provide some but not all of                                                               
the  services available  through a  DMV  office, but  he said  he                                                               
wants to ensure all services  remain available in the communities                                                               
where   they  are   currently  offered,   not   only  in   larger                                                               
communities.   He  said this  is an  issue of  equity.   He named                                                               
services that  can be  provided only  via the  DMV:   issuance of                                                               
driver's licenses; renewal of driver's  licenses for seniors over                                                               
the age  of 69; and  issuance of CDLs.   While, in  theory, there                                                               
are  other  tests  that  can  be  done  by  privatized  or  other                                                               
providers,  it  can  be less  efficient  and  cost-effective  for                                                               
Alaska  consumers  than  getting  those services  through  a  DMV                                                               
8:40:10 AM                                                                                                                    
REPRESENTATIVE FIELDS  pointed to slide 6,  which illustrates the                                                               
long distances people in various  communities would have to drive                                                               
if their DMV  offices were closed.   As shown on slides  7 and 8,                                                               
he discussed the challenges of  driving certain routes in Alaska,                                                               
such as  the mountain  pass to  get out of  Valdez, which  can be                                                               
treacherous during  winter.  As covered  on slide 9, he  said not                                                               
everyone has access to Internet in  Alaska.  Slide 10 shows side-                                                               
by-side  comparisons of  the cost  of  services at  a DMV  office                                                               
versus  via a  private  provider, illustrating  that  it is  more                                                               
economical   to   purchase   these   services   from   the   DMV.                                                               
Representative  Fields  opined it  is  unfair  to take  away  the                                                               
ability of  Alaskans to  go to  a DMV  office, thus  doubling the                                                               
cost of services.                                                                                                               
8:43:28 AM                                                                                                                    
REPRESENTATIVE FIELDS, as shown on  slide 11, stated that the DMV                                                               
pays for itself through its fees.                                                                                               
8:44:50 AM                                                                                                                    
REPRESENTATIVE  PATKOTAK   asked  why   the  DMV   field  service                                                               
locations in downtown  Anchorage and in Nome were  shown on slide                                                               
11 as not available ("N/A") [in terms of revenue].                                                                              
REPRESENTATIVE FIELDS  deferred to Ms. Javier  of the Legislative                                                               
Finance Division.                                                                                                               
8:45:37 AM                                                                                                                    
SABRINA  JAVIER, Fiscal  Analyst,  Legislative Finance  Division,                                                               
explained that  that was  just information  that "would  not pull                                                               
up" when she ran an ad hoc report for the bill sponsor.                                                                         
8:46:08 AM                                                                                                                    
REPRESENTATIVE MCCABE  indicated he  had found  different results                                                               
on  the  numbers  when  including  the "PCNs."    He  offered  an                                                               
example.  He  said it appeared as though  the statistics provided                                                               
by the  bill sponsor  show the DMV  as "wildly  profitable" while                                                               
according to what he sees - "not so much."                                                                                      
REPRESENTATIVE  FIELDS  deferred  to  Ms. Javier  since  she  had                                                               
created the chart on slide 11.                                                                                                  
8:47:39 AM                                                                                                                    
CO-CHAIR HANNAN told Ms. Javier  that the committee would like to                                                               
know  what fiscal  year  the data  is from,  and  she noted  that                                                               
Representative McCabe had pulled PCN data from that data.                                                                       
8:47:52 AM                                                                                                                    
MS. JAVIER responded that when  Representative McCabe's staff had                                                               
requested this  data, she had  pulled the personal  services data                                                               
from  the  numbers.   She  offered  her understanding  that  what                                                               
Representative  McCabe had  received were  "just the  amounts for                                                               
personal services" and "not the entire picture."                                                                                
REPRESENTATIVE MCCABE  observed [the  three columns of  the chart                                                               
on slide  11] were:  "revenue,"  "expenditures and encumbrances,"                                                               
and "difference."   He  indicated that  when he  had asked  for a                                                               
personal  services   category,  it  resulted  in   a  significant                                                               
difference in  profit or  return.   He offered  his understanding                                                               
that the expenditures in the  Delta office equated to five people                                                               
making $20,000  or less a year,  and he said he  thinks something                                                               
is wrong with the numbers.                                                                                                      
CO-CHAIR  HANNAN  pointed  out  that  Representative  McCabe  was                                                               
asking questions based on data he  had received but which was not                                                               
in the committee's possession.                                                                                                  
MS. JAVIER, in response to  Co-Chair Hannan, recollected the data                                                               
she had procured  for the bill sponsor was from  fiscal year 2016                                                               
(FY 16) through FY 20.   She clarified that these numbers are not                                                               
concrete,  and  she could  get  more  concrete numbers  from  the                                                               
department.   She  clarified for  Representative McCabe  that the                                                               
numbers she  had given  him were only  for personal  services and                                                               
were not compared with the cost of revenues.                                                                                    
8:52:51 AM                                                                                                                    
REPRESENTATIVE  HANNAN   suggested  having  information   on  the                                                               
record.   She  asked  whether the  category  of expenditures  and                                                               
encumbrances,  on the  slide provided  by Representative  Fields,                                                               
would include personal services.                                                                                                
8:54:22 AM                                                                                                                    
The committee took a brief at-ease at 8:54 a.m.                                                                                 
8:54:59 AM                                                                                                                    
CO-CHAIR  HANNAN announced  that further  clarification would  be                                                               
sought regarding  the data  Representative McCabe  possessed, and                                                               
then it would be presented to the entire committee.                                                                             
8:55:11 AM                                                                                                                    
REPRESENTATIVE FIELDS  returned to the PowerPoint  and touched on                                                               
the  topic  on   slide  12,  which  read   as  follows  [original                                                               
punctuation provided]:                                                                                                          
     Shifting cost burdens deepen divides:                                                                                      
     -Rural  Alaska   faces  higher  costs   in  healthcare,                                                                    
     gasoline,  &  fewer  options   for  utilities  such  as                                                                    
     -Driving  100+  miles  (each way)  for  service  is  an                                                                    
     additional tax.                                                                                                            
     -Private DMV  partners have no regulations  or controls                                                                    
     over  pricing for  mandatory  services. The  Department                                                                    
     has  method  to  control  costs,  fees,  or  additional                                                                    
     -For  communities where  a private  partner were  to be                                                                    
     the only option, residents must  either pay up front or                                                                    
     through additional  costs such as driving  70-100 miles                                                                    
     for key services.                                                                                                          
     -Internet  is  not always  an  option  for everyone  or                                                                    
     every service.                                                                                                             
REPRESENTATIVE FIELDS,  in conclusion  of his  presentation, drew                                                               
attention to the  information on slide 13, which  read as follows                                                               
[original punctuation provided]:                                                                                                
     "In  our poll,  Seniors  of  Alaska found  overwhelming                                                                    
     support  amongst  our members  to  support  HB 137  and                                                                    
     retain affordable,  safe options  for Seniors  in their                                                                    
     local communities. 96.5%  overall favored keeping their                                                                    
     local  DMV,  and  some  locales  had  100%  of  members                                                                    
     supported this critical public service for seniors."                                                                       
     -Seniors of Alaska                                                                                                         
8:56:03 AM                                                                                                                    
REPRESENTATIVE  PRAX  asked   Representative  Fields  to  confirm                                                               
whether  HB 137  would require  all communities  with populations                                                               
larger than 850 to have a DMV office.                                                                                           
REPRESENTATIVE   FIELDS  clarified   it  would   be  that   those                                                               
communities of  850 or more,  which currently have a  DMV office,                                                               
retain  those offices.   He  said the  structure of  the bill  is                                                               
focused on equity.                                                                                                              
REPRESENTATIVE  PRAX noted  that in  terms of  equity, there  are                                                               
communities with  that population  threshold that  do not  have a                                                               
DMV office.                                                                                                                     
REPRESENTATIVE  FIELDS  said  he  supports the  addition  of  DMV                                                               
locations and would  be willing to work  with Representative Prax                                                               
and consider an amendment to achieve this in a rational way.                                                                    
8:58:08 AM                                                                                                                    
REPRESENTATIVE  MCCABE observed  that Yakutat,  Glenn Allen,  and                                                               
Anderson, Alaska  have DMV offices  currently and  populations of                                                               
fewer  than 850.   He  asked  if the  proposed legislation  would                                                               
result in those offices being closed.                                                                                           
REPRESENTATIVE FIELDS  answered that HB  137 does not  direct the                                                               
department to close  DMV offices at locations that  are under any                                                               
certain  population threshold,  and  the  administration has  not                                                               
proposed closing those DMV offices.   He said the committee could                                                               
decide to  lower the threshold to  300; all that matters  is that                                                               
the threshold is  consistent, he purported.  He  explained he had                                                               
chosen the  number 850  to keep  the DMV  offices open  that were                                                               
under threat of closure.                                                                                                        
REPRESENTATIVE   MCCABE  offered   his  understanding   that  the                                                               
outgoing commissioner  had recommended  not closing down  the DMV                                                               
offices.   He said  he received  a call  from a  constituent, who                                                               
runs  a facility  in Palmer,  Alaska,  that issues  CDLs, who  is                                                               
concerned  the proposed  legislation would  prevent him/her  from                                                               
doing   that.     He  said   vehicle   transfers  and   permanent                                                               
registrations do not need to be done at  the DMV.  Out of about a                                                               
dozen  reasons   to  go   to  a  DMV   office,  he   offered  his                                                               
understanding that  only about 5  of them require the  DMV office                                                               
visit.  He  said the bill seems to be  anti-private business, and                                                               
he  said it  seems to  him a  bad idea  to tie  the hands  of the                                                               
administration in how it must do business.                                                                                      
9:01:38 AM                                                                                                                    
REPRESENTATIVE FIELDS responded  that he does not  believe HB 137                                                               
would hurt "UMVs."   He noted in his district there  is a DMV and                                                               
multiple UMVs,  which are  more convenient for  some people.   He                                                               
said he  supports people having the  choice.  In response  to Co-                                                               
Chair Hannan,  he said while he  does not know what  the initials                                                               
in "UMV" stand  for, it is a private partner  that contracts with                                                               
the  DMV to  provide certain  services.   He suggested  his staff                                                               
might  know what  each letter  represents.   He explained  he had                                                               
listed that which only the UMV provide, in terms of services.                                                                   
9:02:58 AM                                                                                                                    
TRISTAN WALSH,  Staff, Representative  Zack Fields,  Alaska State                                                               
Legislature, explained  that UMV is  just a name for  the largest                                                               
contractor with the DMV; there are other contractors.                                                                           
REPRESENTATIVE  FIELDS  noted   that  Representative  McCabe  had                                                               
questioned   the  necessity   of  this   legislation  given   the                                                               
legislature had addressed  this issue in its budget  process.  He                                                               
said   there  have   been  other   issues  where   there  is   an                                                               
administrative proposal,  a legislative response, and  things get                                                               
"ironed out in one of several ways."   He gave examples.  He said                                                               
with  the  exit   of  the  last  commissioner   and  the  current                                                               
administrative stance  on the DMV  issue, he feels HB  137 should                                                               
continue to be advanced to protect public services.                                                                             
9:05:34 AM                                                                                                                    
REPRESENTATIVE MCCABE  asked whether  one of  the reasons  for HB
137 is to protect jobs.                                                                                                         
REPRESENTATIVE  FIELDS  replied that  he  had  mentioned jobs  in                                                               
terms  of people  driving  to  and from  work  as  it relates  to                                                               
locations of DMV offices.                                                                                                       
REPRESENTATIVE  MCCABE recollected  hearing a  pharmacist testify                                                               
before  the  previous committee  of  referral  that he  was  more                                                               
qualified to give an eye test than was someone at the DMV.                                                                      
REPRESENTATIVE FIELDS  pointed out  that if  a DMV  is eliminated                                                               
from a community  that does not offer another means  to obtain an                                                               
eye test,  then the person  may have to  find a different  way to                                                               
get the test, and that alternative may be more expensive.                                                                       
9:07:50 AM                                                                                                                    
MR.  WALSH  added  that  the  Department  of  Labor  &  Workforce                                                               
Development (DLWD)  had estimated the  cost of an eye  test [from                                                               
an medical doctor] was approximately $230.                                                                                      
REPRESENTATIVE  FIELDS  reiterated   the  advantages  of  getting                                                               
services from the DMV.                                                                                                          
9:08:25 AM                                                                                                                    
CO-CHAIR  SCHRAGE said  he supports  the  intent of  the bill  to                                                               
retain  access to  DMV services  for seniors,  Alaskans in  rural                                                               
communities, and  others but expressed  concern about  the fiscal                                                               
note.   He read [the first  sentence of the fiscal  analysis from                                                               
the fiscal  note with identifier HB  137-DOA-DMV-4-8-21, included                                                               
in the committee packet], which read as follows:                                                                                
     This  bill  removes  the  ability   to  close  a  State                                                                    
     operated  Division of  Motor Vehicles  (DMV) office  in                                                                    
     communities   that   have    850   or   more   citizens                                                                    
     irrespective of  need, economic conditions,  demand for                                                                    
     services, facility  considerations, cost to  the state,                                                                    
     staffing  provisions,  technological advances,  changes                                                                    
     to the industry, or other unforeseen conditions.                                                                           
CO-CHAIR SCHRAGE  said he worries the  proposed legislation would                                                               
put restraints  on DOA irrespective  of changes that  might occur                                                               
in the  next five  to ten years.   He asked  the bill  sponsor to                                                               
REPRESENTATIVE FIELDS  responded that  he thinks the  fiscal note                                                               
is unusual.   He  explained that HB  137 would  maintain existing                                                               
services of the  DMV; therefore, the fiscal note  should be zero.                                                               
He offered  his understanding that  the administration  looked at                                                               
not closing facilities as resulting in  an increase in costs.  He                                                               
stated,  "It's just  not the  way  we've ever  done fiscal  notes                                                               
before."   He said  another issue  is to ask  to what  extent the                                                               
legislature  should  weigh in  on  public  services and  to  what                                                               
extent it should  "leave it to the agency."   He said his general                                                               
approach  is to  leave things  to the  agency unless  it proposes                                                               
something with which the legislature does  not agree.  He said he                                                               
does not  agree that it  is reasonable to  close any of  the DMVs                                                               
the  administration proposed  for closure;  therefore, he  looked                                                               
for a way  to preserve public services  without micromanaging the                                                               
department.   He  acknowledged that  change would  happen in  the                                                               
future but  encouraged legislating  now while  recognizing issues                                                               
will need to be addressed again in the future.                                                                                  
9:11:59 AM                                                                                                                    
REPRESENTATIVE PRAX specified that "the  people" pay for the DMV.                                                               
He asked if the  DMV fees are intended to cover  just the cost of                                                               
issuing "the license or the certificates or whatever."                                                                          
REPRESENTATIVE FIELDS  remarked that  numbers show the  DMV "more                                                               
than  pays for  itself over  the years";  therefore, it  would be                                                               
reasonable to question  whether fees could be  lowered.  However,                                                               
he  deferred  to the  department  to  answer  whether it  is  the                                                               
mission of the  department to cover costs or return  money to the                                                               
REPRESENTATIVE   PRAX  suggested   the  increase   in  electronic                                                               
transactions "would reduce the demand  for a physical presence at                                                               
the  office."   He  reasoned  that  in  that case,  the  services                                                               
offered could  take place in  any state  agency office.   He said                                                               
[HB 137] seems overly constricting.                                                                                             
REPRESENTATIVE FIELDS  noted that  the proposed bill  would allow                                                               
flexibility to  make transactions through other  offices or local                                                               
9:14:56 AM                                                                                                                    
REPRESENTATIVE  DRUMMOND derived  from the  aforementioned fiscal                                                               
note that  the DMV currently  contributes to the  state's general                                                               
fund (GF), and  passage of HB 137 would result  in "a decrease of                                                               
DMV's  contribution  to   the  general  fund."     She  asked  if                                                               
ordinarily  the  fiscal  note  gets "argued  out"  by  the  House                                                               
Finance Committee [when it is the last committee of referral].                                                                  
REPRESENTATIVE FIELDS responded yes.                                                                                            
9:16:09 AM                                                                                                                    
CO-CHAIR  HANNAN  announced  the  committee  would  hear  invited                                                               
9:16:19 AM                                                                                                                    
PETER ZUYUS, Executive Director,  Seniors of Alaska, testified in                                                               
support of HB  137.  He said Seniors of  Alaska has expressed its                                                               
concern about  the negative  effects that  closure of  DMV office                                                               
locations  will  have on  the  following  populations:   seniors,                                                               
disabled, rural,  lower income,  and Native  Alaskans.   He noted                                                               
that a  House Finance subcommittee  voted unanimously  to restore                                                               
budgets cuts  proposed by DOA  that would have cut  the following                                                               
DMV  office  locations:   Homer,  Delta  Junction, Valdez,  Eagle                                                               
River, Tok,  and Haines.   He pointed out that  although restored                                                               
in the  FY 22 budget,  these locations  still could be  closed at                                                               
will by the department.  He  said HB 137 would remove the ability                                                               
for arbitrary  closure and restore  legislative approval  for any                                                               
rural state DMV office closure.   He expressed that the rural DMV                                                               
office  is a  core service,  and the  proposed legislation  would                                                               
keep that service intact.                                                                                                       
MR.  ZUYUS  highlighted that  HB  137  does not  mention  private                                                               
partnership  awards; it  gives legislative  authority to  oversee                                                               
any potential  closure; closure of  a rural DMV could  occur with                                                               
legislative  approval.   He  said  private partnerships  increase                                                               
costs of  services.  He warned  that closure of rural  DMVs could                                                               
leave  the  state  vulnerable  to  multi-million  dollar  federal                                                               
lawsuit action for violation of  the federal Elder Justice Act of                                                               
2010.  He said the former  commissioner of DOA had testified that                                                               
the  proposed  closures  were selected  because  rural  residents                                                               
would  cause   the  least  backlash  and   the  communities  were                                                               
lucrative for private partnership.   He said there was no mention                                                               
of  the  negative  economic  impact  to  those  communities  that                                                               
closures  would create.    He  noted there  have  been three  DOA                                                               
commissioners in  the last  three years,  which has  not provided                                                               
stability for  rural communities  that count  on their  local DMV                                                               
for  state services.    He  said HB  137  would remove  arbitrary                                                               
decisions made by unelected state  workers - decisions that could                                                               
affect rural  Alaska communities; it  is a nonpartisan  bill that                                                               
would help all Alaska communities.                                                                                              
9:20:14 AM                                                                                                                    
MR.  ZUYUS,   in  response  to  Representative   McCabe,  offered                                                               
information about Seniors  of Alaska.  He said it  is a 501(c)(4)                                                               
organization with a viewership of 7,000.                                                                                        
9:22:50 AM                                                                                                                    
NONA  SAFRA, testified  in support  of HB  137.   She noted  that                                                               
although she  has a role as  advocate for seniors and  those with                                                               
disabilities, her  testimony today  is as an  Alaska elder.   She                                                               
said closure  of DMVs in  rural Alaska  would leave many  who are                                                               
mandated  to   appear  at  DMVs  in   person  paying  unregulated                                                               
arbitrary  "convenience fees"  at privatized  offices [contracted                                                               
through the  DMV] over and above  the regulated state fees.   She                                                               
said the commissioner's authority to  close DMVs at will does not                                                               
best  represent Alaskans  as  it is  based  on quantitative,  not                                                               
qualitative, data.                                                                                                              
MS. SAFRA  shared her  experience as a  caregiver for  elders who                                                               
require a  Real ID to  travel to the  Lower 48 for  medical care,                                                               
either driving hundreds of miles in  bad conditions to get to the                                                               
closest DMV  or suffering the  financial burden of  paying higher                                                               
fees  at a  contracted  UMV.   In  terms  of  technology being  a                                                               
solution, she  noted that many  of the 238,000 Alaskans  in rural                                                               
areas have broadband issues, lack  Internet connectivity, and may                                                               
not  have  the  computers,  e-mail  addresses,  or  credit  cards                                                               
necessary to complete on-line  transactions and create electronic                                                               
signatures.    Ms.  Safra  asked  legislators  to  represent  all                                                               
constituents by passing  HB 137 to ensure access for  all to meet                                                               
state mandated DMV requirements.                                                                                                
9:27:12 AM                                                                                                                    
JOE  MICHEL,  Executive  Director, Alaska  Trucking  Association,                                                               
thanked the bill  sponsor for clarifying under  CSHB 137(STA) the                                                               
relationship  that  private  partners  have with  the  DMV.    He                                                               
explained that  he was wearing  two hats:   one was as  a private                                                               
partner with  the DMV and  as a representative of  the commercial                                                               
operators that  would be affected by  DMV closures.  He  said the                                                               
Alaska Trucking Association (ATA)  is concerned about the ability                                                               
of  its  rural operators  to  comply  with the  regulations  that                                                               
federal  agencies put  on  the industry,  and  that that  ability                                                               
would be  affected by  the DMV  closures.   He offered  to answer                                                               
questions from the committee.                                                                                                   
9:28:46 AM                                                                                                                    
REPRESENTATIVE  MCCABE asked  Mr. Michel  to expound  the federal                                                               
regulations for which he uses the DMV to comply.                                                                                
MR. MICHEL  answered the requirements of  registration, which are                                                               
more complex for commercial drivers.                                                                                            
REPRESENTATIVE  MCCABE  said  he   has  registered  a  commercial                                                               
vehicle and  does not  recall having  to go  physically to  a DMV                                                               
MR. MICHEL indicated  that DMV transactions are done  at ATA, and                                                               
there are  two additional pieces  of paper that are  submitted to                                                               
the  DMV.    He  mentioned  "getting  plates  that  fall  off  of                                                               
vehicles"  being more  easily done  by  going into  a DMV  office                                                               
rather than  waiting 6-8 weeks to  receive them in the  mail.  He                                                               
expressed the main  concern is that avenues be left  open for the                                                               
trucking industry to be able to  comply with the regulations.  He                                                               
concluded, "Now  that the bill clarifies  the private partnership                                                               
versus the  DMVs, we're  happy that ...  there's as  many options                                                               
available for  our industry to  comply with the  regulations that                                                               
are placed on us."                                                                                                              
9:32:34 AM                                                                                                                    
CO-CHAIR  HANNAN  opened  public  testimony on  HB  137.    After                                                               
ascertaining that  there was  no one who  wished to  testify, she                                                               
closed public testimony.                                                                                                        
9:33:12 AM                                                                                                                    
REPRESENTATIVE  PRAX  requested  that  the director  of  the  DMV                                                               
describe  the services  related to  commercial vehicles  that are                                                               
provided  by the  DMV offices  and the  measure of  inconvenience                                                               
that would result from the smaller offices being closed.                                                                        
JEFFREY   SCHMITZ,   Director,   Division  of   Motor   Vehicles,                                                               
Department of  Administration, said he  could provide a  list for                                                               
the committee.                                                                                                                  
9:34:02 AM                                                                                                                    
CO-CHAIR  HANNAN asked  what services  are available  through the                                                               
variety of private  contracted partners.  She said  she had heard                                                               
that some cannot provide CDLs while others can.                                                                                 
MR.  SCHMITZ  said  he  could include  that  information  in  the                                                               
forthcoming list.                                                                                                               
CO-CHAIR HANNAN asked  whether the DMV is expecting  an uptick in                                                               
REAL ID applications.                                                                                                           
MR. SCHMITZ  replied that the  short answer is  yes, particularly                                                               
because it  is within six months  of the October 1  deadline.  He                                                               
noted  that 200,000  Alaskans have  already  obtained their  REAL                                                               
9:37:48 AM                                                                                                                    
REPRESENTATIVE PRAX asked whether the  DMV is the only authorized                                                               
issuer of REAL IDs.                                                                                                             
MR. SCHMITZ answered that all  of the DMV's third-party providers                                                               
can issue REAL IDs.                                                                                                             
9:39:02 AM                                                                                                                    
REPRESENTATIVE  MCCARTY asked  a series  of questions  related to                                                               
the REAL ID and the federal passport.                                                                                           
MR.  SCHMITZ, in  response to  Representative  McCarty, said  the                                                               
REAL  ID  is  a  federal  mandate,  the  deadline  for  which  is                                                               
currently October  1, 2021,  although having  been delayed  a few                                                               
times already, it could be delayed  again.  He said the U.S. Post                                                               
Office,  while offering  U.S. passports,  cannot issue  REAL IDs.                                                               
He confirmed  that if a  DMV were shut  down, a U.S.  Post Office                                                               
could provide  a federally compliant passport,  which would allow                                                               
its official carrier  to board a plane, for  example, although it                                                               
is not a REAL ID.                                                                                                               
REPRESENTATIVE FIELDS  clarified for Representative  McCarty that                                                               
not all U.S.  Post Offices issue passports.  He  said the DMV has                                                               
mapped  out  where  all the  passport-issuing  U.S.  Post  Office                                                               
facilities are  in Alaska, as well  as where all the  DMV offices                                                               
are located.   He said this information could be  provided to the                                                               
9:41:59 AM                                                                                                                    
CO-CHAIR HANNAN  remarked that  while both the  REAL ID  and U.S.                                                               
passport are  federally compliant, it  may be easier  for someone                                                               
who  does  not  already  have  a driver's  license  to  obtain  a                                                               
passport than to get a REAL ID.                                                                                                 
9:43:14 AM                                                                                                                    
MR.  SCHMITZ  distinguished  the  difference between  a  REAL  ID                                                               
driver's  license  and  identification   card  -  both  federally                                                               
compliant under the REAL ID Act.                                                                                                
9:43:44 AM                                                                                                                    
CO-CHAIR HANNAN thanked the sponsor and testifiers.                                                                             
[HB 137 was held over.]                                                                                                         
9:44:47 AM                                                                                                                    
There being no further business before the committee, the House                                                                 
Community and Regional Affairs Standing Committee meeting was                                                                   
adjourned at 9:45 a.m.                                                                                                          

Document Name Date/Time Subjects
HB 163 Ver A.PDF HCRA 4/13/2021 8:00:00 AM
HB 163
HB 163 Sponsor Statement 4.9.pdf HCRA 4/13/2021 8:00:00 AM
HB 163
HB 163 Support Letters 4.12.21.pdf HCRA 4/13/2021 8:00:00 AM
HB 163
HB 163 Fiscal Note - DOA - DMV 4.10.21.pdf HCRA 4/13/2021 8:00:00 AM
HB 163
1 CSHB 137 ver G Sponsor Statement 4.7.2021.pdf HCRA 4/13/2021 8:00:00 AM
HB 137
2 CSHB 137 ver G.PDF HCRA 4/13/2021 8:00:00 AM
HB 137
3 CSHB 137 Summary of Changes Ver A to G 4.7.2021.pdf HCRA 4/13/2021 8:00:00 AM
HB 137
4 CSHB 137 ver G Sectional Analysis 4.7.2021.pdf HCRA 4/13/2021 8:00:00 AM
HB 137
5 CSHB 137 Fiscal Note Division of Motor Vehicles.pdf HCRA 4/13/2021 8:00:00 AM
HB 137
6 HB0137A.PDF HCRA 4/13/2021 8:00:00 AM
HB 137
7 HB 137 Supporting Document Letters of Support Received as of 4.7.2021.pdf HCRA 4/13/2021 8:00:00 AM
HB 137
8 HB 137 Supporting Document City of Homer Resolution Received as of Jan 11 2021.pdf HCRA 4/13/2021 8:00:00 AM
HB 137
9 HB 137 Supporting Document Alaska Public Media Received as of 3.19.2021.pdf HCRA 4/13/2021 8:00:00 AM
HB 137
10 HB 137 Support Document Senior Voice Received as of 2.1.2021.pdf HCRA 4/13/2021 8:00:00 AM
HB 137
CSHB137 Safra Testimony April 13.pdf HCRA 4/13/2021 8:00:00 AM
HB 137
CSHB 137 Fiscal Note - DOA-DMV 4.8.21.pdf HCRA 4/13/2021 8:00:00 AM
HB 137