Legislature(2001 - 2002)

04/02/2002 01:56 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                  HOUSE FINANCE COMMITTEE                                                                                       
                       April 02, 2002                                                                                           
                          1:56 PM                                                                                               
TAPE HFC 02 - 72, Side A                                                                                                        
TAPE HFC 02 - 72, Side B                                                                                                        
TAPE HFC 02 - 73, Side A                                                                                                        
CALL TO ORDER                                                                                                                 
Co-Chair Williams called the House  Finance Committee meeting                                                                   
to order at 1:56 PM.                                                                                                            
MEMBERS PRESENT                                                                                                               
Representative Bill Williams, Co-Chair                                                                                          
Representative Eldon Mulder, Co-Chair                                                                                           
Representative Con Bunde, Vice-Chair                                                                                            
Representative John Davies                                                                                                      
Representative John Harris                                                                                                      
Representative Bill Hudson                                                                                                      
Representative Ken Lancaster                                                                                                    
Representative Jim Whitaker                                                                                                     
MEMBERS ABSENT                                                                                                                
Representative Eric Croft                                                                                                       
Representative Richard Foster                                                                                                   
Representative Carl Moses                                                                                                       
ALSO PRESENT                                                                                                                  
Representative  John  Coghill;  Representative  Drew  Scalzi;                                                                   
Danielle   Serino,  Staff,   Representative  Coghill;   Karen                                                                   
Pearson, Director,  Division of Vital Statistics,  Department                                                                   
of  Health   and  Social  Services;  Roger   Painter,  Alaska                                                                   
Shellfish  Growers   Association,  Juneau;   Caren  Robinson,                                                                   
Juneau;  Doug   Mecum,  Director,   Division  of   Commercial                                                                   
Fisheries,  Department  of  Fish  and  Game;  Rick  Thomspon,                                                                   
Department  of  Natural Resources;  Linda  Sylvester,  Staff,                                                                   
Representative Pete Kott; Mary  Marshburn, Director, Division                                                                   
of Motor Vehicles, Anchorage                                                                                                    
PRESENT VIA TELECONFERENCE                                                                                                    
Anne Harrison,  Fairbanks; Jon Agosti, Seward;  Julie Decker,                                                                   
Juneau;  Rick   Thompson,  Juneau;  July   Decker,  Executive                                                                   
Director, Southeast  Alaska Diver Fisheries  Association; Jon                                                                   
Agosti,   Chugiak   Shellfish   Association,   Seward;   Mary                                                                   
Marshburn,  Anchorage; Bob Lynn,  Anchorage; Karen  Vosburgh,                                                                   
Alaska  Right   to  Life,  Matsu;  Linda   Sylvester,  Staff,                                                                   
Representative Pete Kott;                                                                                                       
HB 160    An   Act  requiring   the   reporting  of   induced                                                                   
          terminations of pregnancies.                                                                                          
          CSHB 160 (JUD) was REPORTED out of Committee with                                                                     
          a "do pass" recommendation and with a new fiscal                                                                      
          impact note by the Department of Health and Social                                                                    
HB 208    An  Act relating to  aquatic farming of  shellfish;                                                                   
          and providing for an effective date.                                                                                  
          CSHB 208 (RES) was REPORTED out of Committee with                                                                     
          a "do pass" recommendation and with previously                                                                        
          published fiscal notes: DNR (#2), DFG (#3) and DFG                                                                    
HB 344    An  Act  increasing  fees  for  driver's  licenses,                                                                   
          instruction permits, and identification cards; and                                                                    
          providing for an effective date.                                                                                      
          CSHB 344 (STA) was REPORTED out of Committee with                                                                     
          a "do pass" recommendation and with previously                                                                        
          published fiscal note: ADM (#1).                                                                                      
HOUSE BILL NO. 160                                                                                                            
     An Act requiring the reporting of induced terminations                                                                     
     of pregnancies.                                                                                                            
REPRESENTATIVE  JOHN COGHILL,  SPONSOR, spoke  in support  of                                                                   
the  legislation.   He  noted  that  the   legislation  would                                                                   
implement a  reporting system  on abortion. He  observed that                                                                   
the  reporting  system  would  provide  information  on  teen                                                                   
pregnancy while  protecting confidentiality.  The information                                                                   
obtained  through  the provision  would  allow  the state  to                                                                   
respond  to  policy  issues  ranging  from  contraception  to                                                                   
education.  There  would be  a  30-day reporting  period.  An                                                                   
annual  report  would  come  through   the  Bureau  of  Vital                                                                   
Statistics. Most  states have similar programs  through their                                                                   
Bureaus of Vital  Statistics. There is a $78  thousand dollar                                                                   
fiscal note.  The Centers for  Disease Control (CDC)  and the                                                                   
American   Civil   Liberties   Union   (ACLU)   support   the                                                                   
legislation.  The legislation  would  provide information  on                                                                   
the  number of  abortions, the  number of  abortions tied  to                                                                   
various  health  issues,  percentage  of  abortions  in  each                                                                   
trimester,  and the number  of abortions  in rural  vs. urban                                                                   
Representative  John   Davies  acknowledged   protections  to                                                                   
confidentiality  but questioned how  the statistics  would be                                                                   
derived.   Representative   Coghill    explained   that   the                                                                   
legislation  does not  require  comprehensive reporting,  but                                                                   
would be an additional  tool to be used in assessing  what is                                                                   
happening in the state.                                                                                                         
DANIELLE  SERINO,  STAFF,  REPRESENTATIVE   COGHILL  provided                                                                   
information on the legislation.  In response to a question by                                                                   
Representative Bunde,  she clarified that  Planned Parenthood                                                                   
and  the Alaska  Right  to  Life organizations  testified  in                                                                   
support of the legislation in previous hearings.                                                                                
Representative  Coghill  observed   that  there  are  certain                                                                   
monetary  benefits  to  the  state based  on  the  number  of                                                                   
abortions,  which  would  benefit   Planned  Parenthood.  The                                                                   
statistics  could also  be used  to support  a case for  some                                                                   
other public policy.                                                                                                            
Ms. Serino explained  that insurance would not  be negatively                                                                   
affected  by definitions  contained  in  section  (b) of  the                                                                   
Representative  Coghill  reiterated  that  the intent  is  to                                                                   
determine  the number  of abortions  in the  state of  Alaska                                                                   
through  the  Department  of   Health  and  Social  Services,                                                                   
Division of Vital  Statistics. He observed that  there are no                                                                   
reports at the current time, which  include these statistics.                                                                   
Live  births,  fetal  deaths and  some  sexually  transmitted                                                                   
diseases   are  reported   through   the   Bureau  of   Vital                                                                   
Statistics.   The  category   would   be  protected   through                                                                   
KAREN  PEARSON,  DIRECTOR,  DIVISION   OF  VITAL  STATISTICS,                                                                   
DEPARTMENT OF  HEALTH AND SOCIAL  SERVICES, spoke  in support                                                                   
of the legislation. She clarified  that the legislation would                                                                   
bring the state  into compliance with the CDC  guidelines and                                                                   
maintain privacy  protections. The  change in the  definition                                                                   
of fetal death  would not have any other  implications beyond                                                                   
statistical  information.  The   Division  concurs  with  the                                                                   
fiscal notes.                                                                                                                   
KAREN  VOSBURGH, EXECUTIVE  DIRECTOR, ALASKA  RIGHT TO  LIFE,                                                                   
MATSU,  testified  via  teleconference   in  support  of  the                                                                   
legislation. She questioned if  there would be data regarding                                                                   
the cause, age  of mother, work status,  location (outpatient                                                                   
or office)  or the trimester  that the abortion  takes place.                                                                   
Representative Coghill  explained that the report  form would                                                                   
note the  type of  abortion (whether  it was  a live  birth),                                                                   
gestational period, and national origin or race status.                                                                         
Ms. Serino explained  that the report would have  much of the                                                                   
information  mentioned but  noted  that personal  information                                                                   
would not be  available to the public. The  patient would not                                                                   
be identified. The  final report would have  the summation of                                                                   
the  statistics.  Representative  Coghill observed  that  the                                                                   
statute only requires  a report of the fact that  there was a                                                                   
termination  of  pregnancy. Ms.  Vosburgh  expressed  concern                                                                   
that death of the mother be reported.                                                                                           
ANNE  HARRISON, FAIRBANKS,  testified  via teleconference  in                                                                   
support  of the legislation.  She noted  that the  statistics                                                                   
could  be used  for  scientific  and research  purposes,  but                                                                   
expressed  concern regarding lapses  in confidentiality.  She                                                                   
referred to section  6: "fetal death" means  death before the                                                                   
complete expulsion.  She questioned  if any  sign of  life in                                                                   
the fetus after the abortion would  put the provider in legal                                                                   
jeopardy. She  referred to section  8 line 2 and  stated that                                                                   
she  would  add a  period  after:   "induced  termination  of                                                                   
pregnancy"   means   the  purposeful   interruption   of   an                                                                   
intrauterine pregnancy."  She felt that the  remainder of the                                                                   
section  was redundant:  "with  the intention  other than  to                                                                   
produce a  live-born infant,  and that does  not result  in a                                                                   
live birth,  except that  "induced termination of  pregnancy"                                                                   
does  not  include  management   of  prolonged  retention  of                                                                   
products of conception following  fetal death." She felt that                                                                   
the   language  was   emotionally  charged   and  should   be                                                                   
Representative Coghill observed  that the language was copied                                                                   
from the  Family Planning  Prospective  Volume 30, Number  5,                                                                   
Appendix B.                                                                                                                     
BOB  LYNN,  PRESIDENT,  ALASKA   RIGHT  TO  LIFE,  ANCHORAGE,                                                                   
testified via  teleconference in support of  the legislation.                                                                   
He  maintained  that  more  and  better  information  can  do                                                                   
nothing but help regardless of  one's stance on the issue. He                                                                   
observed   that  governmental   policy   makers  and   health                                                                   
providers could use  the data for a multiple  of purposes. He                                                                   
observed that some studies have  shown an association between                                                                   
induced  abortion and  breast cancer.  Adequate reporting  of                                                                   
abortion,  linked to  the reporting  of  breast cancer  could                                                                   
resolve important questions.                                                                                                    
Representative  John  Davies   questioned  the  necessity  of                                                                   
language on  page 4, lines 3  - 6. Ms. Serino  explained that                                                                   
induced definition  of pregnancy is used by the  CDC and felt                                                                   
that the  language should  remain. She  added that  "does not                                                                   
include  management of  prolonged  retention  of products  of                                                                   
conception" relates to DNC procedures following abortions.                                                                      
Representative  Coghill  stated  that if  the  language  were                                                                   
changed  that  he  would  recommend   the  inclusion  of  the                                                                   
language by Planned Parenthood, which is more encompassing.                                                                     
Ms.  Pearson explained  that the  definition  is intended  to                                                                   
prevent the classification  of the procedure  where the fetus                                                                   
has terminated  prior to  the expulsion, in  order to  get an                                                                   
accurate   account    of   what   areas    actually   induced                                                                   
terminations, as  opposed to procedures  needed to  deliver a                                                                   
fetus that is no longer alive.                                                                                                  
Co-Chair  Mulder referred  to the  fiscal note.  He MOVED  to                                                                   
report CSHB 160 (JUD) out of Committee  with the accompanying                                                                   
fiscal note. There being NO OBJECTION, it was so ordered.                                                                       
CSHB  160 (JUD)  was REPORTED  out  of Committee  with a  "do                                                                   
pass" recommendation  and with  a new  fiscal impact  note by                                                                   
the Department of Health and Social Services.                                                                                   
HOUSE BILL NO. 208                                                                                                            
     An Act relating to aquatic farming of shellfish; and                                                                       
     providing for an effective date.                                                                                           
REPRESENTATIVE   DREW   SCALZI,    SPONSOR,   testified   via                                                                   
teleconference in  support of HB  208. He explained  that the                                                                   
legislation would  change the way the Department  of Fish and                                                                   
Game develops mariculture sites.  Under the current statutory                                                                   
provision,  applicants  locate sites  that  they believe  are                                                                   
applicable to  developing mariculture. A problem  arises when                                                                   
they locate a site  only to find out when they  return to the                                                                   
department that it  conflicts with an earlier  use. Under the                                                                   
legislation, the  department would  find sites and  make them                                                                   
available:  predisposing   problems.  The   department  would                                                                   
locate  90  sites;  the  Department  of  Fish  and  Game  and                                                                   
Department of  Natural Resources would set the  criteria. The                                                                   
90  sites would  be divided:  60 suspended  cultures such  as                                                                   
mussels, oysters;  20 clams sites; and 10 geoduck  sites. The                                                                   
sites would  be available  annually until  taken; a  ten-year                                                                   
lease would be required. Farmers  must abide by the sustained                                                                   
yield  principle   in  harvesting.  The  farming   would  not                                                                   
interfere  with the established  commercial, subsistence,  or                                                                   
personal  use fisheries.  Upon  expiration of  the lease  the                                                                   
permit  holder must  return the  site in  the condition  that                                                                   
mirrors the population estimates  that were in existence when                                                                   
the lease  started. The bill is  the first step by  the state                                                                   
in  supporting  the  development   of  shellfish  farming  in                                                                   
Alaska, since  enactment of  the Aquatic  Farm bill  of 1989.                                                                   
The demand  for Alaska shellfish  in the market  place cannot                                                                   
be met with the  small amount of farms that  are now present.                                                                   
Shellfish farming  is an excellent opportunity  for displaced                                                                   
fishermen or fishermen that need  to supplement their income.                                                                   
A 10-acre  farm could produce  435,000 pounds of  clams worth                                                                   
$1.1  million  dollars  annually.  Alaska's  largest  seafood                                                                   
wholesaler  estimates the  clam market  in Anchorage  at over                                                                   
one million pounds a year.                                                                                                      
Representative    Hudson    referred   to    fiscal    notes.                                                                   
Representative  Scalzi estimated that  over a 10-year  period                                                                   
the collection would pay for the costs.                                                                                         
ROGER PAINTER, ALASKA SHELLFISH  GROWERS ASSOCIATION, JUNEAU,                                                                   
testified in support.  He referred to section  (b)(2): Before                                                                   
offering leases for  aquatic farming sites under  (a) of this                                                                   
section, the commissioner of natural  resources shall solicit                                                                   
nominations of  sites suitable for aquatic farming  of clams,                                                                   
geoducks,  and  other  shellfish  from  the  aquatic  farming                                                                   
industry in the  state and the public." The  Alaska Shellfish                                                                   
Growers Association  is actively working with  the University                                                                   
of  Alaska  on  assessments of  candidate  sites.  Under  the                                                                   
current program  the burden  is on  the applicant to  provide                                                                   
site-specific  information,  which  keeps  the  cost  of  the                                                                   
current  program low.  He suggested that  nominated sites  be                                                                   
required  to provide  site-specific information  to keep  the                                                                   
costs of  the program  down. He felt  that the Department  of                                                                   
Fish and  Game's fiscal  note could  be reduced. He  observed                                                                   
that  the  fiscal   notes  by  the  Division   of  Commercial                                                                   
Fisheries   and  Habitat  Restoration   were  predicated   on                                                                   
observations  at  the  site.  During  a  normal  opening  the                                                                   
Department of Fish  and Game does not visit  sites or conduct                                                                   
dive surveys.  He maintained that  the burden to  provide the                                                                   
information should be on the industry.                                                                                          
Representative John  Davies questioned why not  operate under                                                                   
the statutes. Mr.  Painter explained that the  sites would be                                                                   
located in areas of low conflict  in areas where the industry                                                                   
is  being encouraged.  He referred  to  interaction with  the                                                                   
Prince  of  Wales  community,  which is  working  to  support                                                                   
industry. The cost  to amend current land use  plans, conduct                                                                   
public  hearing  on  the  Prince of  Wales  project  is  $140                                                                   
thousand dollars,  which would  result in  a small  number of                                                                   
sites.  The legislation  would  allow applicants  to go  into                                                                   
areas where there would be a high  probability of farming. He                                                                   
emphasized  the  difficulty of  locating  sites  that can  be                                                                   
approved. There was one applicant  for all of Southcentral in                                                                   
1999. The  legislation  would open doors  by pointing  people                                                                   
into  areas that  would  be successful.  Representative  John                                                                   
Davies  questioned   why  the  department  would   have  more                                                                   
success.  Mr. Painter  responded that  the department's  role                                                                   
would  not  be  to  identify  sites  but  to  evaluate  sites                                                                   
proposed by industry  for points that would cause  them to be                                                                   
Representative  Scalzi  referred to  the  Katchemak Bay  area                                                                   
where there are  a lot of home sites. The  Administration can                                                                   
deal with relationships between  user groups and expedite the                                                                   
TAPE HFC 02 - 72, Side B                                                                                                      
Representative Hudson questioned  if sites would be available                                                                   
by road or boat.  Mr. Painter explained that  they were close                                                                   
to the  road but require  a 2-mile boat ride.  Representative                                                                   
Hudson questioned  the cost of  providing road access  to the                                                                   
site.  Mr. Painter  noted that  he flies all  of his  product                                                                   
from his  farm site,  even though it  is relatively  close to                                                                   
the road.  He produces  between  a 1,000 and  2,000 pounds  a                                                                   
week. He would  like to work with other farms  in the area to                                                                   
truck  the  product  out  as   roads  and  ferry  service  is                                                                   
Co-Chair Mulder observed the fiscal  costs and questioned why                                                                   
the industry is not willing to  pay for the up front costs to                                                                   
begin  the program.  Mr. Painter  acknowledged that  industry                                                                   
should  pay a  greater  portion  of the  up  front costs  and                                                                   
reiterated  that  the  fiscal  notes could  be  reduced.  The                                                                   
industry can complete surveys  for less money than the state.                                                                   
He asserted that  it would cost the department  50 times more                                                                   
than industry to deliver the data.                                                                                              
Representative Lancaster asked  for an example of the cost to                                                                   
survey  a site.  Mr.  Painter noted  that  they surveyed  100                                                                   
miles of  coast at a  cost of $4  thousand dollars.  He added                                                                   
that  he has  worked  with the  Department  of Community  and                                                                   
Economic   Development   to  develop   a   spreadsheet   that                                                                   
demonstrates  the  flow  of  revenues  back  into  the  state                                                                   
treasury from  the passage of  the legislation.  He explained                                                                   
that  they visited  clam  sites  and collected  samples  that                                                                   
allowed them to  analyze the number of clams  available, took                                                                   
soundings  and  salinity  levels, and  looked  for  sensitive                                                                   
habitat  and  other  problems.   The  Department  of  Natural                                                                   
Resources has stated that 80 sites  were permitted before the                                                                   
program was abandoned.                                                                                                          
DOUG  MECUM,  DIRECTOR,  DIVISION  OF  COMMERCIAL  FISHERIES,                                                                   
DEPARTMENT  OF FISH  AND GAME,  provided  information on  the                                                                   
legislation.  He  noted  that  the  department  testified  in                                                                   
support of  the legislation. He  had not heard  any criticism                                                                   
on the fiscal  note previously. He stressed the  need to fund                                                                   
the  program  in  order  to  jump-start   the  industry.  The                                                                   
legislation  would  double  the  size of  the  industry.  The                                                                   
department would do the work to  find sites that are suitable                                                                   
and  free of  conflict.  He emphasized  that  the funding  is                                                                   
needed to do  the work. He observed that no  statutory change                                                                   
is necessary  to keep  the burden  on the  industry, but  the                                                                   
department  supports the  approach taken  in the  legislation                                                                   
[to shift the burden to the department].                                                                                        
Representative  Lancaster questioned  if the  sites had  been                                                                   
previously surveyed.  Mr. Mecum stated that they  do not do a                                                                   
lot  of surveys  on suspended  culture sites,  but that  they                                                                   
have  been involved  in surveying  on bottom  farm sites.  He                                                                   
noted  that   the  department   is  involved  in   litigation                                                                   
regarding  geoducks, which  are highly  viable. Goeducks  are                                                                   
worth $10 - $20 dollars a pound  on the Asian live market. He                                                                   
noted that there were 40 applications  put in during the last                                                                   
application  period, 19  of which were  ground bottom  sites.                                                                   
The department  surveyed the sites  at their cost,  which was                                                                   
expensive.  He stressed the  cost of  "firing up" a  research                                                                   
vessel  with divers  to survey  sites with  scuba gear  to do                                                                   
actual  quantitative surveys  and estimates  of the  existing                                                                   
biomass  and  populations.  He disagreed  that  the  industry                                                                   
could provide  the services cheaper  and estimated  the costs                                                                   
for  one  site  at  $20  thousand  dollars.  The  legislation                                                                   
anticipates nine  sites that could  be anywhere in  the state                                                                   
of Alaska.                                                                                                                      
Representative  Hudson  questioned   if  there  was  conflict                                                                   
between  the diver  fisheries and  the set  aside sites.  Mr.                                                                   
Mecum  affirmed and  acknowledged that  potential dive  sites                                                                   
would have to be taken into consideration  for a third of the                                                                   
sites. He  clarified that the  intent of the  legislation was                                                                   
for  the agencies  to do  the public  process and  biological                                                                   
surveys  to   find  areas  that   would  have   a  reasonable                                                                   
expectation for approval.                                                                                                       
RICK THOMSPON,  STATEWIDE AQUACULTURE PROGRAM,  DEPARTMENT OF                                                                   
NATURAL RESOURCES,  testified  via teleconference in  support                                                                   
of the legislation.  He noted that the Department  of Natural                                                                   
Resources has  worked closely with the industry,  sponsor and                                                                   
Department of Fish and Game to resolve issues.                                                                                  
Representative John  Davies asked if the number  of sites and                                                                   
the potential of  the industry expansion to all  of the sites                                                                   
made available  were practical.  Mr. Thompson stated  that he                                                                   
was not  qualified to speak  to the industry's  capability to                                                                   
expand. He noted that the department  is responsive and would                                                                   
work to  eliminate conflicts. He  stressed the need  to build                                                                   
in efficiencies. There may be  areas that can support 10 - 15                                                                   
sites. He  thought that it would  be good to  identify sites,                                                                   
when and where there are resources available.                                                                                   
JULY  DECKER,  EXECUTIVE  DIRECTOR,  SOUTHEAST  ALASKA  DIVER                                                                   
FISHERIES  ASSOCIATION,   testified  via  teleconference   in                                                                   
support  of  the legislation.  She  did  not think  that  the                                                                   
legislation would be detrimental to the dive fisheries.                                                                         
JON AGOSTI, CHUGIAK SHELLFISH  ASSOCIATION, SEWARD, testified                                                                   
via teleconference  in support  of the legislation.  He noted                                                                   
that  he is  also  the president  of the  Qutekcak  Shellfish                                                                   
Hatchery. He emphasized the importance  of the legislation to                                                                   
his  and  other  state  hatcheries.  They  provide  four  new                                                                   
species of shellfish  cultured in the state in  an attempt to                                                                   
diversify and grow the industry.  The legislation is critical                                                                   
to help jump-start  the industry. Grant funding  is not going                                                                   
to  continue. The  two-year  application  process, which  has                                                                   
less than a 50  percent chance of success, is  a detriment to                                                                   
the  industry. It  is  a large  cost in  time  and money  for                                                                   
unsuccessful applicants, which also acts as a deterrent.                                                                        
CAREN ROBINSON,  THE SHELLFISH  MARKET, JUNEAU, testified  in                                                                   
support.  She noted  that she  is  a partner  in a  shellfish                                                                   
company located  on Prince of  Wales Island. She  distributes                                                                   
the majority of  oysters in Southeast Alaska  and her biggest                                                                   
fear of each week is whether there  will be enough product to                                                                   
meet demand. She  noted that there is not enough  to send out                                                                   
of state.                                                                                                                       
Representative  Hudson asked if  the legislation  extends the                                                                   
length of the lease and questioned  if longer contracts would                                                                   
aid industry.  Ms. Robinson agreed  that it would  be helpful                                                                   
to do anything to extend and simplify the lease process.                                                                        
Representative John  Davies asked if  the level of  effort is                                                                   
reasonable.  Ms.   Robinson  thought  that  the   number  was                                                                   
reasonable.  She  reiterated  that  she  is  unable  to  meet                                                                   
demand, yet it is a difficult industry to get started in.                                                                       
In  response   to  a   question  by  Representative   Davies,                                                                   
Representative   Scalzi   could    not   provide   additional                                                                   
information  regarding  the  amount of  public  interest.  He                                                                   
noted  that if  all 90  sites  were released  that the  state                                                                   
would receive $58,000 annually,  based on the assumption that                                                                   
all sites were released. He felt  that there was an extensive                                                                   
level of interest.                                                                                                              
Representative   Whitaker   reviewed    the   fiscal   notes:                                                                   
Department  of   Fish  and   Game,  Division  of   Commercial                                                                   
Fisheries  $90   thousand  dollars,   and  the  first   year;                                                                   
Department of  Natural Resources, $98.3 thousand  dollars the                                                                   
first  year; and  Department of  Fish and  Game, Division  of                                                                   
Habitat  for  $72.5  thousand  dollars  the  first  year.  He                                                                   
emphasized that the funding would  spur economic development.                                                                   
The  total   cost  would  be   $272  thousand   dollars.  The                                                                   
Department  of  Environmental   Conservation  withdrew  their                                                                   
fiscal  note. He  spoke  in support  of  the legislation  and                                                                   
emphasized that it would help a fledgling industry.                                                                             
Representative  Lancaster  pointed out  that  a hatchery  was                                                                   
built  in Seward  that just  delivered  its first  commercial                                                                   
product  last  fall,  which  could be  used  to  support  the                                                                   
Representative  Hudson  questioned  how  many jobs  would  be                                                                   
involved  in  each project.  Representative  Scalzi  observed                                                                   
that there  are 14  members in  the Katchemak Bay  collective                                                                   
involved. Mr.  Painter stated that  there are four  full time                                                                   
employees at  their site.  The site next  to them has  2 full                                                                   
time partners with a few part-time workers.                                                                                     
Representative  Hudson  estimated  that  there would  be  270                                                                   
individuals employed on the additional sites.                                                                                   
Co-Chair  Mulder  spoke in  support  of the  legislation.  He                                                                   
asked the  sponsor to work  with industry and  the department                                                                   
to look for funding efficiencies.                                                                                               
Representative Lancaster  MOVED to report CSHB  208 (RES) out                                                                   
of Committee with  the accompanying fiscal note.  There being                                                                   
NO OBJECTION, it was so ordered.                                                                                                
CSHB  208 (RES)  was REPORTED  out  of Committee  with a  "do                                                                   
pass"  recommendation and  with  previously published  fiscal                                                                   
notes: DNR (#2), DFG (#3) and DFG (#4).                                                                                         
HOUSE BILL NO. 344                                                                                                            
     An   Act   increasing  fees   for   driver's   licenses,                                                                   
     instruction  permits,  and   identification  cards;  and                                                                   
     providing for an effective date.                                                                                           
LINDA SYLVESTER, STAFF, REPRESENTATIVE  PETE KOTT, HB 344 was                                                                   
introduced  by the House  Rules Committee  at the request  of                                                                   
the Division of  Motor Vehicles.  Passage of HB  344 does two                                                                   
   ΠFees for non-commercial drivers licenses and ID cards                                                                      
     will increase by $5.00. Learner's  permits will increase                                                                   
     by $10.                                                                                                                    
   Considering the approximate 180,000 original issues and                                                                      
   renewals processed annually, the increase translates into                                                                    
   an additional $750,000 to $900,000 per year.  Also,                                                                          
   ΠThe fee increase enables DMV to implement a conversion                                                                     
     to  a  digital license  system.     The  Division  seeks                                                                   
     $500,000  to  implement the  IT  system  to support  the                                                                   
     digital  system. They already  have the capital  funding                                                                   
     for the equipment.                                                                                                         
Ms. Sylvester read a prepared statement:                                                                                        
     Alaska  is one  of 3 remaining  states  that has yet  to                                                                   
     abandon  the Polaroid  system. By  moving beyond  1950's                                                                   
     era technology,  Alaska steps  up efforts to  insure the                                                                   
     integrity  of  this nation's  individual  identification                                                                   
     system.  Since September  11, considerable attention has                                                                   
     focused on the integrity of this system.                                                                                   
     Keep in mind that the driver's  license and ID cards are                                                                   
     considered  "breeder" documents. Once  in hand  they can                                                                   
     be parlayed into other documents  like airplane tickets,                                                                   
     passports, checking accounts,  fire arms permits, credit                                                                   
     cards,  among others.  Just like  that, a  new or  false                                                                   
     identity  is  set  up.   The  driver's  license  is  the                                                                   
     cornerstone  of  the  identity  theft  phenomenon.  Last                                                                   
     year, this little problem  resulted in losses of over $7                                                                   
     billion dollars.                                                                                                           
     Less glamorous  but indicative of a larger  "day to day"                                                                   
     problem  for the restricted  sales industry  is underage                                                                   
     kids  fraudulently  obtaining   or  manufacturing  id's.                                                                   
     You'll  notice  resolutions  from  the  Municipality  of                                                                   
     Anchorage and  from Alcohol Retail Beverage  Association                                                                   
     and a  letter in support  from CHARR that speak  to that                                                                   
     The driver's license is far  more than evidence that you                                                                   
     passed  your  road  test.   It  has  become  a  critical                                                                   
     component  to our  society's  security  both personal  &                                                                   
     As  such the  government  has a  HUGE responsibility  to                                                                   
     ensure the integrity of that system.                                                                                       
     Think about how Alaska lives  up to that responsibility.                                                                   
     The  license   you  carry  in  your  pocket   relies  on                                                                   
     technology that is unchanged since 1954.                                                                                   
     Think  of  the  ways one  might  fraudulently  obtain  a                                                                   
     license.   It takes two documents  with your name  on it                                                                   
     to get a  duplicate license. No photo  identification is                                                                   
     required.  Someone could  steal  mail, walk  into a  DMV                                                                   
     office  and potentially  walk  out with  a license  with                                                                   
     someone  else's identifying  information is now  matched                                                                   
     to their  photo.   Right now, DMV  lacks the  ability to                                                                   
     keep an electronic image  of the individual.  That means                                                                   
     they  can get  that  person's checking  account,  credit                                                                   
     card, etc., etc., etc.                                                                                                     
     Another  creative idea  was shared  by a  staffer for  a                                                                   
     Finance  Committee  member.  In college,  their  friend,                                                                   
     commercial art major created  a large poster of an exact                                                                   
     replica  of an Alaska  Driver's  license. He had  people                                                                   
     stand  in front, in  front of  the 'yellow curtain'  and                                                                   
     took a  Polaroid snapshot,  laminated it and  a driver's                                                                   
     license was created.                                                                                                       
     Alaska's license  is uniquely old fashioned.  I've heard                                                                   
     anecdotal  stories  about bars  or  airlines balking  at                                                                   
     accepting  them  because  it  looks too  low  tech,  too                                                                   
     homemade.  The license  is a  dinosaur. Other  problems:                                                                   
     Alaska's  DMV cannot electronically  transmit a  copy of                                                                   
     the driver's  license nor can they retain  an electronic                                                                   
     image.  If  you are  traveling,  have your  wallet  what                                                                   
     would  you  do? DMV  can  only manufacture  a  duplicate                                                                   
     license with an empty space  where your photo should be.                                                                   
     If your not there in person  to have your picture taken,                                                                   
     no picture  exists.   This is a  crisis for  a traveling                                                                   
     Alaskan  negotiating  their  way through  the  tough  as                                                                   
     nails  security  and  airport  agents  in  the  nation's                                                                   
     airports. If Alaska had a  digital license, a completely                                                                   
     intact, functional duplicate  license could be expressed                                                                   
     to the sorry traveler.                                                                                                     
     If  nothing  I've  said   has  impressed  you  with  the                                                                   
     importance of converting  to the digital drivers license                                                                   
     system,  I've got  one more compelling  reason  for your                                                                   
     consideration. Last year  the Polaroid filed for Chapter                                                                   
     11 bankruptcy.  In February at the  American Association                                                                   
     of  Motor  Vehicle  Administrators   was  informed  that                                                                   
     Chapter  7 Bankruptcy  was likely  to follow. Chapter  7                                                                   
     meaning  selling  off  of  the business  assets.    Once                                                                   
     digital  cameras hit  the  consumer market,  the end  of                                                                   
     Polaroid  photography  became   a  foregone  conclusion.                                                                   
     Already,  the   cameras  used  by  DMV   are  no  longer                                                                   
     manufactured.   It is just  a matter of time  before the                                                                   
     film can no longer be purchased either.                                                                                    
MARY  MARSHBURN,   DIRECTOR,  DIVISION  OF   MOTOR  VEHICLES,                                                                   
ANCHORAGE,  testified via  teleconference in  support of  the                                                                   
legislation.  She  observed  that  Alaska  is  one  of  three                                                                   
remaining  states that  does not use  digital licensing.  The                                                                   
passage  of HB 344  would help  to move  forward for  a much-                                                                   
needed change in the Alaska system.  She observed that Alaska                                                                   
uses  a  manual  process with  preprinted  forms,  which  are                                                                   
laminated. All of  the items are subject to  theft, fraud and                                                                   
alteration, though  she did not  think it would be  as simple                                                                   
as  indicated  by the  previous  testifier. Within  the  past                                                                   
four-months,   five  individuals   have  been  arrested   for                                                                   
fraudulent attempt  to alter or  obtain a license.   Computer                                                                   
generation  are  significantly  more difficult  to  alter  or                                                                   
replicate. There are no preprinted  forms, pouches or photos.                                                                   
Computer generation  allows more complex and  secure features                                                                   
on  the license.  A digital  picture  is stored  and used  to                                                                   
verify  identity   for  renewal   or  law  enforcement.   She                                                                   
concluded that  digital licenses would benefit  consumers. It                                                                   
is more  difficult  to alter and  more secure.  If a  current                                                                   
license were lost it could not  be replaced with a picture if                                                                   
the  holder were  out  of state.  Digital  licenses could  be                                                                   
reprinted and sent  to the consumer. She noted  that there is                                                                   
wide  support among  law enforcement  agencies and  industry.                                                                   
She  addressed the  fiscal notes,  which  would provide  $500                                                                   
thousand  dollars in  capital  funds for  system  development                                                                   
testing and deployment. Funding  would support integration of                                                                   
the  database, license  generation and  data issuance,  image                                                                   
storage  capture, and  storage  of the  transmission for  law                                                                   
enforcement use. It would also  test the system and deploy it                                                                   
statewide, integrate  with other  users, and provide  support                                                                   
software.  Alaska currently  has over  the counter  licensing                                                                   
issuance. She  spoke to  centralizing the function.  Pictures                                                                   
would  be taken  at  the Division  of  Motor Vehicles,  which                                                                   
would  take the  picture  and  application, but  the  license                                                                   
would be mailed from a central facility.                                                                                        
TAPE HFC 02 - 73, Side A                                                                                                      
Ms.  Marshburn  stated  that  centralization  would  be  more                                                                   
expensive  than over  the counter  issuance. Personnel  costs                                                                   
would  be the biggest  factors.  There would  be a $5  dollar                                                                   
increase  to the  license and  duplication fees.  Instruction                                                                   
permits would  be increased  by $10  dollars. Fees  in Alaska                                                                   
are currently at  the low end of the national  scale; raising                                                                   
the fee  would bring Alaskan fees  to the middle to  low end.                                                                   
The Division does not recommend  raising commercial licensing                                                                   
fees. The last  increase to drivers licensing fees  was 10 or                                                                   
more years  ago and  they think  the increase is  reasonable.                                                                   
Licenses  should remain  affordable  to  maintain safety  and                                                                   
encourage licensing.                                                                                                            
Representative  John  Davies  asked  if  there  would  be  an                                                                   
increment  to  maintain accuracy.  Ms.  Marshburn  emphasized                                                                   
that  they currently  require  proof of  birth  and proof  of                                                                   
identity.  Previous photos  can be retrieved  when there  are                                                                   
questions, but they are not instantly recallable.                                                                               
Representative  Lancaster questioned  if the Division  looked                                                                   
into  any technologies  other  than Polaroid.  Ms.  Marshburn                                                                   
observed  that Polaroid  would be  eligible to  bid, but  she                                                                   
thought that it was likely that  another vendor would receive                                                                   
the bid.                                                                                                                        
Representative Lancaster referred  to national identification                                                                   
cards.  Ms.  Marshburn  noted that  discussions  on  national                                                                   
identity  cards envision  a single  card issued  by a  single                                                                   
agency,  such as  the federal  Department of  Transportation.                                                                   
Improving  state licensing could  help defer  the issue  of a                                                                   
national identity card.                                                                                                         
Representative  Hudson questioned if  the renewal  would have                                                                   
to occur  at a division  office. Ms. Marshburn  observed that                                                                   
there would be no changes in the  basic process of issuing or                                                                   
renewing licensing.  Individuals would still be  eligible for                                                                   
renewal by mail after the initial five-year period.                                                                             
In response to a question by Co-Chair  Williams, Ms Marshburn                                                                   
explained that  the Division estimates $900  thousand dollars                                                                   
in revenue would be generated  with the increase of licenses.                                                                   
The  Division  is asking  for  $500  thousand dollars  to  be                                                                   
appropriated to develop the system.                                                                                             
Representative  John Davies  MOVED to  report CSHB 344  (STA)                                                                   
out of  Committee with  the accompanying  fiscal note.  There                                                                   
being NO OBJECTION, it was so ordered.                                                                                          
CSHB  344 (STA)  was REPORTED  out  of Committee  with a  "do                                                                   
pass"  recommendation and  with  previously published  fiscal                                                                   
note: ADM (#1).                                                                                                                 
The meeting was adjourned at 3:43 PM                                                                                            

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