Legislature(2017 - 2018)HOUSE FINANCE 519

05/09/2017 01:30 PM FINANCE

Note: the audio and video recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.

Download Mp3. <- Right click and save file as
Download Video part 1. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 159 OPIOIDS;PRESCRIPTIONS;DATABASE;LICENSES TELECONFERENCED
<Bill Hearing Canceled>
+= HB 150 PAY, ALLOWANCES, BENEFITS FOR MILITIA MEM TELECONFERENCED
Moved HB 150 Out of Committee
+= HB 124 BENEFIT CORPORATIONS TELECONFERENCED
Moved CSHB 124(FIN) Out of Committee
+ HB 142 UNEMPLOYMENT COMPENSATION BENEFITS TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 74 DRIVER'S LICENSE & ID CARDS & REAL ID ACT TELECONFERENCED
Moved CSHB 74(FIN) Out of Committee
                  HOUSE FINANCE COMMITTEE                                                                                       
                        May 9, 2017                                                                                             
                         1:32 p.m.                                                                                              
                                                                                                                                
                                                                                                                                
1:32:01 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Foster  called the House Finance  Committee meeting                                                                    
to order at 1:32 p.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Neal Foster, Co-Chair                                                                                            
Representative Paul Seaton, Co-Chair                                                                                            
Representative Les Gara, Vice-Chair                                                                                             
Representative Jason Grenn                                                                                                      
Representative Scott Kawasaki                                                                                                   
Representative Dan Ortiz                                                                                                        
Representative Lance Pruitt                                                                                                     
Representative Louise Stutes (Alternate)                                                                                        
Representative Steve Thompson                                                                                                   
Representative Cathy Tilton                                                                                                     
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative David Guttenberg                                                                                                 
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Leslie   Ridle,    Deputy   Commissioner,    Department   of                                                                    
Administration;  Cori Mills,  Special  Assistant, Office  of                                                                    
the  Attorney  General,  Department of  Law;  Jane  Pierson,                                                                    
Staff,   Representative   Neal   Foster;   Janey   Hovenden,                                                                    
Director,   Division    of   Corporations,    Business   and                                                                    
Professional  Licensing, Department  of Commerce,  Community                                                                    
and   Economic    Development;   Kendra    Kloster,   Staff,                                                                    
Representative  Chris   Tuck;  Representative   Chris  Tuck,                                                                    
Sponsor;  Lennon Weller,  Economist, Research  and Analysis,                                                                    
Department  of   Labor  and  Workforce   Development;  Patsy                                                                    
Westcott,    Assistant   Director,    Employment   Security,                                                                    
Department    of    Labor   and    Workforce    Development;                                                                    
Representative Gary Knopp; Representative Chris Birch.                                                                          
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Captain Daniel Lowden, Alaska State Troopers, Department of                                                                     
Public Safety; Marla Thompson, Director, Department of                                                                          
Motor Vehicles, Department of Administration;                                                                                   
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 74     DRIVER'S LICENSE & ID CARDS & REAL ID ACT                                                                             
                                                                                                                                
          CSHB 74(FIN)  was REPORTED  out of  committee with                                                                    
          an "amend"  recommendation and  with a  new fiscal                                                                    
          impact  note by  the Department  of Administration                                                                    
          and  with  two  previously published  zero  fiscal                                                                    
          notes: FN1(MVA) and FN2(DPS).                                                                                         
                                                                                                                                
HB 124    BENEFIT CORPORATIONS                                                                                                  
                                                                                                                                
          CSHB 74(FIN) was REPORTED OUT  of Committee with a                                                                    
          "do  pass" recommendation  and  with a  previously                                                                    
          published fiscal impact note: FN1(CED).                                                                               
                                                                                                                                
HB 142    UNEMPLOYMENT COMPENSATION BENEFITS                                                                                    
                                                                                                                                
          HB  142  was  HEARD  and  HELD  in  committee  for                                                                    
          further consideration.                                                                                                
                                                                                                                                
HB 150    PAY, ALLOWANCES, BENEFITS FOR MILITIA MEM                                                                             
                                                                                                                                
          HB 150  was REPORTED out  of committee with  a "do                                                                    
          pass"   recommendation   and   with   a   previous                                                                    
          published indeterminate fiscal note: FN1(MVA).                                                                        
                                                                                                                                
Co-Chair Foster reviewed the agenda for the day. He                                                                             
intended to move HB 74, HB 124, and HB 150 from committee.                                                                      
Also, the committee would have its first hearing on HB 142.                                                                     
                                                                                                                                
HOUSE BILL NO. 74                                                                                                             
                                                                                                                                
     "An Act  relating to the implementation  of the federal                                                                    
     REAL  ID  Act of  2005;  and  relating to  issuance  of                                                                    
     identification   cards  and   driver's  licenses;   and                                                                    
     providing for an effective date."                                                                                          
                                                                                                                                
1:33:27 PM                                                                                                                    
                                                                                                                                
Co-Chair  Foster relayed  that the  bill had  been heard  in                                                                    
committee twice  on April  20, 2018 and  April 25,  2018. In                                                                    
the meeting the committee would  be taking up amendments. He                                                                    
invited  Ms. Ridle  to the  table and  reviewed the  list of                                                                    
testifiers available online.                                                                                                    
                                                                                                                                
Vice-Chair Gara MOVED to ADOPT Amendment 1 (copy on file):                                                                      
                                                                                                                                
     Page 4, following line 20:                                                                                                 
          Insert new subsections to read:                                                                                       
               "(d) The department                                                                                              
                    (1)  may  not   share  more  than  three                                                                    
                    digits  of  a person's  social  security                                                                    
                    number  to  determine whether  a  person                                                                    
                    has  been issued  a driver's  license in                                                                    
                    another state;                                                                                              
                    (2) may share the  number of digits of a                                                                    
                    person's    social    security    number                                                                    
                    required by federal law.                                                                                    
                                                                                                                                
               (e) Notwithstanding  (d)(l) of  this section,                                                                    
               the department  may share  up to  five digits                                                                    
               but as  few digits as feasible  of a person's                                                                    
               social security  number to  determine whether                                                                    
               a person  has been issued a  driver's license                                                                    
               in another state if the department                                                                               
                    (1)  has taken  all  steps necessary  to                                                                    
                    secure  an agreement  to use  only three                                                                    
                    digits  of  a person's  social  security                                                                    
                    number; and                                                                                                 
                    (2)  has   been  unable  to   secure  an                                                                    
                    agreement to use only  three digits of a                                                                    
                    person's social security number."                                                                           
                                                                                                                                
     Reletter the following subsection accordingly.                                                                             
                                                                                                                                
     Page 4, line 22:                                                                                                           
          Delete "(b) and (c)"                                                                                                  
          Insert "(b) - (d)"                                                                                                    
     Page 9, line 3:                                                                                                            
          Delete "AS 28.05.068(d)"                                                                                              
          Insert "AS 28.05.068(e)"                                                                                              
                                                                                                                                
Representative Wilson OBJECTED for discussion.                                                                                  
                                                                                                                                
Vice-Chair  Gara  recently learned  that  in  order for  the                                                                    
Department  of  Motor  Vehicles   (DMV)  to  determine  that                                                                    
someone did not have a  driver's license from another state,                                                                    
it had  been required  by a  conglomeration of  agencies and                                                                    
non-profits  to share  5 social  security number  digits. He                                                                    
continued that with  so many Alaskans having  a "574" Social                                                                    
Security number  that shares 8 number  digits the department                                                                    
had not figured out a way  around having to share 5 numbers.                                                                    
The  amendment stated  that the  department should  share no                                                                    
more than  3 digits. If  3 digits  were not enough,  then no                                                                    
more than  4 should be  shared. He relayed that  federal law                                                                    
at times required  them to share 5 digits -  the state could                                                                    
not  make the  agencies violate  federal law.  The amendment                                                                    
advocated  that the  state should  attempt to  negotiate the                                                                    
number  of  Social Security  digits  down  to  3 or  4.  The                                                                    
purpose  of the  amendment  was to  protect an  individual's                                                                    
privacy.                                                                                                                        
                                                                                                                                
Co-Chair   Foster   indicated  Representative   Pruitt   and                                                                    
Representative  Tilton  had  joined  the  committee  at  the                                                                    
table.  He   also  noted  that  Representative   Stutes  was                                                                    
presently an alternate for Representative Guttenberg.                                                                           
                                                                                                                                
Representative  Wilson liked  the intent  of the  amendment.                                                                    
She referred to  lines 12 through 15 of  the amendment where                                                                    
it talked about  having taken all steps  necessary to secure                                                                    
an agreement.  She asked for clarification.  Vice-Chair Gara                                                                    
responded that  it was  a directive  to the  department. The                                                                    
intent  was for  the department  to work  with the  national                                                                    
non-profit  currently   requiring  5   digits  to   find  an                                                                    
alternative to that requirement.                                                                                                
                                                                                                                                
Representative   Wilson  reiterated   that  she   liked  the                                                                    
amendment. She was  concerned with being brushed  off by the                                                                    
non-profit. She  was hoping the  department could  shed some                                                                    
light  on the  non-profit's  position. She  asked Ms.  Ridle                                                                    
about her dealings with the non-profit around this issue.                                                                       
                                                                                                                                
1:37:52 PM                                                                                                                    
                                                                                                                                
LESLIE   RIDLE,    DEPUTY   COMMISSIONER,    DEPARTMENT   OF                                                                    
ADMINISTRATION, reported that the  non-profit dealt with all                                                                    
of the  DMVs across the  United States. The State  of Alaska                                                                    
was  a member  and had  a representative  from Alaska's  DMV                                                                    
attending meetings who also served  on the governance board.                                                                    
The  department  had already  sent  an  official letter  and                                                                    
would  have representation  and a  physical presence  at the                                                                    
meetings. She  assumed that  Alaska was  not the  only state                                                                    
with  concerns about  the 5-digit  requirement. She  thought                                                                    
the state would have allies in the matter.                                                                                      
                                                                                                                                
Representative Wilson WITHDREW her OBJECTION.                                                                                   
                                                                                                                                
There being NO OBJECTION, Amendment 1 was ADOPTED.                                                                              
                                                                                                                                
Co-Chair Seaton MOVED to ADOPT Amendment 2 (copy on file):                                                                      
                                                                                                                                
     Page 2, lines 13 - 15:                                                                                                     
          Delete "the minimum amount of time required by                                                                        
          P.L. I 09-13, Division B (REAL ID Act of 2005),                                                                       
          or other"                                                                                                             
          Insert "15 years after the date of application                                                                        
          unless otherwise required by another"                                                                                 
                                                                                                                                
     Page 2, line 29:                                                                                                           
          Delete "one year"                                                                                                     
          Insert "15 years"                                                                                                     
                                                                                                                                
     Page 5, lines 1 - 3:                                                                                                       
          Delete "the minimum amount of time required by                                                                        
          P.L. 109-13, Division B (REAL ID Act of 2005), or                                                                     
          other"                                                                                                                
          Insert "15 years after the date of application                                                                        
          unless otherwise required by another"                                                                                 
                                                                                                                                
     Page 5, line 17:                                                                                                           
          Delete "one year"                                                                                                     
          Insert "15 years"                                                                                                     
                                                                                                                                
Representative Wilson OBJECTED for discussion.                                                                                  
                                                                                                                                
Co-Chair Seaton explained that the  purpose of the amendment                                                                    
was  to   keep  Alaska's   current  practice   of  retaining                                                                    
documents for 15 years. He  had heard from the Department of                                                                    
Administration  and  the  Department  of  Public  Safety  in                                                                    
testimonies  about  the  value   of  these  documents  being                                                                    
available.  He  had  also  heard  that  the  documents  were                                                                    
retained  in an  encrypted manner.  He continued  to explain                                                                    
that for  Real ID  compliant licenses  it would  change from                                                                    
the minimum  required by  REAL ID  retention to  the state's                                                                    
current 15  years. For non-compliant licenses  the amendment                                                                    
would keep the  same position as the current  bill. The non-                                                                    
compliant licenses  would not be scanned  or retained except                                                                    
for the photos which would be  retained for 15 years for the                                                                    
Department of Public  Safety and for internal  state use. It                                                                    
would maintain  the current status for  driver's license and                                                                    
use  of documents  within  the State  of  Alaska instead  of                                                                    
modifying it based on federal law.                                                                                              
                                                                                                                                
Co-Chair  Foster  clarified  that   Amendment  2  was  being                                                                    
addressed.                                                                                                                      
                                                                                                                                
Representative Wilson  addressed her objection. She  was not                                                                    
in favor of the amendment. She  did not think the public was                                                                    
aware of their information being  retained for 15 years. She                                                                    
was concerned  with privacy issues.  She had a  problem with                                                                    
DPS using  a picture of  a person,  who had not  committed a                                                                    
crime,  in  a line-up.  She  did  not  believe it  had  been                                                                    
required. People had their picture taken for DMV purposes.                                                                      
                                                                                                                                
Vice-Chair  Gara stated  that  the testimony  had been  very                                                                    
clear from a  previous day that if the state  did not retain                                                                    
photos it would make it  more difficult for the Alaska State                                                                    
Troopers and other law enforcement  agencies to solve murder                                                                    
cases and cold  cases. It would also make  it more difficult                                                                    
to find  missing persons.  He opined  that everything  was a                                                                    
policy  call and  very  few policy  calls  were 100  percent                                                                    
black and white. He sided  with trying to solve murder cases                                                                    
and finding  missing persons.  It had  been reported  by law                                                                    
enforcement officials that keeping  photos helped them to do                                                                    
both.                                                                                                                           
                                                                                                                                
1:42:17 PM                                                                                                                    
                                                                                                                                
Representative  Ortiz asked  if there  were other  practical                                                                    
benefits  for keeping  these records  on file  for up  to 15                                                                    
years  other  than  what  had   already  been  mentioned  by                                                                    
Representative Gara. Ms. Ridle  responded that it had mainly                                                                    
to do with public safety.  She added that the 15-year period                                                                    
was in state  statute. She reported that it  also helped the                                                                    
DMV to issue a duplicate license.                                                                                               
                                                                                                                                
Representative Wilson did not  understand why an old picture                                                                    
would be kept for 15 years  since she was going back every 8                                                                    
years  to  renew  her license.  Ms.  Ridle  responded  that,                                                                    
foremost, it  was a matter  of public safety.  She mentioned                                                                    
the benefit  of having previous  addresses to help  verify a                                                                    
person's identity.                                                                                                              
                                                                                                                                
Representative  Wilson asked  at what  point within  the 15-                                                                    
year period DPS  had access to photos.  Ms. Ridle responded,                                                                    
"as needed." She elaborated that  DPS would contact DMV with                                                                    
what they needed.                                                                                                               
                                                                                                                                
Representative Wilson wondered about  the benefits of having                                                                    
an  older  license  on  file once  a  person  renewed  their                                                                    
license. Ms.  Ridle suggested having Captain  Lowden respond                                                                    
to  Representative  Wilson's  question.  The  Department  of                                                                    
Public  Safety  might  want to  verify  what  information  a                                                                    
person provided about where they lived.                                                                                         
                                                                                                                                
1:45:01 PM                                                                                                                    
                                                                                                                                
CAPTAIN DANIEL LOWDEN, ALASKA  STATE TROOPERS, DEPARTMENT OF                                                                    
PUBLIC SAFETY  (via teleconference), answered that  when the                                                                    
troopers were working  cases that had any age  to them, such                                                                    
as cold cases,  they liked to get the picture  of the person                                                                    
suspected as close to the time period as possible.                                                                              
                                                                                                                                
Representative Wilson asked if  the troopers received all of                                                                    
the information rather  than just the photo  from a person's                                                                    
identification card.  Captain Lowden was unsure  of how much                                                                    
of the information was provided  to the troopers. The Alaska                                                                    
State Troopers dealt mostly with  photographs when trying to                                                                    
identify people and  to find wanted persons.  He thought the                                                                    
records  bureau used  more  of the  documents  in trying  to                                                                    
reconcile   a  person's   records.   Sometimes  people   use                                                                    
different names  and it  was necessary  to merge  records or                                                                    
split  them  out. The  troopers  might  use them  for  fraud                                                                    
investigations  or  for  identify  theft  investigations  as                                                                    
well.                                                                                                                           
                                                                                                                                
Representative Wilson  asked if the groups  he was referring                                                                    
to  were  part of  DPS  or  another entity.  Captain  Lowden                                                                    
answered that  it was  through DPS  in a  different division                                                                    
where the  employees compiled all  records for  every ticket                                                                    
and conviction.                                                                                                                 
                                                                                                                                
Co-Chair Seaton  asked if a  person had to appear  in person                                                                    
at  the  DMV  for  a driver's  license  renewal.  Ms.  Ridle                                                                    
relayed that the  DMV could issue a  one-time renewal online                                                                    
or in  person. If  a person  lost a  license, the  DMV could                                                                    
provide a duplicate with their paperwork on file.                                                                               
                                                                                                                                
Co-Chair  Seaton reminded  the committee  that he  asked the                                                                    
American Civil Liberties Union (ACLU)  about any breaches of                                                                    
information. He reported that the  ACLU was not aware of any                                                                    
breach or  problem with the  15-year retention  of documents                                                                    
for Alaska.                                                                                                                     
                                                                                                                                
Representative Stutes  asked if  the records  were currently                                                                    
kept  for  15  years.   Co-Chair  Seaton  responded  in  the                                                                    
affirmative.                                                                                                                    
                                                                                                                                
Representative Wilson MAINTAINED her OBJECTION.                                                                                 
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Kawasaki,  Ortiz,  Gara,  Grenn,  Stutes,  Seaton,                                                                    
Foster                                                                                                                          
OPPOSED: Pruitt, Thompson, Tilton, Wilson                                                                                       
                                                                                                                                
The MOTION to ADOPT Amendment 2 PASSED (7/4).                                                                                   
                                                                                                                                
Vice-Chair Gara MOVED to ADOPT Amendment 3 (copy on file):                                                                      
                                                                                                                                
     Page 1, line 10:                                                                                                           
          Delete "$20"                                                                                                          
          Insert "$10"                                                                                                          
                                                                                                                                
     Page 8, line 27:                                                                                                           
          Delete "$20"                                                                                                          
          Insert "$10"                                                                                                          
                                                                                                                                
Representative Wilson OBJECTED for discussion.                                                                                  
                                                                                                                                
1:50:25 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
1:51:07 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  Foster indicated  that Representative  Chris Birch                                                                    
had joined the audience.                                                                                                        
                                                                                                                                
Vice-Chair  Gara reported  that the  testimony he  heard was                                                                    
that the  current version  of the  bill added  a $20  fee to                                                                    
obtain a Real ID compliant  driver's license. He thought the                                                                    
amount was  excessive and would  produce roughly  $1 million                                                                    
more revenue  than needed in  FY 19  and FY 20  and $500,000                                                                    
more revenue than needed in FY  21 and FY 22. The department                                                                    
had proposed  a $10 fee  because it  would make the  Real ID                                                                    
license  cost-neutral. However,  a  $20  fee would  generate                                                                    
additional revenue.  He understood the need  for revenue but                                                                    
did not feel it was an  appropriate place to get it. The fee                                                                    
would be a flat charge to people no matter their income.                                                                        
                                                                                                                                
Ms.  Ridle responded  that in  the original  version of  the                                                                    
bill the  fee was $5,  the cost of  making the card.  In the                                                                    
previous committee  the amount  was changed  to $20.  If the                                                                    
fee was reduced  to $10, assuming that about  half of people                                                                    
apply for  a Real ID card  (a guess based on  other states),                                                                    
the state should be able to  payoff about $1.06 million in 2                                                                    
years. It  would take a little  more to pay off  the cost of                                                                    
$1.4 million to implement it.                                                                                                   
                                                                                                                                
Vice-Chair Gara asked Ms. Ridle  whether $10 was an accurate                                                                    
amount to  remain cost-neutral. Ms.  Ridle responded  in the                                                                    
affirmative. At a  certain point $1.5 would be  paid off and                                                                    
the  remainder would  go  back into  the  general fund.  She                                                                    
estimated that  it would take 2.3  to 3 years to  pay of the                                                                    
implementation costs.                                                                                                           
                                                                                                                                
Vice-Chair   Gara  asked   about   the  $5   fee  that   the                                                                    
administration had  originally introduced  in the  bill. Ms.                                                                    
Ridle responded  that the $5 fee  would pay for the  cost of                                                                    
the card.  It did not  include the costs  of implementation.                                                                    
If the  fee was  $10, $5  would go  towards paying  the $1.5                                                                    
implementation cost.                                                                                                            
                                                                                                                                
Representative  Kawasaki  asked if  there  was  a charge  to                                                                    
become  a member  of American  Association of  Motor Vehicle                                                                    
Administrators (AAMVA). Ms. Ridle responded affirmatively.                                                                      
                                                                                                                                
Representative  Kawasaki  wondered  if   the  charge  was  a                                                                    
variable charge  rather than a  fixed charge.  He understood                                                                    
the  charge increased  every year.  Ms. Ridle  did not  know                                                                    
what the state  paid in charges. She  thought Marla Thompson                                                                    
from DMV could answer the question.                                                                                             
                                                                                                                                
1:55:22 PM                                                                                                                    
                                                                                                                                
MARLA  THOMPSON,  DIRECTOR,  DEPARTMENT OF  MOTOR  VEHICLES,                                                                    
DEPARTMENT  OF  ADMINISTRATION (via  teleconference),  asked                                                                    
Representative Kawasaki to repeat the question.                                                                                 
                                                                                                                                
Representative Kawasaki repeated  his question. Ms. Thompson                                                                    
would  have   to  double  check.  The   fees  increased  and                                                                    
decreased, but the  state received notice of  any changes 12                                                                    
months in advance. She would look up the information.                                                                           
                                                                                                                                
Representative Kawasaki  wanted the answer to  his question.                                                                    
He believed the  fees increased annually. He  thought it was                                                                    
important  because  Alaska  would  have  Real  ID  compliant                                                                    
identifications, and  because the state was  going through a                                                                    
national   privately  owned   non-profit  organization.   He                                                                    
suggested that  the fees would  go up every year.  He wanted                                                                    
to make sure the fiscal  note reflected a downward trend. He                                                                    
thought the  cost for implementing  Real ID in  Alaska would                                                                    
actually go up because of being  part of AAMVA. He asked for                                                                    
the answer in writing.                                                                                                          
                                                                                                                                
Representative Pruitt  asked if  the amount was  in addition                                                                    
to the already set fee that the public currently paid for                                                                       
cards.  Ms.  Ridle replied  affirmatively.  It  would be  an                                                                    
additional                                                                                                                      
$20.                                                                                                                            
                                                                                                                                
Representative  Pruitt asked  when  the  last rate  increase                                                                    
occurred. Ms. Ridle thought it was sometime in the 80s.                                                                         
                                                                                                                                
Representative  Pruitt mentioned  that  4 or  5 years  prior                                                                    
Alaska changed  how it produced  its ID's. He asked  if that                                                                    
particular  program cost  more  than  previously. Ms.  Ridle                                                                    
deferred  to Ms.  Thompson. Ms.  Thompson  replied that  the                                                                    
cost  was  similar  because  at  the  time  managers  really                                                                    
struggled with the printers and  the quality of the products                                                                    
that the  division used. In  the end, her  understanding was                                                                    
that  the  cost  was  similar between  what  the  state  was                                                                    
spending on  printer costs, paper, and  supplies versus what                                                                    
the division did with bids.                                                                                                     
                                                                                                                                
Representative  Pruitt asked  if  there was  an increase  in                                                                    
cost from  the time  the fee  was set  at $20.  He suggested                                                                    
there  was an  increase in  costs  over the  time frame.  He                                                                    
asked if his statement  was appropriate. Ms. Ridle responded                                                                    
that the  cost most likely  went up over  time, particularly                                                                    
in personnel.                                                                                                                   
                                                                                                                                
Representative Pruitt asked  if he could expect  the cost to                                                                    
remain  for  an  extended  period  since  $5  was  currently                                                                    
covering the  cost. He wondered  if the state  should expect                                                                    
the amount  to go  up. Ms. Ridle  thought it  would increase                                                                    
incrementally.                                                                                                                  
                                                                                                                                
Co-Chair  Seaton  asked  about  the length  of  the  current                                                                    
driver's license  and what  it would be  under Real  ID. Ms.                                                                    
Ridle answered  that it was  currently a 5-year  renewal and                                                                    
the  Real ID  legislation  would  bump it  up  to an  8-year                                                                    
renewal.                                                                                                                        
                                                                                                                                
Co-Chair Seaton  mentioned the differences  in cost  and the                                                                    
time between  renewals. At  a fee  of $20,  the cost  of the                                                                    
card would be  $5 to make and an additional  $5 per year for                                                                    
the additional 3 years for a  Real ID with an 8-year renewal                                                                    
instead  of   a  5-year   renewal.  He   asked  if   he  was                                                                    
approximately correct. Ms. Ridle responded affirmatively.                                                                       
                                                                                                                                
Vice-Chair  Gara  relayed  that  his  understanding  of  the                                                                    
testimony  was  that if  the  state  charged $10,  it  would                                                                    
offset the  cost for the  first 2  years and there  would be                                                                    
some  money left  over in  the out  years. He  thought there                                                                    
would be less money if the  costs went up. He thought it was                                                                    
possible that the  license fee would have to  be raised. Ms.                                                                    
Ridle answered that  the DMV turned money back  to the state                                                                    
every  year  in  an  amount  between  $30  million  and  $45                                                                    
million. It  would be  the will of  the legislature,  at the                                                                    
time, if it wanted to  increase the fee. Basically, it would                                                                    
be a fee to the public.                                                                                                         
                                                                                                                                
Representative Wilson MAINTAINED her OBJECTION.                                                                                 
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Ortiz, Gara, Stutes, Kawasaki, Foster                                                                                 
OPPOSED: Pruitt, Thompson, Tilton, Wilson, Grenn, Seaton                                                                        
                                                                                                                                
The MOTION to ADOPT Amendment 3 FAILED (5/6).                                                                                   
                                                                                                                                
2:02:14 PM                                                                                                                    
                                                                                                                                
Representative Wilson  MOVED to  ADOPT Amendment 4  (copy on                                                                    
file):                                                                                                                          
                                                                                                                                
     Page 2, line 7:                                                                                                            
          Delete "department"                                                                                                   
          Insert "commissioner of administration"                                                                               
                                                                                                                                
     Page 2, line 12:                                                                                                           
          Delete "or federal"                                                                                                   
                                                                                                                                
     Page 2, line 15:                                                                                                           
          Delete "or federal"                                                                                                   
                                                                                                                                
     Page 4, lines 2 - 10:                                                                                                      
          Delete all material and insert:                                                                                       
               "Sec.   28.05.068.    Prohibition   on   data                                                                    
               sharing. (a)  The department may  not convey,                                                                    
               distribute,  or communicate  data to  be used                                                                    
               in a database, index,  pointer system, or any                                                                    
               other system managed by  an entity other than                                                                    
               the   department,   including  the   American                                                                    
               Association       of      Motor       Vehicle                                                                    
               Administrators."                                                                                                 
                                                                                                                                
     Page 4, line 31:                                                                                                           
          Delete "or federal"                                                                                                   
                                                                                                                                
     Page 5, line 3:                                                                                                            
          Delete "or federal"                                                                                                   
                                                                                                                                
     Page 7, line 31:                                                                                                           
          Delete "state"                                                                                                        
          Insert "department"                                                                                                   
                                                                                                                                
Vice-Chair Gara OBJECTED for discussion.                                                                                        
                                                                                                                                
Representative Wilson  read the  amendment (see  above). She                                                                    
understood  the  attempt was  to  follow  the Real  ID  Act.                                                                    
However, she  thought the  bill would  require the  state to                                                                    
get  permission from  the federal  government. She  believed                                                                    
the  was the  bill an  overreach as  currently written.  She                                                                    
also  expressed concerns  about security  within AAMVA.  She                                                                    
was unfamiliar  with what security  measures the  entity had                                                                    
in place  and the potential  for an information  breach. She                                                                    
argued that there  was a larger framework around  the use of                                                                    
passport information.  She did  not think the  framework was                                                                    
the  same for  AAMVA.  She supported  matching  the list  of                                                                    
requirements for the Real ID Act.                                                                                               
                                                                                                                                
Vice-Chair Gara  was interested in the  department's view of                                                                    
whether the  amendment would violate federal  law. Ms. Ridle                                                                    
pointed to  Page 4,  line 2-10. The  changes would  make the                                                                    
state non-compliant  because AAMVA  was the only  vehicle in                                                                    
which to  check state-to-state  to make  sure there  were no                                                                    
duplicate licenses.  If Alaska was  unable to use  AAMVA, it                                                                    
would  not  be  compliant,  and  Alaska  IDs  would  not  be                                                                    
accepted by Real ID.                                                                                                            
                                                                                                                                
Vice-Chair Gara asked Ms. Ridle  to remind committee members                                                                    
of the  importance of making  sure a  person did not  have 2                                                                    
licenses.  He also  asked her  to review  other reasons  for                                                                    
checking a person's license. Ms.  Ridle responded that every                                                                    
state  had a  state law  that indicated  a person  could not                                                                    
have 2 licenses.  Also, the state checked to  make sure that                                                                    
someone  was  not under  restrictions  for  a DUI  or  other                                                                    
problem driver  issues in other  states. Mainly, it  was due                                                                    
to  every state  having  a  law that  only  allowed for  one                                                                    
license.  She  added  that  Federal  Homeland  Security  had                                                                    
certified the state-to-state AAMVA  system as meeting strict                                                                    
federal requirements of security.  Homeland Security did not                                                                    
convey  that Alaska  had  to  use AAMVA,  but  it met  their                                                                    
standards  of security.  She reemphasized  that  it was  the                                                                    
only system the state could use to be compliant.                                                                                
                                                                                                                                
Co-Chair  Seaton thought  that  lines 11-16  would make  the                                                                    
state non-compliant. He wondered if  the change on lines 5-6                                                                    
would  make  the  state  non-compliant  with  other  federal                                                                    
regulations such  as commercial driver's licenses.  He asked                                                                    
if he was  accurate. Ms. Ridle reported that  lines 11-16 of                                                                    
the amendment that would make the state non-compliant.                                                                          
                                                                                                                                
Co-Chair  Seaton  asked  about  the  other  lines  being  in                                                                    
conflict  with the  retention of  document requirements  for                                                                    
commercial driver's  licenses. He believed it  was 55 years.                                                                    
Ms. Ridle called for a lifeline.                                                                                                
                                                                                                                                
2:08:27 PM                                                                                                                    
                                                                                                                                
CORI  MILLS,  SPECIAL  ASSISTANT,  OFFICE  OF  THE  ATTORNEY                                                                    
GENERAL, DEPARTMENT OF  LAW, referred to lines  5 through 9.                                                                    
The issue the  department was concerned with  was that there                                                                    
were   several  different   laws  dealing   with  commercial                                                                    
driver's  licenses (CDL),  highways,  and how  to deal  with                                                                    
identification. Eliminating the lines  might not present too                                                                    
many  issues. However,  she was  concerned  it would  become                                                                    
tangled as a person looked  further into the laws. She could                                                                    
not  report off  the top  of her  head exactly  what such  a                                                                    
change might implicate. It  could potentially create another                                                                    
tangle of issues.                                                                                                               
                                                                                                                                
Co-Chair  Seaton thought  that  if the  state  got into  the                                                                    
problem of  issuing non-compliant CDL's  it would lead  to a                                                                    
greater problem  of not being  able to use Alaskan  CDL's in                                                                    
other states. He would be opposing the amendment.                                                                               
                                                                                                                                
Representative Wilson reminded  members that the legislature                                                                    
was only  dealing with  the Real  ID Act.  She did  not want                                                                    
other  issues  tied  to  the  Real  ID  Act.  She  expressed                                                                    
concerns about identifying a specific entity in statue.                                                                         
                                                                                                                                
Co-Chair Foster recognized Representative  Gary Knopp in the                                                                    
audience.                                                                                                                       
                                                                                                                                
Vice-Chair  Gara suggested  that  the bill  had 2  competing                                                                    
interests.  The  first  was  the  concern  of  the  business                                                                    
community and  labor community that their  members would not                                                                    
be  able to  travel by  plane, into  Canada, and  would have                                                                    
difficulty  getting work  if the  legislature  did not  pass                                                                    
this bill. The flip side  was that there were privacy issues                                                                    
people  were  concerned about.  The  Department  of Law  was                                                                    
concerned about travel  restrictions on workers, businesses,                                                                    
unions,  military  bases,  and  across state  lines  if  the                                                                    
committee  adopted the  amendment. Ms.  Ridle was  concerned                                                                    
about  the items  Vice-Chair  Gara had  brought  up. If  the                                                                    
state  was not  allowed to  use the  AAMVA system,  it would                                                                    
result in some of the things he mentioned.                                                                                      
                                                                                                                                
Vice-Chair Gara  understood the privacy  issues. He  was not                                                                    
comfortable with  people not being  able to get to  work. He                                                                    
would be opposing the amendment.                                                                                                
                                                                                                                                
Representative  Wilson thought  people  could  get to  work.                                                                    
They had the  option of getting a passport.  She thought the                                                                    
legislature needed  to know how to  protect people's privacy                                                                    
and  to make  sure  the options  were  clearly defined.  She                                                                    
wanted  people to  get to  work but  was concerned  with the                                                                    
amount of  information that would  be provided to  an entity                                                                    
that could change.                                                                                                              
                                                                                                                                
Vice-Chair Gara MAINTAINED his OBJECTION.                                                                                       
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Pruitt, Tilton, Wilson                                                                                                
OPPOSED:  Grenn, Stutes,  Kawasaki,  Ortiz, Thompson,  Gara,                                                                    
Seaton                                                                                                                          
                                                                                                                                
The MOTION to ADOPT Amendment 4 FAILED (3/8).                                                                                   
                                                                                                                                
Co-Chair Seaton MOVED to ADOPT Amendment 5 (copy on file):                                                                      
                                                                                                                                
     Page 3, lines 1 - 2:                                                                                                       
          Delete all material and insert:                                                                                       
               "(2) shall  scan   and  retain   the  minimum                                                                    
               documents  necessary  for   issuance  of  the                                                                    
               identification  card;  the  department  shall                                                                    
               destroy  any  documents   retained  one  year                                                                    
               after the identification card expires."                                                                          
                                                                                                                                
     Page 5, lines 19 - 20:                                                                                                     
          Delete all material and insert:                                                                                       
               "(2) shall  scan   and  retain   the  minimum                                                                    
               documents necessary for  issuance    of   the                                                                    
               driver's   license;   the  department   shall                                                                    
               destroy  any  documents   retained  One  year                                                                    
               after the driver's license expires."                                                                             
                                                                                                                                
Representative Wilson MOVED to ADOPT for discussion.                                                                            
                                                                                                                                
Co-Chair Seaton asked for a brief at ease.                                                                                      
                                                                                                                                
2:15:29 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:16:07 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Seaton explained that  the amendment addressed non-                                                                    
compliant ID's  and licenses. It would  allow the department                                                                    
to scan and  retain the minimum documents needed  for a non-                                                                    
compliant  license and  would require  the  documents to  be                                                                    
destroyed  within  one  year after  the  expiration  of  the                                                                    
identification card  or the non-compliant  driver's license.                                                                    
It would  make the  non-compliant ID's essentially  the same                                                                    
as the status of the  current licenses. The intention of the                                                                    
bill was  to offer  an alternative for  people -  they could                                                                    
get  a Real  ID compliant  license  or continue  to use  the                                                                    
current Alaska  Driver's License. However, with  the changes                                                                    
that had been  made, the non-compliant license  would not be                                                                    
applicable  or  identical  and  would  not  serve  the  same                                                                    
purposes as the current driver's  license. A person would no                                                                    
longer be  able to  get a  duplicate license.  Also, without                                                                    
having the  security of retaining the  applicable documents,                                                                    
the  DMV testified  that it  would  be easier  to falsify  a                                                                    
license, as there would not be an audit available to track.                                                                     
                                                                                                                                
Representative Wilson MAINTAINED her OBJECTION.                                                                                 
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Gara, Grenn, Stutes, Ortiz, Seaton, Foster                                                                            
OPPOSED: Pruitt, Thompson, Tilton, Wilson                                                                                       
                                                                                                                                
Representative Kawasaki was absent from the vote.                                                                               
                                                                                                                                
The MOTION to ADOPT Amendment 5 PASSED (6/4).                                                                                   
                                                                                                                                
2:20:37 PM                                                                                                                    
                                                                                                                                
Vice-Chair Gara MOVED to ADOPT Amendment 6 (copy on file):                                                                      
                                                                                                                                
     Page 1, following line 4:                                                                                                  
          Insert a new bill section to read:                                                                                    
                                                                                                                                
     "* Section 1. The uncodified law of the State of                                                                           
    Alaska is amended by adding a new section to read:                                                                          
                                                                                                                                
          LEGISLATIVE  INTENT.  It  is  the  intent  of  the                                                                    
          legislature that  the state will continue  to work                                                                    
          with the  Alaska delegation  in Congress  to amend                                                                    
          provisions  of P.L.  109-13, Division  B (REAL  ID                                                                    
          Act  of  2005)  that   compromise  the  rights  of                                                                    
          Alaskans   to  the   privacy  of   their  personal                                                                    
          information,   while   protecting   the   nation's                                                                    
          efforts to combat terrorism."                                                                                         
                                                                                                                                
     Page 1, line 5:                                                                                                            
          Delete "Section 1"                                                                                                    
          Insert "Sec. 2"                                                                                                       
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 9, line 10:                                                                                                           
          Delete "Sections 13 and 15"                                                                                           
          Insert "Sections 14 and 16"                                                                                           
                                                                                                                                
     Page 9, line 11:                                                                                                           
          Delete "sec. 16"                                                                                                      
          Insert "sec. 17"                                                                                                      
                                                                                                                                
Representative Pruitt OBJECTED for discussion.                                                                                  
                                                                                                                                
Vice-Chair Gara acknowledged that  privacy concerns had been                                                                    
raised with  Real ID.  Amendment 6  conveyed that  the state                                                                    
took privacy  concerns seriously. He thought  that Amendment                                                                    
6 in conjunction with Amendment 1  tried to limit the use of                                                                    
social  security   numbers.  The  amendment   advocated  for                                                                    
Alaska's  congressional delegation  to  continue working  to                                                                    
limit and  reverse the  provisions of the  Real ID  Act that                                                                    
compromised  the privacy  of Alaskans  in  a way  consistent                                                                    
with the  ability to combat  terrorism. There  were concerns                                                                    
about the privacy provisions of  the federal Real ID Act. He                                                                    
was comfortable that Alaska had  to follow it. Otherwise, he                                                                    
thought  it would  compromise the  ability  of people  being                                                                    
able to  travel. He  wanted Alaska's  delegation to  work to                                                                    
reverse  any of  the provisions  of  Real ID  that were  not                                                                    
necessary and compromised people's privacy.                                                                                     
                                                                                                                                
Representative  Pruitt  asked that  he  be  added as  a  co-                                                                    
sponsor to the amendment.                                                                                                       
                                                                                                                                
Representative Pruitt WITHDREW his OBJECTION.                                                                                   
                                                                                                                                
There being NO OBJECTION, Amendment 6 was ADOPTED.                                                                              
                                                                                                                                
Co-Chair Foster asked Vice-Chair  Gara to walk the committee                                                                    
through the fiscal notes.                                                                                                       
                                                                                                                                
Vice-Chair Gara reviewed the fiscal notes:                                                                                      
                                                                                                                                
     [New Fiscal Impact Note]                                                                                                   
     Department: Department of Administration                                                                                   
     Appropriation: Motor Vehicles                                                                                              
     Allocation: Motor Vehicles                                                                                                 
     OMB Component Number: 2348                                                                                                 
                                                                                                                                
Representative Pruitt requested an at ease.                                                                                     
                                                                                                                                
2:23:44 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:23:58 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Vice-Chair  Gara continued  to review  the fiscal  notes for                                                                    
HB 74:                                                                                                                          
                                                                                                                                
     [FN2 - Zero Fiscal Impact]                                                                                                 
     Department: Department of Public Safety                                                                                    
     Appropriation: Statewide Support                                                                                           
     Allocation: Commissioner's Office                                                                                          
     OMB Component Number: 523                                                                                                  
                                                                                                                                
     [FN1 - Zero Fiscal Impact]                                                                                                 
     Department: Department of Military and Veterans                                                                            
     Affairs                                                                                                                    
     Appropriation: Military and Veterans' Affairs                                                                              
     Allocation: Homeland Security and Emergency Management                                                                     
     OMB Component Number: 2657                                                                                                 
                                                                                                                                
Vice-Chair  Gara  referred to  the  first  fiscal note  (OMB                                                                    
Component Number  2348) and explained that  the note assumed                                                                    
a capital appropriation cost of $1.5 million.                                                                                   
                                                                                                                                
Co-Chair  Seaton  MOVED  to  report   CSHB  74(FIN)  out  of                                                                    
Committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes.                                                                                                      
                                                                                                                                
Representative Wilson OBJECTED.                                                                                                 
                                                                                                                                
Representative Wilson  spoke to her objection.  She believed                                                                    
the bill was important.  She thought the legislation allowed                                                                    
the   state  to   continue  to   scan  and   retain  private                                                                    
information  for 15  years. She  disagreed with  the 15-year                                                                    
period  and with  sharing the  information  provided to  the                                                                    
DMV. She was  also concerned with giving  the information to                                                                    
a private  entity and with  the federal  government changing                                                                    
the  rules no  longer requiring  a Real  ID. She  could have                                                                    
supported  the bill  prior to  adopting  the amendments  but                                                                    
could not support  it in its current from.  She stressed the                                                                    
importance   of   protecting   individuals'   privacy.   She                                                                    
disagreed  with the  argument that  people could  not go  to                                                                    
work   without   an  ID.   She   felt   that  people   could                                                                    
alternatively  obtain a  passport. She  understood that  the                                                                    
bill   would  make   it  more   convenient.  The   bill  had                                                                    
essentially  removed  driver's  licenses and  replaced  them                                                                    
with federal IDs. She would not be supporting the bill.                                                                         
                                                                                                                                
2:27:51 PM                                                                                                                    
                                                                                                                                
Vice-Chair    Gara   understood    Representative   Wilson's                                                                    
concerns.  The   concerns  were  really  with   the  state's                                                                    
congressional delegation  and the  actions of  congress. The                                                                    
state's choice was  to make it more difficult  for people to                                                                    
travel  and   work,  to  have   to  carry   around  multiple                                                                    
documents,  pay extra  for a  passport card  and a  driver's                                                                    
license, or have to carry  around a passport. He thought the                                                                    
question was  whether the  state was going  to make  it more                                                                    
difficult for people to work.  The bill contained provisions                                                                    
to encourage congress  to make changes to the  law. He would                                                                    
be siding in favor of getting people to work.                                                                                   
                                                                                                                                
Representative Wilson MAINTAINED her OBJECTION.                                                                                 
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Thompson. Gara, Grenn, Stutes, Kawasaki, Ortiz,                                                                       
Pruitt, Foster, Seaton                                                                                                          
OPPOSED: Tilton, Wilson                                                                                                         
                                                                                                                                
The MOTION to REPORT OUT CSHB 74 (FIN) PASSED (9/2).                                                                            
                                                                                                                                
CSHB 74(FIN) was  REPORTED out of committee  with an "amend"                                                                    
recommendation  and with  a new  fiscal impact  note by  the                                                                    
Department  of   Administration  and  with   two  previously                                                                    
published zero fiscal notes: FN1(MVA) and FN2(DPS).                                                                             
                                                                                                                                
HOUSE BILL NO. 124                                                                                                            
                                                                                                                                
     "An Act relating to corporations, including benefit                                                                        
     corporations, and other entities; and providing for an                                                                     
     effective date."                                                                                                           
                                                                                                                                
2:29:39 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster MOVED to ADOPT Amendment 2 (copy on file):                                                                      
                                                                                                                                
     Page 15, following line 2:                                                                                                 
          Insert a new section to read:                                                                                         
                                                                                                                                
               "Sec. 10.60.725.  Reliance by  third parties.                                                                    
               (a) A person who,  in good faith, enters into                                                                    
               a transaction with  a benefit corporation may                                                                    
               assume without inquiry  that the transaction,                                                                    
               and each  action or inaction by  any director                                                                    
               or officer of  the benefit corporation giving                                                                    
               effect to the  transaction, does not conflict                                                                    
               with   the   benefit  corporation's   general                                                                    
               public  benefit  purpose or  specific  public                                                                    
               benefit purpose.                                                                                                 
                                                                                                                                
               (b)  Nothing   in  this  section   exempts  a                                                                    
               covered     financial    institution     from                                                                    
               identifying  and   verifying  the  beneficial                                                                    
               owner of  a legal  entity that is  a customer                                                                    
               as required  under a federal or  state law or                                                                    
               regulation.  In   this  subsection,  "covered                                                                    
               financial institution" has the meaning given                                                                     
               in 31C.F.R.1010.605."                                                                                            
                                                                                                                                
Representative Wilson OBJECTED for discussion.                                                                                  
                                                                                                                                
Co-Chair Foster  invited his staff  to the table  to explain                                                                    
the amendment.                                                                                                                  
                                                                                                                                
JANE PIERSON,  STAFF, REPRESENTATIVE NEAL  FOSTER, explained                                                                    
that Amendment  2 was  the safe  harbor amendment  which had                                                                    
been offered  before. The language  had been  corrected. The                                                                    
amendment  operated  as  a  safe  harbor  for  parties  that                                                                    
entered   into   contractual  relationships   with   benefit                                                                    
corporations. It prevented third  parties from being able to                                                                    
assume a contract,  made sure the contract  did not conflict                                                                    
with any public benefit  goals, and provided assurances that                                                                    
the contract  would be enforced.  The amendment  was offered                                                                    
to provide  contractual certainty  to third  parties dealing                                                                    
with benefit corporations.                                                                                                      
                                                                                                                                
Ms.  Pierson continued  that absent  the proposed  language,                                                                    
third parties  might feel compelled  to make  an independent                                                                    
assessment of  whether the transaction satisfied  the public                                                                    
benefit requirement.  The analysis  might increase  the cost                                                                    
of completing  transactions and make some  transactions more                                                                    
difficult to complete. The safe  harbor amendment would make                                                                    
it easier for benefit  corporations to include third parties                                                                    
to transact business with them.                                                                                                 
                                                                                                                                
Co-Chair Foster relayed the list of available testifiers.                                                                       
                                                                                                                                
Representative Wilson WITHDREW her OBJECTION.                                                                                   
                                                                                                                                
There being NO OBJECTION, Amendment 2 was ADOPTED.                                                                              
                                                                                                                                
Vice-Chair Gara reviewed the fiscal note:                                                                                       
                                                                                                                                
     [FN1 - Fiscal Impact Note]                                                                                                 
     Department: Department of Commerce, Community and                                                                          
     Economic Development                                                                                                       
     Appropriation: Corporations, Business and Professional                                                                     
     Licensing                                                                                                                  
     Allocation: Corporations, Business and Professional                                                                        
     Licensing                                                                                                                  
     OMB Component Number: 2360                                                                                                 
                                                                                                                                
Vice-Chair  Gara reported  that  the cost  reflected in  the                                                                    
fiscal  note was  $27,400 in  the first  year with  no other                                                                    
costs  estimated in  the future.  The costs  had to  do with                                                                    
database changes to accommodate the new from of business.                                                                       
                                                                                                                                
Representative  Wilson noted  that the  costs were  paid for                                                                    
through program  receipts but  wanted further  detail. Vice-                                                                    
Chair  Gara thought  the committee  should defer  to someone                                                                    
from DCCED.                                                                                                                     
                                                                                                                                
JANEY   HOVENDEN,   DIRECTOR,  DIVISION   OF   CORPORATIONS,                                                                    
BUSINESS   AND   PROFESSIONAL   LICENSING,   DEPARTMENT   OF                                                                    
COMMERCE,  COMMUNITY  AND  ECONOMIC  DEVELOPMENT,  responded                                                                    
that  fees would  be  spread  across corporations'  business                                                                    
licensing revenues.                                                                                                             
                                                                                                                                
Representative Wilson asked  how much money was  in the fund                                                                    
that was not  being utilized. Ms. Hovenden did  not have the                                                                    
exact  dollar amount  but  relayed that  any  of the  excess                                                                    
revenues went back into the  general fund. She estimated the                                                                    
dollar amount to be about $6 million.                                                                                           
                                                                                                                                
Co-Chair  Seaton  MOVED to  report  CSHB  124 (FIN)  out  of                                                                    
Committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal note.                                                                                                       
                                                                                                                                
Representative Wilson OBJECTED.                                                                                                 
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Gara,  Grenn, Stutes,  Kawasaki, Ortiz,  Thompson,                                                                    
Seaton, Foster                                                                                                                  
OPPOSED: Tilton, Wilson, Pruitt                                                                                                 
                                                                                                                                
The MOTION to REPORT OUT CSHB 74(FIN) PASSED (8/3).                                                                             
                                                                                                                                
CSHB 74(FIN) was REPORTED OUT  of Committee with a "do pass"                                                                    
recommendation  and  with   a  previously  published  fiscal                                                                    
impact note: FN1(CED).                                                                                                          
                                                                                                                                
HOUSE BILL NO. 150                                                                                                            
                                                                                                                                
     "An Act relating to pay, allowances, and benefits for                                                                      
     members of the organized militia."                                                                                         
                                                                                                                                
2:36:06 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster  conveyed that the  last time  the committee                                                                    
had heard  the bill  was on  April 19,  2017. There  were no                                                                    
amendments offered by members.  He invited Kendra Kloster to                                                                    
the table to refresh the committee about HB 150.                                                                                
                                                                                                                                
KENDRA  KLOSTER, STAFF,  REPRESENTATIVE CHRIS  TUCK, relayed                                                                    
that  HB 150  was a  committee  bill from  the Military  and                                                                    
Veterans  Affairs committee.  It was  part of  the Title  26                                                                    
reforms, the state's military code,  which had been outdated                                                                    
since 1955.  The committee  had been  working on  doing some                                                                    
clean  up. House  Bill 150  would streamline  the accounting                                                                    
system  for the  organized  militia and  the pay  structure.                                                                    
Currently, the  state had an  outdated system.  For example,                                                                    
if a  militia member was  doing multiple duties in  one day,                                                                    
they had  to arrange their pay  based on the duty  they were                                                                    
performing. The  accounting system was long  and cumbersome.                                                                    
The bill would  streamline the system on what  the state did                                                                    
for the federal system (based on  grade and rank for the pay                                                                    
structure).                                                                                                                     
                                                                                                                                
Co-Chair  Foster relayed  the list  of available  testifiers                                                                    
online.                                                                                                                         
                                                                                                                                
Vice-Chair Gara reviewed the fiscal notes:                                                                                      
                                                                                                                                
     [FN1 - Indeterminant Fiscal Note]                                                                                          
     Department: Department of Military and Veterans                                                                            
     Affairs                                                                                                                    
     Appropriation: Military and Veterans Affairs                                                                               
     Allocation: Office of the Commissioner                                                                                     
     OMB Component Number: 414                                                                                                  
                                                                                                                                
Vice-Chair  Gara   explained  that   the  fiscal   note  was                                                                    
indeterminant  because it  was not  known under  the formula                                                                    
used in  the new bill what  the changes in pay  would be for                                                                    
state militia members.                                                                                                          
                                                                                                                                
Representative   Wilson  relayed   that   the  fiscal   note                                                                    
indicated  and indeterminate  amount  for FY  18. There  was                                                                    
nothing included in the governor's budget.                                                                                      
                                                                                                                                
Co-Chair  Seaton MOVED  to report  HB 150  out of  Committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
note.                                                                                                                           
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
HB  150 was  REPORTED  out  of committee  with  a "do  pass"                                                                    
recommendation and  with a previous  published indeterminate                                                                    
fiscal note: FN1(MVA).                                                                                                          
                                                                                                                                
Co-Chair  Foster recognized  that Representative  Chris Tuck                                                                    
had joined the meeting.                                                                                                         
                                                                                                                                
REPRESENTATIVE CHRIS TUCK, SPONSOR,  thanked the members for                                                                    
their consideration of the legislation.  He relayed that the                                                                    
bill had come  from the Department of  Military and Veterans                                                                    
Affairs as  a fix to make  things more efficient and  to run                                                                    
smoother  within their  administration.  It  would make  pay                                                                    
more certain.                                                                                                                   
                                                                                                                                
Representative Wilson asked if  the representative was aware                                                                    
that  his   bill  had  been   reported  out   of  committee.                                                                    
Representative Tuck received  a whisper in the  ear that the                                                                    
bill  had passed.  He thanked  members for  allowing him  to                                                                    
make some final comments.                                                                                                       
                                                                                                                                
HOUSE BILL NO. 142                                                                                                            
                                                                                                                                
     "An  Act relating  to unemployment  insurance benefits;                                                                    
     increasing  the maximum  weekly unemployment  insurance                                                                    
    benefit rate; and providing for an effective date."                                                                         
                                                                                                                                
2:40:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CHRIS   TUCK,  SPONSOR,  read   the  sponsor                                                                    
statement:                                                                                                                      
                                                                                                                                
     The   Alaska   Department   of   Labor's   Unemployment                                                                    
     Insurance (UI)  program provides  unemployment benefits                                                                    
     to eligible  workers who  become unemployed  through no                                                                    
     fault of  their own,  working less than  full-time, and                                                                    
     meet certain  other eligibility requirements.  With the                                                                    
     seasonal nature  of much of  the state's  workforce and                                                                    
     Alaska's vast  remoteness, UI  benefits serve  not only                                                                    
     to bridge  the economic gap for  the individual worker,                                                                    
     but   also  as   a  stabilizing   influence  on   local                                                                    
     economies.                                                                                                                 
                                                                                                                                
     The  current Maximum  Weekly Benefit  Amount (MWBA)  of                                                                    
     $370 only  replaces 36% of  the state's  average weekly                                                                    
     wage of $1,020. An MWBA  of $510 would provide 50% wage                                                                    
     replacement of  the average  weekly wage,  a nationally                                                                    
     recognized norm.                                                                                                           
                                                                                                                                
     To compare  to other western  states, the MWBA  rate in                                                                    
     Washington is $681, Oregon is $590, and                                                                                    
     California is $450. In addition,  Alaska is one of only                                                                    
     three states  where the cost  of providing  UI benefits                                                                    
     is shared by employers and employees.                                                                                      
                                                                                                                                
     House  Bill  142  would  increase  the  maximum  weekly                                                                    
     benefit amount under  the UI Program in  two steps from                                                                    
     the current $370 to $458 in 2018 and to $510 in 2019.                                                                      
                                                                                                                                
     Among 50  states, the District of  Columbia, and Puerto                                                                    
     Rico, Alaska is:                                                                                                           
                                                                                                                                
        · 39th in Maximum Weekly Benefit Amount                                                                                 
        · 44th in Average Weekly Benefit Amount ($252)                                                                          
        · 52nd in Wage Replacement Ratio (.288)                                                                                 
        · 9th in Recipiency Rate (unemployed workers                                                                            
          receiving benefits - .37)                                                                                             
                                                                                                                                
     As a  claimant filing for UI  benefits, individuals are                                                                    
     responsible  for  actively  seeking  suitable  fulltime                                                                    
     employment   and   reporting   activity   for   seeking                                                                    
     employment each week to remain eligible.                                                                                   
                                                                                                                                
     The  federal poverty  level for  a family  of three  in                                                                    
     Alaska for 2016 is $25,200, or $2100 a month.                                                                              
                                                                                                                                
     An   unemployed  single   parent  with   two  dependent                                                                    
     children receiving the MWBA of  $370 plus the dependent                                                                    
     child  allowance of  $24 per  child under  18 (up  to a                                                                    
     maximum  of  three)  receives approximately  $1800  per                                                                    
     month in UI benefits.                                                                                                      
                                                                                                                                
     By passing House Bill 142,  Alaska will be more in-line                                                                    
     with  the  average  weekly  benefits  and  provide  the                                                                    
     necessary  financial support  families need  to survive                                                                    
     while seeking employment.                                                                                                  
                                                                                                                                
Representative Tuck relayed  that there were representatives                                                                    
from the  Department of Labor and  Workforce Development who                                                                    
worked   with  the   Unemployment  Insurance   (UI)  Program                                                                    
available for questions.                                                                                                        
                                                                                                                                
Co-Chair Foster reviewed the list of available testifiers.                                                                      
                                                                                                                                
Representative  Wilson commented  that  it  looked like  the                                                                    
amount a person made was going  up rather than having a cap.                                                                    
She wondered  if the legislation would  require employers or                                                                    
employees to pay a higher percentage into unemployment.                                                                         
                                                                                                                                
2:45:30 PM                                                                                                                    
                                                                                                                                
LENNON WELLER, ECONOMIST,  RESEARCH AND ANALYSIS, DEPARTMENT                                                                    
OF LABOR  AND WORKFORCE  DEVELOPMENT, responded that  as the                                                                    
state increased  benefit costs  beyond the  current schedule                                                                    
there would be a bit of  an increase in costs going out into                                                                    
the  future, as  tax rates  would  need to  respond to  some                                                                    
larger benefit costs.                                                                                                           
                                                                                                                                
Representative  Wilson  wanted  to  know if  it  would  cost                                                                    
employers or employees  more of a percentage  than what they                                                                    
currently contributed  to the program. Mr.  Weller responded                                                                    
that there  were essentially two  steps to the  financing of                                                                    
the  UI system.  The first  main part  was a  cost recapture                                                                    
portion  which divvied  out benefit  costs  recaptured as  a                                                                    
share. It was a 73/27 split  in statute. He relayed that the                                                                    
share would  remain the same.  However, as  costs increased,                                                                    
rates would reflect a larger  benefit cost. As more benefits                                                                    
were  paid   out  and  the   trust  fund  moved,   it  would                                                                    
potentially increase tax rates.                                                                                                 
                                                                                                                                
Representative Wilson wondered if  the department would have                                                                    
to come back to the legislature  for a statute change if the                                                                    
rates  increased.  Mr.  Weller relayed  that  the  financing                                                                    
system  was set  in  statute. The  department  would not  be                                                                    
required   to  come   back  to   make   a  statute   change.                                                                    
Essentially,  it  was   an  automatically  adjusting  system                                                                    
trying to both maintain rates  that were reflective of costs                                                                    
and a  target for  the reserve  ratio in  the fund.  All the                                                                    
financing was directed through current statute.                                                                                 
                                                                                                                                
Representative  Wilson wanted  to see  a chart  showing what                                                                    
the change would  look like. She agreed that  the rates were                                                                    
low,  especially with  a cap  in place.  She also  wanted to                                                                    
know about the  training funds such as  the Alaska Technical                                                                    
Vocational  Education  Program  (TVEP)  funds  tied  to  the                                                                    
state's  unemployment.  She  wondered,  that  as  the  state                                                                    
dwindled some of the funds  by increasing funding in another                                                                    
place,  how someone  would have  access to  those funds  for                                                                    
additional  training. She  was concerned  because there  had                                                                    
been an issue  in the prior year  with unemployment funding.                                                                    
Representative Tuck wondered if  her question was about what                                                                    
would happen with the TVEP  funds if the rates increased. He                                                                    
thought the TVEP funding rate was 1 percent.                                                                                    
                                                                                                                                
Representative  Wilson commented  that as  more people  were                                                                    
unemployed  there  would  be less  money  available  in  the                                                                    
unemployment fund, the fund that  funded TVEP. She indicated                                                                    
there  was also  other training  programs, paid  through the                                                                    
unemployment fund,  available for  people needing to  find a                                                                    
new vocation.  She wanted to  ensure there was  enough money                                                                    
for the programs already using the fund.                                                                                        
                                                                                                                                
Mr. Weller conveyed  that an increase in  the maximum weekly                                                                    
benefit amount  would not impact  either the  State Training                                                                    
and  Employment  Program  (STEP)  or  TVEP  funding  to  any                                                                    
extent; they were dedicated taxes  paid for out of a portion                                                                    
of employees' tax rates. It  never actually went into the UI                                                                    
trust  fund. It  was  diverted, pre-deposit,  and the  rates                                                                    
were  set  in  statute.  It  was  sixteen  hundredths  of  a                                                                    
percentage  point for  TVEP and  one tenth  of a  percentage                                                                    
point for  the STEP training  programs of which  were offset                                                                    
against  an  employee's  portion  of their  initial  UI  tax                                                                    
liability.                                                                                                                      
                                                                                                                                
Representative  Tuck responded  that unemployment  would not                                                                    
go up  because of  the bill. Larger  benefits would  help to                                                                    
maintain families. If the  representative was concerned that                                                                    
more Alaskans would remain in  Alaska and would have to take                                                                    
advantage of the programs, it was a possibility.                                                                                
                                                                                                                                
2:51:06 PM                                                                                                                    
                                                                                                                                
Representative  Wilson wanted  Alaskans to  stay in  Alaska.                                                                    
Her concern was that the  excess money that was not utilized                                                                    
currently  would be  utilized  for other  things aside  from                                                                    
benefits. She  wanted to  ensure that  the fund  was healthy                                                                    
enough and  those who needed  to be retrained could  get the                                                                    
training. She  commented that UI  was used for  other things                                                                    
besides benefits. She  wondered how the state  would do more                                                                    
with less. She thought the  cost would fall on the shoulders                                                                    
of  the  employer  and  the  employee.  Representative  Tuck                                                                    
answered  that  he  did  not  know  what  kind  of  benefits                                                                    
unemployed Alaskans  received if there was  left over money.                                                                    
He thought most of the programs  were paid off the top, when                                                                    
the  money   went  into  the   fund.  He  deferred   to  the                                                                    
department.                                                                                                                     
                                                                                                                                
PATSY  WESTCOTT,  ASSISTANT DIRECTOR,  EMPLOYMENT  SECURITY,                                                                    
DEPARTMENT  OF LABOR  AND  WORKFORCE DEVELOPMENT,  responded                                                                    
that  the  funding mechanisms  for  STEP  and TVEP  did  not                                                                    
change with the bill. If  the department had seen variations                                                                    
in the  amount available for  STEP and TVEP, it  was because                                                                    
UI tax rates went up or down.  As UI tax rates went up, more                                                                    
money  was collected  creating a  larger diversion  for STEP                                                                    
and  TVEP. As  tax  rates went  down, there  was  less of  a                                                                    
diversion for STEP and TVEP.                                                                                                    
                                                                                                                                
Representative Wilson asked how the  rates went up and down.                                                                    
Mr. Weller  answered that the  amounts the state  would take                                                                    
in  for  both the  STEP  and  TVEP  programs were  based  on                                                                    
taxable  wages. Specifically,  as  taxable  wages grew,  the                                                                    
nominal amount of dollars being  pulled into either of those                                                                    
funds  would reflect  that  growth. The  rates  for the  two                                                                    
programs  were fixed.  However,  the amount  of money  would                                                                    
change based on the taxable wage base.                                                                                          
                                                                                                                                
Representative Kawasaki  mentioned that in Section  2 of the                                                                    
bill there were  some automatic adjustments in  the bill. He                                                                    
wondered  if  most  states had  automatic  adjustments.  Ms.                                                                    
Westcott  replied  that about  26  states  had an  automatic                                                                    
adjustment  in  their  statutes   to  provide  for  an  auto                                                                    
adjusting maximum weekly benefit amount.                                                                                        
                                                                                                                                
Representative  Kawasaki asked  if the  automatic adjustment                                                                    
typically pegged  to a specific  dollar amount  or something                                                                    
else. Ms.  Westcott answered that  it was typically  tied to                                                                    
the  state's average  weekly  wage or  a  percentage of  the                                                                    
state's average weekly wage.                                                                                                    
                                                                                                                                
Representative  Kawasaki  reported  that  in  Section  2  it                                                                    
stated that  the department  would increase  weekly benefits                                                                    
$2 for  each $250.  He wondered  why the  amount was  set in                                                                    
place. Representative Tuck responded  that it was already in                                                                    
statute.  The  bill was  lifting  the  amount to  about  the                                                                    
national average for those individuals  making more than the                                                                    
average per week. He referred  to Page 2 which reflected the                                                                    
same  formula, only  it extended  the higher  maximum amount                                                                    
paid out.                                                                                                                       
                                                                                                                                
2:55:59 PM                                                                                                                    
                                                                                                                                
Co-Chair  Seaton referred  to  Page 5  of  the handout  that                                                                    
reviewed the  weekly benefit amounts.  The page  was titled,                                                                    
"Recipiency  Rates."  He noted  that  Alaska  was the  ninth                                                                    
state on the list. He  asked about the meaning of recipiency                                                                    
rate and  whether Alaska's rate  was good or bad.  He wanted                                                                    
to better understand the term.                                                                                                  
                                                                                                                                
Mr.  Weller answered  that  recipiency  rates reflected  the                                                                    
percentage of  those who were  unemployed, eligible  for UI,                                                                    
and  those that  were actually  collecting UI.  He suggested                                                                    
that the state would want to  see as many of the people that                                                                    
were eligible for the program  file for and collect benefits                                                                    
if  possible. Research  showed that  it helped  to stimulate                                                                    
the   economy  and   provide   short-term  income,   keeping                                                                    
individuals  in a  geographical  area and  allowing them  to                                                                    
reattach to work more quickly.                                                                                                  
                                                                                                                                
Co-Chair Seaton  asked Mr. Weller  to review  the percentage                                                                    
rates. Alaska  was at 37  percent. He wondered  what factors                                                                    
lead  to Alaska's  percentage being  so  high. Ms.  Westcott                                                                    
responded  that  each  state  had  its  own  unique  set  of                                                                    
eligibility  requirements. In  addition to  being monetarily                                                                    
eligible for  UI, there were  non-monetary disqualifications                                                                    
such as  why someone was  not working or  their availability                                                                    
for fulltime  work. Fluctuations  in recipiency  rates could                                                                    
be  seen   from  state-to-state  depending  on   what  other                                                                    
disqualifications states might have in their laws.                                                                              
                                                                                                                                
Vice-Chair Gara stated  that UI was available  to people who                                                                    
were laid off.  He asked if there was a  distinction that if                                                                    
someone  was  terminated  for  cause,   they  would  not  be                                                                    
eligible  for UI.  Ms. Westcott  confirmed  that Alaska  had                                                                    
disqualifications. For  instance, if someone  was terminated                                                                    
for cause, or if someone  voluntarily quit their job without                                                                    
good cause, there was a  6-week disqualification of benefits                                                                    
under those circumstances.                                                                                                      
                                                                                                                                
Vice-Chair Gara asked if Ms.  Westcott meant that there were                                                                    
6  weeks   of  benefits.  Ms.  Westcott   responded  in  the                                                                    
negative.   They  would   be  disqualified   from  receiving                                                                    
benefits  for  the  first  week   of  unemployment  and  the                                                                    
following 5  weeks. There was  also a 3-week  deduction from                                                                    
the maximum amount  that a person was eligible  for over the                                                                    
term of their benefit year.                                                                                                     
                                                                                                                                
2:59:57 PM                                                                                                                    
                                                                                                                                
Representative  Wilson asked  for  a response  about how  it                                                                    
would impact small business in a negative way.                                                                                  
                                                                                                                                
Representative Pruitt asked about  the numbers listed at the                                                                    
bottom of one  of the handouts provided by  the bill sponsor                                                                    
[Weekly Benefit  Amount Proposal -  Page 1] (copy  on file).                                                                    
He asked  if the  increases listed would  take place  if the                                                                    
bill was enacted. Mr. Weller responded that he was correct.                                                                     
                                                                                                                                
HB  142  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
Co-Chair  Foster  reviewed  the  agenda  for  the  following                                                                    
meeting.                                                                                                                        
                                                                                                                                
Representative  Wilson made  the comment  that she  had just                                                                    
received a  new iPad.  She thought iPads  should be  used in                                                                    
lieu of paper.                                                                                                                  
                                                                                                                                
Co-Chair Foster  stated the Co-Chairs would  think about the                                                                    
idea.                                                                                                                           
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
3:03:26 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 3:03 p.m.                                                                                          

Document Name Date/Time Subjects
HB142 Memo of Changes 4.15.17.pdf HFIN 5/9/2017 1:30:00 PM
HB 142
HB142 Additional Documents-Unemployment Insurance Handbook 4.15.17.pdf HFIN 5/9/2017 1:30:00 PM
HB 142
HB 142 Additional Documents-WBA charts 4.15.17.pdf HFIN 5/9/2017 1:30:00 PM
HB 142
HB142 Opposing Documents - Opposition Letters 4.15.17.pdf HFIN 5/9/2017 1:30:00 PM
HB 142
HB142 Sectional Analysis 4.15.17.pdf HFIN 5/9/2017 1:30:00 PM
HB 142
HB142 Sponsor Statement 4.15.17.pdf HFIN 5/9/2017 1:30:00 PM
HB 142
HB142 Supporting Document - Support Letters 4.15.17.pdf HFIN 5/9/2017 1:30:00 PM
HB 142
HB142 Supporting Document-MWBA Analysis 4.15.17.pdf HFIN 5/9/2017 1:30:00 PM
HB 142
HB 74 Real ID Letter from Commissioner Fisher May 5 2017.pdf HFIN 5/9/2017 1:30:00 PM
HB 74
HB 124 Amendment 2 Foster.pdf HFIN 5/9/2017 1:30:00 PM
HB 124
HB 124 Amendment 1 Foster v.D.1.pdf HFIN 5/9/2017 1:30:00 PM
HB 124
HB 74 Amendments 1 - 4.pdf HFIN 5/9/2017 1:30:00 PM
HB 74
HB 74 _ background_complications of not retaining documents from non-compliant IDS.pdf HFIN 5/9/2017 1:30:00 PM
HB 74
HB 74 Native Am Airport Screening .pdf HFIN 5/9/2017 1:30:00 PM
HB 74
HB74_Oppose_050917.pdf HFIN 5/9/2017 1:30:00 PM
HB 74
HB74_Support_050917.pdf HFIN 5/9/2017 1:30:00 PM
HB 74
HB 74 Amendment NEW NEW 1.PDF HFIN 5/9/2017 1:30:00 PM
HB 74
HB 74 Amendment 5 .PDF HFIN 5/9/2017 1:30:00 PM
HB 74
HB 74 _ background_complications of not retaining documents from non-compliant IDS.pdf HFIN 5/9/2017 1:30:00 PM
HB 74