Legislature(2017 - 2018)HOUSE FINANCE 519
05/09/2017 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB74 | |
| HB124 | |
| HB150 | |
| HB142 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 159 | TELECONFERENCED | |
| += | HB 150 | TELECONFERENCED | |
| += | HB 124 | TELECONFERENCED | |
| + | HB 142 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 74 | TELECONFERENCED | |
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.