Legislature(1997 - 1998)
02/05/1997 02:21 PM JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE JUDICIARY STANDING COMMITTEE February 5, 1997 2:21 p.m. MEMBERS PRESENT Representative Joe Green, Chairman Representative Con Bunde, Vice Chairman Representative Brian Porter Representative Jeannette James Representative Norman Rokeberg Representative Eric Croft Representative Ethan Berkowitz MEMBERS ABSENT All members were present COMMITTEE CALENDAR EXECUTIVE ORDER NO. 99 Transferring the Division of Motor Vehicles from the Department of Public Safety to the Department of Administration. - MOVED EO 99 OUT OF COMMITTEE * HOUSE BILL NO. 91 "An Act extending the termination date of the Board of Parole; and providing for an effective date." - MOVED HB 91 OUT OF COMMITTEE HOUSE BILL NO. 22 "An Act relating to civil liability for illegal sales of alcoholic beverages; and providing for an effective date." - BILL POSTPONED (* First public hearing) PREVIOUS ACTION BILL: HB 91 SHORT TITLE: EXTEND BOARD OF PAROLE SPONSOR(S): REPRESENTATIVE(S) PORTER JRN-DATE JRN-PG ACTION 01/29/97 164 (H) READ THE FIRST TIME - REFERRAL(S) 01/29/97 164 (H) JUDICIARY 02/03/97 (H) JUD AT 1:00 PM CAPITOL 120 02/03/97 (H) MINUTE(JUD) 02/05/97 (H) JUD AT 1:00 PM CAPITOL 120 WITNESS REGISTER RONALD L. OTTE, Commissioner Department of Public Safety P.O. Box 111200 Juneau, Alaska 99811-1200 Telephone: (907) 465-4322 POSITION STATEMENT: Provided department's position and answered questions regarding EO 99. MARK BOYER, Commissioner Department of Administration P.O. Box 110200 Juneau, Alaska 99811-0200 Telephone: (907) 465-2200 POSITION STATEMENT: Provided department's position and answered questions regarding EO 99. JUANITA HENSLEY, Chief Driver Services Division of Motor Vehicles Department of Public Safety P.O. Box 20020 Juneau, Alaska 99811-0020 Telephone: (907) 465-4361 POSITION STATEMENT: Provided department's position and answered questions regarding EO 99. ACTION NARRATIVE TAPE 97-9, SIDE A Number 001 VICE CHAIRMAN CON BUNDE called the House Judiciary Standing Committee to order at 2:12 p.m. Members present at the call to order were Representatives Bunde, Porter, James, Rokeberg, Croft and Berkowitz. Chairman Green, who was attending another meeting, arrived at 2:52 p.m. EO 99 - TRANSFER DMV FROM PUBLIC SAFETY TO ADMINISTRATION VICE CHAIRMAN BUNDE announced the first order of business was Executive Order No. 99, transferring the Division of Motor Vehicles (DMV) from the Department of Public Safety to the Department of Administration. He noted that Commissioner Otte and Commissioner Boyer were present to speak on EO 99. Number 127 RONALD L. OTTE, Commissioner, Department of Public Safety ("Public Safety"), provided a brief history conveying reasons Public Safety believed EO 99 to be a positive move. He explained DMV was a program with 3 million public contacts a year in Alaska, both at the DMV counter and through mail-in transactions. He said, "When you stop and think that everybody from the age of 15 on who is trying to get a learner's permit or a driver's license, state ID card, re-registering a vehicle, renewing a driver's license or all of the other kinds of things that people go to the counters for in terms of titling and those issues, it does literally affect most every household and almost every Alaskan at some time within a one- or two-year period." Number 210 COMMISSIONER OTTE reported that over the last 13 or 14 years, 54 programs mandated by state and federal government had been added to the basic counter service. Although the programs were well- intentioned and many were important, DMV was unable to keep pace with the growing list of responsibilities at the counter. Commissioner Otte cited examples, including "IM types of things" (emissions inspections) in Anchorage and Fairbanks; voter registration; and federal mandates regarding commercial driver's licensing and odometer issues that protected approximately $56 million in State of Alaska highway construction funds from the federal government. Number 281 COMMISSIONER OTTE continued: "It is a program also that is collecting taxes for a variety of communities around the state. And this last session, we did give communities the option of sort of changing those tax rates. And DMV's in the process of trying to work with each particular tax district in restructuring the computer system and ... their mail-outs to ... reflect those kinds of tax rates. They do collect $36 million a year. Right now, $7 [million] of that goes to local communities in the form of property taxes; the other $29 million goes to the general fund, and we put ... a little over $8 million back into the program." COMMISSIONER OTTE indicated during peak summer periods, which lasted five to seven weeks, people had to wait to take driving tests. There was a huge influx of people taking commercial driving tests in order to obtain summer jobs in Alaska. COMMISSIONER OTTE reported although DMV's workload had increased 20 percent over the last five years, staffing had decreased 14 percent. Alaskans were incredibly frustrated that they could not walk into a DMV office and conduct a simple business transaction in a timely manner. "I think they're frustrated that they can't pick up the phone and call a DMV office and get a real person because everybody is at the counter," Commissioner Otte stated. "I think they are equally as frustrated that they see in the business community and the business world a variety of technology-kinds of solutions that make business transactions very easy between financial institutions and other entities, but they don't see that technology applied to the kind of business needs that they have with the ... [Division] of Motor Vehicles." Number 437 COMMISSIONER OTTE explained, "It is for some of those reasons that I began discussions with Commissioner Boyer about transferring this to an area where these kinds of resources, technologies and thought processes really could be brought to bear to make a difference. It's not that I'm not interested. It's not that Public Safety historically has not been interested in this problem. They have been. But when you have a program like [the Division of] Motor Vehicles within Public Safety, given the challenges that we all face with those various issues, the life/safety issues of Public Safety always, always seem to take first priority over the management time, over the resources and over any increments that -- that come into the department. Motor vehicle needs compete with other kinds of needs within Public Safety, such as maintaining our criminal history record system, such as our automated fingerprint system. And there simply are not the personnel within my shop ... to do what I consider `real life safety' data processing issues. And we never seem to get to the motor vehicle issues." Number 527 COMMISSIONER OTTE continued: "It's difficult for any commissioner to sit here and tell you, `We don't think that our department or our program is the best place for this to be fixed, because we've not had a very successful at that over the years.' And maybe that's why no commissioner has ... sat in front of these committees and said, `We think it's time for a change.' It is a difficult thing to do. But I'm convinced if we are going to make a change, we need to do that." COMMISSIONER OTTE referred to suspension of driver's licenses and said, "As you know, in this last budget cycle, we eliminated 13 full-time positions from [the Division of] Motor Vehicles, which was 9 percent of their total work force. We were not able to continue suspending licenses as of July 1 for financial responsibility. The four people doing that program went away from Driver Services. Right now in that program, it takes 40 days to suspend a driver's license for a DWI conviction. It takes 90 days for them to suspend a driver's license for the mandatory insurance violation. And those are up from a window of 12 or 13 days just a few years ago. Commissioner Otte emphasized that merely adding bodies was not what the legislature or the people of Alaska were looking for as a solution, because that could go on forever. Number 626 COMMISSIONER OTTE concluded by saying he had talked to Commissioner Boyer, whose plan he commended. He indicated staff were rolling up their sleeves, ready to take on the project. VICE CHAIRMAN BUNDE asked if there were questions. Number 645 REPRESENTATIVE JEANNETTE JAMES said having followed this issue extensively, she understood the frustration. If there was one kind of complaint legislators received most from constituents, it was those relating to the DMV. Representative James expressed her desire to hear from Commissioner Boyer as well. However, she agreed that adding more employees would not solve the problem. "We have to go to improved technology," she stated. "We can't have people spending time on something that's an automatic entry, which many of them are, and then not being able to take care of some of those things that take more time, and not being to have the people there." Number 697 REPRESENTATIVE JAMES expressed appreciation for Commissioner Otte's recognition of the problem. She said, "[A]nytime we've talked about doing anything with DMV before, we've always met up with strong opposition from the department to make any rash changes. So I think we're moving in the right direction and I'm really happy to see that." VICE CHAIRMAN BUNDE called upon Commissioner Boyer to testify. Number 729 MARK BOYER, Commissioner, Department of Administration, suggested change was sometimes as simple as a new set of eyes looking for a solution. "And the problems that present themselves in trying to rethink the design and delivery of services to DMV is not an easy task, but it is a design process environment," he said. "It's largely ministerial. We charge DMV with being the gate-keeper, the stopper, the cop for a whole bunch of other things. We've got something that people need to exercise a privilege. We've got a license or registration that people need to get on the highways, so we use DMV as a tool, the leverage point, to make sure that people are doing a whole host of other things like IMs." COMMISSIONER BOYER stated, "And to rethink this whole design is really what we're about in the Department of Administration. We're in the middle of a number of redesign initiatives." He explained that fundamentally the Department of Administration looked at ways to enhance and enable departments, including their own at times, to function faster, better, more cheaply and with advantage to the customer. "It is from a customer perspective that I think all of us bring our frustrations to bear on this problem," he added, relating a personal incident. He said he was not unlike other DMV customers. It was 13 miles each way, out and back, to DMV, with a possible wait. "And it's a two-hour journey to update something," he stated. "Now, clearly you can update your address now by telephone, but you still have other issues that you might want to address." COMMISSIONER BOYER referred to the competing higher-value issues that Public Safety needed to address. "We don't have those same competing sets of higher priorities," he advised. "What we do is enable and look for ways to change business practices. And so what I can do is bring things to bear that are normal parts of our day. We're either working with some department to deliver ... something better, faster, quicker, easier through a technology fix, so we're using DIS, or we're using the Division of Finance to allow someone to finance something a bit differently or refinance things differently. We're using personnel to enable somebody to meet a short-term need where they need a quick turnaround on a reclassification of a position. We use those tools on a day-to-day basis, helping people do their businesses better." Number 962 COMMISSIONER BOYER said improvements would look different, feel different and in fact would be different for the public. More fundamentally, the public would be provided, in a "quicker turnaround way," with tools that would fundamentally alter the business transaction environment. For example, the Division of Finance was working with the Division of Treasury to enable a point-of-sale transaction to occur with credit cards at DMVs, aboard ferries, and at Department of Fish and Game counters, much as credit card transactions occurred in retail establishments. COMMISSIONER BOYER explained using credit cards at the DMV would result in faster moving lines and would be cheaper for the DMV. Cash was expensive to handle. "But more fundamentally yet is that once we've moved that financial environment to this credit card acceptance environment, we can move into the interactive voice response environment, we can move to an Internet interface environment, a real transaction-based environment," he said, emphasizing that these opportunities were real and available. Number 1083 COMMISSIONER BOYER stated, "I would expect that by using the credit card acceptance, itself a benefit, and the two other environments that we can roll into ... by ... the ... early summer, we can affect the people who go there and wait in line by 3 to 10 percent would be my guess." COMMISSIONER BOYER indicated the Department of Administration would focus on partnerships with people, including automobile dealers, who had major stakes in transactions. The department was rolling out a pilot program with an automobile dealer in Fairbanks and one in Anchorage to allow completion of the entire transaction at the time of sale, including titling, registration and license plates. It would be much like closing deals on houses. COMMISSIONER BOYER said that was not the case today with DMV, brokers and sales of new automobiles. "It takes as much as eight weeks now for that transaction to be completed," he said. "We will make it transparent to the customer. When you get your keys, you don't know what happens in the background, when the dealer takes the paperwork to DMV. You don't know why it takes you two weeks to get your metal plates. But the dealer certainly knows because the transaction, until it's completed with the exchange of tags and all those other papers, ... the dealer doesn't get the money. So the dealer is a vested stakeholder in our improvements." COMMISSIONER BOYER advised that as a group, automobile dealers supported the change and were eagerly involved in the roll-out of the pilot project. There also would be a broader application to dealers across the state in August or September. "What we have done, then, is enhanced their satisfaction level," he added. Number 1190 COMMISSIONER BOYER emphasized the potential for increased customer satisfaction. "It'll be done in a backdrop of noncompetition with other vital, higher priority initiatives of the state," he said. "It will also allow us to liberate people who are doing lower-value work." Clearly, the public did not want to pay for inefficiency and excess paperwork, which existed today. By eliminating lower- level, lower-value work for some employees, those at the counter could perform more important work on complex titling issues, state jurisdictional issues or other problems requiring a real person and taking more than three to five minutes to handle. Number 1250 COMMISSIONER BOYER cited an example of new eyes looking at a situation. "Across the street, on the eighth floor of the State Office Building, we opened, in a very slow, quiet way, on Monday, something we are calling `Express DMV,'" he explained. One employee had been moved, at no cost, and set up on the same mainframe computer system she had been using. Express DMV handled simple transactions such as vehicle registration renewals, driver's license renewals, and renewals and original issues of state identification cards. COMMISSIONER BOYER revealed, "We're going to kind of unveil this in a more public way on Friday. ... We want the general public to get the message, after we've worked out, through three or four days, the kinks in that process, that there are thousands of employees working for lots of people in downtown Juneau who can walk there in two or three minutes, come in and transact business in three to five minutes in this environment, and take the rest of the 45 minutes left for their lunch and not take any time out of the employer for something that's inefficient, the drive back and forth all by itself and the wait in line." Number 1386 COMMISSIONER BOYER believed this translated into real dollars. "I had 12 people today who went downstairs and had their state IDs made, the photograph taken there, in less than ten minutes, when they were all going to consume about two hours driving out, driving back and the wait in line. And they were tickled," he stated. "And they're people who I've got focused on change. ... Not any administration had thought about it. Simple. New set of eyes. Change. And that's what we're all about in the Department of Administration, and that's why I have a high degree ... of confidence that we could be successful here." Number 1412 REPRESENTATIVE JAMES indicated she had other, peripheral concerns. Various agencies were not necessarily "plugged in" to related agencies. "And that's a concern of mine, particularly as the need for the information that you have from this process for the Department of Public Safety, the licenses, suspensions of licenses, all those things, that would be on the record," she stated. "And my concern is, when we go into using this technology, will you have a system that can be read by either? You know, one of the things ... I've said is we should have a seamless government instead of these ... little groups ... of things working by themselves. Could you respond as to how you would hope to address those concerns?" Number 1470 COMMISSIONER BOYER replied, "We are going to make it absolutely seamless in that respect. ... You have to run essentially two systems for a short, short period of time. But you design your outcome, and the outcome is it needs to feed his interests, his officers who need the information when they need it, as they pull up behind a vehicle or whenever they need that. It could be a life-threatening situation. When they need it, they need it. And it ought to be seamless to the officer wherever that occurs, and it is literally a design problem." COMMISSIONER BOYER continued: "We let this system churn, that we don't think is very efficient right now, and that is data being processed. And in the meantime, ... [m]aybe it takes six weeks to design a system that will enable us to ... work in a different environment with regard to data processing and processing of those transactions and feed, by design, the information is into his system, the APSIN system, seamlessly." COMMISSIONER BOYER maintained there would be no disruption. It would be seamless, accomplished concurrently instead of sequentially. That technique was used frequently in the telephone business, for instance, when switching over to a new system. There would be no down time. The public would not be affected, nor would a person doing business have problems because of it. Commissioner Boyer pointed out his own familiarity with the process and with planning for those "cut-overs." He concluded, "So it's that kind of thing we'll plan for." Number 1550 REPRESENTATIVE JAMES indicated she would follow up on that issue, then said, "The other of this that's distressing, maybe, to me ... is enforcement issues where there is the suspension of licenses and for DWIs and all those other kinds of things. And is that something that would be done, then, by ... the Department of Administration, or would that be something that would continue to be done by the Public Safety, or ... how does that fit into this whole picture?" Number 1567 COMMISSIONER OTTE responded, "The Driver Services is one of the components of [the Division of] Motor Vehicles, and that would follow the transfer right along with the other services ... that the division provides. Nita Hensley's shop would continue to do those kinds of things, the suspensions, the reinstatements, being driven by a variety of actions, whether it's child support issues, whether it's points or what it is. But those will follow DMV because they are so -- we took a look at that, if it made any sense to try to separate those out, and they are so connected that it would create just some fairly significant problems to do that. From my perspective, it's not at all problematic. What I hope that eventually comes out of that, frankly, is the ability to complete all the tasks that are mandated by law within Driver Services, either a) do them all and b) make sure that they're done in a more timely manner. And some of the things that Commissioner Boyer is talking about in terms of technology and reducing paper flow is going to be applied to the whole Driver Services portion of this discussion." Number 1629 REPRESENTATIVE JAMES explained, "What I'm struggling with in this issue of enforcement is that we have people who are in the Department of Public Safety, where it seems to me enforcement ought to be. ... You say it's going to be the same people, they're just going to move over and work for the Department of Administration. It's really a struggle for me to understand that the Department of Administration, ... as a[n] umbrella here, would be involved in enforcement. So if there's no problem with that, I guess, and it's only my problem, it's not a problem. But it just seems that the public would expect those issues to be done by the Department of Public Safety instead of the Department of Administration." Number 1665 COMMISSIONER OTTE responded that in many jurisdictions around the country, those kinds of functions were not necessarily placed with a law enforcement agency. Although traditionally thought of in terms of enforcement, they were administrative actions based on some other instant or issue that had taken place, such as through the courts. "So yes, I guess we can apply the enforcement kind of terminology to it, but it really is an administrative action as a result of some other activity," he explained. COMMISSIONER OTTE continued: "Please be assured that it is a function of [the Division of] Motor Vehicles that is absolutely critical. And I'm not interested in seeing any degradation of the service. I've had many, many discussions with Commissioner Boyer. Both of the issues you've raised in terms of technology interface and Nita Hensley's operation are things that I feel very strongly about. And if I thought for a moment it was going to change, why, we would continue to have those discussions." Number 1716 REPRESENTATIVE BRIAN PORTER responded, "While I'm not, I guess, perhaps, looking forward to Nita losing her badge, just for the information of the committee, there has been a development over the last 30 years of trying to `civilianize,' if you will, functions that found their way into law enforcement and put them in the proper environment, so that law enforcement can deal with law enforcement and utilize the training and backgrounds that are required for these kinds of positions in those pursuits, as opposed to administrative types of pursuits or pursuits that can be done in a more efficient manner. So I would see this move not as a degradation. And certainly, as all agencies within this state, there will be a certain amount of required cooperation because the functions do interrelate. But to be able to let the Troopers provide enforcement, and let the DMV provide the manipulation of that particular set of regulations and administrative functions, is pretty consistent with, I think, what efficiency requires." Number 1783 REPRESENTATIVE NORMAN ROKEBERG asked why the Department of Administration had been chosen, rather than the Department of Revenue, the Department of Transportation and Public Facilities, or another agency. Number 1801 COMMISSIONER BOYER replied it was difficult to get two people to see eye-to-eye. With 14 commissioners, it was tough to reach agreement on something like this. "It's a big move in state government to move ... 150 people, 8 million dollars' worth of resources, and to have people agreeing amicably to make it seamless for themselves and seamless to the public," Commissioner Boyer explained. "It's tough to do. We'll see. We think ... it's going perfectly well now." COMMISSIONER BOYER indicated that was one part of the problem. "The other is that I was a willing supplicant, I guess," he said. "You know, I was willing to take on the challenge." He believed the Department of Administration was the place that administrative, ministerial process work ought to be done. In large part, he was a proponent of centralized ways of doing business. For one thing, he believed economies of scale presented themselves by centralizing services. Commissioner Boyer said the Department of Administration fundamentally existed to have a centralized view, approach, way to procurement, way of looking at information services and way of handling State of Alaska employment. Number 1859 COMMISSIONER BOYER suggested many centralized functions were dysfunctional today in the Department of Administration because of lack of attention. The previous administration had refocused their thinking on centralized delivery. "And so we're committed to looking at those centralized functions again ... and seeing where they make sense to stabilize, to improve, to modernize," Commissioner Boyer explained. COMMISSIONER BOYER continued: "Those areas where it doesn't make sense to centralize, we're not ... interested in doing that. But where we can find economies of scale and real efficiencies, and change those ... delivery systems, whether or not they're in procurement -- which the body helped us with last year, made the first attempt at some major changes in procurement -- whether or not it's bringing a good business sense to acquiring real estate, either for lease or for purchase, where we can make ... changes with the tools that you provide us, whether or not we can do that is always a challenge. But we think that this is the right department. And, frankly, no one else was interested in taking it on. Treasury's function or Revenue's function, their key role is not administrative, ministerial process work." COMMISSIONER OTTE commented, "I think Revenue sent it over to Public Safety about 20 years ago." Number 1921 VICE CHAIRMAN BUNDE acknowledged Representative Green's arrival and turned the gavel over to him. REPRESENTATIVE ROKEBERG referred to page 9, lines 8 - 10, of EO 99 and noted there were deletions. He said, "Reading out of this section, which is Section 24 of the EO here, this provides the commissioner of Public Safety to do certain things. ... If you look at Section 23 above, it provides for both departments to make applicable regulations. But here, I'm curious, number one, about ... the activities relating to the commercial motor vehicles." Representative Rokeberg suggested there were substantive changes but a lack of clarity. He asked, "Are you leaving commercial motor vehicle licensing somewhere, or basically, could you explain ... the intent here ... and is there anything substantive in this?" Number 1996 JUANITA HENSLEY, Chief, Driver Services, Division of Motor Vehicles, Department of Public Safety, replied, "Page 9, actually Section 24, basically gives the duty of the commissioner of Public Safety the authority to adopt regulations that deal with the commercial program and all of the other requirements that are duties, like the rules, the road requirements of Alaska State Troopers, things of this nature. Number 9 takes out the provisions ... and if you look at number 4, 5, 8 and on line 22, the provisions of driver's licensing would be the authority of the Department of Administration. The rest of it would stay within the Department of Public Safety, meaning the rules of road, where-the- rubber-meets-the-asphalt-type programs, traffic-enforcement-type programs, the commercial-vehicle-and-its-safety-inspection-type programs and ... those of that nature." Number 2040 REPRESENTATIVE ROKEBERG responded, "So the DMV will still maintain responsibility for licensure of motor vehicles. Is that correct?" MS. HENSLEY agreed that was correct. REPRESENTATIVE ROKEBERG commented it was a "housekeeping thing." He asked, "Is the Department of Administration going to have to promulgate regulations to take over this, ... because you're taking away some statutory authority here, apparently? Or what are you going to do about that?" Number 2058 MS. HENSLEY replied there were existing regulations in Title 13 that would just be transferred to the Department of Administration. REPRESENTATIVE ROKEBERG declared there were no substantive changes, then. He referred to Section 77, page 27 of EO 99, and said, "It says that the contracts, rights, liabilities and obligations created by or entered into will ... remain in effect. I believe that the DMV has the leasehold obligations with the private landlords, and as a point of `nit-pick,' ... you should say `leases' there, 'cause they're not contracts. They are obligations...." Representative Rokeberg asked, "For the record, ... you mean leases, is that right?" Number 2101 COMMISSIONER BOYER replied, "It's an inclusive term, and in fact I would probably guess that most of the leases we and the DOA already hold, there are some, I think, that DMV ... has initiated, but we own most of those pieces of paper in any event." Number 2112 MS. HENSLEY added, "This is also talking about the contracts that we have negotiated with, like the IM vendors that are doing the ... titling or registration for us, the contracts that we've negotiated through the licensing or the testing contractors that we have that administer commercial driver license testing for us. Those would continue (indisc.--coughing)." REPRESENTATIVE ROKEBERG said his point was that leasehold agreements are not contracts. Number 2134 REPRESENTATIVE BUNDE stated, "Commissioner Otte had mentioned that as it exists now, their main job, of course, is getting the bad guy, and so as money comes in, DMV does not get its fair allocation, or it's kind of a step-child or whatever." He asked, "Commissioner Boyer, as you assume these duties, will there be, then, some reallocation of resources required in the Department of Administration? Because we're not getting where we want to be. A 10 percent increase would be welcomed, of course, but I think we'd want to go more than that, and so what departments in your area would have to then become less important?" Number 2175 COMMISSIONER BOYER said that was an interesting question. "We have agreed to the change -- I've made this point at every committee -- with the understanding that the legislature can change the playing field," he explained. "The playing field I would hope you would embrace is one that has status quo funding for the Division of Motor Vehicles, and that is about $2.9 million worth of pure general fund appropriations and then about 5.1 [million] and change in general fund program receipts and a few dollars in ... interagency receipts or transfers. If we have a level playing field for this year, I don't have to cannibalize something else...." COMMISSIONER BOYER emphasized how lean the budget was. "And we have about $11 million is all in centralized admin[istrative] services," he stated, "The rest is a huge amount of money for grants through the Longevity Bonus Program -- you ... wouldn't want to allocate the Longevity Bonus grant monies, probably, to anybody including the DMV. Pioneer Homes. There's not a lot of places that are discretionary for us. So we are already lean to the point that we wouldn't bring any new resource." COMMISSIONER BOYER continued, "But I'm convinced that ... in an $8 million environment, that ... I can bring economies of scale through purchasing, through staffing, through finance, through information services, because I own those tools. I can use those tools more aggressively, in an unimpeded way. For Ron [Otte] to access that toolbox now is a cumbersome thing for him to do. His department has to ... wind its way through the bureaucracy. I own those tools. I can leverage them and use them to make economies. If you leave the money alone, and I know that's a Finance Committee decision, but ... if I'm given that $8.1 million, I can make this work. And in 18 months or less, if you don't believe it, you have your go at it again. But I'm convinced that if I have that pool of resources, and I don't move a nickel out of DMV, we can make it work." Number 2270 REPRESENTATIVE BUNDE said, "You'd mentioned the point of sale for dealers issuing tags. It seems like a logical idea. Would this, then, allow those people access to [the] DMV computer network? Would they log on, basically?" Number 2279 COMMISSIONER BOYER replied no. "We're initiating a new design of a separate database system that will provide all the information that Public Safety needs to assure the safety of officers in the field and other needs that they have, but allow us to spin, I think, quicker," he stated. "In a different database environment, we think we can have quicker turnarounds, frankly, and the integrity of their ... confidential information is not harmed or jeopardized by ... any means. We want to make sure there's a clear separation of any of those items." Number 2309 REPRESENTATIVE BUNDE said, "As the dealer does this, ... I'm sure they will incur some cost. And you've mentioned, there, the pilot program of using the credit card and the `swipe' environment, which again is logical, but then there's a cost to that too, I think. And retail outlets ... are charged back 6 percent or something like that from the credit card company. What happens to the state? ... I mean, is there ... some percentage that the state has to eat to use this system? And have you talked to dealers about what -- now they get $100 for a secretary taking five minutes to write out a title. How much more are they going to get to issue the tags or the plates?" Number 2340 COMMISSIONER BOYER replied, "The point-of-sale transaction ... that's enabled by credit card acceptance won't affect the dealer in any way. We're not suggesting that you go in and buy a $35,000 pickup truck ... using your credit card. That's not the intent and that won't be the financing technique." REPRESENTATIVE BUNDE said, "Excuse me, I think I've probably confused you, and I've asked two questions in combination. One is, you can purchase your tags with a credit card. COMMISSIONER BOYER replied, "Right." REPRESENTATIVE BUNDE observed there was overhead involved in the use of the credit card. He asked how that would affect the state. He further asked how much dealers would charge the state for issuing plates. Number 2366 COMMISSIONER BOYER replied it was not intended that the dealer would charge any fee for that kind of transaction. "The fee that you pay to use a card is something that the purchaser pays, and that won't be changed in this environment," he asserted. "So when you use your credit card, you're paying some premium already. ... There are discount fees built into that transaction environment. So we don't shift it to the person you're doing transactions with. ... You don't go to ... a fish tackle place in Anchorage now and buy a Fish and Game license using your credit card and the vendor pay something. We pay the vendor a buck, I think, ... to do the transaction...." Number 2394 REPRESENTATIVE BUNDE cited the example of going to a restaurant for dinner. If the restaurant accepted the credit card, the credit company charged the restaurant a percentage. Representative Bunde asked, "And would they not charge the state a percentage for using this?" COMMISSIONER BOYER replied that was a different question. "And that answer is yes," he said. "I mean, we're going to pay the state at DMV, for instance, whether or not it's in a box, on the Internet or at the counter, we're going to pay some discount fee. ... It will be hard to detect at first, but the costs of that transaction, to handle cash or checks now, is more expensive than the fees that we will be charged by the credit card company to process the electronic commerce. It's in the neighborhood of, let's say, about ... 1.75, certainly under 2 percentage points, to process the credit card transaction. We hope it's actually somewhere closer to 1.4 or [1.]5. ... The cost of handling cash is about 3.5. The price of handling checks is about 3.03. The transaction will be cheaper in a credit card environment for the state than the other two alternatives right now." Number 2444 REPRESENTATIVE BUNDE asked, "To accomplish this, ... what kind of new hard equipment are you going to need? ... What kind of new technology are we looking at in new computers and that sort of thing?" COMMISSIONER BOYER said the great thing about the Internet was the Department of Administration did not have to buy anything for the world to access its home page and conduct a transaction. However, the department did have to build that transaction page, for which they had a "Web Master." TAPE 97-9, SIDE B Number 006 COMMISSIONER BOYER referred to bringing the driver's manual on- line. The next big project for the person who was the "Web Master" was to "design the interactive transaction environment for the Internet transaction that's enabled by being able to use a credit card number in a secure transaction environment," he said. "So that's part of what I do bring ... to play here that doesn't cost DMV anything nor the public." COMMISSIONER BOYER continued: "Where we are looking at perhaps a hardware application, though, is in the interactive voice response environment. And the legislature has provided, in the budget, the ability for a, essentially, I call it a `net-back,' although the technical people will call it something else. It's a net-back environment where you partner with someone who in this case owns the box. They own the interactive voice response machine. And let's say they're a banking institution. It's what I use in my normal course of business. It could just as easily be their ATM machines, though. But in this case, it's a black box that somebody dials in with a 1-800 number, so we'll have to pay for 1-800 connection. They go into the black box, and the black box ... says, you know, option A, B, C, D, E, F, G, and you take the option. And in that environment, you probably don't want to see ... or touch a human being anyway, 'cause they're going to foul up your time." In three minutes, a title could be renewed, seven days a week, 24 hours a day, from anywhere. COMMISSIONER BOYER pointed out the department would not own the box, nor did they believe the legislature wanted them to. There was no need to own the infrastructure because it was impossible to keep up with technology shifts. "We're going to pay somebody a fraction of some percent to transact business on their box," he explained. COMMISSIONER BOYER did not anticipate additional hardware or software costs in those arenas. "We're going to be partnering, in a very real way, with a banking institution would be my guess, and we've been talking to them, with dealers, clearly, and we've been talking to them and they're very excited and eager," he said. "So ... that's why we've not proposed a capital budget. You've given us some tools. We want to leverage the tools to the maximum here." Number 101 REPRESENTATIVE JAMES responded, "Commissioner Boyer, not to burst your bubble on this looking at things with new eyes, but I think there is an opportunity when you're at the right place at the right time." She recounted how when she joined the legislature in 1993, excited about available technology, she had sent a survey to the legislature but received a small response indicating limited interest in use of computers. "Things have moved a long ways in four years," she observed. REPRESENTATIVE JAMES expressed excitement about existing opportunities. "And you've confirmed some of the ideas that I've had, that even when we're talking about investing in hardware and software in the computer industry, ... we ought to be partnering with somebody, because we can't possibly invest and keep up," she said. "We would be buying and throwing out ... or else we'd be using outdated equipment such as the Department of Public Safety now has with their fingerprinting equipment, which needs to be replaced and can't even be repaired anymore. So I think that we're looking at something that's ... a real major step, and I'm excited to see you bringing these in." Number 163 REPRESENTATIVE JAMES acknowledged her own interest in regulations. "And you may be well aware that I was proposing legislation that would have made a centralized place in government to promulgate regulations, so that we don't have these little fiefdoms out there doing their little thing," she stated. "And it could be coordinated to make a lot more sense. And I had suggested that it go in the Department of Administration. So when you get your belt around all of these DMV things and have it all perfected, would you please think about that and see what your potential would be in that area?" Number 188 REPRESENTATIVE PORTER commented, "While I too look forward to some of these changes creating better efficiencies, it's not to say that everything that DMV was doing is necessarily bad. One of the things that they, I think, were out-front on, in front of many agencies of this state, was privatization. They have taken great steps in that area, and I would like to think that that can continue serving that mission that you're indicating." Number 213 COMMISSIONER BOYER agreed less needed to be fixed than was suggested by the clamor. "But it's that clamor, that extra 10, 15, 20 percent of improvement, that will be dynamic to the public," he added. REPRESENTATIVE BUNDE expressed amazement at the amount of time required to take a driver's test. "But how will all this whistles and bells of paperwork speed up -- I mean, that's a hands-on sort of thing, and ... we can't do that through a black box and calling in," he said. Number 238 COMMISSIONER BOYER indicated Ms. Hensley could respond. He commented, "And this is one where it's serendipity that allows me to take credit for something that they've been focused on. But it's more of the private sector, privatization -- `partneringship' really, though, is a better way to ... characterize what they're already doing. And we hope to enhance it and speed that process up...." Number 261 MS. HENSLEY responded, "The division is already currently contracting with one vocational school in the state to administer our commercial driver license testing for us. They have so far issued around 200 tests, and they just started in October. That is actually a relief for our CDL examiners because we're able to bring those individuals back and put them back on the counter or actually administer regular basic skills testing for them." MS. HENSLEY continued, "We are currently in the process of expanding that program to basic driver training schools throughout the state, so that they can test the people that they are training for us, and that will actually, again, relieve some of the time that it takes the examiners to be out there on the road examining, so they can be there behind the counter, helping those individuals that need to be there for the difficult title transactions and things of this nature." Ms. Hensley noted several areas were being looked at, such as dealer titling, which would help the department and the public. Number 310 CHAIRMAN JOE GREEN stated, "I don't know whether you've answered this already, and I apologize for being late. But AS 28.20.270, the -- I guess that's a ... suspension of a driver's license for debts that they may owe. I understand currently ... that's a problem because of funding. And will this efficiency, all these things that we're hearing now, allow you to perhaps re-energize that process?" COMMISSIONER BOYER indicated Ms. Hensley could answer that. "But I could preface it by saying that that's part of the deal walking in the door, is that only with the status quo budget for a period of time will we be able to, one, get the efficiencies up and going, but then, more importantly is reallocate resources that are either conducting driver's tests today or at the counter today. But now getting to the issue that you're ... speaking of. It's only through that that we'll be able to reallocate the resources to those couple of areas that ... we're not doing because of lack of resources. ... The changes here don't necessarily mean less money to DMV, but by prioritizing bodies and reallocating resources, ... once you gain some of the efficiencies, you'll get a full array of services that we're not currently providing." Number 368 MS. HENSLEY, speaking to Chairman Green, added, "You have a particular bill that you have introduced that will also enhance the program and that will allow us to hopefully reinstate that program that was cut because of budget reductions last year. ... [I]n our budget document last year, DMV deleted 13 positions. Four of those were from the Driver Services unit that actually did the processing of the financial responsibility suspensions. And that basically compensated victims for the loss of their motor vehicle -- uninsured motor vehicle accident." MS. HENSLEY concluded, "Providing ... that your bill that you have passes this year, along with some of the other initiatives that we have planned, we hope that it would (indisc.) an enabling tool that will allow us to reinstate this program, that's still on the laws, that will allow us to go through and do this program." Number 408 REPRESENTATIVE JAMES believed service to the public was the primary responsibility. With the public's needs met, they would be happier and the legislature would receive less complaints. In the long run, reduction in costs to provide these services would be likely. However, service to the public should be "fixed" first. Number 436 REPRESENTATIVE BUNDE asked Commissioner Otte how many people actually registered to vote via the DMV. He further asked, "Would you please - and you have to do this about once every two years - send a note to all the police departments in the state of Alaska that legislative tags are issued to the legislator and they are found on various vehicles, and they should not detain our wives and husbands for hours at lunch while they're trying to figure this out?" COMMISSIONER OTTE replied, "Yes, that is a good point. ... I've heard a couple of recent problematic stories about that, and we certainly can do that." CHAIRMAN GREEN asked if there were further questions. He then asked the wish of the committee. Number 490 REPRESENTATIVE PORTER made a motion to move EO 99 from committee with individual recommendations. Number 497 CHAIRMAN GREEN asked if there were objections. Hearing none, he advised that EO 99 was moved from the House Judiciary Committee. HB 91 - EXTEND BOARD OF PAROLE Number 515 CHAIRMAN GREEN announced the next order of business was House Bill No. 91, "An Act extending the termination date of the Board of Parole; and providing for an effective date." He invited Representative Porter to present the bill. Number 519 REPRESENTATIVE PORTER, sponsor of HB 91, explained, "This bill extends the existing parole board for four years. I think it probably does not have to be articulated extensively what would happen if we didn't extend the parole board. People otherwise eligible for discretionary parole would not get out, and our Corrections problems would be further exacerbated, and those on mandatory parole would walk without any conditions, which isn't a very healthy thing, either." REPRESENTATIVE PORTER stated, "The only difference between the bill and the recommendation of the legislative audit report is the time. And they recommended a longer time. I wish we could make it the longer time. This going through this every four years seems a little bit silly, but it is a statutory requirement that it can only be extended for four years at a time." Representative Porter noted that Bill Parker, Deputy Commissioner of the Department of Corrections, was available to answer questions. Number 586 REPRESENTATIVE ETHAN BERKOWITZ said, "I'd just note the optimism of putting a zero fiscal note on this in the expectation that we probably won't have more criminals coursing through the system." REPRESENTATIVE BUNDE advised there was a substantial fiscal note. REPRESENTATIVE BERKOWITZ acknowledged he should have said "unchanged." Number 614 REPRESENTATIVE ERIC CROFT said he was curious why the time was four years. He inquired whether the enabling statute had ever been looked at in terms of change. He commented, "It did seem silly that we couldn't at least go the additional two [years] that the audit report recommended." Number 621 REPRESENTATIVE PORTER responded, "I guess it's a balance of the theory of not binding future legislatures and having the opportunity to ask questions if issues do come up about programs in a timely fashion. There's a balance between one and the other, and four years seems to be statutorily what everybody arrived at for just about everything." CHAIRMAN GREEN commented it was a point well-made. He asked Donna White, Acting Executive Director of the Board of Parole, if she wished to testify; Ms. White indicated she would answer questions. Number 645 REPRESENTATIVE JAMES said, "Maybe it's because I'm as old as I am that I see great changes happening from year to year to year to year. And when you put in something in place, and you don't change it until you get here, you have a bigger change to address. And so, if there's something that comes up in the system, or new modern methods or new things, because we live in a changing world, that if you make it too long, you close the door to looking at and making those changes. ... It would be really nice if we had time to just look at everything every year, but we don't. So every four years to take a look at it is certainly wise. But we certainly need to have an open mind, because there may be a better way of doing business than this. We never know until we get there from here." REPRESENTATIVE BERKOWITZ said Representative James's comments seemed more the product of wisdom than age. CHAIRMAN GREEN noted although Margot Knuth from the Department of Corrections had signed up to testify, she had left. Bill Parker, Deputy Commissioner of the Department of Corrections, and Donna White, Acting Director of the Board of Parole, were present to answer questions. Chairman Green asked if there were questions; there were none. Number 717 REPRESENTATIVE BUNDE made a motion that HB 91 move from committee with individual recommendations and the accompanying fiscal note. Number 727 CHAIRMAN GREEN asked if there was any objection. There being none, HB 91 moved from the House Judiciary Committee. CHAIRMAN GREEN advised that, unfortunately, HB 22 was not yet ready. Number 733 ADJOURNMENT CHAIRMAN GREEN adjourned the House Judiciary Committee meeting at 3:26 p.m.