Legislature(2001 - 2002)

02/05/2002 08:02 AM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
             HOUSE STATE AFFAIRS STANDING COMMITTEE                                                                           
                        February 5, 2002                                                                                        
                           8:02 a.m.                                                                                            
                                                                                                                              
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative John Coghill, Chair                                                                                              
Representative Jeannette James                                                                                                  
Representative Hugh Fate                                                                                                        
Representative Gary Stevens                                                                                                     
Representative Peggy Wilson                                                                                                     
Representative Harry Crawford                                                                                                   
Representative Joe Hayes                                                                                                        
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                              
HOUSE BILL NO. 361                                                                                                              
"An Act relating to pilot pay programs to attract and retain                                                                    
exceptional state employees; and providing for an effective                                                                     
date."                                                                                                                          
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
HOUSE BILL NO. 344                                                                                                              
"An Act increasing fees for driver's licenses, instruction                                                                      
permits, and identification cards; and providing for an                                                                         
effective date."                                                                                                                
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
HOUSE BILL NO. 331                                                                                                              
"An Act relating to appointment of persons to positions that                                                                    
require confirmation by the legislature; and providing for an                                                                   
effective date."                                                                                                                
                                                                                                                                
     - BILL HEARING POSTPONED TO 2/12/02                                                                                        
                                                                                                                                
PREVIOUS ACTION                                                                                                               
                                                                                                                                
BILL: HB 361                                                                                                                  
SHORT TITLE:PILOT PAY PROGRAM FOR STATE EMPLOYEES                                                                               
SPONSOR(S): REPRESENTATIVE(S)KOTT                                                                                               
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
01/28/02     2079       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
01/28/02     2079       (H)        STA, FIN                                                                                     
01/28/02     2079       (H)        REFERRED TO STATE AFFAIRS                                                                    
02/05/02                (H)        STA AT 8:00 AM CAPITOL 102                                                                   
                                                                                                                                
BILL: HB 344                                                                                                                  
SHORT TITLE:INCREASE DRIVER'S LICENSE FEES                                                                                      
SPONSOR(S): RLS                                                                                                                 
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
01/18/02     2008       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
01/18/02     2008       (H)        STA, FIN                                                                                     
01/18/02     2008       (H)        REFERRED TO STATE AFFAIRS                                                                    
02/05/02                (H)        STA AT 8:00 AM CAPITOL 102                                                                   
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
LINDA SYLVESTER, Staff                                                                                                          
to Representative Pete Kott                                                                                                     
Alaska State Legislature                                                                                                        
Capitol Building, Room 204                                                                                                      
Juneau, Alaska 99801                                                                                                            
POSITION STATEMENT:  Presented HB 361 and HB 344 on behalf of                                                                   
the sponsor.                                                                                                                    
                                                                                                                                
DAVE STEWART, Personnel Manager                                                                                                 
Division of Personnel                                                                                                           
Department of Administration                                                                                                    
PO Box 110201                                                                                                                   
Juneau, Alaska  99811-0201                                                                                                      
POSITION STATEMENT:  Testified in support of HB 361.                                                                            
                                                                                                                                
JANET CLARKE, Director                                                                                                          
Division of Administrative Services                                                                                             
Department of Health & Social Services                                                                                          
PO Box 110650                                                                                                                   
Juneau, Alaska  99811-0650                                                                                                      
POSITION STATEMENT:  Testified on HB 361 in support of the                                                                      
comments of the Division of Personnel; discussed market                                                                         
pressures and competition for certain job classifications.                                                                      
                                                                                                                                
BRUCE LUDWIG, Manager                                                                                                           
Alaska  Public   Employees  Association/American   Federation  of                                                               
Teachers (APEA/AFT)                                                                                                             
211 Fourth Street                                                                                                               
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:   Spoke  on behalf  of APEA/AFT  regarding HB                                                               
361 and the importance of collective bargaining.                                                                                
                                                                                                                                
MARY MARSHBURN, Director                                                                                                        
Division of Motor Vehicles                                                                                                      
Department of Administration                                                                                                    
3300B Fairbanks Street                                                                                                          
Anchorage, Alaska  99503                                                                                                        
POSITION  STATEMENT:   Outlined  the benefits  and advantages  of                                                               
digital  licensing  and  answered  questions  on  behalf  of  the                                                               
division regarding HB 344.                                                                                                      
                                                                                                                                
MARK MEW, Deputy Chief                                                                                                          
Anchorage Police Department                                                                                                     
Municipality of Anchorage                                                                                                       
PO Box 196650                                                                                                                   
Anchorage, Alaska  99519                                                                                                        
POSITION STATEMENT:   Testified regarding HB  344; discussed what                                                               
digital licensing  would do  for law  enforcement in  general and                                                               
for the Anchorage Police Department in particular.                                                                              
                                                                                                                                
DEL SMITH, Deputy Commissioner                                                                                                  
Office of the Commissioner                                                                                                      
Department of Public Safety                                                                                                     
PO Box 111200                                                                                                                   
Juneau, Alaska  99811-1200                                                                                                      
POSITION  STATEMENT:    Answered   questions  on  behalf  of  the                                                               
department in regard to HB 344.                                                                                                 
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 02-5, SIDE A                                                                                                               
Number 0001                                                                                                                     
                                                                                                                                
CHAIR  JOHN  COGHILL  called the  House  State  Affairs  Standing                                                               
Committee meeting  to order at  8:02 a.m.   Representatives Fate,                                                               
Stevens,  Wilson, Crawford,  Hayes, and  Coghill were  present at                                                               
the call to  order.  Representative James arrived  as the meeting                                                               
was in progress.                                                                                                                
                                                                                                                                
HB 361-PILOT PAY PROGRAM FOR STATE EMPLOYEES                                                                                  
                                                                                                                                
Number 0042                                                                                                                     
                                                                                                                                
CHAIR COGHILL announced  the first order of  business, HOUSE BILL                                                               
NO. 361,  "An Act relating to  pilot pay programs to  attract and                                                               
retain  exceptional   state  employees;  and  providing   for  an                                                               
effective date."                                                                                                                
                                                                                                                                
Number 0114                                                                                                                     
                                                                                                                                
LINDA SYLVESTER, Staff to Representative  Pete Kott, Alaska State                                                               
Legislature, presented  HB 361 on behalf  of Representative Kott,                                                               
sponsor.   She stated that  the pilot pay program  was introduced                                                               
at the  request of  the Department of  Administration.   She read                                                               
from the sponsor statement, as follows:                                                                                         
                                                                                                                                
     The bill  provides options for  the State of  Alaska in                                                                    
     its efforts  to recruit  and retain  in-demand workers.                                                                    
     Alaska's current  ... state employee pay  plan is based                                                                    
     entirely  on  a  job   classification  system  that  is                                                                    
     defined in law  by the principle of "like  pay for like                                                                    
     work."     This  system  serves   the  state   well  in                                                                    
     maintaining pay equity, but it  doesn't allow the state                                                                    
     to respond to the current competitive job market.                                                                          
                                                                                                                                
     This  legislation  authorizes  the Personnel  Board  to                                                                    
     adopt  regulations  defining  pilot  pay  programs  for                                                                    
     positions that  a state agency has  difficulty filling,                                                                    
     as   well    as   recognizing    exceptional   employee                                                                    
     performance.    Payments  made under  this  legislation                                                                    
     would not be considered "base  pay," nor is it included                                                                    
     in retirement  calculations.  Any HB  361 bonuses would                                                                    
     not  be  a part  of  collective  bargaining during  the                                                                    
     pilot  pay  period.    Further,  the  departments  must                                                                    
     absorb the expenses within their budgets.                                                                                  
                                                                                                                                
MS. SYLVESTER  noted that the  pilot pay program  options include                                                               
payment  of   a  recruitment  bonus;  "excellence   bonuses"  and                                                               
retention bonuses; or other bonuses  or incentives that the board                                                               
determines will help  a state agency compete  for high-demand job                                                               
fields  or   for  employees  who  perform   exceptionally.    She                                                               
continued reading from the sponsor statement:                                                                                   
                                                                                                                                
     Last year  the Alaska Legislature  passed HB 242  - the                                                                    
     retiree return  - which  partially addressed  the issue                                                                    
     of   critical   skill   or   knowledge   loss   through                                                                    
     retirement.    To  date,   64  valuable  retirees  have                                                                    
     returned to work ... for  26 employers statewide.  Now,                                                                    
     the State of  Alaska seeks an additional  tool in order                                                                    
     to maintain a high-quality, public-employee workforce.                                                                     
                                                                                                                                
MS. SYLVESTER  noted that the  pilot pay program would  sunset on                                                               
July 1, 2007.                                                                                                                   
                                                                                                                                
Number 0351                                                                                                                     
                                                                                                                                
DAVE   STEWART,  Personnel   Manager,   Division  of   Personnel,                                                               
Department  of  Administration,  came  before  the  committee  in                                                               
support of  [HB 361].   He  said the  division produced  a third-                                                               
quarter workforce  profile in January, based  on executive-branch                                                               
employee  statistics effective  the close  of business,  December                                                               
30, 2001.   Based on  those numbers, he  noted, 6 percent  of the                                                               
workforce was eligible  to retire immediately.   Fives years from                                                               
that  date,  another  16.7  percent  of  the  workforce  will  be                                                               
eligible to  retire, he added.   Mr. Stewart said nearly  200 job                                                               
classes are  reported by  hiring managers  and state  agencies as                                                               
difficult to  fill because  of inability  to offer  a competitive                                                               
salary.  He reported the following statistics:                                                                                  
                                                                                                                                
     In  the  next  five  years, 90  percent  of  the  state                                                                    
     correctional  superintendents   will  be   eligible  to                                                                    
     retire, 81  percent of  the public  safety lieutenants,                                                                    
     64  percent  of  the   natural  resource  managers,  60                                                                    
     percent of  the supervisory  (indisc.-coughing) nurses.                                                                    
     50 percent of the ships'  masters for the Alaska Marine                                                                    
     Highway System will be eligible to retire.                                                                                 
                                                                                                                                
Number 0554                                                                                                                     
                                                                                                                                
MR. STEWART affirmed that he would  provide a written copy of the                                                               
statistics.  He then continued:                                                                                                 
                                                                                                                                
     30  percent of  the  eligible nurses  will  be able  to                                                                    
     retire within five years.   The state law requires that                                                                    
     the state pay plan follow  the premise of "like pay for                                                                    
     like work."   That means that similar work  is paid the                                                                    
     same, no matter where that work occurs.                                                                                    
                                                                                                                                
     Internal equity,  that is, aligning job  classes by the                                                                    
     "like pay  for like  work," is the  basis out  of which                                                                    
     salaries   are   assigned    throughout   the   state's                                                                    
     classification  system.    Making  market  adjustments,                                                                    
     adjusting   for   competitive  pressures   and   market                                                                    
     salaries,  requires  that  the entire  class  of  "like                                                                    
     work" be  adjusted, and there  are job classes  in that                                                                    
     broad base of work that  may or may not be experiencing                                                                    
     (indisc.) equipment problems.                                                                                              
                                                                                                                                
MR.  STEWART   stated  that  the  proposed   bill  provides  some                                                               
flexibility in  responding to  a changing  market.   He mentioned                                                               
pressures in addressing the retention  of critical job skills and                                                               
job knowledge.  He defined  recruitment bonuses, mentioned in Ms.                                                               
Sylvester's  testimony, as  "a onetime  payment  as incentive  to                                                               
accept employment with the State of Alaska."                                                                                    
                                                                                                                                
MR. STEWART explained that the  bill envisions a retention bonus,                                                               
which  he defined  as "a  single or  multiple payment  to current                                                               
employees with needed job skills or  skill 'sets' in order to get                                                               
them to stay  with the State of Alaska," at  least long enough to                                                               
train someone to take another's place.                                                                                          
                                                                                                                                
Number 0625                                                                                                                     
                                                                                                                                
MR. STEWART defined the excellence  bonus as "a payment to reward                                                               
state employees who perform beyond  normal expectations, or whose                                                               
performance  is  exceptional   on  mission-critical  projects  or                                                               
work."  He paraphrased his written testimony, which read:                                                                       
                                                                                                                                
     This  proposal allows  the Personnel  Board to  develop                                                                    
     regulations   adopting  some,   all,  or   other  pilot                                                                    
     programs  ... to  allow the  state to  more effectively                                                                    
     compete for scarce or needed  job skills and knowledge,                                                                    
     and  to retain  valuable  skills and  knowledge in  the                                                                    
     workplace.                                                                                                                 
                                                                                                                                
     The proposal  defines pilot pay programs  adopted under                                                                    
     it as exempt from  collective bargaining.  By retaining                                                                    
     control  over the  definitions  and  duration of  pilot                                                                    
     programs,  the  Personnel  Board  can  most  accurately                                                                    
     assess their  effectiveness.  To have  the pay programs                                                                    
     individually  bargained  could   cause  an  ineffective                                                                    
     program  to  remain  active and  only  perhaps  unused,                                                                    
     while  preventing  the  adoption   and  trial  of  more                                                                    
     effective programs.                                                                                                        
                                                                                                                                
Number 0752                                                                                                                     
                                                                                                                                
REPRESENTATIVE FATE asked Mr. Stewart  if he knew where the State                                                               
of  Alaska   stood  in  relationship  to   other  Western  states                                                               
regarding pay  scale "in  that competitive area."   He  added, "I                                                               
don't  know  that we're  noncompetitive;  I'd  like to  see  some                                                               
statistics that tell me that we're noncompetitive."                                                                             
                                                                                                                                
MR.  STEWART  responded  that [the  Division  of  Personnel]  has                                                               
salary-comparison  information  for  nurses and  engineering  job                                                               
classes, which he offered to provide.                                                                                           
                                                                                                                                
REPRESENTATIVE  FATE   asked  if  there  had   been  any  similar                                                               
circumstance in which  this "type of crunch" had  occurred in the                                                               
past, or  if it was the  first circumstance.  He  also asked what                                                               
Mr. Stewart attributed its occurrence to.                                                                                       
                                                                                                                                
Number 0849                                                                                                                     
                                                                                                                                
MR.  STEWART answered  that for  years, the  State of  Alaska has                                                               
enjoyed "probably" a steady stream  of applicants for most of its                                                               
job  classes.     Some  specialty  skills,   such  as  particular                                                               
[computer]  programming skills  or those  for the  very technical                                                               
job classes,  have required lengthy or  out-of-state recruitment.                                                               
He mentioned the  constant change in technology  within the field                                                               
of  analyst/programmers;  he   said  competition  throughout  the                                                               
country for  those computer programmers,  as well as  for skilled                                                               
nurses and licensed engineers, is keener now than ever before.                                                                  
                                                                                                                                
MR. STEWART  reported that [the  Division of Personnel]  finds it                                                               
often takes six months to get  four or five people to compete for                                                               
a position.  He reiterated that  he would leave a spreadsheet for                                                               
the committee that shows approximately  200 job classes and their                                                               
average length of  recruitment.  He confirmed that this  is a new                                                               
phenomenon.                                                                                                                     
                                                                                                                                
Number 0957                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES asked  Mr. Stewart if he  had any statistics                                                               
indicating how  the previous  RIP [retirement  incentive program]                                                               
may have exacerbated the problem.                                                                                               
                                                                                                                                
MR. STEWART  replied that he  did not, but would  investigate her                                                               
question.    He  noted  that [the  Division  of]  Retirement  and                                                               
Benefits has a number of people  who have retired under the early                                                               
incentive  program and  who are  exempt from  the HB  242 retiree                                                               
return, but it has not done a comparison on those.                                                                              
                                                                                                                                
REPRESENTATIVE  JAMES  asked Mr.  Stewart  if  he had  noticed  a                                                               
change in  the number  of openings in  the specialized  areas, as                                                               
opposed  to jobs  that merely  require a  high school  education.                                                               
She commented that  many state jobs have  become more specialized                                                               
than in the past.                                                                                                               
                                                                                                                                
MR.  STEWART answered  that many  jobs, including  local clerical                                                               
jobs, have become  more technical, but applicants  for those jobs                                                               
lack  those skills.   For  example,  Mr. Stewart  said, he  began                                                               
working for the state 17 years  ago as a clerk typist, and didn't                                                               
have  to  know  Microsoft  Office.    Now  almost  everyone  from                                                               
beginning  administrative  clerks   through  the  director  needs                                                               
proficiency in that skill.                                                                                                      
                                                                                                                                
Number 1079                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES recalled working for  the State of Oregon in                                                               
the  1950s, when  the  incentive was  benefits,  rather than  the                                                               
"paltry" pay.  She asked how  that has changed over the years and                                                               
commented that  it seems wages must  be higher than those  in the                                                               
private sector  in order to  attract prospective employees.   She                                                               
added, "Where is the job security?"                                                                                             
                                                                                                                                
MR.  STEWART  said  there  were  a  couple  of  forces  at  work,                                                               
identified   by  [the   division's]  own   economist  and   other                                                               
economists.  He detailed them, as follows:                                                                                      
                                                                                                                                
     One  of those  is  the changing  nature  of the  people                                                                    
     entering the  workforce.  Fewer people  are looking for                                                                    
     that  long-term  security, long-term  association  with                                                                    
     employers, in  favor of skill  acquisition -  learn the                                                                    
     skill,  move  on, use  it  for  someone else,  and  ...                                                                    
     parlay that new skill set into higher wages.                                                                               
                                                                                                                                
     The other  is the general  erosion through ...  lack of                                                                    
     cost-of-living adjustments  and the changing  nature of                                                                    
     the benefit  plans the state offers.   Fifteen, sixteen                                                                    
     years  ago,  twenty  years  ago,   the  state  had  one                                                                    
     retirement  program; the  state had  one wage  base for                                                                    
     all  its workers.    Currently, there  are  one or  two                                                                    
     contracts that have two-tiered wage  scales.  We've got                                                                    
     three ...  tiers of  retirement [with]  varying degrees                                                                    
     of medical coverage in each of those three tiers.                                                                          
                                                                                                                                
MR. STEWART mentioned the private  sector's coming back to single                                                               
levels of coverage.                                                                                                             
                                                                                                                                
Number 1221                                                                                                                     
                                                                                                                                
REPRESENTATIVE  STEVENS  indicated  his understanding  that  [the                                                               
proposed bill]  was not a mandate,  but merely a tool  that could                                                               
be  used by  a department.   He  mentioned frequent  shortages of                                                               
personnel in  the Alaska Department of  Fish & Game (ADF&G).   He                                                               
stated his understanding that COLA  [cost of living allowance] is                                                               
untaxed  for  federal employees.    He  said there  are  "several                                                               
issues out there that affect our hiring."                                                                                       
                                                                                                                                
REPRESENTATIVE   STEVENS  noted   that  although   the  sectional                                                               
analysis [in  the committee  packet] deals quite  a bit  with the                                                               
Teachers Retirement  System (TRS), Mr. Stewart  had not mentioned                                                               
teachers  in  his  testimony.   Representative  Stevens  said  he                                                               
didn't  know  if  they  were included  in  the  aforementioned  6                                                               
percent eligible to  retire.  He stated his belief  that [HB 361]                                                               
would apply to  the employees of school districts, as  well as of                                                               
the University  of Alaska.   He  asked if this  bill is  the only                                                               
vehicle that would  allow school districts and  the university to                                                               
use this kind of a bonus program.                                                                                               
                                                                                                                                
Number 1291                                                                                                                     
                                                                                                                                
MR. STEWART  responded that  the bill,  as written,  would affect                                                               
the  state pay  plan in  Title 39,  which does  not cover  school                                                               
districts or the  University of Alaska because  they are "defined                                                               
in the exempt service."                                                                                                         
                                                                                                                                
REPRESENTATIVE   STEVENS  asked   why   the  sectional   analysis                                                               
repeatedly addresses TRS.                                                                                                       
                                                                                                                                
MR. STEWART explained that there  are employees in the Department                                                               
of Education and Early Development who are members of TRS.                                                                      
                                                                                                                                
Number 1339                                                                                                                     
                                                                                                                                
REPRESENTATIVE WILSON  noted that  one reason  for the  crisis at                                                               
hand was  because all  of the so-called  baby boomers  [the baby-                                                               
boom generation born  between about 1947 and  1961] are retiring.                                                               
She said  the reason for  her own move  to Alaska nine  years ago                                                               
was because the  wages were so much better than  in the Lower 48;                                                               
however,  the wages  in the  Lower  48 have  risen, but  Alaska's                                                               
haven't.   She asked  Mr. Stewart who  would make  the decisions,                                                               
and she mentioned the need for checks and balances.                                                                             
                                                                                                                                
MR.  STEWART named  three programs  defined  in the  draft:   the                                                               
recruitment  bonus,  the  retention  bonus,  and  the  excellence                                                               
bonus.   He explained  that the recruitment  bonus, based  on the                                                               
job  class,   was  designed  to   attract  applicants   to  state                                                               
employment,  whether  they  be residents  or  nonresidents.    He                                                               
continued:                                                                                                                      
                                                                                                                                
     On nomination  of a  department's commissioner,  or the                                                                    
     Personnel  Board,  the   Division  of  Personnel  would                                                                    
     compile  a   list  of  job  classes   and  monitor  the                                                                    
     recruitment,  as we  decide which  job classes  require                                                                    
     some  incentive, or  would be  eligible for  incentive.                                                                    
     ... In  the pilot pay,  ... for vacancies in  those job                                                                    
     classes,  agencies  would  be  authorized  to  offer  a                                                                    
     recruitment bonus  up to a  maximum established  by the                                                                    
     Personnel  Board in  ... the  program,  whether it's  2                                                                    
     percent of the  annual salary, 5 percent  of the annual                                                                    
     salary  -  some number  that  would  make the  position                                                                    
     competitive.  The  board would then look  at changes in                                                                    
     recruitment  -  whether   that  particular  recruitment                                                                    
     incentive   actually  attracted   more  applicants   or                                                                    
     different applicants with different skill sets.                                                                            
                                                                                                                                
MR. STEWART turned attention to  the retention bonus, which would                                                               
also  be class-based,  rather  than individually  position-based.                                                               
Referring  to mention  by Representative  Stevens of  ADF&G's job                                                               
classes, he said  it is a noted  problem.  He added:   "There are                                                               
House  chair-related and  law enforcement-related  positions that                                                               
have the same sort of  retention difficulty.  Based on nomination                                                               
of  commissioners from  those  departments,  the Personnel  Board                                                               
would  entertain authorizing  a  bonus to  ...  those classes  of                                                               
individuals also."                                                                                                              
                                                                                                                                
MR.  STEWART  noted  that  the   excellence  bonus  would  be  an                                                               
individual award  based on nomination  by the commissioner.   The                                                               
process  could be  as simple  as a  commissioner's nominating  an                                                               
individual in a state agency  to the Personnel Board for granting                                                               
of an  award.   He added,  "We envisioned,  however, that  a peer                                                               
review  -  members  of  some  of the  bargaining  units  -  would                                                               
interview nominations  for service excellence and  make ... final                                                               
recommendations  to the  Personnel Board  for those  awards, with                                                               
limits set, or the other  programs defined by the Personnel Board                                                               
members."                                                                                                                       
                                                                                                                                
Number 1578                                                                                                                     
                                                                                                                                
REPRESENTATIVE WILSON asked Mr. Stewart  how many people serve on                                                               
the Personnel Board and how they are selected.                                                                                  
                                                                                                                                
MR. STEWART  answered that the  Personnel Board is allowed  up to                                                               
three  members appointed  by the  governor and  confirmed by  the                                                               
legislature.  He  estimated that the terms are five  to six years                                                               
in length.   Mr. Otte, who is  in his second year,  and Mr. Borg,                                                               
who is  in his second  or third  year, currently fill  two seats.                                                               
Mr. Stewart told  the committee that during the two  years he has                                                               
been with the Division of  Personnel, there have been two members                                                               
on the board.                                                                                                                   
                                                                                                                                
Number 1643                                                                                                                     
                                                                                                                                
REPRESENTATIVE WILSON  commented if [the bill]  passes, the board                                                               
would become much more important than it has been in the past.                                                                  
                                                                                                                                
MR. STEWART concurred.                                                                                                          
                                                                                                                                
Number 1668                                                                                                                     
                                                                                                                                
REPRESENTATIVE  JAMES  asked Mr.  Stewart  to  confirm that  some                                                               
employees in Seattle work for the State of Alaska.                                                                              
                                                                                                                                
MR.  STEWART  offered his  belief  that  there  are five  or  six                                                               
employees in Seattle.                                                                                                           
                                                                                                                                
REPRESENTATIVE JAMES asked if there  was any difficulty retaining                                                               
those out-of-state employees, considering they  may or may not be                                                               
in an area with "more work or higher pay."                                                                                      
                                                                                                                                
MR. STEWART  replied that the  employees in question work  at the                                                               
[Alaska State]  Ferry Terminal; he  conveyed his belief  that the                                                               
state is  not experiencing  higher turnover  in that  regard than                                                               
elsewhere  in the  state; however,  no monitoring  has been  done                                                               
specific to that issue.                                                                                                         
                                                                                                                                
REPRESENTATIVE JAMES commented that  those employees do receive a                                                               
permanent  fund dividend  (PFD), which  may be  another incentive                                                               
for them to stay.  [Laughter]                                                                                                   
                                                                                                                                
Number 1710                                                                                                                     
                                                                                                                                
REPRESENTATIVE   CRAWFORD  said   he  felt   trepidation  anytime                                                               
consideration   veered  away   from  the   collective  bargaining                                                               
process.    He asked  Mr.  Stewart  if  he  knew how  the  public                                                               
employees unions feel regarding this program.                                                                                   
                                                                                                                                
CHAIR  COGHILL noted  that  Bruce Ludwig  was  also available  to                                                               
comment on that question.                                                                                                       
                                                                                                                                
Number 1799                                                                                                                     
                                                                                                                                
MR.  STEWART  responded,  "The  earlier  conversations  with  ...                                                               
representatives   from  the   bargaining  units   indicated  some                                                               
positive interest in this legislative  proposal.  Recently, there                                                               
were concerns  about not having  it collectively bargained."   He                                                               
mentioned central  monitoring, rather than individual  plans, and                                                               
the flexibility that a central  plan offers; he suggested looking                                                               
at  those, as  well  as the  peer-review  concept for  individual                                                               
awards and the class-based concepts for other awards.                                                                           
                                                                                                                                
Number 1823                                                                                                                     
                                                                                                                                
REPRESENTATIVE HAYES  indicated his understanding that  there are                                                               
approximately 200  job classifications for which  job recruitment                                                               
is difficult.   He asked  if evaluations  had been done  in those                                                               
job classifications  to determine  whether [the State  of Alaska]                                                               
is not competitive with federal jobs or other jobs out of state.                                                                
                                                                                                                                
MR. STEWART answered that some  ADF&G and health care job classes                                                               
are known  to be noncompetitive  with private-sector  and federal                                                               
employers, partly because the federal  COLA of 25 percent is tax-                                                               
free.   Furthermore, the nature  of the  work tends to  draw some                                                               
state  employees to  move into  federal  or private-sector  jobs.                                                               
For  example,   private-sector  construction  jobs   are  pulling                                                               
engineering  staff  from  the Department  of  Transportation  and                                                               
Public  Facilities  (DOT&PF)  and  other  departments  that  hire                                                               
engineering staff, he said.  He  noted that the like pay for like                                                               
work requires broader-based salary increases.                                                                                   
                                                                                                                                
Number 1913                                                                                                                     
                                                                                                                                
JANET  CLARKE,  Director,  Division of  Administrative  Services,                                                               
Department of Health  & Social Services, testified  in support of                                                               
the comments of the Division  of Personnel, noting that she would                                                               
discuss  market   pressures  and  competition  for   certain  job                                                               
classifications.  She  reported that one and one  half years ago,                                                               
the  Division  of  Administrative   Services  recognized  it  was                                                               
beginning  to  have  problems in  recruitment  and  retention  of                                                               
staff,  so  it  engaged  a  contractor  to  execute  a  workforce                                                               
development plan.   Although the  plan is still in  progress, the                                                               
department has already gleaned  significant information that will                                                               
help  it design  its  workforce for  the next  five  years.   She                                                               
offered to provide the report upon its completion.                                                                              
                                                                                                                                
MS.  CLARKE said  the  department has  looked  at vacancy  rates,                                                               
turnover  rates,   and  retirement  rates  for   several  of  its                                                               
positions, as well as "supply."  She quoted statistics:                                                                         
                                                                                                                                
     The U.S. Department of Labor predicts that Alaska will                                                                     
      need 40 percent more nurses over the next ten years,                                                                      
     which is about 220 nurses  per year. ... The University                                                                    
     of Alaska graduates 60-80 nurses  per year.  The Alaska                                                                    
     State Hospital Nursing Home Association  did a study in                                                                    
     taking into  account the aging  of the  workforce [and]                                                                    
     predicted that Alaska would need 400 nurses per year.                                                                      
                                                                                                                                
MS. CLARKE  said the key  problem the department  is experiencing                                                               
is competing with  the private sector.  She mentioned  a need for                                                               
nurses,  particularly  in  public   health  and  at  API  [Alaska                                                               
Psychiatric   Institute],  where   vacancies  have   resulted  in                                                               
mandatory,  burdensome overtime  for  nurses.   Ms. Clarke  noted                                                               
that although  the legislature authorized a  salary increase last                                                               
year,  the  department  is  currently  not  competitive.    Other                                                               
hospitals are providing bonuses and  raises above that amount, as                                                               
well as contracting with other firms.                                                                                           
                                                                                                                                
Number 2063                                                                                                                     
                                                                                                                                
MS.  CLARKE  reported that  the  U.S.  Department of  Labor  also                                                               
ranked  Alaska  seventh   among  the  states  in   the  need  for                                                               
additional  social  workers.   She  noted  that the  Division  of                                                               
Family and Youth  Services looks to hire  highly qualified social                                                               
workers.   She mentioned  a licensing law  that came  into effect                                                               
last summer and  continued problems in "retaining  and keeping up                                                               
with that demand."                                                                                                              
                                                                                                                                
MS. CLARKE told  members that during the 2001  anthrax scares and                                                               
bioterrorism incidents,  the department had a  50 percent vacancy                                                               
in  the microbiologist  staff in  its  new public  health lab  in                                                               
Anchorage.  For  several weeks, the lab director  was working 18-                                                               
hour days to keep  up with specimens that had to  be tested.  She                                                               
said the  department discovered  that many  microbiologists could                                                               
get positions  in other  hospitals, or  other health  fields, and                                                               
make $700-800  more per  month; although  perhaps tempted  by the                                                               
state's new facility, they'd earn more in the private sector.                                                                   
                                                                                                                                
Number 2152                                                                                                                     
                                                                                                                                
CHAIR COGHILL  asked if the  anticipated recruitment  bonus would                                                               
be  enough  to  attract  people.     He  indicated  Ms.  Clarke's                                                               
reference to  an hourly wage and  asked if she could  foresee the                                                               
department using the incentive bonuses in retaining employees.                                                                  
                                                                                                                                
MS.  CLARKE responded  that the  department believes  the bonuses                                                               
would be  another tool that would  allow it to either  recruit or                                                               
retain  individuals.   She stated  a  need to  respond to  market                                                               
pressure, as well,  explaining that bonuses alone  would not make                                                               
up    for   the    aforementioned    salary   differential    for                                                               
microbiologists.                                                                                                                
                                                                                                                                
Number 2199                                                                                                                     
                                                                                                                                
CHAIR   COGHILL  indicated   the  need   for  ongoing   training,                                                               
mentioning  the high-tech  world.   He also  referred to  "onward                                                               
training" and  the need  to reward excellence;  he asked  if that                                                               
would be considered.                                                                                                            
                                                                                                                                
MS.  CLARKE  responded  that the  department  currently  has  the                                                               
ability to provide specialized training,  which is a tool used to                                                               
retain its  workforce and move  people on  a career ladder.   She                                                               
said  one  intention of  this  plan  is  to help  the  department                                                               
reexamine how  it develops career ladders  and provides training,                                                               
even for  employees in entry-level  jobs, so they will  stay with                                                               
the organizations and move up, rather than leave.                                                                               
                                                                                                                                
Number 2320                                                                                                                     
                                                                                                                                
REPRESENTATIVE STEVENS  asked how  the morale of  an organization                                                               
would be affected when the employer  gives a new employee a bonus                                                               
to do the same job that  an established employee is doing already                                                               
for less money.                                                                                                                 
                                                                                                                                
Number 2345                                                                                                                     
                                                                                                                                
MS. CLARKE  said that issue would  have to be developed  with the                                                               
Personnel  Board   when  these  programs  are   designed.    Some                                                               
situations exist  because of differences  between state  jobs and                                                               
other  employment.     She  said  she   routinely  hears  people,                                                               
especially in  the health care  fields, ask why they  should stay                                                               
[in a  state job],  even one  they like, when  they can  get paid                                                               
more in a non-government position.   Ms. Clarke said the question                                                               
is why the  state can't "react more quickly to  both programs and                                                               
respond to  those market conditions."   She concluded that  it is                                                               
clearly an issue to address with caution.                                                                                       
                                                                                                                                
CHAIR COGHILL  thanked Ms. Clarke  and noted that  she represents                                                               
"a section of very large employment in very specialty areas."                                                                   
                                                                                                                                
Number 2419                                                                                                                     
                                                                                                                                
BRUCE     LUDWIG,     Manager,    Alaska     Public     Employees                                                               
Association/American  Federation  of  Teachers  (APEA/AFT),  came                                                               
before  the committee  to  testify.   He  said  APEA/AFT -  which                                                               
represents  employees in  the state  government, the  university,                                                               
municipalities,  boroughs, and  school  districts  - agrees  with                                                               
most of  the concepts  embodied in the  bill, but  disagrees with                                                               
removing it from collective bargaining.   He said the association                                                               
believes collective  bargaining casts light on  the process; when                                                               
it's excluded  from the process, it  opens the door to  abuse, he                                                               
said.  He added that the  Personnel Board is made up of political                                                               
appointees,  appointed by  the governor  to serve  the governor's                                                               
requests and do "what his appointees ask them to do."                                                                           
                                                                                                                                
MR. LUDWIG  explained that in  collective bargaining, there  is a                                                               
process  called  arbitration.   If  problems  arise, there  is  a                                                               
method  for  having  an  impartial  third  party  scrutinize  the                                                               
problem and  ascertain that everything  was executed fairly.   He                                                               
said APEA/AFT  believes there  ought to  be recruitment-retention                                                               
bonuses   and  exceptional-pay   bonuses,   but  the   collective                                                               
bargaining process should cover those.                                                                                          
                                                                                                                                
Number 2480                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES agreed there is  a "huge cavern" between the                                                               
bonuses given  to people and  the collective  bargaining process.                                                               
She said she  is supportive of employees'  being treated properly                                                               
- and knows  there are unions "specifically with that  in mind" -                                                               
but  is  embarrassed that  a  state  agency cannot  treat  people                                                               
fairly without a union.   Representative James clarified that her                                                               
intent was not to destroy the union.                                                                                            
                                                                                                                                
REPRESENTATIVE JAMES  said even with collective  bargaining, this                                                               
would be a  difficult issue.  She suggested the  state may need a                                                               
process every few  years to evaluate the market and  the value of                                                               
jobs.   She commented that [the  state] has known for  nearly ten                                                               
years that it's  had an "exodus," or "missing  ingredient" in its                                                               
18- to  44-year-old residents.   She mentioned hearing  that many                                                               
people  are  ready  to  retire,  but  that  no  replacements  are                                                               
available.  She  opined that part of that is  a complicated issue                                                               
in which the  legislature may have participated by  focusing on a                                                               
single issue, rather than the whole system.                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES asked  how the witness would  do these types                                                               
of  incentive bonuses,  without creating  a long  process through                                                               
the  collective bargaining.   She  expressed her  belief that  it                                                               
would not be possible to do so.                                                                                                 
                                                                                                                                
Number 2602                                                                                                                     
                                                                                                                                
MR. LUDWIG responded  that Workplace Alaska is used  by the state                                                               
to  hire people;  once a  pilot project,  it was  polished before                                                               
being  put in  place for  the whole  workforce.   He suggested  a                                                               
similar  situation could  exist with  pilot projects  through the                                                               
collective  bargaining  process.   He  said  statutory  authority                                                               
would be needed, and he mentioned  monetary terms and any type of                                                               
increase coming back to the legislature.                                                                                        
                                                                                                                                
MR.  LUDWIG   stated  that  the  difficulty   of  recruiting  and                                                               
retaining  [employees]  is not  unique  to  Alaska; the  national                                                               
union  has a  task  force, "the  Recruitment  and Retention  Task                                                               
Force."    As  increasing  numbers  of  baby  boomers  leave  the                                                               
workforce, there are  fewer people to take their  place, he said.                                                               
[The  entire country]  is competing  for the  same people;  until                                                               
[the state]  trains more people  to fill  those jobs, it  will be                                                               
chasing scarce resources, he concluded.                                                                                         
                                                                                                                                
Number 2675                                                                                                                     
                                                                                                                                
REPRESENTATIVE  STEVENS asked  how the  aforementioned inequities                                                               
would be addressed regarding giving a  bonus to a new employee to                                                               
do a job that the established  employee is already doing for less                                                               
pay.  He  also asked what the state could  do about teachers, for                                                               
example, who  come to work  for a  $10,000 bonus, then  leave the                                                               
following year  - a phenomenon which  Representative Stevens said                                                               
has occurred in other states.                                                                                                   
                                                                                                                                
MR.  LUDWIG addressed  inequity.   He said  [APEA/AFT] has  had a                                                               
difficult  time  with  the University  of  Alaska's  hiring  both                                                               
classified  employees  and professors  for  more  money than  the                                                               
current  employees are  making,  which  affects productivity  and                                                               
results in  the loss  of employees who  look elsewhere  for work.                                                               
He  said   [the  employer]  must   proceed  with   caution  while                                                               
maintaining the balance of the workforce.                                                                                       
                                                                                                                                
MR.  LUDWIG  referred to  a  previous  comment by  Representative                                                               
James and said  there used to be a requirement  that the Division                                                               
of Personnel conduct a salary survey  every year; that was one of                                                               
the first  "casualties" in  the mid-'80s,  when oil  was at  $8 a                                                               
barrel.   He indicated he thought  it was not in  the statutes to                                                               
do every year;  he mentioned making it a  requirement to [conduct                                                               
a  survey] every  five  years.   He likened  it  to doing  proper                                                               
maintenance  on   a  heater,  which   will  break   without  that                                                               
maintenance.                                                                                                                    
                                                                                                                                
Number 2770                                                                                                                     
                                                                                                                                
REPRESENTATIVE   STEVENS   reiterated  his   question   regarding                                                               
retention of employees.  He asked  if there would have to be some                                                               
kind of agreement made.                                                                                                         
                                                                                                                                
MR. LUDWIG  responded that currently  [the state] pays  people to                                                               
move  [to Alaska]  in some  cases.   He indicated  recruitment is                                                               
done  "Outside" and  mentioned a  two-year payback  provision; he                                                               
suggested a bonus similar to that  could be tailored.  Mr. Ludwig                                                               
said  he knew  that,  in  some places,  banks  were offering  no-                                                               
interest  loans to  teachers to  teach in  inner-city schools,  a                                                               
benefit that  continues each year.   He suggested  [Alaska] might                                                               
try that.  He added that perhaps  "some kind of a hook " could be                                                               
put in  those employees so that  if they leave early,  they would                                                               
have to pay back [the bonus or benefit] received.                                                                               
                                                                                                                                
Number 2875                                                                                                                     
                                                                                                                                
CHAIR  COGHILL   asked  how   Mr.  Ludwig   envisions  collective                                                               
bargaining as a  part of excellence bonuses -  pay incentives for                                                               
excellence.                                                                                                                     
                                                                                                                                
MR.  LUDWIG replied  that APEA/AFT  has  been offering  something                                                               
similar for a number of years.  He offered the following:                                                                       
                                                                                                                                
     When we had  this mental health lands  claim deal going                                                                    
     on, we  had some  people in  the Department  of Natural                                                                    
     Resources  that  put a  lot  of  time and  effort  into                                                                    
     helping figure  that out.   It  wasn't even  their job,                                                                    
     you  know; they  did it  at night.   And  we paid  them                                                                    
     extra  money  through  the  vehicle   of  a  letter  of                                                                    
     agreement  in the  collective bargaining  process.   We                                                                    
     have  done  that  in a  couple  other  instances  where                                                                    
     people have done exceptional work.                                                                                         
                                                                                                                                
     It recently  came to light that  that probably violates                                                                    
     not  only  the   collective  bargaining  agreement,  it                                                                    
     probably  violates  the  statute by  saying  we  aren't                                                                    
     coming  back to  the legislature,  because that  is the                                                                    
     amendment to the pay plan.                                                                                                 
                                                                                                                                
MR. LUDWIG  indicated APEA/AFT encourages  the legislature  to do                                                               
something,  ensuring  that it  at  least  meshes with  collective                                                               
bargaining.                                                                                                                     
                                                                                                                                
CHAIR COGHILL  offered, "If we exempt  the collective bargaining,                                                               
then  those types  of agreements  will still  be outside  of your                                                               
ability to do, is how you see it."                                                                                              
                                                                                                                                
MR. LUDWIG answered, "If you pass this, yes."                                                                                   
                                                                                                                                
Number 2889                                                                                                                     
                                                                                                                                
CHAIR  COGHILL  asked how  Mr.  Ludwig  envisions the  collective                                                               
bargaining process working with regard to retention bonuses.                                                                    
                                                                                                                                
MR. LUDWIG reiterated Representative  Stevens' comment about [the                                                               
lowered morale of] the rest of  the employees, when one person is                                                               
hired for more  money than other employees are  receiving for the                                                               
same  work.   He  indicated that  by doing  so,  the employer  is                                                               
telling existing employees they aren't worth as much.                                                                           
                                                                                                                                
TAPE 02-05, SIDE B                                                                                                              
Number 2918                                                                                                                     
                                                                                                                                
REPRESENTATIVE  JAMES  mentioned  that  before  her  years  as  a                                                               
legislator, she had  challenged the unions to be  more active "in                                                               
training, in  excellence on the  job."   She asked Mr.  Ludwig if                                                               
the  state   employee  programs  have  any   type  of  workshops,                                                               
training, or methods of encouragement  that would produce better-                                                               
performing employees.                                                                                                           
                                                                                                                                
MR. LUDWIG answered that he  thinks all the collective bargaining                                                               
agreements have provisions in them  for training.  In response to                                                               
a follow-up question by Representative  James regarding who would                                                               
pay for it, he said primarily it would be the state.                                                                            
                                                                                                                                
REPRESENTATIVE  JAMES said  she wondered  if the  unions had  any                                                               
program that "paid out of their dues."                                                                                          
                                                                                                                                
MR. LUDWIG answered  that he does not believe any  of the current                                                               
state employee  unions have apprenticeship programs;  the private                                                               
sector has them, and they work  well.  He added, "If a contractor                                                               
comes to town, you can go to the  hiring hall and you can get ...                                                               
very qualified people."                                                                                                         
                                                                                                                                
MR. LUDWIG  told the committee  that [APEA/AFT] has  something in                                                               
its supervisory unit  that is part of the contract  and is funded                                                               
by  an appropriation  from the  legislature for  $50,000 a  year.                                                               
Through   a   labor-management   committee,   APEA/AFT   provides                                                               
supervisory training  to produce bargaining-unit members  who are                                                               
better supervisors in general.                                                                                                  
                                                                                                                                
MR.  LUDWIG  noted  that  APEA/AFT  also  represents  blue-collar                                                               
workers.  The state employs  a lot of general maintenance people,                                                               
he pointed  out, not only in  state government, but also  for the                                                               
university  and  the  Alaska Housing  Finance  Corporation.    He                                                               
suggested it  would be nice  to have some type  of apprenticeship                                                               
program  or  a  partnership  with  the  university  to  create  a                                                               
scheduled   training  whereby   one   could   excel  in   boating                                                               
maintenance, for example.                                                                                                       
                                                                                                                                
Number 2811                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES asked  Mr. Ludwig whether his  union is just                                                               
managing  grievances regarding  wages and  fair treatment,  or is                                                               
also trying to help its members to be better employees.                                                                         
                                                                                                                                
Number 2735                                                                                                                     
                                                                                                                                
MR. LUDWIG replied that any union  in the country which has taken                                                               
a poll  [has discovered that]  the number-one concern  of members                                                               
is  getting professional  training to  help them  excel in  their                                                               
jobs.   Mr. Ludwig  said, "One  of the  things that  we've tossed                                                               
around in  this training program  is creating a  mentor program."                                                               
He  mentioned  private-sector  unions   and  that,  for  example,                                                               
"you're not going to find a  better operator than somebody in the                                                               
operators' hiring  [hall]."  He  said, "We  just need to  get the                                                               
public-sector  unions similar  to  that, but  there  are so  many                                                               
different job  classes and  so many  disciplines that  you really                                                               
run into difficulties."                                                                                                         
                                                                                                                                
REPRESENTATIVE   JAMES   expressed   her  appreciation   of   the                                                               
conversation and of Mr. Ludwig's response.                                                                                      
                                                                                                                                
Number 2698                                                                                                                     
                                                                                                                                
CHAIR COGHILL noted that the  committee needed to discuss whether                                                               
to amend the language in the bill.   He asked Mr. Ludwig:  "If it                                                               
doesn't get  amended, how do  you feel you'd  be shut out  of the                                                               
discussion?"                                                                                                                    
                                                                                                                                
MR.  LUDWIG answered  that  all kinds  of  situations will  arise                                                               
after  it becomes  law.   Whether it's  true or  not, people  are                                                               
going to say  someone was hired because of being  a friend of the                                                               
supervisor  or   that  someone  received  a   bonus  because  the                                                               
supervisor  liked that  person  better than  somebody  else.   He                                                               
added, "If  you don't  have some  kind of  light on  the process,                                                               
then  it's going  to make  the  process suspect."   He  expressed                                                               
concern that something  with the potential to be  good would turn                                                               
out otherwise.                                                                                                                  
                                                                                                                                
Number 2651                                                                                                                     
                                                                                                                                
REPRESENTATIVE FATE referred to  testimony regarding baby boomers                                                               
[who  are retiring]  and  the increased  need  [for workers];  he                                                               
indicated  the creation  of a  dichotomy.   He  also referred  to                                                               
previous  testimony  about  giving bonuses  "without  that  light                                                               
being  shed," which  he predicted  would result  in an  escalated                                                               
cost of [running]  the state proportionate to  the bonuses given.                                                               
He mentioned  a need to give  more bonuses and the  argument over                                                               
whether  those bonuses  are given  to the  right people,  for the                                                               
right reasons.                                                                                                                  
                                                                                                                                
Number 2603                                                                                                                     
                                                                                                                                
REPRESENTATIVE  STEVENS said  he would  be interested  in hearing                                                               
from state personnel regarding how arbitration would be handled.                                                                
                                                                                                                                
Number 2570                                                                                                                     
                                                                                                                                
CHAIR COGHILL  agreed that the  same discussion needs to  be held                                                               
with the  administration.   He recommended that  [HB 361]  not be                                                               
passed  out of  committee until  a proposed  committee substitute                                                               
(CS) was, perhaps,  created.  He suggested a  discussion of merit                                                               
pay would be important as well.   He asked Mr. Stewart to comment                                                               
on collective bargaining.                                                                                                       
                                                                                                                                
Number 2516                                                                                                                     
                                                                                                                                
MR.  STEWART responded  that  the Personnel  Board  process is  a                                                               
public   process   in   which  bargaining   units   have   always                                                               
participated,  which is  something that  [the division]  expects.                                                               
Referring to the 200-some job  classes that are experiencing some                                                               
difficulty  in recruiting,  he asked  the  committee to  consider                                                               
that a  number of job  classes - many  of them on  the previously                                                               
mentioned list - don't exist solely  in one bargaining unit.  For                                                               
example, analyst/programmer  positions exist in  the confidential                                                               
bargaining   unit,  the   supervisory  unit,   and  the   general                                                               
government  unit.    He said,  "To  have  individually  bargained                                                               
incentive  programs spanning  a particular  job class  would make                                                               
administration of  that program complicated, if  not impossible."                                                               
Engineers  exist  in  supervisory  and  general  government  unit                                                               
positions, he added.                                                                                                            
                                                                                                                                
MR.  STEWART  referred  to  the   issue  of  fairness  previously                                                               
mentioned   by  Representative   Stevens.     He  indicated   one                                                               
suggestion is  to consider a  referral bonus, an  existing option                                                               
in  certain  states  whereby current  employees  responsible  for                                                               
bringing a  successful candidate  for state employment  - whether                                                               
or not that individual is  eligible for a recruitment incentive -                                                               
might be eligible for a referral incentive.  He then stated:                                                                    
                                                                                                                                
     The  idea  behind  this  piece  of  legislation  is  to                                                                    
     provide agencies  with a tool  to make up the  loss of,                                                                    
     or the  failure to  compete successfully  for, specific                                                                    
     skill  sets. ...  Through  the  board process,  through                                                                    
     that open process, and  through work groups established                                                                    
     to  deal with  the specific  bargaining unit  issues, I                                                                    
     think  that the  "light" that  Representative Fate  was                                                                    
     talking   about  would   be  shed   on  this   process,                                                                    
     continually.                                                                                                               
                                                                                                                                
Number 2397                                                                                                                     
                                                                                                                                
CHAIR COGHILL told Mr. Stewart  that regulations would have to be                                                               
written; certainly,  the collective  bargaining units would  be a                                                               
part of that discussion.   He asked, "Do you see  that as part of                                                               
the rule  making, coming into what  the board might have  to view                                                               
as safe criteria for the recruitment, or criteria for bonuses?"                                                                 
                                                                                                                                
MR.  STEWART  answered  that the  entire  regulatory  process  is                                                               
through the  board; it  has to adopt  the regulations,  which are                                                               
subject to public comment.                                                                                                      
                                                                                                                                
CHAIR COGHILL  summarized the following points  for the committee                                                               
to consider.   The  bill would  allow considerable  latitude, and                                                               
the committee  had not taken a  position on that.   He noted that                                                               
favoritism  would have  to be  addressed.   Regarding recruitment                                                               
within the ranks  and Outside recruitment, he  indicated the need                                                               
to deal  with filling  state job vacancies  but not  ignore those                                                               
already in the  state workforce.  He mentioned  criteria for what                                                               
is above and beyond a normal  work expectation, as well as making                                                               
certain that standards for the  regular workforce are not set too                                                               
low - rewarding what would, in any other job class, be expected.                                                                
                                                                                                                                
Number 2307                                                                                                                     
                                                                                                                                
REPRESENTATIVE  JAMES  said she  would  like  to know  how  other                                                               
Western states  deal with this  issue.   She offered that  in her                                                               
experience of  writing regulations, she found  the public process                                                               
flawed.  She  concluded that although she could see  the need for                                                               
this  legislation, she  was  struggling with  how  it would  work                                                               
without adding more confusion to the process.                                                                                   
                                                                                                                                
Number 2259                                                                                                                     
                                                                                                                                
REPRESENTATIVE  WILSON  said  she  views  this  as  a  nationwide                                                               
supply-and-demand problem:   anytime supply is low  and demand is                                                               
great, one  has to pay "somewhere  along the line."   She offered                                                               
that her  own town [Wrangell]  has not received a  single inquiry                                                               
for  an  available  pharmacist  position.    She  also  mentioned                                                               
difficulty  in getting  nurses  to  come to  her  town; she  said                                                               
nurses  who were  recruited were  paid $45  an hour  and wouldn't                                                               
work  weekends  without  getting  paid  overtime,  whereas  those                                                               
already there  had to work  every other weekend.   Representative                                                               
Wilson indicated  there were  morale problems.   She  said Alaska                                                               
needs to  deal with this  problem and will  need money to  do it,                                                               
but she didn't know where the state would get the money.                                                                        
                                                                                                                                
Number 2160                                                                                                                     
                                                                                                                                
CHAIR COGHILL told Representative Wilson  there was a zero fiscal                                                               
note  attached to  [HB 361]  because "they  decided, for  a pilot                                                               
program, they  would work  within their  departments to  work out                                                               
whatever  retention   and  excellence  bonuses   and  recruitment                                                               
bonuses."   He indicated  there were incentives  to work  for the                                                               
state back in  the 1980s; he mentioned changing to  a tier system                                                               
because  of a  lack  of money.   Chair  Coghill  opined that  the                                                               
committee would  want to  consider a balance  in those  tiers, to                                                               
give incentives when  needed and to reduce  those incentives when                                                               
the need  no longer existed.   He agreed having people  work [the                                                               
same job] for different benefits creates conflict.                                                                              
                                                                                                                                
CHAIR COGHILL requested  that Mr. Stewart return  with answers to                                                               
some questions  he might have.   He also asked that  [Ms. Clarke]                                                               
look at issues that may arise  and how the [legislation] would be                                                               
implemented.    He  indicated   having  a  collective  bargaining                                                               
discussion "is  going to be  a good one."   He asked:   "Does the                                                               
board  process give  us  a  broad enough  scope  to all  agencies                                                               
through all the different categories  that we'll be dealing with?                                                               
Is  that better,  or do  the collective  bargaining units  really                                                               
have a  niche, and can ...  that work in certain  ways and should                                                               
we install it in this bill?"                                                                                                    
                                                                                                                                
CHAIR  COGHILL stated  his  intention  to move  the  bill out  of                                                               
committee the  next time it  was heard.  He  mentioned incentives                                                               
and  said even  the constitution  has a  merit-based system.   He                                                               
remarked:   "Merit pay is  a bigger  part of where  we're going."                                                               
[HB 361 was held over.]                                                                                                         
                                                                                                                                
Number 1970                                                                                                                     
                                                                                                                                
CHAIR COGHILL called an at-ease at 9:08 a.m.                                                                                    
                                                                                                                                
[Because  of technical  difficulties, this  portion of  the House                                                               
State Affairs  Standing Committee  minutes was compiled  from log                                                               
notes and  the audio recording  made available from  KTOO's Gavel                                                               
to Gavel,  available on BASIS.   There  is no blank  tape because                                                               
the machine was on "pause."  No log numbers are available.]                                                                     
                                                                                                                                
CHAIR COGHILL called the meeting back to order at 9:12 a.m.                                                                     
                                                                                                                                
HB 344-INCREASE DRIVER'S LICENSE FEES                                                                                         
                                                                                                                                
CHAIR COGHILL  announced the next  order of business,  HOUSE BILL                                                               
NO.  344,   "An  Act  increasing  fees   for  driver's  licenses,                                                               
instruction permits, and identification  cards; and providing for                                                               
an effective date."                                                                                                             
                                                                                                                                
LINDA SYLVESTER, Staff to Representative  Pete Kott, Alaska State                                                               
Legislature, told  the committee that Representative  Kott is the                                                               
chair for House Rules Standing  Committee, which is sponsoring HB                                                               
344.    She explained  that  HB  344  would  raise the  fees  for                                                               
driver's licenses  by $5,  and instruction permits  by $10.   The                                                               
revenues would go  into a general fund.  The  Department of Motor                                                               
Vehicles  (DMV) would  also seek  additional  funds to  implement                                                               
"the first-ever  overhaul of the  driver's license format."   The                                                               
current laminated license will be  converted to a digital license                                                               
system, which will bring Alaska  up to the national standards, in                                                               
terms of security and fraud prevention.                                                                                         
                                                                                                                                
MS. SYLVESTER noted  that Alaska is one of four  states that have                                                               
not yet  switched to the digital  licensing system.  In  the wake                                                               
of  September  11,  2001,  there  is a  demand  to  "harden"  all                                                               
licenses, rather  than to  create a national  ID card,  she said.                                                               
She  listed  other  standards  that  have  been  set  [regarding]                                                               
digitalization as follows:  appearance,  photo file format, and a                                                               
readable media.                                                                                                                 
                                                                                                                                
MS.  SYLVESTER told  the committee  that the  idea [for  adopting                                                               
digital licensing]  was initiated  by DMV and  by a  group called                                                               
CHARR [Cabaret  Hotel Restaurant  & Retailers Association].   She                                                               
explained  that the  cigarette and  alcohol industries  carry the                                                               
burden of ensuring the [validity]  of licenses.  The present type                                                               
of laminated licenses are difficult to read in a bar, she said.                                                                 
                                                                                                                                
MS. SYLVESTER  pointed to examples of  digital licenses [included                                                               
in the  committee packet].   She said that  the need for  [the ID                                                               
checker at a bar] to look for the  date of birth on a license and                                                               
calculate  the  age of  the  ID  holder  will not  be  necessary,                                                               
because underage ID's  will be formatted vertically  on the card,                                                               
instead of horizontally.                                                                                                        
                                                                                                                                
MARY MARSHBURN, Director, Division  of Motor Vehicles, Department                                                               
of Administration, told  the committee that HB  344 would provide                                                               
the  necessary   funds  for  a  much-needed   change  to  digital                                                               
licensing.   She  said  that the  four  states currently  without                                                               
digital  licensing  are  Alaska, Oklahoma,  Nebraska,  and  Rhode                                                               
Island.                                                                                                                         
                                                                                                                                
MS. MARSHBURN  said that the  advantages of digital  licenses are                                                               
that they are  computer generated, more difficult  to alter, have                                                               
machine-readable  data, are  embossed  into card  stock, and  can                                                               
incorporate  multiple  security features.    If  someone were  to                                                               
alter the  face of a  digital license, the information  from that                                                               
license could still  be read by machine.   Furthermore, a digital                                                               
photo  of the  applicant  is  taken, which  can  be  sent to  law                                                               
enforcement.   If a  person comes  in to  report a  lost driver's                                                               
license, the department can verify that  that person is who he or                                                               
she is claiming to be.   She stated that the biggest [benefit] of                                                               
digital licensing  [will be  to] law  enforcement, which  can use                                                               
the media strip to easily transmit data.                                                                                        
                                                                                                                                
MS.  MARSHBURN  reiterated  that  there is  support  for  digital                                                               
licensing  from  industries  that sell  age-restricted  products.                                                               
She  said that  ARBA (Alaska  Regional Beverage  Association) has                                                               
passed  a  resolution in  support  of  digital licensing  and  of                                                               
raising fees  to cover the cost.   CHARR had a  resolution before                                                               
it in the previous week, the result  of which had not yet come to                                                               
Ms. Marshburn's attention.  The  Anchorage Assembly currently has                                                               
a  resolution before  it,  which she  said  she anticipates  will                                                               
pass.                                                                                                                           
                                                                                                                                
MS. MARSHBURN  noted that there  are significant benefits  to the                                                               
public,  including  greater   personal  security  and  protection                                                               
against identity  theft.   Another benefit is  that a  person who                                                               
loses an ID  while traveling can obtain a  duplicate, because the                                                               
image is on file.                                                                                                               
                                                                                                                                
MS.  MARSHBURN  said the  one-time  cost  to the  department  for                                                               
digital  licensing is  approximately $500,000.   The  increase to                                                               
the cost  of the driver's  license will be  $1 per year,  a small                                                               
price to pay for security, she said.                                                                                            
                                                                                                                                
MS. MARSHBURN  talked about the  details on the  example licenses                                                               
depicted on  the handout.   She reiterated  that the look  of the                                                               
license for minors  will be significantly different  than that of                                                               
the license for adults.                                                                                                         
                                                                                                                                
MS. MARSHBURN, in  response to a question by  Chair Coghill, said                                                               
that the bar  code would most likely  be used on the  back of the                                                               
Alaska State license.                                                                                                           
                                                                                                                                
REPRESENTATIVE JAMES asked  if there would be any  type of device                                                               
that could  be used  by those responsible  for checking  IDs that                                                               
would allow them to run the ID through like a credit card.                                                                      
                                                                                                                                
MS.  MARSHBURN answered  that  there are  a  variety of  scanners                                                               
available that retail establishments can use to read that data.                                                                 
                                                                                                                                
REPRESENTATIVE  FATE asked  a question  regarding making  [valid]                                                               
changes on a digital license if it were necessary to do so.                                                                     
                                                                                                                                
CHAIR COGHILL asked Representative  Fate to restate his question,                                                               
because  it  was  brought  to  his  attention  by  the  committee                                                               
secretary that there  had been some technical  difficulty and the                                                               
tape was not recording.                                                                                                         
                                                                                                                                
[The foregoing minutes on HB  344 were reconstructed from the log                                                               
notes  and  Gavel  to  Gavel  recording.    At  this  point,  the                                                               
recording begins again on Tape 02-05, Side B.]                                                                                  
                                                                                                                                
Number 1917                                                                                                                     
                                                                                                                                
REPRESENTATIVE FATE  restated his  question.  He  asked:   If the                                                               
legislature  lowered the  drinking  age  - or  voting  age -  for                                                               
example,  how  difficult  would  it  be to  change  that  on  the                                                               
[identification] card?   For instance,  would a new card  have to                                                               
be issued, or could the software accept the change?                                                                             
                                                                                                                                
MS. MARSHBURN  replied that the answer  would depend specifically                                                               
on what the  change in the law  was.  Most likely,  she said, the                                                               
individual would need a new license.                                                                                            
                                                                                                                                
REPRESENTATIVE  FATE  clarified  that  he  knew  the  card  would                                                               
change,  but  was  asking  if   the  computer  program  could  be                                                               
rewritten with the existing software to facilitate that change.                                                                 
                                                                                                                                
MS. MARSHBURN said yes.                                                                                                         
                                                                                                                                
REPRESENTATIVE  FATE noted  that startup  costs mentioned  by Ms.                                                               
Marshburn were  approximately $500,000,  [the amount]  he thought                                                               
would be  in [a fiscal note].   He explained that  he was looking                                                               
at costs  if changes  are made to  the system,  "recognizing that                                                               
each card is going to have to be changed."                                                                                      
                                                                                                                                
MS. MARSHBURN said  changes to the computer  programming would be                                                               
minimal "in terms of cost for work effort."                                                                                     
                                                                                                                                
Number 1817                                                                                                                     
                                                                                                                                
CHAIR COGHILL pointed  out that the $500,000 is  not reflected in                                                               
the fiscal note;  he asked if that was  because changing software                                                               
was already provided for in [an existing] budget.                                                                               
                                                                                                                                
MS.  MARSHBURN  said no,  adding,  "This  is  a vehicle  for  the                                                               
revenue  to  cover  the  cost."   She  stated  that  it  was  her                                                               
understanding that the  cost could not be included  in the fiscal                                                               
note  because  revenues  cannot  be  dedicated.    She  said  the                                                               
$500,000 for the  division to do the program would  have to be by                                                               
budget appropriation  in the budget  that will come  before House                                                               
Finance Standing  Committee this year;  that would be  a separate                                                               
action by the legislature.                                                                                                      
                                                                                                                                
CHAIR  COGHILL  replied  that generally,  however,  a  bill  that                                                               
requires  increased  spending  requires  an  accompanying  fiscal                                                               
note.                                                                                                                           
                                                                                                                                
Number 1750                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES offered remarks regarding the fiscal note:                                                                 
                                                                                                                                
     I understand  not being able  to have  dedicated funds,                                                                    
     and that doesn't  necessarily indicate dedicated funds.                                                                    
     It  says [that]  you've  got a  change  in revenues  of                                                                    
     $900,000, and  you don't say  where the  money's coming                                                                    
     from.   Well, you say  it's $105,000, which  is general                                                                    
     fund  program receipts,  which should  be down  in that                                                                    
     part, as  well.  But,  up top,  you need to  know where                                                                    
     that money's going to go.   Are we going to get another                                                                    
     $500,000 that  we can spend  for anything we want?   Or                                                                    
     is there something  - some extra cost -  we're going to                                                                    
     have  to cover?   I  don't think  that means  that it's                                                                    
     dedicated.                                                                                                                 
                                                                                                                                
Number 1705                                                                                                                     
                                                                                                                                
MS. MARSHBURN  indicated the fiscal  note could be changed.   She                                                               
explained  that it  had been  drafted to  avoid to  appearance of                                                               
dedicated revenue.   She  remarked that  the bill  itself doesn't                                                               
speak to digital licensing.                                                                                                     
                                                                                                                                
Number 1693                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES  said she thinks  fiscal notes  are actually                                                               
funded separately,  and not all  of them are  covered; therefore,                                                               
it is  important to  show the  costs of [HB  344] and  where that                                                               
money will go.                                                                                                                  
                                                                                                                                
MS. MARSHBURN  thanked Representative  James and said,  "We'll do                                                               
that."                                                                                                                          
                                                                                                                                
Number 1650                                                                                                                     
                                                                                                                                
CHAIR  COGHILL asked  Ms.  Marshburn for  the  projected cost  of                                                               
changing  equipment.   He  asked  if  it  would, indeed,  be  the                                                               
$500,000.                                                                                                                       
                                                                                                                                
MS.  MARSHBURN answered  that  the $500,000  is  for the  project                                                               
development as  it relates  to software:   writing  it; providing                                                               
it; integrating it  to the existing systems;  interfacing it with                                                               
the other users;  and writing the program to  develop the license                                                               
to the  national standards, in  order to facilitate  the exchange                                                               
of data among other user agencies  in Alaska and nationally.  Ms.                                                               
Marshburn  noted  that  the division  has  an  appropriation  for                                                               
hardware in its capital budget.                                                                                                 
                                                                                                                                
Number 1591                                                                                                                     
                                                                                                                                
REPRESENTATIVE   WILSON  requested   clarification  regarding   a                                                               
segment of  the analysis in  the fiscal note that  read [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
     This bill  increases the fees  for the  original issue,                                                                    
     renewal, and  duplicates of  driver's licenses,  and ID                                                                    
     cards  by  $5.   The  fee  for instruction  permits  is                                                                    
     increased by $10.  The  last increase in these fees was                                                                    
     over 10  years ago.   The  Instruction Permit  is valid                                                                    
     for 2  years.   Commercial driver's  licenses including                                                                    
     school bus permits are not included in the increase.                                                                       
                                                                                                                                
MS. MARSHBURN replied:                                                                                                          
                                                                                                                                
     All  of the  licenses  that  we issue  and  all of  the                                                                    
     permits that  we issue would  be converted  to digital,                                                                    
     so  everyone would  benefit.   We did  not include  the                                                                    
     commercial  driver's license  because that  program fee                                                                    
     was  established in  '92  or '93  and  is a  relatively                                                                    
     recent fee.   It's $100 for the license  itself and, on                                                                    
     top of that, it's an  additional $25 for the road test.                                                                    
     ...                                                                                                                        
                                                                                                                                
     Post-September 11th,  there have been some  federal law                                                                    
     changes which will pass down  an additional fee of $100                                                                    
     -  not   through  the  DMV,  but   through  some  extra                                                                    
     background checks  that we will  have to  [ensure that]                                                                    
     these people  go through, but  an additional  $100 that                                                                    
     commercial drivers  are going  to have  to pay  for the                                                                    
     additional background  check, vis-à-vis  recent changes                                                                    
     in federal law.                                                                                                            
                                                                                                                                
     We felt that  that cost - basically $200 to  $225 for a                                                                    
     commercial driver's  license -  was sufficient.   If we                                                                    
     look at the numbers  of commercial driver's licenses in                                                                    
     Alaska, that  is a smaller percentage;  the majority of                                                                    
     our licenses  are the class  D licenses - what  we call                                                                    
     "regular"  licenses  - and  so  we  didn't include  the                                                                    
     commercial  drivers; they're  carrying  a pretty  hefty                                                                    
     burden already.                                                                                                            
                                                                                                                                
REPRESENTATIVE WILSON said she thought that was a "good call."                                                                  
                                                                                                                                
Number 1475                                                                                                                     
                                                                                                                                
REPRESENTATIVE   JAMES  mentioned   recent  problems   of  people                                                               
boarding planes.   She said  she has been advocating  that people                                                               
volunteer to  carry an ID  card that  has a background  check and                                                               
"those kinds of  things," and therefore the  traveler wouldn't be                                                               
patted down [in  airport security].  She asked  Ms. Marshburn, if                                                               
that  were allowed,  whether it  could be  incorporated into  the                                                               
current driver's license or would mean carrying a separate one.                                                                 
                                                                                                                                
MS.  MARSHBURN said  she could  not give  a definite  answer, but                                                               
said the background checks are conducted  by DMV.  She noted that                                                               
legislation  would   be  necessary,  and  the   Federal  Aviation                                                               
Administration (FAA)  would probably be the  approving agency for                                                               
something like that.                                                                                                            
                                                                                                                                
Number 1385                                                                                                                     
                                                                                                                                
CHAIR  COGHILL opined  that  tricky questions  come  up with  the                                                               
subject  of  national identification.    He  said, "This  doesn't                                                               
become  a  national ID  card,  but  it  certainly is  a  national                                                               
identifier."    He  mentioned  digitizing  and  that  privacy  is                                                               
becoming a bigger issue.                                                                                                        
                                                                                                                                
Number 1362                                                                                                                     
                                                                                                                                
REPRESENTATIVE FATE asked if the  renewal dates on licenses would                                                               
carry over in digital form.                                                                                                     
                                                                                                                                
MS. MARSHBURN said  that's correct.  A person's  license would be                                                               
converted when it was up for renewal.                                                                                           
                                                                                                                                
Number 1346                                                                                                                     
                                                                                                                                
REPRESENTATIVE HAYES  asked what security measures  were in place                                                               
to prevent  a [computer]  hacker, for  instance, from  [forging a                                                               
license].                                                                                                                       
                                                                                                                                
MS.  MARSHBURN answered  that  the state  security  system has  a                                                               
number of laws and security measures  in place already.  She said                                                               
[DMV's]  data  and  databases,  as  well as  that  of  the  state                                                               
troopers, require  very high security;  that won't change  with a                                                               
digital license.                                                                                                                
                                                                                                                                
Number 1288                                                                                                                     
                                                                                                                                
REPRESENTATIVE  HAYES  pointed out  that  the  military also  has                                                               
those measures, but  there still are hackers  capable of breaking                                                               
into a system, no matter how good it is.                                                                                        
                                                                                                                                
MS. MARSHBURN  agreed; however, she mentioned  layers of security                                                               
within the  state's mainframe computer.   Within the  agency, she                                                               
noted,  the following  security  measures are  used:   patchwork,                                                               
audit trails, auditing  of computer use, and  built-in alarms and                                                               
monitors.   Although  not foolproof  or failsafe,  those measures                                                               
are in place and wouldn't change with a digital system.                                                                         
                                                                                                                                
Number 1214                                                                                                                     
                                                                                                                                
MARK   MEW,   Deputy    Chief,   Anchorage   Police   Department,                                                               
Municipality  of Anchorage,  testified  via  teleconference.   He                                                               
told the  committee he  would talk  about what  digital licensing                                                               
would do for  law enforcement, in general,  but also specifically                                                               
for the Anchorage Police Department.                                                                                            
                                                                                                                                
MR. MEW referred  to Ms. Marshburn's testimony and  said that two                                                               
immediate  advantages of  using the  new licenses  would be  that                                                               
they are  more difficult to  forge and  they [make it  easier to]                                                               
determine age; both are useful to the police department.                                                                        
                                                                                                                                
MR.  MEW explained  that a  benefit of  digital photographs  that                                                               
meet the national  standard would be the ability to  use them for                                                               
investigative purposes in  a photo lineup.   Police currently use                                                               
photos, rather than  "live" lineups.  Furthermore,  there is case                                                               
law  requiring that  lineups use  people with  similar hairstyles                                                               
and  facial features,  for example.   The  police have  access to                                                               
digital photograph  banks, from  which they  can choose  the best                                                               
lineup  of  photos; however,  Mr.  Mew  noted, [Alaska's]  photos                                                               
don't jibe with those from other states.                                                                                        
                                                                                                                                
Number 1014                                                                                                                     
                                                                                                                                
MR. MEW  brought up the  subject of new technology  in Anchorage,                                                               
through  the  mobile   data  project,  that  he   hopes  will  be                                                               
operational  by  the  summer  of  2002.    The  project  involves                                                               
providing laptop [computers] in  all patrol cars that communicate                                                               
by   radio  frequency   to  headquarters,   he  explained.     It                                                               
facilitates writing  of police reports, transmittal  of data, and                                                               
downloading into the  police system and state  system, with "very                                                               
little  human  intervention."     He  mentioned  criminal-history                                                               
checks, automatic  vehicle location checks, and  real-time checks                                                               
in the patrol car by the officer.                                                                                               
                                                                                                                                
MR.  MEW explained  the  twofold use  of  the driver's  licenses.                                                               
Regarding  data-entry  capacity,   currently  officers  handwrite                                                               
tickets  and accident  reports,  for example.   Most  information                                                               
used in  those reports comes  right off of the  driver's license.                                                               
However, numbers  may be  transposed, and  people's names  may be                                                               
entered in  several ways.   For example, someone could  write the                                                               
name Del Smith, while someone  two days later might write Delbert                                                               
Smith, and someone else could write  Delbert J. Smith.  That data                                                               
must  be cleaned  up, he  said, because  the department  does not                                                               
want that  person showing up  in the database as  three different                                                               
individuals.                                                                                                                    
                                                                                                                                
MR. MEW  explained that if  that person's card were  scanned each                                                               
time  with the  same name,  date of  birth, and  driver's license                                                               
number, then  the information wouldn't require  correction later.                                                               
These corrections create expense for  the department.  Worse yet,                                                               
incorrect  information   may  get  passed  on   to  the  district                                                               
attorney, the court, or [the  Department of] Corrections, thereby                                                               
creating melee in all of the systems.                                                                                           
                                                                                                                                
MR. MEW said he would like  to see Ms. Marshburn's system updated                                                               
to  fit in  with the  digitization.   He said  the aforementioned                                                               
example could  be avoided  by "utilizing  licenses such  as we're                                                               
discussing  now."   He  concluded  that  the advantages  to  [the                                                               
police  force] are  great  in terms  of  officer time  "upfront";                                                               
quality  of data;  and clerical  time "downstream,"  in terms  of                                                               
housekeeping in the system.                                                                                                     
                                                                                                                                
Number 0742                                                                                                                     
                                                                                                                                
REPRESENTATIVE  JAMES,  following  up   a  previous  question  by                                                               
Representative  Hayes,  asked  how  other people  are  kept  from                                                               
intercepting [information in] the system.                                                                                       
                                                                                                                                
MR.  MEW   answered  that  there   are  new  Federal   Bureau  of                                                               
Investigation  (FBI) standards  for security  on any  system that                                                               
interfaces with  the National Crime Information  Center (NCIC) or                                                               
any  state system  authorized by  NCIC, which  would include  the                                                               
Alaska  Public Safety  Information Network  (APSIN).   He offered                                                               
that  those  standards  would   involve  128-bit  encryption  and                                                               
"certain other  protocols" that would  make it  nearly impossible                                                               
to monitor and decipher.                                                                                                        
                                                                                                                                
MR. MEW said [the police department]  has to pass audits in order                                                               
to utilize  the system, whether it's  by radio or hard-line.   He                                                               
reminded the  committee that this  is not  top-secret, classified                                                               
information;  there are  ways  for  the public  to  get the  same                                                               
information if they to go through "the right channels."                                                                         
                                                                                                                                
Number 0618                                                                                                                     
                                                                                                                                
REPRESENTATIVE  CRAWFORD  expressed  fear  that  the  country  is                                                               
moving toward "a  national passport system."  He  stated that one                                                               
basic tenet of [the constitution] is  the right to be left alone.                                                               
He  voiced concern  about how  much information  such as  medical                                                               
information could be  put on the barcode [of  a driver's license,                                                               
or  other type  of ID  card].   It could  be used  as a  national                                                               
tracking  system under  which people  would be  required to  give                                                               
their licenses to  the checker at the grocery store  or any other                                                               
place they went, he warned.                                                                                                     
                                                                                                                                
Number 0500                                                                                                                     
                                                                                                                                
MR. MEW responded that perhaps  Ms. Marshburn should address that                                                               
concern, because  the police  wouldn't have  anything to  do with                                                               
what information is put on the card.   He added that the focus of                                                               
[the  police  department] is  to  be  able  to utilize  the  same                                                               
information already on the card, but in a more efficient manner.                                                                
                                                                                                                                
Number 0475                                                                                                                     
                                                                                                                                
CHAIR COGHILL  told Mr. Mew  he thought he'd  done a good  job of                                                               
explaining  the benefits  of a  consistent, expedient  system and                                                               
how  the   upgrade  of  technology   improves  the   exchange  of                                                               
information.   He announced  that his intention  was not  to move                                                               
the bill  out of  committee until the  fiscal note  was received.                                                               
He  suggested further  subjects for  discussion regarding  HB 344                                                               
may include monetary amounts and the concerns expressed.                                                                        
                                                                                                                                
Number 0359                                                                                                                     
                                                                                                                                
DEL  SMITH,  Deputy  Commissioner, Office  of  the  Commissioner,                                                               
Department  of Public  Safety  (DPS), said  he  has been  talking                                                               
about digital  licensing since he  held Deputy Mew's  position in                                                               
1987.  He said he thinks it  was then that a demonstration by DMV                                                               
was held, which he attended.                                                                                                    
                                                                                                                                
MR. SMITH noted  that although the bill's focus  is raising fees,                                                               
he  wouldn't  be  addressing  that.    He  reiterated  Mr.  Mew's                                                               
comments regarding law enforcement's  ability to make substantial                                                               
use of information that is currently,  by statute, on the face of                                                               
a  driver's  license, through  the  use  of  barcodes.   He  told                                                               
committee members  he appreciated  the concern regarding  some of                                                               
the information that  could potentially go into a  card, but said                                                               
his present  interest is information  on the face of  the license                                                               
that is currently required by statute.                                                                                          
                                                                                                                                
MR.  SMITH  indicated that  although  the  Alaska State  Troopers                                                               
could  see  a  use  for  "in-car  terminals"  in  the  Fairbanks,                                                               
Matanuska-Susitna,  and Anchorage  areas  in the  not-too-distant                                                               
future,  it has  no  plan in  place to  use  them throughout  the                                                               
state,  because of  the "far-flung  reaches" that  are patrolled.                                                               
Considering  the  short-term  applications, he  said,  he  thinks                                                               
digital  licensing would  be beneficial  to  law enforcement  for                                                               
many reasons, including,  as Mr. Mew mentioned,  interfacing on a                                                               
national level.                                                                                                                 
                                                                                                                                
MR.  SMITH noted  that there  is  encryption for  "across-the-air                                                               
transmissions."  He expressed certainty  that standards will need                                                               
to be met for NCIC 2000.   He explained that NCIC is the database                                                               
that  one  checks for  "wants"  or  warrants nationally,  or  for                                                               
information  regarding stolen  property; NCIC  2000 is  "just the                                                               
latest permutation," whereas he  believes the original center has                                                               
been in  existence since  sometime in  the 1970s.   The  DPS, law                                                               
enforcement,  and  the Alaska  Association  of  Chiefs of  Police                                                               
support  the move  to a  digital  license, he  said, to  increase                                                               
security  and help  determine  who should  be  buying alcohol  or                                                               
cigarettes.                                                                                                                     
                                                                                                                                
Number 0096                                                                                                                     
                                                                                                                                
MR. SMITH,  in response to  an earlier comment  by Representative                                                               
James,  said he  thinks the  potential exists  for having  a card                                                               
that  could be  put  through  a scanner  at  an airport  security                                                               
checkpoint   for  those   who  voluntarily   have  provided   the                                                               
information; it could involve a  photo ID and verification of who                                                               
it  is.   He recalled  hearing on  the news  of a  plan to  allow                                                               
frequent  travelers to  go through  a special  line; however,  he                                                               
pointed out, that  causes concern [by other  travelers] when some                                                               
people go through a shorter line.                                                                                               
                                                                                                                                
Number 0020                                                                                                                     
                                                                                                                                
REPRESENTATIVE  JAMES, reevaluating  her previous  concerns about                                                               
the fiscal  note, indicated the  current fiscal note  probably is                                                               
correct  because  "nothing  in  this  piece  of  legislation  ...                                                               
authorizes them to  go do anything; actually, it  just raises the                                                               
rate."                                                                                                                          
                                                                                                                                
TAPE 02-06, SIDE A                                                                                                              
Number 0026                                                                                                                     
                                                                                                                                
REPRESENTATIVE   JAMES  remarked   that  the   comment  regarding                                                               
encryption  did  not  make her  feel  "100  percent  comfortable"                                                               
because,  as  Representative  Hayes   stated,  there  are  people                                                               
[capable of hacking into a system].   She stated the necessity of                                                               
moving forward and becoming smarter than those people.                                                                          
                                                                                                                                
Number 0068                                                                                                                     
                                                                                                                                
MR. SMITH noted that when  he first began work involving driver's                                                               
licenses in  1968, they were  made of paper and  partially filled                                                               
out by hand.  He said  the current driver's license is still easy                                                               
to  change;   therefore,  using  a  secure,   digitally  produced                                                               
[license] makes  sense.  He  mentioned people's concerns  and the                                                               
resulting  removal  by the  legislature  of  the social  security                                                               
number.                                                                                                                         
                                                                                                                                
Number 0142                                                                                                                     
                                                                                                                                
REPRESENTATIVE  JAMES conveyed  her  concern  that [the  barcode]                                                               
should only provide  the information that is on the  face of [the                                                               
license].                                                                                                                       
                                                                                                                                
MS. MARSHBURN confirmed that the  only information in the barcode                                                               
would be that which is on the face of the license.                                                                              
                                                                                                                                
CHAIR  COGHILL  expressed  shock  at discovering  the  amount  of                                                               
information  a  person  can  find on  the  Internet  about  other                                                               
people.                                                                                                                         
                                                                                                                                
Number 0235                                                                                                                     
                                                                                                                                
REPRESENTATIVE WILSON  asked, with this new  digital system, what                                                               
the  implications  are  with  regard   to  FBI  requirements  and                                                               
security  as  it  interfaces  with  passports  and  international                                                               
travel, for instance.                                                                                                           
                                                                                                                                
Number 0286                                                                                                                     
                                                                                                                                
MR. SMITH answered:                                                                                                             
                                                                                                                                
     Technology  is mind-boggling  to me  and changes  every                                                                    
     day.  I  believe it potentially can be  done by linking                                                                    
     them.   Right  now, I  would assume  that Deputy  Chief                                                                    
     Mew's officers have an in-car  terminal they can swipe,                                                                    
     that they can inquire  against the Alaska Public Safety                                                                    
     Information  Network   to  determine  if   there's  any                                                                    
     "wants"   or  warrants   or   "locates"   out  for   an                                                                    
     individual.    It  also  would,  presumably,  determine                                                                    
     whether  or  not  there are  any  national  "wants"  or                                                                    
     warrants  for  the individual.    It  depends upon  the                                                                    
     linkages that  NCIC does, then,  out to  other agencies                                                                    
     about whether or  not you would want  to check passport                                                                    
     status, citizenry status - those kinds of things.                                                                          
                                                                                                                                
     There certainly is  a lot of potential to  gather a lot                                                                    
     of  information  about  an individual  fairly  quickly,                                                                    
     which,   I   believe  was   Representative   Crawford's                                                                    
     concern.   It is  out there,  but electronically  it is                                                                    
     able to be consolidated, which  I think is a concern to                                                                    
     most  people.    But  I  think,  technologically,  what                                                                    
     you're  asking:   yes, it  could be  done, the  same as                                                                    
     swiping it  at the  airport, I assume,  if you  did one                                                                    
     against the national databases.                                                                                            
                                                                                                                                
Number 0380                                                                                                                     
                                                                                                                                
CHAIR COGHILL acknowledged this  subject of concern, but returned                                                               
attention  to the  focus of  the bill,  to raise  the fees.   The                                                               
policy  call, he  said, would  be whether  [the committee]  would                                                               
vote to  waive the  fees; he also  mentioned the  connection with                                                               
the fiscal  note.  He asked  Ms. Marshburn if she  wanted to make                                                               
any last comments.                                                                                                              
                                                                                                                                
MS. MARSHBURN  deferred to Mr.  Mew to address  concern expressed                                                               
about the transmission of data.                                                                                                 
                                                                                                                                
Number 0524                                                                                                                     
                                                                                                                                
MR.  MEW  reminded members  that  the  data under  discussion  is                                                               
currently  going out  over  radio for  everyone  to hear;  names,                                                               
driver's license  numbers, and  identifying features  are radioed                                                               
back and  forth between  any officer  conducting a  records check                                                               
and the dispatcher.   Switching to digital  [licensing] will make                                                               
this nearly impossible to monitor, he noted.                                                                                    
                                                                                                                                
CHAIR COGHILL  said he  appreciated that.   He announced  that HB                                                               
344 would be held over.                                                                                                         
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
Number 0611                                                                                                                     
                                                                                                                                
There being no  further business before the  committee, the House                                                               
State Affairs  Standing Committee meeting was  adjourned at 10:04                                                               
a.m.                                                                                                                            
                                                                                                                                

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