Legislature(2017 - 2018)SENATE FINANCE 532

05/11/2017 09:00 AM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 79 OPIOIDS;PRESCRIPTIONS;DATABASE;LICENSES TELECONFERENCED
Heard & Held
+= HB 111 OIL & GAS PRODUCTION TAX;PAYMENTS;CREDITS TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled: TELECONFERENCED
+= SB 34 DRIVER'S LICENSE & ID CARDS & REAL ID ACT TELECONFERENCED
Heard & Held
                 SENATE FINANCE COMMITTEE                                                                                       
                       May 11, 2017                                                                                             
                         9:12 a.m.                                                                                              
                                                                                                                                
9:12:53 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair  MacKinnon  called  the  Senate  Finance  Committee                                                                    
meeting to order at 9:12 a.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Lyman Hoffman, Co-Chair                                                                                                 
Senator Anna MacKinnon, Co-Chair                                                                                                
Senator Click Bishop, Vice-Chair                                                                                                
Senator Shelley Hughes                                                                                                          
Senator Peter Micciche                                                                                                          
Senator Donny Olson                                                                                                             
Senator Natasha von Imhof                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Doctor  Jay  Butler,  Chief  Medical  Officer,  Division  of                                                                    
Public  Health, Department  of Health  and Social  Services;                                                                    
Sara  Chambers, Deputy  Director,  Division of  Corporations                                                                    
Business   and   Professional   Licensing,   Department   of                                                                    
Commerce, Community and  Economic Development; Laura Cramer,                                                                    
Staff, Senator  Anna MacKinnon;  Juli Lucky,  Staff, Senator                                                                    
Anna MacKinnon;  Senator Cathy Giessel;  Representative Lora                                                                    
Reinbold.                                                                                                                       
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Marla  Thompson,  Director,   Division  of  Motor  Vehicles,                                                                    
Department  of Administration;  Dan Lowden,  Captain, Alaska                                                                    
State Troopers; Sheldon  Fisher, Commissioner, Department of                                                                    
Administration;   Brian   Duffy,   Director,   Division   of                                                                    
Administrative   Services,   Department  of   Military   and                                                                    
Veterans Affairs;  Michael Stanker, Attorney,  Department of                                                                    
Law.                                                                                                                            
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 34     DRIVER'S LICENSE & ID CARDS & REAL ID ACT                                                                             
                                                                                                                                
          SB 34 was HEARD and HELD in committee for further                                                                     
          consideration.                                                                                                        
                                                                                                                                
SB 79     OPIOIDS;PRESCRIPTIONS;DATABASE;LICENSES                                                                               
                                                                                                                                
          SB 79 was HEARD and HELD in committee for further                                                                     
          consideration.                                                                                                        
                                                                                                                                
CSHB 111(FIN)(efd fld)                                                                                                          
         OIL & GAS PRODUCTION TAX;PAYMENTS;CREDITS                                                                              
                                                                                                                                
          CSHB 111(FIN)(efd fld) was HEARD and HELD in                                                                          
          committee for further consideration.                                                                                  
                                                                                                                                
SENATE BILL NO. 79                                                                                                            
                                                                                                                                
     "An  Act  relating  to  the  prescription  of  opioids;                                                                    
     establishing  the  Voluntary Nonopioid  Directive  Act;                                                                    
     relating  to  the   controlled  substance  prescription                                                                    
     database;  relating  to   the  practice  of  dentistry;                                                                    
     relating to  the practice of medicine;  relating to the                                                                    
     practice  of  podiatry;  relating to  the  practice  of                                                                    
     osteopathy;  relating  to   the  practice  of  nursing;                                                                    
     relating to the practice  of optometry; relating to the                                                                    
     practice of veterinary medicine;  related to the duties                                                                    
     of  the  Board  of   Pharmacy;  and  providing  for  an                                                                    
     effective date."                                                                                                           
                                                                                                                                
9:14:56 AM                                                                                                                    
                                                                                                                                
DOCTOR  JAY  BUTLER,  CHIEF  MEDICAL  OFFICER,  DIVISION  OF                                                                    
PUBLIC  HEALTH, DEPARTMENT  OF HEALTH  AND SOCIAL  SERVICES,                                                                    
(DHSS) explained  the reason for the  legislation. He shared                                                                    
that more  than 90 Alaskans  died of an opioid  overdose the                                                                    
year  prior,  which  was  more  than  twice  the  number  of                                                                    
Alaskans who died  of AIDS at the peak of  the HIV epidemic.                                                                    
He stated that an opioid  overdose represented nearly one in                                                                    
every  forty deaths  that  occurred in  the  state the  year                                                                    
prior. He shared that two-thirds  of those deaths involved a                                                                    
prescription opioid. He remarked  that the majority of those                                                                    
people who use heroin and  other illicit opioids report that                                                                    
they first  became addicted  using prescription  opioids. He                                                                    
stressed  that  often  the  opioids  were  obtained  from  a                                                                    
trusted and  well-meaning health care provider.  He stressed                                                                    
that  the  state  was  responding  to  the  opioid  epidemic                                                                    
through  community  coalitions,  citizen action,  and  state                                                                    
government. He shared that SB  91 was passed and signed into                                                                    
law in March 2017, which  authorized increased access to the                                                                    
life-saving drug Naloxone.                                                                                                      
                                                                                                                                
Co-Chair    MacKinnon    acknowledged   Senator    Giessel's                                                                    
participation in the bill process.                                                                                              
                                                                                                                                
9:16:59 AM                                                                                                                    
                                                                                                                                
Dr. Butler  echoed stated  that there  were many  people who                                                                    
were saved by the Naloxone  kits. He remarked that the kits,                                                                    
however,  did  not address  some  of  the underlying  issues                                                                    
surrounding  the opioid  epidemic. He  stated that  the kits                                                                    
did not  support those  in recovery  who wanted  to maintain                                                                    
their  sobriety. He  remarked  that the  kits  also did  not                                                                    
address some  of the underlying  factors in the  increase of                                                                    
opioid use and addiction.                                                                                                       
                                                                                                                                
9:33:19 AM                                                                                                                    
                                                                                                                                
Senator  von Imhof  wondered what  happened to  the reports,                                                                    
and  what occurred  with  a pattern  and  whether there  was                                                                    
action on those  trends. Dr. Butler replied  that the intent                                                                    
of  the bill  was for  authorization for  the Department  of                                                                    
Commerce,  Community  and  Economic Development  (DCCED)  to                                                                    
issue the report card. He  stressed that there was currently                                                                    
no legal authority to issue  that report. He stated that the                                                                    
information to the provider was solely for that provider.                                                                       
                                                                                                                                
Senator  von Imhof  surmised that  the bill  would create  a                                                                    
database that showed all the  prescriptive drug behavior for                                                                    
all health care  providers in the state.  Dr. Butler replied                                                                    
that there  would not be  a new database, but  enhancing the                                                                    
existing  database.  He stated  that  the  database was  for                                                                    
controlled substances only.                                                                                                     
                                                                                                                                
9:36:22 AM                                                                                                                    
                                                                                                                                
Senator Hughes  expressed concern about the  opioid epidemic                                                                    
in  the  state. She  wanted  to  ensure  that the  bill  was                                                                    
addressed the real problem. She  felt that there might be "a                                                                    
few bad apples" in the  state who were over-prescribing. She                                                                    
remarked that  the Division  of Public  Health did  not have                                                                    
the  authority to  forward names  to the  board, but  rather                                                                    
could only  recognize trends. She wondered  whether the data                                                                    
showed  that  most  prescribers  were  contributing  to  the                                                                    
problem,  or was  it only  a few  prescribers. She  wondered                                                                    
whether the suspicious activity  should be investigated, and                                                                    
then  forward that  information to  the appropriate  boards.                                                                    
Dr. Butler agreed  that there were remarkable  efforts and a                                                                    
robust recovery community in the  Mat-Su. He stated that the                                                                    
broader nationwide  data showed that  more than half  of the                                                                    
prescribed  opioids came  from  primary  care providers.  He                                                                    
stated that  the authority  to pursue  problematic providers                                                                    
was within the boards in DCCED.                                                                                                 
                                                                                                                                
9:42:16 AM                                                                                                                    
                                                                                                                                
Senator  Hughes wondered  whether the  various boards  could                                                                    
look at  the Prescription Drug Monitoring  Program (PDMP) to                                                                    
determine the  outliers. She understood that  the boards did                                                                    
not have that  authority. Dr. Butler replied  that there was                                                                    
an issue  with staffing. The  PDMP manager was  currently in                                                                    
recruitment. He stated that there  were red flagged criteria                                                                    
for behavior  related to the  number of prescribers  and the                                                                    
number of pharmacies visited over a set period of time.                                                                         
                                                                                                                                
Senator Hughes felt  that there needed to  be an examination                                                                    
of  the over-prescribers  that were  shown in  the database.                                                                    
She  wondered whether  there needed  to be  a specific  name                                                                    
assigned in the database,  rather than locations and trends.                                                                    
Dr. Butler deferred to Ms. Chambers.                                                                                            
                                                                                                                                
9:45:08 AM                                                                                                                    
                                                                                                                                
SARA  CHAMBERS, DEPUTY  DIRECTOR,  DIVISION OF  CORPORATIONS                                                                    
BUSINESS   AND   PROFESSIONAL   LICENSING,   DEPARTMENT   OF                                                                    
COMMERCE,  COMMUNITY  AND  ECONOMIC  DEVELOPMENT,  responded                                                                    
that the  boards were  recently given  authority to  get the                                                                    
high-level trending non-specific  information, and authority                                                                    
to issue  license discipline if the  prescription drugs were                                                                    
not used  within generally safe  practices. She  agreed that                                                                    
that the  boards did not have  the ability to view  the PDMP                                                                    
and  transmit  the  information on  a  specific  prescriber,                                                                    
unless   there  was   a  subpoena.   She  stated   that  the                                                                    
legislation  expanded the  ability  to provide  information,                                                                    
through  a  subpoena,  to  a  law  enforcement  agency.  She                                                                    
stressed that the PDMP was  not currently used as a punitive                                                                    
investigative tool,  but remarked that it  could change with                                                                    
a policy change.                                                                                                                
                                                                                                                                
                                                                                                                                
Senator Hughes surmised that the  board could only pursue an                                                                    
individual  person after  a  filed  complaint. She  wondered                                                                    
whether  the  courts  were  ever  used  in  investigating  a                                                                    
complaint. Ms. Chambers replied in the affirmative.                                                                             
                                                                                                                                
Senator Hughes  hoped that  there would be  a report  to see                                                                    
whether the  PDMP manager  could have  greater investigative                                                                    
authority.                                                                                                                      
                                                                                                                                
Senator Micciche felt  that the most valuable  aspect of the                                                                    
bill  was  the daily  prescription  limit.  He queried  more                                                                    
information  about the  four-day  and  seven-day limits.  He                                                                    
remarked  that  there  was  data   showing  that  a  ten-day                                                                    
prescription  could   result  in  addiction.   Ms.  Chambers                                                                    
replied that  the Optometry Board  currently had  a four-day                                                                    
limit  in statute,  so that  board was  not included  in the                                                                    
bill. She  stated that the  seven-day limit extended  to all                                                                    
other practitioners, except for veterinarians.                                                                                  
                                                                                                                                
Senator Micciche felt that the limit could be successful.                                                                       
                                                                                                                                
9:52:20 AM                                                                                                                    
                                                                                                                                
Vice-Chair  Bishop  wondered  whether   the  bill  would  be                                                                    
addressed in  the afternoon.  Co-Chair MacKinnon  replied in                                                                    
the negative.                                                                                                                   
                                                                                                                                
Vice-Chair  Bishop queried  the background  of opioids.  Dr.                                                                    
Butler responded  that opium had  been used  medicinally for                                                                    
thousands  of years.  He remarked,  however, that  opium had                                                                    
been known  to result  in addiction and  physical dependency                                                                    
for thousands  of years. He  stated that there  was approval                                                                    
in the 1990s that were introduced.                                                                                              
                                                                                                                                
Co-Chair MacKinnon discussed committee business.                                                                                
                                                                                                                                
Senator Olson requested more information about the boards.                                                                      
                                                                                                                                
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
                                                                                                                                
SB  79  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
10:00:36 AM                                                                                                                   
RECESSED                                                                                                                        
                                                                                                                                
2:18:10 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
CS FOR HOUSE BILL NO. 111(FIN)(efd fld)                                                                                       
                                                                                                                                
     "An Act  relating to  the oil  and gas  production tax,                                                                    
     tax  payments,   and  credits;  relating   to  interest                                                                    
     applicable to  delinquent oil  and gas  production tax;                                                                    
     relating  to carried-forward  lease expenditures  based                                                                    
     on losses  and limiting those lease  expenditures to an                                                                    
     amount  equal  to  the  gross value  at  the  point  of                                                                    
     production of  oil and gas  produced from the  lease or                                                                    
     property  where  the  lease expenditure  was  incurred;                                                                    
     relating to  information concerning tax  credits, lease                                                                    
     expenditures, and oi  l and gas taxes;  relating to the                                                                    
     disclosure of that information  to the public; relating                                                                    
     to an  adjustment in  the gross value  at the  point of                                                                    
     production;  and  relating  to  a  legislative  working                                                                    
     group."                                                                                                                    
                                                                                                                                
2:18:49 PM                                                                                                                    
                                                                                                                                
Vice-Chair Bishop  MOVED to  ADOPT the  committee substitute                                                                    
for  CS  SBHB  111(FIN)(efd  fld),  Work  Draft  30-LS0450\B                                                                    
(Nauman, 5/10/17).                                                                                                              
                                                                                                                                
Co-Chair MacKinnon OBJECTED for discussion.                                                                                     
                                                                                                                                
Co-Chair  MacKinnon  stated  that   the  CS  eliminated  the                                                                    
state's cash  exposure by ending  the program  of refundable                                                                    
oil  and gas  tax credits  to  small or  new companies.  She                                                                    
stated that work after 2017  would no longer be eligible for                                                                    
cash credits. The only credits  remaining statewide would be                                                                    
those  in Middle  Earth, and  those would  be nonrefundable.                                                                    
She stated that it would  conclude a multiple year effort to                                                                    
phase out the credits that  began in 2013. The bill provided                                                                    
opportunities to reduce the  credit backlog, which following                                                                    
two years of vetoes by the current administration.                                                                              
                                                                                                                                
2:23:35 PM                                                                                                                    
                                                                                                                                
LAURA CRAMER,  STAFF, SENATOR ANNA MACKINNON,  explained the                                                                    
committee substitute  with the  Sectional Analysis  (copy on                                                                    
file):                                                                                                                          
                                                                                                                                
     Section 1  Amends AS 31.05.030(n),  Alaska Oil  and Gas                                                                    
    Conservation Act, Powers and duties of commission.                                                                          
     Conforming to  the Sec. 28 requirement  that the Alaska                                                                    
     Oil  and  Gas  Conservation  Commission  determine  the                                                                    
     start of regular production for  purposes of applying a                                                                    
     carry-forward annual loss.                                                                                                 
                                                                                                                                
     Section  2  Amends   AS  43.05.225,  Administration  of                                                                    
     Revenue Laws, Interest.                                                                                                    
     For  all  delinquent  taxes  under  the  Department  of                                                                    
     Revenue,  interest is  three  points  above the  annual                                                                    
     rate  set   by  the  12th  Federal   Reserve  District,                                                                    
     compounded quarterly, and is  applied the entire time a                                                                    
     tax is delinquent.                                                                                                         
                                                                                                                                
     Section  3 Amends  AS 43.20.044(a),  Alaska Net  Income                                                                    
     Tax Act, Exploration incentive credit                                                                                      
     A taxpayer  that earns an  exploration credit  under AS                                                                    
     43.55.025 for work  done after July 1,  2016, may apply                                                                    
     the credit against the  taxpayer's own corporate income                                                                    
     tax. Effective immediately.                                                                                                
                                                                                                                                
     Section  4 Amends  AS 43.20.047(h),  Alaska Net  Income                                                                    
     Tax  Act, Liquefied  natural gas  storage facility  tax                                                                    
     credit.                                                                                                                    
     Conforming to the future repeal  of the Oil and Gas Tax                                                                    
     Credit  Fund  and  conforming  repeals.  Effective  the                                                                    
     later  of   Jan.  1,  2022,   or  when  there   are  no                                                                    
     outstanding applications for credit refunds.                                                                               
                                                                                                                                
     Section  5   Amends  AS   43.55.023(c),  Oil   and  Gas                                                                    
     Production  Tax, Tax  credits  for  certain losses  and                                                                    
     expenditures.                                                                                                              
     Credits  earned  under  this  section  may  be  applied                                                                    
     against prior-year  taxes, interest, penalties  or fees                                                                    
     related to  the oil  and gas production  tax, providing                                                                    
     those  liabilities   have  not   been  subject   to  an                                                                    
     administrative  proceeding or  litigation. Credits  may                                                                    
     not  be used  against  conservation  surcharges or  the                                                                    
     private royalty tax. Effective immediately.                                                                                
                                                                                                                                
     Section  6   Amends  AS   43.55.023(d),  Oil   and  Gas                                                                    
     Production  Tax, Tax  credits  for  certain losses  and                                                                    
     expenditures.                                                                                                              
     Cash  payments  for  credits  under  this  section  are                                                                    
     available only for work performed before Jan. 1, 2018.                                                                     
                                                                                                                                
     Section  7   Amends  AS   43.55.023(d),  Oil   and  Gas                                                                    
     Production  Tax, Tax  credits  for  certain losses  and                                                                    
     expenditures, as amended by Sec. 6.                                                                                        
     Conforming to the  future repeal in Sec. 31  of the Oil                                                                    
     and Gas  Tax Credit Fund.  Effective the later  of Jan.                                                                    
     1, 2022, or when  there are no outstanding applications                                                                    
     for credit refunds.                                                                                                        
                                                                                                                                
     Section  8   Amends  AS   43.55.023(e),  Oil   and  Gas                                                                    
     Production  Tax, Tax  credits  for  certain losses  and                                                                    
     expenditures.                                                                                                              
     Transferrable  tax  credit  certificates  issued  under                                                                    
     this section  may be applied against  prior-year taxes,                                                                    
     interest, penalties or fees related  to the oil and gas                                                                    
     production  tax, providing  those liabilities  have not                                                                    
     been  subject   to  an  administrative   proceeding  or                                                                    
     litigation.   Credits   may   not   be   used   against                                                                    
     conservation  surcharges or  the  private royalty  tax.                                                                    
     Effective immediately.                                                                                                     
                                                                                                                                
     Section  9   Amends  AS   43.55.023(g),  Oil   and  Gas                                                                    
     Production  Tax, Tax  credits  for  certain losses  and                                                                    
     expenditures.                                                                                                              
     Conforming to the  future repeal in Sec. 31  of the Oil                                                                    
     and Gas  Tax Credit Fund.  Effective the later  of Jan.                                                                    
     1, 2022, or when  there are no outstanding applications                                                                    
     for credit refunds.                                                                                                        
                                                                                                                                
     Section  10   Amends  AS  43.55.025(a),  Oil   and  Gas                                                                    
     Production Tax, Alternative tax  credit for oil and gas                                                                    
     exploration.                                                                                                               
     Credits under  this section for  work done on  or after                                                                    
     July 1,  2016, may be applied  against corporate income                                                                    
     taxes. Effective immediately.                                                                                              
                                                                                                                                
     Section  11   Amends  AS  43.55.025(a),  Oil   and  Gas                                                                    
     Production Tax, Alternative tax  credit for oil and gas                                                                    
     exploration, as amended by Sec. 10.                                                                                        
     Conforming  to the  sunset  of  the AS  43.55.025(a)(4)                                                                    
     credit after Jan. 1, 2018, in Sec. 12.                                                                                     
                                                                                                                                
     Section  12   Amends  AS  43.55.025(b),  Oil   and  Gas                                                                    
     Production Tax, Alternative tax  credit for oil and gas                                                                    
     exploration.                                                                                                               
     The   40%   credit   for    seismic   work   under   AS                                                                    
     43.55.025(a)(4)  will not  be available  for work  done                                                                    
     after Jan. 1, 2018.                                                                                                        
                                                                                                                                
     Section  13   Amends  AS  43.55.025(f),  Oil   and  Gas                                                                    
     Production Tax, Alternative tax  credit for oil and gas                                                                    
     exploration.                                                                                                               
     Exploration credits  under AS  43.55.025 for  work done                                                                    
     after  July 1,  2016, against  corporate income  taxes.                                                                    
     Effective immediately.                                                                                                     
                                                                                                                                
     Section  14   Amends  AS  43.55.025(g),  Oil   and  Gas                                                                    
     Production Tax, Alternative tax  credit for oil and gas                                                                    
     exploration.                                                                                                               
     Exploration  tax credits  under this  section that  are                                                                    
     transferred  to another  taxpayer  may  not be  applied                                                                    
     against   the  purchaser's   corporate  income   taxes.                                                                    
     Effective immediately.                                                                                                     
                                                                                                                                
     Section  15   Amends  AS  43.55.025(h),  Oil   and  Gas                                                                    
     Production Tax, Alternative tax  credit for oil and gas                                                                    
     exploration.                                                                                                               
     Tax  credit certificates  and  tax  credits under  this                                                                    
     section  may  be   applied  against  prior-year  taxes,                                                                    
     interest, penalties or fees related  to the oil and gas                                                                    
     production  tax, providing  those liabilities  have not                                                                    
     been  subject   to  an  administrative   proceeding  or                                                                    
     litigation.   Credits   may   not   be   used   against                                                                    
     conservation  surcharges or  the  private royalty  tax.                                                                    
     Effective immediately.                                                                                                     
                                                                                                                                
     Section  16   Amends  AS  43.55.025(i),  Oil   and  Gas                                                                    
     Production Tax, Alternative tax  credit for oil and gas                                                                    
     exploration.                                                                                                               
     Exploration credits issued under  this section for work                                                                    
     done after July 1, 2016,  may be used against corporate                                                                    
     income tax,  but may  not be  used to  reduce corporate                                                                    
     income taxes below zero. Effective immediately.                                                                            
                                                                                                                                
     Section  17   Amends  AS  43.55.025(k),  Oil   and  Gas                                                                    
     Production Tax, Alternative tax  credit for oil and gas                                                                    
     exploration.                                                                                                               
     Conforming to the sunset of  the seismic credit in Sec.                                                                    
     12.                                                                                                                        
                                                                                                                                
     Section 18 Adds  a new subsection to  AS 43.55.025, Oil                                                                    
     and Gas Production Tax, Alternative  tax credit for oil                                                                    
     and gas exploration.                                                                                                       
     Creates a  conditional tax credit certificate  that the                                                                    
     Department  of Revenue  must  issue  to explorers.  The                                                                    
     conditional  certificate enables  the holder  to submit                                                                    
     an  application  for a  refund  while  waiting for  the                                                                    
     state  to issue  a transferrable  certificate, but  the                                                                    
     conditional certificates  may not  be purchased  by the                                                                    
     state. Effective immediately.                                                                                              
                                                                                                                                
     Section  19   Amends  AS  43.55.028(a),  Oil   and  Gas                                                                    
     Production   Tax,  Oil   and   gas   tax  credit   fund                                                                    
     established; cash purchase of tax credit certificates.                                                                     
     As of  Jan. 1, 2018, the  tax credit fund is  only able                                                                    
     to purchase  oil and  gas tax  credits issued  for work                                                                    
     done  before  Jan. 1,  2018,  and  to purchase  instate                                                                    
     refinery and LNG storage facility income tax credits.                                                                      
                                                                                                                                
     Section  20   Amends  AS  43.55.028(e),  Oil   and  Gas                                                                    
     Production   Tax,  Oil   and   gas   tax  credit   fund                                                                    
     established; cash purchase of tax credit certificates.                                                                     
     Allows  the Department  of Revenue  to accept,  but not                                                                    
     purchase, a  conditional certificate from  an explorer.                                                                    
     Effective immediately.                                                                                                     
                                                                                                                                
     Section  21   Amends  AS  43.55.028(e),  Oil   and  Gas                                                                    
     Production   Tax,  Oil   and   gas   tax  credit   fund                                                                    
     established; cash purchase  of tax credit certificates,                                                                    
     as amended by Sec. 20.                                                                                                     
     Conforming to the Sec. 19  provision ending new entries                                                                    
     to the credit purchase program Jan. 1, 2018.                                                                               
                                                                                                                                
Co-Chair MacKinnon wondered whether Section 21 was                                                                              
conforming language to Section 19. Ms. Cramer replied in                                                                        
the affirmative.                                                                                                                
                                                                                                                                
     Section  22   Amends  AS  43.55.029(a),  Oil   and  Gas                                                                    
     Production Tax, Assignment of tax credit certificate.                                                                      
     Conforming to the  Sec. 30 repeal of  the net operating                                                                    
     loss credit.                                                                                                               
                                                                                                                                
2:34:03 PM                                                                                                                    
                                                                                                                                
Ms. Cramer continued to discuss the Sectional Analysis:                                                                         
                                                                                                                                
     Section  23   Amends  AS  43.55.160(d),  Oil   and  Gas                                                                    
     Production Tax,  Determination of production  tax value                                                                    
     of oil and gas.                                                                                                            
     Conforming to the  Sec. 30 repeal of  the net operating                                                                    
     loss credit.                                                                                                               
                                                                                                                                
     Section  24   Amends  AS  43.55.160(e),  Oil   and  Gas                                                                    
     Production Tax,  Determination of production  tax value                                                                    
     of oil and gas.                                                                                                            
     North Slope and Middle  Earth lease expenditures may be                                                                    
     used to establish a  carried-forward annual loss. Gross                                                                    
     value reductions for new oil  cannot make a loss larger                                                                    
     than  it would  otherwise  be.  Also, makes  conforming                                                                    
     changes  to the  Sec. 30  repeal of  the net  operating                                                                    
     loss   credit  and   the  Sec.   25  terms   for  lease                                                                    
     expenditures.                                                                                                              
                                                                                                                                
     Section  25   Amends  AS  43.55.165(a),  Oil   and  Gas                                                                    
     Production Tax, Lease expenditures.                                                                                        
     Lease expenditures  include those, for the  North Slope                                                                    
     and Middle  Earth, that were  unable to be  deducted in                                                                    
     the previous year.                                                                                                         
                                                                                                                                
     Section  26   Amends  AS  43.55.165(f),  Oil   and  Gas                                                                    
     Production Tax, Lease expenditures.                                                                                        
     Conforming to the  Sec. 30 repeal of  the net operating                                                                    
     loss credit.                                                                                                               
                                                                                                                                
     Section  27 Adds  a new  paragraph to  AS 43.55.165(l),                                                                    
     Oil and Gas Production Tax, Lease expenditures.                                                                            
     Defines  "carried-forward   annual  loss"  as   a  loss                                                                    
     established per Sec. 25.                                                                                                   
                                                                                                                                
2:37:02 PM                                                                                                                    
                                                                                                                                
Ms. Cramer continued to discuss the Sectional Analysis:                                                                         
                                                                                                                                
     Section 28  Adds new subsections  to AS  43.55.165, Oil                                                                    
     and Gas Production Tax, Lease expenditures.                                                                                
     Implements new  terms for how a  carried-forward annual                                                                    
     loss is applied. A taxpayer  may choose to apply all or                                                                    
     some of its  loss, or to carry it  forward. In applying                                                                    
     carry-forward annual losses, a  producer subject to the                                                                    
     minimum  tax may  apply the  amount  that would  reduce                                                                    
     taxes to  the equal amount  under the minimum  tax, and                                                                    
     not to  zero. Carry-forward annual losses  in excess of                                                                    
     the amount applied to reduce  taxes to the equal of the                                                                    
     minimum tax are carried forward.                                                                                           
     Fifty percent  of carry-forward annual  losses incurred                                                                    
     from a lease  or property not yet in  production may be                                                                    
     used immediately;  the remaining  50% may be  used once                                                                    
     the  lease or  property enters  regular production,  as                                                                    
     determined  by  the  Alaska Oil  and  Gas  Conservation                                                                    
     Commission.                                                                                                                
                                                                                                                                
     Section  29   Amends  AS  43.55.170(c),  Oil   and  Gas                                                                    
    Production Tax, Adjustments to lease expenditures.                                                                          
     Conforming to the  Sec. 30 repeal of  the net operating                                                                    
     loss credit.                                                                                                               
                                                                                                                                
     Section 30 Repealer                                                                                                        
     Repeals   the    net   operating   loss    credit,   AS                                                                    
     43.55.023(b), on Jan. 1, 2018.                                                                                             
                                                                                                                                
     Section 31 Repealer                                                                                                        
     At the later  of Jan. 1, 2022, or  when all outstanding                                                                    
     applications  for   credit  refunds  have   been  paid,                                                                    
     repeals  the  Oil  and  Gas  Tax  Credit  Fund  and  AS                                                                    
     43.55.028; assignability  of credits to  third parties,                                                                    
     AS 43.55.029; and makes  conforming repeals in sections                                                                    
     of  statute  referencing  the  fund:  AS  43.05.230(l),                                                                    
     Administration  of  Revenue  Laws,  Disclosure  of  tax                                                                    
     returns    and    reports,   annual    disclosure    of                                                                    
     disbursements  from the  fund; AS  43.20.046(e), Alaska                                                                    
     Net Income  Tax Act,  Gas storage facility  tax credit,                                                                    
     use of fund to pay  the credit; AS 43.20.047(e), Alaska                                                                    
     Net  Income  Tax  Act, Liquefied  natural  gas  storage                                                                    
     facility tax  credit, use  of fund  to pay  the credit;                                                                    
     and  AS  43.20.053(e),  Alaska   Net  Income  Tax  Act,                                                                    
     Qualified   in-state    oil   refinery   infrastructure                                                                    
     expenditures  tax  credit,  use  of  fund  to  pay  the                                                                    
     credit.                                                                                                                    
                                                                                                                                
2:38:55 PM                                                                                                                    
                                                                                                                                
Ms. Cramer continued with the Sectional Analysis:                                                                               
                                                                                                                                
     Section 32 Applicability                                                                                                   
     Credits  under  AS  43.55.025 may  be  applied  against                                                                    
     corporate  income taxes  by the  company that  incurred                                                                    
     the  credits,  regardless  of  when  the  credits  were                                                                    
     earned. Effective immediately.                                                                                             
                                                                                                                                
     Section 33 Applicability                                                                                                   
     Credits may be  applied against prior year  oil and gas                                                                    
     tax liabilities,  regardless of  when the  credits were                                                                    
     earned. Effective immediately.                                                                                             
                                                                                                                                
     Section 34 Applicability                                                                                                   
     The new provisions related  to lease expenditures apply                                                                    
     to  lease expenditures  incurred  on or  after Jan.  1,                                                                    
     2018.                                                                                                                      
                                                                                                                                
     Section 35 Transition language                                                                                             
     Interest   rates  charged   on  delinquent   taxes  for                                                                    
     calendar year 2017 are the  rates in statute before the                                                                    
     changes in Sec. 2 take effect on Jan. 1, 2018.                                                                             
                                                                                                                                
     Section 36 Transition language                                                                                             
     Ensures  the public  disclosure  of  tax credit  refund                                                                    
     recipients is  made on April  30 of the  year following                                                                    
     the year  in which the Oil  and Gas Tax Credit  Fund is                                                                    
     repealed, as the public disclosure  is also repealed to                                                                    
     conform. Effective the  later of Jan. 1,  2022, or when                                                                    
     there  are  no   outstanding  applications  for  credit                                                                    
     refunds.                                                                                                                   
                                                                                                                                
     Section 37 Transition language                                                                                             
     Taxpayers who incur a loss  before Jan. 1, 2018, remain                                                                    
     eligible for  the net operating loss  credit in current                                                                    
     statute that is repealed as of Jan. 1, 2018.                                                                               
                                                                                                                                
     Section 38 Transition language                                                                                             
     When the Oil and Gas  Tax Credit Fund is repealed after                                                                    
     outstanding  applications have  been paid,  any balance                                                                    
     of  the fund  lapses into  the general  fund. Effective                                                                    
     the  later  of Jan.  1,  2022,  or  when there  are  no                                                                    
     outstanding applications for refunds.                                                                                      
                                                                                                                                
     Section 39 Transition language                                                                                             
     Dept. of  Revenue may adopt  regulations retroactively.                                                                    
     Effective immediately.                                                                                                     
                                                                                                                                
     Section 40 Conditional effect, notification language                                                                       
     Sections related to  the repeal of the Oil  and Gas Tax                                                                    
     Credit Fund take effect only  after the Commissioner of                                                                    
     Revenue  notifies  the  revisors   when  there  are  no                                                                    
     outstanding  applications  for   the  purchase  of  tax                                                                    
     credits, and  it has  been at least  one year  since an                                                                    
     application has been received. Effective immediately.                                                                      
                                                                                                                                
     Section 41 Effective date                                                                                                  
     Sets an  immediate effective date for  sections related                                                                    
     to the ability to  use Middle Earth exploration credits                                                                    
     against   the  company's   own  corporate   income  tax                                                                    
     liability, and  to use credits  against prior  year tax                                                                    
     liabilities   that  have   not  been   subject  to   an                                                                    
     administrative proceeding or to litigation.                                                                                
                                                                                                                                
     Section 42 Effective date                                                                                                  
     Sets a  Jan. 1,  2018, effective  date for  Section 25,                                                                    
     which is  treated separately  because it  makes changes                                                                    
     to  a  section  of  statute that  is  undergoing  other                                                                    
    changes this year based on House Bill 247 of 2016.                                                                          
                                                                                                                                
     Section 43 Effective date                                                                                                  
     Sets an  effective date of  the later of Jan.  1, 2022,                                                                    
     or Jan. 1 of the year  in which notice is provided that                                                                    
     all  outstanding applicants  for credit  purchases have                                                                    
     been  paid, for  the  repeal  of the  Oil  and Gas  Tax                                                                    
     Credit Fund and conforming sections.                                                                                       
                                                                                                                                
     Section 44 Effective date                                                                                                  
     Sets  a  Jan. 1,  2018  effective  date for  all  other                                                                    
     sections.                                                                                                                  
                                                                                                                                
2:42:47 PM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon  WITHDREW her  OBJECTION. There  being NO                                                                    
further  OBJECTION, the  proposed  committee substitute  was                                                                    
adopted.                                                                                                                        
                                                                                                                                
2:43:05 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:44:01 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
2:44:09 PM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon  announced  that  amendments  should  be                                                                    
submitted by 8am the following  day, because she intended to                                                                    
move the bill  from committee the following  day. She stated                                                                    
that  there would  be  a fiscal  note  presentation at  that                                                                    
meeting.                                                                                                                        
                                                                                                                                
CSHB 111(FIN)(efd fld)  was HEARD and HELD  in committee for                                                                    
further consideration.                                                                                                          
                                                                                                                                
2:45:32 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:48:25 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
SENATE BILL NO. 34                                                                                                            
                                                                                                                                
     "An Act  relating to the implementation  of the federal                                                                    
     REAL  ID  Act of  2005;  and  relating to  issuance  of                                                                    
     identification   cards  and   driver's  licenses;   and                                                                    
     providing for an effective date."                                                                                          
                                                                                                                                
2:48:34 PM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon announced the history of the bill in the                                                                     
committee.                                                                                                                      
                                                                                                                                
Vice-Chair Bishop MOVED to ADOPT the committee substitute                                                                       
for SB 34, Work Draft 30-GS1781\T (Martin, 5/11/17).                                                                            
                                                                                                                                
Co-Chair MacKinnon OBJECTED for discussion.                                                                                     
                                                                                                                                
2:49:42 PM                                                                                                                    
                                                                                                                                
JULI LUCKY, STAFF, SENATOR ANNA MACKINNON, remarked that                                                                        
the CS was drafted because of various discussions.                                                                              
                                                                                                                                
Ms. Lucky addressed the Sectional/Explanation of Changes                                                                        
(copy on file):                                                                                                                 
                                                                                                                                
     Section   1:  NEW:   Intent  language   added  by   the                                                                    
     legislature should  continue efforts to amend  the REAL                                                                    
     ID Act to protect the privacy of Alaskans.                                                                                 
                                                                                                                                
     Section 2: AMENDED: Amends 18.65.310(a)  to set the fee                                                                    
     for  REAL ID  compliant identification  cards at  $20 -                                                                    
     increased from $10 in the previous bill.                                                                                   
                                                                                                                                
     Section  3:  NEW:  Amends 18.65.310(b)  to  require  an                                                                    
     application  for an  identification card  to include  a                                                                    
     provision  that the  applicant understands  the options                                                                    
     between the identification card  types and what type of                                                                    
     card is being selected.                                                                                                    
                                                                                                                                
2:53:23 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:53:30 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Ms. Lucky continued to discuss the changes:                                                                                     
                                                                                                                                
     Section 4:  AMENDED: Adds new sections  to 18.65.310 as                                                                    
     follows:   (m)  Requires   the   department  to   adopt                                                                    
     regulations  to  issue  federally compliant  cards  and                                                                    
     requires an  applicant to specifically choose  one. New                                                                    
     language  in  CS  limits  the  documents  that  can  be                                                                    
     copied/scanned and  retained to the minimum  of what is                                                                    
     required by  REAL ID and codifies  the retention period                                                                    
     of  15  years,  which  matches  what  is  currently  in                                                                    
     regulation.                                                                                                                
     (n)  Requires  the  state to  continue  to  offer  non-                                                                    
     compliant cards. Requires  an applicant to specifically                                                                    
     choose a  federally compliant identification  card. The                                                                    
     CS  keeps   the  prohibition   against  the   state  or                                                                    
     municipality  requiring a  person  to  get a  federally                                                                    
     compliant identification card,  but allows an exception                                                                    
     when  the  state  or  municipality   is  acting  as  an                                                                    
     employer and the job duties  require use of a compliant                                                                    
     identification card.                                                                                                       
     New  language  regarding  non-compliant  identification                                                                    
     cards limits  retention of facial  images to  15 years,                                                                    
     prohibits  retention  if  a card  is  not  issued,  and                                                                    
     limits retention  of verification  documents to  a year                                                                    
     after the expiration date of the license.                                                                                  
     (o) The  previous bill allowed the  department to issue                                                                    
     a card with  a validity of less than eight  years if it                                                                    
     matches the  amount of  time that  a person  is legally                                                                    
     authorized to be  in the country. The  CS contains that                                                                    
     language,  but  amends  a provision  regarding  a  card                                                                    
     issued to a  person that is legally allowed  to stay in                                                                    
     the country  for an "indefinite period."  The CS allows                                                                    
     the department  more discretion to  renew for  a period                                                                    
     of "up to eight years"  - the previous bill limited the                                                                    
     card to one year.                                                                                                          
     The  CS  also  includes   language  regarding  when  an                                                                    
     identification card  can be renewed and  guidelines for                                                                    
     renewal by mail or via the department's website. The                                                                       
     CS also allows the  department more discretion with the                                                                    
     expiration date for a card  when the authorized stay of                                                                    
     an  individual is  indeterminate  -  the previous  bill                                                                    
     required a  one year expiration  date; the CS  allows a                                                                    
     card to be valid "up to eight years."                                                                                      
     (p) Requires the department to  provide the public with                                                                    
     information  about  the   differences  between  current                                                                    
     cards  (non-compliant) and  federally compliant  cards,                                                                    
     including  what  a federally  compliant  identification                                                                    
     card  is   required  for  and  what   alternatives  are                                                                    
     available.                                                                                                                 
     REMOVED:  Requirement  that  a  non-compliant  card  be                                                                    
     created in-state.                                                                                                          
     (q)   Definition  of   "identification  card   that  is                                                                    
     federally compliant" - reworded.                                                                                           
                                                                                                                                
     Section 5:  AMENDED: Adds new sections  to 28.05.068 as                                                                    
     follows:                                                                                                                   
     (a)  If data  is being  shared with  other entities  to                                                                    
     comply with the  REAL ID Act, limits that  data to what                                                                    
     is  required. This  is  similar to  the  intent of  the                                                                    
     language in the previous bill, but has been reworded.                                                                      
     (b) -  (e) - Add  new language relating to  the sending                                                                    
     of  social  security  numbers  to  other  entities  for                                                                    
     verification  that  a  person  who is  applying  for  a                                                                    
     driver's  license  is  not already  licensed  in  other                                                                    
     states. The  language requires  the department  to take                                                                    
     "all steps  necessary" to eliminate  the use  of social                                                                    
     security  numbers, otherwise  to  limit  the number  of                                                                    
     digits of  a social security number  being used. Allows                                                                    
     up  to  five  digits,   which  is  the  current  number                                                                    
     required by the S2S verification  system, to be used as                                                                    
     long as efforts have been made to reduce the number.                                                                       
     (f) Requires  an annual report  of the efforts  made in                                                                    
     (b) - (e); this section  is repealed in 2021 by section                                                                    
     15 of this bill.                                                                                                           
                                                                                                                                
     Section  6: AMENDED:  Adds new  sections to  28.15.041,                                                                    
     relating   to   driver's   licenses,  to   mirror   the                                                                    
     provisions in section 4 of  the bill for identification                                                                    
     cards. Specifically:                                                                                                       
     (d)  Requires the  department to  adopt regulations  to                                                                    
     issue  federally   compliant  driver's   licenses.  New                                                                    
     language  in  CS  limits  the  documents  that  can  be                                                                    
     copied/scanned and  retained to the minimum  of what is                                                                    
     required by  REAL ID and codifies  the retention period                                                                    
     of  15  years,  which  matches  what  is  currently  in                                                                    
     regulation.                                                                                                                
     (e)  Requires  the  state to  continue  to  offer  non-                                                                    
     compliant   licenses.   Requires    an   applicant   to                                                                    
     specifically choose a  federally compliant license. The                                                                    
     CS  keeps   the  prohibition   against  the   state  or                                                                    
     municipality  requiring a  person  to  get a  federally                                                                    
     compliant  driver's license,  but  allows an  exception                                                                    
     when  the  state  or  municipality   is  acting  as  an                                                                    
     employer and the job duties  require use of a compliant                                                                    
     license.                                                                                                                   
     New language regarding  non-compliant driver's licenses                                                                    
     limits  retention   of  facial  images  to   15  years,                                                                    
     prohibits  retention if  a license  is not  issued, and                                                                    
     limits retention of verification  documents to one year                                                                    
     after the expiration date of the license.                                                                                  
     (f) Requires the department to  provide the public with                                                                    
     information  about  the   differences  between  current                                                                    
     driver's   licenses   (non-compliant)   and   federally                                                                    
     compliant   licenses,   including  what   a   federally                                                                    
     compliant identification card is  required for and what                                                                    
     alternatives are available.                                                                                                
                                                                                                                                
     Section   7:  AMENDED:   Adds  a   new  subsection   to                                                                    
     28.15.061(b)    that   mirrors    the   language    for                                                                    
     identification   cards  in   section  3.   Requires  an                                                                    
     application  for  a  driver's   license  to  include  a                                                                    
     provision  that the  applicant understands  the options                                                                    
     between  the driver's  license types  and what  type of                                                                    
     license is being selected.                                                                                                 
                                                                                                                                
     Section 8: Amends 28.15.101 (a)  to extend the validity                                                                    
     of a driver's license to  eight years (from five). Same                                                                    
     as previous bill.                                                                                                          
                                                                                                                                
     Section 9:  AMENDED: Amends  28.15.101 (d),  similar to                                                                    
     the  provisions in  section 4,  subsection (o)  of this                                                                    
     bill,  to  allow the  department  to  issue a  driver's                                                                    
     license with a validity of  less than eight years if it                                                                    
     matches the  amount of  time that  a person  is legally                                                                    
     authorized  to  be  in the  country  and  also  repeals                                                                    
     language allowing  a person to renew  their license for                                                                    
     free  if  the  license  was valid  for  less  than  the                                                                    
     maximum.                                                                                                                   
     The CS  contains that language, but  amends a provision                                                                    
     that limits  the validity of a  driver's license issued                                                                    
     to  a person  that is  legally allowed  to stay  in the                                                                    
     country for  an "indefinite period." The  CS allows the                                                                    
     department  more discretion  to renew  for a  period of                                                                    
     "up to  eight years"  - the  previous bill  limited the                                                                    
     card to one year.                                                                                                          
                                                                                                                                
3:01:23 PM                                                                                                                    
                                                                                                                                
Ms. Lucky continued to highlight the changes:                                                                                   
                                                                                                                                
     Section 10: AMENDED: Amends  28.15.111(a) to update the                                                                    
     security requirements of cards  to the highest security                                                                    
     standards available.                                                                                                       
                                                                                                                                
     Section 11: AMENDED: Adds  new subsections to 28.15.111                                                                    
     that  (d)  prohibit  bulk   sharing  of  facial  images                                                                    
     captured  during the  application process  for driver's                                                                    
     licenses,  other  than  commercial  driver's  licenses,                                                                    
     with  entities outside  the state;  and  (e) require  a                                                                    
     commercial driver's license to be federally compliant.                                                                     
     REMOVED:  Limitations  on   copying  and  retention  of                                                                    
     application  documents  and  facial images  -  see  new                                                                    
     language on same  topic in section 6.  Also removed was                                                                    
     the requirement  that a non-compliant  driver's license                                                                    
     be created in-state.                                                                                                       
                                                                                                                                
     Section  12: Amends  28.15.271(b) to  charge a  $20 fee                                                                    
     for a driver's license  that is federal compliant. Same                                                                    
     as previous bill.                                                                                                          
                                                                                                                                
     Section  13:   AMENDED:  Adds   a  new   subsection  to                                                                    
     28.90.990(a)  to  define   "driver's  license  that  is                                                                    
    federally compliant" - this was reworded in the CS.                                                                         
                                                                                                                                
     Section  14:  NEW:   Repeals  AS  44.99.040(a)(2),  the                                                                    
     statute that  prohibits use of assets  to implement the                                                                    
     REAL  ID Act.  The previous  bill amended  this section                                                                    
     instead of repealing it.                                                                                                   
                                                                                                                                
     Section 15:  NEW: Repeals 28.05.068(f) -  the reporting                                                                    
     requirement added by  section 5 of this bill  - on June                                                                    
     30, 2021.                                                                                                                  
                                                                                                                                
     Section   16:  Transitional   Provisions:  Allows   the                                                                    
     Department  of Administration  to adopt  regulations to                                                                    
     implement this Act.                                                                                                        
                                                                                                                                
     Section 17:  Immediate effective  dates for  section 14                                                                    
     (repeal) and section 16 (authority for regulations).                                                                       
                                                                                                                                
     Section 18: Effective  date of January 1,  2019 for the                                                                    
     remainder of the bill.                                                                                                     
                                                                                                                                
Co-Chair MacKinnon WITHDREW her OBJECTION. There being NO                                                                       
further OBJECTION, the proposed committee substitute was                                                                        
adopted.                                                                                                                        
                                                                                                                                
Senator  von Imhof  noted  that the  bill  stated that  non-                                                                    
compliant  identification  cards  would limit  retention  of                                                                    
facial images  to 15 years.  She wondered what  changed from                                                                    
the  previous   presentation  about  not   retaining  facial                                                                    
recognition.                                                                                                                    
                                                                                                                                
3:05:55 PM                                                                                                                    
                                                                                                                                
MARLA THOMPSON, DIRECTOR, DIVISION  OF MOTOR VEHICLES (DMV),                                                                    
DEPARTMENT    OF   ADMINISTRATION    (via   teleconference),                                                                    
understood the  that Senator von  Imhof was  concerned about                                                                    
the retaining of an image for one year after expiration.                                                                        
                                                                                                                                
Senator  von Imhof  noted that  initially the  bill did  not                                                                    
allow any retention of documents  or facial recognition. She                                                                    
noted that  the new bill allowed  for significant retention.                                                                    
She  queried  the  circumstances  that  contributed  to  the                                                                    
change in the bill.                                                                                                             
                                                                                                                                
Co-Chair MacKinnon  queried the DMV's current  practice. Ms.                                                                    
Thompson replied  that the DMV currently  retained documents                                                                    
for 15  years, which  was the minimum.  She stated  that the                                                                    
change  in   the  legislation  was   from  a   request  from                                                                    
Department of Public Safety (DPS).                                                                                              
                                                                                                                                
Co-Chair MacKinnon noted that  the initial bill presentation                                                                    
from  the  Senate  State   Affairs  committee  had  document                                                                    
disposal.  She  stressed that  it  was  never state  law  to                                                                    
destroy the documents. Ms. Thompson agreed.                                                                                     
                                                                                                                                
Senator von  Imhof wondered whether the  DMV retained copies                                                                    
of  a  person's  passport   and/or  birth  certificate.  Ms.                                                                    
Thompson responded in the affirmative.                                                                                          
                                                                                                                                
Senator von  Imhof understood that  DMV did not  take copies                                                                    
of those documents. She requested  confirmation that the DMV                                                                    
retained copies of the documents.  Ms. Thompson replied that                                                                    
the DMV retained copies of the documents.                                                                                       
                                                                                                                                
3:10:24 PM                                                                                                                    
                                                                                                                                
Senator   Hughes   felt   that   the   bill   had   stronger                                                                    
confidentiality provisions than  the federal provisions. She                                                                    
wondered  whether  the photos  were  shared  with any  other                                                                    
state agencies.  Ms. Thompson replied  that the  photos were                                                                    
only shared with DPS.                                                                                                           
                                                                                                                                
                                                                                                                                
Senator  Hughes wondered  whether  personal information  was                                                                    
shared  with a  national  database.  Ms. Thompson  responded                                                                    
that  the  DMV  shared  information  with  other  states  to                                                                    
produce   the  most   valid  identification   possible.  She                                                                    
stressed  that documents  and photos  were  not shared,  but                                                                    
only validation.                                                                                                                
                                                                                                                                
Senator  Hughes wondered  whether  personal information  was                                                                    
downloaded into the database, or  was there only a search of                                                                    
the  database for  a match.  Ms. Thompson  replied that  the                                                                    
search was only conducted  based on the provided information                                                                    
to determine matches.                                                                                                           
                                                                                                                                
Senator Hughes  surmised that the  information would  not be                                                                    
shared  on  federally  noncompliant licenses.  Ms.  Thompson                                                                    
replied that  the compliant  licenses required  a validation                                                                    
was secure.                                                                                                                     
                                                                                                                                
Senator  Hughes wondered  whether  there was  an issue  with                                                                    
identity theft. Ms. Thompson replied in the negative.                                                                           
                                                                                                                                
Senator  Hughes wondered  whether  the five  to eight  years                                                                    
related  to both  the compliant  and noncompliant  licenses.                                                                    
Ms. Thompson replied in the affirmative.                                                                                        
                                                                                                                                
3:17:07 PM                                                                                                                    
                                                                                                                                
DAN   LOWDEN,   CAPTAIN,    ALASKA   STATE   TROOPERS   (via                                                                    
teleconference),  announced   that  he  was   available  for                                                                    
questions. He  remarked that he  was slightly  confused with                                                                    
the conversation related to the databases.                                                                                      
                                                                                                                                
3:18:05 PM                                                                                                                    
                                                                                                                                
SHELDON FISHER,  COMMISSIONER, DEPARTMENT  OF ADMINISTRATION                                                                    
(via teleconference),  remarked that  the bill  was designed                                                                    
to  give  a   person  a  choice  between   a  compliant  and                                                                    
noncompliant  license. He  stated that  the database  shared                                                                    
minimal  information   to  allow  confirmation   of  license                                                                    
information across states to ensure  that individuals had an                                                                    
appropriate record  in another  state. He stressed  that the                                                                    
other information  was kept  in the state,  and the  Real ID                                                                    
database only confirmed the validity of the documents.                                                                          
                                                                                                                                
Senator  Hughes queried  what was  shared  in the  database.                                                                    
Commissioner Fisher  replied that the five  digits of social                                                                    
security information was in the  database, but would work to                                                                    
reduce or eliminate  that number. He stated  that the number                                                                    
was shared to determine whether  an individual had a license                                                                    
in another state. The primary  documents, such as a passport                                                                    
or birth certificate, was not shared in the database.                                                                           
                                                                                                                                
Senator Hughes wondered whether there  was a concern about a                                                                    
breach in the database.  Commissioner Fisher replied that we                                                                    
should be concerned  about identity theft. He  felt that the                                                                    
nature and amount of information was relatively modest.                                                                         
                                                                                                                                
Senator Hughes  asked whether the commander  of the military                                                                    
bases in Alaska decided  whether a federal compliant license                                                                    
was  required, or  could a  noncompliant license  be chosen.                                                                    
Commissioner  Fisher understood  that  the  commander had  a                                                                    
certain amount of latitude in implementation.                                                                                   
                                                                                                                                
Vice-Chair Bishop  remarked that the Department  of Military                                                                    
and Veterans  Affairs (DMVA) had announced  that a compliant                                                                    
ID would be required for base access.                                                                                           
                                                                                                                                
3:23:58 PM                                                                                                                    
                                                                                                                                
BRIAN DUFFY, DIRECTOR,  DIVISION OF ADMINISTRATIVE SERVICES,                                                                    
DEPARTMENT   OF   MILITARY   AND   VETERANS   AFFAIRS   (via                                                                    
teleconference),  announced that  that  the commanders  were                                                                    
currently  complying  with federal  law,  and  did not  have                                                                    
waiver authority.                                                                                                               
                                                                                                                                
Senator  Hughes  felt  that there  was  misinformation.  She                                                                    
surmised that the commanders did  not have leeway. Mr. Duffy                                                                    
replied in the affirmative.                                                                                                     
                                                                                                                                
Co-Chair MacKinnon  shared a document from  a commander that                                                                    
stated that the bases must comply with the federal law.                                                                         
                                                                                                                                
Senator  Micciche wondered  whether the  noncompliant Alaska                                                                    
IDs  would  present  additional risks.  Commissioner  Fisher                                                                    
replied in the negative.                                                                                                        
                                                                                                                                
Senator Micciche  surmised that the database  was managed by                                                                    
a private  company. Commissioner Fisher stated  that the DMV                                                                    
would  validate  a  passport through  a  database  that  was                                                                    
managed  by Homeland  Security.  The DMV  validated a  birth                                                                    
certificate  that   was  managed  by  a   nonprofit  managed                                                                    
database.                                                                                                                       
                                                                                                                                
3:29:52 PM                                                                                                                    
                                                                                                                                
Senator  Micciche  wondered  whether there  were  additional                                                                    
requirements for a compliant ID  beyond what was required to                                                                    
receive  a  passport.  Commissioner Fisher  replied  in  the                                                                    
negative.                                                                                                                       
                                                                                                                                
Co-Chair MacKinnon  wondered whether the data  on the facial                                                                    
image  would  be  shared with  anyone.  Commissioner  Fisher                                                                    
replied that the facial image data would not be shared.                                                                         
                                                                                                                                
Co-Chair  MacKinnon asked  whether law  officers outside  of                                                                    
the  state  could  subpoena that  information.  Commissioner                                                                    
Fisher replied that  the data would be shared  with DPS, and                                                                    
the DMV would comply with a subpoena.                                                                                           
                                                                                                                                
Co-Chair MacKinnon  wondered whether  the facial  image data                                                                    
was  shared  on  an individual  basis.  Commissioner  Fisher                                                                    
replied that  the state would  share the facial  images with                                                                    
DPS, but there was no bulk sharing.                                                                                             
                                                                                                                                
Co-Chair MacKinnon  queried a  regulation that  required the                                                                    
scanning and  storage of the documents.  Commissioner Fisher                                                                    
deferred to Ms. Thompson.                                                                                                       
                                                                                                                                
Ms.  Thompson replied  in the  affirmative, and  deferred to                                                                    
Mr. Stanker.                                                                                                                    
                                                                                                                                
3:34:52 PM                                                                                                                    
                                                                                                                                
MICHAEL   STANKER,   ATTORNEY,   DEPARTMENT  OF   LAW   (via                                                                    
teleconference),  stated  the  statute  did  not  explicitly                                                                    
mention the  storage or retention  of the  source documents,                                                                    
but  the source  documents were  considered as  part of  the                                                                    
application.                                                                                                                    
                                                                                                                                
Senator  von Imhof  wondered  whether  the noncompliant  and                                                                    
compliant  requirements  would   retain  a  social  security                                                                    
document   in  storage.   Mr.  Stanker   replied  that   the                                                                    
regulations under  Real ID would  take a copy of  the social                                                                    
security  card,  but Alaska  regulation  did  not allow  for                                                                    
scanning of the card-only verification.                                                                                         
                                                                                                                                
Co-Chair   MacKinnon  asked   for   confirmation  of   those                                                                    
comments.  Ms. Thompson  stated  that  social security  card                                                                    
would not be scanned, and only validated.                                                                                       
                                                                                                                                
Co-Chair MacKinnon wondered if there  would be a change. Ms.                                                                    
Thompson replied in the negative.                                                                                               
                                                                                                                                
Co-Chair MacKinnon surmised  that there would be  no copy of                                                                    
the social security card. Ms. Thompson agreed.                                                                                  
                                                                                                                                
Vice-Chair Bishop  wondered whether a  hazardous endorsement                                                                    
on   a    commercial   driver's   license    (CDL)   require                                                                    
fingerprints.   Ms.   Thompson   agreed  to   provide   that                                                                    
information.                                                                                                                    
                                                                                                                                
Co-Chair   MacKinnon    announced   that   the    bill   was                                                                    
controversial,  and Alaskans  expected their  privacy to  be                                                                    
honored.                                                                                                                        
                                                                                                                                
Co-Chair  MacKinnon  announced   that  amendments  were  due                                                                    
following day at 8am.                                                                                                           
                                                                                                                                
SB  34  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
ADJOURNMENT                                                                                                                   
3:39:00 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 3:38 p.m.                                                                                          
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects
HB 111 Work Draft version B.pdf SFIN 5/11/2017 9:00:00 AM
HB 111
HB 111 v B Sectional Analysis.pdf SFIN 5/11/2017 9:00:00 AM
HB 111
CS SB 34 v.T Explanation.pdf SFIN 5/11/2017 9:00:00 AM
SB 34
SB 34 CS SB 34 v.T.pdf SFIN 5/11/2017 9:00:00 AM
SB 34
SB 34 Air Force Letter - Real ID.pdf SFIN 5/11/2017 9:00:00 AM
SB 34
HB 111 Public Testimony Letters 4.pdf SFIN 5/11/2017 9:00:00 AM
HB 111