Legislature(1997 - 1998)

03/31/1998 01:36 PM Senate L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
         SENATE LABOR AND COMMERCE COMMITTEE                                   
                    March 31, 1998                                             
                      1:36 P.M.                                                
MEMBERS PRESENT                                                                
Senator Loren Leman, Chairman                                                  
Senator Tim Kelly                                                              
Senator Mike Miller                                                            
Senator Lyman Hoffman                                                          
MEMBERS ABSENT                                                                 
Senator Jerry Mackie, Vice-Chairman                                            
COMMITTEE CALENDAR                                                             
HOUSE BILL NO. 178                                                             
"An Act relating to letters of credit under the Uniform Commercial             
Code; and providing for an effective date."                                    
     - PASSED HB 178 OUT OF COMMITTEE                                          
SENATE BILL NO. 232                                                            
"An Act relating to electronic signatures, electronic records,                 
requirements for records, and the reproduction of public records."             
     - PASSED SB 232 OUT OF COMMITTEE                                          
CS FOR HOUSE BILL NO. 231(FIN)                                                 
"An Act relating to regulation of snowmobiles."                                
     - PASSED SCSCSHB 231(L&C) OUT OF COMMITTEE                                
PREVIOUS SENATE COMMITTEE ACTION                                               
HB 178 - See Labor and Commerce Committee minutes dated 3/26/98.               
SB 232 - No previous action to record.                                         
HB 231 - See Transportation minutes dated 3/19/98.                             
WITNESS REGISTER                                                               
Mr. Rich Vitale, Aide                                                          
Senator Sean Parnell                                                           
State Capitol Bldg.                                                            
Juneau, AK 99811-1182                                                          
POSITION STATEMENT: Commented on SB 232 for sponsor.                           
Mr. Andy Kline, Special Assistant                                              
Office of the Lieutenant Governor                                              
P.O. Box 110015                                                                
State Capitol Bldg.                                                            
Juneau, AK 99811-0015                                                          
POSITION STATEMENT: Commented on SB 232.                                       
Mr. Mark Boyer, Commissioner                                                   
Department of Administration                                                   
P.O. Box 110200                                                                
Juneau, AK 99811-0200                                                          
POSITION STATEMENT: Available for questions on SB 232.                         
Ms. Juanita Hensley, Chief                                                     
Driver Services                                                                
Division of Motor Vehicles                                                     
Department of Administration                                                   
P.O. Box 10200                                                                 
Juneau, AK 99811-0200                                                          
POSITION STATEMENT: Commented on SB 232.                                       
Mr. Charles McKee                                                              
P.O. Box 243053                                                                
Anchorage, AK 99524                                                            
POSITION STATEMENT: Commented on his own issues.                               
Mr. Michael Eastham                                                            
Snomads Snowmachine Club                                                       
P.O. Box 3646                                                                  
Homer, AK 99603                                                                
POSITION STATEMENT: Supported SB 232.                                          
Mr. Bill Eastham, President                                                    
Mat-Su Snowmushers                                                             
HC03Box 8286                                                                   
Palmer, AK 99645                                                               
POSITION STATEMENT: Supported SB 232.                                          
ACTION NARRATIVE                                                               
TAPE 98-18, SIDE A                                                             
Number 001                                                                     
        HB 178 - UNIFORM COMMERCIAL CODE:LETTERS OF CREDIT                     
CHAIRMAN LEMAN called the Senate Labor and Commerce Committee                  
meeting to order at 1:36 p.m. and announced HB 178 to be up for                
SENATOR KELLY moved to pass HB 178 from Committee with individual              
recommendations.  There were no objections and it was so ordered.              
         SB 232 - ELECTRONIC RECORDS; RECORD REQUIREMENTS                      
CHAIRMAN LEMAN announced SB 232 to be up for consideration.                    
MR. RICH VITALE, Aide to Senator Sean Parnell, sponsor, said                   
Senator Parnell introduced this legislation at the request of the              
Lieutenant Governor who is the Chairman of the Telecommunications              
Information Counsel, which Senator Parnell serves on.  Currently,              
two states, Washington and Utah, have adopted statutes to                      
standardize the practice of electronic signatures.  The legislation            
is pending in most other states.  SB 232 will help continue                    
Alaska's intrastate, interstate, and global economic growth by                 
providing a legal framework for use of electronic signature                    
Specifically, SB 232 establishes electronic signatures as a legal              
practice with the same standing as a standard signature.  This act             
allows the Lieutenant Governor's office or other state agencies to             
develop regulations for using electronic signatures by private or              
public entities and establishes criteria for electronic signature              
regulations.  Lastly, this act repeals some state agencies'                    
notarization requirements to better utilize the efficiencies of                
electronic signatures.  SB 232 is an important component to keeping            
Alaska competitive and efficient in both public and private                    
business practices.                                                            
MR. VITALE said on page 1, line 8, there is reference to penalty of            
unsworn falsification and that is a reference to AS 11.56.210.                 
CHAIRMAN LEMAN asked if there was a definition of electronic                   
MR. VITALE said he thought that would be part of the state                     
regulation.  There was an example in the back of their packet.                 
MR. ANDY KLINE, Office of the Lieutenant Governor, added that there            
is a definition within the bill that, as specifically as they                  
intend to, defines what an electronic signature means.  In a                   
statute that deals with technology, it's best to leave as much of              
the specific definitions out of the statute, leaving it to                     
regulations which can change and try to keep pace with the speed               
with which technology changes.  It's on page 4, line 3 of the bill.            
COMMISSIONER BOYER, Department of Administration, said he was                  
available to answer questions.                                                 
SENATOR KELLY asked Ms. Juanita Hensley, Chief, Drivers Services,              
Division of Motor Vehicles, how this would affect the Division of              
Motor Vehicles.                                                                
MS. HENSLEY answered that they feel this bill has a great potential            
to follow up with all the efficiencies the Division of Motor                   
Vehicles is trying to do to make DMV a more customer-friendly                  
agency.  Faxing is one method of electronic signature; issuing a               
PIN number is another.  Having the capability of issuing a digital             
driver's license and a digital image driver's license will allow               
them to replace lost licenses, for instance, within minutes instead            
of days eliminating the need to send paperwork through the mail.               
SENATOR KELLY asked if lines at DMV were getting shorter.                      
MS. HENSLEY replied that it's going to take time to make all the               
changes they want to make to shorten the lines.  "We have an                   
increased population and everything they do is basically keeping up            
with them moving in.  There are lots of things we can do like                  
opening up express offices."                                                   
SENATOR KELLY said he heard recently that while Alaska is having a             
population growth, we are also experiencing an outmigration. More              
children are being born here.                                                  
MS. HENSLEY added in 1996, there were 629,000 registered vehicles              
and in 1997 there were 658,000.  Residents are buying more cars.               
Number 160                                                                     
MR. CHARLES MCKEE commented on SB 232.                                         
SENATOR KELLY moved to pass SB 232 from Committee with individual              
recommendations.  There were no objections and it was so ordered.              
                HB 231 - REGULATION OF SNOWMOBILES                             
CHAIRMAN LEMAN announced HB 231 to be up for consideration.                    
MR. ED GRASSER, Staff to Representative Beverly Masek, sponsor,                
said she worked in conjunction with the State Snowmachine                      
Association and several other snowmobile clubs as well as a diverse            
group of businesses and organizations.  The requirement to register            
snowmachines has been on the books since 1968.  This bill allows               
registration at the point of sale of snowmachines, rather than                 
buying a snowmachine and waiting in line at DMV to register it as              
required now.                                                                  
HB 231 will also provide a better accounting of how many                       
snowmachines there are in the State through the registration                   
process which is used by the National Recreational Trails Fund as              
a way to count machines for making grants to various states for                
trail funds.  Law enforcement officials support this bill, because             
they feel having snowmachines registered will allow them a better              
opportunity to track and find a stolen machine.                                
He said Representative Masek thought that this would also be a good            
first step towards developing winter tourism potential in Alaska               
because of the trails money that would come to the State through               
the National Recreational Trails Fund.                                         
MR. GRASSER said HB 231 does not require dealers to undertake this             
program, but if they do, they have to do the registration process              
when they sell a snowmachine.  Over 51 organizations and                       
businesses, including banks, support this bill.                                
SENATOR KELLY looked at the fiscal note and asked if it was true               
that it didn't pay for itself.                                                 
MR. GRASSER said that it's just the opposite; the receipts are                 
$300,000 in the fourth or fifth year and cost is only $60,000 or               
SENATOR MILLER said he had the same concern until he looked closer             
at the wording which was not proper.                                           
MS. HENSLEY explained the fiscal note asked for operating expenses             
in the first year of $76.5 and $49.0 for FY'00.  Then it goes up to            
$60.1 and $69.7 in FY'03.  There should be revenues coming in of               
$100,000 for the first two years, the reason being that they are               
estimating having 10,000 snowmobiles registered for each of the                
first two years, and then the third year, they would have 10,000               
new ones and renewals because they will issue bi-annual                        
registrations ($200,000).  It goes up from there. The Division is              
asking for one Motor Vehicle Rep III to be used basically for the              
negotiations and the third party relationships with training the               
dealers and auditing their work, travel, the contractual forms and             
tabs ($3,000 for the first year), computer programing ($15,000),               
and one computer workstation. The contractual figure over the other            
years is $18,000 (which is $15,000 and $3,000 added together).  The            
following year it drops down to $3,000 just for the cost of the                
forms and then it goes up to $14,000 which is for all the forms and            
tabs as the registrations increase.                                            
Number 299                                                                     
SENATOR HOFFMAN said many people who own snowmachines probably                 
don't have proof of ownership if it's five or six years old.  He               
asked how people could comply if they can't show ownership.                    
MS. HENSLEY said this is not a vehicle that is subject to the                  
titling.  They would be able to register snowmachines on the bills             
of sale.  They are talking about new and used at the point of sale,            
plus any others people own.  They are required to register their               
snowmachines now, but not many people have.                                    
SENATOR KELLY asked if it was mandatory that all new dealer sales              
have to be registered.                                                         
MS. HENSLEY said that is correct.                                              
SENATOR KELLY asked what incentive we are giving to dealers to be              
the agent for DMV.                                                             
MS. HENSLEY answered that DMV would not compensate the dealers for             
registering the vehicles for them.  They are choosing to do this               
now as a service for their customers.  It allows the Division of               
Parks to apply for all the federal trail monies that they are                  
eligible for by showing the number of registered snowmachines in               
the State.                                                                     
SENATOR HOFFMAN asked what the penalties were for not registering              
a snowmachine.                                                                 
MS. HENSLEY answered that it is a class B misdemeanor.  Anything in            
Title 28 is a misdemeanor unless it is specified otherwise.                    
CHAIRMAN LEMAN said they should switch it to a violation so there              
could be mail-in-bail.                                                         
MS. HENSLEY said she would have no objection to that as long as                
they could keep regular passenger cars with the same penalty.                  
SENATOR MILLER asked if there had been any prosecutions.                       
MS. HENSLEY answered that she hadn't seen any.                                 
SENATOR KELLY asked if there had ever been a ticket.                           
MS. HENSLEY answered yes, the Division of Parks' park rangers issue            
citations for failure to register snowmachines.  However, the                  
person gets the opportunity to get it registered.  If a snowmachine            
is operated on parks land or in a contest, they automatically have             
to be registered.                                                              
CHAIRMAN LEMAN asked if someone wants to register to come into                 
compliance with the law, should they say the Department "may"                  
require proof of ownership, because there may be times when there              
are other ways to get at it.                                                   
MS. HENSLEY said she didn't have a problem with that.                          
SENATOR KELLY asked what kind of federal money we are talking about            
if we increase our registrations.                                              
MR. GRASSER answered that we currently get about $165,000 in trail             
funds from the National Recreational Trail Fund which is derived               
from an 8 percent tax on gasoline.  According to his calculations,             
we could get an additional $30,000 - $50,000 per year for trails if            
the machines were registered.  The feds use registrations rather               
than bills of sale or sales records for determining the numbers of             
machines in the State.                                                         
MS. HENSLEY said it is estimated there are approximately 70,000                
snowmachines in the State and only 14,000 are registered.                      
CHAIRMAN LEMAN considered changing nonregistration to a violation              
and having an amnesty period so people could get them registered               
and bring in funds.                                                            
SENATOR KELLY said he thought that might not be a bad idea and                 
suggested no-cost for a 90-day period.                                         
MR. GRASSER said that was considered among the dealers who mostly              
support this legislation.  However, he thought the real reason most            
people opted not to register their snowmachines was because the                
line at DMV was two-hours long.  He thought the improvements DMV is            
doing with customer service and registering new machines as they               
are sold would eventually lead to having most of them registered.              
SENATOR MILLER said he thought there was the intent to register the            
old machines, too.  Changing the violation to a $300 fine, would be            
an incentive to have a registration.                                           
CHAIRMAN LEMAN thought enforcement would be easier if the penalty              
were changed to a violation with a mail-in fine.                               
MR. GRASSER said he didn't have any problem with that.                         
MR. MICHAEL EASTHAM, Snomads Snowmachine Club, said it's a $50 fine            
if you fail to register your snowmachine if you're caught driving              
it on public lands.  In 1996 it was estimated that 6,000 to 8,000              
snowmachines were sold annually which would indicate the State is              
losing quite a few dollars.  His club feels this is a very positive            
Number 485                                                                     
MR. BILL EASTHAM, President, Mat-Su Motormushers, supported SB 232             
and he agreed with all the testimony.                                          
CHAIRMAN LEMAN asked why they wanted to give the Department                    
permission to issue registration to a snowmobile owned by the                  
United States without the payment of a fee.                                    
MR. GRASSER answered that it was determined in House Judiciary that            
the United States Government could not be charged for a                        
SENATOR KELLY wanted to know what the Division thought of Senator              
Halford's amendment which says, "A snowmobile may be registered for            
two, four, or six years."                                                      
MS. HENSLEY replied they have no objections to that.                           
SENATOR KELLY moved to adopt the amendment.  There were no                     
objections and it was so ordered.                                              
SENATOR KELLY asked how a buyer would register a vehicle if they               
bought their machine through the mail.                                         
MS. HENSLEY answered that the dealer could register it on behalf of            
the new owner.  Some car dealers do this as well as titling cars.              
SENATOR KELLY said the vendors for fishing and hunting licenses get            
a couple of dollars for each license and asked if they thought                 
about trying to do that as a dealer incentive.                                 
MS. HENSLEY answered that they hadn't had problems with dealers                
being willing to negotiate with them.  The problem they have is                
finding a feasible way to do it.  The Department of                            
Administration's Information Technology Group just negotiated a                
contract with an Internet provider to allow dealers with an e-mail             
address the capability of hooking up with her.  Most of them                   
already have Internet access.                                                  
She noted that the penalties under Title 28 are under AS 28.40.050             
and say anything in Title 28 is a misdemeanor unless it's specified            
as an infraction or felony.  The penalty is $500 or imprisonment of            
not more than 90 days or both.  The $50 Michael Eastham mentioned              
is the bail the court has set for failure to register a vehicle.               
SENATOR KELLY asked if it was the same penalty if you fail to                  
register your auto.                                                            
MS. HENSLEY answered, "Yes."                                                   
CHAIRMAN LEMAN said he viewed this a little differently.  He                   
thought a penalty of $50 would be incentive for someone to                     
register, but he didn't know about it being a misdemeanor.                     
SENATOR HOFFMAN asked what the Department would do if this becomes             
law to inform the public about registering vehicles.                           
MS. HENSLEY said she didn't put anything in the fiscal note to do              
a full-blown public education campaign which can be quite                      
expensive.  They hoped the snowmobile dealers and the Division of              
Parks would assist them in getting information out to the public.              
SENATOR KELLY asked if ATVs had the same registration requirements.            
MS. HENSLEY answered, "No."                                                    
CHAIRMAN LEMAN asked what the reason was for that.                             
MS. HENSLEY answered that she didn't know.                                     
MR. GRASSER added that a law was passed in 1968, under Title 5,                
dealing strictly with snow vehicles.  In 1968 there weren't a lot              
of four-wheelers running around.  He didn't know who promulgated               
registering snowmobiles in 1968.                                               
SENATOR KELLY asked if these are known as snowmobiles or                       
MS. HENSLEY answered that she had heard them called both.                      
MR. GRASSER said all the literature they have from the clubs,                  
associations, and dealers call them snowmobiles.                               
CHAIRMAN LEMAN moved on page 2, line 12 to delete "shall" and                  
insert "may."  There were no objections and it was so ordered.                 
TAPE 98-18, SIDE B                                                             
CHAIRMAN LEMAN said they would hold the bill for a new fiscal note             
and clarified that he wanted nonregistration of snowmobiles to                 
become a violation, a penalty up to $300.  He also thought more                
people could write citations than could write misdemeanors.                    
MS. HENSLEY said it required a peace officer to issue citations.               
She said it would be simple to add under Section 1, lines 5 - 8                
something like the penalty is subject to AS 28.40.050(c).  That way            
it won't affect the other chapters dealing with registrations of               
regular automobiles.                                                           
SENATOR HOFFMAN moved that as a conceptual amendment. There were no            
objections and it was so ordered.                                              
SENATOR KELLY moved to pass SCSHB 231(L&C) from Committee with                 
individual recommendations.  There were no objections and it was so            
CHAIRMAN LEMAN adjourned the meeting at 2:25 p.m.                              

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