Legislature(1997 - 1998)
03/31/1998 01:36 PM L&C
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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 consideration. 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 commerce. 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 signature. 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 so. 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 bill. 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 registration. 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 snowmachines. 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 ordered. CHAIRMAN LEMAN adjourned the meeting at 2:25 p.m.