Legislature(1995 - 1996)

03/19/1996 01:33 PM TRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                     SENATE TRANSPORTATION                                     
                         March 19, 1996                                        
                           1:33 p.m.                                           
  MEMBERS PRESENT                                                              
 Senator Steve Rieger, Chairman                                                
 Senator Robin Taylor, Vice Chair                                              
 Senator Lyda Green                                                            
 Senator Al Adams                                                              
  MEMBERS ABSENT                                                               
 Senator Georgianna Lincoln                                                    
 COMMITTEE CALENDAR                                                            
 CS FOR HOUSE BILL NO. 210(STA) am                                             
 "An Act relating to issuance of motor vehicle registrations and               
 titles, and to licenses and permits to operate a motor vehicle."              
  PREVIOUS SENATE ACTION                                                       
 HB 210 - No previous action to record.                                        
  WITNESS REGISTER                                                             
 Representative Al Vezey                                                       
 State Capitol                                                                 
 Juneau, Alaska 99801-1182                                                     
 POSITION STATEMENT:  Prime sponsor of HB 210.                                 
 Joe Ryan, Staff                                                               
 Representative Al Vezey                                                       
 State Capitol                                                                 
 Juneau, Alaska 99801-1182                                                     
 POSITION STATEMENT:  Answered questions.                                      
 Steve Findsen, Vice-President                                                 
 Knightwatch Security Services                                                 
 PO Box 33246                                                                  
 Juneau, Alaska                                                                
 POSITION STATEMENT:  Supported HB 210.                                        
 Juanita Hensley, Chief                                                        
 Driver Services                                                               
 Division of Motor Vehicles                                                    
 Department of Public Safety                                                   
 PO Box 20020                                                                  
 Juneau, Alaska 99811-0020                                                     
 POSITION STATEMENT:  Discussed HB 210.                                        
 Anne Carpeneti, Assistant Attorney General                                    
 Criminal Division                                                             
 Department of Law                                                             
 PO Box 110300                                                                 
 Juneau, Alaska 99811-0300                                                     
 POSITION STATEMENT:  Answered questions.                                      
  ACTION NARRATIVE                                                             
 TAPE 96-6, SIDE A                                                             
         HB 210 PRIVATE MOTOR VEHICLE LICENSING/TESTING                       
 CHAIRMAN RIEGER called the Senate Transportation meeting to order             
 at 1:33 p.m. and introduced  HB 210  as the only order of business.           
 Number 014                                                                    
 REPRESENTATIVE VEZEY, Prime Sponsor, explained that HB 210 would              
 provide a mechanism to allow and encourage Alaska to place a                  
 government service, currently performed in house, in the private              
 sector.  Currently, there are some private entities in Alaska who             
 issue motor vehicle tags and registrations.  HB 210 merely provides           
 a structure to allow services to be contracted.  The bill                     
 establishes the rights and obligations of Alaska and the                      
 contracting party with regards to the expectations of each and the            
 grounds for termination of the contract.  Representative Vezey                
 pointed out that an earlier version of HB 210 contained more                  
 grounds for contract termination than the version before the                  
 committee today; some of the discretionary areas were taken out               
 because the Division of Motor Vehicles (DMV) did not want that                
 authority.  HB 210 would not cost Alaska anything, the cost of the            
 privatization program is born by the contractor.  The contractor              
 also pays 100 percent of the mandated fees to the state.                      
 Representative Vezey said that the contractor will determine the              
 charge to the customer.                                                       
 Number 059                                                                    
 SENATOR GREEN asked if it was assumed that there would be savings             
 to the state at some point.  REPRESENTATIVE VEZEY replied no.  HB
 210 does not address the DMV budget.  Representative Vezey believed           
 that any savings the state received would be a result of the                  
 receipts from the fee structure without any state labor involved.             
 In response to Senator Green, REPRESENTATIVE VEZEY hesitated to say           
 that a revenue increase could be projected in five or six years               
 because HB 210 does not mandate this.                                         
 SENATOR TAYLOR asked why the entire contract was placed in the                
 bill.  REPRESENTATIVE VEZEY explained that there has been poor                
 success in achieving privatization in Alaska.  If this does not               
 work, then the administration would be forced to return to the                
 legislature to explain why this did not work.  The information                
 learned from this would hopefully be utilized in other areas.                 
 SENATOR ADAMS inquired as to why a three year contract was chosen.            
 REPRESENTATIVE VEZEY believed that three years was drawn from other           
 privatization programs in other states.  The DMV is comfortable               
 with three years as well as the potential users.                              
 Number 110                                                                    
 SENATOR ADAMS did not see a definition for "in a professional                 
 manner" in the bill; is there one?  REPRESENTATIVE VEZEY did not              
 believe that there is a statutory definition.  Representative Vezey           
 said that the bill attempts to provide the department the ability             
 to require that the contractors exercise professional standards.              
 If the department feels the need to go through the appeals process            
 over professional standards, then the department should be able to            
 do so.                                                                        
 CHAIRMAN RIEGER asked if HB 210 is primarily oriented toward                  
 licensing heavy equipment and commercial vehicles or private                  
 passenger cars.  REPRESENTATIVE VEZEY believed that commercial                
 users would be the first to take advantage of HB 210.  HB 210 is              
 set up with the following different types of contracts:  the                  
 issuing of driver's licenses, the issuing of tags, registration and           
 license plates or any combination of those three.                             
 CHAIRMAN RIEGER asked if the examiner function would be for private           
 passenger cars or commercial vehicles.  REPRESENTATIVE VEZEY said             
 that HB 210 does not contain an authorization for CDLs.                       
 In response to Senator Taylor, REPRESENTATIVE VEZEY explained that            
 the authorization for CDLs was not included in HB 210 because that            
 created a technical question with regard to federal regulations               
 governing CDLs.  Representative Vezey did believe CDLs should be              
 Number 157                                                                    
 SENATOR TAYLOR expressed concern with the civil immunity for                  
 liability provision on page 18.  REPRESENTATIVE VEZEY said that               
 HB 210 establishes a gross negligence standard of liability.  This            
 would create a level playing field between the liability that a               
 state employee would have and a private sector employee.  The state           
 is not liable for anything that a DMV employee does.                          
 CHAIRMAN RIEGER was worried that an agent, registrar or examiner              
 could set their own fee.  Perhaps, someone having difficulty in               
 obtaining a license might go to a "license shark" who has a high              
 fee.  He asked if there had been debate in other committees                   
 regarding the possibility of the department or the division being             
 allowed to approve the fees.  REPRESENTATIVE VEZEY indicated that             
 was the most debated aspect of HB 210.  The philosophy behind                 
 allowing the private contractor to establish his/her own fee is               
 that the customer does not have to go this route.  Furthermore, a             
 high degree of accuracy and accountability is required from the               
 agents, examiners, and registrars.  Representative Vezey believed             
 it best to allow the market determine the fee structure.                      
 Number 199                                                                    
 JOE RYAN, Staff to Representative Vezey, explained that the Federal           
 Aviation Act of 1958 designated pilot examiners who give tests from           
 private pilots to 747 pilots and these examiners establish a fee.             
 The agency as in HB 210 would reserve the right to retest someone.            
 CHAIRMAN RIEGER inquired as to where that was located in the bill.            
 JOE RYAN explained that since the agency gives the authority to               
 test by inference the agency has the authority to test or review              
 the private contractors.  If there is suspicion of a "license                 
 shark" contractor, the agency could check that.  Also the number of           
 people being handled by an examiner could indicate the need to                
 review an examiner.                                                           
 REPRESENTATIVE VEZEY informed the committee that HB 210 was                   
 modelled after California's privatization statute and the Federal             
 Aviation Association's regulations regarding licensing and                    
 registration of aircraft pilots.                                              
 SENATOR ADAMS inquired as to how agents could be prevented from               
 misusing their powers.  For example, registering and relicensing              
 stolen vehicles.  REPRESENTATIVE VEZEY pointed out that HB 210                
 requires a high standard of accuracy and the ultimate penalty is              
 the revocation of the license.  Any criminal activity would be a              
 separate offense.                                                             
 Number 242                                                                    
 STEVE FINDSEN, Vice-President of Knightwatch Security Services,               
 believed HB 210 would be an opportunity for the private sector to             
 provide a valuable service while saving the state money.  Mr.                 
 Findsen envisioned that the private contractors could have more               
 convenient hours; he did not however, envision price gouging.                 
 Furthermore, this should be a money making opportunity for the                
 private sector.  He noted that the fee for the service would depend           
 upon the volume of people served, the type of service provided, and           
 the expertise and professionalism with which the public was met.              
 Mr. Findsen said that the private sector would be involved to make            
 a profit and therefore, would be as efficient as possible.  While,            
 state workers do not have the incentive to work as fast.  Mr.                 
 Findsen pointed out that HB 210 requires 95 percent accuracy and              
 the private contractor could be subject to audits at any time.  He            
 felt those stipulations were appropriate and necessary.  Perhaps,             
 the insurance language should be stronger.  He suggested that the             
 private contractor should be required to put up an honesty bond.              
 Mr. Findsen supported HB 210.                                                 
 SENATOR ADAMS commented that he did not see any savings from                  
 HB 210, no employees are eliminated from the DMV.  STEVE FINDSEN              
 said that he did not know that HB 210 would save Alaska money, but            
 the bill will provide a service to the public that is not currently           
 provided.  The burden on the local DMV would be decreased.                    
 Number 325                                                                    
 JUANITA HENSLEY, Drivers Services with the Division of Motor                  
 Vehicles, requested that Anne Carpeneti from the Department of Law            
 also come to the table in order to answer any legal questions.  Ms.           
 Hensley informed the committee that contracting, using commissioned           
 agents, and vendors is not new to the DMV.  Commissioned agents               
 were utilized before statehood.  In 1975, when the DMV was                    
 developed as it currently exists, the DMV was fairly exclusive to             
 contract and commissioned agents.  Currently, 13 commissioned                 
 agents who are paid a fee are being used.  These vendors are paid             
 15 percent of the motor vehicle documents they process and 50                 
 percent of any of the drivers license work they process.  Ms.                 
 Hensley informed the committee that Alaska paid the 13 commissioned           
 agents a total of $174,516 last year.  There are also 20 I/M                  
 vendors who are contracted to process vehicle registration; the I/M           
 vendors are working well.  Over a years time, 13 percent of the               
 renewal registrations were done at the I/M stations which decreases           
 the stress on the DMV.  Ms. Hensley reiterated that contracting is            
 not new to the DMV.  She was then available for questions.                    
 SENATOR ADAMS asked if a contract agent's price would be more or              
 less.  JUANITA HENSLEY clarified that contract agents are only                
 utilized when the agent would cost less than opening a facility in            
 an area.  Currently, the contract agents charge the fee established           
 in statute and then the agent is paid 50 percent of the fee that is           
 collected for driver's license work and 15 percent of the fee for             
 registration work.  Of the 13 commissioned agents, only the                   
 Petersburg agent processes only registration work and receives 15             
 percent of the funds collected for the DMV.  The 20 I/M vendors did           
 not cost the state any additional funds, except for personnel to              
 audit the vendors' programs and work.                                         
 SENATOR ADAMS reiterated that he has yet to see any savings as                
 noted in the fiscal note.  There would not be a need for state                
 employees in areas where contract agents would be utilized; will              
 that be considered and produce another fiscal note.  JUANITA                  
 HENSLEY viewed HB 210 as allowing an expansion of the services                
 provided, not an eliminate state employees.  HB 210 would alleviate           
 some of the DMV's workload by utilizing these contract agents or              
 Number 397                                                                    
 SENATOR ADAMS asked Ms. Carpeneti if she agreed with the three year           
 provision in the bill.                                                        
 ANNE CARPENETI, Assistant Attorney General for the Department of              
 Law, informed the committee that she had not done a lot of civil              
 work and was unfamiliar with contracts.  However, she believed it             
 very unusual to place contract provisions in statute.  A contract             
 is a negotiation between two parties and has unique features.  If             
 there was a point at which the provisions in statute did not work,            
 then the question would have to come before the legislature to be             
 revised rather than through negotiations between the parties.  Ms.            
 Carpeneti said that she had concerns about placing contract                   
 provisions in statutory form.  Certainly, guidelines to be covered            
 by a contract could be established.  Ms. Carpeneti did not believe            
 the particulars including the three year provision to be practical.           
 Ms. Carpeneti referred to page 15, line 26 when stating that she              
 had questions about the termination provisions.  The contract                 
 provides for termination by giving written notice of 60 days while            
 no time period is stated in the provision before the contract.                
 What about an emergency?  Furthermore, the immunity provision                 
 requires that the people entering into these contracts have                   
 insurance while those injured by their negligent acts could not               
 bring action to recover.                                                      
 CHAIRMAN RIEGER commented that contracts are placed in statute at             
 times when a document is relied upon against liability.  ANNE                 
 CARPENETI said that there are good reasons for limiting liability             
 and subsection (b) of the bill does limit the state's liability for           
 acts or admissions of the third party agent.  This is a policy                
 question for the legislature.  Ms. Carpeneti did not believe that             
 it was consistent to require that the contract agent carry                    
 insurance, but not make them liable for bad or negligent actions.             
 Number 438                                                                    
 SENATOR GREEN asked if the complex network of forms would be                  
 replicated in each local agency and who would bear the cost?                  
 JUANITA HENSLEY said that the contract agent would be required to             
 bear the cost of all the necessary equipment and employee process             
 to be on the department's system.                                             
 CHAIRMAN RIEGER directed everyone to page 2, line 10 and asked if             
 that was standard language.  Would there be times when a                      
 corporation would be the registrar and any employee could do the              
 work?  ANNE CARPENETI did not know.                                           
 SENATOR ADAMS interjected that an individual can be a corporation.            
 He pointed out that this had been discussed on the floor with                 
 regards to private airports.                                                  
 SENATOR TAYLOR believed that the language seemed to be reaching               
 towards an individual person, a human being.  The language may not            
 be wise if privatization is the goal.                                         
 CHAIRMAN RIEGER said that he would check with the sponsor on that             
 question.  He directed everyone to page 2, line 31 when asking if             
 the word "shall" should be "may."  Would the language "shall"                 
 create an undue burden on the department?  JUANITA HENSLEY said               
 that "shall" could be changed to "may."  Ms. Hensley clarified that           
 HB 210 is Representative Vezey's bill and the department is neutral           
 on this bill.                                                                 
 Number 483                                                                    
 CHAIRMAN RIEGER referred to page 3, lines 19-21 when asking if this           
 would be a constitutional problem.  Can one be required to provide            
 information regarding a criminal complaint against the person?                
 ANNE CARPENETI believed that criminal charges that are filed in               
 criminal cases are public information.  CHAIRMAN RIEGER assumed               
 that as an agent, the agent would have to bear witness against                
 him/herself if the state has filed a criminal charge.  Chairman               
 Rieger clarified that he was questioning the wording.  ANNE                   
 CARPENETI agreed that this language should be rewritten.                      
 CHAIRMAN RIEGER noted that one would be considered under the                  
 influence commercially at .04 while non commercially it would be              
 .10.  He inquired as to which definition of "under the influence"             
 on page 5, line 8, would be used.  ANNE CARPENETI said that the               
 standard should be specified.                                                 
 JUANITA HENSLEY explained that HB 210 would allow the DMV to                  
 contract with a trucking firm to do CDL testing, but the federal              
 guidelines would be followed.  The bill requires that an examiner             
 be licensed in the class of vehicle for which he/she gives tests.             
 Therefore, a commercial examiner with a Class A CDL would be                  
 subject to the .04 driving under the influence law.  A passenger              
 car examiner would be subject to .10 BAC level.  Ms. Hensley                  
 clarified that a CDL is a commercial driver's license.  In response           
 to Chairman Rieger, Ms. Hensley said that a taxi driver is not a              
 CDL licensee.  The vehicle must be registered as a commercial                 
 vehicle, but a taxi driver is not required to have a CDL.  Ms.                
 Hensley informed the committee that a vehicle weighing 26,000                 
 pounds or more, a vehicle carrying hazardous materials or                     
 passengers require a CDL.  A CDL is also required when there are 15           
 or more passengers.                                                           
 Number 520                                                                    
 ANNE CARPENETI said that she and Ms. Hensley agreed that a blood              
 alcohol level should be stated in the bill.  CHAIRMAN RIEGER                  
 agreed.  SENATOR TAYLOR pointed out that this would be a violation            
 of law anyway; it is not necessary to restate current law.                    
 SENATOR TAYLOR asked why under HB 210 only fleet operators are                
 allowed to conduct CDLs other than the department.  JUANITA HENSLEY           
 explained that HB 210 would allow the department to contract with             
 individual persons who meet the requirements to administer CDL                
 testing.  The CDL federal requirements only allow someone to                  
 administer the skills test if the department did the third party              
 testing for CDLs.  The examiner or third party tester must be an              
 employee of the company for which he/she is administering the test.           
 That examiner can only administer tests to employees of the company           
 for which he/she works.  According to federal law, an individual              
 person cannot be a third party tester to test other CDL operators.            
 SENATOR TAYLOR asked how an individual would change status merely             
 because they are employed by a trucking company.  JUANITA HENSLEY             
 specified that the company is the third party tester.  SENATOR                
 TAYLOR surmised then that a company can do the examination of its             
 own employees for CDL purposes, but that company cannot administer            
 an exam or give CDLs to other persons not in the company.  JUANITA            
 HENSLEY said that was a correct assessment.                                   
 SENATOR TAYLOR asked if there was a manner in which HB 210 could              
 allow these third party agents to administer CDLs.  JUANITA HENSLEY           
 said that would violate federal law.  Any violation of the                    
 Commercial Driver's License Safety Act, would result in a loss of             
 5-10 percent of the highway funds.                                            
 SENATOR ADAMS seemed to think that only applied to CDLs on roads,             
 not off road testing.  JUANITA HENSLEY explained that anyone                  
 operating a commercial vehicle on a roadway is required to have a             
 CDL.  The FHWA granted Alaska a waiver to issue CDLs with an off              
 systems restriction; such persons are only allowed to drive in                
 specific areas and not on the state maintained roadway.                       
 SENATOR TAYLOR could not believe that federal law would allow a               
 trucking company to license all of its drivers, but not allow the             
 state to authorize a third party contract for administering the               
 same exams.                                                                   
 Number 578                                                                    
 CHAIRMAN RIEGER asked if this issue had been explored; can it only            
 be done in house and not for anyone else?  JUANITA HENSLEY said               
 that the federal law is that explicit.  The state can contract with           
 a third party tester who can only administer the test for his/her             
 SENATOR TAYLOR asked if that is why all the CDL personnel must be             
 employees of the department.  JUANITA HENSLEY replied yes, unless             
 when using a commissioned agent.                                              
 CHAIRMAN RIEGER asked if a commissioned agent meant that the agent            
 could not charge the customer an additional amount.  JUANITA                  
 HENSLEY explained that a commissioned agent would receive 50                  
 percent of everything.                                                        
 TAPE 96-6, SIDE B                                                             
 Ms. Hensley said that a contract agent would have to meet the same            
 requirements, but the contract agent would not be paid for their              
 services by the department.  In response to Chairman Rieger, Ms.              
 Hensley explained that the commissioned agents were grandfathered             
 in long ago and that has not been expanded.                                   
 SENATOR TAYLOR expressed interest in determining a way around that.           
 He could not believe that Greyline could administer and issue CDLs            
 to their employees for free while citizens in Ketchikan have to               
 raise the money to travel to Juneau to get the same license.                  
 Number 578                                                                    
 JUANITA HENSLEY said that the department would write to the FHWA to           
 determine if there is an additional waiver that would allow CDL               
 contracting in certain areas in Alaska.                                       
 SENATOR TAYLOR was not sure as to why it is necessary to specify              
 the type of advertising for these people.                                     
 CHAIRMAN RIEGER asked Representative Vezey and Joe Ryan to return             
 to the table for more questions.  Chairman Rieger noted that Legal            
 Services had said that "individual" did mean a natural person; has            
 that been discussed in other committees?  REPRESENTATIVE VEZEY said           
 that had been discussed and asked Mr. Ryan to explain.                        
 JOE RYAN explained that the bill wanted to allow non profits to do            
 this to raise funds.  Legislative drafting determined that                    
 "individual" would encompass corporations and people.  Mr. Ryan               
 clarified that the desire was to have a comprehensive term that               
 allowed companies, non profits, and individuals.                              
 CHAIRMAN RIEGER asked if there would be any objection to changing             
 "shall" to "may" on page 2, line 30.  JOE RYAN pointed out that               
 line 18 specifies that the department has the discretion to choose            
 who would be licensed and who would not be licensed.                          
 REPRESENTATIVE VEZEY did not believe that to be a large issue.                
 CHAIRMAN RIEGER inquired as to what was meant by the language on              
 page 3, lines 17-18.  REPRESENTATIVE VEZEY explained that there are           
 DMV policies and federal requirements regarding the continuing                
 education of licensers, examiners, and agents.  The bill would                
 allow the department to require that agents, registrars, and                  
 examiners maintain current professional training requirements.                
 Representative Vezey noted that there had been much discussion                
 about that paragraph; the department and he are satisfied with the            
 language.  Representative Vezey pointed out that a lot of                     
 discretion had been given to the department to establish a                    
 professional standard.                                                        
 Number 519                                                                    
 CHAIRMAN RIEGER reiterated his concern about providing information            
 regarding a criminal matter.  REPRESENTATIVE VEZEY stated that the            
 purpose was that upon request an applicant would have to provide              
 information to the department regarding criminal complaints.  This            
 information must be disclosed to the state although the information           
 may not be valid for criminal or civil prosecution.  Representative           
 Vezey did not have a problem with relaxing the standards.                     
 SENATOR TAYLOR noted that some of the provisions for the screening            
 for police officers and troopers required waivers for various                 
 constitutional rights.  Requiring the criminal information of these           
 people may violate the Fifth Amendment Rights, but there may be a             
 policy reason to do so.                                                       
 CHAIRMAN RIEGER saw the problem being that the person would respond           
 to a complaint which could merely be from someone who dislikes the            
 examiner.  REPRESENTATIVE VEZEY said that the bill places the state           
 in a supervisory role.                                                        
 CHAIRMAN RIEGER asked if Representative Vezey had a specific blood            
 alcohol level in mind.  REPRESENTATIVE VEZEY said that the federal            
 standard had been adopted for examiners.  The BAC for a passenger             
 vehicle for DWI is .10 and Representative Vezey believed that                 
 everyone would agree that to be too high for a professional                   
 examiner.  Someone holding a commercial driver's licenses no matter           
 the type of vehicle is considered intoxicated at .04 and with a BAC           
 of .01 he/she become ineligible to operate a vehicle for 24 hours.            
 HB 210 requires that these professionals should not partake in                
 intoxicating substances for at least eight hours before work.                 
 Number 471                                                                    
 CHAIRMAN RIEGER asked if Representative Vezey would object by                 
 reference in the bill to the federal CDL standard.  REPRESENTATIVE            
 VEZEY said that the law would remain the same.  CHAIRMAN RIEGER was           
 not sure which standard would apply to a person administering a               
 test in a private passenger car.  REPRESENTATIVE VEZEY clarified              
 that it would depend upon whether the person held a CDL.  A                   
 commercial driver's license is not required in order to be an                 
 examiner in a private vehicle, or one that weighs less than 26,000            
 gross vehicle weight.  Currently, a person holding a CDL is subject           
 to the .04 standard of intoxication and at .01 the person would not           
 be allowed to drive for 24 hours.  Representative Vezey did not               
 have a problem with adopting the CDL standard.  The intent was to             
 create a high standard.                                                       
 SENATOR GREEN felt that this discussion regarding how much alcohol            
 a person could consume before administering a driver's test was               
 ridiculous.  Senator Green stressed that one should not be allowed            
 to drink at all and administer a test.  REPRESENTATIVE VEZEY                  
 assumed that people would not administer a test while intoxicated.            
 This bill merely incorporates the federal standard for pilots;                
 eight hours prior to flight time no alcohol may be consumed.                  
 SENATOR GREEN pointed out that the bill allows an examiner to drink           
 during work hours up to a BAC of .04.  REPRESENTATIVE VEZEY said              
 no.  SENATOR GREEN said that is what the discussion is about.                 
 CHAIRMAN RIEGER agreed.  He posed the situation in which an                   
 examiner who was drinking heavily the night before and comes to               
 work with a BAC of .06, or enough that someone being tested would             
 Number 440                                                                    
 JOE RYAN stated that the "8 hours before" and the "under the                  
 influence" language addresses what is being discussed.  If a pilot            
 drinks within eight hours before a flight or is still under the               
 influence the next morning, he/she cannot fly or drive as is the              
 case in HB 210.  Mr. Ryan noted that one is under the influence               
 when taking the first drink.                                                  
 CHAIRMAN RIEGER inquired as to how strongly the sponsor felt about            
 having the contract in the bill.  REPRESENTATIVE VEZEY said that              
 there are no great examples of privatization in Alaska; this is a             
 small first step.  Representative Vezey hoped that the legislature            
 would keep a close eye on this.  If this does not perform within 12           
 or 24 months, then the program should be reviewed.  Representative            
 Vezey emphasized that historically, agencies take steps in order to           
 ensure that privatization does not work which is why the contract             
 is in statute.                                                                
 CHAIRMAN RIEGER asked if Representative Vezey held that view in               
 light of the agency's testimony that a lot of this is already                 
 occurring.  REPRESENTATIVE VEZEY said that this is an area in which           
 other states are moving in this direction.  In general,                       
 Representative Vezey's experience has been that state agencies are            
 very good at structuring their efforts to ensure that privatized              
 services do not work.                                                         
 CHAIRMAN RIEGER said that would be reviewed in the mark up of the             
 bill.  He believed that placing the contract in the bill may                  
 dramatically inhibit the success of the privatization.                        
 REPRESENTATIVE VEZEY believed that placing the contract in                    
 regulations would decrease the possibility of success.  In                    
 Representative Vezey's opinion, this is an experiment.                        
 Number 407                                                                    
 SENATOR GREEN referred to page 18 , line 26 when asking what that             
 amended portion meant.  Does it mean that a bid process is not                
 necessary?  SENATOR TAYLOR said that it means that the procurement            
 code would not be used.  SENATOR GREEN asked if that was good or              
 REPRESENTATIVE VEZEY explained that the contract was not intended             
 to be limited.  He hoped that all qualified comers would be awarded           
 a contract.                                                                   
 STEVE FINDSEN seemed to be unclear on the training aspect.  A                 
 corporation cannot be trained, each individual would have to be               
 certified.  Although the corporation may be a financial backer of             
 the venture, each employee would need to be trained and certified.            
 Mr. Findsen did not know how the bond would work.                             
 SENATOR TAYLOR felt that was a good point which should be                     
 clarified.  He believed that the drafter had intended to focus on             
 the fact that an individual would be certified by the department,             
 but the person holding the agency relationship may have more than             
 one individual within them.  That does not seem to be in the bill             
 and should be clarified.                                                      
 SENATOR TAYLOR pointed out that the Division of Motor Vehicles is             
 one of the single biggest money makers.  People are made to stand             
 in line for hours or penalized for using the services.  Senator               
 Taylor believed this to be a false economy.  Making licensing and             
 registration easy should be the goal.  Senator Taylor said that he            
 had always been opposed to the reductions in that department.  This           
 will help reduce some of the department's work load.  In Ketchikan,           
 the office has been closed for two weeks because both employees are           
 sick, so no one can registrar a car or obtain a license.  There               
 should be an alternative, especially in the smaller rural                     
 CHAIRMAN RIEGER informed the committee that there is a bill by                
 request relating to the procurement of the Alaska Railroad                    
 Corporation.  A prospective purchaser will be before the committee            
 next week.  Chairman Rieger held HB 210 for possible amendments.              
 There being no further business before the committee, the meeting             
 was adjourned at  2:42 p.m.                                                   

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