Call to Order and Roll Call
The 4th meeting of the Interim Joint Committee on Transportation was held on<Day> Tuesday, September 5, 2017, at 1:00 PM, in Room 149 of the Capitol Annex. Representative Marie Rader, Chair, called the meeting to order, and the secretary called the roll. The minutes from the August 3, 2017 meeting were approved.
Present were:
Members: Senator Ernie Harris, Co-Chair; Representative Marie Rader, Co-Chair; Senators Joe Bowen, Jared Carpenter, C.B. Embry Jr., Jimmy Higdon, Paul Hornback, Gerald A. Neal, Dorsey Ridley, Albert Robinson, Brandon Smith, Johnny Ray Turner, and Mike Wilson; Representatives Lynn Bechler, Tim Couch, Ken Fleming, Al Gentry, David Hale, Chris Harris, Toby Herald, Dennis Horlander, Kenny Imes, James Kay, Suzanne Miles, Robby Mills, Rick Rand, Steve Riggs, Sal Santoro, John Sims Jr, Jim Stewart III, Walker Thomas, and Scott Wells.
Guests: John-Mark Hack, Commissioner, Department of Vehicle Regulations, Kentucky Transportation Cabinet (KYTC), Heather Stout, Executive Director, Office of Information, Kentucky Transportation Cabinet (KYTC), Jason Denny, Anderson County Clerk, Kevin Mooney, Bullitt County Clerk, and David Allgood, Director of Advocacy, Center for Accessible Living.
LRC Staff: John Snyder, Brandon White, Dana Fugazzi, and Jay Jacobs.
Plans for changes in license plate production
John-Mark Hack, Commissioner, Department of Vehicle Regulations, Kentucky Transportation Cabinet (KYTC), gave an overview of the Department of Vehicle Regulations and introduced his leadership team.
Commissioner Hack stated that license plates have not been replaced in Kentucky since 2005. At each license plate renewal, a $0.50 fee is assessed which goes the reflectorized plate fund, a restricted fund designated for the purpose of paying for the issuance of new license plates periodically, normally every five to seven years. Most of the manufacturers of license plates warrant the reflectivity and the physical strength of the plate for five years. However, that restricted fund has been routinely swept during budgeting processes and has hindered the ability to re-plate. The results of not re-plating are very serious in that it compromises public safety, law enforcement, bridge tolling, and Kentucky’s public image. The production system that is used to make license plates is a relic of the 1960’s. Special and personalized license plates are excessively expensive and the standard issue plates are outdated. There are 136 license plates being issued in the Commonwealth. This means Road Fund dollars are being used to subsidize fund raising efforts for the 39 special organization plates for non-profits. Every dollar spent on these plates takes away from the road fund and not towards the construction and maintenance of roads and bridges.
Commissioner Hack gave an overview of the current process which starts in the county clerk’s office as an order placed manually into the mainframe system. The Division of Motor Vehicles licensing staff receives the orders and then an order is placed with the Kentucky Correctional Industries (KCI). KCI produces the plates and the orders are picked up from the Kentucky State Reformatory via box truck the KYTC rents from the Finance Cabinet The orders are brought back to the KYTC in Frankfort and the plates are then mailed to the county clerk’s offices at a cost of around $135,000 annually. Commissioner Hack stated the current process is very inefficient. To sum up the process, plates are bought at retail, sold at wholesale and freight is paid both ways. County clerks have to manage an auditable transaction as well as manage, store, and secure plate inventory which presents them with daily challenges. Technology used to make the plates is out dated and uses obsolete equipment and workers don’t learn marketable job skills. A detail review has been made of the production and distribution model and the costs have been analyzed.
Alternative technology has been identified that can greatly reduce inventory and storage requirements, while automating the plate ordering process. A print on demand solution will completely automate license plate ordering and inventory management for county clerks and put them and the citizens of the Commonwealth directly in contact with the license plate vendor. There will be no capital investment for this new model and vendors would be paid on a transactional model. The benefits to the new plates will be improved visibility for law enforcement, enhanced public safety, more reliable bridge tolling, elimination of physical inventory and inventory handling costs, saving of road fund dollars, saving of money on decals, and reducing inventory to manage and order. Automated inventory management software would keep their inventory stocked without having to place an order. The embossed features of our current plates don’t allow them to be mailed, the new flat plate has a thermally applied decal on aluminum sheeting and is able to be sent through the 1st class mail system.
The new process is state of the art and reduces costs of specialized and personalized plates, has an enhanced appearance, has greater visibility, and gives the Commonwealth an enhanced image. There will be a hybrid distribution model for County Clerks with them stocking and issuing the two standard issue plates in their offices and the ability to order all other plates on demand and sent directly to the tax payer. All of this potentially expedites the development and reduces the cost of the Kentucky Automated Vehicle Information System (KAVIS). This solution presents the opportunity to have enhanced job skills for inmates at the Kentucky State Reformatory providing them with more marketable job skills. Any vendor selected would be required to work (KCI) as a sub-contractor.
Jason Denny, Anderson County Clerk, gave an overview of an onsite visit to Indiana’s Bureau of Motor Vehicle facility and the production of plates with that state’s vendor. Mr. Denny stated that some of the biggest issues that the clerks face will be addressed in the new model.
Commissioner Hack stated that moving to this new model will increase online renewals, ensure all Kentucky plates will look great all the time with a five year issuance cycle, position the KYTC to develop fleet plates, ensure plate production and fulfillment stays Kentucky based, and combine with improvements that are being made to the driver license system to modernize the essential government systems and provide a higher level of customer service. There will be uniform costs on all plates that will result in savings.
In response to a question by Senator Ridley, Commissioner Hack stated that infrared technology is what allows law enforcement to scan license plates and that the new plates will work with that technology. Comparable technology is also used for bridge tolling and there are problems with the readability of our current license plates which have been on the road for up to twelve years. In response to another question, he stated that someone walking into a county clerk’s office on the day that a plate expires would have to take a standard issue plate until the plate that they would like could be ordered and come in unless they choose to risk driving with an expired plate. This new model is a step in the direction of the tag staying with the customer and not the vehicle. Plates will not be printed in each county clerk’s office; they will be printed utilizing a vendor who will subcontract with KCI and that the new technology will teach valuable work skills to inmates.
In response to a question by Senator Robinson, Commissioner Hack stated that he did not believe there would be a void in the budget for the prison system and could create some new opportunities for KCI.
In response to questions by Representative Bechler, Mr. Denny stated that, when someone moves into a new county, the person would come into the clerk’s office and pay a fee of five dollars for a new plate. Commissioner Hack stated that the proposed system would eliminate the need for stickers. A new plate would be issued. If a new plate is issued, then the plate number would change. The savings mentioned do not include any saving at the county clerk’s offices. Those savings would need to be quantified and measured after implementation.
In response to questions by Representative Fleming, Commissioner Hack stated that the cost savings would equate to less than one percent of his departmental annual budget. Vendors would bear all the transition costs and recover over time through each transaction.
In response to questions by Representative Imes, Commissioner Hack stated that it important that production continue through KCI and that the RFP would have a requirement that the vendor would cover all of the capital expenditures and that there would be no direct up-front cost to the state.
In response to questions by Representative Imes, Commissioner Hack stated that the issuance of a license plate would be every five years which would stay within the warranty period for reflectivity of the plate. Renewal stickers would be used after the first plate is issued and that it is a possibility to still use the print on demand sticker system currently in place. The promotional and communication tasks for the license plates will not be as great as the new driver’s licenses. The communication will be partnered with the county clerks and with the Department of Revenue in the renewal notices that are sent out.
In response to questions by Representative Fleming, Commissioner Hack stated that the chart in his presentation shows KCI’s costs only and is not a true overall cost with KYTC’s costs added in.
Update on the implementation of Driver’s license changes (HB 410)
Commissioner Hack gave an overview of the guiding principles and details of HB 410. There are no changes in store until January 1, 2019 and that HB 410 will bring Kentucky into compliance with federal law. The creation of a voluntary travel ID will have stricter requirements and require more documentation but the travel ID will be able to be used for federal identification which includes domestic air travel and military base admission. HB 410 greatly improves security and reduces fraud by taking us from 120 issuance authorities to a sole legal point of issuance with the Kentucky Transportation Cabinet. KYTC will ensure that personal identity information is stored only in state databases that are not shared with other states or the federal government except for the strictly limited purpose of driver license fraud detection. License renewals will move from a four year to eight year renewal system. Circuit Court Clerks will photograph applicants, scan documents and transmit data to a single issuance point that meets the highest security standards. Customers will receive temporary licenses which will be good for thirty days or until the new license comes in the mail which usually takes five to ten days.
Commissioner Hack gave an update on the status of the new extension request being submitted to the U.S. Department of Homeland Security to allow us to continue using our current licenses for a twelve month period. The twelve month extension will allow them to get almost all the way through the implementation process. A driver’s license vendor proposal has been issued and the KYTC hopes to have them under contract by December. There has been ongoing and extensive communication with many organizations that have a hand in or care about the driver’s license system. The KYTC is partnering with all 120 Circuit Court Clerks to provide in person public presentations in all counties by the end of 2018. A cost effective comprehensive public information campaign will be developed to ensure all Kentucky drivers are aware of documents requirements and date of license renewals.
In response to a question by Senator Ridley, Commissioner Hack stated that an electronic notification of driver’s license renewals is a goal and that they looking at doing via e-mail or text message.
In response to a question by Representative Thomas, Commissioner Hack stated that they have been in communication with Ft. Campbell and that the Department of Defense sets the credentials for what they will allow to access the base and that at this point they are not sure if they will adopt the voluntary travel ID. KYTC will work with them to give them all the information they need to make an informed decision.
In response to questions by Representative Wells, Commissioner Hack stated that they are going to ask for the extension to carry over to the implementation date of HB410 but they have been told by the Federal Department of Homeland Security that the extensions that they grant are only going to be for twelve months. It is anticipated that, in October 2018, another extension will have to be filed until full compliance with federal law is reached. It is not possible to move up the implementation date because of the January 1, 2019 effective date of HB 410, which gives the KYTC time to implement the new procedures.
In Response to questions by Representative Bechler, Commissioner Hack stated that the ability to indicate organ donor status will still remain on the driver’s license. He would need to communicate with the Trust for Life to determine if all are on the same page about allowing bone marrow donors to indicate on the licenses because there is limited real estate available on the physical license.
Technology Upgrades across the Department
Heather Stout, Executive Director, Office of Information Technology, Kentucky Department of Transportation gave an update about technology improvements that are being addressed throughout the Department of Transportation. The Kentucky Automated Vehicle Information System (KAVIS) has implemented the first module (disabled placards) in 2016 and bar code readers have been deployed in all counties. Point of sale and boat modules are scheduled for implementation in 2018. Some modules will eventually be combined to speed up the project. Commissioner Hack stated that currently KAVIS is operated on a main frame system that is obsolete and labor intensive and moving to a .net system will enable a broader range of functionality, higher level of customer service, and bring modernization to all vehicle registration tasks. Commissioner Hack shared a thirty second video that gave an overview of the MyCDL Online Portal. He stated that they have a ten day deadline to review and process CDL documents. Failure to comply with these deadlines results in loss of federal highway funding which starts at a reduction of five percent which would equate to about $35 million. Staff has been reduced from seventeen employees in the CDL section down to seven and it is a labor intensive process to ensure that all those documents are reviewed in a timely way. Technology has been implemented in order to elimate to some of that labor intensiveness. Mrs. Stout stated that the MyCDL online portal is mobile friendly for both phones and tablets. Pictures can be taken of documents and uploaded directly to the portal. It allows staff to not have to re-enter data that the system and makes it automated. The challenge now is to get customers to use the system to reduce staff time. Commissioner Hack gave an overview of the metal commodities permit implementation. Mrs. Stout stated that the implementation was quick due to the permitting solution that was already in place was able to be modified. Commissioner Hack stated that they are exploring ways to maximize online vehicle renewals. They are looking at streamlining the process and trying to make it more cost effective. Mrs. Stout stated that growth could be spurned with a reduction in the fees associated with the online renewals.
In response to a question by Representative Wells, Mrs. Stout stated that they are looking at options to be able to draft from a bank account to reduce the fees that a customer would pay.
In response to a questions by Representative Hale, Commissioner Hack stated that federal law requires exams for CDLs to be done by an approved physician.
Disabled parking placard issues
Commissioner Hack stated that the number of disabled parking placard has exploded since 2008. There are obvious fraud and abuse issues which consist of multiple placards often distributed to the same family and that some doctors may not use the same discretion in authorizing disabled placards. There are also issues with a few county clerks issuing a large number of placards by attesting to the disability without a medical form. The results of these problems are real and members of the disabled community of the Commonwealth with genuine disabilities oftentimes find themselves unable to take advantage of the accessibility that is provided by disabled parking spaces. In 2008, the Commonwealth issued 32,000 placards and in 2017 there will be over 300,000. David Allgood, Director of Advocacy, Center for Accessible Living stated that he has daily struggles finding an accessible parking spot for his side loading van. He often must wait or give up and is precluded many times from finding an accessible parking spot. Mr. Allgood stated there is definite fraud occurring and that he looks forward to legislation that will alleviate the problem with finding accessible spots. Commissioner Hack stated that SB 61 passed the Senate unanimously last session but never received a hearing in the House. He stated that the administration is committed to seeking its passage which would greatly protect the interests of genuinely disabled Kentuckians. Kevin Mooney, Bullitt County Clerk stated on behalf of the County Clerk’s Association that they are aware of the difficulty of finding accessible parking spaces. He stated that it is a multi-faceted problem in that location to healthcare is not as accessible in every county and KRS is the authority on what the county clerk is allowed to do in attesting.
In response to a question by Senator Higdon, Mr. Allgood stated that it should be the responsibility of the person with the disability to carry the placard regardless of the vehicle. He stated that in his opinion that this would cut down on the abuse by only allowing one placard per individual. Mr. Moody stated that this would be good from a financial standpoint but that some exceptions should be considered.
In response to questions by Senator Bowen, Commissioner Hack stated that the identification of disabled parking spots is the responsibility of the property owners and the requirements are under the Americans with Disabilities Act. Mr. Allgood stated that he struggles with the striping and visibility of marked accessible spots on a daily basis.
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In response to a question by Representative Bechler, Mr. Allgood stated that federal law requires one disabled spot for every twenty-five regular parking spots.
With no further information to come before the committee, Co-Chair Rader adjourned the meeting at 2:50 P.M.