Legislature(2017 - 2018)ADAMS ROOM 519
04/09/2018 09:00 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB78 | |
| HB216 | |
| HB129 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 129 | TELECONFERENCED | |
| += | SB 107 | TELECONFERENCED | |
| += | SB 78 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 216 | TELECONFERENCED | |
HOUSE BILL NO. 216
"An Act relating to transfers from the dividend fund;
creating the restorative justice account; relating to
appropriations from the restorative justice account
for payments for and services to crime victims,
operating costs of the Violent Crimes Compensation
Board, operation of domestic violence and sexual
assault programs, mental health services and substance
abuse treatment for offenders, and incarceration
costs; and providing for an effective date."
9:42:47 AM
REPRESENTATIVE CHUCK KOPP, SPONSOR, thanked the committee
and introduced himself.
ERIC CORDERO-GIORGANA, STAFF, REPRESENTATIVE CHUCK KOPP,
introduced himself.
Representative Kopp stated that the bill would reset in law
the legislative purpose for making certain persons
ineligible to receive a dividend; those who have been
incarcerated on a felony during their qualifying year,
those that have been convicted of a felony during their
qualifying year, or those that have been convicted of a
misdemeanor but have a prior felony or two prior
misdemeanors. He said that the dividends that would
otherwise be paid to those Alaskans would provide funds for
services and payments to crime victims and operating costs
through he Violent Crimes Compensation Board. Secondly, the
funds would be used to pay restitution owed to crime
victims. Thirdly, the fund would provide for grants to non-
profits for crime victims, for mental health services and
substance abuse treatment for offenders, to provide funds
to the Office of Victims Rights (OVR) to help people get
restitution payments, and to provide fund to the Council on
Domestic Violence and Sexual Assault (CDVSA) for grants to
victims. He added that the bill included obtaining
reimbursement for some costs to the Department of
Corrections related to probation and incarceration. He said
that the bill would establish the Restorative Justice
Account as a separate account within the dividend fund and
allowed the commissioner to make a transfer each year from
the dividend fund to the Restorative Justice Fund in an
amount equal to the amount that would have been paid during
the previous fiscal year to individuals who were ineligible
for dividends. The bill established a priority order and
percentages of payment. He believed that the bill brought
back the original purpose of the fund. He said that the
fund was not considered dedicated and that the legislature
could still make appropriations at they deemed fit.
9:47:20 AM
Co-Chair Foster listed individuals available for questions.
Representative Kawasaki noted that a previous version of
the bill looked at priority order of payment and the
current bill looked at percentages of payment. He thought
that the dedicated fund issue had become murky and quoted
the legal opinion from the legislative Division of Legal
and Research Services from April 7, 2018:
However, you should be aware that creating a
requirement that a certain percentage go towards a
specific purpose can make the fund look more like a
dedicated fund, carrying a greater risk that a court
could find the appropriation is not intended to be
discretionary.
Representative Kawasaki asked Representative Kopp to
address the point raised in the memo.
Representative Kopp thought that there was a long history
of similar practice through the state's technical and
vocational programs; percentages were set in statute for
varying technical programs in the state. He said that it
had never been challenged.
9:49:55 AM
Co-Chair Foster OPENED and CLOSED public testimony.
Representative Grenn MOVED to ADOPT Amendment 1, 30-
LS0572\L.1 (Martin, 3/28/18) (copy on file):
Page 1, lines 6 - 7:
Delete ''relating to contributions from dividends;"
Page 8, line 7, through page 9, line 20:
Delete all material.
Renumber the following bill sections accordingly.
Representative Wilson OBJECTED for discussion.
Representative Grenn explained that he supported the
original intent of the bill. He shared that the original
intent of the Pick.Click.Give program was to focus on
501(c)(3) nonprofits that were the safety net for many
Alaskans. He worried that adding programs like the on under
the bill could divert support from those nonprofit, non-
government organizations. He expressed concern that the
program did not have an audit provision. He thought that
the words Pick.Click.Give should be removed from the
legislation.
9:52:40 AM
Representative Kopp shared that the amendment did not
hinder the bill. He was neutral on the amendment and
believed it stayed consistent with the legislation's
intent.
Representative Wilson OBJECTED to the amendment. She
explained her reasoning.
Representative Grenn replied there were over 600 statewide
nonprofits that Alaskans could donate to in order to help
victims of violent crimes. He listed other nonprofits
focused on helping victims.
Representative Wilson said her understanding was that the
organizations did not help the individual who had been
victimized. She did not believe that Pick.Click.Give would
be affected by the legislation as written.
9:56:27 AM
Representative Kawasaki wondered whether there were
auditing requirements for the compensation fund similar to
the ones required of Pick.Click.Give organizations.
Representative Grenn could not speak to the administrative
process of the account. He did not believe that the fund
worked within the parameters of the nonprofits under the
Pick.Click.Give umbrella. He thought that sticking with the
original intent of the Pick.Click.Give program would be the
best practice for the state.
Representative Wilson hoped to clarify the conversation
about how the compensation funds were being spent and to
quell assumptions that no one was being held accountable to
how the funds were being spent.
KATE HUDSON, EXECUTIVE DIRECTOR, VIOLENT CRIMES
COMPENSATION BOARD, DEPARTMENT OF ADMINISTRATION, answered
that a performance report was completed and submitted to
the federal government every quarter, in addition to an
annual performance report. She said that there was no
requirement to perform a state audit on a regular basis,
but that one had been performed roughly 12 years ago. She
said that the records could be easily audited should that
ben requested. She stated that several agencies were
covered by the legislation, which presented the question of
how they were presented on the Pick.Click.Give page.
10:00:08 AM
Representative Wilson asked whether the needs for violent
crime compensation were currently being met with funding.
Ms. Hudson answered that it varied from year to year. She
said that some years all the money was spent and bled into
the next fiscal year, and some years not all the money was
spent. She said that the issue was that the board was very
small, and that funding had remained flat for many years;
the board knew for a fact that they were not meeting the
needs of all the crime victims in the state and wondered
whether victims were even aware of the fund. She said that
homicides that involved dependent children required a lot
of funds. She said that there were eligibility restrictions
of the fund which were offset by other programs like
domestic violence shelters and rape crisis centers that to
meet some of the needs that the compensation board could
not.
Representative Kawasaki wondered how the compensation board
would advertise itself under Pick.Click.Give.
Ms. Hudson stated that she was not entirely sure. She
assumed that advertising would be done on the
Pick.Clik.Give website and possible public service
announcements would be done.
Representative Grenn answered that one of the requirements
for the application for Pick.Click.Give was a 990. He asked
Ms. Hudson whether her organization used that particular
tax form.
Ms. Hudson replied in the negative.
Representative Wilson MAINTAINED her OBJECTION.
A roll call vote was taken on the motion to adopt Amendment
1.
IN FAVOR: Kawasaki, Ortiz, Pruitt, Gara, Grenn, Guttenberg,
Seaton, Foster
OPPOSED: Thompson, Tilton, Wilson
The MOTION PASSED (8/3). There being NO further OBJECTION,
Amendment 1 was ADOPTED.
Vice-Chair Gara was generally supportive of the bill but
had questions. He asked about the backfill amount for the
various programs that would no longer be receiving as much
money from the funds. He agreed they wanted to move money
to the items specified in the bill, but he was concerned
about items that would receive less funding.
Representative Kopp replied that the bill would establish a
priority order and not a dollar amount. He said that the
percentages were a valuable approach because it would allow
DOC to receive their maximum percentage. He said that OVR
would be allowed to facilitate restitution orders, which
was the greatest need in helping victims get back on their
feet. He stated that the minimal increase would streamline
the restitution process.
10:07:16 AM
DAVID TEAL, DIRECTOR, LEGISLATIVE FINANCE DIVISION,
suggested placing the fiscal notes in order beginning with
the Department of Law note (LAW), OMB component 2717. He
directed committee attention to Page 2:
The Department of Law used to collect restitution for
victims. This program was defunded in 2017. The court
system now collects restitution for victims. Because
the Department of Law no longer collects restitution,
the department anticipates no fiscal impact if the
bill becomes law.
He noted that Page 2 of the bill stated that LAW would
still be involved in the collection of funds, which made
him question the fiscal note. He thought that there could
be fiscal impact in the future.
10:10:10 AM
Representative Kopp relayed that LAW had in the past a
Victims' Restitution Unit, which was removed in 2017. He
said that with that removal the department was still giving
notice to victims about eligibility to receive assistance
from the state but that the court had step in to assist
with receiving payments and helping to facilitate those
payments. He stressed that under the bill, OVR would step
up to facilitate those payments.
10:11:09 AM
Mr. Teal agreed with the sponsor. He stated that there
could be some confusion because LAW could step in if the
victim chose to get help from the department. He thought
that the issue could be addressed in the future. The second
fiscal note was from the Alaska Court System, OMB component
769. He explained that the addition of OVR to the equation
would require coordination, which would have fiscal impact
if the office paid restitution. He pointed to the money for
a data entry person, but no money for the payment of
restitution.
Representative Kopp interjected that the money for
restitution was subject to legislative appropriation. He
said that the most common restitution figure was $1000; the
restitution order had not traditionally been a part of the
OVR budget, so an appropriation to help pay restitution
orders would be needed. He did not believe that huge
amounts of money would need to be appropriated.
10:13:50 AM
Co-Chair Foster listed additional invited individuals
available to testify.
Representative Wilson asked how long the position would be
needed.
Mr. Teal answered that the appropriation for the position
did not have to be used for the position but could be used
for operating costs, including the payment of restitution.
He said that the position was intended to set up the
coordination between the court and OVR to be sure that
their databases aligned. He stated that once the
coordination occurred, the position may no longer be
required. Whether the money was taken away or used for
restitution in the future was up to the legislature.
Representative Wilson thought that it was unusual that the
duration of the position was ambiguous.
10:16:17 AM
Mr. Teal reviewed the Department of Revenue fiscal note,
OMB Component 981. he relayed that the department was
requesting $20 thousand in FY19, and $15 thousand each year
after for management fees associated with the new sub-
account of the dividend fund. He felt that there was little
need to pay for the fees with general funds, he thought
that the new fund could be charged for the management fees.
The bill did not currently stipulate that one of the
purposes of the fund was to allow for the payment of
managing fees. He said that the general fund was
appropriate, given the way the bill was drafted, but that
could be amended.
Representative Wilson asked if the fiscal note pertained to
Amendment 1.
Mr. Teal answered in the negative. He said that when a fund
of any kind was established, the department needed to track
the funds. He said that money would be flowing in and out
of the fund continually, which the department needed to
track.
Mr. Teal reviewed the Department of Health and Social
Services fiscal note, OMB Component Number 2134, with zero
impact.
10:18:38 AM
Mr. Teal addressed the Department of Health and Social
Services fiscal note, OMB Component Number 3099, with zero
impact. Fiscal note 6 was for the Violent Crimes
Compensation Board, OMB Component 2694. The note requested
$178.7 thousand to pay the restitution for victims of
crime. He said that the number was in the range of
allowable percentages. He continued to the Fund
Capitalization note, OMB component 2936, which matched the
previous note. He said the fund would first be capitalized
and then the money went from the Crime Victim Compensation
fund, to the board, which in turn made payments from the
fund.
10:20:46 AM
Mr. Teal reviewed the fiscal note for the Court System, OMB
Component Number 769, which showed a fund source change
with one position added. He said that the change would take
away $167.6 in general funds and replaced it with money
from the Restorative Justice Fund of $251 thousand; the
change resulted in a net gain of $83.8 and would pay for
the 1-year position. He said that if more money became
available, DOC would get less fund and would need
offsetting general fund dollars. The last fiscal note was
for the Department of Corrections, OMB Component Number
2952. He stated that if more of the fixed amount of money
was used for purposes other than behavioral or physical
health within the department, DOC would need money to
offset the fund taken from them and used for other
purposes. In FY19, the fiscal noted were lower than what
was called for in the legislation, which could change in
the future. He related that for 2019, the net cost would be
$262 thousand, primarily in the Crime Victim Compensation
Fund and then the fund source change in OVR. He concluded
that $282 was the net general fund spend associated with
the bill.
10:23:41 AM
Vice-Chair Gara requested further clarification on the
fiscal notes.
Mr. Teal explained that more money would be spent for
victim compensation, which would result in less of the
restorative justice funds available to DOC. The DOC funds
would need to be replaced at the cost of $262 thousand in
general funds, plus $20 thousand in administrative fees,
totaling $282 thousand.
Vice-Chair Gara asked which fiscal note was under
discussion.
Mr. Teal clarified he was speaking about all the fiscal
notes combined.
Vice-Chair Gara spoke to the fiscal note for DOC, OMB 2952.
He understood that $430 thousand was being added for DOC.
Mr. Teal replied in the affirmative. He explained that DOC
had $11,493.4 in restorative funds in their budget for
physical healthcare costs. He said that because those
restorative funds would be used for other purposes, the
department would receive $11,063 from that fund source.
They will need $430 thousand undesignated general funds to
replace the money being used elsewhere. He furthered that
the $282 thousand versus $430 thousand was because of the
negatives in OVR where general funds were being taken away
from the agency; the net of what was being taken from the
agency and replaced with restorative funds was $83.8 and
added up to $282 thousand.
10:27:30 AM
Vice-Chair Gara asked about an additional $11 million being
put in during conference committee.
Mr. Teal hoped that would not be the case.
Representative Wilson asked for verification that if
nothing changed the following year there would still be a
gain of $282 thousand required.
Mr. Teal answered it was not a single fiscal note totaling
$282, rather the sum of all notes. He said that in the next
year the legislature may decide to fund some of the things
that were currently a zero fiscal impact at present. There
were grants through the Department of Health and Social
Services (DHSS) that were a zero in FY19. He relayed that
CDVSA had not prepared a note because they were expecting
money anyway. He stated that there were some grants through
DHSS that were zero in FY19, and according to the bill, the
minimum percentages for those purposes was 1 or 2 percent.
He said that as those things were funded in the future it
would take money form DOC, which would mean that the UGF in
DOC would need to be increased to make up for the loss.
Representative Wilson asked about a scenario where nothing
changed, and everything continued to be funded under the
status quo. Aside from the $20,000 for administrative
purposes - how would the fiscal impact increase.
10:30:29 AM
Mr. Teal replied that the $282 thousand was the FY19 cost.
He said that if nothing changed from the distribution in
FY19 then there would be no change. He related that the
money that was lost by departments to fund the payments
would need to be replaced. He concluded that the future
cost of the legislation may be just the $179 thousand, plus
the $20 thousand in administrative cost.
Co-Chair Foster believed there would be forthcoming note
from Judiciary.
Mr. Teal replied that the note misstated the fund name and
would be corrected.
Co-Chair Seaton MOVED to REPORT CSHB 216(FIN) out of
committee with individual recommendations and the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
CSHB 216(FIN) was REPORTED out of committee with a "do
pass" recommendation and with one new zero fiscal note from
the Department of Law; one new fiscal impact note from the
Department of Administration; one new fiscal impact note
from the Department of Administration for Fund
Capitalization; one new fiscal impact note from the
Department of Corrections; one new indeterminate note from
the Alaska Judicial System; two previously published zero
fiscal notes from the Department of Health and Social
Services: FN2 (DHS) and FN3 (DHS); and one previously
published fiscal impact note from the Department of
Revenue: FN7 (REV).
10:32:59 AM
AT EASE
10:34:11 AM
RECONVENED