Legislature(1995 - 1996)
04/27/1995 08:35 AM House FIN
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* first hearing in first committee of referral
+ teleconferenced
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+ teleconferenced
= bill was previously heard/scheduled
SENATE BILL 135 am
An Act relating to permanent fund dividend program
notice requirements, to the ineligibility for dividends
of individuals convicted of felonies or incarcerated
for misdemeanors, and to the determination of the
number and identity of certain ineligible individuals;
and providing for an effective date.
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DAVID SKIDMORE, STAFF, SENATOR FRANK testified in support of
SB 135. He noted that similar legislation was passed by the
Senate unanimously in the previous session, but died in the
House. He explained that SB 135 amends the Permanent Fund
forfeiture statutes in four ways. It expands the pool of
criminals who are ineligible for permanent fund dividends to
include persons who are convicted but not incarcerated of a
felony and persons incarcerated for their third or
subsequent misdemeanor conviction. It also amends the
process by which the forfeited dividends are available for
appropriation to selected state agencies. There would no
longer be a one year lag in the appropriation to agencies.
This would allow a second appropriation from the dividend to
be available in FY 96. He noted that the Senate's FY 96
Department of Corrections' operating budget is predicated on
the availability of these one-time funds. The bill also
creates a new notice requirement that would show the amount
that would otherwise have been paid to ineligible criminals;
the grounds for the ineligibility; the legislative purpose
in making criminals ineligible; and the amount appropriated
to each of the agencies. The bill would also add the
Department of Law, the Department of Public Safety and the
Department of Revenue to the list of government entities
that are eligible to receive appropriations from the
forfeited dividends. He observed that the Committee has
been provided with an amendment which would remove the
Department of Revenue, Child Support Enforcement Division
(CSED) from the list. He explained that the Department of
Revenue was originally added in response to concerns that
child support cases would be unduly affected. He stressed
that analysis shows that the actual impact to child support
cases would be minimal. He expressed concern that the
inclusion of the Department of Revenue could invalidate the
amendments in SB 135 since there is not a clear linkage
between child support payments of criminals and the criminal
justice system.
Representative Brown asked for clarification of the priority
of call on the permanent fund dividends.
TOM WILLIAMS, STAFF, SENATOR FRANK stated that AS 43.23.065
(b) lists priorities. He reviewed priorities as listed in
AS 43.23.065 (b). He stated that the legislation would not
change the order of draw. He explained that the dividends
would not be available for attachment since they would be
forfeited.
(Tape Change, HFC 95-102, Side 1)
Mr. Skidmore explained that dividends would be appropriated
to reimburse costs imposed on the criminal justice system.
Approximately 2,000 felons would become ineligible.
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Representative Brown suggested that the amount of dividends
that would be available for attachment for child support
would be reduced.
Mr. Skidmore provided members with a summary of the
estimated number of newly-ineligible criminals whose child
support obligations would be affected by SB 135 (Attachment
1). He stated that out of 2,000 criminals approximately 20
percent would have active Child Support Enforcement Division
cases. He stated that 47 percent of these cases would be on
AFDC. He summarized that only 46 cases would be CSED cases
involving PFD garnishment.
Mr. Skidmore observed that the criminals in question would
have less than a one year sentence. He explained that AFDC
cases were exempted since all but $50.0 dollars of their
PFD's are already forfeited to the state.
Mr. Williams added that some persons collecting child
support will be affected by the denial of dividends. He
stressed that the number will be relatively small. He
emphasized that $2.7 million dollars would be available for
state operations in FY 96.
MARILYN MAY, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF LAW
testified via the teleconference network. She agreed that
all but $50.0 dollars of AFDC obliges' PFD's would go to the
State. She stated that the impact on AFDC custodial parents
would be minimal. She acknowledged that the money would be
transferred from one pocket to another.
Representative Brown summarized that funding for Aid to
Families with Dependent Children (AFDC) operation costs
would not be available under the provisions of SB 135.
Ms. May stated that previous constitutional concerns
regarding equal protection and ex-facto have been addressed
by SB 135.
LOREN JONES, DIRECTOR, DIVISION OF ALCOHOL AND DRUG ABUSE
expressed concern that most third time misdemeanor offenders
covered under SB 135 would be part of the Division's
treatment system. He observed that these PFD's are
currently used by treatment agencies to compute income from
fees owed. He stressed that the use of these fees by the
Division of Alcohol and Drug Abuse is not recognized by SB
135. He added that HB 159 would add a new group of felons
that would loose their PFD's as the result of a third time
misdemeanor. He noted that these treatment programs cannot
attach dividends in a subsequent year.
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DEBRA VOGT, DEPUTY DIRECTOR, DEPARTMENT OF REVENUE stated
that the legislation enlarges the class of offenders that
would not be eligible for PFDs. She referred to the timing
mechanisms that permit a one time only appropriation of $2.7
million dollars out of the Permanent Fund Dividend
Distribution Fund in FY 96. She provided members with
charts demonstrating the appropriation path (Attachment 2A
and 2B). She stated that the Governor has concerns that
dividends in question are already being used by other
agencies for other programs.
Ms. Vogt reviewed attachment 2A. She demonstrated that
dividends paid for the January 1 - March 30, 1995 period
would normally be available in 1996. She showed that these
dividends would be appropriated in 1995 under the provisions
of SB 135. She added that dividends withheld from criminals
in the prior year are also paid in 1995. She summarized
that by moving up the notification by a year both dividends
will be appropriated in FY 96. She stated that the result
of two appropriations from the Permanent Fund Dividend will
be that an additional $5.0 dollars would be taken from each
individual's dividend.
Ms. Vogt stated that the drafting language of section 7
would prevent the disclosure of the additional cost of the
provisions of SB 135.
Representative Therriault MOVED to adopt Amendment 1
(Attachment 3). Amendment 1 would remove Department of
Revenue for child support from the list of departments that
can receive funds from the denied criminals. Ms. Vogt
argued that dividends garnished by the Child Support
Enforcement Division go to children. She stressed that the
amendment and an increase of the class of offenders denied
are separate issues from the Administration's opposition to
the bill.
Co-Chair Hanley summarized that the Administration is
opposed to the policy call of having two appropriations in
one fiscal period. Ms. Vogt stated that the Administration
is neutral on amendment 1.
There being NO OBJECTION, Amendment 1 was adopted.
Ms. Vogt demonstrated how the change in the appropriation of
forfeited dividends will result in a reduction of the amount
available for dividends appropriated in 1995. She
reiterated that 1995 dividends will be reduced by $5.0
dollars each. She explained that dividends appropriated to
agencies from forfeits by felons in FY 95 are from felons
incarcerated in FY 94. She reiterated that two years worth
of non-payments to felons are being taken out of one year's
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budget. Representative Navarre argued that the first
payment for 1994 should have been shown in FY 95. Ms. Vogt
stressed that the reason for the gap is that the amount of
the dividend is unknown during the appropriation process.
She observed that those that are not going to get dividends
do not have an incentive to apply. The Department of
Corrections provides the Department of Revenue with a tape
of incarcerated offenders that would have been eligible.
Representative Brown recalled that the reason the
Legislature did not require disclosure of the amount taken
from felons' dividends is that other dividends would not be
affected. She questioned the effect of a 90 day effective
date. Ms. Vogt did not think there would be a large impact.
ANNALEE MCCONNELL DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR testified that the Governor does not
support the concept of SB 135 as a method to solve the FY 96
budget problem. She stressed that the State has on going
budget problems that must be addressed. She emphasized that
SB 135 will not result in a long term solution. She added
that other entities dependent on PFD's receipts would be put
in jeopardy.
(Tape Change, HFC 95-103, Side 1)
Representative Martin spoke in support of program fees. Ms.
McConnell stated that the Governor supports program fees,
but emphasized that they have concern about combining two
year's fees into one.
ARTHUR H. SNOWDEN, II, ADMINISTRATIVE DIRECTOR, ALASKA COURT
SYSTEM pointed out that the PFD's of indigent offenders are
already being assigned to the State for the cost of their
defense.
Ms. May added that the collection for DWI offenders pay for
their incarceration.
Representative Brown asked if the amount of court ordered
restitutions were known. Mr. Snowden stated that the amount
was not known.
Representative Martin MOVED to report SB 135 am out of
Committee with individual recommendations and with the
accompanying fiscal notes. Representative Brown OBJECTED.
She emphasized the impact on those that are currently
receiving the PFD's such as the Child Support Enforcement
Division, parents, victims and Aid to Families with
Dependent Children. She observed that individual PFD's
would be further reduced by $5.0 dollars. She stressed that
much of the money is already going to the criminal justice
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system.
Representative Grussendorf spoke against short term
solutions to a long term budget problem.
A roll call vote was taken on the MOTION to move SB 135 am
from Committee.
IN FAVOR: Kelly, Kohring, Martin, Mulder, Therriault,
Foster, Hanley
OPPOSED: Brown, Grussendorf
Representatives Parnell and Navarre were absent from the
meeting.
The MOTION PASSED (7-2).
HCS CSSB 135 (FIN) was reported out of Committee with "no
recommendation" and with three fiscal impact notes; one by
the Department of Revenue, dated 3/30/95; one by the
Department of Public Safety, dated 3/30/95; and one by the
Department of Education, dated 4/11/95; and with two zero
fiscal notes; one by the Department of Corrections, dated
3/30/95; and one by the Department of Law, dated 4/11/95.
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