Legislature(2017 - 2018)ADAMS ROOM 519

04/09/2018 09:00 AM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
<Bill Hearing Canceled>
-- Public Testimony --
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
Moved CSSSHB 216(FIN) Out of Committee
-- Public Testimony --
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                                                                    
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                                                                    
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                                                                    
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                                                                    
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                                                                    
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                                                                    
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                                                                    
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                                                                    
Mr.  Teal  reviewed  the Department  of  Health  and  Social                                                                    
Services fiscal  note, OMB Component Number  2134, with zero                                                                    
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                                                                    
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                                                                    
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                                                                                                                   

Document Name Date/Time Subjects
HB 216 Letter of Opposition.pdf HFIN 4/9/2018 9:00:00 AM
HB 216
HB 216 - Amendment #1.pdf HFIN 4/9/2018 9:00:00 AM
HB 216
HB216 Legal Opinion Dedicated Funds 4.7.18.pdf HFIN 4/9/2018 9:00:00 AM
HB 216
HB 129 - Amendment #1.pdf HFIN 4/9/2018 9:00:00 AM
HB 129
SB 78 - Letters in Opposition 3.14.2018.pdf HFIN 4/9/2018 9:00:00 AM
SB 78
SB 78 charts 10,000 people,50,000people.pdf HFIN 4/9/2018 9:00:00 AM
SB 78
SB 78 House CS sb78 Y.pdf HFIN 4/9/2018 9:00:00 AM
SB 78
Sara Race Email response.pdf HFIN 4/9/2018 9:00:00 AM
SB 78
SB 78 - Letters in Opposition 3.14.2018.pdf HFIN 4/9/2018 9:00:00 AM
SB 78
SB 78 Letter Support NEA Alaska.pdf HFIN 4/9/2018 9:00:00 AM
SB 78
SB78 Letter Support ALFCIO.pdf HFIN 4/9/2018 9:00:00 AM
SB 78
SB78 Letter Support Carpenters.pdf HFIN 4/9/2018 9:00:00 AM
SB 78
SB78 Letter Support School.pdf HFIN 4/9/2018 9:00:00 AM
SB 78
SB78 model 4-7 modification final.pdf HFIN 4/9/2018 9:00:00 AM
SB 78
HB 129 - Amendment #2.pdf HFIN 4/9/2018 9:00:00 AM
HB 129
SB 78 CS Legal Opinion 3-1-17 Donation vs Contribution.pdf HFIN 4/9/2018 9:00:00 AM
SB 78
SB 78 - Amendment #1.pdf HFIN 4/9/2018 9:00:00 AM
SB 78