Legislature(2005 - 2006)CAPITOL 106
04/13/2006 08:00 AM House STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| SB310 | |
| SB86 | |
| HB461 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | SB 86 | TELECONFERENCED | |
| += | HB 461 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 310 | TELECONFERENCED | |
SB 310-EMPLOYMENT OF PRISONERS 8:03:18 AM CHAIR SEATON announced that the first order of business was SENATE BILL NO. 310, "An Act relating to the employment of prisoners; and providing for an effective date." 8:03:33 AM DARWIN PETERSON, Staff to Senator Lyda Green, Senate Finance Committee, Alaska State Legislature, presented SB 310 on behalf of the Senate Finance Committee, sponsor. He explained that the bill is being introduced at the request of the Department of Corrections. 8:04:47 AM MR. PETERSON, in response to a question from Chair Seaton, said the department knows which amendments the committee approves and has the authority to speak on behalf of the committee regarding those amendments. He stated his assumption that if the department were to come across any amendments it has never seen before, it would let the committee know about them at that point. MR. PETERSON continued with his presentation of SB 310, by paraphrasing the sponsor statement, which read as follows [original punctuation provided]: The legislation that created the Alaska Correctional Industries program and commission was repealed on July 1, 2005. The primary purpose of SB 310 is to provide the necessary statutory authority so the Department of Corrections can continue providing inmate work and training programs without interruption. SB 310 is needed to provide for employment of prison inmates under AS 33/30. This employment program will be funded from Receipt Support Service funds. The bill provides the necessary statutory authority to participate in critical federal Prison Industry Enhancement (PIE) programs. It also grants the authority to actively participate and partner with private enterprise. These partnerships will provide realistic work experience and vocational training for prisoners under conditions similar to those that prevail in the private sector. SB 310 will allow the department to make a deduction from the offenders' wages to apply to the cost of confinement. These receipts will support the prison employment program. In addition, the prison employment program will allow inmates to work toward financial responsibility by taking deductions from wages to pay for child support, victim restitution, criminal fines, civil judgments, fees for utilities, as well as other obligations. SB 310 is a vital piece of legislation if we are to continue inmate work and vocational training programs in our correctional facilities. 8:07:10 AM REPRESENTATIVE ELKINS asked for confirmation that the bill in no way would alter or shut down the program. MR. PETERSON assured Representative Elkins it would not. He explained that SB 310 is basically a redrafting of the previous program that was allowed to sunset. The only difference is that there would not be a commission; the department would oversee the program. 8:07:41 AM REPRESENTATIVE GARDNER asked if the fact that the program was allowed to sunset was inadvertent, or if there was reason for it. 8:07:57 AM MR. PETERSON relayed that the commission was intentionally allowed to sunset, but suggested that the department address the issue of the statutes that were inadvertently allowed to sunset "in addition to that." He concluded, "Those statutes that were repealed when the commission 'sunsetted' is what this legislation would not put back into effect." 8:08:20 AM CHAIR SEATON noted that there is a furniture making program in Seward and a laundry program in Juneau, both related to the corrections industry. He asked, "Is this also necessary for the internal cleaning and internal maintenance that is performed by prisoners at the prisons throughout the state?" 8:08:49 AM MR. PETERSON said those programs that currently exist will have to be discontinued if the proposed legislation is enacted. 8:09:10 AM CHAIR SEATON clarified that the second part of his previous question was whether the bill is also necessary to enable prisoners around the state to "do the work, and the maintenance, and the painting, and the cleaning." 8:09:22 AM MR. PETERSON deferred to the department for an answer to that portion of Chair Seaton's question. 8:10:05 AM SHARLEEN GRIFFIN, Director, Central Office, Division of Administrative Services, Department of Corrections (DOC), in response to Chair Seaton's unanswered question, confirmed that it would make a difference to the regular programs in the prison facilities if SB 310 were not enacted. She explained that there was a provision in the previous statute for exemption from workers' compensation, and without SB 310, the department would have to pay workers' compensation for inmate labor. She continued: The workers' compensation portion is not necessary; the department is [responsible] for inmate healthcare, and if a worker is injured doing anything that they do, the department picks up the cost of that inmate healthcare. If it exceeds what the department is capable of doing and becomes a risk management issue, then we work with [the Division of] Risk Management on it. 8:11:15 AM MS. GRIFFIN, regarding the sunset, explained that the sunset was inadvertent and everyone involved missed the fact that the legislation was going to sunset. 8:11:56 AM CHAIR SEATON clarified that the intent had been to "sunset the commission," and when that happened, all the programmatic functions ended as well. 8:12:01 AM MS. GRIFFIN confirmed Chair Seaton's remark. 8:12:08 AM REPRESENTATIVE GARDNER asked if the workers' compensation requirement applies to internal labor for maintenance and routine jobs within the facility, or "this employment program." 8:12:32 AM MS. GRIFFIN responded that the only exemption there was for not paying workers' compensation on inmate labor at all was in the correctional industry statute. She said there is not a related exemption in the workers' compensation statutes. Furthermore, AS 33.30.201 references the correctional industry statutes, AS 33.32, for the exemption of workers' compensation to apply to facility inmate labor. In response to follow-up questions from Representative Gardner, she stated that under SB 310, all offenders providing labor would once again be exempted from workers' compensation - for either type of labor. 8:13:46 AM REPRESENTATIVE GATTO asked who would pick up the workers' compensation costs for an inmate who, for example, was injured, became a paraplegic, and could no longer work. MS. GRIFFIN deferred the question to Brad Thompson. 8:14:01 AM BRAD THOMPSON, Director, Division of Risk Management, Department of Administration, stated that an inmate who is severely injured may have a tort liability case presented on his/her behalf. He said, "There is not the exclusive remedy protection that an employee is precluded from suing their employer in our involvement with inmates. That's the policy call and the trade- off of not providing the workers' compensation." 8:15:48 AM REPRESENTATIVE GARDNER proffered, "If workers' compensation were to be provided, it would be carried by the industry partner, but not the prison industries, if we're talking about the correctional industry's program." 8:16:03 AM MR. THOMPSON responded as follows: If there was workers' compensation provided to the inmate participating in the correctional industry's program, and they're working for an outside entity, they could, in their purchase of workers' compensation - a statutory policy, also provide remedy to the inmate. But that's ... a policy call. 8:16:32 AM CHAIR SEATON said: Just to clarify, that was for only those inmates that were working in conjunction with another industry; but all of the other exemptions for workers working within the walls of the prison doing maintenance, and painting, and cleaning ... wouldn't be covered by any outside -- I mean, that's not done in conjunction with any other outside entity, is it? 8:16:54 AM MR. THOMPSON answered: If they were determined to be employees under the [Alaska Workers' Compensation] Act, then in this activity - performing service for corrections in the upkeep and maintenance of the facilities - ... Risk Management ... provide[s] the self-insurance protection for the State of Alaska as an employer. And so, if the State Department of Corrections was defined to be the employer of these individuals, it would be through our offices. 8:17:52 AM MR. THOMPSON, in response to a request from Chair Seaton for further clarification, explained: The present system is, there is no workers' [compensation]. If there is injury, the medical is paid by [the Department of] Corrections, as is all medical [that] is being provided to inmates, whether it was [for] accidental [injury] or any other cause. In a prison industry's program, where they're working for an independent party - where they're performing work ... building furniture and they're working for ABC Industries - they today are not eligible for workers' compensation. And so, if that changed, if ... both ... programs - correctional industries as well as within the maintenance side ... - ... were defined to be employees, [then the Division of] Risk Management, on behalf of [the Department of] Corrections, would provide the workers' [compensation] for the maintenance activity, and then the independent employer - if they were working for ABC Industries in their statutory policy - would be required to provide workers' [compensation]. 8:19:18 AM MR. THOMPSON, in response to follow-up questions from Chair Seaton, related that the Division of Risk Management "provides the workers' compensation remedy owed to any state employee on behalf of the Department of Corrections, or any other agency." He reiterated that today workers' compensation is not being paid, but there are tort liability exposures or medical provisions being paid as part of the medical benefit program under [the Department of] Corrections. He concluded, "If there is workers' compensation, then the Division of Risk Management would be responsive." 8:20:04 AM REPRESENTATIVE GARDNER asked first if prisoners are paid for doing the internal maintenance-type work, and second, if there is any reason that the legislature should waive workers' compensation for correctional industries, given that it exposes the state to risk. 8:20:36 AM MS. GRIFFIN told Representative Gardner that the prisoners are paid between 30-60 cents an hour for work done within the prisons, such as janitorial, maintenance, and kitchen help, and are not presently covered by workers' compensation. In order for those workers to be covered by workers' compensation, a rate would have to be determined relating to how much needed to be provided to [the Division of] Risk Management. She stated her understanding that that rate would probably be high, based on the number of inmates that are working, even thought they don't make that much money. She emphasized the importance to the security of prisons in keeping inmates productively busy. 8:21:43 AM MS. GRIFFIN offered an example of a case in which a former inmate who was in a halfway house was injured while performing community work for a nonprofit organization as a condition of his release. The workers' compensation board found that, under law, there was not an express contract between the man who was attempting to become an employee and the employer, because the former inmate was still under the control of the Department of Corrections. He noted that many states have preclusions for workers' compensation to clarify that "these individuals working within and outside the walls in these industry programs are not eligible for workers' [compensation]." He said these individuals are provided with medical [coverage], and he reiterated that if they are significantly injured and there is a tort liability, the state still has "an exposure for general liability for these individuals." He said those cases are rare, but when they happen they are resolved. 8:23:49 AM REPRESENTATIVE GRUENBERG said one of the reasons that workers' compensation laws came into existence is because employers and potential defendants wanted them. He stated, "Prisoners love to litigate, and they can ... file a tort claim pro per." He indicated that the Division of Risk Management would have to have its own lawyer. He asked, "Wouldn't it be just cheaper to cover them?" 8:24:32 AM MR. THOMPSON reiterated that although some of the tort claims that have arisen are significant, their occurrence is a rarity. He indicated that [covering all prisoners with workers' compensation] would be very expensive. 8:25:35 AM REPRESENTATIVE GATTO directed attention to page 7, [lines 3-4], which read: RETROACTIVITY: THE NONCOVERAGE OF AS 23.30. The provisions of sec. 12 of this Act apply retroactively to July 1, 2005. REPRESENTATIVE GATTO asked: Since you had exceeded the fiscal note in previous legislation, I would assume, how did you manage to pay to keep the operation going between the time you had essentially no money, because it was never appropriated, and now? 8:26:18 AM MS. GRIFFIN responded, "This is where the sunset of the Act was missed by everyone." She said DOC received an appropriation from the legislature, through the correctional industry's fund. She said that fund is an ongoing one from which DOC makes expenditures and deposits receipts. She stated, "We did not realize on July 1, that it didn't exist - we really didn't figure it out until ... [about October] - and we continued business as usual." Ms. Griffin said that explains why there is a retroactive date "to cover this year and to change it from the correctional industry's fund to receipt support services." 8:27:43 AM MS. GRIFFIN, in response to follow-up questions from Representative Gatto, said the fund is that of the correctional industry, and she recollected the fund number is 22654. She revealed that the fund balance as of July 1, 2005, was approximately $300,000, and thus that money was available for expenditures and selling services and products. She concluded, "So, there's no additional funding required to make up for the operations thus far this year." 8:30:13 AM CHAIR SEATON closed public testimony. 8:30:22 AM REPRESENTATIVE GRUENBERG stated his understanding that there is some behind-the-scenes negotiating that is taking place. 8:30:29 AM REPRESENTATIVE ELKINS moved Conceptual Amendment 1, as follows: On page 5, line 20: Move paragraph (6) to line 16 and renumber it paragraph (4) Move paragraph (4) to line 18 and renumber it paragraph (5) Move paragraph (5) to line 20 and renumber it paragraph (6) 8:31:22 AM CHAIR SEATON objected for discussion purposes. He reviewed the amendment. 8:33:13 AM MS. GRIFFIN, in response to a request from Chair Seaton, indicated that the department would support [Conceptual Amendment 1], the result of which would be to change the order in which the department would apply deductions related to offender wages. She offered further details. In response to a follow-up question from Chair Seaton, she said [the money would be apportioned] proportionally. She noted, "Child support orders are first, and they generally have a percentage of the wages that [are] to be paid, and that's usually stated in the order." 8:35:44 AM CHAIR SEATON asked, "Is there currently a percentage of their wages that do go to restitution anyway?" 8:35:58 AM MS. GRIFFIN said she thinks that depends on how the court order reads. She stated her belief that there is a percentage applied "as it goes down the line." She offered to follow up on that issue for the committee. 8:36:12 AM CHAIR SEATON said he is concerned, because he has not seen anything in statute that says that "you will only take out a percentage of it for this." He relayed that court orders for dependents, for example, are generally listed on percentages, and he said he is not sure if restitutions are done the same way. He stated, "I want to make sure that by making this change ... we don't get into the legal hole of making it so that the prisoner has zero incentive for participating in the program, and then you end up with very incorrigible people with no leverage over them." 8:37:06 AM CHAIR SEATON removed his objection, but said he wants the department to get back to him about this issue. There being no further objection, Conceptual Amendment 1 was adopted. 8:38:00 AM REPRESENTATIVE GRUENBERG stated his understanding that "the parties are working out some accommodations." 8:38:11 AM REPRESENTATIVE GARDNER said she is troubled by the workers' compensation issue. She directed attention to page 6, [lines 29-31], which read: the provisions of AS 23.30 (Alaska Workers' Compensation Act) do not apply to inmates employed in a prison employment program operated by the Department of Corrections. REPRESENTATIVE GARDNER asked whether the jobs in correctional industries fall under "prison employment program operated by the Department of Corrections", or whether that phrase refers to the "internal works." 8:39:05 AM MS. GRIFFIN replied that Correctional Industries is a program operated by the Department of Corrections; however, not all correctional industry programs involve a vendor outside the department. For example, there is a sewing factory in Highland Mountain Correctional Center that currently makes all the clothing for inmates. She concluded, "So, not all correctional industry programs involve the public sector." 8:39:48 AM REPRESENTATIVE GARDNER asked if it makes sense to draw a line between the employment which is funded through the Department of Corrections and employment which is paid by an outside organization. 8:40:00 AM MS. GRIFFIN responded that that might work in some cases. She said federal regulations for the PIE programs allow either workers' compensation "or its equivalent." In more of a free venture program, the company pays to the department minimum wage for all hours worked by inmates; however, the inmates are only allowed to have 50 percent of minimum wage posted to their account for their pay. Currently, she noted, the state files 1099 forms for inmate labor, as opposed to wage statements that have all of the withholdings. She indicated that she had not really considered the effect of "whether, if the employer were paying workers' compensation, ... we would have some offenders receiving W2s from the private employer, and those working in the institution in industries receiving 1099s." In response to a question from Chair Seaton, Ms. Griffin confirmed that the 1099 form is for miscellaneous income. 8:42:07 AM REPRESENTATIVE GARDNER said she would like to explore this issue further before offering an amendment. She explained: I do have concerns about the whole workers' [compensation] issue, and if they're paid externally on an hourly rate that's minimum wage or more ... they really are employees of some other agency, and I don't ... agree with saving the employer workers' [compensation] money and opening the state to liability. But I don't think we have to do that here if there's another opportunity to ... have an amendment ready for next time. 8:42:48 AM MS. GRIFFIN said she believes there has been discussion among attorneys related to "having those contracts with private vendors read in such a manner that they are also liable." 8:43:36 AM MR. THOMPSON added that in its contract agreements with independent vendors, DOC would require the vendors to hold the state harmless "for claims arising from these activities and operations," and it would make the vendors carry a liability policy, "such that they would have the means to effect a commitment to hold us harmless." He concluded, "And so, those injuries typically would occur while they're not on our premises, or if in fact they're on our premises, they have the directional management and control of the inmate at that time. So, they have the responsibility to resolve the claim." 8:44:25 AM REPRESENTATIVE GARDNER asked, "Has there ever been occasion to actually rely on those policies?" 8:44:37 AM MR. THOMPSON answered that there has been claim history when injury occurred to inmates off premise involving "a contractual tender of defenses." 8:44:44 AM REPRESENTATIVE LYNN recalled that Chair Seaton had previously commented regarding "the nature of what's being worked out." He asked if that nature has anything to do with provisions that would protect law-abiding workers from competition from criminal workers. 8:45:31 AM MS. GRIFFIN confirmed that that is indeed the nature of what is being worked out. She noted that there are provisions in the PIE program that require, before beginning a program: meeting with organized labor, involving the Department of Labor to determine prevailing wages, and not creating competition for organized bargaining units or displacing workers. She stated her understanding that "what we are working towards is having something very similar, if not the same, applied to any industry that ... would be free venture with a private organization." 8:46:14 AM MS. GRIFFIN, in response to a follow-up question from Representative Lynn, offered her belief that there would be an upcoming amendment to address this issue. CHAIR SEATON said it is not the intent of the committee to hold up the bill; however, he said he wants to ensure that any necessary amendments are incorporated. 8:46:54 AM MS. GRIFFIN related that there is an amendment being worked on presently. 8:47:11 AM CHAIR SEATON asked Representative Gardner to work with DOC to ensure that any amendments to be offered are received by the committee in writing before the next meeting. 8:47:34 AM REPRESENTATIVE GARDNER [nodded]. 8:47:43 AM MS. GRIFFIN concluded that the passage of SB 310 is critical in order to keep inmates productively employed. She reiterated that having inmates working and busy is vital to the security of the institution. In response to a request from Chair Seaton, she said she would have a response for the committee, regarding the reprioritization of the deductions, by the next meeting. 8:49:06 AM [The committee held discussion regarding its upcoming calendar.] 8:50:38 AM CHAIR SEATON announced that SB 310 was heard and held.
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