Legislature(1995 - 1996)

04/11/1995 10:05 AM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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       SENATE BILL NO. 135                                                     
       "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."                                                                       
                                                                               
  Co-chair Frank explained that this is  the same bill as last                 
  year expanding the list  of people to be  denied eligibility                 
  to  include felons  not  serving jail  time  and third  time                 
  misdemeanant.  The concept is to  recoup State monies.  Last                 
  year the bill passed  the Senate, but was not  considered by                 
  the House.  There  has been incorporated into the  bill $2.7                 
  million of expected  savings in the  FY 96 year, built  into                 
  the  budget  process.   This bill  is  part of  the Senate's                 
  overall spending plan.  Co-chair Frank explained that  there                 
  is  no  retroactive feature  to the  bill.   This  bill will                 
  capture the dollars  and put it  into the budget opposed  to                 
  distributing them out to the dividend recipients.                            
                                                                               
  Debra Vogt,  Deputy Commissioner  for the  Dept. of  Revenue                 
  introduced Nancy  Jones, Director,  Permanent Fund  Dividend                 
  Division.  Ms.  Vogt spoke to the  charts handed out  at the                 
  meeting (attached to the  minutes).  SB 135 changes,  as the                 
  sponsor   has  indicated,  both   the  way  the  substantive                 
  provisions  of  the  legislation  and   the  timing  of  the                 
  legislation.  The  bill adds to  the list of applicants  who                 
  are  denied dividends for criminal activity.   The list adds                 
  misdemeanant, third time  misdemeanant who are incarcerated,                 
  and any  felon.  The purpose  is to reimburse the  state for                 
  some of  the costs associated  with criminal activity.   The                 
  bill also adds  to the list  of agencies that receive  funds                 
  from the dividends  denied the criminals.   Currently, those                 
  agencies that  are permitted  to receive  funds include  the                 
  Crime  Victim Compensation  Fund,  the  Council on  Domestic                 
  Violence,  and   the  Department   of   Corrections.     The                 
  legislation adds the Dept. of Revenue for child support, the                 
  Dept. of Public Safety and the Dept. of Law.  The reason for                 
  the addition of the  Dept. of Revenue for child  support, is                 
  that many of  those being denied dividends  are garnished by                 
  the Child Support  Enforcement Division  for the support  of                 
  the criminal's children.  By appropriating a portion of  the                 
  funds to the Dept. of Revenue for child support, it does not                 
  give the money to the  children, who would otherwise receive                 
  it  if  the  Child  Support  Enforcement  Division  were  to                 
  distribute to the children.  The Department opposes changing                 
  the  eligibility  requirements  for  dividends.    There  is                 
  opposition to adding  to the list  of ineligible people  and                 
  adding  to  the list  of eligible  people.   The  timing and                 
  fiscal issues are more important issues.   Ms. Vogt referred                 
  to her  timeline under  current law  vs under  SB 135.   The                 
  Department believes this  is an appropriation to  fund state                 
  agencies out of the  dividend fund.  In the  legislation, it                 
  is prohibited  from informing  the dividend  recipients that                 
  this money has  been taken out of their check.  Section 7 of                 
  the legislation  says, "notwithstanding the  amendments made                 
                                                                               
                                                                               
  by the legislation, the notice requirements for 43.23.028 do                 
  not apply to appropriations from  the dividend fund made for                 
  FY  96.  The Department  recognizes  the sponsors  desire to                 
  close the gap between the criminal  activity in one year and                 
  the appropriation several years later.   A felon in jail for                 
  one  year  can only  have  one  dividend taken  away.   This                 
  legislation appropriates  2 dividends  to state  government,                 
  which is why the Department is opposed to it.                                
                                                                               
  Senator Phillips said  that the legislation can be viewed as                 
  a user  fee.   Ms. Vogt  stated that  the Department  is not                 
  opposed  to the idea  of denying  criminals dividends.   The                 
  double-dipping  aspect   of  this   legislation  takes   two                 
  dividends away,  when there  is really  only one  available.                 
  Therefore the second dividend is coming from the rest of the                 
  people of the state who are not criminals.                                   
                                                                               
  Loren Jones, Director, Division of Alcoholism and Drug Abuse                 
  spoke to two issues in SB 135 that the department  wanted to                 
  bring  to  the  committee's  attention.    Under  this  bill                 
  extending  it  to  third  time misdemeanant  offenders,  the                 
  majority of  those offenders we believe will  be referred to                 
  the court  system into the Alcohol Safety Action Program and                 
  thus into  alcohol treatment.   Unlike  felony probationers,                 
  misdemeanant  probationers,  are   not  supervised  by   the                 
  Department  of  Corrections.  In  most  cases, if  they  are                 
  alcohol  related offenses,  they are supervised  through the                 
  Alcohol  Safety  Action Program  in  the Dept.  of  Health &                 
  Social  Services.    There are  substantial  costs  that the                 
  offender  pays.    Usually,  access to,  or  receipt  of the                 
  dividend, provides  those persons with money to  pay for the                 
  service.  In the  Alcohol Treatment System, it is  estimated                 
  that  $300,000  of  third  party  payments, or  first  party                 
  payments  from  the clients,  actually  come from  the their                 
  dividends. There is concern that it would take away from the                 
  local  non-profit  agencies,  revenue available  to  them to                 
  charge  for their services.   Senator Donley asked what else                 
  the Dept. of  Health & Social  Services is doing to  collect                 
  funds  from the criminals?   Mr.  Jones responded  there are                 
  several avenues.   Providers can go off  medicaid. Providers                 
  can  go  after  private insurance  if  the  individuals have                 
  private insurance.   There is a requirement  to collect fees                 
  through  small  claims court.  Most of  the programs  have a                 
  sliding fee scale. The Department  estimates that beyond the                 
  dividends there  is  double that  amount  of money  that  is                 
  collected from other  fees.   Many of the  clients are  also                 
  coming out of a homeless situation, and more than 65% report                 
  an income of less than $10,000 a year.                                       
                                                                               
  Mr. Robert Cole,  Administrative Director  for the Dept.  of                 
  Corrections, stated there is concern that the Administration                 
  does not support  the bill.   Our most immediate concern  is                 
  that the FY  96 budget  is contingent on  this $2.7  million                 
  revenue source.  A  second concern is that the  $2.7 million                 
                                                                               
                                                                               
  which would be realized if the funds are collected, is still                 
  a one time shot and there is a concern of what position that                 
  puts the Department  in for the succeeding FY  97.  Will the                 
  Department  then  be  $2.7  million  out  of  the  base   in                 
  succeeding  years?   There can  be no assurances  of revenue                 
  from collection of permanent fund dividend checks from third                 
  time misdemeanant.  The Department of Corrections works with                 
  the Department  of  Revenue  and  Public Safety  to  try  to                 
  correlate  the  information   system  with  public  safety's                 
  information system and calculate the likely number of future                 
  third time misdemeanant  who would appear in  the Department                 
  of Correction's rolls, two  and three years out, and  in the                 
  future.   He stated that the  payments are used to pay child                 
  support payments, cost to treatment programs, debts owed and                 
  other costs,  fines, etc.  He stated there would be a effect                 
  on  distribution  in the  future from  those purposes  to an                 
  appropriation  purpose.    He  stated   that  the  Dept.  of                 
  Corrections does not know  where they stand, and that  it is                 
  up to the  appropriations process to  decide, and not to  be                 
  locked in law.                                                               
                                                                               
  Co-chair Frank MOVED  to pass out  of committee SB 137  with                 
  individual  recommendations  and accompanying  fiscal notes.                 
  No objection having  been heard SB  137 was REPORTED OUT  of                 
  committee  with the  following  fiscal notes:  Department of                 
  Revenue $2.4; Department of Corrections, zero; Department of                 
  Public   Safety,  $5.0;   Department  of   Education,  zero;                 
  Department of  Law, zero.   Co-chairs  Halford, Frank  along                 
  with Senators  Rieger, Phillips,  and Sharp recommended  "do                 
  pass".  Senator Donley signed "no recommendations".                          
                                                                               

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