Legislature(2003 - 2004)
04/07/2003 01:31 PM Senate JUD
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 23-RESTITUTION FOR CRIME VICTIMS
CHAIR SEEKINS announced HB 23 to be up for consideration.
REPRESENTATIVE BRUCE WEYHRAUCH, sponsor of HB 23, said he
introduced the legislation to overturn a Court of Appeals
decision. He explained that the treasurer of the Alaska Folk
Festival embezzled money from the non-profit corporation. When
the new treasurer went to the police, they told him they did not
have the resources to investigate. The Folk Festival spent
hundreds of hours and dollars to follow the paper trail for the
police, who then submitted it to the district attorney. The
treasurer was convicted of theft and during sentencing the judge
said he would have to pay back the time and effort expended by
the volunteers. On appeal, the Court of Appeals indicated that
the Legislature did not intend the restitution statutes to be
read broadly enough to compensate volunteers of non-profits for
their time, money and effort in uncovering a crime. They
appealed to the Alaska Supreme Court and the divided court
wanted to hear the appeal. Part of the ruling by the dissenting
judges indicated that many other citizens and organizations will
be affected by this ruling. The District Attorney indicated that
they wanted legislation to address this appeal's court decision.
HB 23 would allow a non-profit to come to a court as the victim
and specify the value of the time and effort incurred so the
court could direct the defendant to reimburse the victim. The
bold-faced language in the amended version of the bill makes it
clear that the non-profit is the victim, not the individual
volunteers that did the service. This language was developed by
the Department of Law, the Public Defender's Office and the
court system.
If the volunteer presents a reasonable bill to the
non-profit for reimbursement, that can go in turn to
the sentencing judge, so that the sentencing judge has
a rational basis for providing the compensation to the
non-profit to make its compensation decisions later
on.
SENATOR FRENCH asked if volunteer labor and services are
generally a subject of restitution in law.
REPRESENTATIVE WEYHRAUCH replied that wasn't intended in this
bill. "This bill was meant to be narrow to address the specific
facts of the Demers case where you have a non-profit that is the
victim..."
SENATOR THERRIAULT asked if he is limited to damages or loss
(page 2, line11) as an individual if he expends hours of time to
provide information to the court.
REPRESENTATIVE WEYHRAUCH replied that would be the case, if he
were a victim of a crime. "There is no intent to change that at
all."
SENATOR FRENCH said that judges are often reluctant to grant
restitution for the hours anyone spends taking their car to the
body shop and picking it up or lost wages, for instance. "They
usually want to see a receipt."
1:55 p.m.
MR. RILEY WOODFORD, former president of the Alaska Folk
Festival, reiterated the story. The police made it clear that
their focus was violent crime and public protection. White-
collar crime tends to be a fairly low priority. So, in
situations like this, it falls upon the board of the non-profit
to do most of the investigative work, which takes away from the
mission and the reason the people volunteered. In the end, they
tallied up the amount of time they spent and picked what they
thought was fair compensation to the festival, not to the
individuals to help make right some of the impact of the crime.
He thought this was a fair bill that would help compensate non-
profits that are victimized by this same kind of white-collar
crime.
SENATOR THERRIAULT asked if the group hired an accountant to
quantify the amount of the embezzlement and was that a
compensatable expense or would that come under loss.
CHAIR SEEKINS responded that, if his company's accounting
department quantified an amount of embezzlement, more than
likely he wouldn't be able to recover that internal time, but if
he hired an accounting firm to do it, that would be a direct
expense related to the crime and he would be able to claim that.
He asked Senator French's opinion.
SENATOR FRENCH said this was a fuzzy area. In a $100,000 bank
embezzlement that he was familiar with, he doubted that the
person would be charged with all the investigative costs. He
asked if the festival was receiving any money from the Mr.
Demers.
MR. WOODFORD replied they were receiving money and it would
probably be paid back over a five-year period. He added that
Judge Collins said she would have included the costs if the
statute were more clear-cut.
Non-profits are in a little different situation than a business
in that they are completely volunteer and there is a tremendous
amount of trust and cooperation involved in the board members
who sometimes handle quite a bit of money. Most of the time the
checks and balances are very easy to subvert.
SENATOR FRENCH said they could change a few words on page 2 and
treat everyone the same. You could say, "including compensation
to a victim for the value of labor and goods if the labor and
goods were necessary to alleviate or mitigate the effects of the
crime."
REPRESENTATIVE WEYHRAUCH said he originally wanted this bill to
be broad, but the court has the ability under (2) to address the
financial burden placed on the victim and those who provide
services to the victim and other persons...
The reason this language was put in specific to a non-profit was
to address this particular issue and, two, without it, it loses
a broader base of support from the administration and creates
all kinds of legal issues.
It is intended to allow the individuals that Senator
Therriault is talking about to already be compensated
under this provision of the statute. This just
reverses the Court of Appeals to make sure that a non-
profit that has volunteer effort and expenses expended
can recover, which right now is prohibited under our
case law.
SENATOR FRENCH asked if anyone suggested that it would be
illegal or unconstitutional to have volunteer labor repaid
through a restitution award.
REPRESENTATIVE WEYHRAUCH replied no, because the intent is to
make sure that a court can order it if it can be substantiated
by a preponderance of evidence.
MS. PAM LABOLLE, President, Alaska State Chamber of Commerce,
said they recently suffered embezzlement and didn't have the
ability to determine the extent of their loss through volunteer
efforts. They hired an accountant, which will cost an additional
$10,000. The chamber sees the value of this legislation for non-
profits, because they know what the expense is.
CHAIR SEEKINS said that a lot of non-profits are too small to
have many checks and balances and he can see why they want to
have volunteer time counted. It has intrinsic value and the
court should be able to make a value determination in terms of
restitution. The question now is do they want to bring a not-
for-profit organization under the same bill.
MS. ANNE CARPENETI, Department of Law, said she wasn't as
familiar with the bill as she would like to be, but restitution
is hard for judges, prosecutors and defense lawyers. Limiting it
to non-profits was a beginning point.
SENATOR THERRIAULT wanted to know if this bill gives non-profits
something that private individuals and businesses don't
currently enjoy.
MS. CARPENETI replied she thought they were and asked the
sponsor.
REPRESENTATIVE WEYHRAUCH responded that wasn't what he said.
CHAIR SEEKINS said that would need to be clarified.
SENATOR THERRIAULT said that perhaps the policy call is whether
the benefit society gets out of non-profits matches that special
treatment.
TAPE 03-19, SIDE B
CHAIR SEEKINS closed testimony and said he would hold the bill
for further work.
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