Legislature(1995 - 1996)

03/28/1995 03:35 PM Senate STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
 SSTA - 3/28/95                                                                
                                                                               
              SB 135 PFD NOTICES AND ELIGIBILITY                             
                                                                               
 SENATOR SHARP brings up SB 135 as the next order of business before           
 the Senate State Affairs Committee and calls the first witness.               
                                                                               
 Number 313                                                                    
                                                                               
 SENATOR STEVE FRANK, Co-Chairman of the Senate Finance Committee,             
 prime sponsor of SB 135, states SB 135 is a subject that passed the           
 senate last year.  SB 135 would require persons incarcerated or               
 convicted of a third misdemeanor to contribute their permanent fund           
 dividends, on the theory that those persons should incur at least             
 some part of the costs imposed on the system through their illegal            
 behavior.  It provides the state a way to fund some of the programs           
 in the Department of Corrections.  It would also allow legislative            
 discretion for utilization of the money for other agencies,                   
 including the Department of Public Safety and the Department of               
 Law.                                                                          
                                                                               
 Number 334                                                                    
                                                                               
 SENATOR RANDY PHILLIPS asks if there are any word changes from last           
 year's version.                                                               
                                                                               
 DAVID SKIDMORE, Aide to Senator Frank, responds that the portion of           
 SB 135 that references the Department of Revenue is slightly                  
 different.  Permanent fund dividends forfeited under SB 135 will              
 not be used to satisfy child support obligations; it is thought               
 that would be unconstitutional, under the constitutional                      
 requirement that public funds not be used for private purpose.                
 Another change was in the effective date.  Only offenses from the             
 effective date of January 1, 1996 will be counted.                            
                                                                               
 SENATOR DUNCAN is not sure he understands the entire impact of SB
 135.  He asks if this is being considered as a source of funding              
 for the Department of Corrections in the FY 96 operating budget.              
 If SB 135 does not pass, will it impact funding for the Department            
 of Corrections?                                                               
                                                                               
 Number 365                                                                    
                                                                               
 SENATOR FRANK does not think whether SB 135 passes or not would               
 have any affect on the Department of Corrections budget.  The                 
 budget proposal assumes this money will be available.  But he does            
 not think 2.7 million dollars in general funds will be taken out of           
 the budget if SB 135 does not pass.                                           
                                                                               
 SENATOR DUNCAN asks if he understands correctly that SB 135 would             
 allow 2.7 million dollars of permanent fund earnings to go to the             
 Department of Corrections, and if SB 135 didn't pass, then that               
 funding source will have to be replaced by general funds.                     
                                                                               
 SENATOR FRANK replies that is correct.                                        
                                                                               
 Number 388                                                                    
                                                                               
 SENATOR DUNCAN says he is not in favor of giving convicted felons             
 a permanent fund dividend, but he wants to know what the impact               
 will be on the Child Support Enforcement Division (CSED) and other            
 recipients of garnished dividends.                                            
                                                                               
 SENATOR FRANK thinks there may be some reduction in garnishment of            
 dividends for child support obligations.  They tried to work around           
 that, but they felt as though the number of people affected by that           
 would be small.                                                               
                                                                               
 Number 405                                                                    
                                                                               
 MR. SKIDMORE thinks about 300 of the approximately 2,050                      
 individuals would have child support obligations that would be                
 affected.  That does not take into account families on AFDC.                  
                                                                               
 Number 415                                                                    
                                                                               
 SENATOR DUNCAN comments he is concerned with impact on child                  
 support, victim restitution, treatment programs, and payment of               
 fines and judgements.                                                         
                                                                               
 SENATOR FRANK acknowledges there may be some impact on child                  
 support, but it would only affect those folks who weren't on AFDC.            
 It is hard to tell how many people would be affected, but since it            
 is probably such a small number of people, would we be willing to             
 keep paying dividends to persons convicted of three or more                   
 misdemeanors, just so that small group won't be affected?  If we              
 didn't have AFDC as a back-up mechanism, then there would be more             
 reason to be concerned about those people losing an obligor's                 
 dividend.                                                                     
                                                                               
 [Senator Duncan asked a question, which was not picked up by the              
 recording equipment.]                                                         
                                                                               
 SENATOR FRANK answers maybe.                                                  
                                                                               
 SENATOR DONLEY asks Senator Frank to clarify that currently, only             
 people incarcerated for felonies don't receive their dividends.               
                                                                               
 SENATOR FRANK responds that is correct.                                       
                                                                               
 SENATOR DONLEY asks if SB 135 would continue to deny dividends                
 after a felon has been released from prison.                                  
                                                                               
 MR. SKIDMORE responds SB 135 would not deny dividends to released             
 felons.                                                                       
                                                                               
 SENATOR DONLEY asks if SB 135 would deny dividends to felons for              
 the first year following their release from prison.                           
                                                                               
 MR. SKIDMORE thinks it would do that.                                         
                                                                               
 SENATOR DONLEY doesn't understand that language in the bill.                  
                                                                               
 Number 458                                                                    
                                                                               
 MR. SKIDMORE replies that the structure of the existing statute was           
 followed in drafting the legislation.  Also taken into                        
 consideration was the qualifying period for permanent fund                    
 dividends.                                                                    
                                                                               
 SENATOR DONLEY asks what happens if a person is convicted of a                
 felony, but does not go to prison.  Would a felon lose his or her             
 dividend for the rest of their life?                                          
                                                                               
 MR. SKIDMORE responds that would not be the case.  Under SB 135               
 they would just lose their dividend for the following dividend                
 year.                                                                         
                                                                               
 SENATOR DONLEY notes the same thing would apply to persons                    
 convicted of a third misdemeanor, but not imprisoned.                         
                                                                               
 MR. SKIDMORE confirms that is the case.  In regards to court fines,           
 for which dividends are currently being garnished, those fines                
 would not be extinguished, it would simply be pushed back one year.           
                                                                               
 Number 484                                                                    
                                                                               
 SENATOR DONLEY is willing to work on SB 135 in the Finance                    
 Committee, but he really thinks the bill should be stronger.                  
                                                                               
 SENATOR FRANK thinks they're trying to strike a balance between               
 what would be constitutional and what would be supportable by a               
 majority of legislators.  He acknowledges that for some folks, it             
 probably would be fair to take their dividends away for the rest of           
 their lives.                                                                  
                                                                               
 Number 490                                                                    
                                                                               
 SENATOR DUNCAN asks if Senator Frank concurs with his statement               
 about double-dipping into the permanent fund earnings, and that it            
 will impact everyone's dividend.                                              
                                                                               
 SENATOR FRANK responds SB 135 will not impact everyone's dividend,            
 only the incarcerated folks.                                                  
                                                                               
 SENATOR DUNCAN reasserts that if SB 135 is a double-dip in the                
 permanent fund earnings, then it will affect dividends.                       
                                                                               
 SENATOR FRANK replies if that is what Senator Duncan implied, he              
 was not agreeing with that.  Senator Frank asks Mr. Skidmore to               
 explain why two-years worth of dividends are being picked up to               
 accelerate the collection.  That is what Senator Frank meant by               
 "double-dipping."                                                             
                                                                               
 SENATOR DUNCAN concurs with that.  It does authorize the                      
 legislature to take over 2 million dollars out of the permanent               
 fund earnings, which really hasn't been collected as dividends from           
 the felons or repeat misdemeanants.                                           
                                                                               
 SENATOR FRANK states the dividends won't go to the felon or repeat            
 misdemeanants; that's the deal.                                               
                                                                               
 SENATOR DUNCAN points out that the money is in the corrections                
 budget for FY 96; it is not coming from those dividends, it is                
 coming from the permanent fund earnings.  So it really is double-             
 dipping in the permanent fund earnings.  So Senator Duncan thinks             
 SB 135 will affect the amount of the dividend.                                
                                                                               
 SENATOR FRANK insists that is not the case.  He asks Mr. Williams             
 to discuss that point.                                                        
                                                                               
 TOM WILLIAMS, Aide to Senator Frank, states, "the individual was              
 incarcerated in calendar year 1993.  Therefor they were ineligible            
 for the 1994 dividend.  The department calculates the amount that             
 would have been paid for the 1994 dividend, reports it to the                 
 legislature, and the legislature then appropriates it for fiscal              
 year 1996.  In essence, there is a year's lag in appropriating                
 those funds to the Department of Corrections and the Department of            
 Public Safety, because they were actually dividends that were not             
 paid in fiscal year 1995.  What SB 135 would do, it would double up           
 in one sense by moving when the dividends are paid and                        
 corresponding them to when they are denied."                                  
                                                                               
 Number 522                                                                    
                                                                               
 SENATOR DUNCAN continues his assertion that the first year it would           
 seem to be that the money would be taken out of the permanent fund            
 earnings account.  It will impact the dividends.  He states he is             
 not convinced that dividends will not be reduced.  He wants to know           
 if there will be an impact on dividends, and if that will be                  
 reported on dividend check stubs.  Senator Duncan does not know if            
 he would oppose SB 135 on that point.                                         
                                                                               
 Number 531                                                                    
                                                                               
 SENATOR FRANK does not think dividends would be affected by SB 135.           
                                                                               
 SENATOR DUNCAN agrees with that, with the exception of the first              
 year after the legislation becomes law.  He agrees with everything            
 Senator Frank has said, with the exception of the first year, when            
 he believes there will be an extra 2.8 million dollars taken from             
 the permanent fund earnings.  Perhaps he is mistaken, but that is             
 his perception.  Senator Duncan asks if there is anyone from the              
 Permanent Fund Dividend Division to clarify whether or not his                
 concern is valid.                                                             
                                                                               
 MIKE MCGEE, Chief, Permanent Fund Dividend Operations, Permanent              
 Fund Dividend Division, Department of Revenue, states the governor            
 strongly opposes SB 135 for the very reason discussed today: the              
 double-dipping nature of the first year the bill is law.  Even if             
 that provision is eliminated, the governor would still oppose SB
 135, because he does not want to see a reduction in the monies                
 available to those people and state agencies with attachments on              
 dividends of people affected by the bill.  The administration does            
 see a reduction of 2.7 or 2.8 million in the permanent fund                   
 earnings, because that money will be paid twice.                              
                                                                               
 SENATOR RANDY PHILLIPS comments sometimes the legislature just                
 doesn't agree with the governor.                                              
                                                                               
 Number 549                                                                    
                                                                               
 SENATOR DONLEY wonders how much the dividends will be impacted.               
                                                                               
 [There is general estimation and consensus that the amount will be            
 about $4 or $5 per dividend, and that it will probably not be                 
 reportable on the dividend check stubs.]                                      
                                                                               
 SENATOR DUNCAN thinks people should know if part of their dividend            
 monies are being used for departmental operations.                            
                                                                               
 SENATOR LEMAN makes a motion to discharge SB 135 from the Senate              
 State Affairs Committee with individual recommendations.                      
                                                                               
 Number 567                                                                    
                                                                               
 CHAIRMAN SHARP, hearing no objection, orders SB 135 released from             
 committee with individual recommendations.                                    

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