Legislature(2013 - 2014)BUTROVICH 205

02/06/2014 09:00 AM Senate STATE AFFAIRS


Download Mp3. <- Right click and save file as

Audio Topic
09:02:48 AM Start
09:03:57 AM Overview: Department of Law-medicaid Fraud Control Unit
10:00:26 AM SB104
10:18:49 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Overview: Dept. of Law Medicaid Fraud Control TELECONFERENCED
Unit, Andrew Peterson, Director MFCU
-- Testimony <Invitation Only> --
*+ SB 104 APPROPRIATIONS FROM THE DIVIDEND FUND TELECONFERENCED
Heard & Held
          SB 104-APPROPRIATIONS FROM THE DIVIDEND FUND                                                                      
                                                                                                                                
10:00:26 AM                                                                                                                   
CHAIR DYSON announced that the committee  is now going to take up                                                               
SB 104.                                                                                                                         
                                                                                                                                
10:00:39 AM                                                                                                                   
SENATOR GIESSEL  moved to adopt  work draft  Committee Substitute                                                               
(CS) for SB 104, labeled  28-LS0847\Y, as the working document to                                                               
replace Senate Bill 104 labeled 28-LS0847\P.                                                                                    
                                                                                                                                
CHAIR DYSON announced  that without objection, Version  Y was the                                                               
working document before the committee.                                                                                          
                                                                                                                                
CHAIR DYSON, SB 104's sponsor,  commented that a continuing error                                                               
he has made  in the legislature is  to work very hard  on what he                                                               
thought was  good legislation and  finding that the  execution of                                                               
the legislation fell significantly  short of what the intentions.                                                               
He  expressed  that his  fault  has  been  not following  up.  He                                                               
revealed that  he worked with  Representative Berkowitz  a decade                                                               
ago  on  the  whole  western-government  concept  of  restorative                                                               
justice for  victims to  a pre-offence  condition. He  noted that                                                               
when  possible, perpetrators  are restored  to a  useful role  in                                                               
life as well.                                                                                                                   
                                                                                                                                
He revealed  that the legislature  passed legislation in  1988 to                                                               
make felons  and certain misdemeanants  ineligible for  their PFD                                                               
with  the intent  that the  money go  for victim  restitution. He                                                               
remarked that by and large,  the intended PFD restitution has not                                                               
happened.  He  said several  heinous  crimes  lead to  the  state                                                               
instituting  the Violent  Crimes  Compensation  Board (VCCB).  He                                                               
said  he  has  found  out  through  research  that  approximately                                                               
$100,000 out of the approximate  $500,000 in annual court-ordered                                                               
restitution  is  being  collected  from  the  agencies  that  are                                                               
responsible  for  getting  money  to victims.  He  remarked  that                                                               
victims were going a long time with  no help. He set forth a fact                                                               
that he  felt startling  where approximately  $12 million  to $13                                                               
million  in  prisoners'  PFD  funds   have  gone  towards  inmate                                                               
healthcare rather than towards the compensation fund.                                                                           
                                                                                                                                
He said  the intent in  SB 104 is to  fix the system  as intended                                                               
and  to  clear  up  a  couple of  barriers  within  the  existing                                                               
statute. He  asserted that some  of the state's agencies  have an                                                               
agency-centric  view of  what  should happen  with  the funds  as                                                               
opposed  to  legislature's  clear   intent.  He  noted  that  the                                                               
Governor  is quite  enthusiastic  about what  the legislature  is                                                               
doing. He said the involved  agencies are working with his office                                                               
and providing  good feedback to  make the bill better,  hence the                                                               
CS before the committee.                                                                                                        
                                                                                                                                
10:05:26 AM                                                                                                                   
JOSHUA BANKS, Staff for Senator  Dyson, Alaska State Legislature,                                                               
Juneau, Alaska; provided a CS overview for SB 104.                                                                              
                                                                                                                                
MR. BANKS set forth that the  problem SB 104 is trying to address                                                               
is as follows:                                                                                                                  
                                                                                                                                
    · Fulfill the constitutional right of victims to receive                                                                    
     restitution  and   compensation.  There   are  two   basic                                                                 
     vehicles that the  state has historically used to  achieve                                                                 
     victim restitution: DOL Collections Unit (DOL-CU) and  the                                                                 
     Violent Crimes Compensation Board (VCCB).                                                                                  
  · DOL-CU can only help victims after a conviction, if there                                                                   
     is a  conviction. The  end result leaves  many victims  of                                                                 
     horrific crimes  without compensation or any  restitution.                                                                 
     On the  other hand, VCCB is  able to give compensation  as                                                                 
     soon as there  is a police report, sometimes years  before                                                                 
     a conviction is even given.                                                                                                
                                                                                                                                
MR.  BANKS noted  that in  FY2012, VCCB  was awarded  $637,154 in                                                               
court-ordered restitution, but only $47,652 was received.                                                                       
                                                                                                                                
CHAIR DYSON asked to clarify that VCCB's award is court-ordered.                                                                
                                                                                                                                
MR.  BANKS  answered  yes.  He continued  that  the  majority  of                                                               
restitution funds that DOL receives  are through garnishing PFDs.                                                               
He said  currently under  AS 43.23.005,  a number  of restitution                                                               
ordered  offenders are  ineligible for  the PFDs  that the  state                                                               
cannot  garnish. Unfortunately  the majority  of individual  PFDs                                                               
have gone to DOC: 56 percent in FY2006 and 84 percent in FY2014.                                                                
                                                                                                                                
10:08:04 AM                                                                                                                   
He addressed SB 104's four primary goals as follows:                                                                            
                                                                                                                                
   1.  Seeks to restore crime victims to a pre-offense condition.                                                               
   2.  Establishes a reliable funding source for VCCB.                                                                          
   3.  Sets a priority for use of the Criminal Fund.                                                                            
   4.  Uses a restitution vehicle that already exists in law.                                                                   
                                                                                                                                
CHAIR DYSON added  that when he and  Representative Berkowitz did                                                               
the  restitution  legislation  a   decade  ago,  it  was  clearly                                                               
established  that  the first  priority  for  any funds  that  the                                                               
perpetrator  had  was  to  go   to  the  victim.  He  noted  that                                                               
subsequent  legislation added  child  support to  the number  one                                                               
priority. He  stressed that he and  Representative Berkowitz made                                                               
it  very clear  that court  costs were  secondary to  victims and                                                               
children. He  asserted that  SB 104  also emphasizes  victims and                                                               
children.                                                                                                                       
                                                                                                                                
MR. BANKS detailed  that there is no amount of  money that can be                                                               
given to  repair the victim's  emotional and physical  damage. He                                                               
asserted that  the primary goal is  to use the criminal  funds to                                                               
give some form  of relief in compensation for the  victims and to                                                               
establish a reliable  funding source for VCCB. He  noted that the                                                               
current  statute has  no priority  set for  how the  PFD Criminal                                                               
Fund (PFD-CM) is  to be used. The statute that  is primarily used                                                               
is AS 43.23.028(B)  that simply states what  agencies can receive                                                               
money  from  PFD-CM. He  detailed  that  AS 43.23.028(B)  has  no                                                               
priority set to which agency should  receive more of the fund; it                                                               
is up  to Governor  and the  legislature to  decide. He  said the                                                               
intent is  to create a  reliable funding  source for VCCB  and to                                                               
prioritize PFD-CM so that victims  come first. He reiterated that                                                               
the majority of  PFD-CM funds have gone to DOC.  He remarked that                                                               
prisoners are indirectly  receiving their lost PFDs  when the DOC                                                               
obtains  funds  that  should  be   directed  to  the  PFD-CM.  He                                                               
summarized that  SB 104 uses  the current restitution  vehicle by                                                               
making priority changes to PFD-CM.                                                                                              
                                                                                                                                
10:11:38 AM                                                                                                                   
MR. BANKS reviewed  the PFD-CM history. HB 245 passed  in 1988 to                                                               
make  convicted felons  ineligible for  a PFD.  There was  intent                                                               
language in HB  245 that directed the money to  go towards victim                                                               
compensation with VCCB.  He said AS 43.23.005(d)  was expanded to                                                               
also  include incarcerated  felons,  misdemeanants  with a  prior                                                               
felony, and third  time misdemeanants. He added  that since 1988,                                                               
recipients for PFD-CM was expanded  to include DOC. He noted that                                                               
DOC was not originally intended to be a PFD-CM.                                                                                 
                                                                                                                                
He pointed  out that  the primary  difference with  the CS  is to                                                               
change the PFD-CF's primary recipient  to VCCB as opposed to DOL.                                                               
He said  the belief is that  VCCB can better determine  needs and                                                               
provide funds more quickly to victims.                                                                                          
                                                                                                                                
10:14:35 AM                                                                                                                   
He detailed the CS sectional analysis as follows:                                                                               
                                                                                                                                
     Section 1:                                                                                                                 
          (a) Makes language uniform with other Criminal                                                                        
               Fund statutes.                                                                                                   
          (b) Ensures that money goes towards priority                                                                          
               order created in AS 43.23.031.                                                                                   
     Section 3:                                                                                                                 
          (a) Creates priority order for Criminal Fund:                                                                         
               • VCCB for victim compensation,                                                                                  
               • CSSD for child support arrearages,                                                                             
               • State approved rehabilitation programs,                                                                        
               • Other incarceration cost.                                                                                      
          (b) VCCB will send DOR amount of compensable                                                                          
               claims for previous fiscal year.                                                                                 
        (c) CSSD will send amount owed for child support                                                                        
               arrearages.                                                                                                      
          (d) Court system will send amount owed for                                                                            
               court-ordered drug and alcohol treatment.                                                                        
        (e) DOR will use reports to determine the amount                                                                        
               each agency should receive from the PFD-CF.                                                                      
          (f) DOR will submit a report with the Operating                                                                       
               Budget listing the amounts determined under                                                                      
               (e).                                                                                                             
                                                                                                                                
CHAIR DYSON  asked Mr. Banks  to continue his  sectional analysis                                                               
at the  next committee meeting. He  noted that there is  no known                                                               
opposition to  SB 104 and  he believes  the bill is  an important                                                               
piece of legislation.  He expressed his intent to get  SB 104 out                                                               
of committee the following week. He  said he would commend to the                                                               
committee's  attention the  report from  Legislative Research  on                                                               
what has happened historically with  victim compensation. He said                                                               
if the  committee reads the  report carefully, members may  be as                                                               
angry  due to  the disturbing  information.  He said  SB 104  has                                                               
great  support from  the Governor.  He noted  a meeting  with the                                                               
Governor  where  the  Governor  expressed  being  surprised  that                                                               
victims' compensation  was not working  the way it should  be. He                                                               
asked Mr.  Banks what  department goes  after criminal  assets in                                                               
DOL.                                                                                                                            
                                                                                                                                
10:17:26 AM                                                                                                                   
MR. BANKS replied the DOL Collections Unit (DOL-CU).                                                                            
                                                                                                                                
CHAIR DYSON said  DOL-CU is working hard  with limited resources.                                                               
He explained  that he had  a meeting  with DOL-CU and  noted that                                                               
the  DOL-CU  goes  after  financial  assets,  institutions,  real                                                               
property,  but  does  not  have  the time  to  go  after  private                                                               
property.  He disclosed  that DOL-CU  conveyed  that going  after                                                               
somebody's car would cost more money  than the asset is worth. He                                                               
stated that he would argue that  a $100,000 airplane or a $30,000                                                               
pickup could  make a  huge difference to  victims. He  added that                                                               
Governor Parnell  said collections  can be contracted  along with                                                               
using auction  houses to sell  seized assets. He  summarized that                                                               
there is  an ongoing effort to  encourage DOL-CU to do  more with                                                               
private property collections.                                                                                                   
                                                                                                                                

Document Name Date/Time Subjects
MFCU Presentation to Alaska State Legislature 2014 Final (2).pdf SSTA 2/6/2014 9:00:00 AM
Kanehailua Press Release 10-17-13.pdf SSTA 2/6/2014 9:00:00 AM
Press Release (Final) - MFCU Charges 7-9-13.pdf SSTA 2/6/2014 9:00:00 AM
Press Release Batac 1-27-14.pdf SSTA 2/6/2014 9:00:00 AM
State v Gunes Press Release.pdf SSTA 2/6/2014 9:00:00 AM
CSSB 104 (STA).pdf SSTA 2/6/2014 9:00:00 AM
SSTA 2/13/2014 9:00:00 AM
SB 104
SB 104.pdf SSTA 2/6/2014 9:00:00 AM
SB 104
SB 104 Sponsor Statement.pdf SSTA 2/6/2014 9:00:00 AM
SB 104
SB104-DOA-DOF-01-13-14.pdf SSTA 2/6/2014 9:00:00 AM
SB 104
SB104-DOA-VCCB-01-13-14.pdf SSTA 2/6/2014 9:00:00 AM
SB 104
SB104-DOC-OC-01-21-14.pdf SSTA 2/6/2014 9:00:00 AM
SB 104
SB104-LAW-CIV-02-01-14.pdf SSTA 2/6/2014 9:00:00 AM
SB 104
SB104-DOR-CSSD-02-01-14.pdf SSTA 2/6/2014 9:00:00 AM
SB 104
SB 104 Section Analysis.pdf SSTA 2/6/2014 9:00:00 AM
SB 104
Leg. Research - Restitution.pdf SSTA 2/6/2014 9:00:00 AM
SSTA 2/13/2014 9:00:00 AM
SB 104
SB 104 Presentation - 3.pptx SSTA 2/6/2014 9:00:00 AM
SB 104
HB 245 1988.pdf SSTA 2/6/2014 9:00:00 AM
SB 104