Legislature(2011 - 2012)HOUSE FINANCE 519
03/30/2012 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB289 | |
| HB296 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | HB 289 | TELECONFERENCED | |
| += | HB 296 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
March 30, 2012
1:38 p.m.
1:38:49 PM
CALL TO ORDER
Co-Chair Stoltze called the House Finance Committee meeting
to order at 1:38 p.m.
MEMBERS PRESENT
Representative Bill Stoltze, Co-Chair
Representative Bill Thomas Jr., Co-Chair
Representative Anna Fairclough, Vice-Chair
Representative Mia Costello
Representative Mike Doogan
Representative Les Gara
Representative David Guttenberg
Representative Mark Neuman
Representative Tammie Wilson
MEMBERS ABSENT
Representative Bryce Edgmon
Representative Reggie Joule
ALSO PRESENT
Representative Steve Thompson, Sponsor; Jane Pierson,
Staff, Representative Steve Thompson; Representative Max
Gruenberg, Sponsor; Anne Carpeneti, Assistant Attorney
General, Legal Services Section-Juneau, Criminal Division,
Department of Law; Senator Kevin Meyer
PRESENT VIA TELECONFERENCE
Sam Edwards, Deputy Commissioner, Department of
Corrections, Mat-Su;
SUMMARY
HB 289 NATURAL GAS STORAGE TAX CREDIT/REGULATION
CSHB 289(FIN) was REPORTED out of committee with
a "do pass" recommendation and with one new
fiscal impact note and one new indeterminate note
from Department of Natural Resources, one new
indeterminate note Department of Revenue, one new
zero impact note from Department of
Administration, and one new zero impact note from
Department of Commerce, Community and Economic
Development.
HB 296 CRIME OF ESCAPE/DEF. OF CORRECT. FACILITY
HB 296 was HEARD and HELD in committee for
further consideration.
HOUSE BILL NO. 289
"An Act relating to a gas storage facility; relating
to the tax credit for a gas storage facility; relating
to the powers and duties of the Alaska Oil and Gas
Conservation Commission; relating to the regulation of
natural gas storage as a utility; relating to the
powers and duties of the director of the division of
lands and to lease fees for a gas storage facility on
state land; and providing for an effective date."
1:39:35 PM
REPRESENTATIVE STEVE THOMPSON, SPONSOR, relayed that the
legislation would incentivize private sector delivery of
lower-cost natural gas in the state by extending credits
for above-ground liquefied natural gas storage facilities.
He elaborated that the bill created a new credit for
construction of above-ground liquefied natural gas storage
tanks with a volume of 25 thousand gallons or more. He
furthered that the amount of the credit was would be
limited to 50 percent of the construction costs, or up to
$15 million, whichever was less. He said that the bill also
allowed for an eligible above-ground liquefied storage
facility cited on state lands to request an exemption from
rental payments; the exemption would extend up to 10 years
following commencement of commercial operations. He pointed
to letters of support from multiple agencies and
organizations (copy on file.)
1:41:46 PM
JANE PIERSON, STAFF, REPRESENTATIVE STEVE THOMPSON,
highlighted the changes in version X of the legislation:
Section 1. AS 38.05 is amended by adding a new section
to read:
Sec. 38.05.096. Exemption from rental payments on land
leased for certain liquefied natural gas storage
facilities. (a) A person leasing state land for a
liquefied natural gas storage facility other than a
gas storage facility subject to AS 38.05.180(u) may
request an exemption from lease payments as provided
in this section. The exemption is applicable for the
periods described in (b) of this section.
(b) The exemption is available for the calendar year
in which the liquefied natural gas storage facility
commences commercial operation and for each of the
nine calendar years immediately following the first
year of commercial operation. However, an exemption is
not applicable for the calendar year after the
facility ceases commercial operation or for any
subsequent calendar year. (c) The lessee shall
provide the director with any information the director
requests to determine whether the lessee qualifies for
the exemption.
(d) Information related to state land leased for a
liquefied natural gas storage facility qualifying for
the exemption in this section is public information
and may be furnished to the Regulatory Commission of
Alaska. On request, the director shall provide the
name of each person using state land leased for a
liquefied natural gas storage facility, the years for
which an exemption was granted, and the amount of the
exemption.
(e) A person receiving an exemption for a payment
under this section that contracts to store liquefied
natural gas for a utility regulated under AS 42.05
shall reduce the storage price to reflect the value of
the exemption.
(f) In this section,
(1) "ceases commercial operation" and
"commences commercial operation" have the meanings
given in AS 31.05.032;
(2) "liquefied natural gas storage facility"
has the meaning given in AS 42.05.990.
Sec. 2. AS 42.05.381(k) is amended to read:
(k) The cost to the utility of storing gas in a gas
storage facility or storing liquefied natural gas in a
liquefied natural gas storage facility that is allowed
in determining a just and reasonable rate shall
reflect the reduction in cost attributable to any
exemption from a payment due under AS 38.05.096 or
38.05.180(u), as applicable, [AS 38.05.180(u)] and the
value of a tax credit that the owner of the gas
storage facility received under AS 43.20.046 or
43.20.047, as applicable. The commission may request
the (1) commissioner of natural resources to report
the value of the exemption from a payment due under AS
38.05.096 or 38.05.180(u), as applicable, [AS
38.05.180(u)] that the gas storage facility received;
and (2) commissioner of revenue to report information
on the amount of tax credits claimed under AS
43.20.046 and 43.20.047, as applicable, for the gas
storage facility or liquefied natural gas storage
facility. In this subsection,
(1) "gas storage facility" has the meaning given in
AS 31.05.032;
(2) "liquefied natural gas storage facility" has the
meaning given
in AS 42.05.990
Sec. 3. AS 42.05.990(5) is amended to read:
(5) "public utility" or "utility" includes every
corporation whether public, cooperative, or otherwise,
company, individual, or association of individuals,
their lessees, trustees, or receivers appointed by a
court, that owns, operates, manages, or controls any
plant, pipeline, or system for
(A) furnishing, by generation, transmission,
or distribution, electrical service to the public for
compensation;
(B) furnishing telecommunications service to
the public for compensation;
(C) furnishing water, steam, or sewer service
to the public for compensation;
(D) furnishing by transmission or distribution
of natural or manufactured gas to the public for
compensation;
(E) furnishing for distribution or by
distribution petroleum or petroleum products to the
public for compensation when the consumer has no
alternative in the choice of supplier of a comparable
product and service at an equal or lesser price;
(F) furnishing collection and disposal service
of garbage, refuse, trash, or other waste material to
the public for compensation;
(G) furnishing the service of natural gas
storage to the public for compensation;
(H) furnishing the service of liquefied
natural gas storage to the public for compensation;
Sec. 4. AS 42.05.990 is amended by adding new
paragraphs to read:
(11) "liquefied natural gas storage facility" means
a facility that receives natural gas volumes in a
liquid or gaseous state from customers, holds the gas
volumes in a liquid state in a reservoir, and delivers
the gas volumes in a liquid or gaseous state to the
customer; in this paragraph, "facility" includes
(A) all parts of the facility from the point
at which the natural gas volumes are received by the
facility from the customer to the point at which the
natural gas volumes are delivered by the facility to
the customer;
(B) a facility consisting of a reservoir,
either underground or aboveground, and one or more of
the following components of the facility:
(i) pipe;
(ii) compressor stations;
(iii) station equipment;
(iv) liquefaction plant or facility;
(v) gasification plant or facility;
(vi) on-site or remote monitoring,
supervision, and control facilities;
(vii) gas processing plants and gas
treatment plants, but not including a manufacturing
plant or facility;
(viii) other equipment necessary to
receive, place into the reservoir, monitor, remove
from the reservoir, process, and deliver natural gas;
(12) "reservoir" means a receptacle or chamber,
either natural or man-made, holding a gas or liquid,
and includes a tank or a depleted or nearly depleted
pool; (13) "service of liquefied natural gas
storage" means the operation of a liquefied natural
gas storage facility; "service of liquefied natural
gas storage" does not include the storage of liquefied
natural gas
(A) owned by or contractually obligated to the
owner, operator, or manager of the liquefied natural
gas storage facility;
(B) that is incidental to the production or
sale of natural gas to one or more third-party
customers; or
(C) for which the price of storage is not
separately itemized.
Sec. 5. AS 43.20 is amended by adding a new section to
article 1 to read:
Sec. 43.20.047. Liquefied natural gas storage facility
tax credit. (a) A person that is an owner of a
liquefied natural gas storage facility described in
(b) of this section that commences commercial
operation before January 1, 2020, may apply a
refundable credit against a tax liability that may be
imposed on the person under this chapter or receive
the amount of the credit in the form of a payment for
the taxable year in which the liquefied natural gas
storage facility commences commercial operation. The
tax credit or payment under this section may not
exceed the lesser of $15,000,000 or 50 percent of the
costs incurred to establish or expand the liquefied
natural gas storage facility. The tax credit in this
section is in addition to any other credit under this
chapter for which the person is eligible.
(b) To qualify for the credit in this section, a
liquefied natural gas storage facility
(1) must have a liquefied natural gas storage
volume of not less than 25,000 gallons of liquefied
natural gas, or, if the credit is claimed for an
expansion, the expansion must have increased the
capacity of an existing liquefied natural gas storage
facility by more than 25,000 gallons;
(2) may not have been in operation as a
liquefied natural gas storage facility before January
1, 2011, unless the tax credit in this section is
based on the expansion of the liquefied natural gas
storage facility after December 31, 2011;
(3) must be regulated under AS 42.05 as a
utility and be available to furnish the service of
liquefied natural gas storage to customers, utilities,
or industrial facilities; in this paragraph, "service
of liquefied natural gas storage" has the meaning
given in AS 42.05.990;
(4) if located on state land and leased or
subject to a lease under AS 38.05, must be in
compliance with the terms of the lease; and
(5) must have commenced commercial operation
on or before the date the person takes a credit under
(a) of this section or applies for a payment under (a)
of this section.
(c) To claim the credit or request a payment, a
person shall submit to the department a certification
of the capacity of the liquefied natural gas storage
facility measured in gallons or the capacity of an
expansion to an existing liquefied natural gas storage
facility measured in gallons, the date that the
liquefied natural gas storage facility commenced
commercial operation, the date that any expansion to
the liquefied natural gas storage facility commenced
commercial operation, and other information required
by the department.
(d) A person applying the credit under this section
against a liability under this chapter shall claim the
credit on the person's return. A person entitled to a
tax credit under this section that is greater than the
person's tax liability under this chapter may request
a refund or payment in the amount of the unused
portion of the tax credit.
(e) The department may use money available in the
oil and gas tax credit fund established in AS
43.55.028 to make a refund or payment under (d) of
this section in whole or in part if the department
finds that (1) the claimant does not have an
outstanding liability to the state for unpaid
delinquent taxes under this title; and (2) after
application of all available tax credits, the
claimant's total tax liability under this chapter for
the calendar year in which the claim is made is zero.
In this subsection, "unpaid delinquent tax" means an
amount of tax for which the department has issued an
assessment that has not been paid and, if contested,
has not been finally resolved in the taxpayer's favor.
(f) For the purpose of determining the amount of the
credit under this section, the costs incurred to
establish a liquefied natural gas storage facility or
to expand a liquefied natural gas storage facility
shall be submitted to the department with verification
by an independent certified public accountant,
licensed in the state. The volume of working liquefied
natural gas storage or volume of the expansion to an
existing liquefied natural gas storage facility shall
be verified by a professional engineer licensed in the
state with relevant experience. (g) A person may not
receive a credit under this section for the
acquisition of a liquefied natural gas storage
facility for which a credit has been taken under this
section.
(h) If the liquefied natural gas storage facility
for which a credit was received under this section
ceases commercial operation during the nine calendar
years immediately following the calendar year in which
the liquefied natural gas storage facility commences
commercial operation, the tax liability under this
chapter of the person who claimed the credit shall be
increased, and a person not subject to the tax under
this chapter that received a payment under (d) and (e)
of this section shall be liable to the state in the
amount determined in this subsection. The amount of
the increase in tax liability or liability to the
state
(1) for a person subject to the tax under this
chapter, shall be determined and assessed for the
taxable year in which the liquefied natural gas
storage facility ceases commercial operation,
regardless of whether the liquefied natural gas
storage facility subsequently resumes commercial
operation;
(2) for a person not subject to the tax due
under this chapter, shall be determined and assessed
as of December 31 of the calendar year in which the
liquefied natural gas storage facility ceases
commercial operation, regardless of whether the
liquefied natural gas storage facility subsequently
resumes commercial operation; and
(3) is equal to the total amount of the credit
taken or received as a payment under (d) of this
section, as applicable, multiplied by a fraction, the
numerator of which is the difference between 10 and
the number of calendar years for which the liquefied
natural gas storage facility was eligible for a tax
credit under this section and the denominator of which
is 10.
(i) The issuance of a refund under this section does
not limit the department's ability to later audit or
adjust the claim if the department determines, as a
result of the audit, that the person that claimed the
credit was not entitled to the amount of the credit.
The tax liability of the person receiving the credit
under this chapter is increased by the amount of the
credit that exceeds that to which the person was
entitled. If the tax liability is increased under this
subsection, the increase bears interest at the rate
set by AS 43.05.225 from the date the refund was
issued.
(j) A person claiming a tax credit under this
section for a liquefied natural gas storage facility
that ceases commercial operation within nine calendar
years immediately following the calendar year in which
the liquefied natural gas storage facility commences
commercial operation shall notify the department in
writing of the date the liquefied natural gas storage
facility ceased commercial operation. The notice must
be filed with the return for the taxable year in which
the liquefied natural gas storage facility ceases
commercial operation.
(k) A refund under this section does not bear
interest.
(l) In this section,
(1) "ceases commercial operation" means that
the liquefied natural gas storage facility fails to
add or withdraw 20 percent or more of its working
capacity of liquefied natural gas during a calendar
year after the calendar year in which the liquefied
natural gas storage facility commences commercial
operation;
(2) "commences commercial operation" means the
first input of liquefied natural gas into a liquefied
natural gas storage facility for purposes other than
testing;
(3) "liquefied natural gas storage facility"
has the meaning given in AS 42.05.990.
Sec. 6. AS 43.55.028(a) is amended to read:
(a) The oil and gas tax credit fund is established
as a separate fund of the state.
The purpose of the fund is to purchase transferable
tax credit certificates issued under AS 43.55.023 and
production tax credit certificates issued under AS
43.55.025 and to pay refunds and payments claimed
under AS 43.20.046 or 43.20.047.
Sec. 7. AS 43.55.028(g) is amended to read:
(g) The department may adopt regulations to carry
out the purposes of this section, including standards
and procedures to allocate available money among
applications for purchases under this chapter and
claims for refunds and payments under AS 43.20.046 or
43.20.047 when the total amount of the applications
for purchase and claims for refund exceed the amount
of available money in the fund. The regulations
adopted by the department may not, when allocating
available money in the fund under this section,
distinguish an application for the purchase of a
credit certificate issued under AS 43.55.023(m) or a
claim for refund under AS 43.20.046 or AS 43.20.047.
Sec. 8. This Act takes effect immediately under AS
01.10.070(c).
1:46:42 PM
Representative Neuman pointed to page 7. He asked whether
the fund to purchase transferrable tax credits had already
been established, or would a new fund be created.
Ms. Pierson responded that the fund had already been
established and had been set in statute.
Representative Neuman asked if propane was considered a
natural gas under the legislation.
Ms. Pierson responded in the negative. She furthered that
the storage of propane differed from that of liquefied
natural gas.
Representative Neuman asserted that propane was a natural
gas liquid and wondered why it was not covered under the
bill.
Ms. Pierson replied that adding propane to the language had
been considered and ultimately disregarded. She furthered
that it was cheaper to store propane than to store
liquefied natural gas.
Representative Neuman queried the end goal of the
legislation.
Representative Thompson responded that the bill would
create storage tanks that could be used by multiple
businesses and in various locations.
Co-Chair Stoltze passed the gavel to Co-Chair Thomas.
1:49:23 PM
Representative Gara asked whether the bill would apply
statewide.
Ms. Pierson responded in the affirmative.
Representative Gara understood that the legislation
pertained to above-ground storage only, and would not
duplicate the credit already available for below ground
storage.
Ms. Pierson said that was correct.
Representative Gara asked whether the credit could be
duplicated above another credit.
Ms. Pierson responded that she did not believe it could be
added to another credit. She noted that the credit would be
the only one available for liquefied natural gas storage.
Representative Gara understood that if a credit did already
exist, the bill was not meant to create an additional
credit.
Representative Thompson replied in the affirmative.
Ms. Pierson clarified that there was a leasing provision in
the bill which created two types of available credits.
Representative Costello referred to language in the
sectional analysis that stated that any cost savings would
be passed on to the storage customer. She wondered where
the language was located in the bill.
Ms. Pierson responded that it was located in Section 2.
1:51:51 PM
Representative Costello requested the exact location.
Ms. Pierson read from Section 2:
Sec. 2. AS 42.05.381(k) is amended to read:
(k) The cost to the utility of storing gas in a
gas storage facility or storing liquefied natural gas
in a liquefied natural gas storage facility that is
allowed in determining a just and reasonable rate
shall reflect the reduction in cost attributable to
any exemption from a payment due under AS 38.05.096 or
38.05.180(u), as applicable, [AS 38.05.180(u)] and the
value of a tax credit that the owner of the gas
storage facility received under AS 43.20.046 or
43.20.047, as applicable.
Ms. Pierson explained that any savings that occurred under
the legislation must be passed onto the consumer.
Representative Doogan surmised that the bill created a
subsidy to build the storage containers.
Ms. Pierson responded in the affirmative.
Representative Doogan pointed out that the bill was the
29th piece of legislation that the committee had heard that
included a tax credit.
Co-Chair Thomas reminded the committee that the bill would
apply statewide.
Representative Thompson suggested that liquefied gas from
Cook Inlet could be barged to Bethel and up and down the
Yukon River.
Co-Chair Thomas wondered whether the tax credit would be
needed if a gas pipeline was built.
Representative Thompson thought that the gasline would not
be running for at least 15 years. He said that the bill was
an attempt to create a "bridge" project until a gasline was
established.
Representative Wilson hypothesized that the bill would help
in Fairbanks with utilities that were using diesel.
Representative Thompson responded in the affirmative. He
expounded that using natural gas for electrical production,
and at the refinery, would improve air quality.
Representative Wilson asked who would benefit from the
savings if Flint Hills shared the storage unit with the
major utility in Fairbanks.
Ms. Pierson replied that under the proposed legislation
Flint Hills would not receive the benefit.
Co-Chair Thomas asked how the gas would be delivered from
the storage facility to homes.
Representative Thompson explained that there were already
1100 different locations in Fairbanks hooked up for the
distribution of natural gas, and more were planned once the
gas became available. He stated that electrical users would
immediately see lower electric rates, and lower home
heating rates would follow.
1:56:54 PM
Co-Chair Thomas referenced a circulating supplemental bill
that would allow communities to receive low-interest loans
for natural gas. He wondered if Fairbanks would be included
in the loan program. He believed the loans could help
expedite the process of bringing homes online for natural
gas heating.
Representative Thompson stated that he was not familiar
with the legislation.
Representative Gara surmised that the bill could help
subsidize programs such as bringing natural gas from the
North Slope to Fairbanks by truck.
Representative Thompson answered in the affirmative. He
said that he paid $23.35 per 1000 cubic feet of natural gas
for his rental home in Fairbanks, compared with $8 to $9 in
Anchorage. He asserted that whatever could be done to lower
heating costs would be beneficial.
Representative Doogan wondered if there would be more than
one 25,000 gallon unit of liquefied natural gas stored at a
time.
Ms. Pierson believed that there would be high demand for
the units and that gas would be flowing throughout the
state. She said that currently in Fairbanks there was
discussion of putting in an approximately 3 million gallon
tank. She added that the main utility company in Fairbanks
believed that the component would be necessary to make sure
there was enough gas to fulfill customer's needs.
Representative Doogan understood that the subsidies could
total $30 million.
Ms. Pierson replied yes.
2:00:35 PM
Vice-chair Fairclough discussed the fiscal notes: FN6
(DOA), FN7 (DCCED), FN10 (DNR), FN9 (DOR).
2:02:53 PM
AT EASE
2:07:20 PM
RECONVENED
Vice-chair Fairclough clarified that there was a fifth
fiscal note: FN8 (DOR).
Representative Doogan voiced a complaint related to
indeterminate fiscal notes. He opined that it seemed to
have become policy for the departments to attach
indeterminate fiscal notes to legislation. He communicated
that the finance committee could not do the most important
part of its job without accurate information related to
costs.
Co-Chair Thomas agreed. He hoped that the administration
understood the difficulty the committee faced; attempting
to craft policy with indeterminate fiscal notes.
Representative Gara echoed the complaint and believed the
problem was more extensive. He surmised that Department of
Revenue (DOR) was waiting for bills to report out of
committee before determining what their fiscal impact would
be.
Representative Wilson MOVED to report CSHB 289(FIN) out of
committee with individual recommendations and the
accompanying fiscal notes.
CSHB 289(FIN) was REPORTED out of committee with a "do
pass" recommendation and with one new fiscal impact note
and one new indeterminate note from Department of Natural
Resources, one new indeterminate note Department of
Revenue, one new zero impact note from Department of
Administration, and one new zero impact note from
Department of Commerce, Community and Economic Development.
2:10:56 PM
AT EASE
2:15:17 PM
RECONVENED
HOUSE BILL NO. 296
"An Act relating to service of process on prisoners;
relating to the crime of escape; relating to the
definition of 'correctional facility'; amending Rule
4, Alaska Rules of Civil Procedure; and providing for
an effective date."
2:15:25 PM
Vice-chair Fairclough moved CSHB 296(JUD) 27-LS1199/E as a
working document before the committee. There being no
OBJECTION it was so ordered.
REPRESENTATIVE MAX GRUENBERG, SPONSOR, relayed that the
bill had been drafted by the House Judiciary Committee. He
stated that the office of Legislative Legal created a
booklet every year that discussed cases and issues of that
year that would benefit from further legislative review. He
added that often the court would recommend further
legislative review. He shared that most of the cases in the
booklet did not warrant further review, but some did. He
highlighted Section 4 of the bill which was a "repeal of a
repealer". He explained that several years ago a law was
passed that said if someone was sentenced for gang related
activity, an electronic monitoring device could be required
after parole. He stressed the importance of keeping paroled
gang members separated; the device would monitor if members
congregated. He relayed that there had been a 3 year sunset
placed on the section that was scheduled to expire very
soon. He believed it was essential that the section be kept
in statute.
Co-Chair Thomas asked whether the provision would be given
another sunset date.
Representative Gruenberg replied in the negative. He warned
that it would be detrimental if judges could not order the
monitoring devices. He continued to Sections 1 and 5 of the
legislation. He explained that in some cases prisoners were
sued and that under current the law there was no one
authorized to serve the papers to the prisoner. He said
that as a result the whole writ of execution had been
eliminated. The sections allowed for the superintendent of
the institution to serve the legal papers to the inmates.
He shared that the change had been recommended by
Legislative Legal. He said that the language clarified that
the statute was an indirect court rule change and could be
implemented immediately.
2:20:14 PM
Representative Gruenberg stated that the third issue
addressed in the legislation related to the crime of
escape. He said that in an example case the defendant had
initially been charged with a minor crime, but could not
make bail. He explained that the court felt that the
defendant was not a flight risk and had assigned him to a
halfway house while awaiting trial. The defendant walked
away from the halfway house and was subsequently charged
with a class B felony, even though he had not yet been
formerly charged. The change would make walking away from a
non-secure facility a class B misdemeanor. He said that
Sections 2, 3, and 6 dealt with the ambiguity in statute
pertaining to walking away from a non-secure facility.
2:23:39 PM
Vice-chair Fairclough clarified that the bill did not
change the use of a facility; the definition of a halfway
house was not being changed to a secure correctional
facility.
Representative Gruenberg replied that the zoning would not
change.
Vice-chair Fairclough understood that zoning was not being
changed. She explained that she was referring to the
definition of what a correction facility was. She expressed
the desire to avoid any problems with land-use issues.
Representative Gruenberg replied that the bill would not
change the land-use terms.
Representative Wilson asked what the charges were if a
prisoner escaped from a secure correctional facility.
Representative Gruenberg stated that escaping from a secure
facility would be a class B felony.
Representative Wilson felt that a prisoner escaping from a
halfway house understood that their actions were wrong. She
wondered why the punishment would be different for a non-
secure facility escape.
Representative Gruenberg replied that a person had to be
considered a non-risk to be put into a halfway house; petty
criminal charges and misdemeanors. He said that most people
who did not return to the halfway house when expected were
out looking for work or visiting family. He stressed that
this was not comparable to breaking out of a secure prison
and should therefore not be treated the same under the law.
He added that the codification would also result in a
significant cost savings to the state.
Representative Wilson thought that lowering the punishment
would entice more inmates to walk away from halfway houses
before finishing their sentence. She believed that it was
just as wrong to walk away from a halfway house as it was
to escape from a secure prison.
2:29:32 PM
Representative Gruenberg explained that the inmate would be
required to serve the remainder of their sentence if they
escaped from a halfway house. He stressed the importance
that the punishment should fit the crime.
Representative Gara expressed that he did not want the bill
to change the land use designation of correctional
facilities. He pointed to Page 1, lines 7 and 8 of the
bill:
Section 1. AS 09.05.050 is amended by adding a new
subsection to read:
(c) In this section, "correctional facility" has the
meaning given in AS 33.30.901.
Representative Gara explained that "correctional facility"
was changed only according to AS 09.05.050, which pertained
to service of prisoners. He continued to Page 2, line 13
and 14, which redefined "correction facility," but only in
Section 3. He noted that the term was not being redefined
for land-use.
Co-Chair Stoltze argued that the bill would lower the
security threshold. He thought that the threat of the
felony penalty was a strong inducement for inmates to
follow the rules.
Co-Chair Thomas OPENED public testimony.
SAM EDWARDS, DEPUTY COMMISSIONER, DEPARTMENT OF
CORRECTIONS, MAT-SU (via teleconference), responded to the
concerns raised by Co-Chair Stoltze. He said that the issue
had been carefully examined by LAW the Department of
Corrections (DOC). He believed that each case should be
weighed on an individual basis.
Representative Wilson maintained her concern about the
lesser penalty for halfway house escapees. She thought that
lowering the penalty would increase the number of inmates
walking away from halfway houses before serving out their
sentences.
Co-Chair Thomas understood the bill related to misdemeanors
and not felony offenders.
Representative Gruenberg replied in the affirmative. He
furthered that a person would not be placed in a halfway
house if they were a threat to the public. He stressed that
the bill simply codified the court's current interpretation
of the law. He added that an inmate that walked away from a
halfway house before serving out the full sentence would be
placed in a secure facility when apprehended.
2:37:53 PM
Co-Chair Thomas told a personal story about a friend who
had been released from prison and was living in a halfway
house. The friend wore an electronic ankle bracelet, which
allowed him to be monitored at all times.
Co-Chair Thomas CLOSED public testimony.
Co-Chair Stoltze requested that further public testimony be
taken at the next hearing of the bill.
ANNE CARPENETI, ASSISTANT ATTORNEY GENERAL, LEGAL SERVICES
SECTION-JUNEAU, CRIMINAL DIVISION, DEPARTMENT OF LAW,
clarified that under the bill removing oneself from a
facility would be a class A misdemeanor, which would result
in 1 year in jail.
2:40:17 PM
Representative Guttenberg stated that the issue stemmed
from the failure of the courts to recognize that a halfway
house was a correctional facility. He understood that the
bill corrected that.
Ms. Carpeneti responded that the court stated that in order
for the inmate to be charged under the circumstances of a
class B felony, escape in the second degree; the facility
had to be secured with locks.
Representative Guttenberg understood that the bill would
recognize that a halfway house was considered a
correctional facility.
Ms. Carpeneti reiterated that the bill stated that in order
to be charged with a class B felony for escape an inmate
would have had to have escaped from a secure, locked
facility.
Co-Chair Stoltze requested a letter of position from Joseph
Schmidt, Commissioner, Department Of Corrections.
Co-Chair Thomas discussed housekeeping.
HB 296 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
2:42:56 PM
The meeting was adjourned at 2:43 PM.
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