Legislature(1995 - 1996)

04/26/1996 01:50 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                               
                                                                               
                     HOUSE FINANCE COMMITTEE                                   
                         April 26, 1996                                        
                            1:50 P.M.                                          
                                                                               
  TAPE HFC 96-142, Side 1, #000 - end.                                         
  TAPE HFC 96-142, Side 2, #000 - end.                                         
  TAPE HFC 96-143, Side 1, #000 - end.                                         
  TAPE HFC 96-143, Side 2, #000 - #283.                                        
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Co-Chair  Mark  Hanley called  the  House  Finance Committee                 
  meeting to order at 1:50 p.m.                                                
                                                                               
  PRESENT                                                                      
                                                                               
  Co-Chair Hanley               Representative Martin                          
  Co-Chair Foster               Representative Mulder                          
  Representative Brown          Representative Navarre                         
  Representative Grussendorf    Representative Parnell                         
  Representative Kelly          Representative Therriault                      
  Representative Kohring                                                       
                                                                               
  ALSO PRESENT                                                                 
                                                                               
  Senator  Dave  Donley;  Jerry  Shriner,  Special  Assistant,                 
  Department  of Corrections;  Dean  Guaneli, Chief  Assistant                 
  Attorney General, Department of Law; Dwight Perkins, Special                 
  Assistant,  Department  of Labor;  Diane  Barrans, Executive                 
  Director, Postsecondary Education Commission,  Department of                 
  Education;  Ron   Torgenson,  Department  of   Labor;  Karen                 
  Rehfeld,  Director,  Administrative Services,  Department of                 
  Education;  Mike   Tibbels,  Staff,   Senator  Green;   Mark                 
  Mickelson,  Job Training  Partnership Office,  Department of                 
  Community   and   Regional  Affairs;   Kathleen  Strasbaugh,                 
  Assitant Attorney General, Department of Law.                                
                                                                               
  SUMMARY                                                                      
  SB 148    An   Act  relating   to  a   defined  contribution                 
            retirement plan for state employees.                               
                                                                               
            SB 148 was rescheduled to another time.                            
  SB 175    An Act  relating to correctional  institutions and                 
            their administration; providing the  Department of                 
            Corrections   with   the   authority  to   require                 
            prisoners  to   assist  in   paying  for   medical                 
            treatment; relating  to  the authority  of  a  law                 
            enforcement  agency  to  charge   a  prisoner  for                 
                                                                               
                                1                                              
                                                                               
                                                                               
            medical  costs  for a  preexisting  condition; and                 
            relating to service of criminal sentences.                         
                                                                               
            HCS CSSB 175  (FIN) was reported out  of Committee                 
            with  a "do  pass" recommendation  and with  three                 
            zero fiscal notes; one by the Department of Health                 
            &  Social  Services,  dated  2/14/96; one  by  the                 
            Department of Public Safety, dated 4/1/96; and one                 
            by the Department of Corrections, dated 4/1/96.                    
                                                                               
  SB 229    An Act relating to employment contributions and to                 
            making the state training and employment program a                 
            permanent  state  program;  and  providing for  an                 
            effective date.                                                    
                                                                               
            CSSB 229 (L&C) was reported  out of Committee with                 
            a "do  pass" recommendation  and with  four fiscal                 
            impact notes;  two by the  Department of Community                 
            and Regional  Affairs, dated  3/20/96; two  by the                 
            Department of  Labor, dated  3/22/96;  and with  a                 
            zero fiscal note  by the  Office of the  Governor,                 
            dated 3/20/96.                                                     
                                                                               
  SB 301    An Act relating to postsecondary education.                        
                                                                               
            SB  301   was  HELD   in  Committee   for  further                 
            consideration.                                                     
  SENATE BILL NO. 175                                                          
                                                                               
       "An Act relating to correctional institutions and their                 
       administration; providing the Department of Corrections                 
       with the authority  to require  prisoners to assist  in                 
       paying for medical treatment; relating to the authority                 
       of a  law enforcement agency  to charge a  prisoner for                 
       medical costs for a preexisting condition; and relating                 
       to service of criminal sentences."                                      
                                                                               
  SENATOR DAVE DONLEY, SPONSOR, spoke on behalf of SB 175.  He                 
  maintained that SB 175 is a follow-up for the constitutional                 
  amendment that  was approved  by the  voters in  1994.   The                 
  constitutional amendment passed in 1994,  dealt with victims                 
  rights  and  penal   administration.    The   Constitutional                 
  amendment added  rights  for victims  of crime,  restitution                 
  from  the  offender, and  community  of condemnation  to the                 
  criminal  administration  provisions  of  the  principal  of                 
  reformation and protection of the public.                                    
                                                                               
  Senator Donley asserted that SB 175  seeks to fill these new                 
  constitutional mandates.  According to Senator Donley SB 175                 
  protects  the public safety  by prohibiting participation or                 
  instruction in martial arts or any other activity that would                 
                                                                               
                                2                                              
                                                                               
                                                                               
  facilitate  violent  behavior.    He  maintained  that  such                 
  activities serve  no  rehabilitation purpose  and  can  make                 
  prisoners more dangerous.   He  stated that the  prohibition                 
  against  body building  and  weight lifting  equipment would                 
  also serve  the public  safety goal.   He  noted that  these                 
  provisions were removed and asked that they be restored.  He                 
  added that SB 175 enhances  rehabilitation opportunities for                 
  prisoners by increasing vocational training opportunities in                 
  an effort to  increase both the productivity and  the number                 
  of  inmates  in  the Correctional  Industries  Program.   He                 
  stated  that the  community  condemnation mandate  would  be                 
  fulfilled by  the removal  of "frills"  which are  currently                 
  available in  some Alaskan  prisons, such  as premium  cable                 
  television,   compact  disc   players   and  possession   of                 
  pornographic materials.  He noted  that the original version                 
  included  a  ban  on  video  cassette recorders  (VCRs)  and                 
  personal computers in inmate's individual  rooms.  He stated                 
  that computers were available in common areas where they can                 
  be used for educational purposes.                                            
                                                                               
  Senator Donley emphasized that SB 175 will  reduce costs for                 
  prisoner medical expenses.   He discussed health  care costs                 
  for  inmates  with catastrophic  illness.   Senate  Bill 175                 
  would allow  the Department greater flexibility  in granting                 
  "special medical  paroles".   He observed  that the  savings                 
  from this provision is impossible to predict.  He maintained                 
  that a  lot of money could be saved  if a few inmates became                 
  seriously ill.                                                               
                                                                               
  Senator Donley  reiterated  that he  supports  computers  in                 
  common areas for educational or vocational use.                              
                                                                               
  Senator Donley noted that CSSS  SB 175 (FIN)am would provide                 
  for individual televisions in inmate  cells as an incentive.                 
  Inmates would have to make restitution to victims, achieve a                 
  high school equivalency diploma and comply with court orders                 
  for drug, alcohol or sex counseling.                                         
                                                                               
  In response to a question by Co-Chair Hanley, Senator Donley                 
  clarified that under HCS  CSSS SB 175 (JUD), CD  players are                 
  banned, VCRs and  personal computers  are allowed in  rooms.                 
  Tape players  are allowed under  both versions of  the bill.                 
  In the House version computers are  allowed in cells if they                 
  are only for educational or vocational purposes.  The Senate                 
  version bans them in individual cells.                                       
                                                                               
  In response to a question  by Representative Mulder, Senator                 
  Donley explained that the Department requested that "special                 
  medical paroles" be expanded to cover inmates that would  be                 
  restricted to wheel chairs.                                                  
                                                                               
  Representative Brown MOVED to adopt Amendment 1, 9-LS958\H.6                 
                                                                               
                                3                                              
                                                                               
                                                                               
  (copy on file).   Amendment  1 is a  technical amendment  to                 
  clarify   that  the  commissioner   of  the   Department  of                 
  Corrections shall use Alaska farm products and salmon.                       
                                                                               
  Representative Martin asked why prisoners  need food as good                 
  as the armed services.   Senator Donley noted that  the bill                 
  requires that  prisoners not  receive food  better than  the                 
  quality or quantity of the army.                                             
                                                                               
  Representative Mulder  noted that  halibut can  sometimes be                 
  bought for as  little as .49 cents  a pound.  He  noted that                 
  prison officials could  not purchase halibut even  though it                 
  was the  cheapest protein  available because  it exceed  the                 
  guidelines.  He recommended that halibut be included.                        
                                                                               
  Representative Martin  suggested that  "Alaskan seafood"  be                 
  used.   Senator  Donely  cautioned that  king crab  would be                 
  included under Alaskan seafood.                                              
                                                                               
  Representative  Brown  MOVED to  amend  Amendment 1,  insert                 
  "fish"  and delete "salmon".   There being  NO OBJECTION, it                 
  was  so  ordered.   There  being  NO OBJECTION  to  the main                 
  amendment, Amendment 1 as amended was adopted.                               
                                                                               
  Representative Brown MOVED to adopt Amendment 2, 9-LS095\H.7                 
  (copy on file).  She explained that Amendment 2 would insert                 
  "apparel" on page 4,  line 11.  There being NO OBJECTION, it                 
  was so ordered.                                                              
                                                                               
  Representative  Brown  discussed  Amendment  3,  9-LS095\H.8                 
  (copy  on  file).   She  noted  that Amendment  3  would ban                 
  smoking  in prisons  by prisoners.   She noted  that private                 
  facilities  would  determine  whether   or  not  they  allow                 
  smoking.  Smoking in  state facilities could be  allowed for                 
  employees in  designated areas  that are  not accessible  to                 
  prisoners.  She  amended the amendment to have  an effective                 
  date  of  July  1, 1997.    The  effective  date change  was                 
  recommended by the Department.                                               
                                                                               
  Representative Martin  noted that  the  best way  to calm  a                 
  prisoner down may be to let them smoke.  He stated that if a                 
  prisoner kills  himself, from  smoking, it  is cheaper  than                 
  capital punishment.                                                          
                                                                               
  Representative Brown stated that smoking could be considered                 
  a frill.  She maintained that smoking is a drug.                             
                                                                               
  Representative  Martin suggested that the amendment would be                 
  cruel and unusual punishment.  He stressed that there  would                 
  be problems with inmates that are forced to stop smoking.                    
                                                                               
  Senator Donley noted that smoking has been banned in Oregon,                 
                                                                               
                                4                                              
                                                                               
                                                                               
  Texas,  Kansas and Utah.   Four other states have restricted                 
  smoking  to  designated areas.    The legislation  would ban                 
  smoking to designated areas without Amendment 3.                             
                                                                               
  Representative Grussendorf spoke against Amendment 3.                        
                                                                               
  A roll call vote was taken on the  MOTION to adopt Amendment                 
  3.                                                                           
                                                                               
  IN FAVOR: Navarre, Therriault, Brown, Kohring                                
  OPPOSED:  Mulder, Parnell, Grussendorf, Martin, Foster                       
                                                                               
  Co-Chair  Hanley and  Representative Kelly were  absent from                 
  the vote.                                                                    
                                                                               
  The MOTION FAILED (4-5).                                                     
                                                                               
  Representative  Mulder  MOVED  to  adopt  Amendment  4,   9-                 
  LS0958\H.1  on  behalf  of Senator  Donley  (copy  on file).                 
  Senator Donley  explained that  Amendment 4  would give  the                 
  Correctional Industries a  say in the additional  vocational                 
  training.                                                                    
                                                                               
  Representative  Martin  expressed  support   for  vocational                 
  training.                                                                    
                                                                               
  JERRY SHRINER, SPECIAL  ASSISTANT, DEPARTMENT OF CORRECTIONS                 
  explained  that anytime a product  or service is produced by                 
  the  correctional  industries  there  is  an impact  on  the                 
  community.   He  noted that  the  amendment is  designed  to                 
  address this issue.   The Correctional Industries Commission                 
  can determine  if there  is significant  impact to  existing                 
  private  industry.   He noted  that there  are some  federal                 
  programs   which  require  a  rehabilitative  element.    He                 
  stressed that the legislation can provide the rehabilitative                 
  element  needed for federal funding.  He emphasized that the                 
  Correctional Industries Commission can assure that there are                 
  no negative impacts.                                                         
                                                                               
  Representative Martin  noted that the amendment  states that                 
  there will be no  impact from vocational training.   Senator                 
  Donley observed that there is  a difference between offering                 
  vocational training and  having the industry in  the prison.                 
  Representative Martin  expressed concern that  the amendment                 
  would limit  vocational training opportunities.   Discussion                 
  ensued regarding  the difference of  vocational training and                 
  correctional  industries   in   relation   to   impacts   on                 
  communities.  Mr. Shriner stated that  he did not think that                 
  the "free venture"  laundry service  would be prohibited  by                 
  the legislation.                                                             
                                                                               
  Representative Brown agreed with  Representative Martin that                 
                                                                               
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  the   amendment   would  limit   what   vocational  training                 
  opportunities would be available.   She pointed out that the                 
  amendment  requires  vocational  training to  be  under  the                 
  Correctional  Industries Program.    She observed  that  the                 
  Correctional Industries Program can not serve current inmate                 
  demands.    She emphasized  that  there  may be  self  study                 
  programs.                                                                    
                                                                               
  Representative  Parnell  asked  if all  vocational  training                 
  occurs within Correctional Industries  Program.  Mr. Shriner                 
  noted that the commissioner of the Department of Corrections                 
  may  also provide vocational  training under  AS 33.30.   He                 
  stated that the amendment would not limit the commissioner's                 
  ability to provide vocational training under AS 33.30.                       
                                                                               
  A roll call vote  was taken on the MOTION to adopt Amendment                 
  4.                                                                           
                                                                               
  IN FAVOR: Parnell, Mulder, Foster                                            
  OPPOSED:  Therriault, Brown, Grussendorf, Kohring, Martin                    
                                                                               
  Co-Chair Hanley and Representatives  Kelly and Navarre  were                 
  absent from the vote.                                                        
                                                                               
  The MOTION FAILED (3-5).                                                     
                                                                               
  Representative   Mulder  MOVED  to  adopt  Amendment  5,  9-                 
  LS0958\H.2,  on  behalf  of  the  Sponsor  (copy  on  file).                 
  Senator Donley noted that the amendment would prohibit a VCR                 
  or computer in prisoners' cells.                                             
                                                                               
  Representative Brown OBJECTED.  She  stressed the benefit of                 
  computers.  She  maintained that computers are  an important                 
  part of rehabilitation.                                                      
                                                                               
  Representative Parnell ascertained that  there are no  state                 
  owned computers in individual cells.                                         
                                                                               
  In  response  to a  question  by Representative  Martin, Mr.                 
  Shriner noted that  computers can  be used as  a reward  for                 
  positive  behavior.   He  noted  that  there  are  very  few                 
  personal computers in  individual cells.   He observed  that                 
  the Department  supports the allowance of personal computers                 
  in individual rooms for purposes  of education and training.                 
  He stressed that computers are not viewed as a "frill".                      
                                                                               
  A roll call vote was taken on the MOTION to adopt  Amendment                 
  5.                                                                           
                                                                               
  IN FAVOR: Therriault, Martin                                                 
  OPPOSED:  Brown,  Grussendorf,  Navarre,   Kohring,  Mulder,                 
  Parnell,       Foster                                                        
                                                                               
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  Co-Chair Hanley  and Amendment  Kelly were  absent from  the                 
  vote.                                                                        
                                                                               
  The MOTION FAILED (2-7).                                                     
                                                                               
  (Tape Change, HFC 96-142, Side 2)                                            
                                                                               
  Representative  Mulder  MOVED  to  adopt  Amendment   6,  9-                 
  LS0958\H.3,  on  behalf of  Senator  Donley (copy  on file).                 
  Representatives  Brown and  Navarre  OBJECTED.   Amendment 6                 
  would prohibit body building and weight lifting equipment.                   
                                                                               
  Senator Donley maintained that the public is concerned about                 
  the presence of  body building and weight  lifting equipment                 
  in  prisons.   He  acknowledged  that the  majority  of this                 
  equipment  is  paid for  by the  prisoners.   He  noted that                 
  aerobic equipment would  not be  prohibited.  He  maintained                 
  that inmates  coming out of prison are   "bulked up and look                 
  mean  and nasty."  He  alleged that these  people get out of                 
  prison and intimidate people.                                                
                                                                               
  Mr.   Shriner  stated  that   the  Department  supports  the                 
  elimination of free weights.   He stated that the Department                 
  thinks  that  inmates  tend to  do  a  reasonable amount  of                 
  exercise on other  Nautilus type  equipment.  He  emphasized                 
  that a reasonable  amount of  exercise is healthy,  mentally                 
  and physically.                                                              
                                                                               
  Representative  Navarre  maintained  that  the  use of  free                 
  weights  and  other body  building  equipment is  good.   He                 
  emphasized the amount of  discipline needed to stick with  a                 
  routine.  He stressed the benefit  to inmate self esteem and                 
  mental and physical discipline.  He  noted that exercise can                 
  occupy a lot of the inmate's time.                                           
                                                                               
  Representative  Martin spoke in  opposition to  Amendment 6.                 
  He echoed remarks  regarding the benefit to  self esteem and                 
  discipline.                                                                  
                                                                               
  Representative Kelly  expressed concern  for  the safety  of                 
  guards  from  prisoners  using  body   and  weight  building                 
  equipment.  He  noted that aerobic  training would still  be                 
  available.                                                                   
                                                                               
  In response to a question  by Representative Therriault, Mr.                 
  Shriner explained  that space requirement for  the equipment                 
  varies.   Representative Therriault  pointed  out that  some                 
  body  building  equipment  monopolizes  needed  correctional                 
  space.                                                                       
                                                                               
  Senator  Donely  expressed  support   for  an  amendment  to                 
                                                                               
                                7                                              
                                                                               
                                                                               
  Amendment 6 to restrict the prohibition to free weights.                     
                                                                               
  Representative Navarre pointed out that  free weights can be                 
  used outdoors.   He disputed  the Sponsor's characterization                 
  that inmates use this equipment to become more intimidating.                 
                                                                               
                                                                               
  Representative Kohring spoke in support of Amendment 6.   He                 
  did  not  think  that  body   building  and  weight  lifting                 
  equipment  is  appropriate in  the  prison environment.   He                 
  stated that he meant to vote yes on Amendment 5.                             
                                                                               
  Representative  Parnell  noted   constituent  concern   that                 
  prisons are  not health  spas.   He  questioned the  state's                 
  contribution.    Mr.  Shriner  stressed  that  most  of  the                 
  equipment belongs to inmates or inmate councils.                             
                                                                               
  Representative Therriault  spoke in support  of the multiple                 
  use of space.                                                                
                                                                               
  Representative Navarre noted that the commissioner can limit                 
  the use of body building and weight lifting equipment.                       
                                                                               
  A roll call vote was taken on the MOTION  to adopt Amendment                 
  6.                                                                           
                                                                               
  IN FAVOR: Therriault, Kelly, Kohring                                         
  OPPOSED:  Brown,  Grussendorf,   Navarre,  Martin,   Mulder,                 
  Parnell,       Foster                                                        
                                                                               
  Co-Chair Hanley was absent from the vote.                                    
                                                                               
  The MOTION FAILED (3-7).                                                     
                                                                               
  Representative  Mulder  discussed Amendment  7, 9-LS0958\H.5                 
  (copy on file).   He referred to  Kerr vs. state of  Alaska.                 
  He  explained  that  Amendment  7  would  provide  that  the                 
  commissioner  shall  monitor  or  record  conversations   of                 
  prisoners in pretrial status.                                                
                                                                               
  DEAN  GUANELI, CHIEF  ASSISTANT ATTORNEY, DEPARTMENT  OF LAW                 
  observed that there  has been abuse of  the telephone system                 
  by individuals in pretrial status.   Calls have been used to                 
  intimidate  victims and  witnesses.   He  noted  that a  new                 
  computerized  phone system  was suppose  to eliminate  these                 
  problems by limiting  where prisoners can  call.  The  phone                 
  system  is not  operational.   He observed  that the  Cleary                 
  settlement provides that  the State  will not monitor  phone                 
  calls of pretrial prisoners.  Amendment 7 would be  contrary                 
  to that court order.  If  it passes it would provide grounds                 
  for  the State to  move to set  aside this  provision of the                 
  Cleary order.                                                                
                                                                               
                                8                                              
                                                                               
                                                                               
  Representative  Parnell  questioned how  the attorney/client                 
  privilege  would  be  protected.    Mr. Guaneli  noted  that                 
  inmates can call attorneys after cleared.  Mr. Shriner noted                 
  that  in  some facilities  recorders  are turned  off during                 
  calls with attorneys.   In others, there  are phones without                 
  recorders that are used  only for calls to attorneys  or the                 
  ombudsman.                                                                   
                                                                               
  Mr.  Guaneli   stated  that   it  would   be  rare  for   an                 
  attorney/client conversation to be monitored.  He noted that                 
  a warrant or wirer taping order would be required.                           
                                                                               
  In  response  to a  question  by Representative  Martin, Mr.                 
  Guaneli noted that courts have  absolute immunity for any of                 
  their judicial acts  or the  consequences of their  actions.                 
  He noted prisoners involved in a mail bombing case in Alaska                 
  were not  pretrial prisoners.   Discussion ensued  regarding                 
  the mail bombing case.                                                       
                                                                               
  Mr. Guaneli noted that the amendment removes the prohibition                 
  against monitoring of pretrial prisoners.                                    
                                                                               
  Representative Mulder  MOVED to  adopt Amendment  7.   There                 
  being NO OBJECTION, it was so ordered.                                       
                                                                               
  Representative  Mulder  discussed Amendment  8, 9-LS0958\H.4                 
  (copy  on  file).    He  observed  that  the  Department  of                 
  Corrections  is  currently  paying  for  the  cost  of  post                 
  secondary  education.    The  State  spends  $94.0  thousand                 
  dollars annually for the entire system.  There are currently                 
  17 individuals  involved.   He noted  that the  State has  a                 
  contract with the University  of Alaska.  The cost  would be                 
  the same for additional students.                                            
                                                                               
  Representative   Therriault   asked   if   for   statistical                 
  information  regarding  recidivism   rates  as  related   to                 
  education.  Representative  Brown noted  a study from  Texas                 
  which  showed  a  decrease  in  recidivism  the  higher  the                 
  education  level  of  the  prisoner.   She  maintained  that                 
  individuals  with  a  higher education  are  less  likely to                 
  offend again.  She spoke against the amendment.                              
                                                                               
  Representative  Kelly  stressed  that  there  are a  lot  of                 
  factors involved in recidivism.                                              
                                                                               
  Representative Mulder  pointed out  that the  amendment does                 
  not prevent post secondary education from being offered.  It                 
  would only prohibit the expenditure of state funds.                          
                                                                               
  Mr. Shriner clarified  that the $94.0 thousand  dollars paid                 
  to the University of Alaska only gets the service inside the                 
                                                                               
                                9                                              
                                                                               
                                                                               
  prison.  Prisoners  pay for their  own tuition fees,  books,                 
  lab  fees and other expenses.   They must also meet the same                 
  qualifications as other students.                                            
  Representative Martin spoke in support of the amendment.  He                 
  maintained that the program is being  used by those that are                 
  already educated.                                                            
                                                                               
  Mr. Shriner  noted that  the expense  was the  same when  50                 
  persons  participated.    He added  that  the  Department is                 
  looking at ways  to provide the same  level of service  at a                 
  reduced cost.  He  noted that not all courses  are available                 
  through correspondence.                                                      
                                                                               
  In response to  a question by Representative  Therriault, Mr                 
  Shriner  clarified that  the  State  spends  $94.0  thousand                 
  general fund dollars annually for the service.  The per unit                 
  class cost is the same as for other students.                                
                                                                               
  Representative Kohring spoke  in support of Amendment 8.  He                 
  maintained that the program is a subsidy to inmates.                         
                                                                               
  (Tape Change, HFC 96-143, Side 1)                                            
                                                                               
  Mr.  Shriner  noted  that  there  are  more  inmates  taking                 
  correspondence courses  than are taking  classes through the                 
  University of Alaska.                                                        
                                                                               
  Representative Brown spoke against an absolute spending ban.                 
  She  stressed  that spending  can  be monitored  through the                 
  budget.  She  stressed that correspondence classes  could be                 
  effected  by  the  amendment's   prohibition  against  state                 
  expenditures.                                                                
                                                                               
  Representative  Therriault  emphasized  that  a less  costly                 
  delivery of the service should be sought.                                    
                                                                               
  Mr. Shriner noted that the drop in participation occurred in                 
  the  past  two   years.    He   stated  that  the  drop   in                 
  participation is a result  of a lack of funding  for tuition                 
  fees.                                                                        
                                                                               
  Representative  Parnell   echoed  concern  that   a  literal                 
  interpretation  of the  amendment could  restrict  the State                 
  from providing a room or VCRs for educational use.                           
                                                                               
  Mr. Guaneli agreed  that a  literal interpretation could  be                 
  limiting.   He observed  that the  amendment is  for general                 
  administrative cost and not tuition.  He  observed that some                 
  inmates  taking  college courses  have  been  transferred to                 
  Arizona.                                                                     
                                                                               
  Representative  Mulder  clarified   that  the  contract   is                 
                                                                               
                               10                                              
                                                                               
                                                                               
  annually awarded.  He WITHDREW Amendment 8.                                  
                                                                               
  Representative Martin MOVED to report HCS CSSB 175 (FIN) out                 
  of Committee  with individual recommendations  and with  the                 
  accompanying fiscal notes.  There being NO OBJECTION, it was                 
  so ordered.                                                                  
                                                                               
  HCS CSSB 175 (FIN) was reported out of Committee with  a "do                 
  pass" recommendation and  with three zero fiscal  notes; one                 
  by  the  Department  of  Health  &  Social  Services,  dated                 
  2/14/96;  one  by  the Department  of  Public  Safety, dated                 
  4/1/96;  and  one by  the  Department of  Corrections, dated                 
  4/1/96.                                                                      
  SENATE BILL NO. 229                                                          
                                                                               
       "An  Act relating  to employment  contributions and  to                 
       making  the state  training  and employment  program  a                 
       permanent state program; and providing for an effective                 
       date."                                                                  
                                                                               
  DWIGHT  PERKINS,  SPECIAL  ASSISTANT,  DEPARTMENT  OF  LABOR                 
  testified  in  support of  SB 229.    He explained  that the                 
  legislation  extends  the  life of  the  State  Training and                 
  Employment Program (STEP)  for an  additional two years  and                 
  raises the  maximum weekly  benefit amount  for unemployment                 
  insurance (UI)  from $212  to $248.   The  STEP program  was                 
  originally enacted as  a pilot  program to provide  training                 
  for Alaska workers.   It diverts part of the  employee share                 
  of  the unemployment insurance  tax to a  training fund from                 
  which training grants  are awarded.   Covered employees  pay                 
  one-tenth  of one  percent of  their taxable wages  into the                 
  training fund.   The program will expire on June  30 of this                 
  year without legislative action.                                             
                                                                               
  Mr. Perkins observed  that the bill as  originally submitted                 
  by the Governor would  have made STEP permanent in  the same                 
  form as the  current temporary  program, with the  exception                 
  that  the Alaska  Human  Resource Investment  Council  would                 
  serve as the  coordinating entity, in  place of the  defunct                 
  Alaska  Job  Training Council.    The Senate,  Community and                 
  Regional Affairs Committee  made three changes to  the bill.                 
  First, it provided  for a sunset date  of June 30,  1998, at                 
  which time the  efficiency of  service delivery and  program                 
  goals can  again  be  evaluated.    Second,  it  inserted  a                 
  provision  requiring  the Alaska  Human  Resource Investment                 
  Council  to  impose  accounting  and  grant   administration                 
  standards on all  entities and their  grantees participating                 
  in the program.     Third, it  imposed a 20  percent cap  on                 
  administrative overhead.                                                     
                                                                               
  Mr.  Perkins  noted that  in the  Senate Labor  and Commerce                 
                                                                               
                               11                                              
                                                                               
                                                                               
  Committee the UI  weekly benefit amount provisions in SB 276                 
  were added to the bill, with changes.  This  was the version                 
  passed and transmitted to the House.                                         
                                                                               
  Mr.  Perkins  emphasized  that except  for  the  above-noted                 
  changes,  the  provisions of  the  bill follow  the original                 
  pilot program closely.  He maintained  that the STEP Program                 
  is an integral  component of  Alaska's job training  program                 
  and  has  enabled  participants  to  increase their  average                 
  quarterly  earnings  from nine  to  12 percent.    Since its                 
  inception,  STEP  has  trained 4,890  Alaska  workers  at an                 
  average cost  of  $2,000 per  participant.   The program  is                 
  financed  entirely by employee payroll contributions with no                 
  employer contributions or general fund monies.                               
                                                                               
  Mr.  Perkins  stressed that  STEP  serves workers  who would                 
  often  be  ineligible  for  employment  training  assistance                 
  through other programs.   It offers workers  the opportunity                 
  to  acquire  skills by  investing  in themselves,  and helps                 
  those workers  who have  been displaced  from their  jobs to                 
  learn more skills.  Nearly 60  percent of those entering the                 
  program  are receiving  unemployment benefits,  and  over 80                 
  percent of the participants successful complete the training                 
  and increase their employment opportunities.                                 
                                                                               
  Mr.  Perkins  maintained  that  as  federal  training  money                 
  decreases from  year to  year, continuing  the STEP  Program                 
  will help Alaskans receive the training they need to respond                 
  to the changing needs of business and industry.                              
                                                                               
  Mr. Perkins observed that the Governor's original UI benefit                 
  increase proposal was introduced  as SB 276.  It  proposed a                 
  flexible maximum  weekly benefit  amount, computed  from the                 
  wage base, defined by  statute as 75 percent of  the average                 
  annual wage, in effect for the calendar year.   The bill was                 
  combined  with SB 229  in the Labor  and Commerce Committee,                 
  with the following changes:                                                  
                                                                               
       1.   The benefit cap was set at a  maximum of $248                      
            dollars.      The   flexible   schedule   was                      
            discarded.                                                         
                                                                               
       2.   The  respective  employer/employee  shares of                      
            the benefit cost rate were changed from 82/18                      
            to 80/20.                                                          
                                                                               
       3.   The resulting  employee tax rate  was rounded                      
            to the  nearest one/hundredth of  one percent                      
            (from one/tenth of one percent).                                   
                                                                               
  Mr.  Perkins  observed  that these  changes  will  result in                 
  additional costs to the  fund over time, but  the respective                 
                                                                               
                               12                                              
                                                                               
                                                                               
  employer and  employee shares  of those  costs will  change.                 
  Employees  will  be  contributing a  full  one-fifth  of the                 
  benefit cost rate, and the  employer share will decrease  to                 
  four-fifths.   He  noted that the  schedule of  benefits for                 
  unemployment insurance has not been adjusted to increase the                 
  maximum weekly benefit amount since  1990.  Alaska currently                 
  ranks  49th  in the  nation  in unemployment  insurance wage                 
  replacement,  with the  average weekly  benefit  amount only                 
  slightly more than 27 percent of the average weekly wage for                 
  the state.  In  terms of the maximum weekly  benefit amount,                 
  Alaska ranks 35th in the  nation, notwithstanding the higher                 
  cost  of  living. Alaska  currently  has the  lowest regular                 
  maximum benefit amount of all western states except Arizona.                 
                                                                               
  Mr. Perkins stated that this  increase will provide a modest                 
  improvement in wage replacement, coupled with an increase in                 
  the employee share of UI costs.   He noted that the employee                 
  will share in the increase of costs.  The additional cost to                 
  the employer is  a savings of  $15 dollars per employee  per                 
  year.    The additional  cost to  the  employee will  be $20                 
  dollars more per  year or an additional cost per week of .38                 
  cents.                                                                       
                                                                               
  In  response  to  a question  by  Representative  Brown, Mr.                 
  Perkins stated that Alaska's  rating will not be  changed by                 
  the  legislation.    Employees will  get  a  modest increase                 
  during times of unemployment.                                                
                                                                               
  Representative Mulder maintained that there was no effort to                 
  try to shift  state costs.   The effort was to  increase the                 
  employment benefit.                                                          
                                                                               
  Representative Brown noted  that the employer as  a whole is                 
  contributing less and employees are  contributing more.  She                 
  asserted that the burden is being shifted from the employers                 
  to the workers.                                                              
                                                                               
  Mr Perkins emphasized that lower  scale individuals will pay                 
  less than $20 dollars.                                                       
                                                                               
  RON  TORGENSON,  DEPARTMENT  OF  LABOR  explained  that  the                 
  current unemployment schedule  is bottom  heavy.  He  stated                 
  that the benefit is  proportional to the burden.   He stated                 
  that the change  will cause the  people making less and  not                 
  benefiting  from the  increase to  pay  only pennies  a year                 
  more.   The only people  that will be  paying $25  dollars a                 
  year are the people at the top end of the scale.                             
  Representative Martin expressed concern with  a lack of jobs                 
  for individuals that attend training programs.                               
                                                                               
  MARK MICKELSON, DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS                 
  stressed  that  the identification  of  appropriate training                 
                                                                               
                               13                                              
                                                                               
                                                                               
  only  happens  when  there  is  an  identifiable  career  or                 
  employment goal.  He  stressed that if there is  no evidence                 
  of  employment  money   will  not  be  spent   on  training.                 
  Individual involvement in the program varies.   The  success                 
  rate  of  training  entities are  taken  into  account.   He                 
  estimated a 60  percent employment rate for  those that have                 
  successfully completed training.                                             
                                                                               
  Representative Brown MOVED  to report CSSB 229 (L&C)  out of                 
  Committee  with  individual  recommendations  and  with  the                 
  accompanying fiscal notes.                                                   
                                                                               
  CSSB 229  (L&C) was  reported out  of Committee  with a  "do                 
  pass" recommendation and with four  fiscal impact notes; two                 
  by the Department  of Community and Regional  Affairs, dated                 
  3/20/96; two by the Department of  Labor, dated 3/22/96; and                 
  with a zero fiscal note by the Office of the Governor, dated                 
  3/20/96.                                                                     
  SENATE BILL NO. 301                                                          
                                                                               
       "An Act relating to postsecondary education."                           
                                                                               
  DIANE BARRANS, EXECUTIVE  DIRECTOR, POSTSECONDARY  EDUCATION                 
  discussed SB 301.   Senate  Bill 301 would  move the  Alaska                 
  Student Loan Corporation from the Department of Education to                 
  the  Department of  Revenue and transfer  the administrative                 
  functions  of   the  Alaska   Commission  on   Postsecondary                 
  Education  to  the  Alaska Student  Loan  Corporation.   She                 
  stressed that the Commission is  committed to making changes                 
  necessary for the financial success  and long term viability                 
  of  the  loan  program.   She  observed  that  SB 301  would                 
  consolidate some agency  functions under one board  with the                 
  clear and distinct focus on the welfare of the program.  She                 
  noted that  there would be  some positive  changes from  the                 
  removal  of  institutional  authorization or  regulation  of                 
  postsecondary  institutions  and  the  move  of   loan  fund                 
  administration  to  the  Corporation in  the  Department  of                 
  Revenue.  She questioned why  two boards would be  necessary                 
  in the  future.  She suggested that  the regulation function                 
  could be  transferred as a  function of the  Department with                 
  oversight from the State Board of Education.  She noted that                 
  the  legislation  leaves  inefficiencies and  expenses  of a                 
  state agency having to administer two separate boards.                       
                                                                               
  Ms.  Barrans discussed potential benefits  from SB 301.  The                 
  Board membership is reduced from 17 to 10.  Quorums will  be                 
  easier to achieve and there will  be some reduction in cost.                 
  The legislation  will clean  up unnecessary  language.   She                 
  noted that  Ken Vassar, Bond  Counsel wrote a  memorandum to                 
  her on April  4, 1996,  articulating concerns regarding  the                 
  constitutional existence of the  public Corporation Board in                 
                                                                               
                               14                                              
                                                                               
                                                                               
  SB 301 (copy on file).                                                       
                                                                               
  Ms. Barrans noted that the Legislature wishes  to keep close                 
  ties to the Program.  She stressed that if the Commission is                 
  eliminated that  legislative ties  would remain  through the                 
  budget and loan terms.                                                       
                                                                               
  MIKE TIBBLES, STAFF,  SENATOR GREEN  noted that the  Sponsor                 
  worked with the Legislative Legal Services Agency to address                 
  the constitutional question raised by the Department of Law.                 
                                                                               
                                                                               
  In  response  to a  question  by Representative  Mulder, Mr.                 
  Tibbles noted that many of the provisions of Executive Order                 
  97 were adopted.  He observed that EO 97 had some  out dated                 
  federal laws that needed to be cleaned up.  The are repealed                 
  in SB  301.    He  added that  legislative  involvement  and                 
  confirmation were retained in SB 301.                                        
                                                                               
  In response  to a  question by  Representative Kohring,  Ms.                 
  Barrans discussed the fiscal note accompanying SB  301.  She                 
  observed that the only new cost  that is not currently being                 
  born,  is  the  cost  to  the  Department  of  Education  to                 
  administer the  functions of  AS 14.48.   The  cost of  this                 
  function is  currently being  absorbed by  the Student  Loan                 
  Corporation.   There is  a provision  in SB  301 that  would                 
  allow  the  assessment  of  fees  on institutions  that  are                 
  regulated.  She noted that the  fiscal notes are the same as                 
  for  EO  97  with  the   exception  that  the  institutional                 
  authorization was not moved.                                                 
                                                                               
  KATHLEEN STRASBAUGH, ASSISTANT ATTORNEY  GENERAL, DEPARTMENT                 
  OF LAW spoke regarding constitutional  problems with SB 301.                 
  She referred to a  memorandum she sent to Senator  Judy Salo                 
  on April 23,  1996 (copy on file).  She noted that the Board                 
  of  the  Alaska  Commission on  Postsecondary  Education has                 
  never been subject to legislative  confirmation.  She argued                 
  that the Board's  functions have  not changed sufficient  to                 
  warrant  the  need  for  confirmation.   She  discussed  the                 
  position of legislators on  the Board.  She noted  that non-                 
  voting legislative  members remain on the Board.  She stated                 
  that  under  the legislation,  legislative  members  are not                 
  needed for a  quorum.  The  Corporation would no longer  pay                 
  per diem  to  legislative  members.   She  noted  that  Bond                 
  Counsel has expressed concern that legislators are closer to                 
  the  bond  issuance  process  than  they  were   previously.                 
  Members of the Postsecondary Education Commission become the                 
  members of the Corporation under the legislation.  She noted                 
  that corporations are not subject to confirmation.                           
                                                                               
  (Tape Change, HFC 96-143, Side 2)                                            
                                                                               
                                                                               
                               15                                              
                                                                               
                                                                               
  Ms. Strasbaugh noted  that legislators  will not vote  under                 
  the legislation.   They  currently vote  and are  part of  a                 
  quorum.  She  reiterated that  legislators will not  receive                 
  per diem or be part of the quorum.                                           
                                                                               
  Ms. Strasbaugh maintained that the whole Board is being kept                 
  on  in  order to  require  legislative confirmation  for the                 
  Corporation.    She  asserted  that  this is  expensive  and                 
  unnecessary.    She  added  that  the   regulatory  function                 
  predominates.    She  stressed  that  the  argument  against                 
  confirmation remains.                                                        
                                                                               
  Mr.  Tibbles noted  that under SB  301 legislators  will not                 
  serve  on  the  Commission,  but  they  will  serve  on  the                 
  Corporation as non-voting members.                                           
                                                                               
  Ms. Strasbaugh acknowledged that legislators  are not on the                 
  Commission.   She emphasize  that concern  remains that  the                 
  presences   of   non-voting  legislative   members   on  the                 
  Corporation would be closer to the bonding process.                          
                                                                               
  Ms. Strasbaugh noted that by itself, the Alaska Student Loan                 
  Corporation  is  not  subject  to  confirmation   under  the                 
  Constitution.    The only  way  the Legislature  can require                 
  confirmation is  to claim that  the Postsecondary Commission                 
  is subject to confirmation and then  have the members of the                 
  Student Loan Corporation the same  as the Commission through                 
  statute.                                                                     
                                                                               
  KAREN REHFELD, DIRECTOR, ADMINISTRATIVE SERVICES, DEPARTMENT                 
  OF EDUCATION expressed concern with SB  301.  She noted that                 
  the  Department would  receive  another responsibility  at a                 
  time when the  Department is trying  to focus energy on  the                 
  quality   education  initiative.    She  observed  that  the                 
  Department of Education does not  have staffing or expertise                 
  in these  areas.    She  observed  that  the  Department  of                 
  Education has requested  a part time  position to assist  in                 
  coordinating  and scheduling  meetings.   The  authorization                 
  function  would be new  to the Department.   The legislation                 
  also contemplates  implementation of  regulations for  a fee                 
  structure.   She emphasized  that  the Department's  limited                 
  resources would be diluted.                                                  
                                                                               
  Representative  Brown questioned the  need for  two separate                 
  entities.                                                                    
                                                                               
  REPRESENTATIVE   CON  BUNDE   responded   that  the   Alaska                 
  Commission on  Postsecondary Education's  function  is as  a                 
  quasi judicial board,  warranting legislative  confirmation.                 
  The  Commission  used to  decide  appeals on  student loans.                 
  Currently,  staff  decides  appeals.    He  maintained  that                 
  appeals should go to  the Commission.  He stressed  that the                 
                                                                               
                               16                                              
                                                                               
                                                                               
  Commission can preside over appeals by schools.                              
  Ms. Barrans clarified  that under  the legislation all  loan                 
  related issues are moved away from the Commission.  The only                 
  appeals the Commission could hear, under SB 301, would be an                 
  appeal  of withdrawal  or  termination  of authorization  to                 
  operate an institution in Alaska.  She could not recall such                 
  an appeal before the Commission in the past 14 years.                        
                                                                               
  Ms. Barrans noted that the Commission administers the Alaska                 
  Student  Loan  Program  and  student   aid  programs.    The                 
  Commission also regulates postsecondary education in  Alaska                 
  under AS 14.48.  This function  would move to the Department                 
  of Education under SB 301.                                                   
                                                                               
  Ms. Strasbaugh  maintained that  the basic  function of  the                 
  Corporation would not  be changed.   She  stressed that  the                 
  only  function that  could  be used  to  base arguments  for                 
  confirmation  would  be  the adjudication  of  institutional                 
  authorization that has been rarely invoked.                                  
                                                                               
  SB 301 was HELD in Committee for further consideration.                      
  ADJOURNMENT                                                                  
                                                                               
  The meeting adjourned at 4:15 p.m.                                           
                                                                               
                                                                               
                               17                                              

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