Legislature(2017 - 2018)HOUSE FINANCE 519

02/19/2018 01:30 PM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 197 COMMUNITY SEED LIBRARIES TELECONFERENCED
Heard & Held
-- Public Testimony --
+ HB 216 TRANSFERS FROM DIVIDEND FUND; CRIMES TELECONFERENCED
Heard & Held
+= HB 79 OMNIBUS WORKERS' COMPENSATION TELECONFERENCED
Moved CSHB 79(FIN) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                     February 19, 2018                                                                                          
                         1:37 p.m.                                                                                              
                                                                                                                                
                                                                                                                                
1:37:33 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Foster  called the House Finance  Committee meeting                                                                    
to order at 1:37 p.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Neal Foster, Co-Chair                                                                                            
Representative Paul Seaton, Co-Chair                                                                                            
Representative Les Gara, Vice-Chair                                                                                             
Representative Jason Grenn                                                                                                      
Representative David Guttenberg                                                                                                 
Representative Scott Kawasaki                                                                                                   
Representative Dan Ortiz                                                                                                        
Representative Lance Pruitt                                                                                                     
Representative Steve Thompson                                                                                                   
Representative Cathy Tilton                                                                                                     
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Marie  Marx, Director,  Division  of Workers'  Compensation,                                                                    
Department  of  Labor   and  Workforce  Development;  Paloma                                                                    
Harbour,  Director,  Division  of  Administrative  Services,                                                                    
Department of  Labor and Workforce Development;  David Teal,                                                                    
Director,  Legislative   Finance  Division;   Scott  Jordan,                                                                    
Director,  Risk  Management, Department  of  Administration;                                                                    
Caroline Schultz,  Office of  Management and  Budget, Office                                                                    
of the Governor;  Representative Jennifer Johnston, Sponsor;                                                                    
Elizabeth Rexford, Staff,  Representative Jennifer Johnston;                                                                    
Representative Chuck Kopp,  Sponsor; Erick Cordero-Giorgana,                                                                    
Staff.                                                                                                                          
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Rob Carter, Manager, Plant Materials Center, Division of                                                                        
Agriculture, Department of Natural Resources.                                                                                   
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 79     OMNIBUS WORKERS' COMPENSATION                                                                                         
                                                                                                                                
          CSHB 79(FIN)  was REPORTED  out of  committee with                                                                    
          three  "do pass,"  two "do  not  pass," three  "no                                                                    
          recommendation," and  two "amend" recommendations;                                                                    
          and  with two  new  fiscal impact  notes from  the                                                                    
          Department  of  Labor and  Workforce  Development;                                                                    
          one new fiscal impact note  from the Office of the                                                                    
          Governor; and one new fiscal  impact note from the                                                                    
          Department of Administration.                                                                                         
                                                                                                                                
HB 197    COMMUNITY SEED LIBRARIES                                                                                              
                                                                                                                                
          HB  197  was  HEARD  and  HELD  in  committee  for                                                                    
          further consideration.                                                                                                
                                                                                                                                
HB 216    TRANSFERS FROM DIVIDEND FUND; CRIMES                                                                                  
                                                                                                                                
          HB  216  was  HEARD  and  HELD  in  committee  for                                                                    
          further consideration.                                                                                                
                                                                                                                                
Co-Chair Foster reviewed the meeting agenda.                                                                                    
                                                                                                                                
HOUSE BILL NO. 79                                                                                                             
                                                                                                                                
     "An  Act relating  to workers'  compensation; repealing                                                                    
     the  second injury  fund upon  satisfaction of  claims;                                                                    
     relating to  service fees and  civil penalties  for the                                                                    
     workers' safety programs  and the workers' compensation                                                                    
     program;  relating   to  the  liability   of  specified                                                                    
     officers  and members  of  specified business  entities                                                                    
     for  payment  of  workers'  compensation  benefits  and                                                                    
     civil  penalties;  relating   to  civil  penalties  for                                                                    
     underinsuring or failing to  insure or provide security                                                                    
     for  workers'   compensation  liability;   relating  to                                                                    
     preauthorization   and  timely   payment  for   medical                                                                    
     treatment and  services provided to  injured employees;                                                                    
     relating  to incorporation  of  reference materials  in                                                                    
     workers'   compensation    regulations;   relating   to                                                                    
     proceedings  before  the Workers'  Compensation  Board;                                                                    
     providing   for  methods   of   payment  for   workers'                                                                    
     compensation   benefits;  relating   to  the   workers'                                                                    
     compensation benefits guaranty  fund authority to claim                                                                    
     a   lien;   excluding  independent   contractors   from                                                                    
     workers'   compensation   coverage;  establishing   the                                                                    
     circumstances    under   which    certain   nonemployee                                                                    
     executive  corporate officers  and  members of  limited                                                                    
     liability  companies may  obtain workers'  compensation                                                                    
     coverage; relating  to the duties of  injured employees                                                                    
     to    report    income    or    work;    relating    to                                                                    
     misclassification of  employees and  deceptive leasing;                                                                    
     defining   'employee';   relating   to   the   Workers'                                                                    
     Compensation  Board's approval  of attorney  fees in  a                                                                    
     settlement  agreement; and  providing for  an effective                                                                    
     date."                                                                                                                     
                                                                                                                                
1:38:59 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster  noted the  committee had  adopted committee                                                                    
substitute  (CS)  version  R   and  two  amendments  at  the                                                                    
previous meeting.                                                                                                               
                                                                                                                                
MARIE  MARX, DIRECTOR,  DIVISION  OF WORKERS'  COMPENSATION,                                                                    
DEPARTMENT   OF  LABOR   AND   WORKFORCE  DEVELOPMENT,   was                                                                    
available for questions.                                                                                                        
                                                                                                                                
Co-Chair  Foster referenced  the two  fiscal notes  from the                                                                    
Department of Labor and Workforce Development (DLWD).                                                                           
                                                                                                                                
PALOMA   HARBOUR,  DIRECTOR,   DIVISION  OF   ADMINISTRATIVE                                                                    
SERVICES,  DEPARTMENT OF  LABOR  AND WORKFORCE  DEVELOPMENT,                                                                    
addressed the  first fiscal note:  OMB Component  Number 344                                                                    
for  the   Division  of   Worker'  Compensation.   The  note                                                                    
reflected  a  revenue  change for  the  department  of  $1.8                                                                    
million  from  general  funds to  the  Workers'  Safety  and                                                                    
Compensation Administration Account beginning  in FY 19. The                                                                    
note also reflected a savings  of $59,800 beginning in FY 20                                                                    
resulting from a switch to electronic filing.                                                                                   
                                                                                                                                
Representative  Wilson pointed  to  page two  of the  fiscal                                                                    
note  where  it  specified  the   state  would  mandate  the                                                                    
electronic filing  of documents. She asked  for verification                                                                    
that  mandate was  no  longer  required as  a  result of  an                                                                    
amendment that had been passed by the committee.                                                                                
                                                                                                                                
Ms. Harbour  believed the department  had the option  to set                                                                    
the method  for filing.  She believed the  division director                                                                    
could set the method as electronic filing.                                                                                      
                                                                                                                                
1:42:48 PM                                                                                                                    
                                                                                                                                
Representative   Wilson   stated   that  perhaps   she   had                                                                    
misunderstood   the  amendment.   She   asked  whether   the                                                                    
commissioner or someone in the  department could mandate the                                                                    
filing method.                                                                                                                  
                                                                                                                                
Ms.  Harbour answered  that it  was pertaining  to insurance                                                                    
companies  or  self-insured   employers  filing  reports  of                                                                    
injury. She recalled that Ms.  Marx had specified that if an                                                                    
individual working  through their  employer was  not getting                                                                    
their incident  report filed, the  division would  work with                                                                    
the individual to receive their  report in whatever way they                                                                    
could provide it.                                                                                                               
                                                                                                                                
Representative Wilson  stated that the money  had previously                                                                    
come from  general funds, which  the bill would change  to a                                                                    
designated  general  fund  (DGF)   account.  She  asked  for                                                                    
verification  that  no  savings  would occur  and  that  the                                                                    
switching  of  accounts  merely constituted  a  fund  source                                                                    
change.                                                                                                                         
                                                                                                                                
DAVID   TEAL,   DIRECTOR,  LEGISLATIVE   FINANCE   DIVISION,                                                                    
answered  that the  fiscal note  maintained the  2.7 percent                                                                    
premium tax;  employers would  not be  paying any  more than                                                                    
they had  been. He  elaborated that  a larger  percentage or                                                                    
$1.8  million of  the  2.7  percent tax  would  go into  the                                                                    
Workers'  Safety Fund.  There was  a loss  of GF  revenue of                                                                    
$1.8  million  because  of  the   fund  source  change.  The                                                                    
Legislative  Finance Division  (LFD)  questioned the  reason                                                                    
for the  change - it did  not see any spending  of the fund,                                                                    
only a change of revenue. He  questioned what good it did to                                                                    
merely put  revenue into a fund.  He asked where and  how it                                                                    
got spent.  He turned  to a  table on page  3 of  the fiscal                                                                    
note [OMB Component  Number 344] and referred  to the bottom                                                                    
row   "revenue  less   appropriations  (negative   indicates                                                                    
unsustainable   spending)."  He   pointed  out   there  were                                                                    
numerous  negative  numbers in  the  row,  which meant  that                                                                    
prior to FY 09 the Workers'  Safety Fund had been building a                                                                    
balance as high as  $11 million. Through higher expenditures                                                                    
than revenue,  the balance  had been spent  down and  it had                                                                    
fallen  to $3  million in  FY  18. Roughly  over a  ten-year                                                                    
period,  the  fund had  been  overspent  by $8  million.  He                                                                    
pointed out that by FY 20 there would be no balance.                                                                            
                                                                                                                                
Mr. Teal explained that although  there was no appropriation                                                                    
of the money, Workers'  Compensation would continue to spend                                                                    
at approximately  the current levels.  The tables on  page 3                                                                    
and 4  of the  fiscal note showed  a slightly  negative cash                                                                    
flow. He explained that LFD  had asked why only $1.8 million                                                                    
would   be  taken   because  it   looked   like  there   was                                                                    
overspending by  $2 [million] to $2.1  [million]. The answer                                                                    
from   DLWD  had   been  that   it  anticipated   additional                                                                    
efficiencies. He  noted that the only  efficiencies shown on                                                                    
the fiscal  note were  on page  1 in  the amount  of $59,800                                                                    
[annually) due to the elimination  of one staff position. He                                                                    
did not  know how  additional savings  would be  shown; they                                                                    
should  occur, but  they were  not  on the  fiscal note.  He                                                                    
explained  the division  was already  spending money  and it                                                                    
was an awkward fiscal note to prepare.                                                                                          
                                                                                                                                
Mr.   Teal   summarized   that    the   direct   answer   to                                                                    
Representative  Wilson's question  was  yes  - $1.8  million                                                                    
previously  classified  as GF  would  flow  to the  Workers'                                                                    
Safety Fund.                                                                                                                    
                                                                                                                                
1:47:27 PM                                                                                                                    
                                                                                                                                
Representative Wilson  referenced the  deficit shown  in the                                                                    
fiscal  note tables  and asked  if  committee members  could                                                                    
assume  that  undesignated  general  funds  (UGF)  would  be                                                                    
utilized. She reasoned that it  was not possible to spend in                                                                    
the negative;  therefore, she  wondered if  a growth  in UGF                                                                    
would occur to make up the difference.                                                                                          
                                                                                                                                
Mr. Teal  replied that  the table  on page  4 of  the fiscal                                                                    
note  showed   several  options  including   the  governor's                                                                    
budget. He pointed out that  the FY 23 beginning balance was                                                                    
highly  negative [$5.4  million],  which  was not  possible.                                                                    
Under  the  second  option  [column  2]  that  included  the                                                                    
governor's budget  with the Appeals Commission  (HB 69), the                                                                    
account  went negative  as well.  Under HB  79, the  balance                                                                    
would remain positive.  If both HB 69 and HB  79 passed, the                                                                    
balance  would hold  up well.  He anticipated  a $2  million                                                                    
request for GF if HB 79 did not pass.                                                                                           
                                                                                                                                
Representative Wilson surmised the  $2 million request would                                                                    
be the  same - instead  of putting the  money in the  GF, it                                                                    
would go to "what it's being paid on behalf of."                                                                                
                                                                                                                                
Mr.  Teal  answered in  the  affirmative.  He detailed  $1.8                                                                    
million would be  diverted from GF into  the Workers' Safety                                                                    
Fund,  which would  spend as  a designated  fund; or  the GF                                                                    
could be spent - it came out the same.                                                                                          
                                                                                                                                
1:49:24 PM                                                                                                                    
                                                                                                                                
Ms. Harbour addressed DLWD fiscal  note OMB Component Number                                                                    
2342 related to  the elimination of the  Second Injury Fund.                                                                    
The  note  reflected  savings   anticipated  in  the  future                                                                    
related to  eliminating the Second Injury  Fund program. She                                                                    
reported it would take time  to realize savings because many                                                                    
of  the  injuries   were  permanent,  partial  disabilities;                                                                    
therefore,  benefits to  individuals lasted  the recipient's                                                                    
lifetime. She  explained that the eventual  savings would be                                                                    
realized by employers - their  premium costs would decrease.                                                                    
Self-insured   employers  (e.g.   State  of   Alaska)  would                                                                    
experience savings as savings occur.                                                                                            
                                                                                                                                
Co-Chair  Foster  asked  to  hear  from  the  Department  of                                                                    
Administration  (DOA)  and the  Office  of  the Governor  in                                                                    
relation to their fiscal notes.                                                                                                 
                                                                                                                                
SCOTT  JORDAN,  DIRECTOR,  RISK  MANAGEMENT,  DEPARTMENT  OF                                                                    
ADMINISTRATION,   addressed  the   DOA   fiscal  note,   OMB                                                                    
Component Number  71. The  costs in  the note  reflected the                                                                    
requirement to  electronically file  reports of  injury. The                                                                    
cost in  FY 19  would be  $40,000 to  cover forms  that were                                                                    
billed out at  $1.25 by a third-party  administrator as well                                                                    
as the  programming for  the first  year. The  outyears were                                                                    
$12,900 that  would cover  $1.25 per  form -  the department                                                                    
anticipated  about 1,900  forms  per year  submitted to  the                                                                    
Division of Workers' Compensation.                                                                                              
                                                                                                                                
Representative  Wilson remarked  that the  electronic filing                                                                    
would cost more. She asked  if the electronic filing savings                                                                    
would be reflected on the  Division of Workers' Compensation                                                                    
fiscal notes.                                                                                                                   
                                                                                                                                
Mr. Jordan answered that he  could not comment on savings on                                                                    
the  Division  of  Workers'  Compensation  side.  Currently,                                                                    
doing the work manually was  not costing DOA any more. Doing                                                                    
the work electronically would cost  the department $1.25 per                                                                    
form to submit to the Division of Workers' Compensation                                                                         
                                                                                                                                
1:52:54 PM                                                                                                                    
                                                                                                                                
Representative Wilson  wondered if  it would cost  the state                                                                    
more money  to do  the process electronically.  She wondered                                                                    
if there would be savings as  the committee had been told in                                                                    
one of  the other  fiscal notes. She  surmised that  DOA was                                                                    
fast  at  the forms  and  could  do  them manually  just  as                                                                    
quickly as it could electronically.                                                                                             
                                                                                                                                
Mr.  Jordan answered  that the  process would  not cost  the                                                                    
department  any  more,  but  the  third-party  administrator                                                                    
submitting   the  forms   to   the   Division  of   Workers'                                                                    
Compensation charged  a $1.25  fee per  form. It  would cost                                                                    
DOA  more to  process the  forms, but  it would  not require                                                                    
additional personnel.                                                                                                           
                                                                                                                                
Representative  Wilson  asked   which  department  would  be                                                                    
paying interagency receipts.                                                                                                    
                                                                                                                                
Mr. Jordan deferred  to the Office of  Management and Budget                                                                    
(OMB).                                                                                                                          
                                                                                                                                
Co-Chair  Foster  asked  OMB  to  address  fiscal  note  OMB                                                                    
Component Number 0.                                                                                                             
                                                                                                                                
CAROLINE SCHULTZ,  OFFICE OF  MANAGEMENT AND  BUDGET, OFFICE                                                                    
OF THE GOVERNOR, relayed that  the interagency receipt funds                                                                    
that would go to the  Division of Risk Management would come                                                                    
from  all executive  branch agencies.  The Division  of Risk                                                                    
Management   was    the   state's    self-insured   workers'                                                                    
compensation  manager. The  division charged  rates for  all                                                                    
personal service  budgets for all  agencies. The  rates were                                                                    
calculated annually;  therefore, OMB had elected  to reflect                                                                    
the costs in an OMB various note.                                                                                               
                                                                                                                                
1:54:49 PM                                                                                                                    
                                                                                                                                
Co-Chair Seaton  asked if  overall, electronic  filing would                                                                    
cost the state more or less.                                                                                                    
                                                                                                                                
Mr. Teal answered that Risk  Management would be spending an                                                                    
additional $12,900 per  year to pay a  third-party to handle                                                                    
the forms.  The charge did  not go  only to the  Division of                                                                    
Workers'  Compensation  - it  went  to  every allocation  in                                                                    
every  agency.  The change  would  mean  a small  percentage                                                                    
increase in the working  reserve rate. The legislature could                                                                    
fund the  fiscal note (the money  would go to OMB  to spread                                                                    
out to various agencies). He  explained that the Division of                                                                    
Risk Management  would incur costs  that would be  passed to                                                                    
other  agencies  (it  reflected the  nature  of  interagency                                                                    
receipts). He  elaborated there had  to be cash  backing the                                                                    
payments to Risk Management -  each agency would pay a small                                                                    
portion. Even  if the  legislature did  not fund  the fiscal                                                                    
note  in FY  19,  the  rates would  be  built into  personal                                                                    
service costs  beginning in FY  20. The rates would  go into                                                                    
the adjusted base - the  committee really would not see them                                                                    
- it  would see  the transactions,  but the  committee would                                                                    
not discuss them because they  were automatically assumed to                                                                    
be approved and each agency  would receive a small amount of                                                                    
money  to pay  the costs.  He  reiterated it  would cost  an                                                                    
additional $12,900 to process the forms.                                                                                        
                                                                                                                                
Representative Wilson surmised that  the increase was due to                                                                    
the third-party. She thought the  purpose of the bill was to                                                                    
save money.  She was trying  to determine where  the savings                                                                    
would come  in. She wondered  why the bill should  be passed                                                                    
if there were no savings.                                                                                                       
                                                                                                                                
Mr. Teal believed the question  was probably better answered                                                                    
by   DLWD.  He   stated  that   the  Division   of  Workers'                                                                    
Compensation anticipated savings and  the elimination of one                                                                    
position. Based  on a  table attached  to DLWD  fiscal note,                                                                    
OMB Component  Number 344,  anticipated savings  were around                                                                    
$200,000 per  year. Additionally, there was  the elimination                                                                    
of the  Second Injury Fund,  which would save money  for all                                                                    
employers including  the state. Putting it  all together was                                                                    
more difficult than  one may think. He  explained that every                                                                    
fiscal note  was prepared by  a single allocation  and there                                                                    
had  been some  coordination  problems trying  to make  them                                                                    
match.                                                                                                                          
                                                                                                                                
1:59:19 PM                                                                                                                    
                                                                                                                                
Co-Chair  Seaton  MOVED  to  REPORT   CSHB  79(FIN)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes.                                                                                                      
                                                                                                                                
Representative  Wilson OBJECTED.  She supported  portions of                                                                    
the bill  that she  thought were  needed. She  was concerned                                                                    
about  the  representation of  the  person.  She stated  the                                                                    
representation  of who  it could  be was  based on  the same                                                                    
committee the  person would be  in front of. She  thought it                                                                    
was a  conflict of interest.  She thought it was  better but                                                                    
had  hoped  an  amendment  would  address  the  issue  in  a                                                                    
different way.                                                                                                                  
                                                                                                                                
Co-Chair Seaton clarified his motion  pertained to version R                                                                    
as amended.                                                                                                                     
                                                                                                                                
Representative Wilson MAINTAINED her OBJECTION.                                                                                 
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Grenn,   Guttenberg,   Ortiz,  Kawasaki,   Foster,                                                                    
Seaton                                                                                                                          
OPPOSED: Pruitt, Thompson, Tilton, Wilson                                                                                       
                                                                                                                                
Vice-Chair Gara was absent from the vote.                                                                                       
                                                                                                                                
The MOTION PASSED (6/4).                                                                                                        
                                                                                                                                
There being NO further  OBJECTION, CSHB 79(FIN) was REPORTED                                                                    
out of  committee with three  "do pass," two "do  not pass,"                                                                    
three "no recommendation,"  and two "amend" recommendations;                                                                    
and with two new fiscal  impact notes from the Department of                                                                    
Labor and Workforce Development;  one new fiscal impact note                                                                    
from the Office  of the Governor; and one  new fiscal impact                                                                    
note from the Department of Administration.                                                                                     
                                                                                                                                
2:01:51 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:03:21 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
HOUSE BILL NO. 197                                                                                                            
                                                                                                                                
     "An Act relating to the duties of the commissioner of                                                                      
     natural resources; relating to agriculture; and                                                                            
     relating to community seed libraries."                                                                                     
                                                                                                                                
2:03:28 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JENNIFER  JOHNSTON,   SPONSOR,  provided  an                                                                    
explanation of the bill:                                                                                                        
                                                                                                                                
     Mr.  Chairman  and  members of  the  Finance  committee                                                                    
     thank you for taking the  time in your busy schedule to                                                                    
     hear  HB  197,  a   bill  relating  to  Community  Seed                                                                    
     Libraries.                                                                                                                 
                                                                                                                                
     This bill came from members of my community, as a way                                                                      
     to legalize the sharing of small amounts of seeds.                                                                         
     Currently, a seed cannot be  sold, shared, or exchanged                                                                    
    without going through costly testing and labeling.                                                                          
                                                                                                                                
     Seed  sharing  and  libraries  have  the  potential  to                                                                    
     contribute   significant  value   to  the   health  and                                                                    
     heritage  in our  communities by  providing a  place to                                                                    
     share  regionally-adapted  and  heirloom  seeds  as  an                                                                    
     alternative to outside  genetically modified seeds, and                                                                    
     will   help   to   increase  biodiversity   and   plant                                                                    
     resilience in our state.                                                                                                   
                                                                                                                                
     Seed  libraries  have   been  sprouting  up  throughout                                                                    
     Alaska  and  this  bill  will  allow  them  to  operate                                                                    
     legally without  burdensome and  unnecessary government                                                                    
     regulation.                                                                                                                
                                                                                                                                
     This bill will help grow  an organic sense of community                                                                    
     and increase Alaskan food security.                                                                                        
                                                                                                                                
ELIZABETH REXFORD, STAFF, REPRESENTATIVE JENNIFER JOHNSTON,                                                                     
read from prepared remarks:                                                                                                     
                                                                                                                                
     Thank you,  chairmen and members  of the  house finance                                                                    
     committee, for hearing HB 197.                                                                                             
                                                                                                                                
     HB   197   reduces   onerous   labeling   and   testing                                                                    
     regulations for  small batches of  noncommercial seeds.                                                                    
     Currently, all  seeds in  Alaska fall  under commercial                                                                    
     regulations,  including  the   seeds  that  are  traded                                                                    
     amongst  friends   or  saved  from  the   prior  year's                                                                    
     harvest.  This  bill  will change  this,  allowing  the                                                                    
     Alaskan   gardening   and   farming   communities   the                                                                    
     opportunity to continue  expanding seed sharing without                                                                    
     breaking the law.                                                                                                          
                                                                                                                                
     The new labeling guidelines would require 5 sections:                                                                      
         the seeds' species and variety,                                                                                     
         name and address of seed library                                                                                    
         year the seed was packaged                                                                                          
         the weight of the packaged contents                                                                                 
         and the statement, "Not authorized for commercial                                                                   
          use and not classified, graded, or inspected by                                                                       
          the State of Alaska."                                                                                                 
                                                                                                                                
     While this  may seem  like overkill  for a  small local                                                                    
     seed exchange,  five requirements for labeling  is less                                                                    
     than the  two pages of requirements  we currently have.                                                                    
     Because of the way the  current statute is written, any                                                                    
     seed that is  used at any capacity in the  state has to                                                                    
     go   through  the   commercial  process   of  extensive                                                                    
     testing, germinating percentages and  labeling.  In the                                                                    
     scale of  things, the new requirements  would be pretty                                                                    
     limited.                                                                                                                   
                                                                                                                                
     This  bill   also  broadens  the  duties   of  the  DNR                                                                    
     Commissioner to allow the  department to administer and                                                                    
     promote  the creation  of community  seed libraries.  A                                                                    
     community  seed library  is  not  currently defined  in                                                                    
     statute, so  this bill  carves out  a space  in statute                                                                    
     and  says that  seed libraries  can exist  and provides                                                                    
     guidelines. Alaska has been  experiencing a severe food                                                                    
     security challenge, where residents  now spend close to                                                                    
     $2 billion each year  buying food produced from outside                                                                    
     of  the  state.   Community  seed  libraries  encourage                                                                    
     self-sufficiency  and preserve  agricultural knowledge.                                                                    
     Now that  we have planted  the seed, please join  us in                                                                    
     supporting HB  197.   Rob Carter,  whom is  the state's                                                                    
     plant  materials  center manager,  is  on  the line  to                                                                    
     answer any  questions.  Thank  you for taking  the time                                                                    
     to hear the bill.                                                                                                          
                                                                                                                                
2:06:39 PM                                                                                                                    
                                                                                                                                
Representative  Kawasaki   stated  there  were   letters  in                                                                    
members' packets  from individuals  who were  currently part                                                                    
of the seed library in Alaska.  He asked if the bill sponsor                                                                    
was saying the individuals were running illegal operations.                                                                     
                                                                                                                                
Representative Johnston  answered "quietly." The  bill would                                                                    
help  the individuals  do the  work  on a  more orderly  and                                                                    
legal basis.                                                                                                                    
                                                                                                                                
Representative Kawasaki  stated that based  on conversations                                                                    
with  individuals  with  seed  libraries,  the  bill  looked                                                                    
onerous  for people  with noncommercial  seed libraries.  He                                                                    
asked for detail.                                                                                                               
                                                                                                                                
Representative  Johnston   deferred  the  question   to  the                                                                    
Department of Natural Resources (DNR).                                                                                          
                                                                                                                                
Representative  Kawasaki  repeated   his  question.  He  was                                                                    
trying  to  determine  whether it  was  not  acceptable  for                                                                    
individuals  to  operate  seed  libraries  without  enabling                                                                    
legislation.                                                                                                                    
                                                                                                                                
ROB  CARTER, MANAGER,  PLANT MATERIALS  CENTER, DIVISION  OF                                                                    
AGRICULTURE,   DEPARTMENT   OF    NATURAL   RESOURCES   (via                                                                    
teleconference),    answered   that    current   regulations                                                                    
prohibited all  seed sales and transportation  being offered                                                                    
for  sale in  Alaska.  The  operations had  to  meet a  very                                                                    
defined set of testing  and labeling requirements. Currently                                                                    
all of  the individuals operating seed  libraries, including                                                                    
anyone   sharing   or   transporting  seed,   for   personal                                                                    
noncommercial  use, were  breaking  current regulations.  He                                                                    
explained that  if DNR  went to  a seed  library to  issue a                                                                    
notice of violation or an  order and the seed library failed                                                                    
to  follow through,  under AS  03.05.090 a  person violating                                                                    
one of  the provisions was  guilty of a Class  A misdemeanor                                                                    
and  a fine  of  up to  $500 for  each  violation. He  noted                                                                    
violations  could get  expensive  if a  library contained  a                                                                    
couple hundred packets of seed.                                                                                                 
                                                                                                                                
Representative  Kawasaki  asked  if  the  requirements  were                                                                    
statutory or regulatory.                                                                                                        
                                                                                                                                
2:10:58 PM                                                                                                                    
                                                                                                                                
Mr. Carter  responded that the requirement  was currently in                                                                    
regulation  under the  duties of  the commissioner.  Statute                                                                    
currently allowed DNR's Division  of Agriculture to regulate                                                                    
the  sale, transport,  importation, or  exportation of  seed                                                                    
within the state.                                                                                                               
                                                                                                                                
Representative Kawasaki remarked  on current regulation that                                                                    
gave DNR  and the commissioner  the ability to  regulate. He                                                                    
asked if  it was possible  to amend regulation to  allow DNR                                                                    
to regulate  seed libraries or  transfers of seed  grown and                                                                    
traded in the state.                                                                                                            
                                                                                                                                
Mr.  Carter   replied  it  could  be   effective  to  change                                                                    
regulation  to allow  for personal  use, noncommercial  seed                                                                    
distributions  or  transportations   around  the  state.  He                                                                    
observed that regulations could  be changed much easier than                                                                    
statute. To  protect the industry  in perpetuity  having the                                                                    
requirement  in  statute  was   beneficial  because  of  the                                                                    
protection  it would  provide to  Alaska's small  and larger                                                                    
personal  use seed  exchanges or  transportations. Currently                                                                    
it  was not  in the  best interest  of the  division or  the                                                                    
state for food security and  biodiversity reasons for DNR to                                                                    
issue notices of violation for  non-commercial seed use, but                                                                    
that was  because it was  the way he operated  the division.                                                                    
Knowing  that regulations  could be  changed by  whoever was                                                                    
sitting in  his position (with  a lengthy process  of public                                                                    
scoping  and  through  the  Department  of  Law  (DOL)),  he                                                                    
believed  for long-term  food  security and  sustainability,                                                                    
establishing  statute  would   protect  seed  libraries  and                                                                    
noncommercial seed trading.                                                                                                     
                                                                                                                                
2:13:54 PM                                                                                                                    
                                                                                                                                
Representative Grenn  pointed to  page 3 of  the legislation                                                                    
pertaining to  community seed  libraries [subsection  (c) at                                                                    
the bottom of  the page] "Seed given,  exchanged, or offered                                                                    
for giving  or exchange  under (b) of  this section  must be                                                                    
packaged  for sale  and labeled."  He  noted the  subsection                                                                    
listed several  things that  needed to be  on the  label. He                                                                    
asked for  verification that someone  still needed  to label                                                                    
their seeds  if they  were giving  them away  versus selling                                                                    
them.                                                                                                                           
                                                                                                                                
Representative Johnston replied,  "currently yes." She noted                                                                    
that  the labeling  could be  merely having  a label  on the                                                                    
table or next  to the seeds suggesting what  the seeds were;                                                                    
it did not have to be for each individual packaging.                                                                            
                                                                                                                                
Representative  Grenn   asked  for  verification   that  the                                                                    
requirement to package and label was not per package.                                                                           
                                                                                                                                
Representative Johnston replied in the affirmative.                                                                             
                                                                                                                                
Representative  Grenn  referenced page  4  of  the bill  and                                                                    
asked why there was a one-pound limitation.                                                                                     
                                                                                                                                
Representative Johnston deferred to DNR.                                                                                        
                                                                                                                                
Mr.  Carter replied  that the  issue had  been discussed  at                                                                    
length  -  it  had  initially  been  a  smaller  weight.  He                                                                    
reported that the industry had  reached out and communicated                                                                    
that the weight  was too small. He did not  believe it was a                                                                    
benefit  or   hurdle  for  anyone  sharing   seed.  He  used                                                                    
cauliflower as  an example and  specified there  were 70,000                                                                    
seeds   per   pound.  He   believed   it   was  plenty   for                                                                    
noncommercial  use.  He  thought   that  if  people  started                                                                    
noncommercial sharing  of cereal  grains or larger  seed, it                                                                    
may become  a burden,  but he believed  the weight  limit in                                                                    
the bill was per package.  He elaborated that a person could                                                                    
easily  write  "not authorized  for  commercial  use in  the                                                                    
state of Alaska" on the  packages and could follow the other                                                                    
labeling requirements to overcome the hurdle.                                                                                   
                                                                                                                                
Representative Grenn  asked for  verification that  he would                                                                    
need five separate, one-pound bags  if he wanted five pounds                                                                    
of  one  type  of  seed. He  thought  a  limitation  sounded                                                                    
strange for community sharing.                                                                                                  
                                                                                                                                
Mr.  Carter answered  there  was a  reasonable  way to  work                                                                    
around the  issue. The  intent behind the  bill was  to make                                                                    
sure  the use  was  noncommercial. He  elaborated that  seed                                                                    
laws  existed   to  protect  individuals  who   based  their                                                                    
livelihood on  the quality  of the  seed. Federal  and state                                                                    
seed laws regulated  the quality of seeds  farmers needed or                                                                    
purchased because  their business operations depended  on it                                                                    
- that  was where labeling requirements  for germination and                                                                    
purity came  into play  as a  protection for  farmers. There                                                                    
were many  workarounds to  ensure individuals  sharing seeds                                                                    
could do so easily.                                                                                                             
                                                                                                                                
2:18:38 PM                                                                                                                    
                                                                                                                                
Representative Guttenberg referenced  two emails in members'                                                                    
packets  sent  to his  staff  the  previous year  [email  of                                                                    
opposition from  P.S. Holloway sent  on April 7,  2017 (copy                                                                    
on file)].  He detailed  that the author  of the  email, Dr.                                                                    
Holloway  was  the retired  director  of  the University  of                                                                    
Alaska  experimental farm.  He  emphasized that  no one  had                                                                    
been  more active  in promoting  agriculture in  Alaska than                                                                    
Dr.  Holloway.   He  explained  that  in   addition  to  her                                                                    
cynicism, Dr.  Holloway did  not get  the bill.  He detailed                                                                    
that Dr.  Holloway was in  the middle of the  commercial and                                                                    
free trade of  seeds and plants and was still  active at the                                                                    
University's  experimental  farm.  He   asked  if  the  bill                                                                    
addressed  the concerns.  He referred  to DNR's  zero fiscal                                                                    
note. He  commented that  DNR's budget  was strapped  and he                                                                    
questioned where  the money would  come from to  oversee the                                                                    
changes made by the bill.                                                                                                       
                                                                                                                                
Representative  Johnston answered  that the  email had  been                                                                    
sent on April  7 [2017]. The concerns had  been addressed by                                                                    
the  House Resources  Committee in  an amendment  process on                                                                    
April 28 [2017].                                                                                                                
                                                                                                                                
Representative    Guttenberg   referenced    the   one-pound                                                                    
limitation and  the fact  that noncommercial  seed libraries                                                                    
would  still  be regulated.  He  mentioned  the ability  for                                                                    
people to swap seeds. He thought  it appeared the bill did a                                                                    
substantial amount  without a fiscal  note. He saw  the bill                                                                    
as a  tamping down of  people's ability  to sell seeds  at a                                                                    
farmer's  market or  other. He  stressed the  state did  not                                                                    
have enough  agriculture at present  to dictate  that people                                                                    
could not experiment and if  they did experiment they had to                                                                    
label  and  have  accurate accounting  for  what  they  were                                                                    
doing. He  was concerned the  bill would do the  opposite of                                                                    
enhancing.                                                                                                                      
                                                                                                                                
2:22:16 PM                                                                                                                    
                                                                                                                                
Representative  Johnston replied  that Alaska  would be  the                                                                    
fifth or  sixth state  to do  the work.  She stated  that it                                                                    
appeared  to be  making things  more difficult;  however, it                                                                    
would bring  the business of  seed exchange into a  place of                                                                    
respect and biodiversity, where it  would be possible to buy                                                                    
seeds from  local people  at a  farmer's market.  She stated                                                                    
that while  it seemed  cumbersome to  some, she  believed it                                                                    
would  be  better  to legitimize  the  activity  by  passing                                                                    
statute.                                                                                                                        
                                                                                                                                
Representative   Guttenberg  asked   how  DNR   expected  to                                                                    
implement the  bill without  a fiscal  note. He  stated that                                                                    
normally  there was  a fiscal  note when  writing regulation                                                                    
was required.                                                                                                                   
                                                                                                                                
2:23:49 PM                                                                                                                    
                                                                                                                                
Mr.  Carter  replied that  nowhere  in  the bill  was  there                                                                    
language specifying  someone "shall" do  something, whereas,                                                                    
there   were  numerous   provisions   specifying  that   the                                                                    
department "may" do something if  it chose. The division was                                                                    
currently  reviewing its  seed regulations.  If the  statute                                                                    
moved forward during its next  regulation process, DNR would                                                                    
make sure it addressed the  community seed libraries and the                                                                    
personal   noncommercial  transfer   of   seed  within   the                                                                    
regulations.  He  noted  that   DNR's  current  purview  was                                                                    
commercial only.  He cited the department's  belief it would                                                                    
not have  to regulate the issue  as its reason for  the zero                                                                    
fiscal note.  He elaborated  there would not  be a  need for                                                                    
another  staff. There  may be  some education  and the  bill                                                                    
provided  the opportunity  for DNR  to create  an additional                                                                    
webpage; however,  the department already had  a website. He                                                                    
did not believe the additional  work in the bill would place                                                                    
an undue burden  on the division or  department. At present,                                                                    
if  the  bill passed,  DNR  would  not  have to  police  the                                                                    
noncommercial seed  sharing activities; it would  reduce any                                                                    
work  hours,  trips,  or inspections  the  department  would                                                                    
currently have  to do if  someone brought  noncommercial use                                                                    
to its attention via a complaint.                                                                                               
                                                                                                                                
Representative  Guttenberg  believed  there  were  too  many                                                                    
contradictions associated with the bill.                                                                                        
                                                                                                                                
Representative Wilson  asked if Mr. Carter  had participated                                                                    
in the  House Resources  Committee meetings the  past April.                                                                    
Mr. Carter answered in the affirmative.                                                                                         
                                                                                                                                
Representative  Wilson  asked if  Mr.  Carter  had told  the                                                                    
House Resources  Committee that the issue  was in regulation                                                                    
and DNR could choose to make changes.                                                                                           
                                                                                                                                
Mr.  Carter replied  that he  believed so.  He believed  the                                                                    
concerns could be addressed through  a regulation change. He                                                                    
was uncertain  it would provide longevity  and protection to                                                                    
the noncommercial seed sharing  activities in Alaska, but it                                                                    
very well could be done.                                                                                                        
                                                                                                                                
Representative Wilson asked why  the department had not done                                                                    
anything  in regulation.  She surmised  that the  department                                                                    
could  have   elected  to   implement  regulation   and  the                                                                    
legislature could have changed it  via statute if it did not                                                                    
like the outcome.                                                                                                               
                                                                                                                                
2:27:00 PM                                                                                                                    
                                                                                                                                
Mr. Carter  replied that the  duties of the  commissioner of                                                                    
DNR under  AS 03.05.010  pertained to  the development  of a                                                                    
commercial agriculture industry. The  department did not see                                                                    
the  noncommercial seed  sharing  activities as  commercial;                                                                    
therefore,  it did  not see  the  noncommercial activity  as                                                                    
falling under its purview at present.                                                                                           
                                                                                                                                
Representative Wilson  stated that Mr. Carter  had testified                                                                    
that  DNR wrote  regulations  and could  change  them if  it                                                                    
chose to.  She thought  he was  now saying  that DNR  had no                                                                    
legal authority to write  regulations for noncommercial seed                                                                    
sales or trade.                                                                                                                 
                                                                                                                                
Mr. Carter  confirmed that DNR  did not have the  purview of                                                                    
noncommercial use,  but it did  have purview to  protect and                                                                    
enhance  an   agricultural  industry   in  the   state.  The                                                                    
regulations  that  were likely  last  updated  in the  1980s                                                                    
oversaw and  regulated all seed throughout  the state, which                                                                    
included personal use.                                                                                                          
                                                                                                                                
Representative Wilson asked how DNR  was enhancing if it was                                                                    
not allowing.                                                                                                                   
                                                                                                                                
Mr.   Carter   clarified   the  department   was   enhancing                                                                    
commercial   industry.  He   detailed  the   department  was                                                                    
providing seed  testing and sampling and  was regulating the                                                                    
control, transport, and seeds being  offered for sale to the                                                                    
commercial  industry within  the state.  The department  was                                                                    
not enhancing noncommercial use at present.                                                                                     
                                                                                                                                
Representative Wilson pointed  to page 5, lines  18, 19, 23,                                                                    
and  24 pertaining  to  the duties  of  the department  with                                                                    
respect to agriculture. She asked  if the language read "the                                                                    
Department  of  Natural  Resources  shall  not  control  and                                                                    
regulate  the  entry  and  transportation  of  noncommercial                                                                    
seeds, plants, and other  horticulture products," whether it                                                                    
would  take  care of  the  problem  that  DNR would  not  be                                                                    
regulating the noncommercial industry.                                                                                          
                                                                                                                                
Mr. Carter asked for clarification on the line numbers.                                                                         
                                                                                                                                
Representative Wilson replied  that page 5, lines  18 and 19                                                                    
designated that  DNR shall do  certain things. Lines  23 and                                                                    
24  currently  read  "control and  regulate  the  entry  and                                                                    
transportation  of  seeds,  plants, and  other  horticulture                                                                    
products."  She  believed Mr.  Carter  was  saying that  the                                                                    
language pertained to commercial  activity only and that DNR                                                                    
should  not be  regulating noncommercial.  She asked  if the                                                                    
legislature  wanted   to  ensure  DNR  was   not  regulating                                                                    
noncommercial activity, it should be clarified in statute.                                                                      
                                                                                                                                
Mr.  Carter   believed  it  would   be  a  way   to  address                                                                    
noncommercial seed distribution within the state.                                                                               
                                                                                                                                
2:31:02 PM                                                                                                                    
                                                                                                                                
Representative  Johnston thought  Representative Wilson  had                                                                    
an  excellent  point. The  mission  of  the division  was  a                                                                    
commercial  one.  She  spoke to  the  discussion  about  the                                                                    
weight  limit  discussion  (i.e.  one to  five  pounds)  and                                                                    
reasoned it  brought up  what constituted  commercial versus                                                                    
noncommercial.  She believed  it  was important  to keep  in                                                                    
mind the intent of the  division to protect commercial while                                                                    
not standing in the way of the exchanges.                                                                                       
                                                                                                                                
Co-Chair Seaton pointed out that  one of DNR's duties listed                                                                    
on  page 5,  line 25,  was  to control  and eradicate  pests                                                                    
injurious  to plants.  He believed  allowing individuals  to                                                                    
import  anything  they  wanted  would be  in  opposition  to                                                                    
efforts to  control invasive plants. He  thought getting too                                                                    
broad would create  problems. He noted that  Section 4 (page                                                                    
3) was  new to the  legislation and included  language about                                                                    
giving or exchanging seeds. He  pointed language on lines 23                                                                    
and 24  "...from a  plant grown (1)  outside the  state, and                                                                    
imported   into   the   state    in   compliance   with   AS                                                                    
03.05.010(a)(5)."  He remarked  that the  bill would  change                                                                    
language  on page  2  from  "into" the  state,  to "in"  the                                                                    
state.  He wondered  why the  provision on  page 3  would be                                                                    
necessary, which  would allow  for importation  from outside                                                                    
the  state, if  page 2  specified the  bill applied  only to                                                                    
seed from within the state.                                                                                                     
                                                                                                                                
Representative  Johnston   answered  that   House  Resources                                                                    
Committee had  discussed there  were occasional  chances for                                                                    
seed libraries  to exchange seeds with  commercial entities.                                                                    
She did  not want to  prevent seeds from being  available to                                                                    
seed libraries.                                                                                                                 
                                                                                                                                
2:34:17 PM                                                                                                                    
                                                                                                                                
Mr. Carter  agreed. For example,  if he placed a  seed order                                                                    
for his garden  and ordered one ounce of  broccoli seed (any                                                                    
remaining  seed would  have met  the requirements  within AS                                                                    
03.05.010(a)(5)) he  could leave the seed  in its commercial                                                                    
package or repackage  it and label it  accordingly and could                                                                    
noncommercially share  it with individuals in  his community                                                                    
or in  other regions around  the state. There  were numerous                                                                    
individuals throughout Alaska who  had relatives outside the                                                                    
state who bought and shared  commercial seeds that met DNR's                                                                    
current  regulations to  contain no  noxious weeds  and have                                                                    
high purity  and good germination. There  were also numerous                                                                    
crop  varieties that  were not  great  producers within  the                                                                    
state (e.g.  some could not be  overwintered); therefore, as                                                                    
long as the materials  met the state's labeling requirements                                                                    
in their original container, the  seed could be disseminated                                                                    
in Alaska.                                                                                                                      
                                                                                                                                
Co-Chair  Seaton  referenced  page  2,  line  12  that  read                                                                    
"regulate and  control the  entry in  the state"  instead of                                                                    
the previous  "regulate and control  entry into  the state."                                                                    
He  asked  if  the  language   change  did  not  change  the                                                                    
regulation  of importing  seed  or  distributing within  the                                                                    
state.                                                                                                                          
                                                                                                                                
Mr. Carter  agreed. He viewed  it as a language  change that                                                                    
would still  allow DNR to  regulate seed being  brought into                                                                    
the state  to ensure  it met the  needs of  commercial users                                                                    
and to prevent  invasive species from being  brought in. The                                                                    
language would  still allow seeds  that could not  be viably                                                                    
produced  in   Alaska  to   be  noncommercially   traded  or                                                                    
distributed around the state.                                                                                                   
                                                                                                                                
2:37:35 PM                                                                                                                    
                                                                                                                                
Representative  Pruitt   stated  that  his   concerns  about                                                                    
ensuring the state  maintained its control over  any type of                                                                    
invasive or noxious seeds. He  pointed to language intending                                                                    
to protect from  the issue on page 4  under applicability of                                                                    
other  laws. He  noted the  language specified  that nothing                                                                    
authorized  a person  to possess  or  exchange [invasive  or                                                                    
toxic] seeds. He  asked how to maintain the  control. He had                                                                    
no problem with individuals  sharing heirloom or other seeds                                                                    
with no  issues; however, he  reasoned that  individuals may                                                                    
think  that something  looked  pretty or  had  a value,  but                                                                    
ultimately  it could  have a  negative impact  on the  [non-                                                                    
native] environment it was brought  to. He used Hawaii as an                                                                    
example and  noted that  much of the  plants on  the islands                                                                    
were  invasive. He  asked how  to maintain  controls through                                                                    
the new exchange even if there was good intention involved.                                                                     
                                                                                                                                
Mr. Carter remarked on the  importance of the question about                                                                    
not allowing  invasives to  include non-native  species into                                                                    
the  state. He  referred  to earlier  testimony that  people                                                                    
were going  under the radar.  He believed the intent  of the                                                                    
language   to  provide   some  guidelines   to  follow   for                                                                    
noncommercial use, gave the state  the ability to try to cut                                                                    
off any invasive species from  being brought into the state.                                                                    
He remarked on the difficulty  of the task because vehicles,                                                                    
planes,  boats, lawn  mowers  from  out-of-state, and  other                                                                    
could  have seeds  attached when  brought in.  He referenced                                                                    
Alaska's  large size  and remoteness.  The department  would                                                                    
continue  to utilize  its current  invasive and  restrictive                                                                    
noxious weed list, which it  planned on enhancing to include                                                                    
other species  of concern  it was  hearing about  from other                                                                    
state and federal  agencies. The goal was to  stop the seeds                                                                    
preferably  before they  reached  the state's  border or  if                                                                    
they  made  it  into  the  state and  were  brought  to  the                                                                    
department's attention.                                                                                                         
                                                                                                                                
Representative  Pruitt  asked  if   there  was  language  to                                                                    
include that  would enable DNR  to shut down a  seed library                                                                    
or act to prevent someone  from bringing in invasive species                                                                    
or other. He  did not see specific language in  the bill and                                                                    
asked if the department was able to take action.                                                                                
                                                                                                                                
2:42:07 PM                                                                                                                    
                                                                                                                                
Mr.  Carter  answered  that  DNR   would  take  all  of  the                                                                    
assistance  it  could  get controlling  non-native  invasive                                                                    
species  in   Alaska.  He  referenced   page  4,   lines  16                                                                    
pertaining  to the  applicability of  other laws,  which did                                                                    
not allow  a person  to violate the  PVP Act  [Plant Variety                                                                    
Protection Act], distribute or  exchange seeds classified as                                                                    
controlled  substances,  and  anything  considered  noxious,                                                                    
invasive,  or toxic  under  AS 03  or  a regulation  adopted                                                                    
under those  chapters. He believed  the bill left  all tools                                                                    
the  department  currently had  in  place  to go  in,  issue                                                                    
notice  of  violations and  stop  sales  to have  the  seeds                                                                    
destroyed in a  manner at the discretion of  the director of                                                                    
the Division  of Agriculture.  He did  not believe  the bill                                                                    
hindered  the department's  ability to  continue to  control                                                                    
the entry  into the  state of  invasive or  non-native plant                                                                    
species of concern.                                                                                                             
                                                                                                                                
Co-Chair Foster OPENED and CLOSED public testimony.                                                                             
                                                                                                                                
Representative  Wilson  was  disturbed  the  bill  had  been                                                                    
around  since  the past  May.  She  stated the  Division  of                                                                    
Agriculture  was supposed  to  be  helping agriculture.  She                                                                    
referenced  a  letter from  a  person  in Homer  related  to                                                                    
growing pumpkins.  She hoped there would  be more discussion                                                                    
about how  the bill was enhancing  agriculture. She believed                                                                    
there was currently a huge loss occurring.                                                                                      
                                                                                                                                
Co-Chair Foster  asked members to provide  any amendments by                                                                    
the coming Wednesday.                                                                                                           
                                                                                                                                
HB  197  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
HOUSE BILL NO. 216                                                                                                            
                                                                                                                                
     "An Act  relating to transfers from  the dividend fund;                                                                    
     creating the  restorative justice account;  relating to                                                                    
     appropriations  from  the restorative  justice  account                                                                    
     for  payments  for  and   services  to  crime  victims,                                                                    
     operating  costs  of  the Violent  Crimes  Compensation                                                                    
     Board,  operation  of   domestic  violence  and  sexual                                                                    
     assault programs, mental  health services and substance                                                                    
     abuse  treatment   for  offenders,   and  incarceration                                                                    
     costs; and providing for an effective date."                                                                               
                                                                                                                                
2:45:29 PM                                                                                                                    
                                                                                                                                
Co-Chair Seaton MOVED to ADOPT the proposed committee                                                                           
substitute for HB 216, Work Draft 30-LS0572\M (Martin,                                                                          
2/12/18).                                                                                                                       
                                                                                                                                
Representative Wilson OBJECTED for discussion.                                                                                  
                                                                                                                                
REPRESENTATIVE CHUCK KOPP, SPONSOR, introduced himself.                                                                         
                                                                                                                                
ERICK CORDERO-GIORGANA, STAFF, REPRESENTATIVE CHUCK KOPP,                                                                       
read the changes in a prepared statement (copy on file):                                                                        
                                                                                                                                
      Section 3 - Clarified  that the  Attorney General's                                                                    
        office can  commence assisting  a crime  victim with                                                                    
        collecting  restitution  when  the   victim  accepts                                                                    
        assistance or  at  the  end  of the  90-day  opt-out                                                                    
        period, whichever is earlier.                                                                                           
      Section 4  -   Clarified  language   regarding  the                                                                    
        priorities for  the Office  of Victims'  Rights when                                                                    
        helping  crime  victims  with  restitution  payments                                                                    
        through the Restorative Justice Account.                                                                                
      Section 6 -  Switched priorities  3  and 4,  making                                                                    
        "organizations to  provide grants  for services  for                                                                    
        crime  victims  and  domestic  violence  and  sexual                                                                    
        assault   programs"   the   higher   priority   over                                                                    
        "nonprofit  organizations  to  provide   grants  for                                                                    
        mental health services and substance abuse treatment                                                                    
        for offenders". The blank CS  adds percentage ranges                                                                    
        for appropriations to each priority.                                                                                    
      Sections 8, 9, & 10 - Added the ability for Alaskans                                                                   
        to donate to the crime victim compensation fund that                                                                    
        resides within the Violent Crimes Compensation Board                                                                    
                                                                                                                                
Representative Wilson requested to hear additional detail                                                                       
from bill sponsor about the changes. She wondered if he                                                                         
supported or opposed the changes and why.                                                                                       
                                                                                                                                
Representative  Kopp explained  that  the  changes were  all                                                                    
policy calls.  He believed all  of the changes  advanced the                                                                    
intent of the bill.                                                                                                             
                                                                                                                                
Representative  Wilson WITHDREW  her OBJECTION.  There being                                                                    
NO further OBJECTION, Work Draft 30-LS0572\M was ADOPTED.                                                                       
                                                                                                                                
2:49:19 PM                                                                                                                    
                                                                                                                                
Representative Kopp  thanked the  committee for  hearing the                                                                    
legislation. He  believed many thousands  of Alaskans  in an                                                                    
unrestored condition after being the  victim of a crime were                                                                    
tracking the bill.  He reported that currently  more than 70                                                                    
percent of  all court ordered restitution  for crime victims                                                                    
remained  unpaid  since 1980.  He  added  that in  2017  the                                                                    
Alaska Criminal  Justice Commission had found  the number to                                                                    
be  closer  to  76  percent.  A  2013  Legislative  Research                                                                    
Services report  was included in  members' packets  (copy on                                                                    
file)  that  had been  written  in  response to  a  question                                                                    
asking  why the  state's restitution  collection system  was                                                                    
broken. The report  determined the system was  broken due to                                                                    
broken  communication.  He  elaborated there  were  so  many                                                                    
entities involved  with restitution,  the state  had drifted                                                                    
from  the   fund  that  had  been   implemented  to  address                                                                    
restitution and it had not  insisted in the criminal justice                                                                    
process that restitution be paid.                                                                                               
                                                                                                                                
Representative Kopp continued that  HB 216 sought to improve                                                                    
the  percentage  of  restitution and  compensation  paid  to                                                                    
victims in two ways.  First, it prioritized compensation and                                                                    
restitution  for   victims  from  the   Restorative  Justice                                                                    
Account,  which  was  part  of  the  original  Crime  Victim                                                                    
Compensation Fund  established by  the legislature  in 1988.                                                                    
Members' packets  included a background  document of  HB 245                                                                    
passed by  the legislature  in 1988  to get  restitution for                                                                    
victims. Second,  the bill would increase  opportunities for                                                                    
victim restitution  from the fund.  The original HB  245 was                                                                    
important because  the legislature  had declared  people who                                                                    
were incarcerated  or convicted  during the  qualifying year                                                                    
as ineligible  for a Permanent  Fund Dividend and  the money                                                                    
was  deposited into  a Crime  Victim  Compensation Fund.  He                                                                    
remarked on how memory could  fade and explained he had been                                                                    
speaking with members of the  current executive and judicial                                                                    
branches and they  had told him it had never  been the Crime                                                                    
Victim Compensation  Fund. He  had directed  the individuals                                                                    
to HB 245.                                                                                                                      
                                                                                                                                
Representative Kopp  explained that since the  passage of HB                                                                    
245 the legislature had added  worthy recipients such as the                                                                    
Office  of  Victims'  Rights (OVR),  domestic  violence  and                                                                    
sexual   assault  shelters,   other  crime   victim  service                                                                    
agencies, and  the Department of  Corrections (DOC)  for the                                                                    
costs  of incarceration  and probation.  He did  not believe                                                                    
the legislature  had ever envisioned that  by adding certain                                                                    
eligible recipients,  that the intent  of the fund  would be                                                                    
decimated and would  turn into something that  it would turn                                                                    
into something  it was  never intended  to be.  He explained                                                                    
that HB  216 was about  process and getting back  to helping                                                                    
to restore victims to a pre-offense condition.                                                                                  
                                                                                                                                
2:53:26 PM                                                                                                                    
                                                                                                                                
Representative Kop  introduced a presentation  titled "House                                                                    
Bill 216:  Establishing the Restorative Justice  Account and                                                                    
Prioritizing  Help for  Victims  of Crimes."  He began  with                                                                    
slide 1:                                                                                                                        
                                                                                                                                
     Restoring crime victims to a pre-offense condition                                                                         
     through the Criminal Fund established in 1988.                                                                             
                                                                                                                                
Representative Kopp moved to slide 2:                                                                                           
                                                                                                                                
    59% of adult women in Alaska have experienced domestic                                                                   
     violence or sexual violence throughout their lifetime.                                                                     
     (CDVSA Report)                                                                                                             
    Compensation claims continue to increase yearly. (VCCB                                                                   
     Report) and in 2017, the majority of victims were                                                                          
     women and children.                                                                                                        
  The outstanding balance of restitution orders is over                                                                      
     $129 million.                                                                                                              
                                                                                                                                
Representative  Kopp  pointed   out  that  members'  packets                                                                    
included  a court  system breakdown  starting at  1980 going                                                                    
forward  ["Restitution  Data  -  Including  both  State  and                                                                    
Municipal prosecutions  as of  12/31/2017" (copy  on file)].                                                                    
The  document showed  the amount  collected and  still owed;                                                                    
the  collection rate  was 27.9  percent or  over 70  percent                                                                    
uncollected.  He  added  if the  Alyeska  Pipeline  shooting                                                                    
incident  was removed,  which  had resulted  in  a claim  of                                                                    
about  $20 million,  the amount  owed was  still about  $100                                                                    
million.  He addressed  the difference  between compensation                                                                    
and  restitution.  He  detailed that  compensation  included                                                                    
bridging/emergency funds.  For example,  the funds  helped a                                                                    
person pay  medical bills and  recover lost wages  from work                                                                    
immediately  after a  DUI accident  or serious  assault. The                                                                    
Violent Crimes Compensation Board  could award up to $40,000                                                                    
for a person,  but it may not help a  person with a property                                                                    
loss. Whereas, restitution was a  court ordered payment that                                                                    
went   to  victims,   post-conviction.   He  detailed   that                                                                    
sometimes  it  took  five  to  six years  to  get  a  felony                                                                    
prosecution through the  system and get the  court order for                                                                    
restitution   issued.  He   stated  the   funds  were   very                                                                    
different. He  explained that  HB 216  would help  with both                                                                    
measures [compensation and restitution].                                                                                        
                                                                                                                                
2:55:26 PM                                                                                                                    
                                                                                                                                
Representative  Kopp continued  to a  bar graph  showing the                                                                    
criminal  fund  over  the  years  and  how  funds  had  been                                                                    
distributed (slide 4).  The left side of the  graph showed a                                                                    
parallel distribution between DOC  for cost of incarceration                                                                    
and  probation  (shown in  red)  and  crime victim  services                                                                    
(shown in green).  In FY 12 the  lines diverged dramatically                                                                    
and even more sharply in FY  15 - the fund completely became                                                                    
oriented  toward the  cost of  inmate healthcare  and victim                                                                    
services remained at the very bottom.                                                                                           
                                                                                                                                
Representative Kopp  moved to  a bar graph  on slide  5 that                                                                    
showed  how  the  funds  had  previously  been  shared  more                                                                    
equally  [up to  FY 11]  between DOC  and victims'  services                                                                    
(shown in  yellow and blue respectively).  More recently, 94                                                                    
percent  of  the  funds  went to  inmate  healthcare  and  6                                                                    
percent went to victims' services.                                                                                              
                                                                                                                                
Representative Kopp explained that  the bill would return to                                                                    
a  priority  in  a  way   that  would  not  unfairly  impact                                                                    
financially other  agencies eligible  for the funds.  He was                                                                    
sensitive to  the fact that  inmate healthcare needed  to be                                                                    
paid  for;  however,  the  bill  focused  on  improving  the                                                                    
process  of getting  restitution to  victims of  crime in  a                                                                    
timely way. He believed that  by introducing some key pieces                                                                    
into  the bill,  one being  OVR,  which had  never taken  an                                                                    
active  role  in  helping  victims  get  restitution  orders                                                                    
filled, would improve the service dramatically.                                                                                 
                                                                                                                                
Mr.  Cordero-Giorgana highlighted  that compensation  was an                                                                    
emergency bridging  fund that could be  obtained immediately                                                                    
by crime  victims. He  turned to slide  6 and  reported that                                                                    
the number  of new claims  had increased steadily  from 2000                                                                    
to 2017 - the number  usually correlated with how much money                                                                    
was available  to the Violent Crimes  Compensation Board. He                                                                    
turned to slide  7 and reported the majority  of claims were                                                                    
for victims of domestic  violence, sexual assault, and child                                                                    
abuse. He detailed  that child abuse was one  of the highest                                                                    
percentages at  34 percent, the  majority of  which involved                                                                    
some type of sexual assault.                                                                                                    
                                                                                                                                
2:58:20 PM                                                                                                                    
                                                                                                                                
Mr. Cordero-Giorgana  moved to slide 8  and addressed annual                                                                    
outstanding   restitution   balances.  He   explained   that                                                                    
restitution was ordered  by the court and could  take a long                                                                    
time for someone to receive.  The annual outstanding balance                                                                    
had steadily increased;  a major spike in the  balance in FY                                                                    
14 was related to the Alyeska Pipeline shooting.                                                                                
                                                                                                                                
Mr. Cordero-Giorgana  turned to  slide 9 and  specified that                                                                    
approximately 40  to 50 percent  of restitution  orders were                                                                    
for individuals.  He detailed that  about 50 percent  of the                                                                    
individuals  were   owed  less  than  $1,000.   The  average                                                                    
restitution  payment to  a person  ranged  between $500  and                                                                    
$700.  The  remaining 50  percent  of  the individuals  were                                                                    
usually  owed  less  than  $10,000. The  bill  would  put  a                                                                    
$10,000 cap on the amount  OVR could assist victims with. He                                                                    
added that the  sponsor had reviewed what  other states were                                                                    
doing  and Vermont's  system was  close to  the same  as the                                                                    
bill proposal.                                                                                                                  
                                                                                                                                
Representative Kopp noted that the  $10,000 applied on a per                                                                    
restitution order basis.                                                                                                        
                                                                                                                                
Mr.  Cordero-Giorgana  turned  to   slide  11  and  provided                                                                    
highlights of  the bill  compared to  current law.  The bill                                                                    
created  a   mechanism  for  the  Permanent   Fund  Dividend                                                                    
Division to set aside an  amount calculated annually for the                                                                    
Restorative Justice Account. The  legislature would have the                                                                    
ability  to   appropriate  money   to  entities   and  state                                                                    
agencies, which  would be prioritized with  a percentage. He                                                                    
explained that OVR would have  the ability to assist victims                                                                    
with  restitution payments.  He clarified  that compensation                                                                    
would  remain  paramount  because victims  needed  immediate                                                                    
help  with  bridging  funds. The  bill  would  allow  direct                                                                    
appropriations to  nonprofit agencies  to assist  victims of                                                                    
crimes including  domestic violence and sexual  assault. The                                                                    
sponsor  realized that  compensation  and restitution  would                                                                    
not  make   a  victim  whole;  therefore,   some  nonprofits                                                                    
provided other  services a  victim may  need. The  bill also                                                                    
authorized  funds  for  mental health  and  substance  abuse                                                                    
treatment for offenders.                                                                                                        
                                                                                                                                
3:01:31 PM                                                                                                                    
                                                                                                                                
Mr.  Cordero-Giorgana moved  to  slide 12  and continued  to                                                                    
address highlights of current law  and changes under HB 216.                                                                    
The   bill  would   require  the   court  system   to  share                                                                    
restitution  orders with  OVR.  Currently  DOL received  the                                                                    
orders  and notified  victims about  their  rights and  that                                                                    
they may  qualify for restitution. Currently  a victim could                                                                    
notify  DOL  if  they  want  assistance  or  assistance  was                                                                    
automatic unless they opted out  within 30 days. He noted it                                                                    
was rare for  a person to opt-out; opt-out  reasons could be                                                                    
that a person  did not want to deal with  it, they moved and                                                                    
could not be located by the  state, or they wanted to hire a                                                                    
private  company to  assist with  financial collection.  For                                                                    
many  years the  DOL Restitution  Unit had  been the  entity                                                                    
helping  victims with  collecting  restitution; however,  it                                                                    
had lost  funding. He  furthered that  DOL had  never helped                                                                    
victims  of crimes  through a  criminal fund  established 30                                                                    
years  back;  it  only assisted  victims  with  restitution,                                                                    
things that could be garnishable,  volunteer payments by the                                                                    
offender, or  prepayments. The bill  would allow use  of the                                                                    
funds through OVR as well.                                                                                                      
                                                                                                                                
Mr.  Cordero-Giorgana reported  the  bill  would expand  the                                                                    
opt-out period from 30 to 90  days to give victims more time                                                                    
to  make  a  decision.  He  detailed  that  crime  could  be                                                                    
traumatizing and individuals could need  more time to make a                                                                    
decision  on  the  assistance.   Lastly,  the  bill  allowed                                                                    
Alaskans to  donate to the  Crime Victims  Compensation Fund                                                                    
though  the Pick.Click.Give  program when  filing for  their                                                                    
Permanent Fund Dividend.                                                                                                        
                                                                                                                                
3:03:41 PM                                                                                                                    
                                                                                                                                
Representative  Kopp expounded  that under  current law  and                                                                    
the bill, the  offenders were liable to pay  back any payout                                                                    
made from  the Restorative  Justice Account  for restitution                                                                    
and  any  payout made  by  the  Violent Crimes  Compensation                                                                    
Board for  compensation. He  specified that  offenders would                                                                    
not  be  off the  hook  just  because  a bridging  fund  had                                                                    
offered compensation or restitution.                                                                                            
                                                                                                                                
Representative  Guttenberg  asked   about  language  on  the                                                                    
bottom left of  slide 11 [under current  law] that addressed                                                                    
appropriation  of funds  without priority.  He referenced  a                                                                    
bullet  point designating  the use  of funds  by percentages                                                                    
[under HB 216,  lower right side of slide 11].  He asked for                                                                    
further detail.                                                                                                                 
                                                                                                                                
Representative   Kopp  answered   there  was   currently  no                                                                    
priority or law designating  what the legislature wanted the                                                                    
state to  look at first when  distributing funds. Currently,                                                                    
there  was  nothing  to guide  OMB,  when  establishing  the                                                                    
governor's budget,  on determining the highest  priority. He                                                                    
reported   there  had   been   years   the  Violent   Crimes                                                                    
Compensation Board had fallen  off dramatically and when the                                                                    
Council on Domestic Violence and  Sexual Assault and OVR had                                                                    
not been entirely  funded. The bill made a  policy call that                                                                    
would direct  OMB to prioritize  inmate healthcare  and look                                                                    
at  what may  be left  over for  the other  victims' service                                                                    
agencies.                                                                                                                       
                                                                                                                                
3:06:14 PM                                                                                                                    
                                                                                                                                
Representative Guttenberg  asked what the bill  would change                                                                    
the priority to.                                                                                                                
                                                                                                                                
Representative Kopp answered that  the priority order was in                                                                    
the bill.                                                                                                                       
                                                                                                                                
Mr. Cordero-Giorgana  directed attention to Section  6, page                                                                    
6 of the bill [version M].                                                                                                      
                                                                                                                                
Representative  Kopp  continued  the  bill  established  the                                                                    
Crime  Victim Compensation  Fund  as  the highest  priority,                                                                    
then OVR for  payments to crime victims  and operating costs                                                                    
of  the program,  then  nonprofit  organizations to  provide                                                                    
grants for services for crime  victims and domestic violence                                                                    
and  sexual assault  programs,  then  nonprofits for  mental                                                                    
health  and  substance abuse  treatment,  and  then DOC.  He                                                                    
pointed out the priority  order included a percentage range,                                                                    
which was  based on  historical needs  drawn from  the fund.                                                                    
The numbers  were all policy  calls. He highlighted  that in                                                                    
review of the  bill draft, he realized DOC  should have been                                                                    
65 to 78 percent to accommodate  the scenario of all four of                                                                    
the higher agencies either getting  the low end of the range                                                                    
or the high end of the  range. A substantial majority of the                                                                    
funds would  still go to  inmate healthcare. The  bill would                                                                    
give victims services agencies -  that had been [previously]                                                                    
removed entirely  - more budget  certainty out of  the fund.                                                                    
Most importantly,  the bill introduced  OVR as  a recipient.                                                                    
He explained  that OVR was  the most aggressive  advocate in                                                                    
state government  for victims.  He believed the  state would                                                                    
start turning  the curve  of getting  victims back  on their                                                                    
feet  if OVR  followed up  with restitution  orders and  saw                                                                    
that they received the money.                                                                                                   
                                                                                                                                
3:09:08 PM                                                                                                                    
                                                                                                                                
Representative   Grenn  thanked   Representative  Kopp   for                                                                    
introducing the  bill. He believed prioritizing  for victims                                                                    
was a  great thing for the  fund. He asked about  Sections 8                                                                    
through  10,  which he  believed  had  come from  the  House                                                                    
Judiciary  Committee. He  remarked that  the Pick.Click.Give                                                                    
program  was a  new mechanism  for  giving to  the fund.  He                                                                    
noted  that the  provisions would  mean new  duties for  the                                                                    
Department  of Revenue  (DOR) as  the  administrator and  he                                                                    
wondered  if  the sponsor  had  spoken  with the  department                                                                    
about the new work the provisions would entail.                                                                                 
                                                                                                                                
Representative Kopp replied in  the affirmative. He reported                                                                    
that  DOR  "loved" the  idea.  He  detailed that  the  House                                                                    
Judiciary  Committee  had  exempted  the  normal  7  percent                                                                    
administrative  fee that  would be  deducted. He  elaborated                                                                    
that the  only other exempt  fund was the Peace  Officer and                                                                    
Firefighter Survivor's Fund.                                                                                                    
                                                                                                                                
Representative  Kawasaki  spoke the  historical  restitution                                                                    
data handout.  He asked why  the restitution  percentage had                                                                    
dropped significantly after 2008.                                                                                               
                                                                                                                                
Representative  Kopp  replied  that  the  2013  report  from                                                                    
Legislative Research  Services did the best  job summarizing                                                                    
that  information. The  report specified  the breakdown  was                                                                    
occurring  because there  was not  a good  mechanism between                                                                    
the  courts  and DOC.  He  elaborated  that when  the  court                                                                    
issued an  order for  restitution it was  sent to  DOC where                                                                    
probation  officers were  supposed to  make the  restitution                                                                    
order part of successfully  completing probation and parole,                                                                    
which was often  not happening. In some cases  there was not                                                                    
a high  level of  insistence that  it happen  for successful                                                                    
completion and  in other cases  the money was  collected but                                                                    
not passed on  to the victim. He explained  that perhaps the                                                                    
victim  could  not be  located  to  give  the money  to.  He                                                                    
addressed  restitution   orders  on  people  who   were  not                                                                    
incarcerated  and   conjectured  that   it  could   be  more                                                                    
difficult to  locate people. He believed  the biggest reason                                                                    
was the absence of a recovery  unit - a team of attorneys at                                                                    
DOL, which  had existed in  the past.  He did not  claim the                                                                    
recovery unit had  ever done a fantastic job -  the DOL unit                                                                    
had recently been defunded in 2016.                                                                                             
                                                                                                                                
Representative  Kopp  continued  that  for  various  reasons                                                                    
there  had  been  a  lack  of  communication  between  state                                                                    
agencies and  a lack  of follow through,  which had  made it                                                                    
very  difficult   for  victims   to  get   compensation.  He                                                                    
underscored  that victim  compensation was  a constitutional                                                                    
right  under  Article  I,  Section   24.  He  remarked  that                                                                    
legislators  had all  seen  the lack  of  follow through  on                                                                    
other  things such  as Medicaid  issues and  justice issues.                                                                    
The bill  aimed to put  a process in the  law reestablishing                                                                    
the highest priority and introducing  OVR to help facilitate                                                                    
the restitution  payments. He elaborated  that OVR  was made                                                                    
up of  a skilled team  of attorneys who  attended sentencing                                                                    
hearings  and advocated  for victims.  He added  that Taylor                                                                    
Winston [OVR director] had  been extraordinarily helpful and                                                                    
ready  to  engage  in  helping  victims  access  restitution                                                                    
orders from the court and working with DOR.                                                                                     
                                                                                                                                
3:13:46 PM                                                                                                                    
                                                                                                                                
Representative  Kopp continued  to answer  the question.  He                                                                    
had  worked  with aforementioned  agencies  on  the bill  to                                                                    
refine  the  process  and  prevent  another  breakdown  from                                                                    
occurring.                                                                                                                      
                                                                                                                                
Representative Kawasaki referenced  the restitution data and                                                                    
observed that prior to 2008 it  appeared an average of 40 to                                                                    
50 percent up to 60  percent had been recovered. He observed                                                                    
that  beginning  in  2008   going  forward  the  restitution                                                                    
percentage  dropped  to  single  digits. He  wondered  if  a                                                                    
systemic issue had occurred after 2008.                                                                                         
                                                                                                                                
Mr.   Cordero-Giorgana   answered   that  the   decline   in                                                                    
[restitution]  recovery rates  was  a national  trend -  all                                                                    
states  were  challenged in  finding  new  ways to  increase                                                                    
recovery rates.  Some states created  independent collection                                                                    
units to recover the money.                                                                                                     
                                                                                                                                
Representative  Kawasaki  appreciated   the  intent  of  the                                                                    
legislation. He asked  how to ensure the  department and OMB                                                                    
adhere  to the  legislation  and appropriate  money the  way                                                                    
intended.                                                                                                                       
                                                                                                                                
Representative  Kopp answered  that the  question struck  at                                                                    
the  heart  of the  bill.  He  believed  the answer  was  to                                                                    
establish  a  priority  order  in  statute.  He  pointed  to                                                                    
language on page 6, lines 1 and 2 of the bill:                                                                                  
                                                                                                                                
     The legislature may appropriate amounts from the                                                                           
     account to the following recipients in the priority                                                                        
     order and percentages listed                                                                                               
                                                                                                                                
Representative Kopp  believed the departments would  have to                                                                    
be  knowingly circumventing  the legislative  will [if  they                                                                    
did not  comply with  the bill's  intent]. He  detailed that                                                                    
the  legislature had  never spelled  out the  information so                                                                    
clearly  in terms  of a  priority  order. Legislative  Legal                                                                    
Services had specified that the  bill did not unduly tie the                                                                    
administration's   hands   or   violate   dedicated   funds.                                                                    
Legislative  Legal Services  had  stated there  could be  no                                                                    
successful claim  that perhaps  a lower priority  was filled                                                                    
and maybe not  every higher priority need  was. He explained                                                                    
there  was   still  some  discretion   built  in,   but  the                                                                    
legislation made  it very clear  the legislature  wanted the                                                                    
top priority to  be considered first. He  elaborated that it                                                                    
would involve calling the  Violent Crimes Compensation Board                                                                    
to  enquire about  outstanding claims  for the  coming year.                                                                    
Second,  OVR would  be  called to  determine  the number  of                                                                    
restitution  orders ready  to  go.  The average  restitution                                                                    
order  was  between $500  and  $700.  He  added he  was  not                                                                    
talking about  large numbers,  but about  immediately moving                                                                    
the needle on helping victims get back on their feet.                                                                           
                                                                                                                                
3:17:42 PM                                                                                                                    
                                                                                                                                
Representative  Kawasaki  believed   in  the  importance  of                                                                    
restitution.  He  found  fiscal  note 5  was  troubling.  He                                                                    
pointed  to  the last  sentence  on  page 2  [OMB  Component                                                                    
Number 2952]:  "As such, the  fund change in  the Department                                                                    
of  Corrections  may  shift   to  the  "Restorative  Justice                                                                    
Account" rather than  the general fund." He  stated that the                                                                    
note talked  about that  in practice in  FY 11,  funding had                                                                    
been used  that was either  in crime victim  compensation or                                                                    
DOC. He was  trying to determine ways  to ensure restitution                                                                    
was  the   top  priority.  He   surmised  it  was   for  the                                                                    
legislature to dedicate itself to  during the budget process                                                                    
as well.                                                                                                                        
                                                                                                                                
Representative  Kopp answered  that new  fiscal notes  would                                                                    
accompany  the  CS.  He  added that  the  fiscal  notes  had                                                                    
evolved.   He   appreciated   the   comments   and   relayed                                                                    
[restitution]  was a  constitutional right  and should  be a                                                                    
priority. He believed the legislative  body had not followed                                                                    
through and  insisted on  the law. He  noted the  bill would                                                                    
not remove  the liability of  the offender to pay  the money                                                                    
back.  He concluded  the legislature  was in  a position  to                                                                    
improve it, which was the goal of the legislation.                                                                              
                                                                                                                                
Representative Wilson  stated that Permanent  Fund Dividends                                                                    
would go to a person if  they had not committed a crime. She                                                                    
wondered if the  state was paid back if  it paid restitution                                                                    
on behalf of a person.                                                                                                          
                                                                                                                                
Representative Kopp answered that  when restitution was paid                                                                    
on  behalf on  an  incarcerated  individual, the  individual                                                                    
would be liable to pay  the money back. The individual would                                                                    
be  eligible  for  a  PFD  once  released,  which  could  be                                                                    
garnished  directly.  He  noted   PFD  garnishment  was  the                                                                    
highest return on any recovery effort.                                                                                          
                                                                                                                                
3:20:45 PM                                                                                                                    
                                                                                                                                
Representative Wilson  asked if it included  personal injury                                                                    
on behalf of or restitution only.                                                                                               
                                                                                                                                
Representative  Kopp  answered  that individuals  were  also                                                                    
liable  to pay  violent  crimes compensation  claims to  the                                                                    
Violent  Crimes  Compensation  Board. Restitution  was  also                                                                    
repaid to the  General Fund - the legislature  would have to                                                                    
reappropriate the funds. The  liability for compensation and                                                                    
restitution did not go away  merely because a claim had been                                                                    
paid.                                                                                                                           
                                                                                                                                
Mr.  Cordero-Giorgana  added  that  currently  if  a  victim                                                                    
received  compensation   funds,  the  court  took   it  into                                                                    
consideration  and  sent  any  restitution  to  the  Violent                                                                    
Crimes Compensation  Board. The  offender was liable  to pay                                                                    
the money back through the violent crime compensation fund.                                                                     
                                                                                                                                
Representative  Wilson provided  a scenario  where a  person                                                                    
was  incarcerated  for  several  weeks,  meaning  they  were                                                                    
ineligible for a  PFD. She asked if an  individual's duty to                                                                    
pay back DOC was tracked and by whom.                                                                                           
                                                                                                                                
Representative  Kopp replied  that  the duty  to return  the                                                                    
restitution  orders  was always  with  the  person, even  if                                                                    
incarcerated for  a short time.  He stated that  current law                                                                    
specified   if  a   person  was   incarcerated  and   became                                                                    
ineligible. He  elaborated it  was a  policy call  (e.g. law                                                                    
could be changed  where a person would  become ineligible if                                                                    
they were  incarcerated more than  30 days). The  pros would                                                                    
be  that more  people were  eligible to  receive their  PFD,                                                                    
which  was   the  fastest  way   to  get   recoveries  back.                                                                    
Additionally, the  criminal fund  was growing  because under                                                                    
SB 54  [crime reform legislation  passed in 2017]  the state                                                                    
was putting  many more  people back  in prison.  He remarked                                                                    
that the state's  jails were filling up  again. The criminal                                                                    
fund was replenished annually  with new people incarcerated.                                                                    
If the  goal was  to have the  dividend be  more accessible,                                                                    
the legislature could  look at the length of  stay [in jail]                                                                    
versus taking a  person's PFD if they  were incarcerated for                                                                    
any length of time.                                                                                                             
                                                                                                                                
3:23:41 PM                                                                                                                    
                                                                                                                                
Representative   Wilson  countered   that  jails   were  not                                                                    
growing. On  the contrary,  she believed  prison populations                                                                    
were decreasing. She remarked  that the populations would go                                                                    
down even  more if halfway houses  and electronic monitoring                                                                    
were  utilized more.  She was  trying to  understand when  a                                                                    
person went to  jail and had hurt someone  or took property,                                                                    
whether the  state was  utilizing a  large fund  with pooled                                                                    
money where  no one got  credited or  if the state  tried to                                                                    
recoup as  much cost  as possible  when people  left prison.                                                                    
She  understood much  of  the money  could  not be  recouped                                                                    
because two  out of three  individuals released  from prison                                                                    
went back  to prison.  She stated the  bill was  telling the                                                                    
administration  and  the  legislature  the  priorities.  She                                                                    
remarked that  the bill did  not require the  legislature to                                                                    
appropriate funds.  She stated  that corrections was  one of                                                                    
the fastest growing  costs in the state. She  wanted to have                                                                    
a  better understanding  of  how the  fund  worked to  start                                                                    
with.  She furthered  that if  someone  paid restitution  on                                                                    
their own it  went to the General Fund,  not the Restorative                                                                    
Justice  Account.  She wanted  to  know  how it  all  worked                                                                    
together.  She was  fine with  the bill,  but she  wanted to                                                                    
know  how  the state  was  tracking  all of  the  components                                                                    
involved.                                                                                                                       
                                                                                                                                
Mr.  Cordero-Giorgana  answered  that  currently  the  court                                                                    
system tracked  the information. When the  court worked with                                                                    
DOL they  would track whether an  offender paid restitution.                                                                    
He detailed  that DOC had  a priority  on the type  of fines                                                                    
and  costs that  an  incarcerated offender  had  to pay.  He                                                                    
relayed   that   child    support   restitution,   cost   of                                                                    
incarceration, and  other fines was typically  the priority.                                                                    
When an  individual was released  from jail they  still owed                                                                    
the money  to the  state through DOC.  The bill  allowed for                                                                    
the  legislature  to  appropriate   back  any  repayment  of                                                                    
restitution  funds from  one  account  into the  Restorative                                                                    
Justice Account to continue helping  victims. He deferred to                                                                    
DOC for further detail.                                                                                                         
                                                                                                                                
3:26:32 PM                                                                                                                    
                                                                                                                                
Representative  Wilson was  hoping to  receive something  in                                                                    
writing. She believed  the things could all  be done without                                                                    
the  bill.  She clarified  her  support  for the  bill.  She                                                                    
stated that  as the appropriator, the  legislature could use                                                                    
designated general  funds, undesignated, or make  up its own                                                                    
funds to  decide where to  put or  pay out money.  She asked                                                                    
why  the  funds  were  not put  back  into  the  Restorative                                                                    
Justice Account  versus the General Fund  when recouped. She                                                                    
believed  it   would  be  helpful   in  order  to   have  an                                                                    
understanding on how  much money got paid  back. She thought                                                                    
putting the money into the  General Fund meant it got bogged                                                                    
up with all the other funds.  She reasoned the state did not                                                                    
know whether people  released from jail were  not being held                                                                    
responsible to  pay restitution to  people or  property they                                                                    
damaged.                                                                                                                        
                                                                                                                                
Representative   Kopp   responded   there  was   a   precise                                                                    
accounting of  every restitution order paid  back. The money                                                                    
returned  each year  came  to the  attention  of the  budget                                                                    
director,   so   they   knew    what   was   available   for                                                                    
reappropriation.   He  explained   that  Legislative   Legal                                                                    
Services had  advised that if  the funds  went automatically                                                                    
to the Restorative  Justice Account it would  be a violation                                                                    
of  dedicated  funds  and would  be  subject  to  challenge.                                                                    
Therefore,  the bill  specified the  funds would  go to  the                                                                    
General Fund for reappropriation by the legislature.                                                                            
                                                                                                                                
3:28:13 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster  remarked that many  policy calls  needed to                                                                    
be  made. Additionally,  the committee  needed to  hear from                                                                    
the departments and have an  in-depth conversation about the                                                                    
fiscal notes.                                                                                                                   
                                                                                                                                
Representative Kopp  shared that  the effective date  of the                                                                    
bill  should be  amended to  2019. He  explained there  were                                                                    
processes  involved  that  needed   time  to  implement.  He                                                                    
furthered  that  a 2019  effective  date  (January or  July)                                                                    
would allow time for the  departments to forecast the amount                                                                    
of money available for  distribution associated with persons                                                                    
deemed ineligible.                                                                                                              
                                                                                                                                
HB 216 was HEARD and HELD in committee for further                                                                              
consideration.                                                                                                                  
                                                                                                                                
Co-Chair Foster reviewed the schedule for the following                                                                         
day.                                                                                                                            
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
3:29:46 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 3:29 p.m.                                                                                          

Document Name Date/Time Subjects
HB 197 Sponsor Statement 4.10.2017.pdf HFIN 2/19/2018 1:30:00 PM
HB 197
HB197 Opposition Document - Letter of Opposition 4.27.2017.pdf HFIN 2/19/2018 1:30:00 PM
HB 197
HB197 Sectional Analysis ver CSHB 197(RES) 1.22.2018.pdf HFIN 2/19/2018 1:30:00 PM
HB 197
HB197 Summary of Changes 1.22.2018.pdf HFIN 2/19/2018 1:30:00 PM
HB 197
HB197 Supporting Document - Article Seed Bill 4.9.2017.pdf HFIN 2/19/2018 1:30:00 PM
HB 197
HB197 Supporting Document - Letter of Support 5.1.2017.pdf HFIN 2/19/2018 1:30:00 PM
HB 197
HB216 Additional Documents Criminal Fund Use Over the Years With Percentages 2.13.2018.pdf HFIN 2/19/2018 1:30:00 PM
HB 216
HB216 Additional Documents Difference Bertween Restitution and Compensation 2.13.2018.pdf HFIN 2/19/2018 1:30:00 PM
HB 216
HB 216 Support Documents APOA 2.13.2018.pdf HFIN 2/19/2018 1:30:00 PM
HB 216
HB216 Additional Documents FY14 Felons Memo 2.13.2018.pdf HFIN 2/19/2018 1:30:00 PM
HB 216
HB216 Additional Documents FY15 Felons Memo 2.13.2018.pdf HFIN 2/19/2018 1:30:00 PM
HB 216
HB216 Additional Documents FY16 Felons Memo 2.13.2018.pdf HFIN 2/19/2018 1:30:00 PM
HB 216
HB216 Additional Documents FY17 Felons Memo 2.13.2018.pdf HFIN 2/19/2018 1:30:00 PM
HB 216
HB216 Additional Documents FY18 Felons Memo 2.13.2018.pdf HFIN 2/19/2018 1:30:00 PM
HB 216
HB216 Additional Documents HB245 from 1988 2.13.2018.pdf HFIN 2/19/2018 1:30:00 PM
HB 216
HB216 Additional Documents Victim Restitution Reform in Other States Research 2.13.2018.pdf HFIN 2/19/2018 1:30:00 PM
HB 216
HB216 Victim Restitution Funds Update Research 1.19.2018.pdf HFIN 2/19/2018 1:30:00 PM
HB 216
HB216 Support Document Letter from VCCB 2.13.2018.pdf HFIN 2/19/2018 1:30:00 PM
HB 216
HB216 CSSB Sponsor Statement 2.13.2018.pdf HFIN 2/19/2018 1:30:00 PM
HB 216
HB216 Additional Materials Restitution Statistics from ACS 2.13.2018.pdf HFIN 2/19/2018 1:30:00 PM
HB 216
HB216 Additional Materials LRS Report from 2013 Research 2.13.2018.pdf HFIN 2/19/2018 1:30:00 PM
HB 216
HB 216 CS version M 2.16.18.pdf HFIN 2/19/2018 1:30:00 PM
HB 216
HB216 Additional Documents PowerPoint Presentation 2.18.2018.pdf HFIN 2/19/2018 1:30:00 PM
HB 216
HB216 Restitution Sectional 2.19.2018.pdf HFIN 2/19/2018 1:30:00 PM
HB 216
HB216 Summary of Changes 2.19.2018.pdf HFIN 2/19/2018 1:30:00 PM
HB 216
HB 216 Legal Opinion on Approriations Per Priority 18-057mlp 2.19..pdf HFIN 2/19/2018 1:30:00 PM
HB 216