Legislature(2017 - 2018)BARNES 124
04/05/2017 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB195 | |
| HB171 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 195 | TELECONFERENCED | |
| *+ | HB 171 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
April 5, 2017
3:22 p.m.
MEMBERS PRESENT
Representative Sam Kito, Chair
Representative Adam Wool, Vice Chair
Representative Andy Josephson
Representative Louise Stutes
Representative Chris Birch
Representative Gary Knopp
Representative Colleen Sullivan-Leonard
MEMBERS ABSENT
Representative Mike Chenault (alternate)
Representative Bryce Edgmon (alternate)
COMMITTEE CALENDAR
HOUSE BILL NO. 195
"An Act relating to insurer actions based on credit history and
insurance scores at insurance policy renewal; and providing for
insurer consideration of consumer requests for exceptions of
credit history or insurance scores."
- HEARD & HELD
HOUSE BILL NO. 171
"An Act authorizing the commissioner of corrections to enter
into contracts and cooperative agreements for the productive
employment of prisoners; authorizing the Department of
Corrections to receive money from the productive employment of
prisoners; and providing for an effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 195
SHORT TITLE: INSURER'S USE OF CREDIT HISTORY/SCORES
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
03/24/17 (H) READ THE FIRST TIME - REFERRALS
03/24/17 (H) L&C
04/05/17 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 171
SHORT TITLE: EMPLOYMENT OF PRISONERS
SPONSOR(s): WESTLAKE
03/10/17 (H) READ THE FIRST TIME - REFERRALS
03/10/17 (H) L&C, FIN
04/05/17 (H) L&C AT 3:15 PM BARNES 124
WITNESS REGISTER
LORI WING-HEIER, Director
Division of Insurance
Department of Commerce, Community, and Economic Development
Anchorage, Alaska
POSITION STATEMENT: On behalf of the administration introduced
HB 195.
KRISTIE BABCOCK, Agent
State Farm Insurance
Kenai, Alaska
POSITION STATEMENT: Testified in support of HB 195.
ARMAND FELICIANO, Esq.
Property Casualty Insurers Association of America
Sacramento, California
POSITION STATEMENT: Testified in support of HB 195.
DANIEL LYNCH
Soldotna, Alaska
POSITION STATEMENT: Testified in opposition to HB 195.
REPRESENTATIVE DEAN WESTLAKE
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As the sponsor introduced HB 171.
DEAN WILLIAMS, Commissioner
Department of Corrections
Juneau, Alaska
POSITION STATEMENT: Provided invited testimony on HB 171 and
answered questions about the bill.
TIMOTHY WARD, Vocational Instructor
Wildwood Correctional Center
Department of Corrections
Kenai, Alaska
POSITION STATEMENT: Testified regarding how HB 171 would
benefit his facility and its inmates.
JEFF JESSEE, Legislative Liaison
Alaska Mental Health Trust Authority
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 171.
L. DIANE CASTO, Behavioral Health Policy Advisor
Office of the Commissioner
Department of Health & Social Services (DHSS)
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 171.
CHRISTINA LOVE, Community Resources Coordinator
Aiding Women in Abuse and Rape Emergencies (AWARE)
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 171.
KARA NELSON, Director
Haven House
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 171.
ACTION NARRATIVE
3:22:55 PM
CHAIR SAM KITO called the House Labor and Commerce Standing
Committee meeting to order at 3:22 p.m. Representatives Kito,
Sullivan-Leonard, Stutes, Knopp, Birch, Josephson, and Wool were
present at the call to order.
HB 195-INSURER'S USE OF CREDIT HISTORY/SCORES
3:23:25 PM
CHAIR KITO announced that the first order of business would be
HOUSE BILL NO. 195, "An Act relating to insurer actions based on
credit history and insurance scores at insurance policy renewal;
and providing for insurer consideration of consumer requests for
exceptions of credit history or insurance scores."
3:24:08 PM
LORI WING-HEIER, Director, Division of Insurance, Department of
Commerce, Community, and Economic Development (DCCED), on behalf
of the administration introduced HB 195. She noted that using
credit history or insurance scores to rate personal lines
insurance is a complex matter, whether the insurance is for
legislators or their constituents. There is a misconception, or
people tend to think, that credit scores are discriminatory or
not a true indicator of a risk when writing an insurance policy.
The policies being talked about today are personal lines, she
explained, such as auto and homeowner's policies, motorcycles,
and recreational vehicles (RVs). For commercial lines, it is
common for insurers to ask for financial statements.
MS. WING-HEIER stated that Alaska's current statutes allow for
the use of credit scoring, or insurance scores, when applying
for new business. So, anyone going into a local broker in any
community in the state is asked to allow their credit history or
insurance score [to be used] and, based on that insurance score,
the person may receive a preferred risk. The worst that can
happen, she said, is that people without a credit history are
given a neutral score.
MS. WING-HEIER said one reason for bringing forth HB 195 is that
Alaska statute does not allow for the insurance score to be used
on renewal unless the insurance broker or insurance company asks
for, and receives from the person, a waiver upon each renewal.
This is time consuming and costly, she pointed out. Another
reason for the bill is that, like legislators, many people
travel for their work because they are fishermen, miners, or
North Slope workers. The waivers come in the mail and are
either disregarded or not returned in a timely manner. Then
someone suddenly receives his/her insurance bill or notices that
his/her homeowner's [insurance] has been paid out of escrow and
the premium has doubled because the credit score or insurance
score was not applied to the renewal. It is a cost to the
insurance brokers to ensure that everyone is sent the waivers,
and it is a cost to consumers when they realize they would have
qualified for a preferred rate. But, she continued, to get a
preferred rate, Alaska statute requires that this piece of paper
be signed every renewal, which could be annually or every six
months depending on the policy.
3:27:26 PM
MS. WING-HEIER addressed the question of whether [credit history
or insurance scores] could have a negative and answered yes.
Bad credit will be a negative implication on a person's
insurance premiums, she said. Studies have proven that there is
a correlation between credit history or insurance scores and a
person's likelihood to file an insurance claim. Perhaps it is
because those people who keep good credit and pay their bills
also take care of their homes and their autos, she continued.
Perhaps they are the ones least likely to have speeding tickets.
There is a correlation between the insurance score that is
derived and an insurance risk.
MS. WING-HEIER reiterated that the use of an insurance score is
already allowed in new business and that HB 195 would be applied
for renewals. In addition, she noted, Governor Walker has asked
that the bill contain some important provisions. First, the
governor is asking that the consumer be notified of what is
called an "adverse action". If someone's credit or insurance
score is going to result in the person having a detrimental
policy premium, the person must receive written notices from the
insurance company. Additionally, that notice must tell the
person as a consumer, a policyholder, that they are qualified to
go through an appeals process. Part of the appeals process
would be based on extenuating life circumstances, she explained,
which are outlined in Section 5 of the bill and which include
things like medical, job loss, death of a spouse, deployment
overseas, and other conditions that a prudent person would
consider an extraordinary life circumstance. The consumer would
have to appeal the insurance company within 60 days of receiving
this adverse action. The insurance company would then make the
first determination. Second, she continued, Governor Walker
didn't like that last year's Senate Bill 127 said that after
this appeals process went through, the final decision maker
would be the insurance company. So, HB 195 has been changed to
reflect that the final decision maker will be the director of
the Division of Insurance through processes and procedures that
[the division] already has established for handling other types
of appeals for consumer compliance.
MS. WING HEIER summarized by stating that HB 195 is about:
allowing for credit scoring to be used for renewal; defining an
adverse action and what an insurance company must do upon
determination that there is an adverse action on a policyholder;
and providing an appeals process that goes to the director of
the Division of Insurance for adjudication if the policyholder
doesn't like the [insurance company's] decision on an appeal
filed in regard to extenuating life circumstances.
3:31:19 PM
REPRESENTATIVE BIRCH related that he recently had a personal
impact where his insurance company was going to ramp up the cost
of his car insurance because he needed to sign something, but
because he is in Juneau and not home there is a delay in
receiving his mail. He said HB 195 is great as well as timely
and he appreciates that the bill is being brought forward.
3:32:15 PM
REPRESENTATIVE JOSEPHSON offered his understanding that when
there has been no insurance policy issued an insurance company
can use credit scoring, but not for renewals.
MS. WING-HEIER replied that during the original application the
applicant still must give permission, but yes, the insurance
company can use the applicant's credit score to determine an
insurance score. She added that when a person doesn't sign the
form it sometimes ends up becoming what is called "churning"
because the person always wants to be a new customer, an
applicant, as opposed to a renewal.
REPRESENTATIVE JOSEPHSON asked what happens if in the initial
application the applicant declines to give permission.
MS. WING-HEIER qualified she is unable to speak for insurance
companies, but that in most cases the applicant would be treated
as neutral, meaning not given a preferred rate.
3:33:26 PM
REPRESENTATIVE KNOPP noted Senate Bill 127 passed both bodies
last year before being vetoed by the governor. He further noted
that the language in Senate Bill 127 and HB 195 is identical
except for the small tweaks mentioned by Ms. Wing-Heier, which
he thinks are good. He asked whether a homeowner's insurance
policy that is wrapped into the policyholder's mortgage and
automatically paid each month is looked at annually by the
insurance company and subject to renewal every year.
MS. WING-HEIER answered that that would be subject to HB 195,
and even though it is paid through escrow the policyholder could
end up with an increased premium if the policyholder does not
sign and allow the insurance company to obtain the
policyholder's credit history to determine an insurance score.
REPRESENTATIVE KNOPP stated he isn't clear on the difference
between an insurance score and a credit score. He inquired how
they vary and how the insurance score is derived; for example,
whether the credit score is used to establish the insurance
score. He further inquired whether a new credit history is
pulled up every time the policy comes up for renewal or whether
the insurance score is used.
MS. WING-HEIER replied that a credit score is a part of the
insurance score. The overall insurance score may include things
that are already allowed, and which are not changed in the bill,
such as where the policyholder lives, the number of miles driven
to work, the kind of car, and age. Responding further, she said
HB 195 requires that an insurance company order a policyholder's
credit score at least every 24 months. The administration's
intent is that if anyone were to have a poor credit score or
insurance score that the person is allowed to improve it. The
bill also asks that the insurance company not use a credit
report or credit history that is more than 90 days old so that
the data is current.
3:36:34 PM
REPRESENTATIVE WOOL offered his understanding that if a new
homeowner applies for homeowner's insurance, the homeowner is
not required to submit a credit score and so might be deemed
neutral. He asked whether the credit score requirement is
waived when a year later the policy renewal comes up and the
policyholder signs something.
MS. WING-HEIER responded that what is being waived is the
statute and allowing the insurance company to order the
policyholder's credit score upon renewal because right now it is
not allowed upon renewal. In other words, she continued, a
person signing as a new insurer is only allowing the insurance
company to order it once, the company cannot do it twice without
getting another signature, and the third year the company would
need to get yet another signature from the policyholder.
REPRESENTATIVE WOOL stated he has a fundamental problem with a
person's insurance rate being determined by their insurance
score which is somewhat based on a credit score. He said he
understands insurance is based on actuarial [science] and the
likelihood of having to pay out for a claim, but he pointed out
that things can happen to alter a person's credit score that
don't necessarily mean the person is more likely to have a house
fire. People might lose a job or become divorced causing their
credit score to go down, but in his opinion that shouldn't
negatively affect them. He noted that when buying a house, a
person's credit score will determine if the bank will approve a
loan, but it won't determine how much the house costs. He asked
whether there are other things where the amount of charge is
dependent upon a person's credit score.
MS. WING-HEIER answered that she considers insurance a financial
product, not a service. She said she is not aware of any
service, such as a contractor, where one's credit score is
looked at for performing the service. However, she continued,
most financial products do look at a person's credit to
determine whether to extend the credit, how much credit will be
extended, and the rate.
REPRESENTATIVE WOOL stated he would call a bank loan a financial
product for which a person's credit score is evaluated and the
bank determines whether it will make the loan as well as what
the interest rate will be. But, he continued, once that is
established it remains stable and the bank doesn't do another
credit check and raise the interest rate if the credit score has
changed.
3:41:09 PM
REPRESENTATIVE JOSEPHSON offered his assumption that when it is
said that the [director] will make a determination, [the
director] doesn't have a file that is looked at but rather a
system is used and [the director] delegates it to a subordinate.
MS. WING-HEIER confirmed she would as director assign it to a
staff member to gather the information and give her a report
that it either did or didn't meet the determination or criteria
for an extenuating life circumstance. She would not be
personally obtaining the information and making a determination.
3:42:11 PM
REPRESENTATIVE WOOL surmised that insurance companies probably
like this because it must bring them more revenue with a net
result of more people paying more money. He asked why some
insurance brokers have said they don't like this credit score
being used.
MS. WING-HEIER answered she thinks it could be controversial
because some see it as a negative and don't understand the
positives of how this can positively impact consumers. Is there
a negative? Certainly, she said. If someone has poor credit it
may result in a poor insurance score. It is one factor in
determining the insurance score. The statute specifically says
that insurance companies cannot just use the credit history to
assign an insurance premium. They must use other factors or
risk characteristics, such as age, where the policyholder lives,
kind of vehicle driven, and driving history. In some cases, she
continued, it is perhaps a misunderstanding of how much has been
put into this bill to protect consumers to ensure there is an
appeal process if they feel that they've been improperly graded,
and how much it is to administer the renewals for consumers to
sign the waiver.
3:43:52 PM
CHAIR KITO stated that the use of age as a criterion for what
someone's insurance rate might be is something he went through
before age 25 and having to pay a higher premium. He was not
necessarily a higher risk, he said, but was in that age
category, which means he was an individual that met that
statistic. That is accepted because nobody can change their age
and it is accepted that there is a correlation between age and
risk, but that doesn't mean everybody who is under 25 is going
to be driving more poorly. Therefore, [the legislature] cannot
change the use of age to establish a credit or insurance score
because everybody does. He said he doesn't think correlation
means causation, but to find ways to decrease the overall cost
of insurance, companies look to try to find risk characteristics
that correlate to actual things that can be measured.
3:45:15 PM
CHAIR KITO opened public testimony on HB 195.
3:45:39 PM
KRISTIE BABCOCK, Agent, State Farm Insurance, testified in
support of HB 195. She said she employs eight individuals and
markets insurance and financial services to fellow Alaskans.
She recalled that last year a similar bill passed the
legislature by a large margin but was vetoed. She stated her
customers see the impact of the current law every day. They
hear about the impact of the current law when her agency calls
them and lets them know that the rate they received two years
prior when their policy was originally written is going to
dramatically change. Her agency lets them know the rate change
isn't because of anything they've done. It is not a simple
conversation, she advised. Her agency must explain that current
law allowed the use of their credit history in their original
rate but after two years that credit history must be stripped
out. Her agency then explains that there is an option for the
customer to give specific permission to use their credit for
that policy for the coming year and hopefully avoid the
increase. If her agency is successful in reaching them, getting
the form to them, getting the form back from them, and all in
time to avoid the increase, then there won't be a rate increase
for a year. Then the next year comes.
MS. BABCOCK said her agency has been doing this for many years
now and she has one team member who exclusively deals with the
difficulty that this current law presents for her customers.
Customers are hard to reach and are busy, and they ask her why
she can't just charge them the rate they deserve. They further
tell her that they shopped around for their insurance when they
first came to her and that's why they chose her. Customers ask
why they must get a phone call or letter every year on every
policy just to ensure that they don't get over-charged. She
noted she has customers of all demographics, of all ages, that
have tried hard to keep their credit strong and their driving
record strong. She would like to charge them the rate they
deserve and that is what HB 195 is about. Alaska is the only
state currently that makes the insurance companies take out the
credit component on the policy's renewal and it creates this
frustrating consumer experience.
MS. BABCOCK stated she doesn't see a public purpose served by
the current system and urged that the committee help fix it.
She related that some people have asked her what the impact of
HB 195 on the public would be. First, she said, it would
alleviate the dramatic swings in rates, which to customers seems
like bait and switch when their starting rate changes at
renewal. Second, HB 195 would eliminate the frustrating and
cumbersome process of getting a manual waiver signed, thereby
automating the renewal process. Lastly, she continued, HB 195
would allow customers to shop with confidence knowing there is
stability in both the initial and renewal rating factors.
3:49:46 PM
REPRESENTATIVE WOOL asked whether the majority of Ms. Babcock's
clients would pay less if credit scores were allowed.
MS. BABCOCK replied correct, the majority of Alaskans have
favorable credit characteristics that would give them a decrease
over the base rate, rather than just paying the base rate.
REPRESENTATIVE WOOL inquired whether insurance companies would
be losing money if credit checks were allowed.
MS. BABCOCK responded it might be thought about as insurance
being a zero sum. Insurance companies are going to try to
collect the correct premium to take care of the claims for the
risk pool that they represent. One of the ideas behind
insurance is to try to charge the correct rate for each person
for the risk they present. Rates are always changing and the
risk of the consumer base that a company insures is always
changing. So, she reiterated, the idea is to charge the correct
rate for each risk and the insurance company on the backend has
the duty to make sure it is charging the overall right rate so
that it is able to pay future claims.
3:51:08 PM
REPRESENTATIVE KNOPP expressed his appreciation for Ms. Babcock
talking about customer dissatisfaction. He said Ms. Babcock has
been his insurance agent for 15-20 years and he insures 5 or 6
personal vehicles with her and has both commercial and personal
policies. He shared that he is a customer who has called Ms.
Babcock's office to complain about all the forms he receives in
the mail all the time and asking why he can't just have his rate
left alone and the bill sent to him, so he can pay it. This is
an important component of HB 195, he said.
3:52:13 PM
The committee took a brief at-ease.
3:53:26 PM
ARMAND FELICIANO, Esq., Property Casualty Insurers Association
of America, testified in support of HB 195. He stated that his
association is part of an insurance coalition supporting the
bill that includes members such as Alaska USA, American
Insurance Association, and the National Association of Mutual
Insurance Companies. In the coalition's collective view, he
related, HB 195 is a reasonable middle ground that would allow
consumers to see the full benefits of credit scoring and put in
place an equitable process to solve credit disputes. The bill
would address the unnecessary market construction inherent in
existing statute, which removes credit scoring upon renewal.
Also, he continued, the bill would broaden extraordinary life
circumstances and authorize the Division of Insurance to resolve
credit disputes. He added that HB 195 is a commonsense approach
to fix Alaska's existing credit scoring rules.
3:54:41 PM
REPRESENTATIVE WOOL observed that Mr. Feliciano is calling from
California and inquired whether California allows credit scores
for insurance assessment.
MR. FELICIANO replied that California is one of two states that
doesn't allow for a credit score. About 23 other states follow
the national model, he said, and about half of the other states
follow a variation of the national model.
REPRESENTATIVE WOOL asked whether there is a lack of insurance
companies in California due to being disallowed from using
credit scores. He further asked whether it is hard to find
insurance in California.
MR. FELICIANO responded no, and said California is a very
competitive market with lots of insurance companies, so it is
not an issue.
3:55:47 PM
DANIEL LYNCH testified in opposition to HB 195 and said he
believes in privacy and logic. He stated that in his 20-plus
years on the Kenai Peninsula there are now more insurance
companies, and none have gone out of business because of credit
scores. He maintained that credit scores are irrelevant to
insurability. An insurer can go to the Division of Motor
Vehicles (DMV) and get a person's complete driving history for
$10. An insurer can go to Google Earth and plug in a person's
address to find the distance to a fire station, flood plain, or
beetle-killed forest. He noted that in 1978 he cut up his last
credit card and that his last loan from a financial institution
was in 1975. Other than three seatbelt violations he hasn't had
a ticket or accident in over 35 years. He is free money to
the insurance company, he said. What does the committee think
his credit score is? Why do his premiums go up every renewal
when the values of his vehicles are less, he is retired, and he
drives fewer miles?
MR. LYNCH stated that vehicle insurance in Alaska is like
"Obamacare" [the Affordable Care Act]. Residents are forced to
purchase from a private entity or else they can be fined,
incarcerated, and their vehicle impounded. Yet the insurance
company can cancel, increase rates, or refuse coverage willy-
nilly with no logical reason. He pointed out that Wells Fargo
opened two to three million new accounts without customer
request, which affected the people's credit scores.
MR. LYNCH noted that the previous witness is also involved in
new financial investment opportunities that have nothing to do
with insurance. He said the governor's transmittal letter for
the bill talks about the insurance code and the director and
that from last year to this year [the bill] adds many consumer
protections. But, he continued, requesting a life circumstance
exception is his business. He asked whether he would need to
hire a secretary and/or attorney to file an appeal and said this
would be cumbersome for the consumer, especially for people who
travel and might miss the paperwork and who would then have no
recourse. He questioned the final judge being the director [of
the Division of Insurance] because it is not an elected position
and because a previous director was a 20-year employee of the
insurance industry. He further pointed out that if a person
shops around for insurance and goes to six different companies
that would mean six hits against the person's credit scores and
a loss in points with each hit.
MR. LYNCH stated that if the legislature would like to pass a
law to help insurance companies, citizens, and all drivers and
pedestrians, then it could eliminate all cell phone use while
driving. He closed by asking whether committee members went to
Juneau to represent the citizens of Alaska or corporate America
and lobbyists. He urged that HB 195 and SB 98 not be passed.
4:00:51 PM
REPRESENTATIVE BIRCH asked whether Mr. Lynch has insurance.
MR. LYNCH answered correct.
REPRESENTATIVE BIRCH inquired as to how an insurer could best
size up Mr. Lynch as an insurable party.
MR. LYNCH replied that if it were for driving insurance it would
be through his driving record.
REPRESENTATIVE BIRCH offered his understanding that credit score
is a pretty good indicator for insurance companies to validate
how good a credit risk someone is or how reliable someone might
be for taking care of their possessions. He asked whether Mr.
Lynch objects to the insurance companies having access to that
information.
MR. LYNCH suggested that if he pays his bill every six months
that establishes his credit, and he usually pays cash. If one
has nothing to do with the other, he continued, the insurance
company can go to the DMV and see that he hasn't had a ticket or
an accident in 35 years and he will voluntarily tell the company
that he doesn't use a cell phone while in his vehicle. One has
nothing to do with the other to make it convenient for insurance
companies. "Who are we going to make it convenient for next
time?" he asked in conclusion. "Fred Meyer, a sporting goods
store?"
4:02:53 PM
REPRESENTATIVE KNOPP offered his appreciation that Mr. Lynch is
probably a person for whom the bill would have a neutral or
negative effect as far as using Mr. Lynch's credit score for
rating purposes. He noted that about 15 years ago legislation
was approved to allow the use of credit scores for rating
clients. However, he continued, that is not what HB 195 is
about, it is about consumer protection. Since the industry uses
credit reporting as a method to rate people, not passing HB 195
would be detrimental to consumers because if [a signed waiver]
is not received by the insurance company it will err on the side
of caution. Compared to Senate Bill 127 of last year, the
adjustments made in HB 195 make it a consumer protection bill.
He reiterated that the issue here isn't using credit scores for
rating a person as that issue was addressed 15 years ago.
MR. LYNCH responded he has been testifying on these bills for
the last four or five years because it comes back every year
with a change here or there. He recounted Director Wing-Heier
stating that HB 195 is about individual policies, not commercial
customers, and asked why they are not treated the same. He
further recounted Director Wing-Heier stating that the bill does
have potential negative consequences if a person has a bad
credit score, or, as in his case, no credit score at all. He
reiterated his question as to whether committee members are
representing the citizens of Alaska or corporate America.
4:05:46 PM
CHAIR KITO ascertained no one else wished to testify on HB 195.
4:06:02 PM
REPRESENTATIVE STUTES inquired whether HB 195 is also applicable
to medical insurance.
MS. WING-HEIER answered that it is not applicable. She said it
is personal lines, such as auto, homeowners, motorcycles, and
recreational vehicles. It is not commercial insurance, workers'
compensation, property insurance on a commercial building,
general liability, commercial auto, or any type of health or
life insurance.
REPRESENTATIVE STUTES asked whether there is a reason this isn't
affecting commercial insurance.
MS. WING-HEIER replied that financial statements are asked for
in most commercial accounts. The commercial insurance companies
will look at Dun & Bradstreet (D & B) reports. Or, if it is a
larger company, they will look at Moody's or S&P and those types
of reports, which in essence are a credit report, and then that
would be factored into an insurance score.
REPRESENTATIVE STUTES, regarding the process for appeals, noted
that the industry would be judging its own appeals, rather than
an independent body determining whether an individual had a
valid appeal. The industry, which stands to profit, would be
making the determination, she said.
MS. WING-HEIER responded that that is one reason the bill was
vetoed last year. Regarding extenuating life circumstances and
the appeal process, [under HB 195] the consumer would present
written documentation to the insurance company stating why they
think they qualify, and if the consumer doesn't receive a
favorable response, they bring it to the [Division of
Insurance]. The division director has the final say in whether
the consumer qualifies through the appeal for a preferred rate
and if the consumer should be given a waiver for an extenuating
life circumstance. So, she said, the [Division of Insurance]
becomes the third party.
4:08:45 PM
REPRESENTATIVE KNOPP offered his understanding that under HB 195
something related to medical on a person's credit report could
not be used to negatively impact the person's rating as far as
insurance.
MS. WING-HEIER answered that medical circumstances, medical
bills, for the person or family member is one of the extenuating
life circumstances that can be appealed for why the person's
credit score has taken a turn and why the person deserves a
better rate.
4:09:45 PM
REPRESENTATIVE WOOL posed a scenario in which he has large
medical bills and misses a payment to a hospital, thereby
affecting his credit score and in turn his insurance score so
that he is then assessed a higher [insurance] fee. He offered
his understanding that this would be the point at which he would
have to go through the appeal process.
MS. WING-HEIER replied that if the medical bills were to such a
point that they impacted a person's credit score, then, yes, the
person could ask for an appeal. That would be part of the
extenuating life circumstances that are defined in the bill.
4:10:36 PM
CHAIR KITO held over HB 195.
HB 171-EMPLOYMENT OF PRISONERS
4:10:42 PM
CHAIR KITO announced that the final order of business would be
HOUSE BILL NO. 171, "An Act authorizing the commissioner of
corrections to enter into contracts and cooperative agreements
for the productive employment of prisoners; authorizing the
Department of Corrections to receive money from the productive
employment of prisoners; and providing for an effective date."
4:11:03 PM
REPRESENTATIVE DEAN WESTLAKE, Alaska State Legislature, as the
sponsor, introduced HB 171. He explained the bill would allow
the commissioner of the Department of Corrections to broaden the
stakeholders who are being consulted throughout the work
procedures and pricing process within the employment of prison
inmate section of Alaska Statute (AS) 33.30.191. Currently this
statute reads that the commissioner will consult with local
union organizations prior to contracting, he continued. The
bill would broaden the language to "industrial representative",
which would include the union representatives but would also
include other groups, allowing the commissioner to coordinate
with a broader array of entities.
REPRESENTATIVE WESTLAKE stated that the intention of HB 171 is
to increase inmate employment opportunities and increase
employment amongst inmates. This would reduce idleness, reduce
recidivism, improve mental health, increase the amount of
restitution paid, and increase the work experience of inmates.
He related that conversations with labor unions have already
been started to find win-win scenarios.
REPRESENTATIVE WESTLAKE said HB 171 is being presented because
many people who are incarcerated owe restitution payments, child
support, court fees, and more. The bill would help provide a
way for inmates to try to get back on their feet, get a sense of
self-worth as they work, and find a job before being released.
4:14:06 PM
REPRESENTATIVE BIRCH remarked he is happy to see this bill. He
noted that he served the Department of Corrections for several
years as project manager in the Anvil Mountain Correctional
Center as well as other projects. He said he has long
recognized the merits of a program like this and recalled the
[former] Prison Industry Program that built furniture. He asked
whether HB 171 would be resurrecting something that existed in
the past but had fallen by the wayside.
REPRESENTATIVE WESTLAKE replied the aim of the bill is getting
these folks back on their feet. Regarding recidivism, he said
that many times inmates have no job skills and no work even
though they may want to do something, and so they end up back on
the streets and need to eat and end up back in front of a judge.
REPRESENTATIVE BIRCH referenced the Percent for Art Program and
said he recommended buying raw ivory to be used for a [prisoner]
training program or classwork.
4:16:02 PM
REPRESENTATIVE JOSEPHSON stated that HB 171 looks like a good
bill. He inquired as to the catalyst for the bill.
REPRESENTATIVE WESTLAKE responded that it's been a long time
coming. He said sometimes only the industries close by are
considered "when we're in Juneau." He indicated that "when you
just pick one," [that excludes others]. He continued:
You want other people in there, ... whether they're
working and getting paid; ... my hope is they can
volunteer. The thing in my region is we dig the
graves ourselves. We do it whether it's winter, if
it's forty below or, in my case, one time sixty below.
We do that; we make our own coffins; we make our
crosses; things like that. And there are people in
jail now that aren't going to be home for these
things, and they've lost that privilege to be free.
It was their choosing; they understand that. But
maybe being able to help build a cross or a coffin
could help bring them back and get that sense of self-
worth in there.
4:17:17 PM
REPRESENTATIVE KNOPP brought attention to page 1, line 11, of
the bill, which states, "require payment to the commissioner".
He noted it doesn't talk about where that wage is going or what
the intent is. He asked whether the wages would go towards
incarceration, would be kept by the commissioner, would be
dedicated to restitution, or would be kept by the inmates for
when they are released.
REPRESENTATIVE WESTLAKE deferred to the commissioner of the
Department of Corrections to answer the question.
DEAN WILLIAMS, Commissioner, Department of Corrections, State of
Alaska, offered his appreciation for the bill's introduction and
answered that thus far the bill is very generalized in terms of
how that is going to be set up. As contracts are entered, he
explained, the inmates would be paid for the work that they do.
One focus of the bill is to provide people with the opportunity
to pay the restitution and child support that they owe, and this
would be articulated in the administrative code for people in
the program. When a person leaves prison with $100 in his or
her pocket, the question is now what and where does the person
go without any place to start. So, he reiterated, while it
isn't articulated in the bill, it would be part of how the
structure is set up through regulation.
REPRESENTATIVE KNOPP stated he is going to look for that detail
before supporting the bill. He said he also wants to look at
details regarding whether the prisoners would be employees
covered under workers' compensation and unemployment insurance.
4:20:16 PM
REPRESENTATIVE WOOL observed the bill provides that the
prisoners would be paid at least minimum wage. He said he
doesn't know what kind of work they would be doing and whether
they would be competing with the private sector and what kind of
coverage the prisoners would get. He further observed the bill
provides that payment would go to the commissioner. He offered
his understanding that many prisoners have obligations through
the crime they committed or because they have kids and owe child
support, and he asked what the distribution formulation would
be. He further asked what prisoners are paid when they do work
within the prison.
COMMISSIONER WILLIAMS replied that presently it is from $.60 per
hour on up to $1.00 per hour for cleaning jobs and other routine
work inside the facility. Inmates are hired to do chores at the
facility, which is a standard thing around the country, so the
bill is not needed for what is being done right now.
REPRESENTATIVE WOOL offered his understanding that HB 171 is
about taking contracts for jobs outside the prison in the
private sector and so potentially competing with private
sectors. He inquired whether inmates would retain any of their
wages or whether it would all go toward payment of their debts.
COMMISSIONER WILLIAMS requested he be allowed to present his
invited testimony to answer this and other questions.
CHAIR KITO agreed.
4:23:22 PM
COMMISSIONER WILLIAMS explained why HB 171 is being brought
forward. He said the prison industry in Alaska should not
compete with current labor markets. He suggested similar work
is done in virtually every other state in the U.S. He stated
the bill would open the door to a public-private partnership in
ways that have not been seen. The reason why he is in his job
is because he thinks prison industries are a way to provide
services or products to the department and the state that would
not otherwise be provided.
COMMISSIONER WILLIAMS said the current language, which was
changed a number of years ago, became very restrictive in how
the Department of Corrections was allowed to enter into
contracts. He stated he was not commissioner at that time, and
doesn't know why the state got there, but he thinks there was
concern back then when the state had a lot of money that it did
not want to be competing with private industries and private
labor pools. The problem with that, he submitted, is the
state's current fiscal environment and that several things
should be thought about. He said incarcerated individuals are
going to be there for either short or long periods of time and
providing productive and meaningful activities to them would
prevent a situation of idle hands and make the prison facilities
safer for both inmates and staff. Second, it would provide
business opportunities that don't [currently] exist to pay the
department's own way. The correctional systems in other states,
he said, start to pay their own way by virtue of prison
industries.
4:26:20 PM
COMMISSIONER WILLIAMS pointed out that [the Department of
Corrections] spends about $200,000 on frozen vegetables, yet
there is an agricultural community in the Matanuska-Susitna
Valley that is waiting to grow. One fundamental, he continued,
is that if a fresh product is not sold right now, it either
won't be picked or it will be gone, so the capacity of
agricultural development is limited by what can be done. Other
people already started working on that and developing plans
before he was commissioner, he said, which is why he has already
started to meet with the Department of Agriculture and others.
A large freeze plant operated by a stable work force would
expand agricultural development in the Matanuska-Susitna Valley.
It would be a huge opportunity for nominal cost. The Department
of Corrections could pay for the piece of equipment in five
years given the department is currently spending $200,000 for
frozen vegetables to feed to inmates.
COMMISSIONER WILLIAMS said he is asking the committee to
understand that he wants this proposal to be well. He has
already consulted with labor unions, he continued, and wants
them to understand that the department is not attempting to take
out existing jobs; that is not the focus of this. But, he
explained, he needs more permissive language and such language
may need to be gone through to find the right balance. He added
that he is keenly aware of that and is listening hard to
concerns. He said he has seen how this works in other states,
and it is amazing and provides products and services that the
private market is not covering. He reiterated that he is
including people in unions and urged that this not be seen as a
threat, but rather an enhancement opportunity for how the
Department of Corrections can pay its way while also providing a
service and business opportunities.
4:28:41 PM
REPRESENTATIVE SULLIVAN-LEONARD, regarding contracts, noted that
the City of Wasilla has at times had inmates working around
town, such as sweeping, cleaning, and brush clearing, which has
been good. She inquired whether Commissioner Williams would
look at contracts with the cities to develop and increase the
wages for inmates for labor work, should the bill pass.
COMMISSIONER WILLIAMS replied he is not sure what that would
look like that far down the road, but the department may be able
to do some of that right now. He said he is pushing the
department to do things and there are no restrictions on some of
the things the department is doing in terms of having inmates
work for local municipalities doing things that normally are not
funded. These inmates are highly motivated and have a high work
ethic, he added. While the department can do some of those
things right now, the difference in having this bill is that it
allows the department to scope things differently, such as a
product or something the city needs done that a private business
can't do it because the cost overhead is too hard or because a
worker can't be found to do that job.
COMMISSIONER WILLIAMS continued. He said Mr. Ward, a vocational
director, would be speaking to a specific example of what he is
working on in Kenai. However, he explained, going to the next
step is prevented because certain metal fabrication can only be
done in certain sheet metal plants where people are paid much
higher wages, making it too costly. If the department were to
make it at a lower cost and sell it back to the business at
wholesale, then the business could still make money on it and
expand an area of the market that it can't get a corner on right
now. So, he continued, conversations are going on. Going
slowly and strategically is critical because he doesn't want to
offend someone and begin a fight that he doesn't want to have.
There are some things the department can do now, but there are
other opportunities for which the department would need
legislation like this to be able to expand into.
4:31:33 PM
REPRESENTATIVE BIRCH cautioned that there was recently a huge
tangle with the Mount McKinley Meat and Sausage plant. He urged
that the department have a business plan in place to seek
professional assistance and to map out a step-by-step path
forward. Regarding the furniture industries, he said he knew a
furniture retailer in Anchorage who was upset about the
beautiful furniture that was being made in Seward and put in a
number of offices. He noted he is very intrigued by the
academic and vocational education potential that would help
inmates advance themselves. He asked what are the things that
can be done.
COMMISSIONER WILLIAMS, regarding furniture industries, stated
that there are some amazing skills and pieces of furniture
coming out of the woodshop at the Point Mackenzie Correctional
Farm. High quality furniture is being made because the inmates
have time on their hands. The furniture is as good as any being
brought into the state, he said, and it would be awesome to have
the same ability to do that quality level of furniture in state.
He explained that he is prevented from selling the farm's
products to a wholesaler or a store because he is not able to
enter into contracts. There is potential there that would not
hurt anyone else in the business community; it would enhance a
product, plus there would be the social impact of development of
this furniture people would be paid to get a second chance at
life and be able to pay restitution and get education. Those
are win-win opportunities.
COMMISSIONER WILLIAMS said there are other examples that could
be done, such as providing laundry services for cruise ships.
Currently, he related, laundry is being done in Juneau for the
Alaska Marine Highway System. However, if there was a way to
enter into contracts, the department could work in conjunction
with other businesses to provide laundry services for the
smaller cruise ships that are currently using laundry services
out of state because there is not enough laundry service
capacity in Juneau. The department, inmates, and laundry
businesses would all make money. Those are the scenarios that
he wants, he continued. He is not interested in scenarios where
the department can't grow it and he will stay away from anything
that is too difficult. That is the vision of how this could be
different, he said, and far more impactful for the state and how
the business community could win.
4:36:26 PM
REPRESENTATIVE BIRCH suggested getting some Sitka spruce wood
for making nice [furniture].
COMMISSIONER WILLIAMS, regarding a business plan on the freeze
plant, noted there is a businessman on line who has been working
on having large commercial freezer space and the timing is right
for exploring this. The business people are looking for a
stable workforce that could be committed to the effort. There
are many people in the private business community who are very
interested in this bill and this effort.
4:38:03 PM
TIMOTHY WARD, Vocational Instructor, Wildwood Correctional
Center, Department of Corrections, stated that his facility does
steel manufacturing and could offer that toward this proposal.
He said he has spoken with three businesses in the [Kenai] area
that do manufacturing with steel and aluminum and that are very
interested in getting onboard. The hurdles must be jumped to
see if this can be made to happen and to do some good for the
community and inmates.
COMMISSIONER WILLIAMS requested Mr. Ward to provide an example
about a piece of equipment that someone wants manufactured but
cannot do on their own and so is looking for alternatives such
as an inmate force to help develop the product.
MR. WARD responded that one of the businesses he talked to was
making a product for the City of Soldotna and was welding 200
units. The business owner would be very interested in getting
onboard with the department, he related, if the correctional
facility could come up with a way to get the units welded and
lower the business's cost for selling them. That would free the
business's shop to continue another project as well as finish
this product in a timelier manner than the business could
otherwise do.
COMMISSIONER WILLIAMS explained there is a piece of recreational
equipment that the business must either make itself or buy from
somebody else. It is hard to do, and the labor costs make it
prohibitive to get very much involved in the market. If the
business could find a lower cost labor market to make the piece,
he continued, it could still mark it up 10 or 20 percent and
make a profit, expand a business area, and keep everything in
state and local instead of purchasing from China or out of
state. That is one sector in Kenai that Mr. Ward has been
working with and it is also the area where he has had a lot of
business contacts. This is how a next step would provide
opportunities for the business community and the Department of
Corrections, he said.
4:41:01 PM
REPRESENTATIVE WOOL stated that in reading the bill he didn't
understand what the thrust of this is, although the testimony
has helped. For example, prisoners are, or have been, making
furniture in Seward and selling it, and other industry like
laundry is already happening within prisons. He asked whether
the bill is trying to expand that to go outside the prison to a
farm or a metal fabrication facility and using prison labor in
these places.
COMMISSIONER WILLIAMS replied that the department is not selling
any of the furniture that he talked about on a commercial,
wholesale, or other basis. The furniture is either given away
or raffled away for other things and the furniture pieces are
highly prized items because they are that good and made from
birch. He pointed out that the furniture items are not being
sold to anybody because the restriction in current statute makes
it very difficult, if not impossible, for him to enter into a
contract. For example, he cannot enter into a contract with a
store to sell the prison-made furniture instead of the store
bringing up furniture from the Lower 48 to sell. He said he
needs more balanced language that would allow him to enter those
types of contracts. He could then sell furniture in a business
opportunity because the contracts would allow him receipt
authority to receive money, so he could pay a wage to the
inmates who are doing the work, and out of the wage he would pay
restitution.
4:43:35 PM
JEFF JESSEE, Legislative Liaison, Alaska Mental Health Trust
Authority, testified in support of HB 171. He said his agency
is excited to see this legislation come forward. He allowed
that some details will need to be worked out regarding what
industries to get into, how to work with the community, and what
industries are already in existence. He pointed out that three
things are necessary to reduce recidivism and reduce the prison
population: 1) a place for people to live, 2) employment that
provides a legitimate income, and 3) support for recovery. The
bill would be one of the three legs of the stool that would give
inmates the opportunity to gain skills, gain self-worth, get
experience, and have a leg up when they come back into the
community. He urged the committee to support the bill.
4:45:19 PM
L. DIANE CASTO, Behavioral Health Policy Advisor, Office of the
Commissioner, Department of Health & Social Services (DHSS),
testified in support of HB 171. She said her department is
involved because the things that people need when they come out
of prison are housing, employment, and treatment in health
opportunities. She explained that her department is very
actively involved in the issues. As people are moving out of
prisons and coming back into the community, her department wants
to ensure they have every opportunity to be successful as they
move into re-entry. She recalled that during last year's
consideration of Senate Bill 74, the Medicaid reform bill, and
Senate Bill 71, it was very strongly stated many times that the
opportunities the state has for getting people into treatment
really help to reduce the number of people in prison.
MS. CASTO noted that she spent a short time working at the
Department of Corrections and that those individuals who had the
opportunity to work, to learn job skills, and to develop
confidence and self-worth were much more successful as they
moved out into the community. The work that can be done through
this bill will help build that confidence, will help build those
job skills, and will help them develop strong and sustainable
community involvement and not return to prison, which is the
goal. Treatment is a critical piece of being able to hold a
job, she pointed out, because even if a person has the skills
but has an addiction that they cannot deal with, they often run
into difficulty. She agreed with Mr. Jessee that the three legs
of the stool - employment, housing, and treatment and recovery
are critical to ensuring a smooth transition and strong healthy
people in communities.
4:47:51 PM
REPRESENTATIVE WOOL offered his support for the arguments about
idle hands, self-worth, and learning job skills. Stamping
license plates, making blue jeans, or doing some sort of prison
industry day in and day out are good skills to a certain extent,
he said, and may add to the other components. But, he
continued, he would hope that if the commissioner is getting
paid that minimum wage or some sort of wage that is not what
could be called slave labor [would be paid] and would not be
used to prop up an industry that otherwise wouldn't be
sustainable. For example, if everyone had employees working at
$.60 per hour, that employer could make a lot of things. Paying
inmates somewhat normalized wages that they could access when
they got released would give them more than just $100 and a bus
ticket, it would be working towards something and not just
helping the company. He said he hopes this can be incorporated
[into the bill] somehow.
MS. CASTO agreed that having the ability to save some money is
important. She noted that there is a process within Alaska's
correctional system where inmates can work and put money into
savings and some into commissary costs. She also offered her
agreement with Commissioner Williams' statements about
restitution and child support. She said if inmates don't have
an opportunity to pay down some of those things while
incarcerated, they would be so far behind in financial ability
when they get out of prison that it will oftentimes stifle their
ability to move forward and become a productive citizen. The
details must be worked out, she allowed, but overall and in the
long run the bill would be a very positive thing for the
inmates, their families, the communities, and the industries.
4:50:49 PM
CHRISTINA LOVE, Community Resources Coordinator, Aiding Women in
Abuse and Rape Emergencies (AWARE), testified in support of HB
171. She began by sharing that she is a person in recovery and
that she was in and out of jail for almost a decade due to
substance use. She later learned that her substance use was a
coping mechanism for the physical and sexual abuse that she
survived as a child. She said she considers herself a self-
proclaimed professional in the world of trauma, substance use,
and people re-entering the community. A big part of her
education was her own experience in navigating through the
system. She said the three things talked about by Mr. Jessee
and Ms. Casto are what she calls the three pillars to successful
re-entry, or recovery capital as it is called in the recovery
world housing, employment, and recovery supports.
MS. LOVE related her personal story, stating that the trades she
had prior to incarceration were not trades she could go back to.
Although she did learn things while in jail, they were not
helpful in not going back to jail. Jail was traumatic for her,
she said. Not being able to continue to use drugs as her coping
mechanism was incredibly difficult for her. In coming out of
jail there was a process of re-learning society and re-learning
societal norms, she explained. As a felon applying for jobs,
there were a lot of places that wouldn't hire her and there were
a lot of places that she couldn't live. Today, much of the work
she does is helping people navigate through that system and it
is incredibly difficult with cognitive impairments. Eighty
percent of incarcerated people have substance use disorders, she
pointed out, and many of them have co-occurring disorders, such
as mental health, cognitive impairments, traumatic brain
injuries, and fetal alcohol syndrome. It is surprising how many
people that she works with don't know how to accurately read,
write, or understand paperwork, and they don't have a skill. A
lot of people coming home from incarceration have learned their
trade from their family, whether that is just living in the
criminal world or selling and using drugs they have never had
a job that was legitimate, they've never been trained or had a
skill that could be profitable to provide a life with quality or
sustained housing. Having HB 171 in place would open the doors
for so many opportunities.
MS. LOVE said her real dream would be to have jails that are
trauma informed, to have opportunities for employment and
continued education and really have rehabilitative services so
that individuals who are entering into the criminal justice
system could come out better or equipped to work. Putting in
place HB 171 would reduce the time that is spent getting people
into vocational rehabilitation, which is a process and has a
waitlist just to begin the process to start a trade. The bill
would help in so many different avenues as far as recovery
capital and having a trade and reducing recidivism.
4:54:41 PM
REPRESENTATIVE BIRCH asked what Ms. Love sees as the range of
opportunities, training potentials, skill sets, and vocational
education teaching that could be offered in a prison environment
that would be constructive and add value so that inmates would
come out with marketable capabilities.
MS. LOVE replied that having a wage that reflects value in the
inmates would be huge, as would recognition that these people
are still part of the community. As far as what type of
employment would be of benefit and successful, inmates would
start off where ever they can. Anywhere that someone can start
would be beneficial. Anything that would give someone the
ability to work into any type of employment, but, she quipped,
probably not folding laundry, which could be why she dislikes
folding her own laundry now. There are so many different areas
and HB 171 would open the door for more of those conversations.
REPRESENTATIVE BIRCH commented that knowledge in technology and
the Internet would gain leverage as a skillset that would be
helpful for a long time.
MS. LOVE concurred.
4:56:55 PM
REPRESENTATIVE KNOPP related that he has put a few people to
work in the prison ministry and has found that the ones who are
successful and work well are those who had skills and a work
ethic prior to incarceration. He said he has also put some
people to work who had no skills going in, and although many of
them were excellent workers that had a lot of potential, they
couldn't seem to break the habit of what they've always known.
He asked whether it was difficult for Ms. Love to be forced into
a career change when she got out.
MS. LOVE warned that she is going to be blunt, honest, and
vulnerable in her response. She said she worked in a bar and as
a stripper, industries she could not go back to, and she sold
drugs. Those were businesses that made her a lot of money, she
noted, so it was incredibly humbling when she walked out of jail
and did not have enough money for the bus or to make a phone
call. A lot of the people she works with go back to what they
know because there is nothing else in place. Like a lot of
people, every time she went to jail, she became a better
criminal. She said it was incredibly difficult to navigate
through that process and to literally start over from the very
ground up and to learn new patterns of behavior. Treatment was
a huge part of her recovery. For people who want to go to
treatment and for people who don't want to go to treatment, it
used to be said that the outcome was the same. But now
statistics show that there is a higher percentage of people who
are successful that don't want to do it but do it anyway. It is
said in the recovery world that it's not for people who need it
and it's not for people who want it, it is for people who do it.
There is this process and this system, she continued, that is
already in place where people can walk through literally the
same steps that she has walked through to be a successful
rehabilitated person and be successful.
5:00:19 PM
KARA NELSON, Director, Haven House Juneau, testified in support
of HB 171. She explained that Haven House Juneau is a faith-
based peer-run recovery residence for women coming home after
incarceration. She said she and Ms. Love work closely together
in the re-entry recovery field as people of lived experience.
She spent over 20 years in Alaska's criminal justice system and
today she is almost six years clean. Her experience, she
explained, allows her to walk and navigate the system both
inside and outside with men and women.
MS. NELSON related that this morning she was at the gate of the
Lemon Creek Correctional Center to bring home a sister who had
spent 13 consecutive years in prison. This woman, she related,
has done so much work on her life through every kind of program
and is a mentor and an example of restoration in her own life
and her family's through her work in the prison system. This
woman walked out with $118 and she worked the entire time she
was in prison. Under HB 171 more partnerships would be opened
to engage the community with people who are incarcerated and
part of the community, she said. During this time of criminal
justice reform and trying to find a solution amidst so many
tragedies, there is a need to focus on inmates because they are
Alaskans who will be going home and who want to work and be
productive, and an avenue to do that is needed.
MS. NELSON shared that when she brings someone into Haven House,
the woman might not know that this is what she wants because she
has never seen it before. But once the option is available, the
picture opens, and it is incredible to watch what happens with
that support. Regarding the question about the difference when
coming out of prison and making a different career change, she
said there is not one thing, but several, such as employment and
education. What if those were put into place prior to release?
People could be taken so much further if that portion had
already been started prior to release, she pointed out.
MS. NELSON expressed her support for HB 171. She said there are
hundreds of stories of why this bill would bring hope to those
who are incarcerated, formerly incarcerated, and their families.
All the women in Haven House right now owe child support and
restitution and have years and years of that built up. There is
also the astronomical cost to inmates of staying in touch with
their families, she noted. For example, the woman she picked up
this morning said the cost of staying in daily touch with her
family was over $300 a month. She underlined it displays a
small snapshot into the effectiveness of implementing some
workforce prior to release.
5:05:07 PM
REPRESENTATIVE WOOL recalled it being mentioned that a decent
wage would be a good thing. He further recalled the mention of
$118 when someone walked out the door, as well as being able to
pay off prior debt so there isn't insurmountable debt that
cannot be paid off. He said it sounds like the proposed
program would do a lot of these things. He asked whether Ms.
Nelson is putting a lot of value on being able to pay off debt
and being able to leave prison with more than $100.
MS. NELSON answered that there is a lot of value on that, but
said it also brings purpose and community to an inmate while
inside and then while outside. For example, the woman she
picked up this morning worked in all sorts of things and never
made more than $1 an hour, which was a huge wage. She shared
that she herself worked at Alaska Correctional Industries in
2008 for $.85, which was a huge wage. Just having hope and
value [is important], she said, and if these women didn't have
Haven House to come to then they would be back on the street and
in recidivism.
5:07:16 PM
CHAIR KITO held over HB 171.
5:07:36 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
5:07 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB195 Fiscal Note DCCED-DOI 3.28.17.pdf |
HL&C 4/5/2017 3:15:00 PM |
HB 195 |
| HB195 Sectional Analysis ver A 3.28.17.pdf |
HL&C 4/5/2017 3:15:00 PM |
HB 195 |
| HB195 Supporting Documents-Letter of Support 3.28.17.pdf |
HL&C 4/5/2017 3:15:00 PM |
HB 195 |
| HB195 Supporting Documents-Side by Side 3.28.17.pdf |
HL&C 4/5/2017 3:15:00 PM |
HB 195 |
| HB195 Transmittal Letter 3.28.17.pdf |
HL&C 4/5/2017 3:15:00 PM |
HB 195 |
| HB171 Fiscal Note DOC-IDO 3.31.17.pdf |
HL&C 4/5/2017 3:15:00 PM |
HB 171 |
| HB171 Sponsor Statement 3.21.17.pdf |
HL&C 4/5/2017 3:15:00 PM |
HB 171 |
| HB171 Supporting Documents-Letters of Support 4.5.17.pdf |
HL&C 4/5/2017 3:15:00 PM |
HB 171 |