Legislature(2017 - 2018)BARNES 124

04/05/2017 03:15 PM LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 195 INSURER'S USE OF CREDIT HISTORY/SCORES TELECONFERENCED
Heard & Held
-- Public Testimony --
*+ HB 171 EMPLOYMENT OF PRISONERS TELECONFERENCED
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled 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