Legislature(1999 - 2000)
01/25/2000 08:05 AM House STA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE STATE AFFAIRS STANDING COMMITTEE
January 25, 2000
8:05 a.m.
MEMBERS PRESENT
Representative Jeannette James, Chair
Representative Joe Green
Representative Jim Whitaker
Representative Bill Hudson
Representative Beth Kerttula
Representative Hal Smalley
Representative Scott Ogan
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
2d SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 124
"An Act relating to the taxation of income and providing a
credit for certain property taxes, and permitting the
legislature to use certain income tax proceeds to make
appropriations for public schools."
- HEARD AND HELD
HOUSE BILL NO. 259
"An Act relating to a parent's eligibility to be represented by
the public defender before and during the probable cause and
temporary placement hearing that is held after the state takes
emergency custody of a child."
- MOVED CSHB 259(STA) OUT OF COMMITTEE
PREVIOUS ACTION
BILL: HB 124
SHORT TITLE: INCOME TAX ON INDIVIDUALS & FIDUCIARIES
Jrn-Date Jrn-Page Action
3/05/99 367 (H) READ THE FIRST TIME - REFERRAL(S)
3/05/99 367 (H) STA, FIN
3/19/99 514 (H) SPONSOR SUBSTITUTE INTRODUCED
3/19/99 514 (H) READ THE FIRST TIME - REFERRAL(S)
3/19/99 514 (H) STA, HES, FIN
1/18/00 1937 (H) 2D SPONSOR SUBSTITUTE INTRODUCED
1/18/00 1937 (H) READ THE FIRST TIME - REFERRALS
1/18/00 1937 (H) STA, HES, FIN
1/18/00 1937 (H) REFERRED TO STATE AFFAIRS
1/25/00 (H) STA AT 8:00 AM CAPITOL 102
1/25/00 (H) MINUTE(STA)
BILL: HB 259
SHORT TITLE: PUBLIC DEFENDER CHILDREN'S PROCEEDINGS
Jrn-Date Jrn-Page Action
1/10/00 1887 (H) PREFILE RELEASED 12/30/99
1/10/00 1887 (H) READ THE FIRST TIME - REFERRALS
1/10/00 1887 (H) STA, JUD, FIN
1/10/00 1887 (H) REFERRED TO STATE AFFAIRS
1/25/00 (H) STA AT 8:00 AM CAPITOL 102
WITNESS REGISTER
BARBARA COTTING, Legislative Assistant
to Representative Jeannette James
Alaska State Legislature
Capitol Building, Room 102
Juneau, Alaska 99801
POSITION STATEMENT: Presented sponsor statement for HB 124.
SCOTT CALDER
P.O. Box 75011
Fairbanks, Alaska 99707
POSITION STATEMENT: Testified on HB 124 and HB 259.
REPRESENTATIVE JOHN COGHILL JR.
Alaska State Legislature
Capitol Building, Room 416
Juneau, Alaska 99801
POSITION STATEMENT: Presented HB 259.
DOUG WOOLIVER, Administrative Attorney
Alaska Court System
820 West 4th Avenue
Anchorage, Alaska 99501
POSITION STATEMENT: Provided court system's position and
answered questions regarding HB 259.
BLAIR MCCUNE, Deputy Director
Alaska Public Defender Agency
900 West Fifth Ave, Suite 200
Anchorage, Alaska 99501-2090
POSITION STATEMENT: Provided information on HB 259.
ACTION NARRATIVE
TAPE 00-1, SIDE A
Number 0013
CHAIR JEANNETTE JAMES called the House State Affairs Standing
Committee meeting to order at 8:05 a.m. Members present at the
call to order were Representatives James, Whitaker, Kerttula,
Smalley and Ogan. Representatives Green and Hudson arrived as
the meeting was in progress.
HB 124-INCOME TAX ON INDIVIDUALS & FIDUCIARIES
CHAIR JAMES announced that the first order of business would be
2d SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 124, "An Act relating
to the taxation of income and providing a credit for certain
property taxes, and permitting the legislature to use certain
income tax proceeds to make appropriations for public schools."
CHAIR JAMES, sponsor of HB 124, asked Barbara Cotting to read
the sponsor statement.
Number 0035
BARBARA COTTING, Legislative Assistant to Representative
Jeannette James, Alaska State Legislature, read the following:
This bill proposes a two-part income tax. Both taxes
are levied only against income earned within the state
of Alaska, based on W-2 wages, and federal schedules
C, E, and F (business income, rentals, royalties,
partnerships, S corporations, trusts, and farming).
The taxes will NOT be levied on retirement pay,
interest, dividends, capital gains, or other
miscellaneous income.
(See Federal Tax Return 1040. ONLY lines 7, 12, 17,
and 18 are taxed.)
A 1/2 percent tax will be levied as a "school tax" -
i.e., specifically available for the legislature to
allocate toward public schools - allowing a credit
only for those who pay property tax for education.
For several years, we have been hearing testimony from
the public regarding an inequity that exists in
Alaska. People who own property in an organized
borough pay property taxes, a portion of which funds
education. Other Alaskans do not contribute to
education, yet they receive the same benefits as those
who pay. This bill is intended to remove that
inequity. By allowing a credit only for those who do
pay property tax, it levels the playing field.
In addition, a 3 percent general income tax will be
levied on the same net income as above, but ONLY on
income in excess of $12,500. This would be a flat
tax, which is much more equitable than a percent of
federal tax.
Number 0247
CHAIR JAMES explained that she thinks HB 124 is important, but
feels that some people think it is a joke. She announced that
she did not want to move HB 124 out of committee at this time.
Her purpose in filing this legislation was to give legislators
and the public some information illustrating that a state tax
based on a percentage of federal taxes is not the only way to
implement a state tax in Alaska. She did not believe any state
tax will be approved this year by the legislature; but the
subject is out there in front of the public and the public is
thinking about it.
CHAIR JAMES offered her personal belief that there is no way to
balance Alaska's budget over the long term without reducing
spending and making government more efficient. Therefore, she
felt some broad-based tax and some use of permanent fund
earnings would eventually be needed. The purpose of presenting
the school tax was strictly as a leveling tool. She has heard
many people say, "We could just implement a $100-a-year instead
of $10 school tax." However, she believes that idea is not
feasible because the government would be taking the tax only
from people who work for wages. She argued that wage-earning
people are the wrong group to attack because they are not the
only people who make money in the state.
CHAIR JAMES noted that the $10 school tax levied on everyone in
the past functioned because Alaska had an income tax at the
time. She indicated that a similar tax today, as suggested by
some people, would not be feasible. She believes HB 124 is
feasible. One half of one percent is about the same amount that
is held out of an employee's pay for unemployment insurance.
Furthermore, if an individual paid a property tax allocated to
education, that individual would receive a credit not to exceed
the amount of the tax. Therefore, Chair James explained, a
leveling would occur so that all people who are making a living
in the state would be paying that tax.
CHAIR JAMES further explained that HB 124 was drafted in order
to allow a tax similar to a flat income tax. She alleged there
was no easy way to write a fiscal note for this legislation
because legislators do not have relevant numbers for the amount
of money that is earned according to federal schedules. When
she attempted to obtain information from the Institute of Social
and Economic Research (ISER) study, someone had mentioned to her
that the information was available only on tapes. The
legislature could get that information, if necessary, so as to
make it easier to calculate what the net taxed income would be.
She reiterated that her purpose in drafting HB 124 was to
generate comments on this kind of tax as a tax that would be
equitable, fair and easy to administer.
Number 0594
REPRESENTATIVE GREEN asked if HB 124 would also tax Individual
Retirement Account (IRA) cash-ins, which are not salaries.
People who are 70-1/2 years old can cash in their IRAs.
Although a cash-in would put money into their dossiers, they are
not earning it. He wanted to clarify whether that money would
be subject to the 3 percent tax.
CHAIR JAMES answered no.
REPRESENTATIVE GREEN said he understood, then, that only
earnings on salaries would be taxed.
Number 0671
CHAIR JAMES answered yes. Salaries, profit/loss in business and
professions, Schedule E rental income, royalties, partnerships,
liability companies in Subchapter S corporations, and fund
income are included in the 3 percent tax. Her purpose was to
tax only income from people who are actively making a living, as
opposed to retirees. She recognized that some people do make a
living by investments alone; however, she wanted to encourage
investments under HB 124, not discourage them by taxation.
Therefore, she exempted Schedule B from HB 124 taxation.
Number 0726
REPRESENTATIVE HUDSON asked if HB 124 will tax retirement
incomes.
CHAIR JAMES replied that retirement incomes are non-taxable.
REPRESENTATIVE HUDSON asked if Chair James knew the value amount
of tax collected under HB 124.
Number 0760
CHAIR JAMES estimated this tax would bring in about $300
million. She surmised that Subchapter S corporations and
partnership income might be higher than anticipated.
REPRESENTATIVE OGAN noticed that dividends would not be taxable.
He sought clarification as to whether the language referred to
stock dividends rather than permanent fund dividends.
Number 0851
CHAIR JAMES explained that the language referred to all
dividends recorded under item 9 of the "income" section of the
Internal Revenue Service (IRS) form 1040. Chair James stated
that interest dividends, capital gains, or retirement income
would be non-taxable. In response to a further question, she
specified that permanent fund dividends are not be taxable under
HR 124.
Number 0887
REPRESENTATIVE GREEN referred to the September 14, 1999
[advisory] vote [regarding use of the permanent fund]. After
reading a poll about that vote, he'd surmised that the populace
did not want to use permanent fund earnings and did not want new
taxes. He asked Chair James if she had taken public opinion
into consideration when drafting HB 124.
Number 0950
CHAIR JAMES answered with an emphatic yes. In extensive
discussions with folks, she'd heard that folks prefer sales tax
as opposed to an income tax. She did not believe the public was
ready to accept a tax. She reiterated that her purpose in
drafting HB 124 was to get people to think about tax
alternatives other than a percentage of the federal tax. Also,
she surmised that the legislature can draft a tax that excludes
retirees since they are not actively making a living in the
state. Her purpose in drafting the school tax was to level the
playing field so everybody would help pay for education.
CHAIR JAMES announced that Representative Moses had joined the
committee discussion.
Number 1042
REPRESENTATIVE HUDSON commented that he did not view HR 124 as a
joke or untimely. He noted that he'd heard that Governor
Knowles has expressed the need to tax the thousands of people
who work in Alaska on a seasonal basis. Representative Hudson
said he himself feels that out-of-state workers should pay for
usage of roads and public utilities, just as Alaskans do. He
agreed with Chair James about pursuing a broader understanding
of tax alternatives by presenting HB 124 and allowing folks to
testify. If people believe now is not the time for additional
sources of revenue to balance the budget, he said, then those
people must think the legislature can exhaust financial reserves
and let somebody else deal with the budget deficit later. He
did not agree with that reasoning.
Number 1209
REPRESENTATIVE KERTTULA asked if one part of HB 124 was a flat
tax on anything a worker earned over $12,500.
CHAIR JAMES answered yes.
REPRESENTATIVE KERTTULA continued, "So it doesn't matter if you
are making $13,000 or if you are making $300,000, everybody is
going to pay that 3 percent?"
CHAIR JAMES answered yes. She further pointed out that HB 124
is an individual tax, and therefore if a husband and wife are
both working, each would receive the $12,500 exemption. The tax
does not provide any deduction based on marriage or dependent
children; it is an individual tax. She did not know whether
$12,500 is a good number; it is just a place to start.
Therefore, she indicated that the exemption number could be
moved up and down, as could the percentage. She surmised that
the legislature would want to set the exemption number as low as
possible in order to collect sufficient tax revenue. Then
later, if a new figure was needed in case of emergencies or
disasters, this arrangement would be an easy way to add .25
percent or reduce it by .25 percent.
Number 1322
REPRESENTATIVE KERTTULA commented that she had not seen the
committee assignments regarding the corporate income tax bills
that had just been moved into the House Judiciary Standing
Committee. She asked whether the House State Affairs Standing
Committee would be hearing those bills. She expressed the need
to maintain a balance regarding the tax issue; therefore, the
committee needs to review what the larger companies in the state
are paying. She deemed perusal of the corporate income tax
bills as a valuable exercise in understanding the whole tax
picture. Representative Kerttula did not disagree with Chair
James in presenting HB 124 as a good place to start. However,
she wanted to look at larger corporate individuals first and
what they are paying before looking at individual Alaskans.
Number 1375
REPRESENTATIVE SMALLEY recalled that Chair James had estimated
HB 124 could earn as much as $300 million. He asked if that
$300 million included both the .50 percent and the 3 percent tax
as outlined in HB 124.
CHAIR JAMES answered no; the .50 percent tax would only provide
about $35 million.
Number 1399
REPRESENTATIVE SMALLEY requested information with regard to cost
for additional employees to conduct audits, investigations and
appeals if the legislature were to pursue a tax program
according to HB 124.
Number 1466
CHAIR JAMES answered that she did not have a fiscal note for HB
124 or associated costs.
REPRESENTATIVE SMALLEY said he felt that employers would not be
elated about being held accountable for collections and
submittal of tax revenue raised under HB 124.
CHAIR JAMES responded that it is not difficult to collect money
under a flat tax arrangement. No W-4 information is required
and no dependents are counted when using a flat tax. Employers
are already collecting money for unemployment from their
employees. She surmised it would be simple just to add another
line on the present unemployment form; consequently, a flat tax
would be easy to administer.
Number 1541
REPRESENTATIVE SMALLEY informed the committee that he'd visited
with Kenai Peninsula folks during the September 14, 1999, vote
period. He observed that those living on the Kenai Peninsula
leaned more toward an income tax than a sales tax, since they
already pay a sales tax, although he was not alleging that the
majority of Alaskans would support an income tax versus a sales
tax. He said although retirees are not earning income in the
state, they utilize state services. Therefore, retirees should
be included in taxation. He believed the purpose of taxation is
to help offset the cost of state services.
Number 1612
CHAIR JAMES spoke about forms of taxation that people might
prefer. She believes that people who live in communities that
do not levy a sales tax would prefer a sales tax [versus an
income tax]. Personally, she felt that the imposition of sales
tax should be reserved for a community and municipality funding
source, instead of using it for a state funding source. She
would not object to imposing a 2 percent sales tax statewide and
then allowing small communities to "piggyback" on the state
sales tax. She saw this as an administrative way to ensure that
everybody paid. Her opinion was that if the legislature were to
collect all the budget deficit by sales tax, it would be too
heavy a burden on Alaskans.
Number 1717
REPRESENTATIVE OGAN said he could not support any taxes because
he did not believe the state had addressed the fundamental
question of what the state should or should not be funding. He
asserted that since Alaska had started receiving oil money, the
state has funded 500 different programs; as far as he knew, only
two had been eliminated as a result of the budget deficit
discussion.
Number 1761
CHAIR JAMES asked if Representative Ogan believed the budget
could be cut by $500 million and, if so, where would the
legislature cut?
Number 1790
REPRESENTATIVE OGAN said he believed the state budget could be
cut by $250 million. He thought the state should narrow its
funding scope while striving to perform well on basic programs
such as public safety, road maintenance and education. He
concluded that the legislature is not getting cooperation from
the Administration in cutting excessive programs from the
budget.
Number 1761
CHAIR JAMES recalled that when she first came to Juneau as a
legislator, she expressed the exact same attitude as
Representative Ogan has today. She found out within two months
that reducing the size of government had to start at the
governor's office; there has to be cooperation between the
legislature and the governor, or nothing would happen.
Number 1901
REPRESENTATIVE WHITAKER concluded that the legislature needs to
build agreement regarding the budget deficit, which does not
allow the legislature to cut the budget beyond where it is now.
He thought the legislature had reached the end of budget-cutting
feasibility; he respectfully disagreed with Representative Ogan
on that point. Representative Whitaker said he felt that the
legislature had reached the point where it needed to consider
the programs as proposed by Chair James and discuss them
seriously. He acknowledged that some people in the political
spectrum will agree with Representative Ogan's opinion.
However, he trusted that differences in political opinion would
not deter other legislators who believe that cutting of
governmental spending has reached its limit. He explained that
now it is time to look at alternative revenue sources because
ultimately the legislature will have to make a difficult budget
decision.
Number 1997
REPRESENTATIVE MOSES said he favored HB 124. He'd discerned
that in the last decade (1990) Alaskan politicians had
campaigned on the platform that they would go to Juneau and cut
the budget without adding taxes; that was a promise the
politicians made to their constituents. Such campaign promises
simply could not be fulfilled without revenue; however, the
public was "psyched" into thinking that state business went on
as usual, even with cuts to the budget and no taxes. He
explained that the school property tax credit was very
important, since that kind of income tax affected nonresidents
too. A nonresident who decided to become a property owner in
the state would be entitled to the credit. Representative Moses
said he knew many legislators who complained about areas of the
state that do not contribute. In the absence of a local
property tax, those Alaskans would contribute revenue to the
state, just like a nonresident under HB 124.
Number 2097
REPRESENTATIVE GREEN informed the committee that he'd talked
with many people, inside and outside the state, who are confused
regarding government payments of $1,700 to each individual [the
permanent fund dividend] and the legislature's discussion of
taxing those same individuals to bring money back to the state
coffers.
Number 2172
CHAIR JAMES expressed interest in how taxes affect people. She
pointed out that nonresidents from Oregon, who come to Alaska to
work on the North Slope, pay income tax to their home state.
Oregon is actually getting more out of employment taxation than
Alaska, even though Alaska's North Slope provides the employment
opportunity, because Oregon collects the tax and Alaska does
not. It seems strange that people want government cuts, yet
still want government services without paying for them.
CHAIR JAMES agreed that Alaskans are taxpayers because they do
pay taxes to the federal government and the bulk of our state
budget is federal funds. Therefore, if state government spends
federal funds for programs, then taxpayers can object because
some of the money spent is theirs. However, taxpayers do not
contribute anything on the state portion of a government-funded
program. She believed that is exactly where the budget gap
existed: in general state funds. This observation has led her
to believe the budget deficit could not be covered by cutting
programs only. She noted that the legislature is now into its
fifth year of "zero" fund spending; as a consequence, the
legislature has found other kinds of fill-in funds. She
reiterated that the legislature has cut $220 million over a
period of five years. In so doing, the legislature has held the
line on budget spending. Chair James felt it was not just a
matter of reducing spending each year, but also of holding the
line on natural growth.
Number 2433
REPRESENTATIVE HUDSON agreed with Chair James regarding the
budget reduction over the past five years, although his figures
indicated the budget had been reduced by $240 million over the
past five years. He believed if the legislature had not reduced
the budget, Alaska's constitutional budget reserve - the only
publicly acceptable source of funds - would have been depleted
entirely. He said one alternative would have been to use the
earnings reserve account or some other assets of the permanent
fund to fund the budget. He continued by saying other
alternatives would have been to establish an income tax, sales
tax, or corporate income tax. He argued that it was not easy to
cut programs to which the public has become accustomed.
Number 2502
REPRESENTATIVE MOSES commented that like no other state, Alaska
has tens of thousands of people who come here to make a nest egg
- living here five to ten years with no intention of staying,
and saving every dollar to take home. Consequently, he felt
they were not true residents of Alaska and that the state did
not get the benefit of a trickle-down effect in the state
economy; that type of resident takes the money and runs.
CHAIR JAMES turned to public testimony.
Number 2550
SCOTT CALDER testified via teleconference from Fairbanks.
Although he liked the idea of HB 124, Mr. Calder said he had a
few concerns. He remembered when Alaska used a school tax to
collect revenue. The school tax was a simple plan that he
thought was fair and equitable. He referred to page 3, Section
5, which includes an extensive rewrite of AS 47.20.030. That
section appeared to discuss how a tax is to be collected. He
favored collecting the tax through the employer, rather than
creating a burden on citizens to submit paperwork to the state.
MR. CALDER also noted that on page 7, line 11, the definitions
of the words "includes" and "including" were deleted and a
definition of the word "individual" was inserted in their place.
He did not understand why those changes were made. Generally
speaking, he thought HB 124 was a good idea.
Number 2721
REPRESENTATIVE GREEN recalled when the legislature passed a
tobacco tax, which he had favored. He explained that he favored
that tobacco tax because he sincerely thought it was going to be
used entirely for education of youth. Unfortunately, the tax
has been diverted into several other areas because a tax cannot
be dedicated. Therefore, he expressed concern that the same
would occur to HB 124. All taxes go into the general fund and
are allocated as the legislature sees fit. He said imposing a
tax for a specific purpose and then seeing that revenue go
straight into the general fund causes him considerable
agitation.
Number 2784
CHAIR JAMES addressed the issue of constitutionality regarding
use of tax revenue. The Alaska State Constitution states that
the legislature cannot have a dedicated fund. She explained
what had happened regarding the tobacco tax. The legislature
does have a dedicated fund for the cigarette tax, not the
tobacco tax. The cigarette tax is a dedicated fund set up
before Alaska became a state; that money can only be used for
the maintenance and construction of school buildings or paying
school construction bonds. She said Representative Green was
talking about a tax on tobacco and related products, not
cigarettes, which tax is being used for things other than
educating youth about tobacco.
Number 2844
REPRESENTATIVE GREEN replied that the pre-state dedicated
cigarette fund and examples like the use of tobacco tax revenue
were a subterfuge. He had voted in good faith for the tobacco
tax and is now very opposed to how the revenue generated by that
law is being used. [HB 124 was held over.]
HB 259-PUBLIC DEFENDER CHILDREN'S PROCEEDINGS
CHAIR JAMES announced that the committee would next hear HOUSE
BILL NO. 259, "An Act relating to a parent's eligibility to be
represented by the public defender before and during the
probable cause and temporary placement hearing that is held
after the state takes emergency custody of a child."
Number 2869
REPRESENTATIVE COGHILL, sponsor, explained that HB 259 is the
result of a meeting sponsored by Chair James among the
Department of Administration, the Department of Law, Judge
Steinkruger, and legislative staff from the Interior. From this
meeting it became apparent that a 48-hour hearing is required
when a child in need of aid (CINA) is taken into custody. It
was his observation that when summoned to a 48-hour hearing,
many parents hadn't had the opportunity to obtain counsel or
were unaware that they could even have counsel present at the
hearing. The Office of Public Advocacy (OPA) saw that lack of
knowledge as a shortfall in the current system.
REPRESENTATIVE COGHILL noted that Representative Whitaker also
held several meetings in Fairbanks regarding this subject.
Representative Coghill had met with different family groups and
found that a family summoned into a 48-hour CINA hearing
actually did not know what they were getting into.
Representative Coghill said he feels there was a grave
misunderstanding of how important the 48-hour hearing is when a
determination of CINA exists. He believed HB 259 provided an
opportunity to extend representation to a parent who did not
understand what was going on, since there seems to be much
confusion in the first minutes when a child has been taken into
custody and the parents are summoned to court. House Bill 259
attempts to supply the representation that parents need,
regardless of their financial status because many parents do not
even know to call a lawyer in this situation.
REPRESENTATIVE COGHILL pointed out that HB 259 had no fiscal
note at this time. He offered a written amendment, labeled
Amendment 1, which read as follows:
Page 1, line 6, after the word "person":
Delete: [, whether or not indigent,]
Page 1, line 8, after the word "represented":
Insert: , pending a determination of indigence,
TAPE 00-1, SIDE B
Number 2958
REPRESENTATIVE COGHILL commented that HB 259 is a
straightforward bill. He agreed, as Amendment 1 states, that
there has to be a determination of indigence somewhere along the
line, which he felt would probably ensure a zero fiscal note.
Number 2943
REPRESENTATIVE GREEN expressed concern that a disproportionate
number of low-income people, who are not necessarily indigent,
might be having their children taken into custody in comparison
to people who are financially secure. That was his observation
as a result of information-gathering visits to the Division of
Family and Youth Services (DFYS). Representative Green asked:
Would enactment of HB 259 provide notification to the parents
that they do have the right to request a public defender, or are
the parents under obligation to know they have that right?
REPRESENTATIVE COGHILL replied that it was his intention that
the parents be notified.
CHAIR JAMES surmised that the notification requirement would be
implemented by the court system, and that the court would ask
the parents whether they want to be represented by counsel.
Number 2856
REPRESENTATIVE COGHILL acknowledged that was his intention. He
mentioned that he and Representative Whitaker have worked
together regarding responsibility and rights measures that
should be presented as a briefing in a court. However, that is
a separate measure, not to be confused with HB 259.
Representative Coghill said he believed that if a person did
come before a judge at a 48-hour hearing without counsel, HB 259
would require the judge to advise the person of his or her right
to counsel. House Bill 259 has not expressly said that, but
Representative Coghill said he did not want a directive to that
effect either.
Number 2796
DOUG WOOLIVER, Administrative Attorney, Alaska Court System,
explained that even now people do have the right to counsel at
48-hour hearings. According to most of the judges with whom he
had spoken, many parents qualify for public defender services.
Under the current statute, if parents appeared at a 48-hour
hearing without an attorney, they have the option to either
proceed without an attorney through the probable cause hearing
(which does not happen often), or request a continuance.
Continuance occurs when a parent indicated they wanted to obtain
an attorney and either they did not know they could do so or
they had not taken steps yet to do so. The continuance then
allows the hearing to be postponed for another two or three
days. Meanwhile, the child in custody stayed wherever the child
had been placed, which was an incentive for the parents to act
quickly so they could regain custody of their child. When
parents obtained representation, they returned to court for the
hearing.
MR. WOOLIVER informed the committee that at present, when DFYS
takes custody of a child, DFYS provides a brochure to parents
which explains their rights as parents. One of those rights is
the right to a public defender. Mr. Wooliver observed that
according to the Anchorage Police Department, it was not
uncommon for the parent to have already taken the step of
requesting a public defender. To request a public defender,
the court has to make an indigence determination, a public
defender is then appointed and the parents appear at the hearing
with counsel. Mr. Wooliver felt HB 259 facilitates the current
process. Under HB 259, parents would not have to first appear
in court to obtain an indigence determination. The notification
provision of HB 259 allows the parents to request a public
defender at the time the child is taken into custody.
Therefore, parents can appear at the 48-hour hearing with
representation even if a court determination of indigence has
not yet been declared.
REPRESENTATIVE GREEN asked if obtaining an attorney quickly
under HB 259 would save money and reduce the caseload, given the
fact that deferments, postponements, or continuances do add to
case costs.
Number 2659
MR. WOOLIVER answered that it was possible there might be fewer
continuances. On the other hand, a parent might still not
understand that he or she did have the right to a public
defender. He offered his observation that the DFYS brochure
advises people of their right to counsel, but that people do not
always avail themselves of that right. Mr. Wooliver reiterated
that the family is in a crisis situation, so the system will
continue to have cases where people do not obtain representation
in a timely manner, which causes some continuances. However, HB
259 is expected to reduce the number of times someone comes in
without an attorney, and thus reduce the need for a continuance.
REPRESENTATIVE WHITAKER asked how many continuances occur and
whether Mr. Wooliver had data to support his answer.
Number 2605
MR. WOOLIVER said he might be able to obtain the data.
REPRESENTATIVE WHITAKER reiterated that the point of HB 259 is
to protect every individual's rights. He expressed concern for
that percentage of people who do not understand their
circumstances and for which HB 259 ensures protection of their
rights. He believed HB 259 to be an important piece of proposed
legislation.
Number 2531
REPRESENTATIVE KERTTULA expressed uncertainty regarding the
reason for a zero fiscal note. She surmised perhaps it was
because OPA assumed HB 259 would be amended so that OPA did not
represent non-indigent people; she asked when that might happen.
It sounded to her as if OPA would ask the appropriate questions
right upfront during the first custody hearing to determine
whether the parents were indigent and would qualify for
representation. However, she saw a problem if OPA allowed
people to have OPA representation and proceed through the
system, only to find out later that the people involved did not,
in fact, qualify for public defender representation. She felt
this scenario would create a budget increase for OPA, contrary
to the zero fiscal note.
Number 2485
REPRESENTATIVE OGAN made a motion to adopt Amendment 1 [text
provided previously].
Number 2465
REPRESENTATIVE COGHILL reiterated that it is desirable for
counsel to be present at 48-hour hearings. Nevertheless,
somewhere along the line there has to be a determination of
indigence or a continuance. Amendment 1, which was forwarded to
Representative Coghill's office from OPA, makes it more emphatic
that counsel from the public defender's office is available,
regardless of a determination of indigence.
Number 2424
REPRESENTATIVE HUDSON asked if it was easy to make a
determination of indigence.
MR. WOOLIVER replied that the Alaska Court System required
people seeking a determination of indigence to meet certain
financial criteria in order to be appointed to a public
defender. There are forms to submit and court procedures for
making that determination. It is not an instant process.
Number 2387
REPRESENTATIVE GREEN questioned whether HB 259 will create a
burden on OPA before an indigence determination has been made.
Number 2347
MR. WOOLIVER answered that under HB 259, OPA would be
responsible for representing people who may or may not meet
indigent standards. In that sense, OPA's workload might
increase. He did not know how much difference Amendment 1 would
make.
Number 2309
CHAIR JAMES said she believes people should have counsel at 48-
hour hearings, since counsel is an important protection. She
had seen people after a court hearing who still did not know
what had happened to them or why they were at the hearing. It
was her understanding that a public defender is a state
employee. If that assumption is correct, a public defender ought
to be present at a 48-hour CINA hearing.
Number 2243
MR. WOOLIVER agreed that a public defender ought to be present,
but for that to occur, the assigned attorney has to be notified
of the case within 48 hours. Although parents are not required
to have an attorney, they are entitled to an attorney and still
need somebody to initiate the request for a public defender.
Also, OPA has to check whether a conflict exists for the
assigned public defender regarding the applicant.
Number 2190
REPRESENTATIVE SMALLEY agreed with Representative Kerttula that
there will be an additional cost to OPA.
Number 2153
BLAIR MCCUNE, Deputy Director, Alaska Public Defender Agency,
testified from Anchorage via teleconference. He said the public
defender process varied in different areas around the state. He
cited the example of Anchorage, where OPA currently does not
accept intake calls. If someone needed a public defender, OPA
refers the applicant to the court. At the court, the applicant
fills out an application for a public defender and waits for a
formal determination of indigence. Upon receipt of a
determination of indigence, OPA could then represent an
applicant. This process takes time, but it can be done before
the 48-hour hearing, at which parents are advised of their
rights. Child-in-need-of-aid rules governing these hearings
require that parents be notified of their right to counsel at
public expense.
MR. MCCUNE answered Representative Hudson's question by saying
sometimes it is easy to make an indigence determination and
sometimes it is not. Often OPA can quickly determine whether
someone is able to pass an indigence screening. OPA asks a few
questions; for example, an important one would be whether the
applicant is currently on public assistance. If the applicant
is receiving public assistance, OPA can safely assume that the
applicant has had indigence screening through one of the state
or federal agencies. In questionable cases, OPA would be better
advised to refer the applicant to the court system for a formal
indigence determination. If an applicant can afford their own
lawyer, then OPA can refer them to lawyers in private practice
who can represent the applicant.
MR. MCCUNE turned to the fiscal impact of HB 259. He referred
to lines 7-8 on page 1, which read "may be represented ... by
the Public Defender Agency." He acknowledged that OPA must
exercise care regarding conflicts of interest in these cases.
He said OPA tries to conserve state resources by assigning OPA
staff attorneys - which are state employees - to those cases
that will be the most time-consuming or serious. The Office of
Public Advocacy also strives to conserve resources by
representing both a CINA case and a criminal case if no conflict
of interest exists. Mr. McCune believes OPA would not feel any
fiscal impact due to HB 259 if the words "may be represented"
provided OPA with flexibility in who they represent and
delineated the scope of representation. Nevertheless, he
reminded the committee that OPA did have limited resources and
could not promise immediate response in every case. For
example, if all OPA lawyers were attending court hearings, OPA
might not be able to respond to an intake call right away. Mr.
McCune endorsed the words "may be represented" as the correct
interpretation. He agreed that HB 259 will help people who need
help without resulting in further fiscal impact to OPA.
Number 1890
REPRESENTATIVE GREEN posed a scenario in which 10 or 12 CINA
children were taken into custody in the same timeframe. He
asked if a defense was prepared for all the children at once.
He also asked if OPA was notified at the time of intake or
waited for someone to request representation and then provided a
public defender at the first 48-hour hearing. He asked if the
legislature was creating an additional burden on OPA by HB 259.
He further asked whether OPA normally would provide
representation anyway - the question just being who pays for it.
Number 1811
MR. MCCUNE offered to explain the OPA process. OPA did not
currently represent anyone until the court had made such an
appointment. The court will call OPA and inform OPA that it has
been appointed to represent "Mrs. Smith" in a CINA case. The
Office of Public Advocacy then checks their conflicts material
to see if OPA has any conflict in representing "Mrs. Smith." If
so, OPA will call the court and say that due to conflict of
interest, another OPA attorney needs to be appointed to
represent "Mrs. Smith." When OPA does represent "Mrs. Smith" in
a criminal case, OPA will read the petition, exercising care
about whom they are representing and will begin work at that
point. Mr. McCune said HB 259 will allow OPA to take some
custody intake calls. "Mrs. Smith" can call the public defender
office to report her children have been taken into custody. OPA
would call the court and ask for a copy of the petition
involving "Mrs. Smith" and review social workers' notes, medical
reports, or police reports.
MR. MCCUNE noted that often parents will agree with OPA that
there are reasons why the state was involved in their lives.
Not all cases go to contested hearings; only a small percentage
do. If a case does go to a contested hearing, OPA must have
more time to get the paperwork needed to represent the person in
that hearing. House Bill 259 would allow OPA to take the
custody intake call, get the petition sent to the court, verify
what OPA was dealing with, and get started earlier. Mr. McCune
did not anticipate more work; rather, he anticipated being able
to do OPA's work earlier.
MR. MCCUNE pointed out that most of OPA's workload is criminal
cases. In 1996 the legislature passed a law that clarified
OPA's responsibility to represent anybody in a criminal case
only after being formally appointed. That law has also been
applied to CINA cases. House Bill 259 would change the law so
that OPA can get involved in CINA cases at an earlier stage, as
opposed to criminal cases only.
Number 1521
REPRESENTATIVE GREEN said it sounds to him, after listening to
Mr. McCune's testimony, that with more people involved, OPA's
workload could increase, which could impact its ability to do
the job unless OPA hires more employees.
REPRESENTATIVE GREEN posed a scenario in which people who were
automatically represented at a 48-hour hearing were later found
to be non-indigents. He asked: Do they reimburse OPA for the
extra work OPA performed?
Number 1479
MR. MCCUNE answered that in CINA cases there was no payback
provision. There are payback provisions in criminal cases, and
attorney fees are charged to citizens who use the public
defender in appellate cases. Mr. McCune said he believed OPA
would not start work on a case unless OPA was reasonably sure
the person was indigent. Mr. McCune affirmed that most of the
parents involved in CINA represented by OPA and who appear
before the court are people determined to be indigent. He
asserted that OPA is careful not to represent people that OPA
would not represent anyway.
Number 1427
REPRESENTATIVE GREEN requested affirmation that if HB 259
passed, OPA would not anticipate a budget increase next year.
Number 1420
REPRESENTATIVE KERTTULA reiterated her belief that OPA is
increasing its workload, since OPA does not represent such
parents now. She said she understood that OPA is relying on its
own schooling, pending a determination of indigence, to
determine whether a parent involved in a CINA call is indigent.
After listening to Mr. McCune's explanation, she believes that
OPA is taking control of that step in the process and making its
own indigence determination right then. She sought confirmation
that her understanding is correct in that OPA will reject some
people and take some people right at the point of call.
Number 1381
MR. MCCUNE affirmed Representative Kerttula's understanding of
the process. He said he believes HB 259's use of the language
"may be represented" allows OPA to make an initial indigence
determination. He reaffirmed his belief that OPA would have
flexibility in its response to calls in the initial stages.
Number 1355
REPRESENTATIVE KERTTULA said that is the reason she supports HB
259. However, she believes OPA will experience increased
caseloads and will have a fiscal note in connection with HB 259.
Number 1330
REPRESENTATIVE HUDSON renewed Representative Ogan's motion to
adopt Amendment 1. There being no objection, Amendment 1 was
adopted.
REPRESENTATIVE OGAN read from Representative Coghill's sponsor
statement, "This means a reduction in foster care, case worker,
and health care costs, as well as long-term public defender,
guardian ad litem, and attorney general expenses."
Representative Ogan said he believed Representative Coghill was
asserting that if parents' rights are addressed early on, then
perhaps parents who have had their children taken away will get
their children back sooner, which will cost less money to the
state.
Number 1218
REPRESENTATIVE COGHILL replied in the affirmative. He
reiterated that many, many parents get caught up in 48-hour
hearings. It is clear to him that parents suffer emotional
trauma; because they do not understand the legal system, even if
they knew to obtain counsel, they would not know whom to get.
House Bill 259 attempts to make counsel available and let people
have access to counsel. He felt that if parents were notified
that they had access to counsel or did have counsel, then the
CINA cases would be fewer, because once parents get involved in
the child-in-need-of-aid system, they have to go through all
steps of the system. A court timeline is set up from the first
48-hour hearing onward, and those timelines have to be
fulfilled. There can be continuances, counsel, and foster care;
however, if at the 48-hour hearing counsel determines there was
no CINA case, then the case could end at that point.
Representative Coghill said many times the only recommendations
before a judge is an agency determination and a parent's frantic
plea. He felt HB 259 was one more way of protecting the rights
of both children and parents.
Number 1077
CHAIR JAMES, in response to Representative Ogan, said it was
difficult and speculative, when trying to change a system, to
determine whether there would be a reduction in cost. She felt
the numbers were not available.
Number 1043
REPRESENTATIVE WHITAKER expressed concerned that the discussion
was centered around dollars, as opposed to protecting
individual, constitutionally guaranteed rights. He said he did
not believe HB 259 concerns saving or spending a dollar.
Rather, it is a question of absolutely demanding that
individuals involved in this kind of situation know their rights
are protected. Although the legislature cannot be irresponsible
with spending, HB 259 is a much larger issue.
CHAIR JAMES agreed.
Number 0973
MR. CALDER testified again. He said he liked HB 259 and
Amendment 1. However, he did not feel HB 259 got to the heart
of the problem. He offered the following suggestions:
Amend:
A. Page 1, line 7;
Delete "[AS 47.10.142]."
Insert "AS 47.10 and AS 47.12".
B. Line 9;
Insert: "first" before "hearing."
C. Line 13; (same as 'A' above).
D. Page 2, line 10;
Delete: "[upon request]" and "[All]".
Insert: "not" before "release".
E. and line 11;
Delete: the words following "subsection"
beginning "[except information...]" to the end.
F. Add court rules change for notice requirements.
CHAIR JAMES recognized Mr. Calder's concerns were legitimate.
Number 0865
MR. CALDER reemphasized the necessity of including cases arising
under AS 47.10 and AS 47.12. He agreed the issue should not be
centered around dollars, but around the basic rights of people
before the judicial branch. He concluded that it is reasonable
for parents to be represented, always recognizing the
appropriate separation of powers in this matter.
Number 0408
REPRESENTATIVE HUDSON suggested that Mr. Calder put those
proposed amendments in writing; they then could be forwarded
with HB 259 to the House Judiciary Standing Committee.
REPRESENTATIVE HUDSON made a motion to move HB 259, as amended,
out of committee with the zero fiscal note and individual
recommendations; he asked for unanimous consent. There being no
objection, CSHB 259(STA) moved from the House State Affairs
Standing Committee.
ADJOURNMENT
Number 0330
There being no further business before the committee, the House
State Affairs Standing Committee meeting was adjourned at 9:40
a.m.
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