03/13/2001 08:01 AM House STA
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+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE STATE AFFAIRS STANDING COMMITTEE
March 13, 2001
8:01 a.m.
MEMBERS PRESENT
Representative John Coghill, Chair
Representative Jeannette James
Representative Hugh Fate
Representative Gary Stevens
Representative Peggy Wilson
Representative Harry Crawford
Representative Joe Hayes
MEMBERS ABSENT
All members present
OTHER LEGISLATORS PRESENT
Representative Norman Rokeberg
COMMITTEE CALENDAR
HOUSE BILL NO. 3
"An Act relating to deposits to the Alaska permanent fund from
mineral lease rentals, royalties, royalty sale proceeds, net
profit shares under AS 38.05.180(f) and (g), federal mineral
revenue sharing payments received by the state from mineral
leases, and bonuses received by the state from mineral leases,
and limiting deposits from those sources to the 25 percent
required under art. IX, sec. 15, Constitution of the State of
Alaska; and providing for an effective date."
- MOVED HB 3 OUT OF COMMITTEE
HOUSE BILL NO. 149
"An Act relating to correctional facility space and to
authorizing the Department of Corrections to enter into an
agreement to lease facilities for the confinement and care of
prisoners within the Kenai Peninsula Borough."
- HEARD AND HELD
CONFIRMATION HEARING:
Commissioner of Public Safety
Glenn G. Godfrey
- CONFIRMATION ADVANCED
PREVIOUS ACTION
BILL: HB 3
SHORT TITLE:DEPOSITS TO THE PERMANENT FUND
SPONSOR(S): REPRESENTATIVE(S)ROKEBERG
Jrn-Date Jrn-Page Action
01/08/01 0024 (H) PREFILE RELEASED 12/29/00
01/08/01 0024 (H) READ THE FIRST TIME -
REFERRALS
01/08/01 0024 (H) STA, JUD, FIN
02/28/01 0473 (H) COSPONSOR(S): MURKOWSKI,
DAVIES,
02/28/01 0473 (H) HUDSON
03/08/01 (H) STA AT 8:00 AM CAPITOL 102
03/08/01 (H) Heard & Held
MINUTE(STA)
03/09/01 0529 (H) COSPONSOR(S): STEVENS
03/13/01 (H) STA AT 8:00 AM CAPITOL 102
BILL: HB 149
SHORT TITLE:PRIVATE PRISON IN KENAI
SPONSOR(S): REPRESENTATIVE(S)CHENAULT
Jrn-Date Jrn-Page Action
02/26/01 0437 (H) READ THE FIRST TIME -
REFERRALS
02/26/01 0437 (H) STA, FIN
02/26/01 0437 (H) REFERRED TO STATE AFFAIRS
03/13/01 (H) STA AT 8:00 AM CAPITOL 102
WITNESS REGISTER
JANET SEITZ, Staff
to Representative Rokeberg
Alaska State Legislature
Capitol Building, Room 118
Juneau, Alaska 99801
POSITION STATEMENT: Provided information on HB 3.
CHUCK LOGSDEN, Chief Petroleum Economist
Department of Revenue
550 West Seventh Avenue, Suite 500
Anchorage, Alaska 99501-3566
POSITION STATEMENT: Provided information on HB 3.
REPRESENTATIVE MIKE CHENAULT
Alaska State Legislature
Capitol Building, Room 432
Juneau, Alaska 99801
POSITION STATEMENT: Spoke as sponsor of HB 149.
DALE BAGLEY, Mayor
Kenai Peninsula Borough
144 North Binkley Street
Soldotna, Alaska 99669
POSITION STATEMENT: Testified in favor of HB 149.
MARGOT KNUTH, Assistant Attorney General
Office of the Commissioner
Department of Corrections
431 North Franklin Street, Suite 203
Juneau, AK 99801
POSITION STATEMENT: Testified on HB 149.
GLENN G. GODFREY, Commissioner
Department of Public Safety
P.O. Box 111200
Juneau, Alaska 99811-1200
POSITION STATEMENT: Testified as appointee for confirmation.
ALFRED McKINLEY, SR.
Executive Committee Member, Grand Camp
Alaska Native Brotherhood
P.O. Box 21713
Juneau, Alaska 99802
POSITION STATEMENT: Testified on HB 149.
RICHARD SEGURA, President and CEO
Kenai Native Association, Inc.
215 Fidalgo Avenue
Kenai, Alaska
POSITION STATEMENT: Testified in favor of HB 149.
MAKO HAGGERTY
P.O. Box 2001
Homer, Alaska 99603
POSITION STATEMENT: Testified in opposition to HB 149.
MARVIN WIEBE, Senior Vice President
Cornell Companies, Inc.
188 Via Baja
Ventura, California 98023
POSITION STATEMENT: Testified on HB 149.
DANIEL BROWN
[No address provided]
Juneau, Alaska
POSITION STATEMENT: Testified in support of a private prison in
Alaska.
FREDERICK BELL
336 Gold Street
Juneau, Alaska 99801
POSITION STATEMENT: Testified in support of Native cultural
programs for prisoners and in favor of bringing all inmates back
to Alaska.
ACTION NARRATIVE
TAPE 01-20, SIDE A
Number 0001
CHAIR JOHN COGHILL called the House State Affairs Standing
Committee meeting to order at 8:01 a.m. Representatives
Coghill, James, Fate, Stevens, Wilson, and Crawford were present
at the call to order. Representative Hayes arrived as the
meeting was in progress.
HB 3-DEPOSITS TO THE PERMANENT FUND
Number 0256
CHAIR COGHILL announced the first order of business would be
HOUSE BILL NO. 3, "An Act relating to deposits to the Alaska
permanent fund from mineral lease rentals, royalties, royalty
sale proceeds, net profit shares under AS 38.05.180(f) and (g),
federal mineral revenue sharing payments received by the state
from mineral leases, and bonuses received by the state from
mineral leases, and limiting deposits from those sources to the
25 percent required under art. IX, sec. 15, Constitution of the
State of Alaska; and providing for an effective date."
Number 0282
JANET SEITZ, Staff to Representative Rokeberg, Alaska State
Legislature, sponsor of HB 3, came forward. She called
committee members' attention to a workbook provided by
Representative Rokeberg concerning the revenue impact of HB 3 on
the general fund. The material had been prepared by Chuck
Logsden, Chief Petroleum Economist, Department of Revenue.
CHAIR COGHILL noted that the information had just been given to
committee members, who had not had a chance to study it before
the meeting. He asked why the year 2006 was such a significant
one for income.
Number 0430
CHUCK LOGSDEN, Chief Petroleum Economist, Department of Revenue,
testified by teleconference. Two new fields are beginning
production and increasing the amount of oil coming from new
leases (potentially contributing a greater percentage into the
general fund than the old leases do. He stressed that the older
fields will continue to dominate production over the next 10-15
years. By 2005, 20 percent of the state's oil royalties would
be coming from new leases that could be impacted by HB 3. He
stressed that revenue forecasts are very much impacted by the
price of oil.
MR. LOGSDEN turned his attention to the fiscal note. He pointed
out that the amount of revenue coming into the general fund
could be anywhere between $25 million and $45 million, depending
upon oil prices.
MR. LOGSDEN noted that the fiscal note projections extend
through 2007. Any production resulting from exploration going
on today will not occur until after 2007, and possibly not until
10-12 years from now.
Number 0799
CHAIR COGHILL observed, "It really does come down to a policy
decision" about whether the legislature wishes to return to the
constitutionally mandated 25 percent of oil royalties going into
the Permanent Fund or allow the current 50 percent allocation,
authorized by statute, to remain in effect. Because HB 3 also
will be heard by the House Judiciary and Finance Committees, he
said he did not want the State Affairs Committee to scrutinize
all the dollars, but to "discover the policy."
Number 0888
REPRESENTATIVE JAMES expressed her support for HB 3. She said
she was hesitant to support anything short of a long-term
revenue plan, "and if we inch our way along, we may never get
there." However, she thinks HB 3 is a piece of the larger
solution. The state has been taking in less money than it is
spending every year, and in the past five years, the legislature
has worked very hard to reduce general fund spending and thereby
to close that fiscal gap. Yet there is an automatic growth in
government every year just to cover cost-of-living pay increases
and the growing number of participants that affect formula
funding. To close the fiscal gap and maintain the economies
that have been achieved, "we have to have a lot of different
pieces," she said.
REPRESENTATIVE JAMES noted that the principal of the Permanent
Fund is untouchable as a source of money; that is
constitutionally mandated. But also according to the
constitution, the earnings reserve of the Permanent Fund is not
untouchable. It is the legislature's prerogative to decide what
to do with the earnings reserve. She said it would be better to
give that fund a different name because the public perceives the
Permanent Fund as all one piece, and so thinks it all should be
protected. She noted that the Permanent Fund [principal] has a
lot of money in it, providing the state with long-term income
from interest earnings. She also thinks it is a good thing to
give the people a dividend out of those earnings, "because that
gives us the constituency to protect the fund."
REPRESENTATIVE JAMES said a long-range fiscal plan will be made
up of "a little [from] taxes here and there -- fair ... and
equitable taxes across the board ...[so] everyone pays a little
-- and also some more reduction ... in the cost of government,
[including] maybe even not doing some of the things we're
doing."
REPRESENTATIVE JAMES noted, "The amount of money that we've been
putting into the Permanent Fund over and above the
constitutional mandate was made when we were rolling in bucks.
We're not rolling in bucks any more." She said it doesn't make
a lot of sense to keep putting in more money than is mandated.
She thinks HB 3 is an excellent first step that the legislature
should take toward long-range fiscal stability.
Number 1223
REPRESENTATIVE JAMES moved to report HB 3 out of committee with
individual recommendations and the accompanying fiscal notes.
Number 1242
REPRESENTATIVE WILSON agreed with Representative James. She
observed that the people of the state are used to high income
from oil royalties, and "don't believe us when we say that we're
in a crunch and that we're having to be very careful about how
we budget the finances of the state right now." She cautioned,
"When we do something like this [HB 3]..., they're saying, 'See,
we aren't in that bad a shape. See, they pulled the money from
somewhere and they always do.'"
Number 1356
CHAIR COGHILL objected to Representative James's motion for
purposes of discussion.
Number 1369
REPRESENTATIVE STEVENS concurred that HB 3 was a good first step
toward good fiscal management, but he acknowledged that "it is
just putting off the day when we have to consider other
taxation."
Number 1394
REPRESENTATIVE FATE agreed that there is a public perception
that Alaska has a lot of money. True, the state has about $21
billion in the principal of the Permanent Fund. But that's
protected by the constitution, and the people helped vote that
into the constitution, he pointed out. "So we simply don't have
that money available," he emphasized. "We have the earnings
from that money available, and the earnings simply don't go far
enough to run government once you take out the inflation-
proofing ...[and] the dividends, [both of] which we want to
continue." The state does have a lot of money but it is
unavailable and it was made unavailable by the vote of the
people. He concluded by voicing support for HB 3.
Number 1479
REPRESENTATIVE CRAWFORD said:
I feel really pulled because I don't believe that our
generation is paying our fair share. We're the only
state in the union [in which people do not] pay their
share of the cost of government today. We completely
fund our government off of non-recurring, one-time
revenues. I believe that ... if we pass this bill,
we're taking money away from future generations. I
believe it's time now for us to realize our
responsibilities and use some of our recurring
revenues to fund the cost of government, and I believe
that this is just a very small step toward [a] long-
term fiscal plan and our stepping up to the plate and
doing what really needs to be done. I don't concur
with this.
Number 1547
REPRESENTATIVE JAMES said the numbers tell the story. The
fiscal note for HB 3 projects an increase in revenue of about
$40 million. "We're anticipating in the budget this year a
shortage of somewhere near $400-500 million. If we would yield
to all of the demands out there that are reasonable, ... we
could raise that deficit from $400-500 million to a billion in a
heartbeat. We can anticipate, if we have a broad-based income
tax similar to what we had before ..., bringing in somewhere
between $400 [million] and $500 million at the most."
REPRESENTATIVE JAMES continued:
My point is that this $40 million is a very small
contribution. This has no effect whatsoever on
whether or not we need a broad-based tax, because
we're going to need a broad-based tax. We're going to
need some more economic development to increase the
amount that we can receive from a broad-based tax.
We're going to have to use some of the earnings of the
Permanent Fund, and we're quite likely going to have
to change the way we calculate the Permanent Fund
dividend although we can maintain a healthy dividend
over the long term.
REPRESENTATIVE JAMES reiterated that the potential income from
HB 3 is a very little piece of what is needed. Nevertheless,
she said, it a piece that should be put in place.
Number 1712
CHAIR COGHILL confessed that he struggles with HB 3, which has
been called a "no brainer." He is disturbed by the insatiable
appetitive of government. "We are a service government; we are
a service-delivery government," he stated. "I object to that."
Just because there is a need in society, it doesn't necessarily
mean that government should step up and fill that need. He
thinks government has been too many things to too many people,
and the question needs to be asked about whether government
should even be doing some of the things it is doing now. Chair
Coghill concluded that he is going to vote against HB 3 but he
thinks it would be unfair of him as a chairman to hold the bill
in committee.
Number 1845
CHAIR COGHILL removed his objection to HB 3. There being no
further objection, HB 3 was passed out of the House State
Affairs Standing Committee.
HB 149-PRIVATE PRISON IN KENAI
Number 1874
CHAIR COGHILL announced that the next order of business would be
HOUSE BILL NO. 149, "An Act relating to correctional facility
space and to authorizing the Department of Corrections to enter
into an agreement to lease facilities for the confinement and
care of prisoners within the Kenai Peninsula Borough."
Number 1920
REPRESENTATIVE MIKE CHENAULT came forward to speak as sponsor of
HB 149. He noted that progress toward a private prison in Delta
Junction has been stalled for several years. Meanwhile, Alaska
is spending more than $20 million to house many if its prisoners
in Arizona. He thinks it is time to bring those dollars back to
Alaska and help to diversify the economy here. The project
proposed in HB 149 would provide work for Alaskans.
Number 2030
DALE BAGLEY, Mayor, Kenai Peninsula Borough, testified by
teleconference. He said the prison project proposed in HB 149
is important to those on the Kenai Peninsula. It is a big
construction project, creates 300 permanent jobs and many more
secondary jobs, and would add a fourth strong industry to the
region's economic diversity. The Kenai Borough assembly and
administration both support the project. There have been many
public hearings as part of a competitive Request for Quotes
(RFQ) process. "There has been some opposition, but by and
large, there has been strong support for this prison project,"
he said.
CHAIR COGHILL asked Mr. Bagley to characterize the opposition.
MR. BAGLEY said the majority of the opposition he has heard has
dealt with the private/public prison issue. The question the
borough has been asking the public is, "If the legislature
wants a private prison built somewhere in Alaska, shouldn't the
Kenai Peninsula try to do that?" Most of the opposition has
come from people who do not support the concept of a private
prison instead of a public one.
CHAIR COGHILL asked him to describe the RFQ process.
MR. BAGLEY said the borough followed the RFQ process because
although the Department of Corrections has been helpful, the
borough didn't "have a lot of the nuts and bolts that we needed
to do a Request for Proposals (RFP) process." So the borough
developed this RFQ process instead. There were four responses,
which were narrowed down to two through an administration
selection committee. Then the assembly listened to
presentations by the finalists. The Cornell/Kenai Native
Association proposal was the one the assembly selected. The
process took two months, and Mr. Bagley said he thought it was a
good one.
CHAIR COGHILL wanted to know how much money the municipality has
put into it.
MR. BAGLEY said the assembly appropriated $150,000, and he
thinks about $50,000 of that has been spent so far.
Number 2232
REPRESENTATIVE STEVENS asked Mr. Bagley what advantages he sees
in having a private prison.
MR. BAGLEY said he was willing to let others debate the
private/public issue. He has heard that private prisons are
less expensive while allowing the Department of Corrections to
have a great deal of control over what happens to those
prisoners.
Number 2284
REPRESENTATIVE JAMES recalled that a few years ago, the Seward
Community had expressed interest in expanding the Spring Creek
Correctional Center there. She asked if anything had been heard
from Seward since then.
MR. BAGLEY said the RFQ process did not limit the location to
the Kenai area, but allowed it to be any place in the Kenai
Peninsula Borough [which includes Seward]. Those in Seward were
aware of the opportunity and did not submit a proposal. He
added that he had heard talk of expansion at Spring Creek, and
he thought it would be great if that were to happen, too. He
said there is a desire for a strong prison industry on the Kenai
Peninsula.
Number 2373
REPRESENTATIVE CRAWFORD wanted to know why the decision was made
to have a for-profit prison instead of a nonprofit one.
REPRESENTATIVE CHENAULT said it was decided three years ago with
House Bill 53 that the state would look at funding a private
prison rather than a public one. He recalled that projected
cost savings were the main reason for that decision.
REPRESENTATIVE CRAWFORD said he thought the same cost savings
could be realized from a privately operated prison without it
being a for-profit institution. He wondered why the consortium
that has put together the proposal [in HB 149] had decided to
take the for-profit approach.
REPRESENTATIVE CHENAULT said he could not answer for the
consortium, but assumed that the decision was made because the
consortium is made up of private businesses, and that they are
in business to make money.
CHAIR COGHILL asked if that was part of the discussion when the
Kenai Borough came up with the RFQ process.
MR. BAGLEY said it was not, and that this is the first time he
has heard that brought up.
CHAIR COGHILL said that would be part of the discussion, and
that those who are participating in the discussion might want to
keep it in mind.
Number 2475
REPRESENTATIVE CRAWFORD asked what the prison would cost.
REPRESENTATIVE CHENAULT said he did not know the exact dollar
amount, but that he thought the prison would cost between $60
million and $80 million.
CHAIR COGHILL apologized for not having a fiscal note ready, and
said the committee would have it before making a decision on HB
149.
Number 2531
REPRESENTATIVE JAMES observed that HB 149 has a referral to the
Finance Committee.
CHAIR COGHILL said that was a good point, and referred to his
earlier comment about the Finance Committee being the place
where the number crunching goes on.
Number 2621
MARGOT KNUTH, Assistant Attorney General, Office of the
Commissioner, Department of Corrections, came forward to
testify. She explained that several years ago, HB 53 authorized
both a jail replacement project in Anchorage and a private
prison in Delta Junction on the Fort Greely site. She said the
current bill, HB 149, is virtually identical to the part of HB
53 that authorized the Commissioner of Corrections to enter into
a lease with the City of Delta Junction. However, HB 149
includes a provision that repeals the authorization for the
prison at Delta Junction.
MS. KNUTH read from a letter by the governor to Mr. Bagley in
which the governor said that the legislature's intent in HB 53
was to develop a private prison at the Fort Greely site. "The
state has been working to do so ever since," she read. "There
is no doubt that any change of focus or development of a new
private prison plan will involve legislative action." She
thought that was what Mr. Bagley was alluding to when he said
that the Department of Corrections has been able to provide only
limited assistance to them. That is because in HB 53, the
administration was directed to work with the community of Delta
Junction, and they are doing so to this day, Ms. Knuth said.
MS. KNUTH said the other issue the governor addressed in his
letter to Mr. Bagley was that early on, his administration had
developed an approach to prison expansion based on five
principles. Those five principles, discussed in conjunction
with HB 53, were: Protecting the public safety, addressing
statewide and regional needs, consistency with best correctional
practices, community participation through government-to-
government transactions, and cost-effectiveness. "We must use
those principles when we're looking at any proposals to expand
existing facilities or create new facilities," Ms. Knuth said.
MS. KNUTH noted that when Governor Knowles signed HB 53, he
called it a good first step in addressing the needs of the
state. At that time he had submitted legislation proposing
expansion of the correctional facilities in Bethel and in
Sutton. "We have very urgent need to expand the jail at Bethel
and also the jail at Fairbanks," she said. "Those two
facilities have been ... our weak links in trying to resolve
overcrowding problems. The prison, albeit at Delta Junction or
at ... Kenai, will not solve the problems that we have of
overcrowding in our jails."
MS. KNUTH explained that very different populations are served
by jails and by prisons. "A jail is where you're holding pre-
trial people or people who have very short sentences; it's for
misdemeanants," she said. "It's not economical to send somebody
to a facility that is either several hundred or several thousand
miles away if the amount of time that they can spend is only
going to be three days and then you have to bring them back."
She told the committee that Alaska needs to address not only its
prison needs, but also its local jail needs.
Number 2871
MS. KNUTH said a second item of concern is "the vagueness of the
terms that are in this legislation [HB 149]." For the Anchorage
jail proposal, the legislation specified a dollar amount for the
capital project and how much could be spent per bed. House Bill
149 is virtually identical to the one for Fort Greely except
that it is silent in that regard. "It's unusual in this state
to suggest that a commissioner of department ... is going to be
authorized to enter into a transaction where no dollar figures
are specified," she said. "It would be more traditional and I
think it would set the transaction up for greater success if we
were to have very clear guidance on what the cost of the project
is to be ..."
TAPE 01-20, SIDE B
Number 0001
MS. KNUTH also sought clarification about operating costs. "Is
the payment that is anticipated ... meant to be just for the
lease of the space, which is what the state is accustomed to
doing, or is it anticipated that the 20-year lease is going to
include the cost of operating the facility?" she asked.
MS. KNUTH went on to describe Internal Revenue Service
limitations. For the bonds that are being sold to be tax-
exempt, a private operator cannot be involved in the project for
a period longer than five years. The Kenai proposal includes
using property owned by the Kenai Native Association. The
Native association's status as either a for-profit or a
nonprofit corporation makes a difference in whether the bonds
that are involved are tax-exempt or not, she said. Also, there
are financial consequences if the transaction is structured as
partnership between KNA and the Borough of Kenai or if, instead,
the Borough of Kenai enters into a long-term lease with KNA for
the use of the land. "These are factors that can have a very
significant impact on the cost of the transaction and so I think
the vagueness that surrounds the proposal at this point is
understandable but should be addressed," she said.
MS. KNUTH noted that HB 53, which dates back to 1998, included
both the Anchorage jail project (which was set out in fairly
traditional, specific terms) and the Fort Greely proposal.
Construction of the Anchorage jail is now 65 percent complete
and the jail is scheduled to open a year from now. "I believe
that part of the reason for that success is because the parties
knew what the transaction was that was being contemplated and
there was a meeting of minds and an agreement on it," she said.
"Unfortunately, the prison proposal at Delta Junction is still
in just the planning stages, and ... we still don't have a clear
understanding of what that proposal was."
Number 2797
CHAIR COGHILL challenged that characterization, saying that the
community in Anchorage was more unanimously supportive of the
project there than was the community of Delta Junction.
MS. KNUTH concurred that an important factor in the success of a
project is the community's willingness to embrace it and go
forward. "I agree with you entirely on that," she said.
Number 2777
REPRESENTATIVE FATE volunteered that the mayor of Delta Junction
two days ago had told him that they considered that project
"kaput," and no planning is being done at this time.
Number 1751
REPRESENTATIVE JAMES read from HB 159, "The agreement to be
entered into ... is predicated on and must provide for an
agreement between the Kenai Peninsula Borough and a private,
third-party contractor under which the private third-party
contractor constructs and operates the facility by providing for
custody, care, and discipline services for persons held by the
commissioner of corrections under authority of ... law." She
thought all of that has to be determined and that "it would come
down to a daily bed rate. It sounds to me ... like they're
leasing the whole thing."
REPRESENTATIVE JAMES pointed out that numbers are available for
what each of the correctional facilities currently is costing.
She also noted that the interest rate usually is adjusted to
reflect whether the bonds are tax-exempt or taxable, so that the
cost is similar. She agreed with Representative Faith that the
Delta Junction project has been the topic of more community
discussion than has the Kenai project.
REPRESENTATIVE JAMES, speaking from her perspective as an
accountant, said the difference between nonprofit and profit
does not necessarily mean the cost goes up or down. A for-
profit undertaking has an incentive to keep costs down so that
there is a profit.
Number 2578
CHAIR COGHILL expressed concern about time constraints, noting
that a confirmation hearing was scheduled to begin. He
suggested that Ms. Knuth respond to Representative James'
concerns, after which the committee would turn its attention to
the confirmation hearing.
Number 2503
MS. KNUTH said she did not have all of the answers to
Representative James' questions, but she noted that the
Department of Revenue has advised the Department of Corrections
that tax-exempt bonds are considerably cheaper for the state,
and that that was a factor in the Anchorage jail project. She
did not think the issue of cost was resolved by the daily bed
rate. Bonds issued by the Borough of Kenai can only be for
capital costs. She thought that capital costs for the Kenai
project needed to be separated from the operating costs.
REPRESENTATIVE JAMES said she is philosophically opposed to
state-owned properties within a municipality because there is no
property tax derived from them. That did not seem fair to the
local community. If there is no property tax, there can be some
savings -- but that comes out of the borough.
CHAIR COGHILL suspended testimony, stating his intent to return
to the discussion of HB 149 following the confirmation hearing.
CONFIRMATION HEARING:
Commissioner of Public Safety
Number 2207
GLENN G. GODFREY, Commissioner, Department of Public Safety,
came forward. In response to Chair Coghill's opening question
about his background, Mr. Godfrey said he had been appointed
commissioner by the governor in August 2000. Prior to that he
was director of the Division of Alaska State Troopers for 5.5
years and acting director for a year before that. He served
with the Division of Alaska State Troopers for a total of 30
years.
CHAIR COGHILL asked Mr. Godfrey about his vision for the
Department of Public Safety.
MR. GODFREY focused first on the largest division in the
Department of Public Safety, the Division of Alaska State
Troopers, which has 237 commissioned troopers. Emphasis now is
on recruitment of Alaskans to join the department. Recruitment
efforts so far have been successful and standards are high.
This will continue to be a focus in both the Division of Fish
and Wildlife and the Division of Alaska State Troopers. He
acknowledged that successful recruiting costs money, and
expressed appreciation to the legislature for its support.
MR. GODFREY noted that it is a challenge to deliver public
safety to rural Alaska. Only 86 Division of Fish and Wildlife
"brown shirts" are providing service to "some of the best fish
and game resources in the world," he said. Their jurisdiction
includes all commercial and sport fishing and hunting. "We've
always tried to do the best with what we have and do more with
less, but we're at the point in this department where we are
doing less with less," he said. That is frustrating to him as
well as to the men and women in the division.
MR. GODFREY referred to an ongoing lawsuit filed by the Native
American Rights Fund against the State of Alaska regarding the
state's enforcement efforts or lack thereof throughout the rural
areas of the state. "We definitely do need more resources in
rural Alaska, but I feel very strongly that with the resources
we have, we're doing the best job we can statewide, whether it's
on the highway system, in the urban areas, or in the rural
areas," he said. "We have our manpower allocated where we feel
is best for the citizens of the state of Alaska."
CHAIR COGHILL noted that the job that has to be done is larger
in Alaska, not only with public safety, but also with education
and in other areas. He noted that public safety is a high
priority in this legislature.
MR. GODFREY described joint efforts with the commissioners of
Corrections, Health and Social Services, Education, and the
Attorney General's Office to look at public safety and justice
concerns in a holistic manner. "We continuously are having
meetings discussing ... alcohol and drug abuse, [and] abuse of
children ... with an emphasis on rural Alaska," he said. The
proposed public safety components of that joint effort include
re-establishing the constable program to put officers at the
level of Alaska State Troopers in rural Alaska, focusing on
hiring people who come from the region they will serve,
increasing the number of Village Public Safety officers by 20
and increasing their salaries by 15 percent, and hiring another
10 blue-shirt and 10 brown-shirt troopers.
CHAIR COGHILL asked the commissioner what he would like to say
to Alaska as a community.
MR. GODFREY said a law-enforcement agency has a responsibility
not only to lock up people when that is appropriate, but also to
try to prevent crimes from taking place. An important component
of that is effective "community-based policing," working with
communities throughout the state to respond to what the
community wants from law enforcement. He said the vast majority
of the calls he gets are not complaints about the quality of
work the troopers do, but the fact that troopers don't get to
rural communities fast enough. He said his vision is for the
troopers to become better in community-based policing including
getting into the schools, spending time with the children, and
as first responders to incidents, doing a better job of
addressing the needs of the victims.
Number 1627
REPRESENTATIVE STEVENS praised the Village Public Safety Officer
(VPSO) program and asked Mr. Godfrey to comment on it.
MR. GODFREY explained to the committee that he was in Bethel
when the program began there. The VPSO program is, in his
opinion, the best program in state government today. "We've
taken this program to other countries, and it is very
interesting to other law enforcement entities," he said. The
program was started "to get some teeth into law enforcement in
rural Alaska." What he saw in Bethel was dedicated local police
officers who, because the state had no responsibility to support
them, were powerless to remove a perpetrator from the community
or to follow up.
MR. GODFREY explained that now, the program establishes a
partnership of three entities: the Alaska State Troopers, the
nonprofit Native corporation for the area, and the particular
village. Villages set the priorities for public safety and
enforcement efforts. The Native corporation receives state
funds and actually employs and pays the VPSOs, and the troopers
provide the "extra teeth." The troopers also provide provide
the VPSOs' initial training at the police academy in Sitka, on-
the-job training throughout the year, and technical support.
MR. GODFREY said the VPSOs get "a lot of respect" in their
communities. They go into the schools, teach snow machine and
boating safety, and are involved in fire prevention and
response. The VPSO program has expanded throughout the state,
and Mr. Godfrey said he is very proud of the men and women in
the program and that the relationship between them and the
troopers is "very, very close throughout the state of Alaska."
Number 1361
REPRESENTATIVE JAMES expressed appreciation and recommended
confirmation of Mr. Godfrey's appointment.
REPRESENTATIVE FATE thanked Mr. Godfrey for his many years of
service to State of Alaska and concurred with the recommendation
for confirmation.
There being no objection, the recommendation for confirmation
was advanced to the full body. [CONFIRMATION ADVANCED]
HB 149-PRIVATE PRISON IN KENAI
Number 1304
CHAIR COGHILL redirected committee attention to HOUSE BILL NO.
149, "An Act relating to correctional facility space and to
authorizing the Department of Corrections to enter into an
agreement to lease facilities for the confinement and care of
prisoners within the Kenai Peninsula Borough."
Number 1284
REPRESENTATIVE HAYES expressed a desire to hear from Delta
Junction before taking action on HB 149, which would change a
law specific to that area.
CHAIR COGHILL said that was an excellent point. He then
indicated concern about hearing from those who had come to
testify that day.
Number 1216
ALFRED McKINLEY, SR., Executive Committee Member, Grand Camp,
Alaska Native Brotherhood (ANB), and delegate to the Central
Council of Tlingit-Haida Indians of Alaska, came forward to
testify. He summarized resolutions passed by the ANB Grand Camp
and the Tlingit-Haida Central Council related to HB 149. He
said it is immaterial to them where the prison is built or
whether it is a nonprofit or for-profit enterprise so long as it
is in Alaska. "Our people are unique people," he said. Alaska
Natives have a culture that is different in the way it handles
conflicts and discipline. It is important to keep Alaska Native
prisoners in Alaska rather than sending them to Arizona where
they are picking up undesirable habits and behavior from
outsiders. It is important for them to be where they can be
visited. "If you don't visit your people who are in prison,
they'll ... think you don't care for them and they'll say, 'To
heck with the world!'" he said.
CHAIR COGHILL asked Mr. McKinley If he saw the central issue as
having the facility in Alaska where the inmates can be visited.
MR. McKINLEY confirmed that was the Native organizations'
primary concern. He expressed hope that work can start right
away and that the project can be completed.
Number 0692
CHAIR COGHILL said he thought the committee was in agreement
with Mr. McKinley about the importance of visiting prisoners, as
family ties and cultural ties are important to rehabilitation.
Number 0591
RICHARD SEGURA, President and CEO, Kenai Native Association,
came forward to testify in support of HB 149. The prison
proposed in HB 149 would be built on Kenai Native Association
property. But more important to him personally and as an Alaska
Native is the disproportionate percentage of Alaska Natives
incarcerated. "We're not making any excuses," he said. "We
have a problem with substance abuse and alcohol, and it's
something that is a sad legacy for us to leave to our children."
The Kenai prison proposed in HB 149 has the support of Native
leaders throughout the state, including those of the Alaska
Federation of Natives, all of the regional corporations, and
many of the smaller native and village corporations and tribes.
"We have a personal stake in this as a people," he concluded.
"We want to help ourselves. If we don't, nobody else is going
to do it."
CHAIR COGHILL asked Mr. Segura how he sees HB 149 helping to do
that.
MR. SEGURA observed that many of the state rehabilitation
programs don't seem to be working. One prisoner who had been
held in Arizona told him, "They want us to heal, but they don't
give us the means to do that." Mr. Segura acknowledged that
there are some good programs, but said he thinks many of them
are not geared culturally to Native needs. The Cook Inlet
Tribal Council is interested in putting together a Native task
force to address these issues and try to institute some
programs. He added that having the prison on Native land may
not be very important to many people, but to Native people, it
is. It is also important that "it's in Alaska, it's home."
CHAIR COGHILL affirmed that one of the key issues was keeping
Alaska prisoners at home, and that the Native culture issue is
an important one.
Number 0155
REPRESENTATIVE HAYES wanted to better understand the benefit of
the prison to the Native corporation. "Are you leasing out the
land to the state, the private company? How did your land get
selected to be the site for the new prison?"
MR. SEGURA explained that the Native corporation, a for-profit
entity, saw the prison as a business opportunity and contacted
Cornell Companies, Inc. [the potential prison provider] and the
Department of Corrections and "things just evolved from there."
TAPE 01-21, SIDE A
Number 0001
REPRESENTATIVE JAMES commented that she is very concerned about
the high percentage of Native Alaskans in the prison population.
"You're absolutely right," she told Mr. Segura. "We can't fix
it without you. We can help, but you have to guide us."
CHAIR COGHILL again emphasized that the State Affairs
Committee's job is to make a policy decision, leaving to other
committees the issues related to bonding and financing.
Number 0189
MAKO HAGGERTY, of Homer, who identified himself as "a concerned
citizen of the Kenai Peninsula and of Alaska," testified by
teleconference that he is opposed to HB 149. "If you could just
eliminate 'private' and build a prison, that's fine," he said.
"But a private prison ... is going to cause more problems than
what it's supposed to solve." He said his objections to private
prisons include that statistics do not bear out that private
prisons save any money, they're not accountable to the
community, and they are run for profit and not for
rehabilitation. In addition, he said, private prisons do not
pay their employees well and there is a high rate of staff
turnover. Private prisons have failed in other states, and the
private prison industry in the United States is rife with
problems. He called it an "outrage" that so many Alaskans are
incarcerated in Arizona and does not object to building a
prison, but does not think a private prison is the way to go.
"I think the legislature really needs to look at building a
public facility," he said.
Number 0554
MARVIN WIEBE, Senior Vice President, Cornell Companies, Inc.,
came forward to testify. He said the firm is happy to have been
selected to partner with the Kenai Peninsula Borough in working
with the Kenai Native Association, and that he was available to
answer questions.
CHAIR COGHILL asked him to describe the qualifications of the
Cornell Companies.
Number 0626
MR. WIEBE said Cornell began in 1990, not as an operator of
prisons, but with their design, building, and financing. The
founder, David Cornell, decided to get into operation and bought
a company that had operated secure correctional facilities on a
for-profit basis. That company had been in business since 1977
and was the first private operator of a secure facility for the
State of California and for the federal Bureau of Prisons.
Cornell has since acquired a variety of other companies and won
many projects through a competitive bid process, negotiated many
contracts, and currently operates about 14,450 beds in a total
of 72 facilities. Many of those are juvenile facilities.
Cornell also operates halfway houses in Alaska and elsewhere.
"The company is committed not only to intervene early on where
people don't go to prison but also in the transition out of
prison which is a critical phase," he said.
MR. WIEBE said the institutional part of the company (in terms
of prison beds) represents about 40 percent of the business.
The rest is divided between juvenile facilities and those for
adults who are coming out of prison. The juvenile division
dates back to 1973, and other providers that are now part of the
company have long histories going back nearly three decades.
Cornell is the third-largest provider of these kinds of
facilities in the United States today.
Number 0791
REPRESENTATIVE STEVENS asked Mr. Wiebe to comment on allegations
about rehabilitation not occurring in a private prison,
employees not being paid well, and there being a high rate of
turnover.
MR. WIEBE noted that every company is different. He said:
I'm not saying that private prisons haven't had some
difficulties. "Anecdotally, you can come up with lots
of illustrations both on the public sector and the
private sector. Corrections is a very tough business,
and we applaud and support not only those who are in
privatization with us, but also the efforts of the
departments of corrections. ... Cornell as a company
has tried to set itself apart by really putting out
time and energy and money into doing a quality job
.... We understand that there has to be retribution.
We understand that there has to be punishment and
incapacitation, but we recognize, too, that ... 90
percent of [the inmates] come back. There needs to be
some program of rehabilitation, of making a change in
what's happening ...
MR. WIEBE said the three highest priorities at Cornell are
accountability, competency development, and community safety.
He said:
There has to be accountability for inmates,
accountability to acknowledge that they've done
something wrong and that they owe something back to
the community... Then we've got to give them
resources, vocational programs, a variety of skills,
as well as cognitive behavioral therapies and other
treatment programs that change how they think is the
second major component. And the third [priority] is
community safety. If communities aren't safe, if we
let people out in the community and people are
injured, we're going to not operate any longer.
Number 1055
REPRESENTATIVE STEVENS said he appreciated the comments on
rehabilitation but would like responses on employees' pay and
the rate of staff turnover.
MR. WIEBE said that during the startup time of a facility, there
typically is higher turnover. "Believe me, not everyone is cut
out to be a correctional officer or to work with prisoners, and
so there is a winnowing out that goes on," he said. But after a
couple of years, Cornell facilities become very stable in their
staffing. "Our staff are paid competitive wages, but frankly,
they may not be paid as highly as government workers sometimes
are, particularly on the benefits side. Our benefits are
commensurate with the private sector," he said.
Number 1145
CHAIR COGHILL said it had been his intention to move HB 149 out
of committee that day, but "I just don't feel like we have
scratched as far as we want to scratch on this."
Number 1206
REPRESENTATIVE CRAWFORD asked Mr. Wiebe the amount of investment
Cornell intends to make and the rate of return they intend to
make from that investment.
CHAIR COGHILL said that was a good question for the committee
but its discussion would require more time than the four minutes
remaining.
Number 1262
REPRESENTATIVE WILSON said she saw something very special that
the Native community could gain from the prison plan. She asked
Mr. Wiebe if he felt Cornell could work with the Native
community in a way that would work their culture into a
rehabilitation program that would have apparent results.
MR. WIEBE replied, "I know we can do it ... because we're doing
it all over ... the country."
CHAIR COGHILL invited testimony from anyone who would not be
able to come next time.
Number 1359
DANIEL BROWN, of Juneau, introduced himself as a full-blooded
Tlingit, directly descended from the people of Glacier Bay and a
lifelong resident of Alaska. He said he has "seen what happens
at all different levels in Alaska" as a Village Public Safety
Officer in Holycross, as a 25-year member of the International
Union of Operating Engineers, and as a teacher at Dzantik'i
Heeni Middle School.
MR. BROWN said it is unconstitutional to take a rural resident
who has committed a crime out of the village and out of state.
"I'm strongly for privatization and I'm also strongly for having
you guys build a prison here in Alaska," he said. "I think the
best thing for Alaska is to bring [its] people back and to work
with the people that are willing to work with them and to make
[the prison] a strong asset within the community ... [and] keep
our funds in Alaska."
Number 1464
FREDERICK BELL, of Juneau, began his testimony by stating, "I'm
one of those inmates you guys are talking about and I was in the
facility down there in Arizona. Personally, I think they should
bring all the boys home that are down there." He alluded to
abuse issues and described an intimidating personal experience
with a "shakedown" in March of 2000.
MR. BELL said he had been active in the Native culture club
there, and felt it had helped him a lot. He wanted to assure
that inmates would have that type of opportunity. The problem
in Arizona was, "They'd offer it to us, and then it was taken
away," he said. "From week to week it would change."
CHAIR COGHILL said he thought the consistency could be managed a
little better if the prison were closer to home.
Number 1622
REPRESENTATIVE HAYES said he would like to hear from somebody in
Delta Junction about whether they are out of the picture as far
as building a prison, and he volunteered to find someone to
testify next week.
ADJOURNMENT
There being no further business before the committee, the House
State Affairs Standing Committee meeting was adjourned at 10:00
a.m.
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