Legislature(1999 - 2000)

01/21/2000 09:06 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
MINUTES                                                                                                                         
SENATE FINANCE COMMITTEE                                                                                                        
January 21, 2000                                                                                                                
9:06 AM                                                                                                                         
                                                                                                                                
TAPES                                                                                                                           
                                                                                                                                
SFC-00 # 7, Side A and B                                                                                                        
                                                                                                                                
CALL TO ORDER                                                                                                                   
                                                                                                                                
Co-Chair John Torgerson convened the meeting at                                                                                 
approximately 9:06 am.                                                                                                          
                                                                                                                                
PRESENT Co-Chair John Torgerson, Senator Al Adams, Senator                                                                      
Dave Donley, Senator Lyda Green, Senator Randy Phillips,                                                                        
Senator Gary Wilken, Co-Chair Parnell                                                                                           
                                                                                                                                
Also Attending:                                                                                                                 
Senator Taylor and Senator Elton                                                                                                
Bruce Richards, Special Assistant, Department of                                                                                
Corrections; Larry Persily, Deputy Commissioner, Department                                                                     
of Revenue; Nanci Jones, Director, Permanent Fund Dividend                                                                      
Division; Marsha Partlow, State GED Director, Department of                                                                     
Labor & Workforce Development; Jean Smith, Legislative                                                                          
Assistant, Senator Mackie; Guy Bell, Director, Division of                                                                      
Retirement & Benefits; Bill Church, Retirement Supervisor,                                                                      
Division of Retirement & Benefits; Earl Clark, former                                                                           
Professor, University of Alaska; Project Coordinator,                                                                           
Department of Public Safety; Clarke Damon, former state                                                                         
employee.                                                                                                                       
                                                                                                                                
Attending via Teleconference:                                                                                                   
Blair McCune, Deputy Director, Public Defender Agency                                                                           
Michael Dean                                                                                                                    
                                                                                                                                
SUMMARY INFORMATION                                                                                                             
                                                                                                                                
SB 1-NO MANDATORY PAROLE RELEASE WITHOUT GED                                                                                    
                                                                                                                                
The Department of Corrections, Department of Revenue,                                                                           
Permanent Dividend Fund Division and the Department of                                                                          
Labor & Workforce Development testified. A Committee                                                                            
Substitute was amended and adopted.  The bill was held in                                                                       
Committee.                                                                                                                      
                                                                                                                                
SB 85-CREDITED SERVICE FOR TEMP EMPLOYEES:PERS                                                                                  
                                                                                                                                
The Division of Retirement and Benefits, as well as members                                                                     
of the public testified.  The bill was held in Committee.                                                                       
                                                                                                                                
SB 123-PUBLIC INTEREST LITIGANT: FEES                                                                                           
                                                                                                                                
This bill was scheduled but not heard.                                                                                          
                                                                                                                                
CS FOR SENATE BILL NO. 1(JUD)                                                                                                   
"An Act conditioning the award of good time and                                                                                 
release on mandatory parole on the attainment of                                                                                
certain minimum educational standards for prisoners                                                                             
serving certain sentences."                                                                                                     
                                                                                                                                
                                                                                                                                
Co-Chair Torgerson noted that a Committee Substitute (CS)                                                                       
was before the Committee regarding this legislation.                                                                            
                                                                                                                                
Senator Adams clarified that when SB 1 was before the                                                                           
Committee last session, he introduced an amendment and was                                                                      
not sure if it had been adopted.  The intent of this                                                                            
amendment was to increase the "good time" allowance by 60                                                                       
days, once a General Educational Development Diploma (GED),                                                                     
was acquired by an inmate.  It was determined that this                                                                         
amendment was not moved.                                                                                                        
                                                                                                                                
Senator Donley stated that Alaska has made tremendous                                                                           
progress in criminal justice laws over the last decade.                                                                         
Crime does not pay in Alaska anymore.  Back in the 60's                                                                         
these laws were embarrassingly lenient for murder and other                                                                     
various crimes.  Now people are serving longer sentences                                                                        
and crime has gone down.  Senator Donley felt as though                                                                         
there was a direct relationship here, partly due to the                                                                         
progress that this legislature has made, sometimes in                                                                           
objection to the Administration.  Alaska still has one of                                                                       
the most liberal "good time" laws in the United States.  It                                                                     
is also very difficult for someone to lose his or her good                                                                      
time.  Presently the law allows for an individual that                                                                          
behaves well to be able to reduce their sentence by one-                                                                        
third.  The national standard, both federal and state, is                                                                       
85 per cent. In Alaska an individual usually only serves 66                                                                     
percent of his sentence while incarcerated.                                                                                     
                                                                                                                                
Senator Donley stated that the biggest single factor for                                                                        
whether people behave themselves once out of prison is                                                                          
whether or not they can read and write.  The correlation                                                                        
between people who cannot read and write and recidivism is                                                                      
very high.  This legislation attempts to give an incentive                                                                      
to those prisoners, while incarcerated, to read and write,                                                                      
by offering them a chance to a full "good time" reduction.                                                                      
The original legislation proposed that a prisoner would                                                                         
only get two-thirds existing "good time" if they did not                                                                        
learn to read and write.  The CS before the Committee                                                                           
reduces this to only a one-twelfth reduction of the                                                                             
available "good time," if they do not learn to read and                                                                         
write.  Unfortunately the fiscal impacts of holding back                                                                        
one-third "good times" are high, but he thought the                                                                             
department's estimates of how much more time people would                                                                       
spend in prison was exaggerated, even though it is hard to                                                                      
predict these things.  The concern of the Committee last                                                                        
year was the fiscal note, which was at about $800,000.                                                                          
                                                                                                                                
Over the interim Senator Donley's office worked on two                                                                          
things: reducing the fiscal impact by reducing the amount                                                                       
of time that is offered as the incentive and seeking funds                                                                      
sources in an attempt to balance the fiscal note.  Last                                                                         
year, they worked with Senator Halford's SB 4 and SB 219                                                                        
regarding victims programs and added several revenue                                                                            
generators there.  The money estimated from these                                                                               
generators, were in excess of what the programs would                                                                           
actually cost.  They rolled these revenue generators into a                                                                     
CS for this bill.  Unfortunately, they have not been able                                                                       
to get an estimate from the Administration regarding how                                                                        
much monies would be created as a result of these                                                                               
generators.                                                                                                                     
                                                                                                                                
Senator Adams asked if this piece of legislation was                                                                            
necessary.  He referred to the Alaska Statute 12.55.015.10,                                                                     
which states that the judge or the court system can order                                                                       
the defendant (while incarcerated) to participate or comply                                                                     
with a treatment plan of the rehabilitation program that is                                                                     
related to the defendant's offense. He noted that they                                                                          
already have the ability to impose the requirement of                                                                           
obtaining a GED.  He made mention of this present                                                                               
legislation's fiscal note and how money could be saved by                                                                       
not adopting it.  He also mentioned that this legislation                                                                       
calls for taking permanent fund monies away from                                                                                
individuals, but he noted that there are already agencies                                                                       
in place, which depend on receiving this money.                                                                                 
                                                                                                                                
Senator Phillips asked about language on page three,                                                                            
section four, regarding the state holding a prisoner's                                                                          
permanent fund dividend (PFD) for one year after they are                                                                       
released from prison.                                                                                                           
                                                                                                                                
Senator Donley responded that this was the language of the                                                                      
existing law but that in the new legislation this time                                                                          
frame would expand to two years.  He explained that                                                                             
presently, when a person commits a felony, the law states                                                                       
that the first year they get out of prison, they will not                                                                       
get their permanent fund dividend, but they do get it                                                                           
afterwards.  This new legislation states that they would                                                                        
not receive it for two years, for those individuals                                                                             
committing a felony.                                                                                                            
                                                                                                                                
Co-Chair Torgerson noted that it would be hard to quantify                                                                      
the money generated from permanent funds unless release                                                                         
dates of the defendants were specifically known.  He stated                                                                     
that he did not disagree with this legislation and felt it                                                                      
was important to mandate education under these                                                                                  
circumstances.  He added that there still is a fiscal note                                                                      
problem and that because of this, they must look at                                                                             
alternative methods.                                                                                                            
                                                                                                                                
Senator Green stated that she understood what this                                                                              
legislation was attempting to do, but she wondered how the                                                                      
individual who already has their high school diploma or                                                                         
even a college degree would have an incentive to further                                                                        
their education.  She asked if this new legislation creates                                                                     
a situation for discrimination.                                                                                                 
                                                                                                                                
Senator Donley responded that this legislation was designed                                                                     
for people to acquire at least the threshold of an                                                                              
education.  He stated that he would have no problem with                                                                        
inmates continuing their education beyond.                                                                                      
                                                                                                                                
Senator Green noted that the State would not want to pay                                                                        
for this continuing education though.                                                                                           
                                                                                                                                
Senator Donley added that for someone to be able to read                                                                        
and write is essential, especially once they are released                                                                       
from prison.  In response to Senator Adams concern, there                                                                       
is no way to order these individuals to work towards                                                                            
obtaining a GED.  This legislation creates a more specific                                                                      
incentive for individuals to participate in these programs                                                                      
even if the court has not ordered them to do so.                                                                                
                                                                                                                                
Senator Green inquired about the development of waivers, in                                                                     
terms of who would not be required to take a test.  She                                                                         
asked how parameters were established.                                                                                          
                                                                                                                                
Senator Donley noted that the waivers would be for somebody                                                                     
found incapable.  Occasionally there are people without the                                                                     
mental capacity to realize a GED.  If English is not a                                                                          
person's primary language, or if the person's age or social                                                                     
background is such that the Commissioner determined that                                                                        
they were unable to meet this educational requirement,                                                                          
these inmates would be disallowed.  This would ensure that                                                                      
they are not unduly or unfairly discriminated against.                                                                          
                                                                                                                                
Senator Green thought that because this waiver is so broad,                                                                     
most Commissioners could find a reason to require someone                                                                       
to obtain his or her GED.  She noted that the Committee was                                                                     
not trying to diminish what was already in the law, by                                                                          
adding these waivers.  She thought this question of pre-                                                                        
testing an individual was more complex than it appeared to                                                                      
be and wondered if Senator Donley's staff had met with an                                                                       
educator to work out these details.  This pre-testing issue                                                                     
could become a bigger issue than requiring a GED, in light                                                                      
of prisoner's rights.                                                                                                           
                                                                                                                                
Senator Donley responded that it was his understanding that                                                                     
the department already pre-tests everyone that comes into                                                                       
their system, establishing education levels.                                                                                    
                                                                                                                                
Senator Adams stated that through this legislation the                                                                          
prisoners are motivated more by negative incentives.  The                                                                       
present law allows for one-third off for good time, but                                                                         
instead this legislation goes back to one-twelfth off which                                                                     
is 25 percent more time in prison.  He noted that the                                                                           
sponsor of this legislation wished to lower the fiscal                                                                          
impact by taking prisoner's PFDs and noted that there are                                                                       
other agencies already in line for these funds.  He felt as                                                                     
though the Committee should leave the existing statute in                                                                       
place, while at the same time accepting his amendment in                                                                        
order to keep the cost of this legislative down.                                                                                
                                                                                                                                
Senator Wilken asked about the period of time that a                                                                            
prisoner's permanent fund is held from one year to two                                                                          
years.  He wondered if the only purpose of this is to fund                                                                      
the bill.                                                                                                                       
                                                                                                                                
Senator Donley stated that the Committee had already passed                                                                     
the related funding out in another piece of legislation and                                                                     
he referred to SB 219.                                                                                                          
                                                                                                                                
Co-Chair Torgerson added that the Senate was that high up                                                                       
yet on SB 219.  The Senate passed this legislation out, but                                                                     
now it is over on the House side.                                                                                               
                                                                                                                                
Senator Wilken spoke to page two, line nine regarding a                                                                         
high school diploma and asked if this bill took into                                                                            
account an exit exam requirement, which is now law in the                                                                       
State of Alaska.                                                                                                                
                                                                                                                                
Senator Donley responded that an exit exam is required for                                                                      
anyone, so it applies here also.  This bill should not have                                                                     
to explicitly state this as such, although this was                                                                             
certainly Senator Donley intent.                                                                                                
                                                                                                                                
Senator Wilken asked about someone without a high school                                                                        
education, which becomes incarcerated, and obtains a GED                                                                        
while in jail.  Would they receive a "good time" advantage                                                                      
over someone who already has their high school diploma, he                                                                      
asked.                                                                                                                          
                                                                                                                                
Senator Donley stated that these individuals would.  One of                                                                     
the original versions of the legislation had a provision                                                                        
for continuing education programs and "good time"                                                                               
incentives, but it also had a high fiscal note impact.                                                                          
                                                                                                                                
Senator Wilken responded that he agrees with what Senator                                                                       
Donley is attempting, but added that if a prisoner already                                                                      
has a high school diploma, they are at a disadvantage for                                                                       
obtaining "good time" incentives.                                                                                               
                                                                                                                                
Senator Green  noted that if someone flunked the GED test,                                                                      
they would be allowed to take it again within a year, and                                                                       
two times the next, etceteras, not to mention the cost of                                                                       
the tutorial.  She reminded the Committee of discussions                                                                        
some three years ago regarding the change to the post                                                                           
secondary education loan program.  There was great pressure                                                                     
placed on the legislature to approve the right of prisoners                                                                     
to apply for loans, while still incarcerated.  She stated                                                                       
that she did not want to revisit similar conversations.                                                                         
                                                                                                                                
Senator Donley wished to disagree with the characterization                                                                     
Senator Adams presented as to this bill creating a backward                                                                     
system for "good time."  He felt it was a step forward and                                                                      
reiterated Alaska's liberal "good time" allowances and                                                                          
comparable percentages with other states.  This legislation                                                                     
helps to make individuals more accountable for their crimes                                                                     
and adds incentives for education.  He then clarified the                                                                       
related fiscal calculations and noted that the fraction was                                                                     
based on one-third rather than the full "thing."                                                                                
                                                                                                                                
Senator Adams responded that he still maintains this                                                                            
legislation goes backwards.  The Committee has worked hard                                                                      
on missions and measures.  One of these, for the Department                                                                     
of Corrections, is that their facilities promote positive                                                                       
changes.  This legislation goes backwards against policies                                                                      
they are trying to set up, which is a good education.  This                                                                     
legislation is unnecessary since such provisions are                                                                            
already established in present law.                                                                                             
                                                                                                                                
BRUCE RICHARDS, Special Assistant, Department of                                                                                
Corrections referred to the previous discussion about "good                                                                     
time" numbers in Alaska.  The national standard for "truth                                                                      
in sentencing" is at 85 percent.  He added that Alaska has                                                                      
very tough sentences.  On an average most states with 85                                                                        
percent "truth in sentencing" still serve less time than                                                                        
those do for murder in the first and second degree.  He                                                                         
checked with the Office of Justice and Bureau statistics.                                                                       
He found that "truth in sentencing" state inmates serve                                                                         
less time than prisoners do in Alaska.  The way the                                                                             
Department of Corrections reads the bill, if someone fails                                                                      
to get their GED and they are deemed capable, they would be                                                                     
entitled to a one-twelfth "good time" reduction.  This                                                                          
means they would serve 8 percent less of their full                                                                             
sentence, as opposed to 33 percent less.  It is not one-                                                                        
twelfth of 33 percent, but one-twelfth of 100 percent.                                                                          
This means a reduction of one-twelfth off the total                                                                             
sentence, rather than one-twelfth of the current statutory                                                                      
"good time" at 33 percent.                                                                                                      
                                                                                                                                
Co-Chair Torgerson noted that this was an important point.                                                                      
He clarified whether Senator Donley was calculating this as                                                                     
one-twelfth off of the one-third amount or not.                                                                                 
                                                                                                                                
Senator Donley stated that this is what the Committee was                                                                       
trying to accomplish.                                                                                                           
                                                                                                                                
Mr. Richards referred to page two, line 19 of the proposed                                                                      
CS, "one-twelfth of the term or terms of imprisonment."  If                                                                     
someone failed to acquire their GED, they would be entitled                                                                     
to one-twelfth of the term or terms of imprisonment,                                                                            
rounded-off to the nearest day.                                                                                                 
                                                                                                                                
Co-Chair Torgerson pointed out that if the Department does                                                                      
institute one-twelfth of the "good time" credit, the fiscal                                                                     
note would change to reflect this.                                                                                              
                                                                                                                                
Mr. Richards suggested that the amount of credit to be                                                                          
deducted should be increased not by taking a percentage of                                                                      
the statutory "good time" in place.  If the Committee                                                                           
wanted this number higher, they could set the number higher                                                                     
than one-twelfth, rather than building steps into the                                                                           
formula.  He also referred to a pertinent memo that he                                                                          
previously submitted to the Committee as having an                                                                              
incorrect fiscal note, which should actually be greater                                                                         
than what was noted there.                                                                                                      
                                                                                                                                
Co-Chair Torgerson recommended the Committee adopt the CS                                                                       
along with pertinent language changes so the Department                                                                         
could submit an updated fiscal note along with the bill's                                                                       
next hearing.                                                                                                                   
                                                                                                                                
Mr. Richards responded to a question posed by Senator Green                                                                     
regarding a prisoner who might serve 12 years and factoring                                                                     
"good time" estimates in their sentences. He noted that if                                                                      
someone were originally sentenced for 12 years, under                                                                           
current statute, they would get a 33 percent reduction for                                                                      
statutory "good time," which would be four years.  Under                                                                        
the CS, if a prisoner came into the system with a current                                                                       
diploma, they would still get four years off.  If they came                                                                     
in without a diploma, obtained it while they were                                                                               
incarcerated before the date that they would normally come                                                                      
under "good time," they would be entitled to the same four                                                                      
years. This would change for someone who failed to obtain                                                                       
their GED, after determining they were capable without any                                                                      
extenuating circumstances, such as English as a second                                                                          
language, or their age or social background comes into                                                                          
play.  They then would be entitled to a one-twelfth                                                                             
reduction, which translated to an eight-percent reduction                                                                       
in their sentence.                                                                                                              
                                                                                                                                
Mr. Richards refreshed the Committee's recollection; those                                                                      
issues discussed last year.  There are no other states,                                                                         
which would have imposed legislation such as this,                                                                              
requiring a person to obtain a GED in order for them to                                                                         
qualify for "good time."  Florida entitles a prisoner a 60-                                                                     
day meritorious "good time" credit if someone obtains a                                                                         
GED.  The only state that comes close to this is Tennessee.                                                                     
They have never enforced the taking away of "good time,"                                                                        
due to overcrowding in facilities.  The Department of                                                                           
Corrections believe that this same goal could be reached by                                                                     
giving everyone a 33 percent statutory "good time"                                                                              
reduction, along with a 60 day credit for obtaining a GED                                                                       
such as Senator Adams suggested.                                                                                                
                                                                                                                                
Co-Chair Torgerson noted that it was his understanding                                                                          
there might be a new federal regulation pending that would                                                                      
require educating prisoners under the age of 22.  They                                                                          
would use the public school system to educate inmates under                                                                     
the age of 22 by federal requirement.  This possibility                                                                         
needs to be considered in light of the number of inmates                                                                        
estimated in the system presently at 411 inmates under 22                                                                       
years of age.  These inmates would possibly be educated by                                                                      
running them through the foundation formula and paid for by                                                                     
the Department of Education.  If this does happen, it would                                                                     
change the way he viewed this legislation.  He wondered                                                                         
what the number of inmates was over the age of 22 that have                                                                     
their GEDs.  It was his understanding that under this                                                                           
proposed federal regulation, there would be at least 100                                                                        
inmates in Spring Creek who would qualify for an education.                                                                     
                                                                                                                                
Senator Donley referred to the Department of Correction's                                                                       
memo and noted that there are other states that are trying                                                                      
to get inmates educated through an array of programs.    He                                                                     
felt that on a national level, basic education for                                                                              
prisoners is a good thing.  He asked how other states try                                                                       
to reconcile the issue of those prisoners who already have                                                                      
their GED, giving those inmates without one, an advantage.                                                                      
                                                                                                                                
Mr. Richards responded that the department did not ask                                                                          
states how they have reconciled this situation.  The Alaska                                                                     
Department of Law feels that the state would prevail                                                                            
because of the interest of providing educational                                                                                
opportunities for inmates.  They are certain that lawsuits                                                                      
would be filed, but in this event, the state would most                                                                         
likely prevail.                                                                                                                 
                                                                                                                                
Senator Donley noted that if Alaska was already at the                                                                          
national standard now, an 85 percent "truth in sentencing"                                                                      
situation, he would support Senator Adam's amendment for                                                                        
additional time off.  His concern was that Alaska is only                                                                       
at 65 percent, which is why he was reluctant to add more                                                                        
"good time" into this formula.                                                                                                  
                                                                                                                                
Senator Donley referred to Mr. Richards's memo that made                                                                        
reference to Virginia and its literacy requirement where                                                                        
inmates are ineligible for the maximum amount of "good                                                                          
time," if they chose not to participate in literacy                                                                             
programs.  He asked if this was not the same as what the                                                                        
Committee was presently proposing.                                                                                              
                                                                                                                                
Mr. Richards noted that this issue referred to by Senator                                                                       
Donley was in regards to parole and he further stated that                                                                      
while inmates are not denied parole strictly for refusal to                                                                     
participate, further participation is stressed for those                                                                        
whose parole requests are turned down.  This was more of a                                                                      
parole issue, rather than "good time."                                                                                          
                                                                                                                                
Senator Adams questioned the fiscal note.  He realized that                                                                     
a new one would be adopted once the CS was also adopted.                                                                        
He reiterated the permanent fund provision and asked if the                                                                     
Department of Corrections was able to determine what agency                                                                     
had first priority over an individual's PFD in order for                                                                        
the Committee to determine how much money overall would be                                                                      
available for this program.                                                                                                     
                                                                                                                                
                                                                                                                                
Tape: SFC - 99 #7, Side B, 9:54 p.m.                                                                                            
                                                                                                                                
                                                                                                                                
MR. PERSILY, Deputy Commissioner, Department of Revenue                                                                         
stated that he was before the Committee on behalf of the                                                                        
Child Support Enforcement Division.  Under the current law,                                                                     
child support has first priority for garnisheeing the                                                                           
permanent fund dividend.  He stated for the record that the                                                                     
Department of Revenue and the Division opposes further                                                                          
attempts that would limit the amount of money garnisheed                                                                        
for child support debt.  The more recipients that are cut                                                                       
off this list, the less money the division will get for                                                                         
child support.  This past year, the Division of Child                                                                           
Support Enforcement collected about $14.5 million from                                                                          
dividends.  There is no exact way to know if the proposed                                                                       
CS before the Committee is adopted, how many dividends for                                                                      
garnisheeing would be affected.  It is guesswork now in                                                                         
terms of how many dividends they are losing.  It would also                                                                     
depend on whether the former inmate chooses to stay in the                                                                      
state.  Individual case files would have to be pulled in                                                                        
order to see, when an inmate was released, where they moved                                                                     
to, whether or not they are still eligible, etceteras.                                                                          
"Under this proposed CS, there would be several hundred                                                                         
additional people who currently qualify for a dividend who                                                                      
would not under the provision that an inmate would lose                                                                         
their dividend to a second year."                                                                                               
                                                                                                                                
Co-Chair Torgerson asked if under current law whether or                                                                        
not they take the first year's dividend once an inmate is                                                                       
released.  He asked if the division files for this dividend                                                                     
automatically or does the inmate file, following by the                                                                         
state garnisheeing it.                                                                                                          
                                                                                                                                
Mr. Persily stated that the Department of Corrections gives                                                                     
the Permanent Fund Division a tape of people who have                                                                           
served time, and then the division runs it against past                                                                         
applications.  They look to see if an applicant received a                                                                      
dividend and whether or not he or she is a felon.  "We                                                                          
assume they were eligible before, they will be eligible                                                                         
this year, we come up with a number, multiply that by the                                                                       
amount of the PFD and tell Office of Management and Budget                                                                      
this is how much money is available because these people                                                                        
are not eligible."  The inmate does not apply, the                                                                              
department comes up with a quasi-educated guess regarding                                                                       
how many people are not eligible and then this money is                                                                         
made available and appropriated to Gate Money, Violent                                                                          
Crimes, Compensation Board, Sexual Offender Programs,                                                                           
ecetera.                                                                                                                        
                                                                                                                                
Co-Chair Torgerson noted that if this were the case, then                                                                       
Mr. Persily's prior testimony regarding an inmate moving                                                                        
out of state is irrelevant in terms of one or two years, if                                                                     
this number is just an estimate.                                                                                                
                                                                                                                                
Mr. Persily agreed but noted that this makes it harder to                                                                       
estimate, because right now if someone is eligible this                                                                         
year, it is assumed that they are eligible as long as they                                                                      
are in state custody.  "We have two years and we do not                                                                         
know where they are anymore, it makes it even harder to                                                                         
guess."                                                                                                                         
                                                                                                                                
Senator Green wanted to confirm that no name identification                                                                     
was included along with the Department's request to the                                                                         
Permanent Fund to get a total for the number of PFDs.                                                                           
                                                                                                                                
Mr. Persily stated that he believed the Department of                                                                           
Corrections provides a tape with names of people in custody                                                                     
on it.  This is then matched against Permanent Fund                                                                             
Dividend records in order to ascertain who was eligible in                                                                      
past years, but who are now in state court due to a                                                                             
felonious charge.                                                                                                               
                                                                                                                                
Co-Chair Torgerson asked if this meant that if someone was                                                                      
arrested before they were eligible for the dividend that                                                                        
they would not garnishee the dividend the first year after                                                                      
release.  His understanding was that the department                                                                             
automatically filed for the inmates and there was some sort                                                                     
of mechanism to track this.  He asked if an inmate becomes                                                                      
eligible for residency in Alaska, regarding a dividend, if                                                                      
he or she is incarcerated.                                                                                                      
                                                                                                                                
MS. JONES, Director, Permanent Fund Dividend Division noted                                                                     
that there were two characteristics, which they keep in                                                                         
mind while reviewing the list from Corrections.  If a                                                                           
person never applies for a dividend, they are obviously not                                                                     
eligible to receive one.  If they applied and then were                                                                         
denied, they are not eligible.  They would have to have                                                                         
established residency, become eligible for the program in                                                                       
order for them to count this as a positive.                                                                                     
                                                                                                                                
Senator Adams asked what percentage of the dividend                                                                             
garnisheed was used for child support.                                                                                          
                                                                                                                                
Mr. Persily stated that the Child Support Agency takes 100                                                                      
percent of the Alaska Permanent Fund Dividend.                                                                                  
                                                                                                                                
Senator Donley asked for clarification.  He understood the                                                                      
Department's motivation to protect the best interest of                                                                         
their clients, which are people entitled to child support.                                                                      
For one year that they could currently garnishee the                                                                            
dividend they would be able to, for some of those who got                                                                       
out of prison for a year, the department would not be able                                                                      
to take that person's dividend.  The department could still                                                                     
go after an individual for child-support if the released                                                                        
prisoner was employed or had other means of support at                                                                          
their disposal.  This bill would not preclude them from                                                                         
tapping into the permanent funds.                                                                                               
                                                                                                                                
Mr. Persily responded yes, but pointed out that in some                                                                         
cases this was their only source of revenue for support.                                                                        
Usually people who serve time in prison have limited                                                                            
earning potential.                                                                                                              
                                                                                                                                
Co-Chair Torgerson asked if the department had any idea of                                                                      
the number of dividends they get from prisoners.  Is there                                                                      
anyway to track these numbers.                                                                                                  
                                                                                                                                
Senator Adams noted that this legislation taps into the                                                                         
permanent fund money and utilizes it towards lowering the                                                                       
cost of its fiscal note and he asked how much money would                                                                       
there be left after the agencies, first in line, had taken                                                                      
their chunk.  He wondered if there was a way to track these                                                                     
amounts to see if there was anything left in a prisoner's                                                                       
account to apply towards this bill's fiscal note.                                                                               
                                                                                                                                
Mr. Persily responded that if inmates were allowed to get                                                                       
their dividends or whatever monies left over, a person                                                                          
would have to pull the case files for all the inmates, look                                                                     
for any possible liens, or if all restitution or court                                                                          
fines were all paid off.  In order to do this, all the case                                                                     
files would have to be pulled, which would be a lengthy                                                                         
process.                                                                                                                        
                                                                                                                                
Senator Donley asked whether these inmates' dividends go                                                                        
into a pool of funds based on the fact that they are                                                                            
incarcerated and not allowed to keep this money for                                                                             
themselves.  He didn't think this question was answered                                                                         
clearly.                                                                                                                        
                                                                                                                                
Ms. Jones responded that this would be a pool of money that                                                                     
is diverted from the prisoners had they been eligible, they                                                                     
would have received "x" amount of money.  The division                                                                          
notifies Office of Management and Budget, they in turn make                                                                     
this money available for appropriation to the various                                                                           
entities.  She added that with the present CS there is a                                                                        
false sense of security about the second year.  There is a                                                                      
disincentive for person's to file, knowing that their                                                                           
dividend is automatically going to be taken.  Also, there                                                                       
is no tracking of this individual anymore, if in fact, they                                                                     
have completed 100 percent of their sentence.  Unless, they                                                                     
filed for a dividend, the department could not count them                                                                       
according to the provision included in the CS.   She noted                                                                      
that this was a phantom year, which the department could                                                                        
not quantify by conducting an actual head count.  When                                                                          
someone is incarcerated, this can be done, to an extent.                                                                        
                                                                                                                                
Senator Donley responded that the department presently                                                                          
deals with the current law, allowing for the first year an                                                                      
inmate is released by taking their dividend.  He asked how                                                                      
this would be significantly different allowing for a two                                                                        
year time period.                                                                                                               
                                                                                                                                
Ms. Jones pointed that for a year a person is incarcerated,                                                                     
the department knows this person is not eligible for a                                                                          
dividend, but their numbers are still tallied for                                                                               
calculation purposes.  An inmate is not eligible for a                                                                          
dividend within a year after their release.  "They are                                                                          
actively still in the possession of the state.  The state                                                                       
reports that these people were incarcerated for these                                                                           
qualifying years.  It is not an automatic, like you're                                                                          
saying, the year they get out they automatically get it.                                                                        
It's the year, the qualifying year before the dividend                                                                          
whether or not they were sentenced, all or part, of that                                                                        
calendar year, or either incarcerated.  We know those                                                                           
numbers."  She also noted, according to the Committee's CS,                                                                     
when these people are released (within the next year) the                                                                       
department has no idea whether these people still exist                                                                         
unless they apply for a dividend.  They would have to                                                                           
state, that yes, I was incarcerated.  The department could                                                                      
not assume that this person would still qualify for a                                                                           
dividend.  A good revenue number cannot be generated                                                                            
because of the second, "phantom" year.                                                                                          
                                                                                                                                
Senator Donley added that the way to get around this issue                                                                      
would be to manipulate the dividend calculation allowing                                                                        
for the assumption that the same number of inmates were                                                                         
released, remained in the state but were illegible.  This                                                                       
number could be rolled into the total calculation formula                                                                       
so that this amount of money would be received as normal                                                                        
for those persons currently incarcerated.  This allowance                                                                       
would have to be spelled out specifically in this new                                                                           
legislation.                                                                                                                    
                                                                                                                                
MARSHA PARTLOW, State GED Director, Department of Labor &                                                                       
Workforce Development offered two technical amendments                                                                          
regarding the present CS (JUD) before the Committee.                                                                            
First, the words on line 9, "a general education                                                                                
development diploma."  She noted that the actual title for                                                                      
this should be, "general educational development diploma."                                                                      
Second, for the Committee's consideration, the phrase on                                                                        
line 9 and 10, as it reads, "has obtained a high school                                                                         
diploma, a general educational development diploma or the                                                                       
equivalent."  She noted that unless there was a definition                                                                      
of another equivalent diploma that she was not aware of,                                                                        
she believed that the wording should actually be on line 9,                                                                     
"has obtained a high school diploma or its equivalent, a                                                                        
general educational development diploma."                                                                                       
                                                                                                                                
Senator Donley responded that the intent of this section                                                                        
takes into account that maybe some other states would not                                                                       
have the same terminology as Alaska does.  The matter of                                                                        
"equivalent" would apply to what other states or even other                                                                     
countries might provide for the same type of educational                                                                        
requirement.                                                                                                                    
                                                                                                                                
Ms. Partlow noted that this was a valid point and withdrew                                                                      
her suggestion for the second technical amendment.                                                                              
                                                                                                                                
BLAIR MCCUNE, Deputy Director, Alaska Public Defender                                                                           
Agency testified by teleconference and noted that they had                                                                      
submitted an indeterminate fiscal note for this                                                                                 
legislation.  He added that the agency was concerned about                                                                      
an inmate who is incapable of obtaining a diploma and what                                                                      
the measures of assessment might be.  [Inaudible.]  If this                                                                     
becomes an internal departmental matter, they do not                                                                            
usually represent prisoners under these circumstances.  He                                                                      
said it would be very difficult to determine whether                                                                            
someone is incapable of obtaining a diploma, whether due to                                                                     
time constraints or otherwise.  He then made reference to                                                                       
the statute read previously by Senator Adams.  Under                                                                            
current law the department handles quite a few cases where                                                                      
probation can be taken away before someone is released,                                                                         
which is called, "Anticipatory Revocation."  This is used                                                                       
normally in the event where an inmate refuses to                                                                                
participate in treatment programs, such as substance abuse.                                                                     
In these cases, if an inmate refuses participation, some of                                                                     
their "good time" can be taken away.  This process is                                                                           
explicitly laid out in statute.  He was concerned that the                                                                      
refusal to participate in a GED program could become a more                                                                     
serious offense than participation in a substance abuse or                                                                      
sex offender program.  Once the "good time" is taken away,                                                                      
the incentive to go through with these other rehabilitative                                                                     
programs would not exist.                                                                                                       
                                                                                                                                
Mr. McCune then spoke to a concern about the current                                                                            
system, under the aforementioned statute, where the judge                                                                       
or the parole board has an opportunity to look at what the                                                                      
prisoner's efforts might be towards obtaining a GED.  He                                                                        
used the example of an inmate who decides to "blow off" the                                                                     
GED and then another individual who is somewhat "slow," but                                                                     
nonetheless capable who works very hard right up until the                                                                      
end of their sentence and then fails.  He felt there should                                                                     
be some kind of decision-making body to access the fairness                                                                     
of such situations. As a final comment, he noted that even                                                                      
with the existing "good time" laws in Alaska, jail terms                                                                        
are much longer than many other states.                                                                                         
                                                                                                                                
Co-Chair Torgerson stated that he would not mind adopting a                                                                     
CS in order to get a fiscal note before the Committee.  He                                                                      
further noted that he would not mind receiving a fiscal                                                                         
note related to Senator Adam's amendment, in order to                                                                           
compare the two while making a final decision about this                                                                        
bill.                                                                                                                           
                                                                                                                                
Senator Donley moved for the adoption of the proposed CS                                                                        
with the addition of, on page two, line ten, changing the                                                                       
word "education" to "educational," and on page two, line                                                                        
19, changing one-twelfth to one-fourth.                                                                                         
                                                                                                                                
Senator Adams added that he does not oppose the adoption of                                                                     
this CS, even though this piece of legislation is not                                                                           
necessary.                                                                                                                      
                                                                                                                                
Co-Chair Torgerson stated that hearing no objection to the                                                                      
adoption of this CS, it was so moved, with the minor                                                                            
changes at noted.  He then asked that Mr. Richards supply                                                                       
the Committee with a relevant fiscal note, one for the                                                                          
adopted CS and one for Senator Adam's amendment.  Co-Chair                                                                      
Torgerson stated that this legislation would be held over                                                                       
for further discussion.                                                                                                         
                                                                                                                                
CS FOR SENATE BILL NO. 85(L&C)                                                                                                  
"An Act relating to credited service in the public                                                                              
employees' retirement system for temporary                                                                                      
employment."                                                                                                                    
                                                                                                                                
                                                                                                                                
JEAN SMITH, Legislative Assistant, Senator Mackie, read the                                                                     
sponsor statement into the record.  This legislation was                                                                        
introduced at the request of Senator Mackie's constituents.                                                                     
She stated that SB 85 is an  effective management tool for                                                                      
the state to utilize and minimize the impact of current and                                                                     
future budget reductions.  The bill will have the effect of                                                                     
allowing employees to meet their retirement eligibility                                                                         
threshold sooner than would otherwise be anticipated.  The                                                                      
employees prone to use this benefit retirement credit are                                                                       
employees with higher service totals on the higher end of                                                                       
the pay scale.  Additionally, employer costs decrease when                                                                      
these employees are replaced through reduced costs to the                                                                       
supplemental benefit system and to the retirement systems.                                                                      
Savings are realized in the long term by replacing tier one                                                                     
and tier two category employees with tier three category                                                                        
employees in order to lower benefit costs.  Currently these                                                                     
temporary employees can buy their temporary time, however,                                                                      
this time does not count towards their minimum service                                                                          
requirement needed for retirement.  This amends Alaska                                                                          
Statutes by enabling the employees covered under PERS, to                                                                       
buy back their temporary time and have it credited towards                                                                      
the minimum service time for retirement.                                                                                        
                                                                                                                                
Last session, the Senate Labor and Commerce Committee                                                                           
amended this bill.  On page one, line nine, after the word                                                                      
"retires," they added "an election under this subsection                                                                        
does not change the date that an employee is considered to                                                                      
have commenced participation in the system under Alaska                                                                         
Statute, 39.35.120."  This language was added to clarify                                                                        
the original intent of this legislation, that employees who                                                                     
qualified under tier two could not use temporary time to                                                                        
qualify for tier one benefits.  They added this language to                                                                     
strengthen the intent of this provision so it could not be                                                                      
misinterpreted to provide that flexibility.  The fiscal                                                                         
impact on this legislation, since temporary service is                                                                          
recognized under the retirement system, provides that the                                                                       
full actuarial cost of using the temporary service be paid                                                                      
for by the employee.  There is no general fund expenditure                                                                      
involved in this proposal.  The Department of                                                                                   
Administration's fiscal note reflects a designated fund                                                                         
source, the Retired Employees Retirement Trust Fund,                                                                            
contracted services are required for computer system                                                                            
modifications.                                                                                                                  
                                                                                                                                
Amendment #1: This amendment allows for the combination of                                                                      
Public Employees' Retirement System (PERS) and Teachers'                                                                        
Retirement System (TRS.)  Senator Wilken moved for an                                                                           
adoption saying that the fiscal note affected about 50                                                                          
people around the state.  He also noted that it was not his                                                                     
intent to burden SB 85 with this issue, but he thought this                                                                     
might be a good time to discuss its ramifications.                                                                              
                                                                                                                                
GUY BELL, Director, Division of Retirement & Benefits                                                                           
Department of Administration stated that the department                                                                         
supports SB 85.  He then submitted a related fiscal note of                                                                     
$4,000, for programming time, to accommodate this change of                                                                     
allowing employees to count their temporary service to 20                                                                       
and out, or 30 and out.  It is the intent that the full                                                                         
cost to opt for the service credit provision be borne by                                                                        
the employee making that election.                                                                                              
                                                                                                                                
Mr. Bell then spoke to the amendment.  It adds public                                                                           
service retirement benefit to the PERS statute.  It would                                                                       
allow a person who has at least a total of five years of                                                                        
service in PERS and TRS combined, at least two of which are                                                                     
in PERS and paid (monies within the system.) This person                                                                        
could apply and receive a retirement benefit under PERS.                                                                        
Presently, a person must have a minimum of five years in                                                                        
PERS or eight years in the Teachers Retirement System.                                                                          
This would allow combined five years from both systems to                                                                       
qualify for a retirement benefit.  He noted that this issue                                                                     
boiled down to fairness.  These folks have paid in their                                                                        
contributions and the employer has contributed toward a                                                                         
retirement benefit as well.  He pointed out there is a                                                                          
small number of individuals involved with this issue,                                                                           
roughly about 50 statewide. The individuals who find                                                                            
themselves in this situation (a no man's land), possibly                                                                        
years ago may have been working for state government and                                                                        
then switched from a PERS to TRS program.  This amendment                                                                       
would effectively address a gap in the law, to allow these                                                                      
people to obtain a retirement benefit.  If there is a                                                                           
difference in cost between what the system has built up                                                                         
through contributions and interest, and the expected pay                                                                        
out of benefits over the lifetime of the member, the                                                                            
employee would pay the actuarial cost at the time of their                                                                      
retirement.  This amendment would have a zero fiscal impact                                                                     
because it does require the individual to pay any cost                                                                          
calculated beyond what is allowed by the system on that                                                                         
person's behalf.                                                                                                                
                                                                                                                                
Co-Chair Torgerson noted that a few years ago, when this                                                                        
was offered, it had an attached fiscal note which read:                                                                         
"This change would not have a measurable impact on employee                                                                     
contribution rates, or the total funding ratio of PERS or                                                                       
TRS.  It would increase the PERS unfunded liability by                                                                          
$492,000 and a TRS unfunded liability by $1.4 million.  He                                                                      
asked if these 50 individuals would pick up the cost of                                                                         
$1.9 million of unfunded liabilities or was this situation                                                                      
rectified by the amendment.                                                                                                     
                                                                                                                                
Mr. Bell responded that their actuary had not done this                                                                         
type of calculation.                                                                                                            
                                                                                                                                
Co-Chair Torgerson assumed that something had changed in                                                                        
their system to account for such a discrepancy.                                                                                 
                                                                                                                                
BILL CHURCH, Retirement Supervisor, Division of Retirement                                                                      
and Benefits noted that the shifting of liability states                                                                        
the obvious, a movement of money from the TRS to the PERS                                                                       
system.  As they look at unfunded liability, they look at                                                                       
assets over liabilities and come up with the difference.                                                                        
By shifting this money, this means that that there is less                                                                      
money in the total assets.  This is where the statement as                                                                      
noted by Senator Taylor comes from.   This represents                                                                           
monies that the actuary has not calculated as being paid                                                                        
out.  In other words, the system has unrealized gain                                                                            
because someone has put in time, but they are not eligible                                                                      
for benefits.  This money is still in the employer's                                                                            
account.  What this has a tendency to do, not so much in                                                                        
TRS, since they work on a flat constant employer rate, but                                                                      
in PERS, it affects the amount of money in the employer                                                                         
fund.  The larger this fund is, the lower the employer's                                                                        
rate tends to be.  When someone puts their money in, the                                                                        
interest that is gleaned on this amount over time,                                                                              
(considering the employee leaves their contribution in the                                                                      
system), this money tends to push down the employer                                                                             
contribution rate.  Through the proposed legislation, this                                                                      
money would be utilized by the employee, which explains the                                                                     
statement read by Co-Chair Torgerson.  Technically, there                                                                       
is fundamentally no change to the rate of the fund itself,                                                                      
due to the amount of employees affected.                                                                                        
                                                                                                                                
Co-Chair Torgerson stated that he appreciated the                                                                               
explanation and added that he would require a zero fiscal                                                                       
note stating as such.                                                                                                           
                                                                                                                                
                                                                                                                                
SFC-00 # 8, Side A                                                                                                              
                                                                                                                                
                                                                                                                                
Co-Chair Parnell wondered about this bill and its purpose                                                                       
to rectify a situation similar to one that might take place                                                                     
in the private sector.  He pointed out that people make                                                                         
career changes, from one job to the next, without a clear                                                                       
purpose to retirement benefits.  He asked if this was part                                                                      
of the argument.                                                                                                                
                                                                                                                                
Mr. Bell gave an extreme example of an employee who might                                                                       
work eleven and one-half years between PERS and TRS, 4 and                                                                      
one-half in PERS and 7 and one-half years in the TRS and                                                                        
not be eligible to receive a retirement benefit.                                                                                
                                                                                                                                
Co-Chair Parnell noted that these are career choices that                                                                       
people make.                                                                                                                    
                                                                                                                                
Mr. Bell added that the least restrictive system is PERS,                                                                       
which requires a total of five years of service.  If                                                                            
someone has less than five years of service in PERS, the                                                                        
only entitlement that someone would have, is to their own                                                                       
contributions plus interest.  They are not entitled to                                                                          
retirement benefits.  This new legislation allows for a                                                                         
person who has at least five years of service between PERS                                                                      
and TRS effectively, entitled to receive a retirement                                                                           
benefit in the future.  This seems reasonable to the                                                                            
department.                                                                                                                     
                                                                                                                                
Co-Chair Parnell asked whether the judicial system came                                                                         
under a different retirement system.                                                                                            
                                                                                                                                
Mr. Bell answered affirmatively.                                                                                                
                                                                                                                                
Co-Chair Parnell asked how this department would be treated                                                                     
under a PERS and TRS scenario.  If someone only had 4 and                                                                       
one-half years in PERS and then went to the Judicial                                                                            
system, could that person work a year in the latter and                                                                         
still link up for a benefit under this new legislation.                                                                         
                                                                                                                                
Mr. Church responded that these two retirement systems were                                                                     
not linked at all.  These have been set up as different                                                                         
retirement systems, focusing on specific groups of people.                                                                      
They were originally established individually and funded                                                                        
separately.  The only current link between the systems, is                                                                      
between PERS and TRS.  If a person is vested in one system                                                                      
they can apply for a conditional service benefit only if                                                                        
they have a minimum of two years paid in the other                                                                              
companion system.  Each benefit and the rate an employer                                                                        
pays are separate.                                                                                                              
                                                                                                                                
Co-Chair Parnell added that as a policy matter if it is                                                                         
good for one employee, it should be good for another.  He                                                                       
asked if they had looked at the overall state retirement                                                                        
system to see how many different ones there were and how                                                                        
they could be linked if deemed appropriate.                                                                                     
                                                                                                                                
Mr. Bell responded that the basic retirement systems in the                                                                     
state are PERS, TRS, Judicial, and the Elected Public                                                                           
Officers Retirement System (EPORS) which is a 60-person                                                                         
retirement system and one that existed for a very short                                                                         
period of time.                                                                                                                 
                                                                                                                                
Senator Donley thought that the Employee Retirement Income                                                                      
Security Act (ERISA) required no more than a five-year                                                                          
vesting.  He asked if the reason that TERS is eight years                                                                       
is because it is a state sovereignty question.                                                                                  
                                                                                                                                
Mr. Bell responded that the state was not subject to ERISA.                                                                     
                                                                                                                                
Senator Green asked if this proposed legislation would                                                                          
apply only if someone qualified for benefits in neither                                                                         
system.                                                                                                                         
                                                                                                                                
Mr. Church responded affirmatively.                                                                                             
                                                                                                                                
EARL CLARK, former professor, University of Alaska, and                                                                         
Project Coordinator, Department of Public Safety testified                                                                      
in favor of the proposed legislation.  He outlined for the                                                                      
Committee, his work history over the years, the combination                                                                     
of which did not count towards retirement.  He built up                                                                         
service in both systems, but does not have a retirement.                                                                        
He stated that this legislation rectifies a situation for                                                                       
employees that have served the State of Alaska.                                                                                 
                                                                                                                                
CLARKE DAMON, testified in support of SB 85.  He stated                                                                         
that his career was in education and throughout this period                                                                     
he participated in six different retirement programs.  He                                                                       
receives $88 from the Carpenter's union.  He then gave a                                                                        
detailed synopsis of his work history for the Committee.                                                                        
Mr. Damon calculated his contributions to each of the                                                                           
departments of which he had the opportunity to work for,                                                                        
along with the contributions made by the State into his                                                                         
retirement.  As of July 1997, the balance of these funds                                                                        
was $69,000 for his contributions and $139,000 from the                                                                         
fund earnings.  This retirement would work out to be                                                                            
$606.00 monthly, $237.00 for his benefit and $348.00 for                                                                        
health benefits.  After 18 years from the date of                                                                               
retirement, the total unrealized benefit to Mr. Damon would                                                                     
total $584,000.  Based on an average life expectancy, this                                                                      
total would go up to $704,000 at an eight-percent earnings                                                                      
rate of $4703.00 per month.  At this present time, Mr.                                                                          
Damon is not eligible to receive any of these monies, due                                                                       
to the limitations of the present legislation.  Mr. Damon                                                                       
made the point that he was at the mercy of reorganizations                                                                      
of departments and/or reclassifications of jobs.                                                                                
                                                                                                                                
MICHAEL DEAN, testified by teleconference in Anchorage in                                                                       
support of SB 85.  He urged the Committee to do whatever                                                                        
was necessary to expedite this legislation.                                                                                     
                                                                                                                                
Senator Taylor requested that the Division of Retirement &                                                                      
Benefits provide a fiscal note incorporating changes in the                                                                     
proposed amendment.  Amendment #1 was TABLED.  The bill was                                                                     
held in Committee.                                                                                                              
ADJOURNED                                                                                                                       
                                                                                                                                
Senator Torgerson adjourned the meeting at 10:59 am.                                                                            
SFC-00 (1) 1/21/00                                                                                                              

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