Legislature(2001 - 2002)

03/21/2001 01:40 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                     ALASKA STATE LEGISLATURE                                                                                   
                    SENATE JUDICIARY COMMITTEE                                                                                
                          March 21, 2001                                                                                        
                             1:40 p.m.                                                                                          
MEMBERS PRESENT                                                                                                               
Senator Robin Taylor, Chair                                                                                                     
Senator John Cowdery                                                                                                            
Senator Johnny Ellis                                                                                                            
MEMBERS ABSENT                                                                                                                
Senator Dave Donley, Vice Chair                                                                                                 
Senator Gene Therriault                                                                                                         
COMMITTEE CALENDAR                                                                                                            
SENATE BILL NO. 82                                                                                                              
"An  Act making  corrective  amendments to  the Alaska  Statutes  as                                                            
recommended  by  the  revisor  of statutes;  and  providing  for  an                                                            
effective date."                                                                                                                
     MOVED CSSB 82 (STA) OUT OF COMMITTEE                                                                                       
SENATE BILL NO. 142                                                                                                             
"An Act giving  notice of and approving  a lease-purchase  agreement                                                            
with the City  of Seward for the construction of an  addition to the                                                            
Spring  Creek  Correctional  Center  for the  purpose  of  providing                                                            
secure classroom  facilities and housing for prisoners  committed to                                                            
the  custody  of  the  commissioner  of  corrections;   and  setting                                                            
conditions  and  limitations  on  the  facility's  construction  and                                                            
     HEARD AND HELD                                                                                                             
PREVIOUS COMMITTEE ACTION                                                                                                     
SB 82 - See State Affairs minutes dated 2/20/01 and 3/01/01.                                                                    
WITNESS REGISTER                                                                                                              
Ms. Pamela Finley                                                                                                               
Legislative Affairs Agency                                                                                                      
Legislative Legal and Research                                                                                                  
State Capitol                                                                                                                   
Juneau, Alaska 99801-1182                                                                                                       
POSITION STATEMENT:  Revisor of SB 82                                                                                         
Ms. Mary Jackson                                                                                                                
Staff to Senator Torgerson                                                                                                      
Alaska State  Capitol                                                                                                           
Juneau, Alaska 99801-1182                                                                                                       
POSITION STATEMENT:  Introduced SB 142                                                                                        
Mr. Scott Janke                                                                                                                 
PO Box 167                                                                                                                      
Seward, Alaska  99664                                                                                                           
POSITION STATEMENT:  Supports SB 142                                                                                          
Mr. Malcolm Fleming                                                                                                             
Spring Creek High School                                                                                                        
PO Box 302                                                                                                                      
Seward, Alaska  99664                                                                                                           
POSITION STATEMENT:  Supports SB 142                                                                                          
Mr. Willard Dunham                                                                                                              
No address  furnished                                                                                                           
Seward, Alaska  99664                                                                                                           
POSITION STATEMENT:  Supports SB 142                                                                                          
Mr. Louis Bencardino                                                                                                            
PO Box 95                                                                                                                       
Seward, Alaska  99664                                                                                                           
POSITION STATEMENT:  Supports SB 142                                                                                          
Ms. Margot Knuth                                                                                                                
Assistant Attorney General                                                                                                      
Department of Corrections                                                                                                       
431 North Franklin, Suite 203                                                                                                   
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Supports SB 142                                                                                          
Mr. Deven Mitchell                                                                                                              
Debt Manager                                                                                                                    
Department of Revenue                                                                                                           
PO Box 110400                                                                                                                   
Juneau, AK  99811-0400                                                                                                          
POSITION STATEMENT:  Testified on SB 142                                                                                      
ACTION NARRATIVE                                                                                                              
TAPE 01-10, SIDE A                                                                                                            
Number 001                                                                                                                      
CHAIRMAN ROBIN TAYLOR called the Senate Judiciary Committee meeting                                                           
to order  at 1:40 p.m.   He announced  the first  order of  business                                                            
would be SB 82.                                                                                                                 
                     SB 82-2001 REVISOR'S BILL                                                                              
MS.  PAMELA  FINLEY, Revisor  of  Statutes,  Legislative  Legal  and                                                            
Research Services, said  SB 82 is prepared pursuant to statute.  The                                                            
purpose of  SB 82 is to  fix errors in previous  legislation  if the                                                            
fix does not involve policy choices.                                                                                            
SENATOR COWDERY asked if SB 82 was just a clean-up bill.                                                                        
MS. FINLEY replied yes.                                                                                                         
SENATOR COWDERY asked about the change of age for a minor.                                                                      
MS. FINLEY said when the  definition of minor at 19 was enacted, the                                                            
age of majority  was 19, which is  part of the Uniform Probate  Code                                                            
(UPC).  The UPC  Model Act says, "Here insert the  age of majority,"                                                            
it was done and  it was correct in 1972.  In 1977,  however, the age                                                            
of majority  was lowered to 18, and  it was not changed in  the UPC.                                                            
SENATOR  COWDERY  asked  about  the  Medicare  supplemental   policy                                                            
MS. FINLEY  said  the defined  term does  not exist  in [42  U.S.C.]                                                            
1345ss[(g)(1)].   It is being changed  to fit with what the  federal                                                            
law actually says.                                                                                                              
SENATOR  COWDERY  asked  for  an explanation  of,  "required  to  be                                                            
submitted to [SUBJECT TO APPROVAL BY] the legislature."                                                                         
MS. FINLEY said under [AS]  23.42.15, subsection (b) the legislature                                                            
had to  approve the monetary  terms of an  agreement under  "23.40,"                                                            
the public employee's agreement.   This was changed last year, which                                                            
caused the approval requirement  to no longer make sense in terms of                                                            
(c).   (c) should have  been amended  last year  when (b) went  from                                                            
approval to  submission.  "This says  that the terms do not  have to                                                            
be approved and now it  is saying they do not have to be submitted."                                                            
These are the  terms of a school district  - the school district  in                                                            
Wasilla  does  not  have  to  submit  its   contract  terms  to  the                                                            
Number 386                                                                                                                      
CHAIRMAN TAYLOR  asked if "spousal equivalent" in  Sec. 9 is defined                                                            
again in a different section.                                                                                                   
MS. FINLEY  explained that  it was not defined  in AS 39.50.030(g),                                                             
"this was a  bad cross-reference."   The definition that  applies to                                                            
AS 39.50.030(g) is found in AS 39.50.200.                                                                                       
CHAIRMAN  TAYLOR   noted  that  some   of  the  changes   were  just                                                            
grammatical.  He asked for an explanation of Sec. 15.                                                                           
MS. FINLEY referred to  the language at the top of page 5, "however,                                                            
a lessee that  owns or operates a  natural gas pipeline."   She said                                                            
that (A)  was in  existing law  and (B)  was added  last year.   The                                                            
problem was the bracketed  language on lines 9 through 19 used to be                                                            
at the end [(B)].  The  language that required it to accept "without                                                            
unreasonable  discrimination,"   used  to  go  at  the  end  of  the                                                            
paragraph,  which was  acceptable,  but when  another exception  was                                                            
added,  it was put  in the  middle where  it did  not belong.   This                                                            
language  was  subject  to  negotiation  between  industry  and  the                                                            
attorney general's  (AG) office.  After the legislation  passed, the                                                            
AG notified Ms.  Finley that there was a mistake.   Before she added                                                            
this section  to  SB 82, industry  look  at it and  approved of  the                                                            
Number 509                                                                                                                      
CHAIRMAN TAYLOR said he  could not see any substantive changes in SB
82, and without  the changes subsection (B) becomes  convoluted.  He                                                            
noted,  for the  record, that  there are  no substantive  or  policy                                                            
changes that  are occasioned  by the language  being moved  from one                                                            
part of the statute to another.                                                                                                 
MS. FINLEY replied no.                                                                                                          
CHAIRMAN  TAYLOR  noted that  on the  top of  page  7, the  language                                                            
"[LAND  AND  WATER  MANAGEMENT]"   was deleted   and  replaced  with                                                            
"division of lands."   He asked if this was because  the division of                                                            
lands already encompassed land and water management.                                                                            
MS. FINLEY  replied  yes, the division  of lands  is established  in                                                            
statute.  The  division of land and  water management never  existed                                                            
in statute it only existed in fact.                                                                                             
Number 592                                                                                                                      
MS.  FINLEY  said it  was  a subgroup  that  was  never statutorily                                                             
created.   Because  it was  not legally  created  under statute,  it                                                            
could very easily be uncreated by changing the name.                                                                            
SENATOR COWDERY  asked for an explanation of the effective  dates in                                                            
Sec.  25 and  Sec. 26.   He  also  asked for  an explanation  of  AS                                                            
01.10.070(c) [in Sec. 26.].                                                                                                     
MS. FINLEY  noted that  AS 01.10.070(c) is  the statutory  provision                                                            
that  provides for  immediate  effective  dates if  the legislature                                                             
passes  it by  the  required two  thirds  vote.   The  reason for  a                                                            
special  effective  date  for Sec.  23  is that  the  section  being                                                            
amended, AS  45.29.702(b), does not  take effect until July  1.  The                                                            
reason the revisor's bill  is given an effective date is so that any                                                            
changes  it makes,  if  the same  section is  amended  later by  the                                                            
legislature, will override the revisor's bill.                                                                                  
CHAIRMAN TAYLOR  asked if a law that  was passed last year  on liens                                                            
occasioned Sec. 23.                                                                                                             
MS. FINLEY  answered  yes.  This  is the  redo of  Article 9 of  the                                                            
Uniform  Commercial  Code (UCC).   In  the Model  Act,  there was  a                                                            
subsection  (c), which  was  a temporary  provision,  and was  later                                                            
moved into a temporary  law provision.  It was deleted because there                                                            
was no subsection (c).                                                                                                          
CHAIRMAN TAYLOR  said the bill was  a rewrite of the UCC.   He asked                                                            
if a transitional piece was labeled as a regular piece.                                                                         
MS. FINLEY replied yes.                                                                                                         
SENATOR COWDERY  moved CSSB 82 with individual recommendations  from                                                            
committee.  There being  no objection, CSSB 82 moved from committee.                                                            
Number 872                                                                                                                      
          SB 142-LEASE-PURCHASE SPRING CREEK CORRECTIONAL                                                                   
MS.  MARY  JACKSON,   staff  to  Senator  Torgerson,   said  SB  142                                                            
authorizes a lease  purchase for a facility in Seward  at the Spring                                                            
Creek  Correctional  Center.   The  purpose of  the  facility is  to                                                            
construct  educational space,  vocational  education space,  housing                                                            
for up  to 150  inmates,  and site and  utility  improvements.   The                                                            
target population is youth,  which will conform to the Department of                                                            
Correction's  (DOC) youth  offender  program and  also to the  pilot                                                            
project  being conducted  at Spring  Creek for  educating the  youth                                                            
inmates.   SB 142 allocates  $15 million,  which does not match  the                                                            
backup materials  provided.  The information  used when drafting  SB
142 was incorrect,  DOC has provided new information  but the amount                                                            
is  still  not  known.    This  will  be  resolved  in  the  finance                                                            
MS.  JACKSON  said  the  city  of  Seward  built  the  Spring  Creek                                                            
Correctional Center, and endorses SB 142.                                                                                       
SENATOR COWDERY  asked how much vocational  training there  would be                                                            
at the Spring Creek center.                                                                                                     
MS. JACKSON said  the Alaska Vocational Technical  Center (AVTEC) is                                                            
located in  Seward and is one of the  best vocational facilities  in                                                            
the  state.    One  reason  the  cost  increased   was  because  the                                                            
vocational  education space  was added, which  would facilitate  the                                                            
rehabilitation of prisoners.                                                                                                    
Number 1034                                                                                                                     
CHAIRMAN  TAYLOR said that  receiving vocational  training  while at                                                            
the  center would  be  important  for youth  offenders  after  their                                                            
release.  He asked why  the bonding and funding were in this fashion                                                            
instead of the  way harbors have been funded, where  the communities                                                            
were required  to bond up-front, build the facilities,  repair them,                                                            
and then after  paying for the bonds, the communities  would then be                                                            
MS. JACKSON said  this is different because the state  would own the                                                            
facility on completion.                                                                                                         
CHAIRMAN  TAYLOR asked if  the city of Seward  was offering  to take                                                            
over the maintenance.                                                                                                           
MS.  JACKSON   said  the  city  stands   ready  to  facilitate   the                                                            
construction,  do the bond work in  conjunction with the  state, and                                                            
provide  the on  site  construction.   DOC  would then  operate  the                                                            
CHAIRMAN TAYLOR  asked if the facility would be funded  with general                                                            
obligation (GO) bonds.                                                                                                          
MS. JACKSON  said the  bonds would  be revenue  bonds that the  city                                                            
would sell with the state.                                                                                                      
CHAIRMAN TAYLOR asked if the city would then own the facility.                                                                  
MS. JACKSON replied no.                                                                                                         
CHAIRMAN  TAYLOR  asked how  bonds  could  be issued  without  first                                                            
having ownership.                                                                                                               
MS.  JACKSON  said she  did  not know,  but  it  was done  when  the                                                            
facility was  built.  She said she  thought it was a lease  purchase                                                            
to the city.                                                                                                                    
CHAIRMAN  TAYLOR said  the city would  own the  facility during  the                                                            
period of  time in  which it makes  the lease  payments back  to the                                                            
state, which pays off the  city bonds, and then the facility becomes                                                            
state property when paid off.                                                                                                   
CHAIRMAN  TAYLOR noted  that  people in  the audience  were  shaking                                                            
their heads no.                                                                                                                 
MS. JACKSON read  from page 2, line 27, "(3) at the  end of the term                                                            
of  the   lease-purchase   agreement,  the   state  shall   own  the                                                            
correctional facility."                                                                                                         
Number 1213                                                                                                                     
MR. SCOTT  JANKE,  City of Seward,  testifying  via teleconference,                                                             
said the city  of Seward passed a  resolution in support  of SB 142.                                                            
He said  the city would sell  a revenue bond  to build the  facility                                                            
having executed  an agreement with the state to lease  it back.  The                                                            
pledged leases would pay  the revenue bond off and at the end of the                                                            
term the state would own the facility.                                                                                          
MR. JANKE  commented that  a dollar amount  was not included  in the                                                            
resolution because the  city was aware that the initial amount was a                                                            
preliminary number and would change over time.                                                                                  
CHAIRMAN TAYLOR  asked if SB 142 expanded the amount  of beds in the                                                            
MR. JANKE said  150 beds would be added as well as  classroom space.                                                            
CHAIRMAN TAYLOR asked how  this would impact Seward's bond capacity.                                                            
MR.  JANKE said  it  does not  impact  the city  in a  negative  way                                                            
because there is a pledge  from the state to make the bond payments.                                                            
This does not affect the  city's GO bonding capacity because this is                                                            
a revenue  bond with an  identified revenue  source - revenue  bonds                                                            
are usually identified to a specific revenue source.                                                                            
CHAIRMAN TAYLOR  asked if the revenue bond would affect  the GO bond                                                            
capacity for other projects the city might want.                                                                                
MR. JANKE said no, it would not affect other revenue bonds.                                                                     
Number 1375                                                                                                                     
MR.  MALCOLM  FLEMING,  Principal,  Seward Middle  High  School  and                                                            
Spring Creek  High School,  testifying via  teleconference,  said he                                                            
supports SB  142.  The current Youth  Offender Program (YOP),  which                                                            
includes Spring Creek High  School, is housed in a single mod, which                                                            
is one large  room.  The room includes  the inmate's cells,  leisure                                                            
area,  eating area,  as well  as the  instructional  class area  for                                                            
three teachers.   There  are currently 40  students, with  expansion                                                            
for 50 students.   Currently, the school is being  conducted in what                                                            
resembles   a  gymnasium   -   three   classes  are   being   taught                                                            
simultaneously  in a single  area, and the  distractions are  almost                                                            
insurmountable.   The YOP  is set up in phases  and the classes  are                                                            
set  up by  skill  level.    The current  facility  does  not  allow                                                            
students to  be segregated for optimum  programming.  They  are also                                                            
squeezed  into the adult  facility.   This project  would allow  the                                                            
youth offenders  to be segregated  from the adult population,  which                                                            
would enable the  program to do something for the  students.  All of                                                            
the students  were juvenile  when  they committed  a crime and  they                                                            
were sentenced  as an adult.  A large percent of the  students would                                                            
be out of prison  at age 25, effectively  missing their educational                                                             
Number 1495                                                                                                                     
SENATOR COWDERY  asked for Mr. Fleming's  opinion about the  conduct                                                            
of the youths at Spring Creek.                                                                                                  
MR. FLEMING noted  that the student's conduct had  been fairly good,                                                            
but there  are  some problems  because  there are  40 teenagers  all                                                            
living in the same room and tempers do flare.                                                                                   
MR.  WILLARD DUNHAM,  testifying  via  teleconference,  said he  was                                                            
chairman  of the first project  to build Spring  Creek.  Mr.  Dunham                                                            
said  this was  a simple  way to  do the  expansion.   He hoped  the                                                            
legislature  would give SB 142 serious  consideration and  then pass                                                            
the bill.                                                                                                                       
CHAIRMAN  TAYLOR asked what  the cost per day  is for a prisoner  at                                                            
Spring Creek.                                                                                                                   
MR. DUNHAM said he did not know the cost.                                                                                       
CHAIRMAN TAYLOR  said his concern would be whether  there would be a                                                            
cost benefit  ratio in reducing the  overall cost on a per  prisoner                                                            
basis through the expansion.   He said he was not sure 150 beds were                                                            
enough.  He thought  the facility should be completed  as originally                                                            
designed so it could house  some of Alaska's out-of-state prisoners.                                                            
MR. DUNHAM said  the city had offered to do this but  was snubbed by                                                            
the state.                                                                                                                      
MR.  LOUIS   A.  BENCARDINO,  speaking   via  teleconference,   said                                                            
expanding Spring Creek  Correctional Center was a smart move because                                                            
a lot of  people were being  sent out of  state because Alaska  does                                                            
not have adequate facilities to house them.                                                                                     
CHAIRMAN TAYLOR  said 1,500 additional  beds were needed  within the                                                            
state, Alaska should be planning for the future.                                                                                
MR. MALCOM  FLEMING said there is  an economy of scale for  bringing                                                            
the students  together in  one place rather  than trying to  educate                                                            
them in  a series  of small  schools across  the state.   There  are                                                            
about 400 inmates that  fit the criteria for the school and if these                                                            
students  could  be  brought  together  the  school  would  be  more                                                            
economical to run.                                                                                                              
CHAIRMAN TAYLOR said DOC could do this by reclassification.                                                                     
Number 2057                                                                                                                     
MS.  MARGOT KNUTH,  Strategic  Program  Coordinator,  Department  of                                                            
Corrections  (DOC), noted  that several years  ago Governor  Knowles                                                            
set out a five-part test  for consideration when looking at building                                                            
or expanding  prisons and  jails.   The five parts  are:  1)  Public                                                            
safety protection,  2) Proposals  needs to  fit within statewide  or                                                            
regional needs for correction  space, 3) Best correctional practices                                                            
must   be  met,   4)  Community   participation   achieved   through                                                            
government-to-government   transactions, and  5)  Proposals must  be                                                            
cost effective.  Measured  against these five standards, SB 142 is a                                                            
good piece  of legislation.  There  is a need for education  for the                                                            
growing population of youthful  offenders.  A large component of the                                                            
proposed education program  is vocational, which DOC believes is the                                                            
right direction to go in.                                                                                                       
MS. KNUTH said  that Spring Creek is Alaska's only  maximum-security                                                            
facility.   Running  a  maximum-security  facility  costs more  than                                                            
running  a minimum-security  facility.   In terms  of the most  cost                                                            
effective manner for bringing  on new beds for prison expansion, the                                                            
medium  security   facility  at  Palmer  would  be   the  most  cost                                                            
effective.  A  maximum-security facility needs a higher  staff ratio                                                            
and there are  also higher construction costs involved.   The prison                                                            
population  needs to be put  in a facility  that matches its  needs.                                                            
Spring  Creek is  the  largest in-state  facility  and  by having  a                                                            
school there,  further economies of  scale would be created  for the                                                            
cost of care.                                                                                                                   
MS. KNUTH  said that DOC  has had ambivalent  feelings about  Spring                                                            
Creek ever  since the facility  opened.   Alaska needs the  maximum-                                                            
security  facility, and Seward  has been  enthusiastic about  having                                                            
the facility, but Seward  has been a difficult place to find housing                                                            
for the officers  and support staff.   It is also a difficult  place                                                            
for secondary employment.   But Seward is recognizing the importance                                                            
housing for  DOC's needs and is trying  to do more about  affordable                                                            
housing for  staff.  This has made  a significant impression  on DOC                                                            
and is part of the reason DOC is in support of SB 142.                                                                          
MS. KNUTH  noted  the cost  for the  Anchorage jail  project is  $56                                                            
million.   The project will  house a large  number of people  but it                                                            
will  definitely  function as  a jail,  which  means  it will  house                                                            
short-term  people.   The Anchorage  jail is the  first place  where                                                            
steps have  been taken to meet DOC's  statewide and regional  needs.                                                            
There are  pressing  needs for the  expansion of  the Fairbanks  and                                                            
Bethel jail.  Inmates at  Fairbanks and Bethel could not effectively                                                            
be transferred  to places like Spring  Creek and Arizona  because of                                                            
the transportation  costs.  DOC needs more prison  and regional beds                                                            
especially in Bethel and Fairbanks.                                                                                             
Number 2302                                                                                                                     
CHAIRMAN TAYLOR asked why  the youths are being run through the only                                                            
recreational area  of the top maximum-security prison  in the state.                                                            
MS. KNUTH replied  that the youthful  population is a special  needs                                                            
population.   The under 25  population tops  the list for needing  a                                                            
secure  facility.  Teenagers  who  have been convicted  of a  felony                                                            
offense are very out of  control.  Therefore, correctional practices                                                            
say  that   when  dealing  with  a   youthful  offender,   a  secure                                                            
environment is the best placement for them.                                                                                     
CHAIRMAN  TAYLOR said he  thought there was  a vocational  education                                                            
program in Palmer.                                                                                                              
MS. KNUTH said  Point McKenzie is the vocational farm.   She did not                                                            
know how  many youthful offenders  were there  but it is a  minimum-                                                            
security placement.   It is not listed as one of DOC's  institutions                                                            
and it  requires the  best inmates  rather than  the most  troubled.                                                            
Ms. Knuth said  there are good vocational education  programs in the                                                            
state but more  are needed, especially  for the under 25  age group.                                                            
SIDE B                                                                                                                        
CHAIRMAN TAYLOR  said he was glad  to hear that Alaska had  a policy                                                            
on  prisons.   But  it seemed  odd  to him  that  there  would be  a                                                            
vocational education program at Palmer and also at Spring Creek.                                                                
MS. KNUTH said there are  42 students in the program at Spring Creek                                                            
and there is  capacity for 50.  DOC  has identified 400 inmates  who                                                            
are 25 and  under who have a sentence  long enough to serve,  making                                                            
it appropriate  for  them  to go through  the  program.   If SB  142                                                            
passed,  not all  of the  400  inmates would  be qualified  for  the                                                            
vocational  education program.   Out of the  400, a 150 bed  program                                                            
could be  filled.  Corrections  is a developing  growth industry  in                                                            
Alaska  and DOC  is always  looking at  what is  the most  efficient                                                            
allocation  of resources and Spring  Creek seems to be an  efficient                                                            
CHAIRMAN  TAYLOR asked  if 150  youth offenders  would  be moved  to                                                            
Spring Creek for the program.                                                                                                   
MS. KNUTH said there are 150 there at any given moment.                                                                         
CHAIRMAN TAYLOR noted that  the fiscal note indicated the cost would                                                            
be $4.25  million per  year.  He  asked if this  was just the  lease                                                            
MS.  KNUTH said  she  thought  the $4.25  million  was  for the  new                                                            
operating expenses of the  school, and the lease cost would be $23.2                                                            
CHAIRMAN  TAYLOR said the  lease cost would  be paid over a  20-year                                                            
MS. KNUTH said that was correct.                                                                                                
CHAIRMAN  TAYLOR  asked if  that was  for the  cost  of running  the                                                            
prison or for the educational program within the prison.                                                                        
MS. KNUTH said it was for  the number of new positions required - 31                                                            
new correctional  officers, 2 probation officers,  another nurse and                                                            
another  kitchen staff  would also  be needed, and  a mental  health                                                            
clinician  - this would  be pro-rata  growth for  the number  of new                                                            
beds.  Funding  for new teachers would  come from the Department  of                                                            
Education's Education Foundation Formula.                                                                                       
CHAIRMAN  TAYLOR noted  that a fiscal  note from  the Department  of                                                            
Education was missing.                                                                                                          
MS. KNUTH said DOC is planning  on a 150 student enrollment.  The 50                                                            
bed spaces that  are now being devoted to this program  would revert                                                            
back to the general  population.  The way education  costs are borne                                                            
in the  state is  that the  money follows  the  student and  funding                                                            
would follow students to Spring Creek.                                                                                          
CHAIRMAN TAYLOR  asked if the funding would follow  a student to age                                                            
MS.  KNUTH said  she did  not know.   She  said there  were  several                                                            
restrictions and methods  for structuring a program to access funds.                                                            
CHAIRMAN TAYLOR said he would like this information.                                                                            
Number 2053                                                                                                                     
SENATOR COWDERY asked what is anticipated for class size.                                                                       
MS. KNUTH said  there would be three  different pods - breakdown  of                                                            
groups.   There would  be 50  youthful offenders  in three  separate                                                            
programs,  but she was  not sure  how the programs  would be  broken                                                            
down  into  classroom  sizes.    She  said  she  would  furnish  the                                                            
committee with this information.                                                                                                
SENATOR  COWDERY asked  her to  include  a little  detail with  this                                                            
CHAIRMAN  TAYLOR said most  vocational education  requires  a higher                                                            
level of teacher  participation because  of the smaller class  size.                                                            
CHAIRMAN TAYLOR said he  was curious about the costs and whether the                                                            
legislature  should be making SB 142  more than a policy  call as to                                                            
where in the state prisoners  should be focused.  He asked why there                                                            
are not more than 40 youthful offenders at Spring Creek.                                                                        
MS. KNUTH  said there are  space constraints  and Spring Creek  is a                                                            
maximum-security  facility.  DOC is trying to balance  the desire to                                                            
have youthful  offenders in  one place but  there are only  a finite                                                            
number  of  maximum-security  beds  available.    The  Spring  Creek                                                            
expansion would help meet these needs.                                                                                          
CHAIRMAN  TAYLOR said that  still leaves the  state with 650  to 700                                                            
offenders in Arizona.                                                                                                           
Number 1948                                                                                                                     
MS. KNUTH replied yes.   Prisoners are a growth industry for Alaska,                                                            
gaining in population of  100 to 150 each year and the state has not                                                            
been building capacity to keep up with that.                                                                                    
CHAIRMAN TAYLOR  said a prison could not be built  in Alaska without                                                            
it  being  operated  by DOC.    In other  states  some  prisons  are                                                            
privately operated, and  "the big problems are one of unions."  "The                                                            
administration  will  not allow  the expansion  of  any of  Alaska's                                                            
facilities without a union running it."                                                                                         
MS.  KNUTH said  Spring Creek  is  a state  facility.   Most of  the                                                            
program providers  are private, their services are  procured through                                                            
contract  but the correctional  officers  are part  of DOC.   HB 53,                                                            
which  passed in  1998,  authorized  the state  to negotiate  for  a                                                            
private  prison in Delta  Junction  and the state  has been  working                                                            
toward that,  but there have been  a number of obstacles  to prevent                                                            
this from happening.   Governor Knowles's  signed HB 53 and  DOC has                                                            
been trying to make it a reality.                                                                                               
CHAIRMAN  TAYLOR  asked if  the  Delta Junction  facility  might  be                                                            
MS. KNUTH said  a cost effective study  has been completed  on this.                                                            
HB 53 required  that the  prison be built  on the Fort Greely  base,                                                            
using the existing facilities.   DOC believes this would not be cost                                                            
effective.   It would be  cheaper to build  a new facility  off base                                                            
than to use the existing  facilities.  The facilities at Fort Greely                                                            
have  asbestos  and  the barracks'  are  rectangular.    The  latest                                                            
thinking in prison development  is to use circular structures, which                                                            
gives  the  greatest  line of  sight  for  staffing,  reduces  staff                                                            
numbers, and  is more efficient.   Also, the federal government  has                                                            
not ruled out using this base for a missile defense program.                                                                    
Number 1767                                                                                                                     
MR.  DEVEN  MITCHELL,  Department  of Revenue  (DOR),  said  he  had                                                            
listened to the  people from Seward testifying and  he would like to                                                            
talk with them about the  prospective financing.  He envisioned this                                                            
being structured  similar to the original  financing that  built the                                                            
Spring  Creek  Correctional   Facility,  which   was  a  state  sold                                                            
certificate of  participation with the city of Seward's  involvement                                                            
in facilitating the lease.                                                                                                      
CHAIRMAN  TAYLOR  asked if  SB 142  was different  from  HB 53  with                                                            
regards to financing.                                                                                                           
MR.  MITCHELL  said  he  thinks  the  legislation  allows  the  same                                                            
structure -  it is similar HB 53.   It is a matter of how  DOR works                                                            
with the city  in enacting it.  Either way, the credit  of the state                                                            
would be on  the line.  The city does  not want to incur  liability,                                                            
and  due  to  the  outstanding  obligations   of  the  Spring  Creek                                                            
facility, an investor  could not be given the facility  if the state                                                            
quit making  the lease payments.   The lease  payments of the  state                                                            
are the security.                                                                                                               
CHAIRMAN TAYLOR  asked if the only constraint on the  lease purchase                                                            
was legislative approval.                                                                                                       
MR. MITCHELL  said yes.   For real  property there  is a $1  million                                                            
limit on  the ability to  get a lease purchase  without legislative                                                             
SENATOR COWDERY asked a  question but the tape malfunctioned and the                                                            
question was not recorded.                                                                                                      
MR. MITCHEL  said, "and  that was  after a  particular facility  was                                                            
financed with a combination  of lease purchases, where the limit was                                                            
$5 million  and they had two financings.   One to acquire  property,                                                            
one to provide improvements, just under $5 million."                                                                            
CHAIRMAN TAYLOR  said, "They became  very creative in not  having to                                                            
come to the legislature  to do it.  This would not impact because it                                                            
is revenue  bonds backed by  the state.  This  would not impact  the                                                            
overall bonding capacity of the community of Seward."                                                                           
MR. MITCHELL  said it would impact  the state of Alaska rather  than                                                            
CHAIRMAN TAYLOR  said any community could do the same  thing as long                                                            
as they had bonding capacity.   He said as long as they were revenue                                                            
bonds, backed  by the state, there would be no impact  on Ketchikan,                                                            
Thorn Bay, or Wrangell, who have been lobbying for a prison.                                                                    
CHAIRMAN  TAYLOR said he  would hold SB 142  in committee until  the                                                            
Department of  Education furnished the committee with  the requested                                                            
There  being no  further  business  to come  before  the  committee,                                                            
CHAIRMAN TAYLOR adjourned the meeting at 2:47 p.m.                                                                              

Document Name Date/Time Subjects