Legislature(1995 - 1996)

04/23/1996 04:02 PM Senate L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
               SENATE LABOR AND COMMERCE COMMITTEE                             
                         April 23, 1996                                        
                           4:02 P.M.                                           
 MEMBERS PRESENT                                                               
 Senator Tim Kelly, Chairman                                                   
 Senator John Torgerson, Vice Chairman                                         
 Senator Mike Miller                                                           
 Senator Jim Duncan                                                            
 Senator Judy Salo                                                             
  MEMBERS ABSENT                                                               
 All members present                                                           
  COMMITTEE CALENDAR                                                           
 CS FOR HOUSE BILL NO. 436(TRA)                                                
 "An Act relating to purchase and sale of mobile homes by mobile               
 home dealers; to mobile home titles; and providing for an effective           
 SENATE BILL NO. 323                                                           
 "An Act relating to investments by fiduciaries; and providing for             
 an effective date."                                                           
 CS FOR HOUSE BILL NO. 533(L&C) am                                             
 "An Act relating to the board of directors of the Alaska Aerospace            
 Development Corporation."                                                     
 CS FOR HOUSE BILL NO. 428(FIN) am                                             
 "An Act relating to the authority of the Department of Corrections            
 to contract for facilities for the confinement and care of                    
 prisoners, and annulling a regulation of the Department of                    
 Corrections that limits the purposes for which an agreement with a            
 private agency may be entered into; and giving notice of and                  
 approving a lease-purchase agreement for the design, construction,            
 and operation of a correctional facility, and setting conditions              
 and limitations on the facility's design, construction, and                   
  PREVIOUS SENATE COMMITTEE ACTION                                             
 HB 436 - No previous action to consider.                                      
 SB 323 - No previous action to consider.                                      
 HB 533 - No previous action to consider.                                      
 HB 428 - See Labor and Commerce minutes dated 4/18/96.                        
  WITNESS REGISTER                                                             
 Tom Anderson, Staff                                                           
 Representative Terry Martin                                                   
 State Capitol Bldg.                                                           
 Juneau, AK 99801-1182                                                         
  POSITION STATEMENT:   Staff to sponsor of HB 436.                            
 Rod Shipley, Senior Vice President                                            
 Manager, Trust Department                                                     
 National Bank of Alaska                                                       
 Anchorage, AK                                                                 
  POSITION STATEMENT:   Supported SB 323.                                      
 Kevin Sullivan                                                                
 Federated Securities, Inc.                                                    
 Charles Campbell                                                              
 3020 Douglas Hwy.                                                             
 Juneau, AK 99801                                                              
  POSITION STATEMENT:   Opposed HB 428.                                        
 Gary Damron, Correctional Officer                                             
 Highland Mountain Correctional Center                                         
 Department of Corrections                                                     
 P.O. Box 600                                                                  
 Eagle River, AK 99577                                                         
  POSITION STATEMENT:   Opposed HB 428.                                        
 Glenn Schrader                                                                
 P.O. Box 1264                                                                 
 Kenai, AK 99611                                                               
  POSITION STATEMENT:   Opposed HB 428.                                        
 Bill Parker                                                                   
 HC 1, Box 1418                                                                
 Soldotna, AK 99669                                                            
  POSITION STATEMENT:   Opposed HB 428.                                        
 Richard Seward                                                                
 P.O. Box 60351                                                                
 Fairbanks, AK 99709                                                           
  POSITION STATEMENT:   Opposed HB 428.                                        
 Chester Zeigler                                                               
 1043 W. 74th Ave.                                                             
 Anchorage, AK 99501                                                           
  POSITION STATEMENT:   Opposed HB 428.                                        
 Chuck O'Connell, Business Manager                                             
 Alaska State Employees Association                                            
 AFSVME Local 52                                                               
 3510 Spenard Rd., #200                                                        
 Anchorage, AK 99503                                                           
  POSITION STATEMENT:   Opposed HB 428.                                        
 Ross Kinney, Deputy Commissioner                                              
 Department of Revenue                                                         
 P.O. Box 110405                                                               
 Juneau, AK 99811-0400                                                         
  POSITION STATEMENT:   Commented on HB 428.                                   
 Bob Cole, Director                                                            
 Division of Administrative Services                                           
 Department of Corrections                                                     
 P.O. Box 112000                                                               
 Juneau, AK 99811-2000                                                         
  POSITION STATEMENT:   Commented on HB 428.                                   
  ACTION NARRATIVE                                                             
  TAPE 96-29, SIDE A                                                           
 Number 001                                                                    
 CHAIRMAN KELLY called the Senate Labor and Commerce Committee                 
 meeting to order at 4:02 p.m. and said they would first take up the           
 Governor's confirmations of Pam Aldersebaes for the Board of                  
 Chiropractic Examiners and Mr. Clair Ramsey and Gordon Severson for           
 the Real Estate Commission.                                                   
 SHERMAN ERNOUF, Staff to Senator Kelly, said their office had                 
 received no comments on the nominees.                                         
 SENATOR KELLY directed staff to send a letter to the President of             
 the Senate saying while reserving their right to vote for or                  
 against, we recommend they go to the Joint Conference.                        
              HB 436 MOBILE HOME DEALERS & TITLES                             
 TOM ANDERSON, Staff to sponsor, Representative Terry Martin, said             
 HB 436 is a consumer protection bill establishing procedures for              
 licensing and regulating mobile home dealers.  There is inequality            
 with the way realtors are licensed and the way mobile home dealers            
 are not.  The bill requires a bond of $50,000 to be maintained and            
 requires mobile homes to be titled through the Division of Motor              
 MR. ANDERSON explained they first wanted to license mobile home               
 agents who might sell mobile homes, but the American Manufactured             
 Housing Association recommended they delete the word agent and                
 maintain it as a dealer affected bill.                                        
 He said that the Division of Occupational Licensing concurs with              
 their changes and they have letters of support from different                 
 mobile home dealers as well the Alaska Public Interest Research               
 SENATOR KELLY asked if there was a fiscal note.                               
 MR. ANDERSON replied that Division of Occupational Licensing                  
 submitted one for 1997 and 1998 for $24,200 and Public Safety                 
 provided one with $0.                                                         
 SENATOR KELLY asked if there was any opposition to the bill.  MR.             
 ANDERSON replied there was some opposition several weeks ago                  
 regarding the bond amount and there was talk of reducing it to                
 $25,000, but that didn't happen.  He didn't know if the opposition            
 was still there.                                                              
 Number 85                                                                     
 SENATOR TORGERSON moved to pass HB 436 from committee with                    
 individual recommendations.  There were no objections and it was so           
               SB 323 INVESTMENTS BY FIDUCIARIES                              
 SENATOR KELLY announced  SB 323  to be up for consideration.                  
 ROD SHIPLEY, Senior Vice President and Trust Manager for the                  
 National Bank of Alaska, said he was responsible for all of NBA's             
 fiduciary activities.  He said that SB 323 updates and clarifies              
 provisions in Title 13 and amends Title 6, the Alaska Banking Code.           
 MR. SHIPLEY said that 35 states have enacted legislation the same             
 as SB 131 which Governor Knowles signed in April '96.  The                    
 obligations of the U.S. Government has been interpreted in the 35             
 other states to include agencies or instrumentalities such as                 
 federate securities corporations.  However, a minority of states              
 have interpreted obligations of the U.S. Government to include only           
 treasury obligations.  SB 323 removes the ambiguity.  Agencies or             
 instrumentalities of the U.S. Government include the Federal Home             
 Administration (FHA), General Services Administration, U.S.                   
 Maritime Association, and Small Business Administration, the                  
 Government and National Mortgage Association, Housing and Urban               
 Development, Farms Home Administration, the Federal National                  
 Mortgage Association, the Federal Home Loan Mortgage Corporation,             
 Federal Land Bank, Central Bank For Cooperatives, the Federal                 
 Intermediate Credit Bank, Student Loan Marketing Association, and             
 the Federal Home Loan Banks.                                                  
 SB 323 also provides for fiduciary investment or interest in other            
 investment companies whose portfolios are restricted to obligations           
 of the U.S. Government.  This amendment is aimed at capturing the             
 administrative efficiencies and cost savings generated by very                
 recent structural changes in the manner in which some investment              
 companies conduct their business.                                             
 Section two achieves consistency between Title 6 and Title 13.  It            
 clearly establishes a law which pertains to entities which operate            
 simultaneously under both titles.                                             
 Number 159                                                                    
 SENATOR TORGERSON questioned the effective date of sections 3 and             
 KEVIN SULLIVAN, Federated Securities, Inc., explained that the                
 effective date ties in with SB 131, the underlying piece of                   
 legislation this is speaking to.  There will be no window in time             
 when SB 131 goes into effect based upon when it was signed by the             
 SENATOR TORGERSON moved SB 323 from committee with individual                 
 recommendations.  There were no objections and it was so ordered.             
        HB 533 ALASKA AEROSPACE DEVELOPMENT CORP. BOARD                       
 SENATOR KELLY announced  HB 533  to be up for consideration.                  
 SENATOR TORGERSON moved to pass HB 533 from committee with                    
 individual recommendations.  There were no objections and it was so           
          HB 428 LEASE-PURCHASE CORRECTIONAL FACILITY                         
  SENATOR KELLY announced  HB 428  to be up for consideration.                
 CHARLES CAMPBELL, Juneau resident, said he was Director of                    
 Corrections during the last three years of the Hammond                        
 Administration.  More recently he served as standing compliance               
 monitor in the Cleary case.  However, he had no role in reaching              
 the settlement, but he had a responsibility for monitoring                    
 compliance with the decision.  He said he had a variety of roles in           
 Corrections over a period of about 45 years including assignments             
 to seven different federal prisons.                                           
 During recent years he has spent much of time researching and                 
 writing in the field of penal history and he believed that when it            
 comes to making public policy it is a big mistake to ignore the               
 lessons of history, especially when the lessons are clear and                 
 applicable as they are where imprisonment for profit is concerned.            
 He said we especially need to remember the appalling results and              
 sad legacy, especially in the Southern States, of turning                     
 imprisonment over to private, profit seeking interests as was done            
 at the end of the civil war.                                                  
 MR. CAMPBELL opposed HB 428 or any legislation that would move                
 Alaska toward privatization of prisons.  He said the core problem             
 here is not so much the lack of space to house convicts as it is              
 the really alarming number of Alaskans in prison.  The                        
 privatization idea is a way of accommodating a problem rather than            
 looking for ways of solving it.  Privatization will become a matter           
 of relying on folks whose corporate survival depends on the problem           
 not being solved or alleviated very much.                                     
 MR. CAMPBELL said we need to keep in mind the Alaska Constitutional           
 requirement reiterated in the Cleary settlement that the State's              
 prisons provide rehabilitative opportunities.  The privatization of           
 a facility does not relieve the State from this requirement.  We              
 ought to be able to assume that the people running rehabilitative             
 programs or facilitating those programs in a State prison genuinely           
 want the programs to be successful.  How could we ever make that              
 assumption when the financial interests of the company running the            
 prisons are served best by the failure of rehabilitation programs?            
 Recidivism is a plus factor for the private prison industry.                  
 He said that he didn't think that people getting six figure                   
 salaries were the kind of folks who would be using their skills and           
 influence to encourage legislation that might reduce the rate of              
 MR. CAMPBELL said he didn't think we could build our way out of               
 this problem.  It is not just here in Alaska; it's a national                 
 problem - an increase of the prison population of almost 150                  
 percent over the last 15 years. Here in Alaska we have outstripped            
 that growth.                                                                  
 He added that after WWII the U.S. sent thousands of young Americans           
 off to colleges, universities, and technical schools.  The whole              
 nation benefited.  Now we are sending thousands of young Americans            
 off to penal institutions that hardly make a pretense anymore of              
 having rehabilitative programs.  We will be sure to reap the                  
 consequences of the new and revised kinds of training these                   
 thousands of Americans are receiving in jails and prisons across              
 the country.  It is not a happy prospect.                                     
 MR. CAMPBELL said he did not believe the American people are so               
 inclined to violent, criminal behavior as to justify the highest              
 incarceration rate on earth.  He asked what happened to the                   
 Criminal Justice Planning Commission or to the Corrections Master             
 Plan that was developed in the late '70's and early '80's.  He                
 asked what happened to the Sentencing Commission.  He said we are             
 paying the price for failing to appreciate the importance of                  
 analysis and long range planning.                                             
 He said we need to reject the privatization idea, go with the                 
 Governor's plan that is the best approach for dealing with the                
 immediate problem, and then set up some arrangement to seek out the           
 factors that have contributed and are still contributing to the               
 problem of over imprisonment.  He said we need to revamp the                  
 sentencing statutes of the State, making sure dangerous offenders             
 stay confined a long time and that nondangerous offenders take up             
 less bed space in conventional prisons.  We need to make expanded             
 use of alternatives to imprisonment for prisoners who are not                 
 dangerous and we need to give serious support to drug and alcohol             
 treatment programs and other kinds of preventative measures like              
 better schools and better resources for young people and better               
 parenting for our children.                                                   
 Number 313                                                                    
 SENATOR SALO said she agreed with much of what Mr. Campbell said,             
 but in the event they were not going to lay aside HB 428 she had              
 some amendments that would make this bill better public policy.               
 SENATOR SALO moved amendment #1.                                              
 SENATOR KELLY apologized and said there were a number of people               
 waiting on teleconference to testify before they voted on                     
 amendments.  SENATOR SALO said that was o.k.                                  
 GARY DAMRON, Shift Supervisor, Department of Corrections, said he             
 spoke on behalf of 800 correctional officers with ASEA and over               
 75,000 correctional officers who have contacted him nationally.               
 MR. DAMRON said that private corrections throughout the United                
 States has a long history or failure.  He noted a number of                   
 institutions in the 1700 and 1800s that had to be taken over                  
 because of abuses against the prisoners.  New York's most prominent           
 prisons, Auburn and Singsing, were once private facilities run by             
 corporations.  In the late 1880's private prisons were so popular             
 they were the norm, not the exception.  Around 1900, due to abuse             
 complaints from the private sector, the states were forced to                 
 accept responsibility to manage and operate the facilities.                   
 MR. DAMRON said there is a substantial conflict of interest for a             
 private company to run a public prison.  The Alaska Constitution              
 requires reclamation of the defender, but private companies want to           
 keep their cells filled to keep their profits up.  There is no                
 incentive for them to run quality rehabilitation programs, because            
 if you reform a defender, he or she becomes a productive member of            
 society and you lose our revenue.  Rehabilitation programs are very           
 Another conflict of interest comes to disciplinary problems inside            
 the prison.  One of their best management tools currently is                  
 statutory good time for good behavior.  A private prison would have           
 no incentive to use that tool.                                                
 The two companies, Wackenhut and Correction Corporation of America,           
 seem to be the force behind the privatization effort in Alaska.               
 Wackenhut used unlicensed investigators in Alaska to quiet Alyeska            
 Pipeline Service Company critics and they broke the law in three              
 states investigating congressmen.  The Correction Corporation of              
 American is currently being investigated for a bribery kickback               
 scam involving a $1 million contract for operating a correctional             
 In conclusion, MR. DAMRON said that the State of Alaska wants a               
 correction system that concentrates on the humane treatment and               
 reformation of the prisoner and not merely warehouse a convicted              
 person.  The Alaska Department of Corrections is the finest                   
 correctional system in the United States.  We have excellent                  
 programs including sex offender treatment, drug and alcohol abuse,            
 male and female offender rehabilitation, and mental health                    
 treatment and education.                                                      
 Number 330                                                                    
 RICHARD SEWARD, Fairbanks, opposed HB 428.  He said he wasn't a               
 correctional officer, but he had spent time visiting correctional             
 centers and looking into Alaska correction issues.  When you are              
 enforcing the captivity of citizens there is always a threat of the           
 use of force.  He thought it was bad public policy to let the use             
 of force be a profit making endeavor.  He said it is very clear to            
 him that the liability of the use of force will always be with the            
 State of Alaska.                                                              
 GLENN SCHRADER, Kenai, said he was totally against privatization of           
 the prison system.  A private operator is in it to make money and             
 they will try to cut corners and cut costs.  He endorsed Governor             
 Knowles proposal to add on to existing facilities.                            
 Number 440                                                                    
 BILL PARKER, Soldotna, said he agreed with the previous testimony             
 because they are correct.  Private jails were tried in this country           
 years ago and they didn't work.  He said it didn't make a lot of              
 sense to spend a whole lot of money shuffling inmates all over the            
 State from one location for meetings with their attorneys and                 
 CHESTER ZEIGLER, Anchorage, said he had talked to a lot of people             
 from different walks of life and found no one who supports this               
 bill.  MR. ZEIGLER said it becomes a dehumanized task to handle               
 prisoners, but it becomes more so when you don't have State                   
 responsibility and oversite of it.  He said the Governor's plan is            
 the best plan we have right now and is a better way to go than                
 getting involved with privatization.                                          
 Number 485                                                                    
 CHUCK O'CONNELL, ASEA, said he read an article in a national                  
 publication concerning privatization.  Last summer there was a                
 major riot at a privately run facility in northern New Jersey.                
 Previous to that riot the Federal Bureau of Prisons had contracted            
 to build four additional private prisons.  Following the riot and             
 the tremendous liability the Federal Government found themselves              
 facing with the deaths and injuries that occurred in the riot, they           
 canceled all of their private contracts with the exception of one             
 that is about to open.                                                        
 He thought it was important to note that we have never had a riot             
 in Alaska.  In Minnesota and Louisiana when private contracts were            
 let, they came in with very low bids, but in all (three) instances            
 they came back for and received additional money.                             
 Number 515                                                                    
 ROSS KINNEY, Deputy Commissioner, Department of Revenue, said they            
 have one concern with this bill and that is with the financing                
 mechanism being proposed.  He explained that lease purchase is a              
 viable option for financing.  However, in this case, the concerns             
 they have from the State bond community's perspective is the fact             
 that the financing is rolled into an overall contract that deals              
 with construction and operation.  There are a number of inherent              
 risks association with that type of activity from a financing                 
 The concerns they have are simple.  They feel as though the State             
 bonding community can issue debt on behalf of the State of Alaska             
 cheaper than anyone else can issue on our behalf.  The revenue                
 stream that would arrive from the lease payments associated with              
 the contract would be pledged as security for this debt.  That is             
 subject to annual appropriation by this legislature and as a result           
 will receive a rating that is significantly less than our general             
 obligation bond rating.  Where we have a AA rating for GO bonds,              
 our rating on a prison facility under a COP issue would be rated A.           
 Rates that could be utilized under an insured issue for a AAA                 
 rating are substantially below what a AA GO rate would be.                    
 If a private contractor were to finance this obligation, there                
 would be risks associated with that, not only in the area of                  
 appropriation risk, but a construction risk.                                  
 He said you need to be aware of the fact that they need to deal               
 with a contractor who is rated or is highly rated in order to                 
 assure we will get the best interest rates for the kinds of debt              
 that is being issued.  If there is a problem with either the                  
 construction or the operation of this contract, it has to be                  
 unbundled to separate the financing portion.  This could be                   
 extremely expensive.  There is a question also if the State will              
 benefit from interest rates moving in our favor and being able to             
 utilize refinance mechanisms to lower our interest costs over the             
 life of the debt.                                                             
 MR. KINNEY said on our current revenue stream and the unrestricted            
 portion of the general fund revenue our debt rating is predicated             
 on the fact that we are looking at a situation whereby oil is                 
 decreasing in production quantity and that over time our budget is            
 going down accordingly.  For that reason the issuance of debt                 
 according to the rating agencies by the State of Alaska should not            
 be extended beyond the year 2013 until the legislature come to                
 grips with the need for a long range fiscal plan and a capital                
 improvements program that covers six years, but also covers the               
 broad spectrum of needs that we have.  If we want to extend beyond            
 that, he assured them that he could issue that debt, but there is             
 an extremely high probability that we will have to accept reduction           
 in the State's rating and therefore an increase in the interest               
 cost.  This is the case for either G.O. debt or lease purchase, he            
 SENATOR TORGERSON asked why we didn't have this problem with                  
 construction of the Seward Prison.  MR. KINNEY replied in that case           
 they were using a municipality for that purpose, as a conduit, and            
 not a contractor.  The State remained liable for everything.  This            
 is entirely different from having an independent contractor                   
 utilizing our credit rating and our stream of money for those                 
 Number 568                                                                    
 SENATOR SALO moved to adopt amendment #1.                                     
 SENATOR MILLER objected.                                                      
 SENATOR SALO explained that amendment #1 requires the facility to             
 demonstrate that they can operate 10 percent below the cost of a              
 comparable State facility.                                                    
 REPRESENTATIVE MULDER opposed the amendment strongly because there            
 is no other facility in terms of size or scope in the State of                
 Alaska to compare it to.  Also the jury is not impartial since the            
 Commissioner opposes the private concept.  He noted that the                  
 operations is only a portion of the cost.                                     
 SENATOR KELLY asked all those in favor of amendment #1 to raise               
 their hands.  Upon a show of hands SENATOR SALO voted yes; SENATOR            
 MILLER, SENATOR TORGERSON, and SENATOR KELLY voted no; and the                
 amendment failed.                                                             
 SENATOR SALO moved and asked unanimous consent to adopt amendment             
 SENATOR SALO explained that currently the bill does not allow the             
 State to operate the facility unless the contractor defaults.                 
 TAPE 96-29, SIDE B                                                            
 Number 586                                                                    
 It takes out the language saying "the State may not operate" and              
 gives the Commissioner some latitude to deal with problems like if            
 the bids are not responsive, what if the operator is unacceptable,            
 etc.  It could easily be in the State's interest to take over an              
 operation before an emergency situation exists.                               
 REPRESENTATIVE MULDER opposed the amendment saying the only time              
 the bill allows the State to operate the facility is when the                 
 private contractor has defaulted and only until they have put in              
 another private contractor.  He thought the State employees were              
 afraid of some competition and this specifies there will be                   
 Upon a show of hands SENATOR SALO voted yes; SENATOR MILLER,                  
 SENATOR TORGERSON, and SENATOR KELLY voted no; and the amendment              
 SENATOR SALO commented that she is repeatedly getting a response              
 that somebody is afraid of competition or the Commissioner is                 
 somehow to be distrusted.  She thought the State of Alaska has                
 invested authority into the Commissioner of Corrections for a very            
 good reason and she trusted that authority and the Commissioner.              
 SENATOR SALO moved to adopt amendment #3.  She said the bill                  
 requires correctional officers to meet certain standards, but it is           
 permissive relating to guards.  The proposed amendment requires               
 guards to meet the current standards of training for correctional             
 officers.  The intent of the amendment is to make sure, whether               
 they are privately or publicly run, the guards are well trained.              
 REPRESENTATIVE MULDER responded that the bill already allows for              
 the Commissioner to direct officers within the private facility be            
 trained to the same level as their public counterparts.  It makes             
 training mandatory and not at the option of the Commissioner.                 
 MR. DEWITT, Staff to Representative Mulder, said AS18.65 requires             
 things other than training and this amendment limits the                      
 requirements to training.                                                     
 SENATOR TORGERSON said he thought they should divide the question.            
 The first part of the amendment doesn't hurt anything, but he                 
 agrees with the later part.                                                   
 SENATOR TORGERSON moved to divide the question. REPRESENTATIVE                
 MULDER said he had no opposition to that amendment.  SENATOR SALO             
 commented that she thought removing the Commissioner reference in             
 the beginning of that sentence would be shifting responsibility               
 somewhat to the Department of Administration.  She said if the                
 statutes talk about training and more, then it didn't matter to               
 have the Commissioner in the first part.                                      
 SENATOR TORGERSON removed his motion.                                         
 Upon a show of hands SENATOR SALO AND SENATOR DUNCAN voted yes;               
 amendment #3 failed.                                                          
 SENATOR SALO moved to adopt amendment #4.  SENATOR MILLER objected.           
 She explained that this bill does not allow the State to operate              
 the facility unless the contractor defaults, but the amendment                
 would allow the Commissioner to operate this facility if the                  
 contractor does not meet the 10 percent cost savings assuring that            
 the cost savings remains.                                                     
 REPRESENTATIVE MULDER commented that this was a combination of                
 amendments #1 and #2 and the same arguments can be used.  He added            
 that his bill makes a statement that we want a private prison                 
 within the State to provide competition.                                      
 Upon a show of hands SENATOR SALO and SENATOR DUNCAN voted yes;               
 amendment #4 failed.                                                          
 Number 487                                                                    
 SENATOR SALO moved to adopt amendment #5.  SENATOR MILLER objected.           
 She explained that amendment #5 requires the operator of the                  
 facility meet the Cleary settlement or else the State must step in.           
 REPRESENTATIVE MULDER said that he originally included this                   
 language in his bill, but it was removed at the request of the                
 Department of Corrections because the Commissioner felt she wanted            
 to have that latitude.                                                        
 BOB COLE, Administrative Director, Department of Corrections, said            
 that any facility operating within Alaska is bound by the Cleary              
 SENATOR KELLY said there was no objection to amendment #5 and it              
 was adopted.                                                                  
 SENATOR SALO moved to adopt amendment #6.  SENATOR MILLER objected.           
 She explained that it requires the facility to seek, obtain, and              
 maintain accreditation.  This would hold the facility to a standard           
 that she thought the State ought to be able to expect.                        
 REPRESENTATIVE MULDER said that not all of our State facilities are           
 accredited.  He thought that accreditation should be required of              
 all facilities.                                                               
 SENATOR KELLY asked why some facilities aren't accredited.  MR.               
 COLE replied that it's mostly because of overcrowding.  SENATOR               
 KELLY commented why shouldn't they have to be accredited.                     
 SENATOR SALO moved to amend amendment #6 to delete "This                      
 requirement is effective only when, as a matter of policy, the                
 Commissioner of Corrections seeks and obtains accreditation of                
 State Correction facilities."                                                 
 There was discussion on the motion and SENATOR TORGERSON asked if             
 there was a yearly process for reaccreditation.  MR. COLE said he             
 believed there was a reaccreditation process that occurs                      
 SENATOR KELLY asked who does the accreditation.  MR. COLE answered            
 the American Correctional Association.                                        
 SENATOR KELLY moved to adopt, "In the award of a contract for the             
 operation of the correctional facility to be constructed and                  
 operated under the notice and approval given in A of this section             
 the Department of Administration shall require the contractor to              
 seek, obtain, and maintain accreditation of the correctional                  
 facility by the American Correctional Association."                           
 SENATOR SALO said she like that language.                                     
 SENATOR KELLY announced that there were no objections to that                 
 amendment and it was adopted.                                                 
 Number 400                                                                    
 SENATOR SALO moved to adopt amendment #7 and asked for unanimous              
 consent.  SENATOR MILLER objected and asked how they accounted for            
 areas like Fairbanks where there is a second class Borough and                
 there are home rule cities within that or if you want to put the              
 prison in an unorganized borough.                                             
 SENATOR SALO said there was an example like that in the Kenai                 
 district where a half way house was proposed that wasn't in a                 
 municipality or a zoned area and there was no method by which to              
 hold hearings.  One might argue that if it is in an area like that,           
 it's not as densely populated as when it is within a municipality             
 or the wording could be changed to provide a hearing process                  
 anywhere.  She thought it was important to have a public process.             
 REPRESENTATIVE MULDER opposed the amendment.  He said the site                
 selection is a public process already included in the fiscal note.            
 He is sensitive to the public process, but the word "approves"                
 troubles him because it sets up another hurdle.  People don't want            
 a prison in their back yard.  SENATOR SALO responded that when it             
 remains a public facility it is governed by existing rules and                
 regulations, but if it moves to the private sector, those                     
 regulations and requirement for public input diminish                         
 significantly.  She said in the spirit of cooperation she would               
 withdraw the amendment and try to work on something that would meet           
 their needs.                                                                  
 SENATOR SALO withdrew amendment #7.                                           
 SENATOR KELLY said he had his sympathies with this amendment in               
 another form, but he didn't want to hold the bill in this committee           
 waiting for the acceptable form to be drafted.  He said he                    
 preferred that she work on it as it passes through.                           
 Number 330                                                                    
 SENATOR TORGERSON moved to adopt the CS to HB 428.  There were no             
 objections and it was so ordered.                                             
 SENATOR TORGERSON moved SCSHB 428 from committee with individual              
 recommendations.  SENATOR SALO objected.  Upon a show of hands                
 SENATOR SALO and SENATOR DUNCAN voted no; and the bill passed from            
 SENATOR KELLY adjourned the meeting at 5:45 p.m.                              

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