2:18:14 PM HB 216-TRANSFERS FROM DIVIDEND FUND; CRIMES  CHAIR CLAMAN announced that the final order of business would be SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 216, "An Act relating to restitution; relating to the office of victims' rights; relating to transfers from the dividend fund; creating the restorative justice account; relating to appropriations from the restorative justice account for services for and payments to crime victims, operating costs of the Violent Crimes Compensation Board, operation of domestic violence and sexual assault programs, mental health services and substance abuse treatment for offenders, and incarceration costs; relating to delinquent minors; and providing for an effective date." CHAIR CLAMAN noted that two additional fiscal notes were added to the committee packet that day. 2:19:29 PM REPRESENTATIVE EASTMAN directed attention to a letter in the committee packet, dated 12/18/17, from Sara Race, Director of the Permanent Fund Dividend Division of the Department of Revenue, to Pat Pitney, Director of the Office of Management and Budget. He said the letter spells out what amount of money would become part of the fund proposed under HB 216. He indicated he would like clarification regarding the calculations in the letter. 2:20:12 PM SARA RACE, Director, Central Office, Permanent Fund Dividend Division, Department of Revenue (DOR), recommended Representative Eastman look at a calculation breakdown in the committee packet [titled "FY 19 PFD Fund Appropriation Calculation for Departments of Corrections and Public Safety"]. She said the division bases the amount available for calculation on the dividend available two years ago. She said [4,588] individuals [from the Department of Corrections (DOC) and 665 from the Department of Public Safety (DPS)] who applied for a dividend in 2017 were later identified as [incarcerated] felons or misdemeanants or [sentenced felons]. She related that the division can determine eligibility on those cases as it would for any other application it receives and identify how many would otherwise have been eligible [had they not been denied as a felon or misdemeanant]. That calculation results in a percentage shown on the breakdown. She pointed out a couple minor adjustments that are made to result in [an estimated number of otherwise eligible applicants], and that number is multiplied by the dividend amount to come up with the [total appropriation]. REPRESENTATIVE EASTMAN pointed out the amount of [11,429, under the category of estimated number of otherwise eligible applicants], and he asked how the division accounts for individuals whose PFD is already "going toward some kind of restitution." MS. RACE answered that when the division is determining eligibility a garnishment has not yet been applied. Those who filed could have had garnishments attached to their applications, but they would have been denied because they were a felon or misdemeanant. REPRESENTATIVE EASTMAN asked Ms. Race if she has any idea how many of the [11,429] might fall into the category of those whose PFDs are "already not going to them" but instead are being directed toward restitution for crimes victims, child support, for example. MS. RACE answered that the division would not have the number of individuals that fall into that category "for the entire population"; however, the division would have "a pretty good idea of how many that would be of the 4,500 individuals that did apply for a dividend." The division could look at those applications to determine whether there were "garnishments that would have otherwise been applied if they had been paid and not denied." In response to a follow-up question, she said she does not have that number available right now. 2:23:58 PM REPRESENTATIVE REINBOLD asked for confirmation that the state is "taking permanent fund dividends from ineligible people that normally would not, because of a conviction, ... be allowed to receive the dividend." MS. RACE confirmed that is correct. REPRESENTATIVE REINBOLD said basically the state is taking that money and redistributing it, and in [2017] 94 percent "went to the offender[s] themselves to pay for their healthcare in the last year according to the last testimony or helping pay, I think it was 6 percent, to restitution." She inquired whether, if the state did not do that, the money from ineligible people would go back into the corpus or earnings reserve or be distributed among other Alaskans. MS. RACE answered as follows: The calculation is part of statute now, and the amount available that is calculated through this process is available for appropriation. So, past that point I really can't speak to how it is broken into the 94 percent that you speak to that's going to Department of Corrections. MS. RACE indicated that if statute changed regarding individuals that fall into this category, then the money would go back into the dividend fund and then become available for the calculation process for individuals that are receiving a dividend. 2:26:16 PM REPRESENTATIVE KOPP asked whether DOC is an eligible recipient of the fund. MS. RACE answered, "They are one of the individuals that are listed in the priority order available for appropriation." REPRESENTATIVE KOPP clarified there are five or six eligible recipients and, as Representative Reinbold pointed out, one recipient is "pretty much consuming all the fund." He said it is the criminal fund, and he said he thinks the question is whether that money, if not going to an inmate fund, would "rotate back out of the criminal fund" or "stay in the criminal fund itself." MS. RACE replied that the money available to the criminal fund is appropriated directly from the dividend fund. She offered her understand that if no part of this was listed in statute, then that money would be available to pay dividends. REPRESENTATIVE KOPP summarized that "these eligible recipients" are paid out of the criminal fund through a formula that the Office of Management and Budget applies. MS. RACE answered as follows: The money that we calculate here is what we refer to OMB through the [memorandum], and from that point forward, if it wasn't appropriated, ... I'm not sure I could answer that question. REPRESENTATIVE KOPP referred to the 1980 law that established the crime victim compensation fund, and indicated that under SSHB 216, the amount of the dividends that would otherwise have been paid to those who are not eligible because of their criminal convictions would be appropriated annually from the dividend fund to the crime victim compensation fund. He referred to [Representative Reinbold's] question as to whether those dividends would go somewhere else if not to the fund, and he said he is not aware that that has ever happened but would like to know if it has. MS. RACE responded that she is not aware that [that has ever happened]. REPRESENTATIVE KOPP concluded, "So, it's available to go to eligible recipients as far as you know rather than being re- appropriated for other purposes." MS. RACE answered that's correct. 2:29:34 PM REPRESENTATIVE EASTMAN commented that he would like to know how many of 4,500 incarcerated persons "already ... did not have access to the PFD because it had already been taken by the courts to ... go to someone who deserved it more." He said he suspects a number of Alaskans deserve to see those funds, and he is hesitant to "maintain the system" wherein "the state takes those funds." 2:30:40 PM REPRESENTATIVE KOPP emphasized that when a felon or repeat misdemeanant is ineligible to receive a dividend "that money is not going to anything else but victim compensation." He continued as follows: So, they would have an excellent argument to go right to [the Office of Victims' Rights] (OVR), who is going to be taking care of restitutions, the crime victim compensation fund, or eligible nonprofit organizations that provide grants for crime victims and show them their order. And this bill prioritizes victims first out of this fund, which right now they're victims last. So, if we're truly concerned about victims, you're right, there may be a small percentage of people who were on a payment plan - that dividend is not lost, it is going directly to victim restoration, but it's not like it's going to ... something else. REPRESENTATIVE KOPP clarified that SSHB 216 would bring a significantly greater quantity of resource to restoring survivors of crime than anything under current law. 2:31:56 PM CHAIR CLAMAN said the decision made several years ago to put dividend money for which people are not eligible into a fund is not a decision up for discussion. The focus today is how to prioritize the money that has been set aside. CHAIR CLAMAN said he would entertain amendments to SSHB 216, and he noted that Legislative Legal and Research Services has permission to make any technical and conforming changes to the bill based on any amendments adopted. 2:33:37 PM REPRESENTATIVE KREISS-TOMKINS moved to adopt Amendment 1, to SSHB 216, labeled 30-LS0572\T.1, Martin, 1/18/18, which read as follows: Page 6, lines 8 - 11: Delete all material and insert: "(3) nonprofit organizations to provide grants for services for crime victims and domestic violence and sexual assault programs; (4) nonprofit organizations to provide grants for mental health services and substance abuse treatment for offenders; and" REPRESENTATIVE FANSLER objected. REPRESENTATIVE KREISS-TOMKINS deferred to his staff to speak to Amendment 1. 2:33:58 PM NOAH STAR, Staff, Representative Jonathan Kreiss-Tomkins, Alaska State Legislature, spoke to Amendment 1 to SSHB 216 on behalf of Representative Kreiss-Tomkins. He explained the proposed amendment would switch the order of the third and fourth priorities listed under SSHB 216 such that "crime victims and domestic violence and sexual assault programs" would be listed before "mental health services and substance abuse treatment for offenders". 2:34:52 PM REPRESENTATIVE REINBOLD emphasized her support for Amendment 1. 2:35:42 PM REPRESENTATIVE FANSLER asked the bill sponsor why the two organizations were listed the way they are listed in SSHB 216. 2:35:57 PM REPRESENTATIVE KOPP answered that both recipients are important. He stated support for Amendment 1. 2:36:13 PM REPRESENTATIVE FANSLER removed his objection to the motion to adopt Amendment 1. There being no further objection, Amendment 1 was adopted. 2:36:39 PM REPRESENTATIVE REINBOLD moved to adopt Amendment 2, to SSHB 216, labeled 30-LS0572\T.2, Martin, 1/22/18, which read as follows: Page 1, line 6, following "costs;": Insert "relating to contributions from  dividends;" Page 8, following line 5: Insert new bill sections to read:  "* Sec. 8. AS 43.23.062(a) is amended to read: (a) Notwithstanding AS 43.23.069, the Department of Revenue shall prepare the electronic Alaska permanent fund dividend application to allow an applicant who files electronically to direct that money be subtracted from the dividend payment and contributed to the crime victim compensation fund  (AS 18.67.162), the peace officer and firefighter survivors' fund, or [TO] one or more of the educational organizations, community foundations, or charitable organizations that appear on the contribution list contained in the application. A contribution to the crime victim compensation fund, the peace officer and firefighter survivors' fund or to an organization may be $25, $50, $75, $100, or more, in increments of $50, up to the total amount of the permanent fund dividend that the applicant is entitled to receive. If the total amount of contributions elected by an applicant exceeds the amount of the permanent fund dividend that the applicant is entitled to receive, contributions shall be deducted from the dividend in the order of priority elected by the applicant on the application until the entire amount of the dividend that the applicant is entitled to receive is allocated for contribution. The electronic dividend application form must include notice that seven percent of the money contributed will be used for administrative costs incurred in implementing this section, and money from the dividend fund will not be used for that purpose. * Sec. 9. AS 43.23.062(b) is amended to read: (b) The department shall list each educational organization, community foundation, or charitable organization eligible under (c) and (d) of this section, each university campus that applies under (l) of this section, the crime victim compensation fund, and the peace officer and firefighter survivors' fund on the contribution list. The department shall maintain an electronic database for the contribution list that is accessible to the public and that permits searches by organization or fund name, geographic location, and type. The department shall provide a statement of the contributions made by an individual that is suitable for federal income tax purposes to each individual who elects to contribute under (a) of this section. * Sec. 10. AS 43.23.062(m) is amended to read: (m) In addition to the application fee in (f) of this section, the department shall withhold a coordination fee from each organization, foundation, or university campus that receives contributions under this section in the immediately preceding dividend year. The coordination fee for an organization, foundation, or university campus that receives contributions under this section shall be seven percent of the amount of contributions reported by the department under (j) of this section for the organization, foundation, or university campus for the immediately preceding dividend year. The coordination fee shall be separately accounted for under AS 37.05.142 and shall be accounted for separately from the application fee collected under (f) of this section. The annual estimated balance in the account maintained under AS 37.05.142 for coordination fees collected under this subsection may be appropriated for costs of administering this section. The department may not withhold a coordination fee for contributions to the crime victim compensation fund or the peace officer and firefighter survivors' fund." Renumber the following bill sections accordingly. REPRESENTATIVE FANSLER objected. 2:36:44 PM REPRESENTATIVE REINBOLD prefaced her explanation of Amendment 2 by relating that a lot of people are not giving as much [in donations] as they used to give. She said the proposed amendment would allow eligible recipients of the PFD the option of donating their PFD monies to the crime victim compensation fund through an existing method called ["Click, Pick, Give"]. REPRESENTATIVE KOPP stated his support of Amendment 2. He added, "The Restorative Justice Account, which holds the appropriation, it's ... number one priority is the crime victim compensation fund, which Representative Reinbold has identified; so, this would just move it into the top priority voluntarily by people on the ... Pick, Click, and Give-type of thing, I guess." 2:38:07 PM REPRESENTATIVE FANSLER said he likes Amendment 2 but wonders if the Permanent Fund Dividend Division may be concerned that adding too many recipient choices on Pick, Click, Give may "dampen the giving spirit." 2:38:43 PM MS. RACE responded that the division has not done specific studies on the issue, but she offered her understanding that the Alaska Community Foundation, which houses the Pick, Click, Give program, would have data. She said there are search tools available to help individuals narrow the search for charitable organizations on Pick, Click, Give. 2:39:23 PM CHAIR CLAMAN asked for confirmation that there are service charges associated with the Pick, Click, Give program such that 100 percent of a donation does not go to the donor's choice(s). MS. RACE confirmed that 7 percent of a donation is collected in administrative fees to cover the running of the program. CHAIR CLAMAN asked if the same 7 percent would be taken out if someone chose the crime victim compensation fund under Pick, Click, Give, even though it is a state funded program rather than a nonprofit organization. MS. RACE answered that the peace officer and fire fighter survivors' fund is excluded from the 7 percent administrative fee and so, too, would be the crime victim compensation fund. 2:40:40 PM REPRESENTATIVE EASTMAN offered his understanding that one of the reasons for the administrative cost is that there is a verification process involved. He echoed Ms. Race's comment that the crime victim compensation fund would be exempt. 2:41:33 PM REPRESENTATIVE FANSLER removed his objection to the motion to adopt Amendment 2. There being no further objection, Amendment 2 was adopted. 2:41:48 PM REPRESENTATIVE KOPP moved to adopt Amendment 3, to SSHB 216, labeled 30-LS0572\T.5, Martin, 1/22/18, which read as follows: Page 2, line 23, following "Law": Insert "If the Department of Law receives a  response to the notice before the 90-day period, the  Department of Law may begin collection on the  restitution." Page 9, line 9, following "Law": Insert "If the Department of Law receives a  response to the notice before the 90-day period, the  Department of Law may begin collection on the  restitution." REPRESENTATIVE FANSLER objected. 2:41:52 PM REPRESENTATIVE KOPP spoke to Amendment 3. He said it would clarify that once the Department of Law receives notice from the crime victim, the department may immediately begin "aggressively providing assistance." The clarification would, under Amendment 3, be applied to two sections of SSHB 216. 2:42:32 PM REPRESENTATIVE FANSLER asked if "this" would hamper a person, who at first decided not to ask for restitution but later decides he/she wants restitution. REPRESENTATIVE KOPP answered: Once an order is given, the Department of Law gives notice to the eligible recipient that they have 90 days to elect to collect the restitution without the assistance of the Department of Law. REPRESENTATIVE KOPP directed attention to language on page 2, line 23, of SSHB 216, which read: A recipient may inform the Department of Law at a later time of the recipient's election to collect the restitution without the assistance of the Department of Law REPRESENTATIVE KOPP said there is no time [constraint] on that provision, so a person could decide a year later he/she does not want help. He said he does not know if Representative Fansler's question was in terms of a year later someone deciding he/she does want help. He said he thinks it makes sense in the law to have some time limitation. CHAIR CLAMAN directed attention to the answer to the issue, which is in Section 3, on page 2, lines 26-29, which read as follows: A recipient who has elected under this section to collect restitution without the assistance of the Department of Law may not later request the services of that department to collect the restitution. 2:44:18 PM REPRESENTATIVE KOPP pointed out that that is current law. REPRESENTATIVE FANSLER indicated that is the answer he was seeking. 2:44:31 PM REPRESENTATIVE EASTMAN said he thinks everyone is assuming that the proposed phrase "receives a response to the notice" - as read in Amendment 3 - means a person wants to "move forward on this." He questioned whether the committee should specify what type of response. REPRESENTATIVE KOPP said the context of the sentence in its entirety - "If the Department of Law receives a response to the  notice before the 90-day period, the Department of Law may begin  collection on the restitution" - is obvious, because the department would not begin collection on the restitution if the person had said he/she did not want it. REPRESENTATIVE EASTMAN asked if there is any intent for a minimum waiting period. REPRESENTATIVE KOPP answered that the key word in the sentence is "before", which allows the process to start immediately - as soon as the department is notified. 2:46:20 PM REPRESENTATIVE FANSLER withdrew his objection to Amendment 3. There being no further objection, Amendment 3 was adopted. 2:46:33 PM REPRESENTATIVE KOPP moved to adopt Amendment 4, to SSHB 216, labeled 30-LS0572\T.6, Martin, 1/22/18, which read as follows: Page 3, lines 7 - 9: Delete all material and insert: "(b) The office of victims' rights shall make restitution payments to eligible victims in the following priority order:" REPRESENTATIVE FANSLER objected. 2:46:39 PM REPRESENTATIVE KOPP noted that language on page 3, lines 7-8, of SSHB 216, read: "If an order of restitution provides for payment to more than one crime victim". Representative Kopp said that sounds like a restitution order for multiple people. Amendment 4 would highlight the priority order, which reflects current practice. REPRESENTATIVE EASTMAN asked how OVR would be instructed to deal with instances where there is more than one crime victim if that language is changed under Amendment 4. REPRESENTATIVE KOPP answered that under the current system, once a case is adjudicated and it is time to issue a restitution order, the court would notify OVR of the restitution orders, which would enable the office to connect with the victims to offer assistance in getting victims' orders paid and work with the Permanent Fund Dividend Division. He added, "This actually empowers OVR in a way they have not been empowered before to represent victims in getting them restitution." REPRESENTATIVE KOPP said if Representative Eastman's question pertains to multiple victims on a single incident, then those individuals are distinct victims and would receive distinct restitution orders. The priority [as shown on page 3, lines 10- 12, of SSHB 216], would remain as follows: (1) a natural person; (2) private businesses; (3) state and local governments. REPRESENTATIVE EASTMAN offered a situation in which there are two crimes and a victim from each one, and he asked if the Office of Victims' Rights would prioritize the first natural person and get PFD funds to him/her but not be able to get funds to the other person whose chronological order is second. REPRESENTATIVE KOPP replied that Representative Eastman's question is answered on [page 3], lines 13-15, which read: (c) The office of victims' rights shall adopt regulations under AS 44.62 (Administrative Procedure Act) to establish a process for payments of restitution balances from the restorative justice account established in AS 43.23.048. REPRESENTATIVE KOPP stated, "It's very difficult in statute to get down into the weeds of what needs to happen on the regulation level." Regulation cannot violate statute and carries out the will of statutes, he said. He concluded, "We are putting into the law the vehicle from which regulation is enabled, which will answer those thornier questions, and certainly there is public comment periods and things like that for us to comment on." 2:50:47 PM REPRESENTATIVE FANSLER removed his objection to the motion to adopt Amendment 4. There being no further objection, Amendment 4 was adopted. 2:50:59 PM REPRESENTATIVE EASTMAN moved to adopt Amendment 5, to SSHB 216, labeled 30-LS0572\T.3, Martin, 1/23/18, which read as follows: Page 4, line 31: Delete "if they had been eligible" Insert "[IF THEY HAD BEEN ELIGIBLE]" Page 5, line 7: Delete "if they had been eligible" Insert "[IF THEY HAD BEEN ELIGIBLE]" Page 5, lines 30 - 31: Delete "if they had been eligible" REPRESENTATIVE FANSLER objected. 2:51:03 PM REPRESENTATIVE EASTMAN spoke to Amendment 5. He explained that by removing the words "if they had been eligible", the assumption would be that those individuals would have been eligible, which is the process he said the department uses currently wherein if someone is incarcerated and convicted, then the assumption is that he/she would have been eligible but because of the conviction/incarceration he/she is not. He said that is what triggers the money to restorative justice account. REPRESENTATIVE KOPP responded that Representative Eastman had identified a legislative drafting style. He suggested reading the first part of [paragraph (6)], on page 4, line 29, and adjoining it with the final words on line 31, such that it read: "the total amount that would have been paid" "if they had been eligible". He said this language has been in statute for 30 years and has worked for the Department of Revenue. Representative Kopp again suggested compacting the words in [subsection (b)], on page 5, lines 4 and 7, to read: "total amount that would have been paid" "if they had been eligible". He said deleting "if they had been eligible" just changes drafting style; it's a different way of saying the same thing. He indicated that adopting Amendment 5 could complicate things, because the committee would be "messing with a section of law that's worked well for a long time." 2:53:49 PM REPRESENTATIVE REINBOLD indicated that she would have supported the proposed amendment "if we weren't collecting from anybody ineligible." However, she opined that deleting "if they had been eligible" is undermining, because "who are we to stop ... if they'd never been eligible in the first place?" She said she would oppose Amendment 5. 2:54:26 PM REPRESENTATIVE FANSLER said he gathers that Amendment 5 is just wordsmithing. He asked if it was Representative Eastman's thought to delete the words as a way of making the language more concise. REPRESENTATIVE EASTMAN indicated that Amendment 5 is directed to someone who is not privy to the way the language has been interpreted by the department. He said the assumption is that "we're only dealing with individuals who are eligible and then, because of their conviction or incarceration, they are rendered ineligible." He said there are many requirements to be eligible; one of them is that a person must apply. He continued: But that's not the way that ... the department has interpreted it. They have interpreted it as though those words were not, in fact, there. They've interpreted it as though if you are incarcerated or if you have received a conviction, ... you're still in Alaska, you've ... accomplished your eligibility and so forth, and so we'll just ... presume that eligibility. And so, ... what I've suggested through this amendment is that instead of obliging the department to sort of make that interpretive decision, make it more clear in the language that we are not, in fact, requiring anyone to apply, so that then they can be found ineligible by virtue of their conviction or incarceration. 2:56:10 PM REPRESENTATIVE KOPP suggested there may be some confusion in the matter. He offered clarification as follows: You are presumed in the law to not be eligible, period, even if you have applied. ... It doesn't matter; ... that is now an ineligible dividend, and it goes into this crime [victim] compensation fund. 2:56:44 PM REPRESENTATIVE LEDOUX offered a scenario in which someone comes to Alaska, commits a crime on day one in the state, and ends up in jail. She said the person would not only be ineligible for a PFD because of being incarcerated, but he/she would also be ineligible [for not having met the minimum residency requirement]. She asked if that person's money would go into [the crime victim compensation fund]. REPRESENTATIVE KOPP said the answer is no because the person was already not eligible [before he/she committed the crime]. He said [SSHB 216] addresses AS 43.23.005(d), which pertains to the criminal aspects regarding disqualification. He said there are other [subsections], including one that addresses a residency requirement. The proposed legislation focuses on a person who is otherwise eligible but for subsection (d) of the statute. 2:59:33 PM REPRESENTATIVE EASTMAN questioned how a person who is not eligible [for a PFD] would "impact this situation." MS. RACE pointed back to the aforementioned calculation page and continued as follows: Because we do have 4,500 individuals that do apply for the dividend, we are able to walk through the standard eligibility process, which would then speak to any other eligibility requirements that those individuals did not meet, which is why a percentage is applied to the total number of individuals that are reported from DPS and Public Safety rather than 100 percent. 3:00:40 PM CHAIR CLAMAN announced that Amendment 5 would be left pending. He noted that Representative Eastman had supplied a memorandum addressing the issue, and he said he would distribute it to the committee in future. He noted the last paragraph of the memorandum written by Hillary Martin advises caution in amending a statute that has existed for years and has been interpreted one way. [SSHB 216 was held over.]