SENATE BILL NO. 232 An Act relating to permanent fund dividend program notice requirements, to the ineligibility for dividends of individuals convicted of felonies or incarcerated for misdemeanors, and to the determination of the number and identity of certain ineligible individuals; and providing for an effective date. Co-chairman Halford directed that SB 232 be brought on for discussion. Senator Frank explained that the proposed bill would remove third-time misdemeanants from eligibility for permanent fund dividends. He noted that those moving in and out of the correctional system incur substantial costs for the criminal justice system. It is thus appropriate that they contribute their permanent fund dividends toward defraying part of that cost. The major change from the bill that was vetoed last year is that collection of the dividend is not accelerated, and dividends are not utilized in the current budget year. TOM WILLIAMS, aide to Senator Frank, explained that under current law an individual incarcerated for a felony conviction is ineligible for a permanent fund dividend in the next calendar year. The law also allows the amount that would have been paid to individuals, for the next fiscal year, to be appropriated from the dividend fund (without notice on the dividend stub) to three entities: 1. The crime victim compensation fund. 2. Counsel on domestic violence and sexual assault 3. Dept. of Corrections The proposed bill will accomplish four ends: 1. Increase the pool of individuals ineligible for the permanent fund dividend to include those who, in a given year, are convicted of a felony or incarcerated for their third or subsequent misdemeanor conviction. 2. Require that the dividend stub provide public notice of the criteria for denying individuals, the legislative purpose for denying those individuals, the amount that would have been paid in the prior fiscal year to the individuals, and how that money was appropriated to the above-noted agencies in the subsequent fiscal year. 3. Add the departments of Public Safety and Law to the list of criminal justice system agencies authorized to receive the funds. 4. Clarify the purposes for which the funds may be used. Mr. Williams directed attention to file materials containing a sectional analysis of the bill and a comparison of agencies now receiving funds and those which would received funds under the proposed legislation. Fiscal notes from the Dept. of Public Safety and Dept. of Revenue are the same as last year. The note from the Dept. of Corrections is $68.0 as opposed to zero last year. While the original approach contemplated that notice provisions be added to this year's dividends, a proposed amendment would start notification a year from now. Concerns regarding prior legislation pertained to whether agencies that presently garnish permanent fund dividends would be impacted. The estimated effect on child support enforcement garnishments is negligible (less than one tenth of one percent of child support). Mr. Williams further commented on diversion of permanent fund moneys to child support and indicated that discussion of that issue would be ongoing. Department proposals will be explored. END: SFC-96, #26, Side 1 BEGIN: SFC-96, #26, Side 2 In response to a question from Senator Zharoff, Mr. Williams noted that legislative attorneys raised constitutional questions over denial of funds to felons and subsequent appropriation to a specific individual or case. Senator Frank advised that the bill would be held in committee to work on the issue. NANCY JONES, Director, Permanent Fund Division, Dept. of Revenue, next came before committee. She referenced the above-noted amendment and asked that it be favorably considered. Speaking to expansion of the class of ineligible permanent fund dividend recipients, Ms. Jones said that the department has no problem with addition of felony convictions and incarcerated misdemeanants. Income diversion, however, remains a concern. Ms. Jones further attested to technical problems with the bill concerning the flow of information on convictions, particularly for those who are convicted but not incarcerated. Ms. Jones voiced support for disclosure requirements of the bill. She explained that the department interprets bill language to require that information flow to felons ineligible to receive the dividend rather than to the general public. The department fiscal note is higher than last year because of a noticeable increase in the number of appeals as a result of the program. The department thus seeks funding for a position to handle appeals. The issue is the same within the Dept. of Corrections. Ms. Jones described the transfer of information between the two departments during the appeal process. In her closing remarks, Ms. Jones reiterated support for expansion of the class of ineligible recipients and urged that the committee give favorable consideration to addition of child support--the largest recipient of funds--if that provision can be added to the bill. ANNE CARPENETI, Assistant Attorney General, Criminal Division, Dept. of Law, came before committee. She noted that denial of dividends to third-time misdemeanants and those convicted of but not incarcerated for felonies removes possible funds to pay orders of restitution to victims of crime who are not covered by the violent crimes compensation board. Co-chairman Halford asked if statistics are available showing how many dividend dollars are used for restitution and child support. Both Co-chairmen concurred in need for those numbers. Co-chairman Frank advised that analysis indicates that only a small percentage flows to child support enforcement. ADJOURNMENT The meeting was adjourned at approximately 10:10 a.m.