HOUSE FINANCE COMMITTEE April 11, 1996 8:20 A.M. TAPE HFC 96-111, Side 1, #000 - end. TAPE HFC 96-111, Side 2, #000 - end. TAPE HFC 96-112, Side 1, #000 - #248. CALL TO ORDER Co-Chair Mark Hanley called the House Finance Committee meeting to order at 8:20 a.m. PRESENT Co-Chair Hanley Co-Chair Foster Representative Martin Representative Brown Representative Mulder Representative Grussendorf Representative Parnell Representative Kelly Representative Therriault Representative Kohring Representative Navarre was absent from the vote. ALSO PRESENT Representative Jerry Mackie; Representative Ed Willis; Ron King, Chief, Air Quality Improvement, Department of Environmental Conservation; Tom Williams, Staff, Senator Frank; Juanita Hensley, Chief Driver Services, Division of Motor Vehicles, Department of Public Safety; Bill Parker, Deputy Commissioner, Department of Corrections. SUMMARY HB 2 An Act allowing courts to require certain offenders as a special condition of probation to complete a boot camp program provided by the Department of Corrections; making prisoners who complete the boot camp program eligible for discretionary parole; providing for incarceration of certain nonviolent offenders in boot camps operated by the Department of Corrections; allowing the Department of Corrections to contract with a person for an alternative boot camp program; creating the Boot Camp Advisory Board in the Department of Corrections; and providing for an effective date." HB 2 was HELD in Committee for further consideration. 1 SB 226 An Act relating to biennial registration of motor vehicles; imposing biennial registration fees on motor vehicles and authorizing a scheduled biennial municipal tax on motor vehicles; relating to fees for motor vehicle emissions control programs; and providing for an effective date. HCS CSSB 226 (FIN) was reported out of Committee with a "do pass" recommendation and with a fiscal impact note by the Department of Public Safety. SB 250 An Act relating to the University of Alaska and to assets of the University of Alaska; authorizing the University of Alaska to select additional state public domain land, designating that land as `university trust land,' and describing the principles applicable to the land's management; and defining the net income from the University of Alaska's endowment trust fund as `university receipts' subject to prior legislative appropriation. SB 250 was rescheduled to another time. SENATE BILL NO. 226 "An Act relating to biennial registration of motor vehicles; imposing biennial registration fees on motor vehicles and authorizing a scheduled biennial municipal tax on motor vehicles; relating to fees for motor vehicle emissions control programs; and providing for an effective date." TOM WILLIAMS, STAFF, SENATOR FRANK reviewed amendments previously adopted by the Committee (see House Finance Committee minutes 3/29/96). Amendment 1 was adopted as a technical amendment to eliminate superfluous effective date sections. Amendment 3 was also adopted. Amendment 3 provided that implementation of biannual registrations and biannual emissions testing would begin January 1997. Co- Chair Hanley noted that this date would allow the Department time to implement the program. Representative Kelly MOVED to adopt Amendment 7, 9- LS1452\M.1, 4/9/96 (copy on file). REPRESENTATIVE JERRY MACKIE testified on behalf of Amendment 7. He explained that the amendment would provide that registration at a contract office would not be subject to the $10 dollar fee. He pointed out that rural areas of the State do not have Division of Motor Vehicle offices. He 2 stressed that it is unfair for rural residents to pay the extra $10 dollar fee to relieve crowding in urban areas. Representative Martin asserted that those living in smaller areas get away cheaper with personal contact. He spoke against the amendment. Representative Mackie spoke in support of Amendment 7. He asked why people using contract offices should pay to alleviate congestion when there is no congestion at these offices. In response to a question by Representative Therriault, Representative Mackie stated that he supports the fee when transactions occur at Division of Motor Vehicle (DMV) offices. He emphasized that the State is trying to present incentives for contract agents to take over some of the responsibilities that the State cannot support. He noted that the contract agents operate through local police departments. JUANITA HENSLEY, CHIEF DRIVER SERVICES, DIVISION OF MOTOR VEHICLES, DEPARTMENT OF PUBLIC SAFETY stated that the Department does not support the amendment. She noted that the amendment would set up two different types of programs. She observed that rural communities where DMV offices exist would have to pay the fee even if there is no congestion. Other rural communities would not pay the fee if DMV activities are performed by contract agents. She stressed that the amendment would not be fair for the entire State. She clarified that contract agents are not state employees. They are city employees. The State pays 15 percent for vehicle registration and 50 percent for driver's license work to contract agents. Co-Chair Hanley summarized that if the disincentive to renewing licenses in person goes away it will cost the State more money. Ms. Hensley agreed and added that the State still has to perform paper and computer work on collections by contract agents. In response to a question by Representative Brown, Ms. Hensley discussed HB 210. She noted that HB 210 would not result in commissioned contract offices. She clarified that a contract office opened under HB 210 would be exempt from paying the $10 dollar fee without the adoption of the amendment. She pointed out that commissioned contract agents are paid by the State to perform DMV functions. Contract agents under HB 210 and emissions testing do not cost the State. Representative Mackie emphasized that commissioned contract 3 agents need incentives to continue operation. He observed that reimbursements to commissioned contract agents have been reduced due to the addition of the $10 dollar fee. He stressed that the State would have to pay more to maintain a DMV office in small communities. Ms. Hensley observed that some commissioned contract agents are employed half-time. She noted that a half-time position would cost DMV $18.0 thousand dollars. The State paid the Craig police department $27,443 thousand dollars in FY 96. The commission contract agent in Craig was paid $19,644 thousand dollars. She estimated that adoption of the Amendment would result in a loss to the State of $31.0 thousand dollars and additional operating costs of $11.0 thousand dollars to pay for contract additions. Representative Martin noted that there is a post office in Craig. Representative Mackie noted that there are commissioned contract offices in Craig, Wrangell, Petersburg, Skagway, Dutch Harbor, Dillingham, Naknek, Barrow, Anderson and Seward. Ms. Hensley noted that of 13 commissioned contract agents only five process vehicle registration. A roll call vote was taken on the MOTION to adopt Amendment 7. IN FAVOR: Kohring, Mulder, Parnell, Grussendorf, Kelly, Foster OPPOSED: Martin, Therriault, Brown, Hanley Representative Navarre was absent from the vote. The MOTION PASSED (6-4). Representative Mulder MOVED to adopt Amendment 5, 9- LS1452\M.2 (copy on file). He explained that the amendment would allow municipalities to collect an additional fee for the ambient air quality program to be collected along with the motor vehicle emission control inspection fee. Mr. Williams noted that the sponsor does not object to the amendment. RON KING, CHIEF, AIR QUALITY IMPROVEMENT SECTION, DEPARTMENT OF ENVIRONMENTAL CONSERVATION observed that the Department supports the amendment. Ms. Hensley noted that the amendment would not affect the Department of Public Safety. 4 Representative Martin spoke against the amendment. He asserted that the municipality makes a lot of money processing unnecessary paper. Mr. King noted that both the Anchorage and Fairbanks have to recover the cost of their inspectors and programs. He noted that the volume of vehicles in Alaska is small in comparison to the fixed cost that most be sustained. He explained that of the $10 dollar fee, the vehicle emissions inspection program costs a little over $7.50 dollars. The remaining $2.50 dollars is attributed to the air quality program. In Fairbanks the emissions inspection program costs approximately $7 dollars and the air quality program $3 dollars. Representative Brown read from a letter from Tim Rogers, to Representative Mulder (not on file). She noted that Mr. Rogers wrote that $295 thousand dollars of Anchorage emissions inspection revenues are appropriated to the air quality program as are required match for a $110 thousand dollar pass through grant from the Environmental Protection Agency. Mr. King explained that the Anchorage air quality program was funded with approximately $295 thousand dollars from the general fund, as a grant match to $110 thousand dollars in federal funds. Four years ago, the general fund obligation was reduced through the substitution of the $2.75 cents collected on a per car basis in the emissions inspection program. He emphasized that Anchorage fronted $1.8 million dollars to start the vehicle inspection program. The $2.75 dollars per car was being used to recover the start up costs. The start up costs were not completed recovered before the Anchorage Assembly made the decision to switch the $2.75 dollars to the air quality program. In response to a question by Co-Chair Hanley, Mr. King agreed that the municipality will not be able to charge for the air quality program without the adoption of amendment 5. He summarized that there would be a budgetary shortfall to the municipality of Anchorage of approximately $295 thousand dollars. He noted that discussions are occurring regarding the State's assumption of Fairbanks' inspection and air quality programs. Co-Chair Hanley noted that if the amendment is not adopted Anchorage would have to increase property taxes to cover the cost of the programs. A roll call vote was taken on the MOTION on adoption of amendment 5. 5 IN FAVOR: Brown, Grussendorf, Kelly, Kohring, Mulder, Parnell, Therriault, Foster, Hanley OPPOSED: Martin Representative Navarre was absent from the vote. The MOTION PASSED (9-1). Representative Mulder MOVED to adopt Amendment 8, 9- LS1452\K.10 (copy on file). He explained that the amendment would exempt rental vehicles from the two year registration requirement. He noted that many rental companies have seasonal fleets. The Sponsor and the Department of Public Safety had no objections to Amendment 8. There being NO OBJECTION, it was so ordered. In response to a question by Representative Martin, Ms. Hensley explained that the Anchorage field office has a fleet dealer unit that registers all vehicle fleets. Representative Martin MOVED to report HCS CSSB 226 (FIN) out of Committee with individual recommendations and with the accompanying fiscal note. Representative Brown OBJECTED for purposes of discussion. She asked how the fiscal note would be affected by the adoption of amendment 7. Ms. Hensley noted that there would be a operating cost under contractual of approximately $5.5 thousand dollars. There would also be a loss of $31 thousand dollars in revenues. Discussion pursued regarding the fiscal note. Co-Chair Hanley estimated that the contract costs would show a slight savings, while the revenue lost to the State would be 85 percent of 10 dollars. Ms. Hensley noted that if 50 percent of those that are using the mail now choose to go back into the contract offices that the Division would need an additional $11 thousand dollars to pay the commissions. (Tape Change, HFC 96-111, Side 2) Discussion regarding the fiscal note continued. Co-Chair Hanley summarized that contract offices would also lose revenues. He asked for an updated fiscal note. In response to a question by Representative Brown, Ms. Hensley pointed out that half of the vehicles will be registered the first year in a two year basis. The other half would be registered in the next year. There will be an increase in registration fees the first two years. The 6 legislation also contains a reduction of $2 dollars for a two year period. This is shown in the future years as a revenue loss. Mr. Williams noted that the $2 dollar break was given to provide an incentive. Representative Brown maintained that the $2 dollar reduction is an unnecessary loss of future income. She stressed the convenience of registering every two years. Ms. Hensley noted that there would be a savings in postage. Co-Chair Hanley asked if there would be decrease in the workload. Ms. Hensley noted that 60 percent of vehicle owners mail their registration. She emphasized that the legislation will allow the Division to operate more efficiently. She estimated that the legislation will allow lines at DMV offices to be smaller. Representative Brown reiterated concerns with the $2 dollar reduction. Representative Martin WITHDREW the motion to move HCS CSSB 226 (FIN) from Committee. There being NO OBJECTION, it was so ordered. Representative Brown MOVED to delete the $2 dollar reduction. Representative Martin and Mr. Williams spoke against the amendment. A roll call vote was taken on the MOTION. IN FAVOR: Brown OPPOSED: Mulder, Therriault, Grussendorf, Kelly, Kohring, Martin, Foster, Hanley Representatives Navarre and Parnell were absent from the vote. The MOTION FAILED (1-8). Representative Martin MOVED to report HCS CSSB 226 (FIN) out of Committee with individual recommendations and with the accompanying fiscal note. HCS CSSB 226 (FIN) was reported out of Committee with a "do pass" recommendation and with a fiscal impact note by the Department of Public Safety. HOUSE BILL NO. 2 "An Act allowing courts to require certain offenders as 7 a special condition of probation to complete a boot camp program provided by the Department of Corrections; making prisoners who complete the boot camp program eligible for discretionary parole; providing for incarceration of certain nonviolent offenders in boot camps operated by the Department of Corrections; allowing the Department of Corrections to contract with a person for an alternative boot camp program; creating the Boot Camp Advisory Board in the Department of Corrections; and providing for an effective date." REPRESENTATIVE ED WILLIS, sponsor of HB 2, spoke in support of the legislation. He noted that the legislation was first introduced in 1993. He asserted that HB 2 addresses the needs of the Department of Corrections with regard to the proposed program. He maintained that placing nonviolent felony or misdemeanor offenders in a prison setting is not the best way to accomplish rehabilitation of the offender. He maintained that providing an alternative to prison time and an opportunity to learn discipline and acceptable behavior will offer these offenders a chance to avoid further encounters with the law. Representative Willis noted that HB 2 would offer boot camp as an alternative program for convicted felons or misdemeanant under the age of 26. Individuals convicted of crimes such as homicide, assault, kidnapping, sexual offenses, and offenses involving the use of a deadly weapon would not be eligible for this option. The emphasis is on nonviolent offenders. The Department of Corrections has requested that the maximum age limit be raised to 30 years. Representative Willis noted that at least 24 states, in addition to the federal government, operate boot camp programs. Each state offers the program to different groups. For example, in 1993 Virginia's program was limited to nonviolent male felony offenders 24 years of age or under and did not allow felons convicted of murder, manslaughter, kidnapping, sexual assault, etc., to participate in the program. Massachusetts' program, in 1993, was for male offenders under the age of 40. In recent testimony before committees in the United States Congress, Kathleen Hawk of the Department of Justice mentioned that as of 30 September 1994, over one thousand federal inmates had graduated from the federal Intensive Confinement Center/boot camp program. Representative Willis emphasized that the Department has revised its 1995 fiscal note to zero due to the possibility of federal funds for both construction and operating costs. Savings from this legislation could be seen within two to three years. The program involves intensive staff time and follow-up through parole and probation. He maintained that 8 the expenditures are well spent if offenders learn how to structure their lives and recidivism is reduced. He stressed that a boot camp program has the potential of providing many long-term benefits. Representative Brown noted that the Committee was provided with a proposed committee substitute, Work Draft 9-LS0016\M, dated 4/10/96 (copy on file). She observed that the proposed committee substitute would provide for the operation of a boot camp from July 1, 1996 to June 30, 1997. Representative Willis observed that the time frame may not be sufficient. Representative Brown pointed out that fiscal funds are anticipated in the federal fiscal year 1996. BILL PARKER, DEPUTY COMMISSIONER, DEPARTMENT OF CORRECTIONS anticipated that the program would be implemented with federal funds. He did not know if the time frame could be met. Co-Chair Hanley observed that no general fund match is requested. Mr. Parker stated that the Department anticipates that the campus and buildings provided by the State will be counted as the match. Representative Mulder noted that the proposed committee substitute is drafted so that if the federal government does require a cash match that the State would not participate. He noted that the Department received a $50.0 thousand dollar federal grant to study the proposal. Representative Mulder referred to page 2, lines 18 - 21. He noted that regulations must include provisions requiring prisoners to reimburse the Department for the costs of participating in the boot camp program. Representative Willis clarified that the program is voluntary. Mr. Parker noted that prisoners who complete the program will be eligible for parole earlier. Representative Martin questioned if there would be many volunteers. Mr. Parker noted that 50 prisoners could participate. He acknowledged the percentage of indigent prisoners. The cost of the program would be approximately $85 dollars a day. He observed that regulations have not been drafted. He agreed that most inmates could not afford the program. Representative Kelly stressed that family support may be possible. He spoke in support of the program. Co-Chair Hanley questioned if other state's charge for participation in boot camp programs. 9 Representative Brown noted that inmates are currently charged for medical services in halfway houses. She suggested that "must" be changed to "may" and the Department be allowed to setup a system for reimbursement. Representative Mulder agreed that the program should be financially supported. He noted that families may be willing to pay some cost. He stressed that the total amount would too much for must families. He spoke in support of the requirement that a reasonable portion of the cost be reimbursed. Representative Kelly emphasized that the cost should be reasonable so that inmates are not discouraged from participation. Representative Martin stated that the program would be more costly than incarceration in other facilities. Representative Willis stressed that savings will be realized through the transfer from hard to soft beds. He added that sentences will be shorted as a result of the program. Representative Therriault stressed that the program will help to rehabilitate inmates. Representative Mulder stated that the program will be a cost avoidance measure if inmates are rehabilitated and do not reenter the system. He agreed that the per day cost per inmate will be greater. Representative Mulder MOVED to adopt Work Draft 9-LS0016\M, dated 4/10/96. There being NO OBJECTION, it was so ordered. Representative Brown MOVED to delete "must" and insert "may" on page 2, line 19; and insert a "portion of" on page 2, line 20. She explained that the amendment would acknowledged that it is not reasonable for inmates to pay the entire cost of the program, but that some reasonable charge is appropriate. Representative Therriault suggested that the change from "must" to "may" was unnecessary. Representative Brown MOVED to AMEND Amendment 1 by deleting the change from "must" to "may". There being NO OBJECTION, it was so ordered. Representative Martin observed that a portion can vary. He expressed concern with the requirement to charge for the program. Representative Brown noted that the Department "shall" adopt regulations. She stressed the time needed to adopt regulations. She asked if regulations are necessary for implementation of a fee schedule. She stated that the adoption of regulations could take at least 6 to 8 months. She noted that the Department can operate if there is 10 statutory authority. Co-Chair Hanley added that regulations would not be needed if payments are not required. Representative Brown stressed that the most expedient way to allow the Department to implement a pilot program would be to state that the commissioner "may" adopt regulations and that regulations "may" include charges. Representative Brown WITHDREW her motion to amend HB 2. Representative Mulder suggested that the completion dated be changed to September 30, 1997 to match the federal fiscal year on page 2, line 14 and page 3, line 17. Representative Mulder MOVED to delete "June 30, 1997" and insert "September 30, 1997" on page 2, line 14 and page 3, line 17. Representative Brown spoke in support of a longer extension. She added that the legislation could be subject to the availability of federal funds. She maintained that as long as the federal government is providing funding the project should be fully developed. She observed that renovations at the Wildwood Correctional Facility will cost $2.0 million dollars. She suggested that the program be tied to the availability of federal dollars and no limit or a five year limit be added. (Tape Change, HFC 96-112, Side 1) Co-Chair Hanley noted that a conceptional amendment was needed. He stressed that the intent is that the program be implemented only if federal funds are available for the entire program, including capital and operational costs. Representative Willis noted that the Department has requested that the age limit be changed from 26 to 30 years. Representative Kohring spoke in support of the legislation. He noted that permanent fund dividend payments could be attached to pay for part of an inmates participation in the program. He noted that previous programs have been successful in Alaska. He agreed that federal funding is critical. Representative Brown emphasized that the legislation should not preclude future opportunities. She suggested that the legislature should be able to consider making an appropriation. Co-Chair Hanley spoke against the appropriation of general funds. Representative Brown spoke in support of a 3 to 5 year sunset. She added that the legislation could be 11 subject to federal funds or a specific general fund appropriation. She observed that prisoner payments could provide the state match. She spoke in support of the program. She maintained that one year is too short. Mr. Parker stated that the Department now anticipates that the federal government will provide capital and operational costs. Representative Mulder asked if the boot camp must be located in a state correctional facility. He emphasized the increased cost of a correctional facility. Mr. Parker felt that the facility would have to be part of the correctional system. He noted that the Department intends to locate the camp in buildings outside of the fence at the Wildwood Correctional Facility. He did not know if federal guidelines require the camps to be a correctional facility. Representative Brown pointed out that halfway houses are correctional facilities under contract. The bill provides for contract of operations on page 2, subsection (f). HB 2 was HELD in Committee for further consideration. ADJOURNMENT The meeting adjourned at 10:05 a.m. 12