HOUSE FINANCE COMMITTEE April 26, 1996 1:50 P.M. TAPE HFC 96-142, Side 1, #000 - end. TAPE HFC 96-142, Side 2, #000 - end. TAPE HFC 96-143, Side 1, #000 - end. TAPE HFC 96-143, Side 2, #000 - #283. CALL TO ORDER Co-Chair Mark Hanley called the House Finance Committee meeting to order at 1:50 p.m. PRESENT Co-Chair Hanley Representative Martin Co-Chair Foster Representative Mulder Representative Brown Representative Navarre Representative Grussendorf Representative Parnell Representative Kelly Representative Therriault Representative Kohring ALSO PRESENT Senator Dave Donley; Jerry Shriner, Special Assistant, Department of Corrections; Dean Guaneli, Chief Assistant Attorney General, Department of Law; Dwight Perkins, Special Assistant, Department of Labor; Diane Barrans, Executive Director, Postsecondary Education Commission, Department of Education; Ron Torgenson, Department of Labor; Karen Rehfeld, Director, Administrative Services, Department of Education; Mike Tibbels, Staff, Senator Green; Mark Mickelson, Job Training Partnership Office, Department of Community and Regional Affairs; Kathleen Strasbaugh, Assitant Attorney General, Department of Law. SUMMARY SB 148 An Act relating to a defined contribution retirement plan for state employees. SB 148 was rescheduled to another time. SB 175 An Act relating to correctional institutions and their administration; providing the Department of Corrections with the authority to require prisoners to assist in paying for medical treatment; relating to the authority of a law enforcement agency to charge a prisoner for 1 medical costs for a preexisting condition; and relating to service of criminal sentences. HCS CSSB 175 (FIN) was reported out of Committee with a "do pass" recommendation and with three zero fiscal notes; one by the Department of Health & Social Services, dated 2/14/96; one by the Department of Public Safety, dated 4/1/96; and one by the Department of Corrections, dated 4/1/96. SB 229 An Act relating to employment contributions and to making the state training and employment program a permanent state program; and providing for an effective date. CSSB 229 (L&C) was reported out of Committee with a "do pass" recommendation and with four fiscal impact notes; two by the Department of Community and Regional Affairs, dated 3/20/96; two by the Department of Labor, dated 3/22/96; and with a zero fiscal note by the Office of the Governor, dated 3/20/96. SB 301 An Act relating to postsecondary education. SB 301 was HELD in Committee for further consideration. SENATE BILL NO. 175 "An Act relating to correctional institutions and their administration; providing the Department of Corrections with the authority to require prisoners to assist in paying for medical treatment; relating to the authority of a law enforcement agency to charge a prisoner for medical costs for a preexisting condition; and relating to service of criminal sentences." SENATOR DAVE DONLEY, SPONSOR, spoke on behalf of SB 175. He maintained that SB 175 is a follow-up for the constitutional amendment that was approved by the voters in 1994. The constitutional amendment passed in 1994, dealt with victims rights and penal administration. The Constitutional amendment added rights for victims of crime, restitution from the offender, and community of condemnation to the criminal administration provisions of the principal of reformation and protection of the public. Senator Donley asserted that SB 175 seeks to fill these new constitutional mandates. According to Senator Donley SB 175 protects the public safety by prohibiting participation or instruction in martial arts or any other activity that would 2 facilitate violent behavior. He maintained that such activities serve no rehabilitation purpose and can make prisoners more dangerous. He stated that the prohibition against body building and weight lifting equipment would also serve the public safety goal. He noted that these provisions were removed and asked that they be restored. He added that SB 175 enhances rehabilitation opportunities for prisoners by increasing vocational training opportunities in an effort to increase both the productivity and the number of inmates in the Correctional Industries Program. He stated that the community condemnation mandate would be fulfilled by the removal of "frills" which are currently available in some Alaskan prisons, such as premium cable television, compact disc players and possession of pornographic materials. He noted that the original version included a ban on video cassette recorders (VCRs) and personal computers in inmate's individual rooms. He stated that computers were available in common areas where they can be used for educational purposes. Senator Donley emphasized that SB 175 will reduce costs for prisoner medical expenses. He discussed health care costs for inmates with catastrophic illness. Senate Bill 175 would allow the Department greater flexibility in granting "special medical paroles". He observed that the savings from this provision is impossible to predict. He maintained that a lot of money could be saved if a few inmates became seriously ill. Senator Donley reiterated that he supports computers in common areas for educational or vocational use. Senator Donley noted that CSSS SB 175 (FIN)am would provide for individual televisions in inmate cells as an incentive. Inmates would have to make restitution to victims, achieve a high school equivalency diploma and comply with court orders for drug, alcohol or sex counseling. In response to a question by Co-Chair Hanley, Senator Donley clarified that under HCS CSSS SB 175 (JUD), CD players are banned, VCRs and personal computers are allowed in rooms. Tape players are allowed under both versions of the bill. In the House version computers are allowed in cells if they are only for educational or vocational purposes. The Senate version bans them in individual cells. In response to a question by Representative Mulder, Senator Donley explained that the Department requested that "special medical paroles" be expanded to cover inmates that would be restricted to wheel chairs. Representative Brown MOVED to adopt Amendment 1, 9-LS958\H.6 3 (copy on file). Amendment 1 is a technical amendment to clarify that the commissioner of the Department of Corrections shall use Alaska farm products and salmon. Representative Martin asked why prisoners need food as good as the armed services. Senator Donley noted that the bill requires that prisoners not receive food better than the quality or quantity of the army. Representative Mulder noted that halibut can sometimes be bought for as little as .49 cents a pound. He noted that prison officials could not purchase halibut even though it was the cheapest protein available because it exceed the guidelines. He recommended that halibut be included. Representative Martin suggested that "Alaskan seafood" be used. Senator Donely cautioned that king crab would be included under Alaskan seafood. Representative Brown MOVED to amend Amendment 1, insert "fish" and delete "salmon". There being NO OBJECTION, it was so ordered. There being NO OBJECTION to the main amendment, Amendment 1 as amended was adopted. Representative Brown MOVED to adopt Amendment 2, 9-LS095\H.7 (copy on file). She explained that Amendment 2 would insert "apparel" on page 4, line 11. There being NO OBJECTION, it was so ordered. Representative Brown discussed Amendment 3, 9-LS095\H.8 (copy on file). She noted that Amendment 3 would ban smoking in prisons by prisoners. She noted that private facilities would determine whether or not they allow smoking. Smoking in state facilities could be allowed for employees in designated areas that are not accessible to prisoners. She amended the amendment to have an effective date of July 1, 1997. The effective date change was recommended by the Department. Representative Martin noted that the best way to calm a prisoner down may be to let them smoke. He stated that if a prisoner kills himself, from smoking, it is cheaper than capital punishment. Representative Brown stated that smoking could be considered a frill. She maintained that smoking is a drug. Representative Martin suggested that the amendment would be cruel and unusual punishment. He stressed that there would be problems with inmates that are forced to stop smoking. Senator Donley noted that smoking has been banned in Oregon, 4 Texas, Kansas and Utah. Four other states have restricted smoking to designated areas. The legislation would ban smoking to designated areas without Amendment 3. Representative Grussendorf spoke against Amendment 3. A roll call vote was taken on the MOTION to adopt Amendment 3. IN FAVOR: Navarre, Therriault, Brown, Kohring OPPOSED: Mulder, Parnell, Grussendorf, Martin, Foster Co-Chair Hanley and Representative Kelly were absent from the vote. The MOTION FAILED (4-5). Representative Mulder MOVED to adopt Amendment 4, 9- LS0958\H.1 on behalf of Senator Donley (copy on file). Senator Donley explained that Amendment 4 would give the Correctional Industries a say in the additional vocational training. Representative Martin expressed support for vocational training. JERRY SHRINER, SPECIAL ASSISTANT, DEPARTMENT OF CORRECTIONS explained that anytime a product or service is produced by the correctional industries there is an impact on the community. He noted that the amendment is designed to address this issue. The Correctional Industries Commission can determine if there is significant impact to existing private industry. He noted that there are some federal programs which require a rehabilitative element. He stressed that the legislation can provide the rehabilitative element needed for federal funding. He emphasized that the Correctional Industries Commission can assure that there are no negative impacts. Representative Martin noted that the amendment states that there will be no impact from vocational training. Senator Donley observed that there is a difference between offering vocational training and having the industry in the prison. Representative Martin expressed concern that the amendment would limit vocational training opportunities. Discussion ensued regarding the difference of vocational training and correctional industries in relation to impacts on communities. Mr. Shriner stated that he did not think that the "free venture" laundry service would be prohibited by the legislation. Representative Brown agreed with Representative Martin that 5 the amendment would limit what vocational training opportunities would be available. She pointed out that the amendment requires vocational training to be under the Correctional Industries Program. She observed that the Correctional Industries Program can not serve current inmate demands. She emphasized that there may be self study programs. Representative Parnell asked if all vocational training occurs within Correctional Industries Program. Mr. Shriner noted that the commissioner of the Department of Corrections may also provide vocational training under AS 33.30. He stated that the amendment would not limit the commissioner's ability to provide vocational training under AS 33.30. A roll call vote was taken on the MOTION to adopt Amendment 4. IN FAVOR: Parnell, Mulder, Foster OPPOSED: Therriault, Brown, Grussendorf, Kohring, Martin Co-Chair Hanley and Representatives Kelly and Navarre were absent from the vote. The MOTION FAILED (3-5). Representative Mulder MOVED to adopt Amendment 5, 9- LS0958\H.2, on behalf of the Sponsor (copy on file). Senator Donley noted that the amendment would prohibit a VCR or computer in prisoners' cells. Representative Brown OBJECTED. She stressed the benefit of computers. She maintained that computers are an important part of rehabilitation. Representative Parnell ascertained that there are no state owned computers in individual cells. In response to a question by Representative Martin, Mr. Shriner noted that computers can be used as a reward for positive behavior. He noted that there are very few personal computers in individual cells. He observed that the Department supports the allowance of personal computers in individual rooms for purposes of education and training. He stressed that computers are not viewed as a "frill". A roll call vote was taken on the MOTION to adopt Amendment 5. IN FAVOR: Therriault, Martin OPPOSED: Brown, Grussendorf, Navarre, Kohring, Mulder, Parnell, Foster 6 Co-Chair Hanley and Amendment Kelly were absent from the vote. The MOTION FAILED (2-7). (Tape Change, HFC 96-142, Side 2) Representative Mulder MOVED to adopt Amendment 6, 9- LS0958\H.3, on behalf of Senator Donley (copy on file). Representatives Brown and Navarre OBJECTED. Amendment 6 would prohibit body building and weight lifting equipment. Senator Donley maintained that the public is concerned about the presence of body building and weight lifting equipment in prisons. He acknowledged that the majority of this equipment is paid for by the prisoners. He noted that aerobic equipment would not be prohibited. He maintained that inmates coming out of prison are "bulked up and look mean and nasty." He alleged that these people get out of prison and intimidate people. Mr. Shriner stated that the Department supports the elimination of free weights. He stated that the Department thinks that inmates tend to do a reasonable amount of exercise on other Nautilus type equipment. He emphasized that a reasonable amount of exercise is healthy, mentally and physically. Representative Navarre maintained that the use of free weights and other body building equipment is good. He emphasized the amount of discipline needed to stick with a routine. He stressed the benefit to inmate self esteem and mental and physical discipline. He noted that exercise can occupy a lot of the inmate's time. Representative Martin spoke in opposition to Amendment 6. He echoed remarks regarding the benefit to self esteem and discipline. Representative Kelly expressed concern for the safety of guards from prisoners using body and weight building equipment. He noted that aerobic training would still be available. In response to a question by Representative Therriault, Mr. Shriner explained that space requirement for the equipment varies. Representative Therriault pointed out that some body building equipment monopolizes needed correctional space. Senator Donely expressed support for an amendment to 7 Amendment 6 to restrict the prohibition to free weights. Representative Navarre pointed out that free weights can be used outdoors. He disputed the Sponsor's characterization that inmates use this equipment to become more intimidating. Representative Kohring spoke in support of Amendment 6. He did not think that body building and weight lifting equipment is appropriate in the prison environment. He stated that he meant to vote yes on Amendment 5. Representative Parnell noted constituent concern that prisons are not health spas. He questioned the state's contribution. Mr. Shriner stressed that most of the equipment belongs to inmates or inmate councils. Representative Therriault spoke in support of the multiple use of space. Representative Navarre noted that the commissioner can limit the use of body building and weight lifting equipment. A roll call vote was taken on the MOTION to adopt Amendment 6. IN FAVOR: Therriault, Kelly, Kohring OPPOSED: Brown, Grussendorf, Navarre, Martin, Mulder, Parnell, Foster Co-Chair Hanley was absent from the vote. The MOTION FAILED (3-7). Representative Mulder discussed Amendment 7, 9-LS0958\H.5 (copy on file). He referred to Kerr vs. state of Alaska. He explained that Amendment 7 would provide that the commissioner shall monitor or record conversations of prisoners in pretrial status. DEAN GUANELI, CHIEF ASSISTANT ATTORNEY, DEPARTMENT OF LAW observed that there has been abuse of the telephone system by individuals in pretrial status. Calls have been used to intimidate victims and witnesses. He noted that a new computerized phone system was suppose to eliminate these problems by limiting where prisoners can call. The phone system is not operational. He observed that the Cleary settlement provides that the State will not monitor phone calls of pretrial prisoners. Amendment 7 would be contrary to that court order. If it passes it would provide grounds for the State to move to set aside this provision of the Cleary order. 8 Representative Parnell questioned how the attorney/client privilege would be protected. Mr. Guaneli noted that inmates can call attorneys after cleared. Mr. Shriner noted that in some facilities recorders are turned off during calls with attorneys. In others, there are phones without recorders that are used only for calls to attorneys or the ombudsman. Mr. Guaneli stated that it would be rare for an attorney/client conversation to be monitored. He noted that a warrant or wirer taping order would be required. In response to a question by Representative Martin, Mr. Guaneli noted that courts have absolute immunity for any of their judicial acts or the consequences of their actions. He noted prisoners involved in a mail bombing case in Alaska were not pretrial prisoners. Discussion ensued regarding the mail bombing case. Mr. Guaneli noted that the amendment removes the prohibition against monitoring of pretrial prisoners. Representative Mulder MOVED to adopt Amendment 7. There being NO OBJECTION, it was so ordered. Representative Mulder discussed Amendment 8, 9-LS0958\H.4 (copy on file). He observed that the Department of Corrections is currently paying for the cost of post secondary education. The State spends $94.0 thousand dollars annually for the entire system. There are currently 17 individuals involved. He noted that the State has a contract with the University of Alaska. The cost would be the same for additional students. Representative Therriault asked if for statistical information regarding recidivism rates as related to education. Representative Brown noted a study from Texas which showed a decrease in recidivism the higher the education level of the prisoner. She maintained that individuals with a higher education are less likely to offend again. She spoke against the amendment. Representative Kelly stressed that there are a lot of factors involved in recidivism. Representative Mulder pointed out that the amendment does not prevent post secondary education from being offered. It would only prohibit the expenditure of state funds. Mr. Shriner clarified that the $94.0 thousand dollars paid to the University of Alaska only gets the service inside the 9 prison. Prisoners pay for their own tuition fees, books, lab fees and other expenses. They must also meet the same qualifications as other students. Representative Martin spoke in support of the amendment. He maintained that the program is being used by those that are already educated. Mr. Shriner noted that the expense was the same when 50 persons participated. He added that the Department is looking at ways to provide the same level of service at a reduced cost. He noted that not all courses are available through correspondence. In response to a question by Representative Therriault, Mr Shriner clarified that the State spends $94.0 thousand general fund dollars annually for the service. The per unit class cost is the same as for other students. Representative Kohring spoke in support of Amendment 8. He maintained that the program is a subsidy to inmates. (Tape Change, HFC 96-143, Side 1) Mr. Shriner noted that there are more inmates taking correspondence courses than are taking classes through the University of Alaska. Representative Brown spoke against an absolute spending ban. She stressed that spending can be monitored through the budget. She stressed that correspondence classes could be effected by the amendment's prohibition against state expenditures. Representative Therriault emphasized that a less costly delivery of the service should be sought. Mr. Shriner noted that the drop in participation occurred in the past two years. He stated that the drop in participation is a result of a lack of funding for tuition fees. Representative Parnell echoed concern that a literal interpretation of the amendment could restrict the State from providing a room or VCRs for educational use. Mr. Guaneli agreed that a literal interpretation could be limiting. He observed that the amendment is for general administrative cost and not tuition. He observed that some inmates taking college courses have been transferred to Arizona. Representative Mulder clarified that the contract is 10 annually awarded. He WITHDREW Amendment 8. Representative Martin MOVED to report HCS CSSB 175 (FIN) out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. HCS CSSB 175 (FIN) was reported out of Committee with a "do pass" recommendation and with three zero fiscal notes; one by the Department of Health & Social Services, dated 2/14/96; one by the Department of Public Safety, dated 4/1/96; and one by the Department of Corrections, dated 4/1/96. SENATE BILL NO. 229 "An Act relating to employment contributions and to making the state training and employment program a permanent state program; and providing for an effective date." DWIGHT PERKINS, SPECIAL ASSISTANT, DEPARTMENT OF LABOR testified in support of SB 229. He explained that the legislation extends the life of the State Training and Employment Program (STEP) for an additional two years and raises the maximum weekly benefit amount for unemployment insurance (UI) from $212 to $248. The STEP program was originally enacted as a pilot program to provide training for Alaska workers. It diverts part of the employee share of the unemployment insurance tax to a training fund from which training grants are awarded. Covered employees pay one-tenth of one percent of their taxable wages into the training fund. The program will expire on June 30 of this year without legislative action. Mr. Perkins observed that the bill as originally submitted by the Governor would have made STEP permanent in the same form as the current temporary program, with the exception that the Alaska Human Resource Investment Council would serve as the coordinating entity, in place of the defunct Alaska Job Training Council. The Senate, Community and Regional Affairs Committee made three changes to the bill. First, it provided for a sunset date of June 30, 1998, at which time the efficiency of service delivery and program goals can again be evaluated. Second, it inserted a provision requiring the Alaska Human Resource Investment Council to impose accounting and grant administration standards on all entities and their grantees participating in the program. Third, it imposed a 20 percent cap on administrative overhead. Mr. Perkins noted that in the Senate Labor and Commerce 11 Committee the UI weekly benefit amount provisions in SB 276 were added to the bill, with changes. This was the version passed and transmitted to the House. Mr. Perkins emphasized that except for the above-noted changes, the provisions of the bill follow the original pilot program closely. He maintained that the STEP Program is an integral component of Alaska's job training program and has enabled participants to increase their average quarterly earnings from nine to 12 percent. Since its inception, STEP has trained 4,890 Alaska workers at an average cost of $2,000 per participant. The program is financed entirely by employee payroll contributions with no employer contributions or general fund monies. Mr. Perkins stressed that STEP serves workers who would often be ineligible for employment training assistance through other programs. It offers workers the opportunity to acquire skills by investing in themselves, and helps those workers who have been displaced from their jobs to learn more skills. Nearly 60 percent of those entering the program are receiving unemployment benefits, and over 80 percent of the participants successful complete the training and increase their employment opportunities. Mr. Perkins maintained that as federal training money decreases from year to year, continuing the STEP Program will help Alaskans receive the training they need to respond to the changing needs of business and industry. Mr. Perkins observed that the Governor's original UI benefit increase proposal was introduced as SB 276. It proposed a flexible maximum weekly benefit amount, computed from the wage base, defined by statute as 75 percent of the average annual wage, in effect for the calendar year. The bill was combined with SB 229 in the Labor and Commerce Committee, with the following changes: 1. The benefit cap was set at a maximum of $248 dollars. The flexible schedule was discarded. 2. The respective employer/employee shares of the benefit cost rate were changed from 82/18 to 80/20. 3. The resulting employee tax rate was rounded to the nearest one/hundredth of one percent (from one/tenth of one percent). Mr. Perkins observed that these changes will result in additional costs to the fund over time, but the respective 12 employer and employee shares of those costs will change. Employees will be contributing a full one-fifth of the benefit cost rate, and the employer share will decrease to four-fifths. He noted that the schedule of benefits for unemployment insurance has not been adjusted to increase the maximum weekly benefit amount since 1990. Alaska currently ranks 49th in the nation in unemployment insurance wage replacement, with the average weekly benefit amount only slightly more than 27 percent of the average weekly wage for the state. In terms of the maximum weekly benefit amount, Alaska ranks 35th in the nation, notwithstanding the higher cost of living. Alaska currently has the lowest regular maximum benefit amount of all western states except Arizona. Mr. Perkins stated that this increase will provide a modest improvement in wage replacement, coupled with an increase in the employee share of UI costs. He noted that the employee will share in the increase of costs. The additional cost to the employer is a savings of $15 dollars per employee per year. The additional cost to the employee will be $20 dollars more per year or an additional cost per week of .38 cents. In response to a question by Representative Brown, Mr. Perkins stated that Alaska's rating will not be changed by the legislation. Employees will get a modest increase during times of unemployment. Representative Mulder maintained that there was no effort to try to shift state costs. The effort was to increase the employment benefit. Representative Brown noted that the employer as a whole is contributing less and employees are contributing more. She asserted that the burden is being shifted from the employers to the workers. Mr Perkins emphasized that lower scale individuals will pay less than $20 dollars. RON TORGENSON, DEPARTMENT OF LABOR explained that the current unemployment schedule is bottom heavy. He stated that the benefit is proportional to the burden. He stated that the change will cause the people making less and not benefiting from the increase to pay only pennies a year more. The only people that will be paying $25 dollars a year are the people at the top end of the scale. Representative Martin expressed concern with a lack of jobs for individuals that attend training programs. MARK MICKELSON, DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS stressed that the identification of appropriate training 13 only happens when there is an identifiable career or employment goal. He stressed that if there is no evidence of employment money will not be spent on training. Individual involvement in the program varies. The success rate of training entities are taken into account. He estimated a 60 percent employment rate for those that have successfully completed training. Representative Brown MOVED to report CSSB 229 (L&C) out of Committee with individual recommendations and with the accompanying fiscal notes. CSSB 229 (L&C) was reported out of Committee with a "do pass" recommendation and with four fiscal impact notes; two by the Department of Community and Regional Affairs, dated 3/20/96; two by the Department of Labor, dated 3/22/96; and with a zero fiscal note by the Office of the Governor, dated 3/20/96. SENATE BILL NO. 301 "An Act relating to postsecondary education." DIANE BARRANS, EXECUTIVE DIRECTOR, POSTSECONDARY EDUCATION discussed SB 301. Senate Bill 301 would move the Alaska Student Loan Corporation from the Department of Education to the Department of Revenue and transfer the administrative functions of the Alaska Commission on Postsecondary Education to the Alaska Student Loan Corporation. She stressed that the Commission is committed to making changes necessary for the financial success and long term viability of the loan program. She observed that SB 301 would consolidate some agency functions under one board with the clear and distinct focus on the welfare of the program. She noted that there would be some positive changes from the removal of institutional authorization or regulation of postsecondary institutions and the move of loan fund administration to the Corporation in the Department of Revenue. She questioned why two boards would be necessary in the future. She suggested that the regulation function could be transferred as a function of the Department with oversight from the State Board of Education. She noted that the legislation leaves inefficiencies and expenses of a state agency having to administer two separate boards. Ms. Barrans discussed potential benefits from SB 301. The Board membership is reduced from 17 to 10. Quorums will be easier to achieve and there will be some reduction in cost. The legislation will clean up unnecessary language. She noted that Ken Vassar, Bond Counsel wrote a memorandum to her on April 4, 1996, articulating concerns regarding the constitutional existence of the public Corporation Board in 14 SB 301 (copy on file). Ms. Barrans noted that the Legislature wishes to keep close ties to the Program. She stressed that if the Commission is eliminated that legislative ties would remain through the budget and loan terms. MIKE TIBBLES, STAFF, SENATOR GREEN noted that the Sponsor worked with the Legislative Legal Services Agency to address the constitutional question raised by the Department of Law. In response to a question by Representative Mulder, Mr. Tibbles noted that many of the provisions of Executive Order 97 were adopted. He observed that EO 97 had some out dated federal laws that needed to be cleaned up. The are repealed in SB 301. He added that legislative involvement and confirmation were retained in SB 301. In response to a question by Representative Kohring, Ms. Barrans discussed the fiscal note accompanying SB 301. She observed that the only new cost that is not currently being born, is the cost to the Department of Education to administer the functions of AS 14.48. The cost of this function is currently being absorbed by the Student Loan Corporation. There is a provision in SB 301 that would allow the assessment of fees on institutions that are regulated. She noted that the fiscal notes are the same as for EO 97 with the exception that the institutional authorization was not moved. KATHLEEN STRASBAUGH, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF LAW spoke regarding constitutional problems with SB 301. She referred to a memorandum she sent to Senator Judy Salo on April 23, 1996 (copy on file). She noted that the Board of the Alaska Commission on Postsecondary Education has never been subject to legislative confirmation. She argued that the Board's functions have not changed sufficient to warrant the need for confirmation. She discussed the position of legislators on the Board. She noted that non- voting legislative members remain on the Board. She stated that under the legislation, legislative members are not needed for a quorum. The Corporation would no longer pay per diem to legislative members. She noted that Bond Counsel has expressed concern that legislators are closer to the bond issuance process than they were previously. Members of the Postsecondary Education Commission become the members of the Corporation under the legislation. She noted that corporations are not subject to confirmation. (Tape Change, HFC 96-143, Side 2) 15 Ms. Strasbaugh noted that legislators will not vote under the legislation. They currently vote and are part of a quorum. She reiterated that legislators will not receive per diem or be part of the quorum. Ms. Strasbaugh maintained that the whole Board is being kept on in order to require legislative confirmation for the Corporation. She asserted that this is expensive and unnecessary. She added that the regulatory function predominates. She stressed that the argument against confirmation remains. Mr. Tibbles noted that under SB 301 legislators will not serve on the Commission, but they will serve on the Corporation as non-voting members. Ms. Strasbaugh acknowledged that legislators are not on the Commission. She emphasize that concern remains that the presences of non-voting legislative members on the Corporation would be closer to the bonding process. Ms. Strasbaugh noted that by itself, the Alaska Student Loan Corporation is not subject to confirmation under the Constitution. The only way the Legislature can require confirmation is to claim that the Postsecondary Commission is subject to confirmation and then have the members of the Student Loan Corporation the same as the Commission through statute. KAREN REHFELD, DIRECTOR, ADMINISTRATIVE SERVICES, DEPARTMENT OF EDUCATION expressed concern with SB 301. She noted that the Department would receive another responsibility at a time when the Department is trying to focus energy on the quality education initiative. She observed that the Department of Education does not have staffing or expertise in these areas. She observed that the Department of Education has requested a part time position to assist in coordinating and scheduling meetings. The authorization function would be new to the Department. The legislation also contemplates implementation of regulations for a fee structure. She emphasized that the Department's limited resources would be diluted. Representative Brown questioned the need for two separate entities. REPRESENTATIVE CON BUNDE responded that the Alaska Commission on Postsecondary Education's function is as a quasi judicial board, warranting legislative confirmation. The Commission used to decide appeals on student loans. Currently, staff decides appeals. He maintained that appeals should go to the Commission. He stressed that the 16 Commission can preside over appeals by schools. Ms. Barrans clarified that under the legislation all loan related issues are moved away from the Commission. The only appeals the Commission could hear, under SB 301, would be an appeal of withdrawal or termination of authorization to operate an institution in Alaska. She could not recall such an appeal before the Commission in the past 14 years. Ms. Barrans noted that the Commission administers the Alaska Student Loan Program and student aid programs. The Commission also regulates postsecondary education in Alaska under AS 14.48. This function would move to the Department of Education under SB 301. Ms. Strasbaugh maintained that the basic function of the Corporation would not be changed. She stressed that the only function that could be used to base arguments for confirmation would be the adjudication of institutional authorization that has been rarely invoked. SB 301 was HELD in Committee for further consideration. ADJOURNMENT The meeting adjourned at 4:15 p.m. 17