Legislature(2013 - 2014)SENATE FINANCE 532
03/17/2014 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| Confirmation: Department of Revenue, Commissioner Angela Rodell | |
| SB161 | |
| SB135 | |
| SB108 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | SB 80 | TELECONFERENCED | |
| + | SB 108 | TELECONFERENCED | |
| += | SB 161 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| = | SB 135 | ||
SENATE FINANCE COMMITTEE
March 17, 2014
9:04 a.m.
9:04:53 AM
CALL TO ORDER
Co-Chair Meyer called the Senate Finance Committee meeting
to order at 9:04 a.m.
MEMBERS PRESENT
Senator Pete Kelly, Co-Chair
Senator Kevin Meyer, Co-Chair
Senator Anna Fairclough, Vice-Chair
Senator Click Bishop
Senator Mike Dunleavy
Senator Lyman Hoffman
Senator Donny Olson
MEMBERS ABSENT
None
ALSO PRESENT
Angela Rodell, Commissioner, Department of Revenue; Senator
Fred Dyson; Chuck Kopp, Staff, Senator Fred Dyson; Nancy
Meade, General Counsel, Alaska Court System; Carmen
Gutierrez, Self, Juneau.
PRESENT VIA TELECONFERENCE
Dr. Norman Means, Self, Anchorage; James Mooney, Self,
Anchorage; James Noble, Self, Prudhoe Bay; Donna Klecka,
Self, Eagle River.
SUMMARY
CONFIRMATION: Department of Revenue, Commissioner Angela
Rodell
SB 80 OUT-OF-STATE PHYSICIAN LICENSE
SB 80 was SCHEDULED but not HEARD.
SB 108 LIMIT PUBLIC ACCESS TO CRIMINAL RECORDS
SB 108 was HEARD and HELD in committee for
further consideration.
SB 135 EXTEND ALASKA HEALTH CARE COMMISSION
SB 135 was REPORTED out of committee with a "do
pass" recommendation and with a previously
published zero fiscal note: FN1 (DHS).
SB 161 AUTOPSIES AND DEATH CERTIFICATES
CSSB 161(FIN) was REPORTED out of committee with
a "do pass" recommendation and with a new zero
fiscal note from the Department of Health and
Social Services.
9:06:31 AM
Co-Chair Meyer related that typically in confirmation
hearings, the committee allowed the designee time to
explain why they wanted the job and why they were the best
selection.
9:06:58 AM
^CONFIRMATION: DEPARTMENT OF REVENUE, COMMISSIONER ANGELA
RODELL
ANGELA RODELL, COMMISSIONER, DEPARTMENT OF REVENUE, spoke
about her background and related that a love of public
service had led her to get a double major in political
science and economics. She discussed her background and
work history. [The information can be found in her resume
which was in members' packets (copy on file).] She shared
that she then received a Master's Degree in Public
Administration with an emphasis in public finance. She
related that through her work in financing housing, she had
visited Alaska and met with the Alaska Housing Finance
Corporation (AHFC); the trip had made a real impression on
her at the time. She related that when she had met with
AHFC in December of 1996, Alaska was in a very different
place; however, it was also in a very similar place. She
shared that many of issues that were being discussed this
year were also under discussion 20 years prior. She related
that 20 years ago, a natural gas pipeline, the depletion of
the Constitutional Budget Reserve Fund, and the decline or
elimination of the Prudhoe curve were all being discussed.
Commissioner Rodell continued to address the committee and
felt that she had gained a unique perspective over the last
15 years as she had been advising clients in Alaska and
around the United States. She asserted that Alaska was in a
great position and had hard decisions to make; she wanted
to be part of that decision making process and taking the
state forward. She offered that Alaska had always managed
its resources well and made the hard decisions when they
arose. She thought that Alaska saved money when appropriate
and had likewise invested money in the state when that was
appropriate. She opined that the State of Alaska had
honored its contract obligations and had taken care of its
people. She added that Alaska currently had a lot
possibilities and that it was a very exciting time to be
here; additionally, she was excited to work with the
current administration. She related that although she had
officially come to Alaska in 2011 as the Deputy
Commissioner of Treasury for the Department of Revenue, she
felt as though she had been participating in the state's
finances for almost 20 years; she wanted to continue in
that roll.
9:11:20 AM
Co-Chair Meyer noted that Commissioner Rodell's background
was very impressive.
Co-Chair Meyer inquired what Commissioner Rodell's forecast
was for improving revenue for the state and referenced
concerns regarding the oil production forecasts continuing
to go down, despite passing the oil tax bill the prior
session. It was his impression that Commissioner Rodell
tended to be conservative with the forecasts and that if
they exceeded the prediction that would be great; he hoped
that production forecast would at least be above the
conservative number.
Co-Chair Meyer requested an explanation of how Commissioner
Rodell made the production forecast, as well as how she
viewed future revenue for the State of Alaska. Commissioner
Rodell responded that from her standpoint, it was
imperative that DOR was conservative on the production
forecasts, given that it was used for all of the state's
spending decisions. She stated that she would rather error
on the side of showing revenues lower than forecasted so
that there were potential surpluses at the end of the year
rather than significantly large deficits. She acknowledged
that it was important to give the legislature comfort with
the methodology that was used in the forecasts.
Commissioner Rodell shared that she did have concerns
regarding Alaska's growing dependence on the oil and gas
production tax as opposed to other taxes or revenue sources
available within the state. She thought that 20 years ago
Alaska was maybe 70 percent reliant on the oil and gas
production tax, but that now Alaska was 90 percent reliant
on that as a revenue source; meanwhile, the federal
government was also cutting back on its spending in Alaska.
She wondered how the state was going to pick up the federal
portion of the revenue sharing. She opined that the state
would have to continue to look for diversity in its revenue
base and look at investment earnings as a source of
revenue. She thought that the state needed to continue to
look at ways to encourage business development within the
state.
9:14:12 AM
Co-Chair Meyer offered that it was a little risky having 90
percent of your revenue coming from one source. He inquired
how Commissioner Rodell saw the makeup of the state's
revenue stream in 20 years and hoped that the state would
have income from gas by then. Commissioner Rodell replied
that gas was important component of what DOR saw 20 years
in the future; however, this was still a huge influence
from the energy sector overall. She hoped to see more
revenue coming from business sectors within the state
outside of the energy sector such as fisheries, other
resource development, and mineral taxes.
Co-Chair Meyer thought that financially speaking, the state
was in a good position and inquired if Alaska had the
highest credit rating that was possible. Commissioner
Rodell replied in the affirmative.
Co-Chair Meyer inquired what changes Commissioner Rodell
anticipated or desired to make within DOR in the future.
Commissioner Rodell replied that DOR was in a really good
position currently and that she felt good about many of the
things that it was taking on; DOR was continuing to review
its regulations and was attempting to find an easier way to
comply with statute through regulations and encouraging
certain business activity through those regulation changes.
She reported that DOR was doing to a lot of work to develop
its databases to provide good information on both the use
of tax credits along with where tax revenues were coming
from. She reported that DOR was trying to find cost
efficiencies where it could but thought that the department
was doing a much better job of serving the public; DOR was
becoming a more customer-service friendly department and
she wanted to continue that effort. She wanted to continue
to foster working across divisions to address many of the
concerns regarding confidentiality in order to provide the
public with information about what the department was doing
and how it was conducting the state's business.
9:17:27 AM
Senator Hoffman relayed that the Permanent Fund was $50
billion. He inquired how Commissioner Rodell saw the fund
today, as well as how she envisioned its role in the
future. He thought that the Permanent Fund Earnings Reserve
account had about $5 billion and additionally inquired what
role Commissioner Rodell saw it playing in the near future
for the State of Alaska. Commissioner Rodell replied that
the Permanent Fund was a tremendous asset to Alaska, not
only in the financial support it offered to the state in
terms of comfort and security, but also in the form of
yearly assistance to the state's economy. She thought that
the state needed to recognize what an asset the Permanent
Fund could be to economic development. She clarified that
she did not necessarily mean investing Permanent Fund
dollars into the state or its projects, but recognizing the
jobs that the fund was creating in and of itself by hiring
external managers, accountants, and bankers to the extent
that the DOR could encourage some of that development to
come to the state. She related that recognizing that the
$50 billion Permanent Fund and its investment strategies
can do certain things that it would not have had the
capability to do 10 years prior.
Commissioner Rodell addressed the second part of Senator
Hoffman's question and related that the state's various
reserve accounts were partially responsible for the state's
tremendous credit rating. She thought that Permanent Fund
Earnings Reserve would be important as the state when
forward with the budgets, especially if it Constitutional
Budget Reserve continued to be used as forecasted. She
found it interesting that Alaska always had always
management to turn reserves around either through cutting
expenses or additional revenue. She thought that the
Permanent Fund Earnings Reserve was more of a source of
support and credit for Alaska rather than a source of
spending.
9:20:52 AM
Senator Bishop inquired what the largest financial package
in dollar amounts that Commissioner Rodell had put together
in her 7 years with First Southwest in New York City.
Commissioner Rodell responded that it was an interesting
question because there was a difference between dollar
volume and complexity. She offered that some of the most
complex transactions that she had worked on had been some
of the smallest dollar sized transactions; they had been
complex because of the number of parties, moving parts, and
agreements associated with them. She opined that real-
estate transactions in particular tended to be complex
because of all the associated legal agreements attached to
them. She thought that the largest volume sized transaction
that she had worked on was $11 billion.
Senator Bishop noted that he had been before a confirmation
hearing as a commissioner designee and his questions were
not "gotchya" questions; they were intended to make him
feel better about the future.
Senator Bishop inquired if Commissioner Rodell felt that
she had the wherewithal to see the state through the AK LNG
project. Commissioner Rodell replied in the affirmative and
added that she was very excited about the prospect. She
thought that the AK LNG project would be one of the most
interesting times and transactions that Alaskans would work
on.
9:23:17 AM
Senator Olson appreciated that Commissioner Rodell was
"taking the bull by the horns" and noted that the state was
going through some difficult times regarding its future. He
pointed out that the commissioner of DOR was handling a lot
of money and recalled a prior issue where the state had
lost a lot of money because of investment mistakes.
Senator Olson queried what Commissioners Rodell's thoughts
were regarding having the Permanent Fund being managed in a
more financially metropolitan centers such as New York or
San Francisco instead of in state. Commissioner Rodell
replied that with technology and information sharing at its
current state, there was no need to manage the fund outside
of the state. She added that it would not be necessary. She
stated that between the state office building and the
Goldbelt building, the state was managing over $100 billion
and offered that she had seen nothing in her career that
would indicate that it needed to be managed anywhere but
Alaska. She added that it might be helpful for DOR to have
offices in anchorage.
Senator Olson related that recently, the Senators had met
to look over some of the budget forecasts related to the
unfunded liability. He reiterated that the commissioner of
DOR was dealing with a lot of money, but that the state
also had a fair amount of liability in the retirement
system; he inquired how Commissioner Rodell saw this aspect
playing out in the long run. He referenced long-term
forecasts and inquired what Commissioner Rodell's views
were regarding the unfunded liability, particularly in
light of all the aging retirees. He further queried if the
state could survive the issue with the unfunded liability.
Commissioner Rodell responded that she thought the state
could survive something like this and that it was an
important piece of the governor's proposal of putting $3
billion into the PERS and TRS Trust Fund. She reported that
the state was moving some money out of reserves into the
PERS and TRS and that it would allow Alaska to offset the
liability to a much more manageable level in order to take
on additional debt in the future. She was concerned that if
the money was not transferred, the liability would just
continue to grow. She thought that if Alaska wanted to move
the pension liability to a more pay as you go structure, it
would have to convert the asset allocation in PERS and TRS,
which was currently targeted at 8 percent, to a much more
conservative asset allocation that earned a lower rate so
that the principle could be preserved to pay out benefits.
She thought that contract obligation would be essential in
moving the gasline forwards and that the state needed to be
able to demonstrate that it honored it debts and contract
obligations; people would be entering more than 50
contracts with the state in a partnership in the gasline.
9:28:06 AM
Commissioner Rodell continued to address Senator Olson
question and related that the state needed to show that it
took care of its liabilities.
Senator Olson discussed a recent 5 percent drop in oil
production in one month and that there was a concern
regarding the reserve accounts being exhausted in the
future. He offered that bonding would be the only way the
state could continue on with essential services; he saw a
bleak financial future for the state. He opined that as
conservative as Commissioner Rodell was, some of the
revenue forecasts were fairly optimistic. He inquired how
the state would keep itself out of trouble in 7 or 10
years. Commissioner Rodell responded that it would be a
challenge to manage the state's spending into the future.
She related that she was optimistic about the forecast and
saw a lot of untapped potential in areas of exploration or
in heavy and shale oil. She thought that the state had
opportunities in the future to increase revenue. She spoke
of the need to create a stable tax environment for any
business to plan and operate through. She understood
Senator Olson's comment about a bleak financial future, but
she approached it from the standpoint of tremendous
opportunity.
Senator Olson pointed out that the following questions had
been provided by a constituent and inquired if Commissioner
Rodell had ever been employed by the oil companies.
Commissioner Rodell responded in the negative.
Senator Olson queried if Commissioner Rodell had a pension
from an oil company. Commissioner Rodell replied in the
negative.
Senator Olson inquired if Commissioner Rodell owned any oil
company stock. Commissioner Rodell responded that she did
not own stock directly.
Co-Chair Meyer mused that that all Alaskans owned oil stock
through the Permanent Fund.
9:31:23 AM
Co-Chair Kelly inquired what Commissioner Rodell thought of
the future of interest rates and the economic environment
of America in general over the next 10 years. Commissioner
Rodell thought that it felt like Americans had been waiting
for the interest rate to go up, but that the yield curve
continued to steepen; people expected that the interest
rates would be higher in 10 years. She noted that interest
rates were staying extremely low in the near-term. She
recalled that the state had sold a one-year note for $170
million and that the interest rate on that was 1/10 of 1
percent; that was great for barrowers, but was terrible for
investors. She noted that Alaska was investing in the same
market and was not really getting any investment income.
Co-Chair Kelly queried why investors even bothered to
continue to invest with such a low interest rate.
Commissioner Rodell replied that DOR had had that
discussion internally and wondered if it would be better
holding dollar bills rather than losing purchasing power
through some of the investments. She stated that the
interest rate was the area where the state was really
getting punished. She related that the state had $20
billion in reserves, but that it knew that future revenues
might not be sufficient to operate the state; therefore,
Alaska was heavily reliant on maintaining the principal in
those reserves so that the money was available for
essential core services. She concluded that short-term
investments were not making a lot of money currently.
Co-Chair Kelly observed that he enjoyed talking to
economists that could explain their thinking and that
Commissioner Rodell was able to do that. He inquired what
mechanisms would fall in place and how it would affect
Alaska if the Chinese economy tanked. Commissioner Rodell
replied that if the Chinese economy tanked, the expectation
was that the demand for oil worldwide would drop; therefore
prices overall would fall. There was a school of thought
that Oil Producing and Exporting Countries (OPEC) and the
Middle East had a certain floor that they did not want to
go below and would do things and ratchet back supply in
order to prop up oil prices. She offered that there would
be continued volatility and other things that caused oil
prices to spike. She thought that China had a big influence
and would continue to, but that there were other offsetting
influences in the near term.
Co-Chair Kelly inquired if the state invested much in gold
and wondered if it should. Commissioner Rodell responded
that she would have to go back and look to see specifically
where the state had gold. She stated that Alaska
periodically looked at the direct buying of gold, but
thought that most of the investments in gold were found in
the permanent funds rather than the state funds. She
concluded that she would have to return with an answer.
Co-Chair Kelly noted that a lot of economies had invested
in gold and thought that Alaska was one of the few that
could play in that market. He didn't know that it was a
good idea, but was curious. Commissioner Rodell related
that DOR did look for investments that were counter-
cyclical in order offset potential losses and that it did
look for opportunities to invest in other markets or
commodities in order to minimize the volatility.
[FRA1]
Vice-Chair Fairclough requested the commissioner to discuss
her management style and how she worked with others. She
noted that government typically was operated in silos, but
that mega projects required collaboration. She inquired how
Commissioner Rodell would relate peer to peer at the
commissioner level and how she would work with her own team
to encourage them to perform their best. Commissioner
Rodell replied that she would describe her management style
as open, transparent, and team oriented. She shared that
she did not have a hierarchal style that was top down, but
was more about looking across DOR and assessing where there
was real talent for specific projects. She related that in
the case of moving the gasline forward, she thought that
people from the Treasury Division would be important
because of their perspective as an investors. She thought
that it would also be important to bring in the Tax
Division so that the state could understand the
implications from that standpoint. She added that having
all of that under the department would be helpful in
evaluating the terms of contracts going forward.
Commissioner Rodell continued to address Vice-Chair
Fairclough's questions and related that it was also
important that she worked in the same collaborative manner
with the other commissioners and expounded that she could
see a role in the gasline for almost every commissioner
that she worked with; the Department of Public Safety, the
Department of Transportation and Public Facilities, the
Department of Labor and Workforce Development, the
Department of Commerce, Community and Economic Development,
the Department of Labor and Workforce Development, the
Department of Natural Resources, and the Department of
Administration would all have to be involved. She offered
that her experience with cabinet so far was that it was a
very collegial group that reached out routinely to discuss
various issues.
Vice-Chair Fairclough shared a "glowing" report from a DOR
employee. The employee had indicated that DOR had an open
door policy and that they could come into Commissioner
Rodell's office and offer suggestions or supply information
that might be useful.
Vice-Chair Fairclough noted that Commissioner Rodell had
briefly discussed how the unfunded pension liability could
affect the state's credit rating; she inquired if anything
else could jeapardize the state's top credit rating.
Commissioner Rodell responded that it was important to note
that the rating analysts were more focused on the near
term, even though the rating might be on a long-term 20 or
30 year piece of debt; however, they were really focused on
the actions being taken now and over the next 5 years. She
reported that rating analysts would look at how the state
continued to meet its near-term obligations and what Alaska
was doing to take care of the state. She thought that the
important take away was that Alaska did a good job of
taking care of people first in thin times and had invested
when it was easier to do a capital budget. She expounded
that Alaska had a record of doing what it said it was going
to do as opposed to running gimmicks that she could point
to in the Lower-48; she believed that it was a cultural
thing in Alaska that she did not see in other parts of the
country.
9:42:47 AM
Vice-Chair Fairclough inquired how the market would view
"kicking a can down the road" and wondered how simply
making the prescribed payments under the current funding
mechanism would be viewed. She thought that the state was
required to contribute $600 million and wondered what would
happen if the market looked at a 5-year plan and saw that
the payment was escalated to over a $1 billion.
Commissioner Rodell responded Alaska had historically
funded its ark and that as a long as the Alaska kept making
the annual payment, it would be acceptable. Credit would be
given for continuing to make the annual payment; however,
the question was what would happen if the payment got to be
a greater percentage of the operating budget and the state
zeroed or backed away from it. She related that rating
analysts were concerned about the size of the unfunded
liability, but that making a payment versus not making one
was of greater concern.
Vice-Chair Fairclough inquired if Commissioner Rodell could
discuss ethics and how it applied to her position, as well
as how she held to that standard so that the legislature
would have confidence in the information that she was
providing. Commissioner Rodell responded that you could not
do her job without public trust and the trust of the
legislature. She stated that if there was anything that
might give a constituent pause that she might not be acting
in the best interest of the state, such as contracting
through with various vendors, she would take steps to
remove herself, so that there was no appearance of conflict
and that those procurements were kept above board. She
shared that the test for her was if it would raise flags or
give her a bad feeling if she was on the outside looking
in; if it did, it was important to take steps to avoid even
the appearance of a conflict.
9:46:52 AM
Co-Chair Kelly inquired what would happen if the state paid
off the unfunded liability completely with a $12 billion
payment and there was a crash in the stock market the next
day. He inquired what would happen to the money.
Commissioner Rodell replied that there would be significant
losses and the creation of a new liability. Co-Chair Kelly
noted that in that case, there would be a new liability and
the money would be lost. He wanted DOR to look at a
strategy of the value of concrete and steel versus dollars
in bank accounts. He was not a proponent of willy-nilly
spending with capital money in districts to get people
reelected; however, the state had some huge projects coming
up and it needed to look after the next generation. He
hoped that DOR would not be so conservative and balance the
needs of the next generation. He was unsure what would
happen to many rural areas of the state if the state's
reserves became depleted because it overreacted to the
unfunded liability and at the same time, it failed to
provide energy infrastructure. He noted that it would be
people in the cold and not simply theoretical graphs that
were being discussed. He did not think that this discussion
took place often enough regarding the unfunded liability.
He offered that a piece of steel and concrete that produced
gas that could be sold or a pipeline that could be laid to
mines would produce for the state regardless of the
interest rates and other market factors. He asserted that
as the Commissioner of the Department of Revenue, Ms.
Rodell's job had to go beyond the graphs.
Co-Chair Kelly MOVED to ADVANCE the name of Angela Rodell
for the appointment of Commissioner of the Department of
Revenue. The name will be forwarded to the full membership
of the legislature in joint session for consideration and a
final vote. There being NO OBJECTION, it was so ordered.
The name of Angela Rodell was ADVANED for the appointment
of Commissioner of the Department of Revenue. The name was
forwarded to the full membership of the legislature in
joint session for consideration and a final vote.
Co-Chair Meyer read from Uniform Rule 46:
Signing the reports regarding appointments to boards
and commissions in no way reflects individual member's
approval or disapproval of the appointees and that
that nominations were merely forwarded to the full
legislature for confirmation or rejection.
9:51:57 AM
AT EASE
9:53:20 AM
RECONVENED
SENATE BILL NO. 161
"An Act relating to duties and procedures of the state
medical examiner and the Department of Health and
Social Services; and relating to death certificates."
9:53:46 AM
Co-Chair Meyer noted that SB 161 had a companion bill in
the house.
Senator Olson noted that during the last hearing on SB 161,
there had been a question on one of the fiscal notes, which
had been a zero note. He confirmed that the note was in
fact a zero note.
Co-Chair Kelly MOVED to REPORT CSSB 161(FIN) out of
committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CSSB 161(FIN) was REPORTED out of committee with a "do
pass" recommendation and with a new zero fiscal note from
the Department of Health and Social Services.
Vice-Chair Fairclough requested a brief AT EASE.
9:55:35 AM
AT EASE
9:55:53 AM
RECONVENED
SENATE BILL NO. 135
"An Act extending the termination date of the Alaska
Health Care Commission; and providing for an effective
date."
9:55:53 AM
Co-Chair Meyer noted that the only prior concern was the
bill's cost. The committee had been unable to reduce the
cost of the legisaltion, but had added a 3-year sunset
date.
Senator Olson related that the Alaska Health Commissioner
was originally put in place by Governor Palin and had been
into statute. The commission had been looking at healthcare
issues, particularly with costs in the state of Alaska. He
asserted that Kris Kurtis, who was the auditor, had
indicated that the Alaska Healthcare Commission was indeed
serving the public's interest, which was why there
recommendation to go to a 3-year sunset.
Co-Chair Meyer recalled that his concern was that there
were two staff people dedicated to board with a cost of
$500,000; however, a lot of it was federal matching money,
which made it difficult to reduce the bill's cost.
Co-Chair Kelly MOVED to REPORT SB 135 out of committee with
individual recommendations and the accompanying fiscal
note. There being NO OBJECTION, it was so ordered.
SB 135 was REPORTED out of committee with a "do pass"
recommendation and with a previously published zero fiscal
note: FN1 (DHS).
9:58:03 AM
AT EASE
10:00:39 AM
RECONVENED
SENATE BILL NO. 108
"An Act relating to the confidentiality of certain
records of criminal cases; and providing for an
effective date."
10:01:00 AM
SENATOR FRED DYSON, SPONSOR, addressed the legislation. He
believed many members had handled Second Amendment issues
well and that First Amendment issues would be addressed on
a more frequent basis. The bill pertained to the Fourth
Amendment's right to privacy. His concern had come out of
the task force currently working on barriers to reentry
from the criminal justice system. He discussed that the
State of Alaska had a public website called CourtView that
listed criminal records. He stated that unfortunately, the
website also carried arrest records. The bill would
strengthen the privacy and liberty interests of persons
when charges were dismissed or acquitted by removing
records from CourtView after 120 days. The information
would remain available to police, the Department of
Corrections, judges, and prosecutors. He stated that many
employers, landlords, and other frequently looked at
CourtView to determine whether a person had a record; a
person's name on the website hindered that person from
competing for jobs and other. He referred to a case in
Anchorage from the prior year as an example of an innocent
person with their name posted on CourtView. He relayed that
the record on CourtView was indefinite.
10:04:25 AM
CHUCK KOPP, STAFF, SENATOR FRED DYSON, stated that section
1 of the bill addressed the practicality of going back
without incurring a large fiscal note. The sponsor's office
had developed the legislative intent language in
conjunction with the Alaska Court System that aimed to
address people who were currently struggling under the
weight of an acquitted or dismissed charge on CourtView. He
read from the sectional analysis (copy on file):
Section 1
Provides legislative intent directing the Court, to
the extent practicable, to treat as confidential
records of criminal cases disposed of before the
effective date of the Act by acquittal of all charges,
dismissal of all charges, or acquittal of some charges
and dismissal of remaining charges, to the same extent
that records are held confidential by this bill, under
AS 22.35.030.
Section 2
Amends AS 22.35 by adding a new section, AS 22.35.030.
Records concerning criminal cases resulting in
acquittal or dismissal confidential.
This section establishes that a court record of a
criminal case is confidential if 120 days have elapsed
from the date of acquittal or dismissal and (1) the
person was acquitted of all charges filed in the case;
(2) all charges against the person have been dismissed
by the prosecuting authority; or (3) the person was
acquitted of some of the charges in the case, and the
remaining charges were dismissed.
Provide exceptions for access to information made
confidential for state agency employees responsible
for health, safety, welfare, or placement of a child,
a person with a physical or intellectual disability,
or a person with a mental illness; employees that
protect other vulnerable citizens, and state criminal
justice information network users. The Department of
Health and Social Services will adopt regulations to
administer these exceptions.
Section 3
Establishes the Applicability of the Act to criminal
charges concluded on or after the effective date of
the Act by dismissal or by acquittal of the defendant.
Section 4
Establishes the effective date of the Act as October
1, 2014.
Mr. Kopp elaborated that that the original bill had read
that a court record of a criminal case would be
confidential if 90 days had elapsed from the date of
acquittal or dismissal; the provision had been updated in
Section 2 to 120 days per a request from the Department of
Law due to a 120 evidentiary rule.
10:08:52 AM
Mr. Kopp directed committee attention to the zero fiscal
notes from the Department of Administration, which included
the Office of Public Advocacy and the Public Defender's
Office, and one from the Department of Law. He stated that
the courts could address the process by which records were
held confidential under court rule. He noted that there
were letters of support in member files as well as one
letter of opposition from the Office of Victim's Rights.
NANCY MEADE, GENERAL COUNSEL, ALASKA COURT SYSTEM,
testified that the Alaska Court System (ACS) was neutral on
the bill. She shared that she had worked with the bill
sponsor to ensure that the legislation could be implemented
with the least amount of expense and technological
problems. She said that ACS could make cases confidential;
this would be a unique category of cases, as all other
cases that were confidential were so from the beginning of
the case. She relayed that when the legislature made a
certain case type confidential the case was not posted on
Court View or released in hard copy. The cases were kept in
courthouses in a fluorescent envelope and were viewed by no
one, with the exception of: the parties in the case, the
attorneys in the case, court staff for case processing
purposes, and the judge. She explained that the legislation
would make cases confidential after they had previously
been public. Provided that every charge in the case was
dismissed or acquitted the case would be removed from
CourtView at no fiscal impact to the state. She spoke to
the retroactivity provision in the bill. She stated that
ACS had transferred all of its case management to the
CourtView system over the past decade and different courts
had different dates on which they were put on CourtView.
She said that as long as courts were on CourtView certain
case types could be removed. She warned that removing case
files prior to the conversion date could prove logistically
problematic. The retroactivity intent language in the bill
would alleviate the fiscal and logistical problem of
retrieving cases from storage and categorizing them
differently. She reiterated that ACS could implement all of
the changes proposed in the legislation without a fiscal
impact except for the exceptions that were created for
certain state agencies. She stated that in order for
certain people in specific state agencies to gain access to
cases that had been removed from CourtView a special portal
would need to be created. The portal would need to work
with the ACS vendor and would have an initial fee of
$22,000, a yearly maintenance fee of $3000, and a security
fee of $500.
10:14:20 AM
DR. NORMAN MEANS, SELF, ANCHORAGE (via teleconference),
spoke in support of SB 108. He relayed a story concerning
is daughter's arrest for driving under the influence (DUI).
He stated his daughter was driving with friends when the
fuel pump in the vehicle went out. The vehicle stalled in
the middle of the road and an Anchorage police officer
responded. He said that after the officer pushed the van to
the side of the road while is daughter steered, he issued a
traffic stop. He explained that his daughter provided all
of the required documents, which were in order. He
testified that the officer then began demanding his
daughter's personal phone number, which she refused to
provide. He stated that his daughter asserted her
constitutional right to remain silent, requested an
attorney, and refused to consent to any searches. He
furthered that at that point the officer placed her under
arrest for DUI; she was transported to the Anchorage jail.
He read from the arresting officer's report: "She does not
appear to be under the effects of any drugs, legal or
illegal."
Dr. Means related that his daughter passed a Breathalyzer
Test and was released on her own recognizance; however, the
arrest record currently remains on Court View. He expressed
frustration that the vehicle had been impounded when it was
registered under his name, and not to his daughter. He said
that he had had no fewer than 5 separate departments of
municipal government find fault with all, or part, of the
arresting officer's actions. He shared that he filed a
complaint with the Chief of Police, and after an
investigation, Internal Affairs responded in a written
letter to him alerting him that his complaints concerning
the vehicle impoundment had been sustained. He felt that
his daughter's experience was an example of the
difficulties a person faced when attempting to get an
arrest record sealed based on the improper actions of one
police officer.
Mr. Means lamented that despite the overwhelmingly
controvertible evidence that his daughter had done nothing
wrong the municipal attorney at the time had written that:
While the officer might not have had probable cause to
arrest her for DUI, he had probable cause to arrest
her for some crime.
Mr. Means wondered what that crime would have been. He
opined that all that his daughter had wanted was to have
her record sealed, even offering to waive her right to
pursue any litigation. As a result his daughter had been
forced to file litigation in an effort to clear her name.
He shared that his daughter would be testifying before the
legislature at a later date on SB 180. He remarked that the
system in the state made it impossible to get a record
expunged or sealed. He worried that his daughter's record
could limit her options for graduate school or future
employment.
10:21:27 AM
JAMES MOONEY, SELF, ANCHORAGE (via teleconference),
testified in strong support of SB 108. He stated that in
2009 he had been falsely accused of sexual assaulting his
fiancé. He said that the relationship had lasted for 6
years, but began to deteriorate after differences of
opinion arose concerning child custody. He was arrested for
sexual assault, fought the charge in court, and was
acquitted on all charges. His accuser and his daughter
moved out of state several weeks after making the
accusations, as a result he had not seen his daughter in 4
years. He believed that the accusations were premeditated
because his accuser had knowledge of the legal system. He
reiterated that he had been acquitted on all charges. He
shared that he had lost his job and had been out of work
for months and was living off savings. He opined that
employment opportunities were cut short once employers ran
a background check. He felt that he was suffering
repercussions as though he had been convicted and sent to
prison.
10:25:40 AM
JAMES NOBLE, SELF, PRUDHOE BAY (via teleconference),
testified in support of SB 108. He relayed a story
concerning two charges filed against him and the
repercussions he experienced following a dismissal ruling
from a judge on both cases. He stated that after
researching cases similar to his he had determined that the
common thread was revengeful actions from a significant
other who was abusing the court system. He explained that
he had been in a romantic relationship from 2003 to 2007.
He said that his partner terminated the romantic
relationship in 2006, but a platonic relationship remained.
He relayed that he ended the friendship when the person
began dating a new person. He stated that he received a
domestic violence protective order from the court on
September 17, 2007 and hired an attorney who represented
him throughout court proceedings. During the course of the
defense for the domestic violence order, the attorney
discovered a stalking charge, filed by his ex on September
11, 2007 and had been dismissed by the court on September
12, 2007. He argued that he had never been notified of, or
given any details concerning, the stalking charge. He
opined that the stalking charge could be seen on CourtView,
regardless of the fact that the charges had been dismissed.
He said that he appeared before the court on October 4,
2007 to contest the domestic violence charge which was
dismissed due to insufficient evidence.
10:28:54 AM
Mr. Noble feared that the information on CourtView could
hinder him when seeking future employment. He added that
the social stigma could limit his ability to form new
relationships.
10:31:10 AM
DONNA KLECKA, SELF, EAGLE RIVER (via teleconference), spoke
in favor of the SB 108. She testified that she was self-
employed which made word-of-mouth important to her
professional reputation. She state that she had gone
through a divorce in 1999. During the proceedings her ex-
husband attempted to use domestic violence charges as
leverage for child custody. She spoke of another incidence
where a woman, whom she believed to be mentally unstable,
had made multiple charges against her of trespassing, theft
and stalking. Due to the charges, she was arrested and held
for 24 hours. She related that the arresting officer had
lost her job for the episode because she had not had an
arrest warrant. She said that she had received accusatory
notes from neighbors. She added that she had been charged
with assault and battery at one point as well. She opined
that her children were harassed at school. She relayed that
approximately a year and a half ago she had consumed
alcohol and was pulled over for speeding in Seward. She
asserted that the Alaska State Trooper had profiled her by
pulling up her record before pulling her over. She shared
that she had been nervous while taking the field sobriety
test, which was videotaped. She stated that in the process
of her arrest her arm was broken by the police. She said
that the arresting officers had written in their report
that she has not had alcohol on her breath; she also
submitted to a blood test, which turned up negative. She
said that all of the charges against her were dismissed.
She shared that during discovery the arresting officer
stated that he had been aggressive with her as a result of
having reviewed her record.
10:38:55 AM
CARMEN GUTIERREZ, SELF, JUNEAU, spoke in support of SB 108.
She read from a prepared document (copy on file):
Thank you for the opportunity to comment on SB 108. As
a former attorney for 25 years followed by the
privilege of serving the state as Deputy Commissioner
for the Department of Corrections, I have observed
first-hand the need for the criminal justice reforms
for which this Committee has so tirelessly worked to
advance. I thank this Committee for its courageousness
in promoting needed revisions aimed at reducing
recidivism. Every former offender who is able to
successfully return to his or her community means one
less victim, one less crime, and one less costly
prosecution.
I believe that SB 108 is another step in that
direction. As it stands today, every person who is
arrested for a criminal offense has a permanent public
record of that arrest. In felony cases, a detailed
statement of alleged factual detail accompanies the
fact of arrest and charge.
The name of the person arrested and then convicted
always remains available to the public through the
period of prosecution and after conviction. That is
fair.
What is not fair and not in keeping without system of
criminal justice is that under current law a person's
name and fact of charge remains available to the
public even when the prosecutor dismisses the charge,
the charge is dismissed by the court of after a jury
acquits the person. Despite dismissal of or acquittal
on the charge, the fact of arrest and the accompanying
documentation forever remains available for public
examination.
The reality is that when the fact of arrest after
dismissal continues to be made available for public
inspection either by an in-person visit to the
courthouse or by review on CourtView, the arrest often
becomes synonymous with conviction in the mind of
those doing the inspecting. This greatly impedes a
person's ability to find employment, rent an apartment
and to live a life free of stigmatization for a crime
for which the person was never convicted.
Numerous individuals - both men and women - in Alaska
are arrested for the crime of Assault in the Fourth
Degree. A person may be charges with this offense if a
police officer concluded there is probable cause to
believe that a person by "words or other conduct
recklessly places another person in fear of imminent
physical injury."
AS 18.65.530 appropriately provides that in a domestic
relations context, when a person reports to the police
that she/he was placed in fear of imminent physical
injury, the police must arrest the alleged offender
for Domestic Violence Assault when the officer decides
there is probable cause to believe that assault took
place.
Needless to say, police officers taxed with a
tremendous amount of work have to make snap decisions
when deciding if there is probable cause to believe an
assault occurred. The soundness of the police
officer's decision often depends on the experience of
the officer and the officer's perceived need to
diffuse a situation.
After the person is arrested and charges, a prosecutor
later has more time to review the merits of the case.
In some cases, upon more careful review and with the
benefit of additional facts, the prosecutor determines
the charge doesn't merit prosecution and dismisses it.
The individual arrested, however, is forever
stigmatized by his arrest. It will forever be a part
of the Alaska Court System records available for
public inspection.
A good number of cases filed in Alaska are ultimately
dismissed. For example, in FY13, the state filed 6,675
felony cases. Of those, the state dismissed 1,289
cases. Of the 29,562 misdemeanor cases filed, the
state dismissed 9,508.
Our constitutional right to due process of law is
intended to protect citizens from being treated as
convicted persons without first being afforded certain
procedural safeguards. That is the way it should be
and it is our responsibility to uphold out system of
criminal justice, the shining example and envy of
other countries.
There are those who would have you believe that their
individual judgment is more knowing than the
collective wisdom of a jury; that a person's record
should forever be stigmatized by an arrest and charge
even though the prosecutor dismissed the charge or a
jury of his peers acquitted him of the charge. These
same individuals would have you believe that an arrest
should be equated to conviction of a crime. Alaska
citizens, judges, prosecutors, and defense attorneys
will always have different opinions regarding the
facts of a case. That is why our system requires due
process under the law before someone is convicted of a
crime and shoulders the burdens associated with
criminal conviction.
For these reasons, the fact of an arrest and charge
without conviction should not forever tarnish the
reputation of an Alaskan citizen. SB 108 is intended
to rectify these unintended and harmful consequences
that in many cases impact a person's ability to
successfully live and work in our communities.
10:45:10 AM
Ms. Gutierrez asserted that for every individual that could
come forward to say that having access to CourtView made a
meaningful difference in a decision being made, there were
many more cases of individuals who have had their ability
to live successfully in their community compromised.
Senator Hoffman inquired if Ms. Gutierrez would support the
legislation for an individual that had been acquitted due
to a hung jury.
Ms. Gutierrez replied that when an individual was found not
guilty by virtue of a hung jury the prosecutor had the
ability to evaluate the evidence in the and decide whether
the case merited a new trial. She understood that if the
prosecutor decided that the evidence supported the charge
it was the prosecutor's burden to take the case back to a
jury. She asserted that, in the spirit of due process and
constitutional procedure, in a hung jury case the record
would be deemed confidential.
Co-Chair Meyer CLOSED public testimony.
10:48:12 AM
Vice-Chair Fairclough queried whether the opposition letter
from the Office of Victim's Rights had been submitted
before or after changes to the legislation had been made in
the Senate Judiciary Committee.
Mr. Kopp replied that the letter had arrived before the
bill was amended in Senate Judiciary. He added that the
sponsor had not received any additional communications from
the Office of Victim's Rights.
Vice-Chair Fairclough understood that an old court record
could be damaging to people well after the fact. She
expressed concern as to how the legislation would affect
the rights of victims, specifically for victims of domestic
violence and rape; however, she recognized that instances
of false accusation did occur.
SB 108 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
10:50:57 AM
The meeting was adjourned at 10:51 a.m.