Legislature(1995 - 1996)
03/28/1995 03:35 PM Senate STA
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
SSTA - 3/28/95
SB 135 PFD NOTICES AND ELIGIBILITY
SENATOR SHARP brings up SB 135 as the next order of business before
the Senate State Affairs Committee and calls the first witness.
Number 313
SENATOR STEVE FRANK, Co-Chairman of the Senate Finance Committee,
prime sponsor of SB 135, states SB 135 is a subject that passed the
senate last year. SB 135 would require persons incarcerated or
convicted of a third misdemeanor to contribute their permanent fund
dividends, on the theory that those persons should incur at least
some part of the costs imposed on the system through their illegal
behavior. It provides the state a way to fund some of the programs
in the Department of Corrections. It would also allow legislative
discretion for utilization of the money for other agencies,
including the Department of Public Safety and the Department of
Law.
Number 334
SENATOR RANDY PHILLIPS asks if there are any word changes from last
year's version.
DAVID SKIDMORE, Aide to Senator Frank, responds that the portion of
SB 135 that references the Department of Revenue is slightly
different. Permanent fund dividends forfeited under SB 135 will
not be used to satisfy child support obligations; it is thought
that would be unconstitutional, under the constitutional
requirement that public funds not be used for private purpose.
Another change was in the effective date. Only offenses from the
effective date of January 1, 1996 will be counted.
SENATOR DUNCAN is not sure he understands the entire impact of SB
135. He asks if this is being considered as a source of funding
for the Department of Corrections in the FY 96 operating budget.
If SB 135 does not pass, will it impact funding for the Department
of Corrections?
Number 365
SENATOR FRANK does not think whether SB 135 passes or not would
have any affect on the Department of Corrections budget. The
budget proposal assumes this money will be available. But he does
not think 2.7 million dollars in general funds will be taken out of
the budget if SB 135 does not pass.
SENATOR DUNCAN asks if he understands correctly that SB 135 would
allow 2.7 million dollars of permanent fund earnings to go to the
Department of Corrections, and if SB 135 didn't pass, then that
funding source will have to be replaced by general funds.
SENATOR FRANK replies that is correct.
Number 388
SENATOR DUNCAN says he is not in favor of giving convicted felons
a permanent fund dividend, but he wants to know what the impact
will be on the Child Support Enforcement Division (CSED) and other
recipients of garnished dividends.
SENATOR FRANK thinks there may be some reduction in garnishment of
dividends for child support obligations. They tried to work around
that, but they felt as though the number of people affected by that
would be small.
Number 405
MR. SKIDMORE thinks about 300 of the approximately 2,050
individuals would have child support obligations that would be
affected. That does not take into account families on AFDC.
Number 415
SENATOR DUNCAN comments he is concerned with impact on child
support, victim restitution, treatment programs, and payment of
fines and judgements.
SENATOR FRANK acknowledges there may be some impact on child
support, but it would only affect those folks who weren't on AFDC.
It is hard to tell how many people would be affected, but since it
is probably such a small number of people, would we be willing to
keep paying dividends to persons convicted of three or more
misdemeanors, just so that small group won't be affected? If we
didn't have AFDC as a back-up mechanism, then there would be more
reason to be concerned about those people losing an obligor's
dividend.
[Senator Duncan asked a question, which was not picked up by the
recording equipment.]
SENATOR FRANK answers maybe.
SENATOR DONLEY asks Senator Frank to clarify that currently, only
people incarcerated for felonies don't receive their dividends.
SENATOR FRANK responds that is correct.
SENATOR DONLEY asks if SB 135 would continue to deny dividends
after a felon has been released from prison.
MR. SKIDMORE responds SB 135 would not deny dividends to released
felons.
SENATOR DONLEY asks if SB 135 would deny dividends to felons for
the first year following their release from prison.
MR. SKIDMORE thinks it would do that.
SENATOR DONLEY doesn't understand that language in the bill.
Number 458
MR. SKIDMORE replies that the structure of the existing statute was
followed in drafting the legislation. Also taken into
consideration was the qualifying period for permanent fund
dividends.
SENATOR DONLEY asks what happens if a person is convicted of a
felony, but does not go to prison. Would a felon lose his or her
dividend for the rest of their life?
MR. SKIDMORE responds that would not be the case. Under SB 135
they would just lose their dividend for the following dividend
year.
SENATOR DONLEY notes the same thing would apply to persons
convicted of a third misdemeanor, but not imprisoned.
MR. SKIDMORE confirms that is the case. In regards to court fines,
for which dividends are currently being garnished, those fines
would not be extinguished, it would simply be pushed back one year.
Number 484
SENATOR DONLEY is willing to work on SB 135 in the Finance
Committee, but he really thinks the bill should be stronger.
SENATOR FRANK thinks they're trying to strike a balance between
what would be constitutional and what would be supportable by a
majority of legislators. He acknowledges that for some folks, it
probably would be fair to take their dividends away for the rest of
their lives.
Number 490
SENATOR DUNCAN asks if Senator Frank concurs with his statement
about double-dipping into the permanent fund earnings, and that it
will impact everyone's dividend.
SENATOR FRANK responds SB 135 will not impact everyone's dividend,
only the incarcerated folks.
SENATOR DUNCAN reasserts that if SB 135 is a double-dip in the
permanent fund earnings, then it will affect dividends.
SENATOR FRANK replies if that is what Senator Duncan implied, he
was not agreeing with that. Senator Frank asks Mr. Skidmore to
explain why two-years worth of dividends are being picked up to
accelerate the collection. That is what Senator Frank meant by
"double-dipping."
SENATOR DUNCAN concurs with that. It does authorize the
legislature to take over 2 million dollars out of the permanent
fund earnings, which really hasn't been collected as dividends from
the felons or repeat misdemeanants.
SENATOR FRANK states the dividends won't go to the felon or repeat
misdemeanants; that's the deal.
SENATOR DUNCAN points out that the money is in the corrections
budget for FY 96; it is not coming from those dividends, it is
coming from the permanent fund earnings. So it really is double-
dipping in the permanent fund earnings. So Senator Duncan thinks
SB 135 will affect the amount of the dividend.
SENATOR FRANK insists that is not the case. He asks Mr. Williams
to discuss that point.
TOM WILLIAMS, Aide to Senator Frank, states, "the individual was
incarcerated in calendar year 1993. Therefor they were ineligible
for the 1994 dividend. The department calculates the amount that
would have been paid for the 1994 dividend, reports it to the
legislature, and the legislature then appropriates it for fiscal
year 1996. In essence, there is a year's lag in appropriating
those funds to the Department of Corrections and the Department of
Public Safety, because they were actually dividends that were not
paid in fiscal year 1995. What SB 135 would do, it would double up
in one sense by moving when the dividends are paid and
corresponding them to when they are denied."
Number 522
SENATOR DUNCAN continues his assertion that the first year it would
seem to be that the money would be taken out of the permanent fund
earnings account. It will impact the dividends. He states he is
not convinced that dividends will not be reduced. He wants to know
if there will be an impact on dividends, and if that will be
reported on dividend check stubs. Senator Duncan does not know if
he would oppose SB 135 on that point.
Number 531
SENATOR FRANK does not think dividends would be affected by SB 135.
SENATOR DUNCAN agrees with that, with the exception of the first
year after the legislation becomes law. He agrees with everything
Senator Frank has said, with the exception of the first year, when
he believes there will be an extra 2.8 million dollars taken from
the permanent fund earnings. Perhaps he is mistaken, but that is
his perception. Senator Duncan asks if there is anyone from the
Permanent Fund Dividend Division to clarify whether or not his
concern is valid.
MIKE MCGEE, Chief, Permanent Fund Dividend Operations, Permanent
Fund Dividend Division, Department of Revenue, states the governor
strongly opposes SB 135 for the very reason discussed today: the
double-dipping nature of the first year the bill is law. Even if
that provision is eliminated, the governor would still oppose SB
135, because he does not want to see a reduction in the monies
available to those people and state agencies with attachments on
dividends of people affected by the bill. The administration does
see a reduction of 2.7 or 2.8 million in the permanent fund
earnings, because that money will be paid twice.
SENATOR RANDY PHILLIPS comments sometimes the legislature just
doesn't agree with the governor.
Number 549
SENATOR DONLEY wonders how much the dividends will be impacted.
[There is general estimation and consensus that the amount will be
about $4 or $5 per dividend, and that it will probably not be
reportable on the dividend check stubs.]
SENATOR DUNCAN thinks people should know if part of their dividend
monies are being used for departmental operations.
SENATOR LEMAN makes a motion to discharge SB 135 from the Senate
State Affairs Committee with individual recommendations.
Number 567
CHAIRMAN SHARP, hearing no objection, orders SB 135 released from
committee with individual recommendations.
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