Legislature(1997 - 1998)

03/14/1997 01:08 PM House JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
 HB 53 - LEASE-PURCHASE CORRECTIONAL FACILITY                                  
                                                                               
 Number 0138                                                                   
                                                                               
 CHAIRMAN GREEN advised members they would hear House Bill No. 53,             
 "An Act relating to the authority of the Department of Corrections            
 to contract for facilities for the confinement and care of                    
 prisoners, and annulling a regulation of the Department of                    
 Corrections that limits the purposes for which an agreement with a            
 private agency may be entered into; authorizing an agreement by               
 which the Department of Corrections may, for the benefit of the               
 state, enter into one lease of, or similar agreement to use, space            
 within a correctional facility that is operated by a private                  
 contractor, and setting conditions on the operation of the                    
 correctional facility affected by the lease or use agreement; and             
 giving notice of and approving a lease-purchase agreement or                  
 similar use-purchase agreement for the design, construction, and              
 operation of a correctional facility, and setting conditions and              
 limitations on the facility's design, construction, and operation."           
                                                                               
 CHAIRMAN GREEN noted that there were a number of proposed                     
 amendments.                                                                   
                                                                               
 REPRESENTATIVE NORMAN ROKEBERG asked whether they were still                  
 addressing version 0-LS0194\K.                                                
                                                                               
 CHAIRMAN GREEN confirmed that.  He said they would begin with the             
 three amendments submitted by himself, 0-LS0194\K.30, K.31 and K.32           
 (revised), followed by amendments submitted by Representatives                
 Rokeberg (K.37), Croft and Berkowitz.                                         
                                                                               
 CHAIRMAN GREEN invited Representative Mulder and Dennis DeWitt to             
 join members at the table.                                                    
                                                                               
 CHAIRMAN GREEN offered Amendment 1, 0-LS0194\K.30, Chenoweth,                 
 3/10/97, which read:                                                          
                                                                               
      Page 2, line 9:                                                          
           Delete "that is unable"                                             
           Insert "unless the agency demonstrates the qualifications           
      and experience necessary"                                                
                                                                               
      Page 2, line 10, following "state":                                      
           Insert "and by regulations that are adopted by the                  
      commissioner"                                                            
                                                                               
 REPRESENTATIVE BRIAN PORTER objected for the purpose of discussion.           
                                                                               
 Number 0343                                                                   
                                                                               
 CHAIRMAN GREEN explained that Amendment 1 expands the language so             
 there is no question that the builder of the facility would                   
 demonstrate the qualifications and experience necessary to                    
 accomplish what is proposed under a private prison facility; these            
 regulations would be adopted by the commissioner.                             
                                                                               
 REPRESENTATIVE ROKEBERG referred to line 6 of Amendment 1.  He                
 asked whether adding the language, "and by regulations that are               
 adopted by the commissioner", would not delay the commissioner's              
 ability to go out to bid with a Request for Proposals (RFP) by                
 requiring the writing of a series of regulations that may be                  
 superfluous and by requiring going through the Administrative                 
 Procedure Act (APA).  Representative Rokeberg asked Chairman Green            
 to explain the intent.                                                        
                                                                               
 CHAIRMAN GREEN replied that it meant regulations would be                     
 established.   He questioned how one would determine a person's               
 ability to do this unless there were regulations to go by.  They              
 had not wanted to put that in statute.                                        
                                                                               
 Number 0541                                                                   
                                                                               
 REPRESENTATIVE JEANNETTE JAMES understood it to mean any current              
 regulations relating to the degree of custody, which is an issue              
 that is not necessarily to be changed by a new facility.                      
                                                                               
 CHAIRMAN GREEN noted that "adoption" implies something in the                 
 future.  He asked whether that was Representative Rokeberg's                  
 objection.                                                                    
                                                                               
 REPRESENTATIVE JAMES suggested if it read, "existing regulations",            
 it would be more clear.                                                       
                                                                               
 REPRESENTATIVE PORTER asked whether Chairman Green would concede to           
 a friendly amendment adding language to make the sentence read,               
 "and by existing regulations that have been adopted by the                    
 commissioner".                                                                
                                                                               
 CHAIRMAN GREEN suggested that would imply that no new regulations             
 could be implemented.                                                         
                                                                               
 REPRESENTATIVE PORTER said that was the only way he would support             
 the amendment.                                                                
                                                                               
 REPRESENTATIVE ERIC CROFT said it was appropriate, in this entirely           
 new area, that there be regulations implementing the new statute.             
 Regulations are required to conform to the statute, not contradict            
 it.  Although a regulation sometimes strays from the intent of a              
 bill, that can be specifically corrected by court action if a                 
 regulation goes beyond its enabling statute.  The department is               
 given a large degree of deference in that area, and if they do not            
 even have the normal deference provided by the legislature to write           
 a regulation following a statute, Representative Croft did not                
 understand the reason for giving them deference in every other area           
 except the one they traditionally had.                                        
                                                                               
 Number 0717                                                                   
                                                                               
 REPRESENTATIVE PORTER explained that the task they were asking the            
 commissioner to perform, if the amendment was adopted, was ensuring           
 that the agency demonstrated the qualifications and experience                
 necessary to be able to provide the care, custody and discipline to           
 the extent required by the laws of the state of Alaska.  Those laws           
 exist.  They do not need a new regulation to require the                      
 commissioner to write a regulation as to whether or not someone has           
 the ability to meet an existing law.  He noted that to the extent             
 that they have to follow their own regulations in any existing                
 procedures, he would approve.  However, to write a regulation                 
 requiring going through the APA to give an opinion on whether                 
 somebody meets the law seemed a bit cumbersome.                               
                                                                               
 REPRESENTATIVE JAMES pointed out that under the context of this               
 statement, they were not talking about regulations that would be              
 written as a result of this legislation.  Rather, they were talking           
 about what kinds of consideration would be necessary before the               
 commissioner entered into an agreement with an agency.  She                   
 suggested there may be another way to do that.  She further                   
 suggested the gist of the amendment was to say, "and discipline to            
 the extent required by the statutory or regulatory laws of the                
 state which would be in effect at this time."  She believed the               
 purpose was clear:  They would not accept any lesser quality of               
 treatment, care or custody than currently existed under the laws of           
 the state, including existing regulations.                                    
                                                                               
 Number 0860                                                                   
                                                                               
 REPRESENTATIVE ETHAN BERKOWITZ said the problem he had with                   
 inserting "existing" regulations was that presently all regulations           
 were coming under scrutiny.  If some were eliminated, there could             
 be confusion as to whether the regulations existing at the time of            
 enactment would preclude eliminating regulations down the road.               
 His personal sense was that when there are regulations, any sort of           
 evaluation should be more objective.  There are standards by which            
 the commissioner and the private contracting agency can gauge each            
 other's conduct.  Without regulations, it would be entirely                   
 subjective.                                                                   
                                                                               
 REPRESENTATIVE ROKEBERG made a motion to divide the question on               
 Amendment 1.                                                                  
                                                                               
 CHAIRMAN GREEN had no objection.  Lines 1 through 4 of Amendment 1,           
 amending page 2, line 9, became Amendment 1-A.  Lines 5 and 6 of              
 Amendment 1, amending page 2, line 10, became Amendment 1-B.                  
                                                                               
 REPRESENTATIVE JAMES referred to Amendment 1-B and said the                   
 language, "as required by the laws of the state", is inclusive of             
 statutory and regulatory laws and therefore unnecessary.  However,            
 if they wanted to be perfectly clear that any regulations would be            
 included, they could refer to "administrative law."                           
                                                                               
 REPRESENTATIVE JAMES said even beyond that, the legislature did not           
 expect an agency to enter into an agreement that would be changed             
 by a regulation before they do it, setting it up so that no one               
 could qualify.  She did not believe that was the intent of the                
 amendment.  She believed the intent was to ensure that all existing           
 rules and regulations are applied so that any agreement would be              
 "taking care of things the same way as they had been all along."              
                                                                               
 CHAIRMAN GREEN asked whether there was any objection to Amendment             
 1-A.  There being none, Amendment 1-A was adopted.                            
                                                                               
 CHAIRMAN GREEN asked whether there was further discussion on                  
 Amendment 1-B.                                                                
                                                                               
 REPRESENTATIVE ROKEBERG advised members he was not in support of              
 Amendment 1-B.  He concurred with Representative James that the               
 proposed language was redundant.  He asked for the sponsor's                  
 opinion.                                                                      
                                                                               
 CHAIRMAN GREEN, without objection, withdrew Amendment 1-B.                    
                                                                               
 Number 1119                                                                   
                                                                               
 Representative Porter departed, as he had a bill before the House             
 Finance Committee meeting.                                                    
                                                                               
 CHAIRMAN GREEN offered Amendment 2, 0-LS0194\K.31, Chenoweth,                 
 3/10/97, which read:                                                          
                                                                               
      Page 3, following line 3:                                                
           Insert a new bill section to read:                                  
           "* Sec. 2. AS 33.03.031(c) is amended to read:                      
                (c)  An [NOTWITHSTANDING AS 36.03.300, AN] agreement           
           with a private agency to provide necessary facilities               
           under (a) of this section must, notwithstanding AS                  
           36.30.300, be used on competitive bids.  The commissioner           
           may not enter into an agreement with a private agency to            
           provide necessary facilities in the state unless the                
           agency                                                              
                     (1)  posts an adequate performance bond and               
           payment bond;                                                       
                     (2)  demonstrates to the commissioner's                   
           satisfaction the capability to provide the necessary                
           qualified personnel to implement the terms of the                   
           contract; and                                                       
                     (3)  provides a bond or certificate of                    
           insurance sufficient to defend and indemnify the state              
           and a municipality in which the facility is located                 
           against claims or liability arising from the operation of           
           the correctional facilities by the contractor."                     
                                                                               
      Renumber the following bill sections accordingly.                        
                                                                               
      Page 4, line 27:                                                         
           Delete "sec. 4"                                                     
           Insert "sec. 5"                                                     
                                                                               
      Page 6, line 30:                                                         
           Delete "sec. 3"                                                     
           Insert "sec. 4"                                                     
                                                                               
      Page 7, line 9:                                                          
           Delete "sec. 4"                                                     
           Insert "sec. 5"                                                     
                                                                               
 REPRESENTATIVE ROKEBERG objected for the purpose of an explanation.           
                                                                               
 CHAIRMAN GREEN explained that even though it may be a private                 
 contractor for a private prison, the concern exists that it is                
 being done for the state.  The amendment requires an adequate bond            
 to ensure that if something happens, such as the contractor going             
 broke, the bond would be attachable so that the state would not end           
 up with "no prison and a lot of bond indebtedness."                           
                                                                               
 REPRESENTATIVE ROKEBERG asked for the sponsor's opinion.                      
                                                                               
 REPRESENTATIVE MULDER deferred to Dennis DeWitt.                              
                                                                               
 Number 1189                                                                   
                                                                               
 DENNIS DeWITT, Legislative Assistant to Representative Eldon                  
 Mulder, advised members that these are performance standards and              
 bonds, and insurance requirements, that may or may not be                     
 appropriate in each case.  If they are addressed statutorily, there           
 is not the full range of options for indemnity from which to                  
 choose.                                                                       
                                                                               
 MR. DeWITT pointed out that in the model RFP form published by the            
 Department of Administration (DOA), the template has insurance                
 requirements and explanations of additional terms of condition, bid           
 bonds, performance bonds and surety deposits, depending on what the           
 RFP is for and tailored specifically to it.                                   
 MR. DeWITT explained that the required contract, under Appendix               
 B(1), requires indemnification and insurance such as workers'                 
 compensation, general liability and auto liability, all of which              
 can be, and should be, required in the RFP.  He said the important            
 thing, to him, is that there is a process covered in the                      
 procurement code, the RFP model and the template that is required             
 to be used by the DOA to handle those issues.  Including that                 
 language in statute may produce a conflict, and it limits the                 
 state's options in terms of getting the best surety that the                  
 committee might be after.                                                     
                                                                               
 REPRESENTATIVE ROKEBERG referred to line 9 of Amendment 2,                    
 subsection (c)(1), which says "posts an adequate performance bond             
 and payment bond".  He said that may be necessary where a                     
 contractor was being asked to perform under the construction                  
 contract but not under the operation contract, which might require            
 another type of bonding arrangement or additional sureties.  He               
 said depending on how the RFP was drafted by the department, Mr.              
 DeWitt was advocating flexibility, whereas this amendment would               
 statutorily tie their hands, he assumed.                                      
                                                                               
 MR. DeWITT agreed that was the concern.  However, there was also              
 concern that certain bonds and certificates of insurance can be               
 substantially more expensive than other kinds of sureties that are            
 just as protective to the state's interests.  There was a                     
 possibility that it would increase the cost of a project through              
 the state's choice of instruments, rather than through the                    
 instruments chosen by the offerer and the agency signing the                  
 contract.                                                                     
                                                                               
 Number 1367                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ suggested eliminating the terms                      
 "performance bond" and "payment bond" and inserting "surety", which           
 would cover everyone's concerns.                                              
                                                                               
 CHAIRMAN GREEN accepted that as a friendly amendment.                         
                                                                               
 REPRESENTATIVE ROKEBERG spoke to the friendly amendment, saying he            
 thought performance bonds are necessary under the construction                
 phase, while the surety would be more appropriate for the                     
 operational phase.  He had been thinking of specifying that these             
 particular items are for the construction phase of the project,               
 which he suggested might be more acceptable to the sponsor.                   
                                                                               
 CHAIRMAN GREEN referred to line 9, (c)(1), and line 13, (c)(3), of            
 Amendment 2.  He said wherever they were talking about those kinds            
 of things, they were just saying "adequate surety", to which he had           
 no objection.  That would separate any problems between the                   
 construction and the operation.                                               
                                                                               
 Number 1440                                                                   
                                                                               
 REPRESENTATIVE JAMES was concerned because subsection (c) says,               
 "provide necessary facilities", but nothing about operating them.             
 She would therefore believe that this language has referred to                
 construction, not operation.                                                  
                                                                               
 REPRESENTATIVE MULDER advised members that he supported what the              
 amendment was attempting to do; however, he opposed it from the               
 standpoint that they were implying lack of confidence in the                  
 Department of Administration's ability to protect the state.  He              
 expressed confidence in the department, adding that this would come           
 back before the legislature for review and the DOA would be held              
 accountable for their actions.                                                
                                                                               
 REPRESENTATIVE MULDER pointed out that the bill is extremely                  
 flexible, by design, to try to give the commissioner a full range             
 of options to capture the most savings.  He believed that Amendment           
 2 may limit their opportunity in relation to perhaps contracting              
 through a municipality where it says, "the commissioner may not               
 enter into an agreement with a private agency to provide ...                  
 facilities".                                                                  
                                                                               
 CHAIRMAN GREEN pointed out that "unless" followed that language.              
                                                                               
 REPRESENTATIVE MULDER agreed.                                                 
                                                                               
 CHAIRMAN GREEN said if that was already being done, they should               
 have no objection.  All it said was "surety", which provides a wide           
 range of flexibility but does require that they do it.  He felt it            
 would be in the state's best interest to insist that they provide             
 adequate surety.                                                              
                                                                               
 REPRESENTATIVE ROKEBERG suggested that departmental personnel could           
 comment, based on points made by the sponsor and the ability to               
 finance the bond package that may or may not result.                          
                                                                               
 Number 1568                                                                   
                                                                               
 REPRESENTATIVE CROFT said what was remarkable was how little the              
 amendment ties the state's hands and how general it is.  It simply            
 requires an adequate bond; if the friendly amendment was accepted,            
 it would simply require adequate surety.  Subsection (2), nobody              
 had quibbled with, and he believed it would be hard to demonstrate            
 capability to the commissioner's satisfaction.  Under subsection              
 (3), it requires simply sufficient insurance.                                 
                                                                               
 REPRESENTATIVE CROFT emphasized that it set general guidelines to             
 implement in the RFP, and the sponsor and Mr. DeWitt had indicated            
 those would be required under the RFP anyway.  Representative Croft           
 did not see the problem.  He believed those should be required, and           
 he would worry if they were not.                                              
                                                                               
 REPRESENTATIVE MULDER expressed that he would like to hear from the           
 Department of Revenue or the Department of Administration in                  
 relation to current contracts.                                                
                                                                               
 Number 1656                                                                   
                                                                               
 FORREST BROWNE, Debt Manager, Treasury Division, Department of                
 Revenue, advised members that from his department's standpoint,               
 what the amendment requires is done as a matter of course on RFPs.            
 It certainly would not hurt for the bill to specify it, although in           
 his opinion, it was probably not required.                                    
                                                                               
 KEITH GERKEN, Architect, Division of General Services, Department             
 of Administration, reported that current statutes specify the                 
 minimum requirements for bonding and insurance by either the                  
 Department of Transportation, for construction, or the Department             
 of Administration, for nonconstruction elements.  As far as he                
 knew, there was no limitation as to how much above that minimum one           
 could go in a given proposal, whether for construction or for                 
 services.                                                                     
                                                                               
 MR. GERKEN believed there would be a fair amount of discussion                
 among the Departments of Law, Administration, Transportation/Public           
 Facilities, Revenue and Corrections, and anyone else involved, in             
 setting the reasonable amount in any case.  He stated that the                
 problem with that unique kind of an RFP is knowing how much                   
 insurance to impose upon the proposers, without making it                     
 unaffordable.  Mr. Gerken assured members that that would be a                
 fundamental part of preparing the RFP because the state would be              
 concerned about whatever liabilities might exist.                             
                                                                               
 CHAIRMAN GREEN asked whether that would be onerous or time-                   
 consuming.                                                                    
                                                                               
 MR. GERKEN said establishing a required level for proposers could             
 be onerous if they required too much insurance, which would                   
 effectively limit the competition.  They would want to strike a               
 balance between protecting the state's interests and not making the           
 proposals uncompetitive or unable to respond to what the state                
 requires.  Mr. Gerken believed that a conversation must occur as              
 part of putting the proposal together.  He did not know whether               
 anyone today knows what those limits should be for this kind of               
 RFP.                                                                          
                                                                               
 Number 1765                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ suggested that inclusion of this provision           
 would clarify any ambiguity regarding sureties with this new                  
 entity, the private prison contractor/operator.                               
                                                                               
 MR. GERKEN responded that he did not know that it added clarity.              
 He believed that a conversation would occur about what level should           
 be required.  If the committee prescribed a specific level, that              
 would provide clarity.  But for anything short of that, a                     
 discussion of balance would have to take place.                               
                                                                               
 REPRESENTATIVE BERKOWITZ asked whether that level of clarity could            
 come about through either contractual negotiations or regulation.             
                                                                               
 MR. GERKEN did not think it would be in regulation but simply would           
 be a part of the RFP.  The agencies crafting the RFP would make a             
 determination, independently for the construction and                         
 nonconstruction elements, about what kind of bonding, surety and              
 insurance requirements above state minimums may or may not be                 
 required, if any.                                                             
                                                                               
 Number 1820                                                                   
                                                                               
 CHAIRMAN GREEN asked whether by having it in statute, it would not            
 be subject to changes in regulations or procedures.  The proposed             
 amendment would say, "yes, you will," which might be good because             
 there would be dialogue, then, between the agencies involved.                 
                                                                               
 MR. GERKEN said the dialogue would happen in any case, because the            
 agencies need to be looking out for the state's interests.                    
                                                                               
 CHAIRMAN GREEN requested confirmation that it was not doing                   
 anything that the state does not already do.                                  
                                                                               
 MR. GERKEN believed that was a fair statement.                                
                                                                               
 REPRESENTATIVE JAMES asked whether the friendly amendment to                  
 Amendment 2, to change subsection (c)(1) to "posts adequate                   
 surety", had been accepted.                                                   
                                                                               
 CHAIRMAN GREEN said yes, although they had not voted on it.                   
                                                                               
 REPRESENTATIVE JAMES asked whether that only applied in one place.            
                                                                               
 CHAIRMAN GREEN affirmed that.                                                 
                                                                               
 REPRESENTATIVE JAMES noted that this, by itself, just talks about             
 facilities.  Then under (c)(3), it refers also to operations.  She            
 assumed that something ahead of that in AS 33.30.031 tied those               
 together.  Given that, she did not believe the statements in there            
 made much difference.  However, she would support the amendment.              
                                                                               
 MR. DeWITT expressed concern that those issues referred to by Mr.             
 Gerken were already statutory.  The question was:  If they again              
 enacted them, would it change the current statutory base, which is            
 not regulatory and cannot be changed through a regulatory action?             
                                                                               
 REPRESENTATIVE JAMES asked the sponsor whether he believed                    
 restating it was a problem.                                                   
                                                                               
 MR. DeWITT replied that while he was in the bureaucracy, the                  
 question he would ask if a statute was restated was, "What's the              
 new message?"  He suggested department personnel would ask the same           
 question.                                                                     
                                                                               
 Number 1995                                                                   
                                                                               
 REPRESENTATIVE JAMES acknowledged that concern.  However, if                  
 putting out an RFP for construction and operation of a facility was           
 new, this would restate that the existing rules apply.                        
                                                                               
 MR. DeWITT said the problem is that most of the people who would be           
 dealing with the issue administratively were not present and would            
 not have the benefit of the discussion of, "all we wanted to do is            
 reiterate what was here."  In addition, between now and decision-             
 making time, there were likely to be other changes.  He said it               
 takes a lot of time to trace it back to find out that all they were           
 doing is "something benign and reminding."                                    
                                                                               
 Number 2019                                                                   
                                                                               
 REPRESENTATIVE ROKEBERG expressed that he did not want to confuse             
 the issue; however, for the purpose of discussion, he had a                   
 friendly amendment to offer that would add some meat to the bone,             
 to add a new subsection (c)(4), to read, conceptually, "The terms             
 and conditions of RFPs formulated under this subsection shall not             
 be constructed so as to limit competition."                                   
                                                                               
 CHAIRMAN GREEN suggested to alleviate concern, they could state               
 that this in no way would be redundant or conflict with existing              
 law.                                                                          
                                                                               
 REPRESENTATIVE CROFT noted that they had started out having                   
 complete faith in the department, with complete discretion, and now           
 they were worried that the department would use the words "adequate           
 surety" or "sufficient insurance" to stifle the process.                      
 Representative Croft stated his opinion that Amendment 2 provides             
 adequate assurance that the department is making these assurances             
 but does not tie their hands or allow them to do mischief.                    
                                                                               
 CHAIRMAN GREEN, noting acceptance of the friendly amendment to line           
 9 of Amendment 2, to delete the words following "adequate" and                
 insert "surety", asked whether the objection was maintained.                  
                                                                               
 REPRESENTATIVE ROKEBERG said yes.                                             
                                                                               
 CHAIRMAN GREEN requested a roll call vote on Amendment 2.  In                 
 favor:  Representatives Bunde, James, Croft, Berkowitz and Chairman           
 Green.  Opposed:  Representative Rokeberg.  Representative Porter             
 was absent.  Therefore, Amendment 2, including the friendly                   
 amendment, was adopted 5 to 1.                                                
                                                                               
 Number 2280                                                                   
                                                                               
 CHAIRMAN GREEN moved Amendment 3 (revised from 0-LS0194,\K.32,                
 Chenoweth, 3/10/97, which was not submitted).  Amendment 3 read:              
                                                                               
      Page 3, following line 3:                                                
           Insert a new bill section to read:                                  
           "*Sec. 2.  AS 33.03.031 is amended by adding a new                  
      subsection to read:                                                      
                (f)  The commissioner may not enter into an                    
      agreement to provide necessary facilities under (a) of this              
      section as a correctional facility that is to be constructed             
      in this state after the effective date of this Act unless the            
      commissioner initiates and completes a site selection process.           
      The site selection process must provide the public reasonable            
      opportunity to comment about sites to be considered for the              
      location of the correctional facility.  In additions [sic],              
      if, on the basis of the site selection process, the                      
      commissioner determines to enter into an agreement to contract           
      for provision of necessary facilities at a correctional                  
      facility that is to be located at a site within a municipality           
      or legal subdivision of the state, the correctional facility             
      may not be constructed at the site unless approved by a                  
      majority of the voters within the "affected area" voting at an           
      election conducted by the municipality or legal subdivision of           
      the state.  For the purpose of this subsection, "affected                
      area" means the area within 2 miles of the external perimeter            
      of the correctional facility.  This restriction does not apply           
      to construction within the perimeter of correctional                     
      facilities in existence before the effective date of this act.           
      [end-quote omitted]                                                      
                                                                               
      Renumber the following bill sections accordingly.                        
                                                                               
      Page 4, line 27:                                                         
           Delete "sec. 4"                                                     
           Insert "sec. 5"                                                     
                                                                               
      Page 6, line 30:                                                         
           Delete "sec. 3"                                                     
           Insert "sec. 4"                                                     
                                                                               
      Page 7, line 9:                                                          
           Delete "sec. 4"                                                     
           Insert "sec. 5"                                                     
                                                                               
 CHAIRMAN GREEN explained that Amendment 3 would require that once             
 a site selection was made, an affirmative vote of the citizenry               
 within a two-mile radius of the perimeter of the facility would be            
 required, establishing a local veto power.                                    
                                                                               
 REPRESENTATIVE BERKOWITZ asked that Chairman Green explain the two-           
 mile requirement.                                                             
                                                                               
 CHAIRMAN GREEN stated that rather than requiring a total vote of              
 the entire municipality, it would require a total vote of the                 
 affected people, and two miles appeared to be a reasonable radius.            
                                                                               
 REPRESENTATIVE BERKOWITZ felt it would be somewhat difficult to               
 determine which voters were within the two-mile radius, especially            
 at the edge of a district.                                                    
                                                                               
 CHAIRMAN GREEN said the perimeter of the proposed facility would be           
 established, then they would go two miles in any direction on a               
 map.                                                                          
                                                                               
 Number 2360                                                                   
                                                                               
 REPRESENTATIVE CON BUNDE referred to the possibility of placing a             
 prison in an unorganized area.  If there were six people within the           
 two-mile radius, for example, would those six have authority to               
 determine the outcome?                                                        
                                                                               
 CHAIRMAN GREEN indicated it would require four of those six.                  
                                                                               
 REPRESENTATIVE JAMES said she would assume the bid proposals                  
 submitted would include a facility site, which would go before the            
 voters within a two-mile radius.  She was concerned that if the               
 people knew who the contracting bidders were, they could basically            
 choose the bidder.  She asked how far the process would go before             
 it went before the voters.                                                    
                                                                               
 CHAIRMAN GREEN pointed out that site selection would occur prior to           
 designing a facility because it would be necessary to design for              
 the prospective area.  Once a site was selected and approved by the           
 commissioner, the project would go out for bid; if not accepted by            
 the commissioner, it would be necessary to select another site.               
                                                                               
 REPRESENTATIVE JAMES asked:  Who would pick the site, the                     
 commissioner?                                                                 
                                                                               
 CHAIRMAN GREEN stated, "The commissioner may not enter into an                
 agreement until the site has been selected and approved."                     
                                                                               
 REPRESENTATIVE JAMES asked:  Who would select the site and put it             
 out for approval?  And who would pay for the election?                        
                                                                               
 CHAIRMAN GREEN said as stated in the amendment, it would be the               
 city or the subdivision of the state.                                         
                                                                               
 TAPE 97-39, SIDE B                                                            
 Number 0006                                                                   
                                                                               
 REPRESENTATIVE JAMES said she agreed with the thought.  But how it            
 would be done, when, and by whom were not clear to her.                       
                                                                               
 CHAIRMAN GREEN explained that the commissioner may not enter into             
 an agreement to do that until there is a site selection approved by           
 the people who are affected.                                                  
                                                                               
 REPRESENTATIVE JAMES understood, then, that the cost of the land              
 would not be part of the bid document, which would preclude people            
 from bidding on and using land that they already owned.                       
                                                                               
 CHAIRMAN GREEN asked why it would preclude that.                              
                                                                               
 REPRESENTATIVE ROKEBERG said Representative James's point was                 
 accurate.  Injecting the commissioner into the site selection                 
 process would completely throw out the RFP process, and it                    
 presupposes there would be a site selection prior to any                      
 competition for the construction or operation of the facility.                
 Consequently, it would have to be on pre-selected land purchased by           
 the state or public land available some other way.  Representative            
 Rokeberg said this does an extraordinary disservice to the state by           
 limiting the areas from which to choose.                                      
                                                                               
 REPRESENTATIVE ROKEBERG expressed that he was familiar with the               
 RFP-type bidding process for buildings.  He asked the sponsor how             
 the language in Amendment 3, as well as in much of the bill, would            
 reflect on the statutory authority of the Department of Corrections           
 to procure other facilities such as Community Residential Center              
 (CRC) beds and other soft beds, in terms of their requirements.  He           
 asked what impacts the statute and the bill would have on all RFPs            
 that the DOC may enter into, in their whole scope of acquisition of           
 real property.                                                                
                                                                               
 Number 0121                                                                   
                                                                               
 REPRESENTATIVE MULDER said while he was sympathetic with the                  
 direction Chairman Green was attempting to go, he did not think               
 Amendment 3 got them there.  It would create a problem, for                   
 example, in relation to half-way houses.  He read from AS                     
 33.30.901(4), which states, "`Correctional facility' or `facility'            
 means a prison, jail, camp, farm, half-way house, group home, or              
 other placement designated".                                                  
                                                                               
 REPRESENTATIVE MULDER said this is really a municipal issue and               
 concern.  He referred to AS 29.40.040, which states:  "In                     
 accordance with a comprehensive plan ... the provisions governing             
 the use and occupancy of land that may include, but are not limited           
 to, (1) zoning regulations".   The statute already provides for               
 municipal governments to provide their own regulation on what                 
 should and should not be, and on what is appropriate, and where.              
 If they want to establish further hurdles, hindrances or peer                 
 review panels, that is appropriate within the municipal charter and           
 government.                                                                   
                                                                               
 REPRESENTATIVE MULDER said he did not have a problem with that;               
 however, he felt it would fetter state government unnecessarily to            
 try to have state policy determined by four people.  A common good            
 that would benefit the state could be thwarted, literally, by four            
 people, and he felt that would set up a dangerous precedent within            
 state law.                                                                    
                                                                               
 REPRESENTATIVE MULDER said, although unintentional, this provision            
 would also set in policy a hinderance to private facilities that              
 did not exist for public facilities.  For example, under current              
 state law, the commissioner could place a prison anywhere by                  
 emergency regulation, without consideration of municipal                      
 ordinances.  He suggested it was appropriate for municipalities to            
 have discussions and perhaps put into their own municipal codes or            
 ordinances something that would deal with this situation.                     
                                                                               
 CHAIRMAN GREEN thanked Representative Mulder for his explanation;             
 however, he took issue with the fact that it would do away with               
 half-way houses, for example, because the last sentence of                    
 Amendment 3 states:  "This restriction does not apply to                      
 construction within the perimeter of correctional facilities in               
 existence before the effective date of this Act."                             
                                                                               
 CHAIRMAN GREEN asked:  With respect to future facilities, is it in            
 the state's best interest to use a site that adversely impacts                
 those closest to it?  If four out of six people in a remote area              
 would be adversely affected, he felt the facility could be moved a            
 little.  He noted that many areas in the state have no population,            
 including some areas close to municipalities.                                 
                                                                               
 CHAIRMAN GREEN stated, "This presupposes, by your objection, that             
 there will be objection to the facility.  That tells me right away            
 there must be something in the public's interest, at least those              
 that are affected, that they should have a right to say no.  I                
 mean, if they're going to build next to your house, would you say             
 no?"                                                                          
                                                                               
 REPRESENTATIVE MULDER pointed out that when the country was                   
 established, there was discussion along the same lines.  The                  
 greater public good had always been a consideration of the founding           
 fathers and hence, the power of eminent domain.  Nobody wants a               
 road down their back yard, because it tends to devalue property,              
 and yet roads have been considered to be a necessary, integral part           
 of society.  Similarly, if the state determines the need to lock              
 people away, prisons are needed; to that end, they meet a public              
 need.  To further that end, the prisons should be strategically               
 located to provide the necessary service.                                     
                                                                               
 REPRESENTATIVE MULDER stated that he was sensitive to Chairman                
 Green's concern.  If the commissioner found that a facility should            
 be located in South Anchorage, for example, the municipality should           
 ensure a responsive, fair public process.                                     
                                                                               
 CHAIRMAN GREEN said he did not believe the proposed legislation               
 wanted to go to the point of compensating those who might be                  
 adversely affected, which was done in eminent domain for highways.            
 He pointed out that for highways, exceptions were made, along with            
 condemnations and compensation.                                               
                                                                               
 Number 0380                                                                   
                                                                               
 REPRESENTATIVE ROKEBERG said he agreed with Representative Mulder.            
 He said there had been testimony in the building that year that the           
 Department of Corrections had endeavored to acquire CRC soft beds             
 in the Matanuska Valley and the Kenai area; both were turned down             
 by local groups.  Subsequent to the "turn-down" of one location in            
 their community, the City of Kenai had identified nine different              
 sites that might be satisfactory for CRC beds.  Representative                
 Rokeberg felt that if that was what the amendment intended to                 
 accomplish, choosing a site from those that had been identified by            
 communities as acceptable, it would not.  Instead, he believed the            
 proposed statute would virtually halt the corrections business in             
 Alaska, because it would require building a new facility at the               
 publicly-selected site acquisition, for which the City of Kenai               
 would ask the legislature for $5 million to build the facility.               
                                                                               
 REPRESENTATIVE ROKEBERG said when using CRC beds, they had to                 
 acquire an existing multi-family dwelling, or another commercial-             
 type dwelling, for example, to convert into a CRC facility to                 
 provide the necessary beds in a cost-effective manner.  He stated,            
 "In other words, you can't go out there unless you have lots and              
 lots of money, and start out with a raw dirt site and build soft              
 beds."  He restated that Amendment 3 would halt the entire                    
 correction business in the state and could jeopardize public safety           
 overnight.  He said that was an unintended consequence.  It would             
 halt acquisition of soft beds in Alaska.                                      
                                                                               
 Number 0489                                                                   
                                                                               
 CHAIRMAN GREEN disagreed, saying several communities were begging             
 for a correctional site location.                                             
                                                                               
 REPRESENTATIVE ROKEBERG emphasized that he was talking about CRC              
 soft beds.                                                                    
                                                                               
 REPRESENTATIVE CROFT asked what statute Section 4 enacted.  He                
 pointed out that Section 2 referred to AS 33.30.043; however,                 
 Sections 3, 4 and so on do not provide a section number that they             
 enact.                                                                        
                                                                               
 MR. DeWITT explained that those are in codified statutes.  He said            
 the section they were now discussing was in current statute.  In              
 1987, when CRCs were first discussed, there were a number of points           
 in the statute relating to whether private facilities could be in             
 or out of state, as well as a host of other things relating                   
 specifically to CRCs.  The bill attempts to clean that statute up.            
                                                                               
 MR. DeWITT said in addition, there is language currently in statute           
 where the state can give the municipality a state facility to run;            
 however, it does not say the state can lease prison space from a              
 municipality, which is corrected in Section 2.                                
                                                                               
 MR. DeWITT advised members that Sections 3 and 4 discuss pre-                 
 approval of either a lease or a lease/purchase contract under the             
 codes that require the legislature to do that.  He concluded, "That           
 takes an uncodified act by the legislature.  So, that's why those             
 are not codified."                                                            
                                                                               
 Number 0611                                                                   
                                                                               
 REPRESENTATIVE CROFT read:  "The commissioner may not enter into an           
 agreement to provide necessary facilities under ...."  He said the            
 word "under" seemed to be the crux of the matter.  For example,               
 when it is under (a), it may or may not have an affect on soft                
 beds.  But when it is under Sections 3 and 4, "these                          
 lease/purchase, these private facilities", then they are being                
 clear on what they are conditioning.  It seemed buttressed by the             
 fact that the title of Section 4 is "NOTICE AND APPROVAL OF LEASE-            
 PURCHASE AGREEMENT ...."  He said they were "exactly providing for            
 that:  more notice and more power to approve or disapprove."                  
                                                                               
 REPRESENTATIVE CROFT said it was almost a conceptual/friendly                 
 amendment.  If there were a way - but he did not know that way - to           
 make it apply to sections of the bill, they would be sure they had            
 no unintended consequences.  He added that he did not know whether            
 there were unintended consequences or not.                                    
                                                                               
 CHAIRMAN GREEN suggested on line 18, after the word "act" of                  
 Amendment 3, adding, "nor does it apply to correctional facilities            
 of less than 100-bed capacity."  He said that would take care of              
 anything except jails and prisons because no half-way houses are              
 that large.                                                                   
                                                                               
 An unidentified speaker disagreed, saying, "Yeah, they are."                  
                                                                               
 Number 0680                                                                   
                                                                               
 REPRESENTATIVE CROFT said that made a lot of sense.  Noting that              
 Representative Rokeberg had experience relating to alcohol                    
 regulation issues, he said there are similar provisions for the               
 approval of a range for a new bar, for example, a change in an                
 existing license.  So, it is certainly not an unheard-of provision            
 in areas where there are concerns about public safety.                        
                                                                               
 Number 0730                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ agreed that if a friendly amendment would            
 differentiate between hard and soft beds, that would eliminate much           
 of the concern.  He said essentially they were talking about hard-            
 bed facilities.                                                               
                                                                               
 REPRESENTATIVE BUNDE said more than even hard beds, soft beds                 
 should be subjected to community site selection because people can            
 and do walk away from facilities.  As with a liquor license, he               
 thought Representative Rokeberg would have something to say about             
 a soft-bed facility located across the street from the Northwood              
 Elementary School.  While he could not say definitely that this               
 would prohibit the building of soft beds, and did not want to do              
 that, he would support community site selection for soft beds as              
 well as hard beds.                                                            
                                                                               
 Number 0803                                                                   
                                                                               
 REPRESENTATIVE ROKEBERG referred to public notification in                    
 elections and stated that his knowledge was based on the                      
 implementation of Title 21 in the Municipality of Anchorage.                  
 There, when there is a zoning change or a conditional use such as             
 a liquor license, letters of information are sent to property                 
 owners within a particular radius.  The property owners have the              
 right to submit comments as to their approval or disapproval of the           
 zoning activity or platting board activity, for example.  Only                
 registered property owners are allowed to comment on the activity             
 within a finite area.  However, what is being contemplated here may           
 be a little more difficult because they may have to look at every             
 registered voter.  He said he saw a large, almost-mechanical                  
 problem.  He said apparently Amendment 3 did not speak to who had             
 the authority to execute an election.                                         
                                                                               
 CHAIRMAN GREEN pointed out that it does.                                      
                                                                               
 REPRESENTATIVE ROKEBERG felt that the Municipality of Anchorage had           
 demonstrated the ability to react to the public will in terms of              
 site selection, and the assembly had the ability to deny any                  
 construction or award of any project under the Planning and Zoning            
 Commission, as well as the issuance of a building permit.  As he              
 saw it, the amendment was an unfunded mandate to an area to do                
 something that he believed they are capable of doing.                         
                                                                               
 REPRESENTATIVE ROKEBERG suggested a friendly amendment, saying, "by           
 moving it out of that statutory thing, but also excluding the                 
 words, `the municipal or', and taking it out of the municipalities,           
 and leaving it in areas that aren't even -- that don't have the               
 protections and safeguards that municipal governments have."  He              
 said his biggest objection to the amendment is that he believes the           
 municipal governments in Alaska have adequate public hearing                  
 processes in place to protect themselves.  He noted that his own              
 district is near Chairman Green's, and the people share many of               
 those concerns.                                                               
                                                                               
 Number 1000                                                                   
                                                                               
 REPRESENTATIVE JAMES said her concern with this amendment still had           
 not been addressed.  She was trying to visualize the process to               
 establish a contract with somebody to build a prison.  "This                  
 doesn't provide any opportunity to ever get there," she stated.               
 She said she felt very sensitive about the issue of finding a                 
 location.  She had talked with Margot Knuth after the previous                
 hearing, and there are people who want a facility.  She asked why             
 they were not focusing on that, which seemed to be the biggest                
 hurdle to obtaining more bed space.                                           
                                                                               
 REPRESENTATIVE JAMES suggested they could visualize an RFP going              
 out, with several bidders making an offer that would include a                
 location.  She thought it might be sensible to state that if the              
 commissioner entered into an agreement, it would be subject to                
 approval of the location by the community or municipality, for                
 example.  But she had a problem with saying the commissioner must             
 find a place before putting out an RFP, which she believes this               
 language says, because it limits land selection and requires                  
 arrangements with the owners to determine whether the land can even           
 be procured.                                                                  
                                                                               
 REPRESENTATIVE JAMES emphasized that she agreed with the intent of            
 Amendment 3 but did not believe it was the right way to do it.  She           
 offered to work with the Chairman to make it workable.                        
                                                                               
 Number 1123                                                                   
                                                                               
 REPRESENTATIVE BUNDE pointed out that people in his district did              
 not share the confidence of some other Anchorage-area legislators             
 regarding the municipality's ability to deal fairly with its                  
 citizens.                                                                     
                                                                               
 REPRESENTATIVE CROFT said in the school site-selection process, the           
 typical procedure involves selection from a number of different               
 locations.  Bidders take options.  They do not have to buy land,              
 put up a building and hope it is used, although that had happened             
 in Arizona.                                                                   
                                                                               
 REPRESENTATIVE CROFT explained, "You get an option on it.  You put            
 your bid together.  And they choose both the site and the project,            
 somewhat together.  I don't think there's anything in this language           
 that prohibits that.  In fact, it sorts of facilitates it.  You               
 pick what would be the best site and then, if that site is selected           
 through an appropriate process, you pick it, and you confirm with             
 the people in the area that that's okay."  The entire horizon can             
 be looked at, to find an area that really wants it.                           
                                                                               
 Number 1204                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ said he read it differently.  He believed            
 the commissioner could say she/he was looking for a place for a               
 prison and ask whether anyone had a good idea for a site.  He said            
 that is what "initiates" means.  "I don't see anything more                   
 sinister than that in this language," he added.                               
                                                                               
 CHAIRMAN GREEN agreed and said he could not see the restriction.              
                                                                               
 REPRESENTATIVE JAMES asked:  If the commissioner had initiated a              
 site selection process, would property owners of various sites be             
 expected to come forward?  Or would potential bidders be expected             
 to come forward with sites?  After the commissioner selected a                
 site, the property owner would be very happy because his/her site             
 was selected.  At that point, the commissioner would put out an RFP           
 for someone to build and operate a facility there.  As                        
 Representative James' understood the process, that property owner             
 would then really have a deal because of its increased value.                 
                                                                               
 CHAIRMAN GREEN provided another scenario in which it is decided               
 that a 600-to-800-bed prison is needed.  Notification would take              
 place and a number of site recommendations might be received, after           
 which the commissioner would eliminate sites for various reasons.             
 A decision then would be made as to whether the remaining sites               
 were workable.                                                                
                                                                               
 REPRESENTATIVE JAMES said for a school or hospital, there would be            
 numerous offers.  However, for a correctional facility, many sites            
 offered would be too far from town for people to be happy.  She               
 believed the whole process would have to occur simultaneously,                
 including an opportunity for affected people to have a say.                   
 Somehow, she would like to place the burden on the bidder to choose           
 a place that "meets the muster of the people."                                
                                                                               
 REPRESENTATIVE JAMES acknowledged that she could be reading the               
 language wrong; it may not say that site selection occurs first.              
 However, she believed that unless the state plans to purchase any             
 property that they would select as a site, and unless the cost of             
 that property would be part of the selection process so that they             
 secured the property in that same action, they would be setting up            
 an unworkable situation.  However, she did not believe they wanted            
 to say the state must buy or secure the land, either.                         
                                                                               
 REPRESENTATIVE BUNDE said it would be necessary for him to leave              
 shortly because of a 3:00 p.m. commitment.                                    
                                                                               
 CHAIRMAN GREEN acknowledged Representative James's offer to work on           
 the amendment.  He announced Amendment 3 would be kept "at bay."              
                                                                               
 Number 1502                                                                   
                                                                               
 CHAIRMAN GREEN brought before the committee Representative                    
 Rokeberg's Amendment 4, 0-LS0194\K.37, Chenoweth, 3/14/97, which              
 read:                                                                         
                                                                               
      Page 1, lines 9 - 11:                                                    
           Delete "a lease-purchase agreement or similar use-                  
      purchase agreement for the design, construction, and operation           
      of a correctional facility, and setting conditions and                   
      limitations on the facility's design, construction, and                  
      operation"                                                               
           Insert "lease-purchase agreements or similar use-purchase           
      agreements for the design, construction, and operation of                
      correctional facilities, and setting conditions and                      
      limitations on the design, construction, and operation of                
      those facilities"                                                        
                                                                               
      Page 4, line 31:                                                         
           Delete "AGREEMENT"                                                  
           Insert "AGREEMENTS"                                                 
                                                                               
      Page 5, line 1:                                                          
           Delete "AGREEMENT"                                                  
           Insert "AGREEMENTS"                                                 
                                                                               
      Page 5, line 4:                                                          
           Delete "an agreement"                                               
           Insert "one or more agreements"                                     
           Following "AS 33.30.031,":                                          
           Insert "each to be"                                                 
                                                                               
      Page 5, line 6:                                                          
           Delete "a correctional facility"                                    
           Insert "one or more correctional facilities"                        
                                                                               
      Page 5, line 11:                                                         
           Delete "facility"                                                   
           Insert "facilities that are approved by this section"               
                                                                               
      Page 5 line 12:                                                          
           Delete "agreement"                                                  
           Insert "agreements that are approved by this section"               
                                                                               
      Page 5, line 14:                                                         
           Delete "agreement"                                                  
           Insert "agreements"                                                 
                                                                               
      Page 5, line 16, following "term of":                                    
           Delete "the"                                                        
           Insert "a"                                                          
                                                                               
      Page 5, line 18, following "(b)":                                        
           Delete "The"                                                        
           Insert "A"                                                          
                                                                               
      Page 5, line 21, following "male prisoners":                             
           Insert "if only one correctional facility is designed and           
      constructed under the notice and approval given in (a) of this           
      section; however, if more than one correctional facility is              
      designed and constructed under the notice and approval given             
      in (a) of this section, at least one correctional facility               
      must be limited to confining female prisoners only"                      
                                                                               
      Page 5, line 29:                                                         
           Delete "The"                                                        
           Insert "Each"                                                       
                                                                               
      Page 6, line 17, following "operate":                                    
           Delete "the"                                                        
           Insert "a"                                                          
                                                                               
      Page 6, line 21, following "operation of":                               
           Delete "the"                                                        
           Insert "a"                                                          
                                                                               
      Page 7, line 5:                                                          
           Delete "a major correctional facility"                              
           Insert "one or more major correctional facilities"                  
                                                                               
      Page 7, line 7, following "job site of":                                 
           Delete "the"                                                        
           Insert "a"                                                          
                                                                               
      Page 7, lines 8 - 9:                                                     
           Delete "the correctional facility described"                        
           Insert "a correctional facility for which notice and                
      approval is given"                                                       
                                                                               
 REPRESENTATIVE ROKEBERG directed members' attention to page 2, line           
 17, of Amendment 4, the insertion following "male prisoners" on               
 page 5, line 21 of the bill.  He said this is the substance of the            
 amendment.  It allows, under existing limits and caps of HB 53,               
 that if there was more than one facility constructed, one could be            
 a women's facility, which is needed in Alaska.                                
                                                                               
 REPRESENTATIVE ROKEBERG said this is a plan he wants to see                   
 implemented in Alaska.  He noted that the Administration had                  
 provided a one-page plan the previous week.  He believed the state            
 needed a separate women's facility, and he knew that the people at            
 the Hiland-Meadow Creek area were concerned about changes to that             
 particular facility.                                                          
                                                                               
 REPRESENTATIVE ROKEBERG said he believed there are adequate funds             
 to construct a 400-bed jail in some large municipal area in Alaska,           
 as well as a women's facility, anywhere it could be located, that             
 might fit within the bill.  He said all his amendment did was                 
 specify that if more than one facility were constructed under HB
 53, it could be a women's facility.  He said it did not bind                  
 anybody's hands but provided flexibility and, perhaps, guidance.              
                                                                               
 Number 1680                                                                   
                                                                               
 REPRESENTATIVE MULDER advised members that the department had                 
 brought forth, in the supplemental budget, a request to use $2.3              
 million to convert the Hiland facility into a women's facility and            
 to meet the Cleary requirements.  He had spoken with Phil Volland,            
 attorney for the Cleary plaintiffs, and it was news to Mr. Volland            
 that the department could utilize the funds to make a settlement in           
 that regard.                                                                  
                                                                               
                                                                               
 REPRESENTATIVE MULDER pointed out that a women's facility had not             
 been a very large topic of discussion with Mr. Volland, the                   
 plaintiffs and the department.  He suggested the women's issue was            
 being brought forward more by the commissioner.                               
                                                                               
 REPRESENTATIVE BERKOWITZ requested a rough estimate of numbers of             
 female prisoners and an estimate of the need.  He also asked what             
 the commissioner had to say about it; he presumed the commissioner            
 would be in a better position to understand it than Mr. Volland.              
                                                                               
 REPRESENTATIVE ROKEBERG suggested others could answer the question            
 about numbers.  He said while on the corrections subcommittee,                
 which had oversight of that budget and their operations for several           
 years, there had been indications about converting the Hiland                 
 Mountain-Meadow Creek Correctional Center into a women's facility             
 for some time.                                                                
                                                                               
 REPRESENTATIVE ROKEBERG mentioned his inspection of correctional              
 facilities around the state and said the Lemon Creek Correctional             
 Center in Juneau housed both female and male prisoners on an                  
 "almost co-ed basis," which he found quite disturbing.  He believed           
 the need for a women's facility in Alaska was paramount.  Its total           
 effect, in terms of Cleary, was that any additional beds                      
 constructed should take pressure off other facilities.  He would              
 like to see one centralized women's facility, constructed in such             
 a way, and under this "privatize bill," that it does not create a             
 financial burden to the state and allows the state to meet its                
 responsibilities to those prisoners, as well as to meet any                   
 responsibilities under Cleary.  "And that's the only reason I                 
 brought forward this amendment," he stated.                                   
                                                                               
 REPRESENTATIVE ROKEBERG guessed that there are 500 or 600 female              
 prisoners in the state, of which possibly 100 to 200 are hard-bed             
 prisoners.                                                                    
                                                                               
 Number 1918                                                                   
                                                                               
 REPRESENTATIVE BUNDE expressed understanding for the need for                 
 adequate housing for female prisoners; however, he did not see                
 anything in the bill that predetermined that the private prison, if           
 built, would not be for women.  He suggested if the demand was                
 there, the supply would occur.  While this language may be                    
 permissive, it strongly encourages that the commissioner take it as           
 legislative intent that the next private facility be for female               
 inmates.  Representative Bunde believed the commissioner should be            
 able to decide what type of facility might best serve the needs of            
 the state.  He pointed out that they did not know the exact                   
 numbers.                                                                      
                                                                               
 CHAIRMAN GREEN suggested if Amendment 4 was put in statute and a              
 women's facility was built, the next time around, another women's             
 facility would have to be built.  In effect, two of the next three            
 facilities could be women's facilities.  Chairman Green was taking            
 into consideration the 8-percent-growth factor of prisoners                   
 annually.                                                                     
                                                                               
 REPRESENTATIVE ROKEBERG affirmed that.  If more than one prison               
 could be built under the authorization provided in HB 53, he wanted           
 it to be a women's prison.  He said he had just been handed some              
 figures.  As of March 12, 1997, there were 106 sentenced female               
 prisoners and 108 unsentenced female inmates in the system.  He               
 said the necessity of keeping that facility near the majority of              
 judicial activity seemed apparent.  With respect to Representative            
 Bunde's comment that this is a policy statement, Representative               
 Rokeberg said that is certainly his intent.                                   
                                                                               
 CHAIRMAN GREEN said while he could subscribe to the policy intent,            
 nothing in the bill precludes building the next prison for females.           
 It just allows a prison to be built, without specifying location or           
 gender.  However, when put in statute, it would last and last.  If            
 a women's prison were built and later it was decided that two new             
 prisons were needed in Alaska, Amendment 4 would require one of the           
 next two to also be for females.  He asked, "Is that what we really           
 want to do in statute?"                                                       
                                                                               
 REPRESENTATIVE ROKEBERG stated his understanding that the                     
 legislation was noncodified statutory authority to proceed under              
 the caps indicated.  He asked the sponsor for clarification,                  
 specifically asking whether what was being done was authorizing a             
 cap of $150 million and up to 800 or 1,000 prisoners.                         
                                                                               
 REPRESENTATIVE MULDER responded that they were authorizing one                
 facility, "a" new facility                                                    
                                                                               
 REPRESENTATIVE ROKEBERG said they could not possibly build more               
 than one or two facilities under the caps specified.                          
                                                                               
 CHAIRMAN GREEN asked whether there would be a repealer at some                
 point down the road, since it would be in statute.                            
                                                                               
 REPRESENTATIVE CROFT said he was not yet sure what he thought about           
 the women's prison issue; however, he was happy to see                        
 Representative Rokeberg's amendment in the other areas.  It had               
 disturbed him for awhile that the bill specified "a" facility.  He            
 stated, "Even if I worry that this may not be the proper area for             
 market competition, at least it should be that, right?  If that's             
 the proposal."                                                                
                                                                               
 REPRESENTATIVE CROFT suggested dividing the question.                         
                                                                               
 TAPE 97-40, SIDE A                                                            
 Number 0006                                                                   
                                                                               
 REPRESENTATIVE CROFT proposed separating the question into                    
 Amendment 4-A, being everything but the women's issue, and                    
 Amendment 4-B, being page 2, lines 16 through 20, the insertion               
 following "male prisoners".  He commented that he had not heard               
 enough on the women's prison issue.  However, he believed he had              
 heard enough about whether it should be multiple facilities that he           
 knew his feelings about that.                                                 
                                                                               
 CHAIRMAN GREEN expressed concern that while the sponsor said this             
 is "a" prison, page 1, lines 1 and 2 of the bill said, "to contract           
 for facilities".  Chairman Green read that to mean more than one              
 prison.                                                                       
                                                                               
 MR. DeWITT directed members' attention to Section 1, which would              
 amend AS 33.30.031(a), and said that deals with procurement of a              
 host of correctional facilities.  He believed that was why the                
 title refers to the word in plural in that particular instance.  He           
 suggested that looking through the entire bill, it is clearly the             
 intent, the way the bill is drafted, that whatever form of                    
 financing is used, they are talking only about one facility.                  
                                                                               
 CHAIRMAN GREEN pointed out that he saw the word "facilities" on a             
 number of pages of the bill.                                                  
                                                                               
 MR. DeWITT explained that page 2 deals with how the department                
 procures services of nondepartmental correctional services, such as           
 half-way houses; that is plural because there are contracts with              
 several.  Beginning with Section 3, particularly on page 4,                   
 starting at line 26, it says, "The Department [of Corrections] may            
 not, under this section, enter into an agreement to lease space for           
 the use of space in a correctional facility if, under sec. 4 of               
 this Act, the Department of Administration, on behalf of the                  
 Department of Corrections, enters into a lease-purchase agreement,            
 use-purchase agreement, or other agreement to use a facility that             
 has a nominal purchase option."  Mr. DeWitt said following through            
 Section 4, members would find the singular use.  He then referred             
 to page 6, line 28, and said that language essentially says "that             
 if they use this section, you can't use Section 3."                           
                                                                               
 Number 0385                                                                   
                                                                               
 REPRESENTATIVE MULDER said it was clearly his intention that it be            
 singular.  He said to the extent that they look at all these                  
 amendments, they were more-or-less "dancing on the head of a pin".            
 He believed the commissioner already had statutory authority to               
 enter into an agreement with a private contractor, as the                     
 commissioner had done with the state of Arizona.                              
                                                                               
 REPRESENTATIVE MULDER explained, "I just wanted to make certain               
 that we codified those arrangements for in-state contracts, in law,           
 and that the main purpose or focus of this bill was to pre-                   
 authorize that arrangement or that agreement."  He said to the                
 extent that they put binders on it, they were making a pretty                 
 simple concept into what is now a seven-page bill, soon to be twice           
 that size.                                                                    
                                                                               
 REPRESENTATIVE JAMES responded that on that point, her                        
 understanding was that the bill was to establish a privately-built            
 facility where part of the contract would include operation of the            
 facility.  She agreed that if the commissioner could contract with            
 Arizona, she also could contract with a state facility.  The                  
 commissioner had the ability to put a prisoner, or prisoners, into            
 someone else's facility.                                                      
                                                                               
 REPRESENTATIVE JAMES stated, "We don't have, or probably wouldn't             
 have, that opportunity to do that in this state without a piece of            
 legislation that would indicate that that is a possibility."  She             
 asked whether the bill restricts any RFP for construction of a                
 facility to also including the operation of the facility.                     
                                                                               
 REPRESENTATIVE JAMES pointed out that she had been vocal for a long           
 time on "managed competition," as opposed to having a monopoly                
 within the state.  With managed competition, operation of the                 
 facility would go out to bid and the agency could bid also.  She              
 believes that is one of the best ways to "kind of edge ourselves              
 into privatization."  She asked whether this bill allows that to              
 happen or whether it specifies that it must be done in a package.             
                                                                               
 REPRESENTATIVE MULDER responded that the issue they were discussing           
 was called "bundling."  For the first five years, yes, construction           
 and operation would be "bundled" together; after that period, they            
 would be "unbundled."                                                         
                                                                               
 REPRESENTATIVE JAMES concluded that this, then, is different from             
 what the Administration is currently operating under.  Bundling is            
 not available under current statute or the current ability of the             
 Administration.                                                               
                                                                               
 Number 0580                                                                   
                                                                               
 REPRESENTATIVE MULDER responded that in his conversations with Jack           
 Chenoweth, Legislative Legal Counsel, Mr. Chenoweth believed that             
 the commissioner has that ability today.                                      
                                                                               
 REPRESENTATIVE JAMES asked, "Then why don't we have a piece of                
 legislation that refers to bundling, as an option?"                           
                                                                               
 REPRESENTATIVE MULDER replied that bundling is in this bill.                  
                                                                               
 REPRESENTATIVE JAMES said she believed it is easier to sell                   
 bundling than building a private prison.                                      
                                                                               
 REPRESENTATIVE MULDER replied, "But I think they're integrally tied           
 in this sense.  We simply specified, within this bill, that they              
 are bundled for the first five years, for a reason.  And that was             
 that if you take Spring Creek, for example, it was designed by                
 people who didn't have to be there afterwards."  He said those now            
 operating that facility do not like the way it was built or                   
 designed.  One who takes something from inception to operation will           
 be far more sensitive about the functionality of that facility.               
 "You're going to make it work, and you're going to make it work               
 efficiently and effectively, in order to meet your bid," he stated,           
 "because if you don't, you lose money on the deal.  So, you're                
 going to be very sensitive about what works and what doesn't work."           
 He said this is not a new concept, practice or program.                       
                                                                               
 REPRESENTATIVE JAMES said that certainly had merit.  She noted that           
 they had not heard that specific argument or statement before.                
                                                                               
 Number 0744                                                                   
                                                                               
 REPRESENTATIVE ROKEBERG noted that the bundling clause is                     
 subsection (2)(A) of the bill, page 6, lines 10 through 12.                   
                                                                               
 REPRESENTATIVE MULDER confirmed that.                                         
                                                                               
 REPRESENTATIVE ROKEBERG said his intention with Amendment 4 was to            
 ask for a women's facility, underneath the structure of the bill,             
 and Mr. Chenoweth had provided language to accomplish that.  He               
 took exception to dividing the question, saying there was a policy            
 question, but stated that he would be happy to abide by the wishes            
 of the committee.                                                             
                                                                               
 CHAIRMAN GREEN asked:  If HB 53 only addresses one prison, is                 
 Amendment 4 applicable?                                                       
                                                                               
 Number 0852                                                                   
                                                                               
 REPRESENTATIVE ROKEBERG said yes.  If the Department of Corrections           
 decided to build more than one facility under HB 53, for example,             
 a jail and a women's facility in an unnamed area, they could if               
 adequate funding was available.  That was his intention.                      
                                                                               
 REPRESENTATIVE BUNDE pointed out that if they were building one               
 prison, and if Amendment 4 passed, it would be a women's prison.              
 If they were building more than one, the bill would have to be                
 rewritten.  He questioned how they could attach Amendment 4, which            
 discussed additional prisons, to a bill that specified one                    
 facility.                                                                     
                                                                               
 Number 0950                                                                   
                                                                               
 CHAIRMAN GREEN asked:  If there was $150 million, and if the                  
 decision was to build a jail rather than a prison, would they be              
 staying within the purview of the bill?  Chairman Green asked                 
 whether the department could say that what they really wanted was             
 the money, and if secured, they could build a prison for males and            
 also have funds available to build a prison for females.                      
                                                                               
 REPRESENTATIVE ROKEBERG referred to Margot Knuth's previous                   
 testimony regarding a jail in Anchorage that would be a "stick-               
 built" costing $60 million.  Referring to page 5, line 11, he said            
 the construction cost is $90 million.  He felt it was simple logic            
 that if one facility could be built for $60 million, a women's                
 facility could be built with the remaining $30 million.  He asked             
 to hear from the sponsor about that.                                          
                                                                               
 Number 1010                                                                   
                                                                               
 REPRESENTATIVE BUNDE understood there were varying amounts;                   
 however, they needed to decide whether this was for a single                  
 prison.  He said if they could amend HB 53 to allow for more than             
 one facility, he would support Amendment 4.  However, if they                 
 decided it only allowed one prison, he did not understand the                 
 amendment.                                                                    
                                                                               
 REPRESENTATIVE BERKOWITZ said they were operating on a presumption            
 that the state would hire a general contractor to produce one                 
 facility.  However, if they incorporated plural language, they                
 could be in a situation where the state behaved like the general              
 contractor and directed two or more entities to construct the                 
 various parts of the facility.  He noted that it would require                
 dividing the question on Amendment 4.                                         
                                                                               
 Number 1071                                                                   
                                                                               
 REPRESENTATIVE JAMES referred to earlier testimony of the sponsor             
 and testimony of Margot Knuth relating to extensions of existing              
 facilities.  Even though the bill includes bundling, Representative           
 James could not imagine them building and operating an extension.             
 Therefore, she believed they would have to operate the whole                  
 facility.  With the exception of the Anchorage jail, which would be           
 a new facility, she did not see an option for getting two                     
 facilities, even if it specified two, for under $90 million.  She             
 said whether or not the bill was amended to allow for more than one           
 facility, and whether or not a second facility would be a women's             
 facility, it needed to be consistent in some way.                             
                                                                               
 REPRESENTATIVE JAMES agreed with Representative Bunde that if                 
 members accepted Representative Rokeberg's amendment, they would              
 have to provide for the capability of more than one facility.                 
 However, she did not think the intent of HB 53, with the economies            
 of scale being the driving factor, as well as the construction                
 design of the facility, would allow an extension of an existing               
 facility.                                                                     
                                                                               
 REPRESENTATIVE ROKEBERG said given the conversation and testimony             
 on Amendment 4, and if the sponsor felt the amendment confused the            
 bill further, he would withdraw Amendment 4.                                  
                                                                               
 REPRESENTATIVE ROKEBERG pointed out that page 5 of the bill, lines            
 20 and 21, says, "(1)  must be designed and constructed so as to              
 house, in separate housing, female prisoners and male prisoners".             
 He hoped members were now more aware of the need for a women's                
 facility in the state.  He then withdrew Amendment 4.                         
                                                                               
 CHAIRMAN GREEN acknowledged that Representative Rokeberg had a                
 reason for offering Amendment 4, there was a concern, and he                  
 withdrew it.   He noted that there was also concern over the site             
 selection process.  He asked whether Representative Rokeberg saw              
 merit in placing those into a subcommittee to attempt to come up              
 with usable language.  He further asked whether Representative                
 Rokeberg maintained his withdrawal of Amendment 4.                            
                                                                               
 REPRESENTATIVE ROKEBERG replied that he supported the bill and did            
 not want to be a party to anything that would distract from it or             
 help sink it.  If the amendments were placed in subcommittee, he              
 requested that the sponsor be included.                                       
                                                                               
 CHAIRMAN GREEN announced that they would continue working the bill            
 with the other amendments.  However, he was assigning a                       
 subcommittee consisting of Representatives James, Croft and himself           
 to consider Amendments 3 and 4.  He asked that Representative James           
 chair that subcommittee.                                                      
                                                                               
 REPRESENTATIVE JAMES agreed.                                                  
                                                                               
 CHAIRMAN GREEN advised members that HB 53 would be heard again the            
 following Monday.                                                             

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