Legislature(1997 - 1998)
03/14/1997 01:08 PM House JUD
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* first hearing in first committee of referral
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+ teleconferenced
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HOUSE JUDICIARY STANDING COMMITTEE March 14, 1997 1:08 p.m. MEMBERS PRESENT Representative Joe Green, Chairman Representative Con Bunde, Vice Chairman Representative Brian Porter Representative Norman Rokeberg Representative Jeannette James Representative Eric Croft Representative Ethan Berkowitz MEMBERS ABSENT All members present COMMITTEE CALENDAR 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." - HEARD AND HELD; ASSIGNED AMENDMENTS 3 AND 4 TO SUBCOMMITTEE HOUSE BILL NO. 150 "An Act giving notice of and approving a lease-purchase agreement with the City of Seward for the construction and operation of an addition to the Spring Creek Correctional Center, and setting conditions and limitations on the facility's construction and operation." - SCHEDULED BUT NOT HEARD * HOUSE BILL NO. 115 "An Act making corrective amendments to the Alaska Statutes as recommended by the revisor of statutes; and providing for an effective date." - BILL POSTPONED TO 3/17 CS FOR SENATE BILL NO. 1(FIN) am "An Act relating to living and working conditions of prisoners in correctional facilities operated by the state, and authorizing the commissioner of corrections to negotiate with providers of detention and confinement services under contract to apply those conditions and limitations on services to persons held under authority of state law at facilities operated under contract or agreement; relating to services provided to prisoners; amending the definition of `severely medically disabled' applicable to prisoners seeking special medical parole; amending provisions of the correctional industries program; and extending the termination date of the Correctional Industries Commission and the program." - BILL POSTPONED TO 3/19 CONFIRMATION HEARINGS ON GOVERNOR'S APPOINTS TO: Violent Crimes Compensation Board - CONFIRMATION HEARINGS POSTPONED TO 3/17 (* First public hearing) PREVIOUS ACTION BILL: HB 53 SHORT TITLE: LEASE-PURCHASE CORRECTIONAL FACILITY SPONSOR(S): REPRESENTATIVE(S) MULDER JRN-DATE JRN-PG ACTION 01/13/97 41 (H) PREFILE RELEASED 1/10/97 01/13/97 41 (H) READ THE FIRST TIME - REFERRAL(S) 01/13/97 41 (H) STATE AFFAIRS, FINANCE 02/19/97 406 (H) JUD REFERRAL ADDED 02/21/97 428 (H) STA REFERRAL WAIVED 02/21/97 428 (H) REFERRED TO JUDICIARY 03/07/97 (H) JUD AT 1:00 PM CAPITOL 120 03/07/97 (H) MINUTE(JUD) 03/10/97 (H) JUD AT 1:00 PM CAPITOL 120 03/10/97 (H) MINUTE(JUD) 03/12/97 (H) JUD AT 1:00 PM CAPITOL 120 03/12/97 (H) MINUTE(JUD) 03/14/97 (H) JUD AT 1:00 PM CAPITOL 120 WITNESS REGISTER DENNIS DeWITT, Legislative Assistant to Representative Eldon Mulder Alaska State Legislature Capitol Building, Room 501 Juneau, Alaska 99811 Telephone: (907) 465-2647 POSITION STATEMENT: Testified on behalf of sponsor of HB 53. REPRESENTATIVE ELDON MULDER Alaska State Legislature Capitol Building, Room 501 Juneau, Alaska 99811 Telephone: (907) 465-2647 POSITION STATEMENT: Sponsor of HB 53. FORREST BROWNE, Debt Manager Treasury Division Department of Revenue P.O. Box 110405 Juneau, Alaska 99811-0405 Telephone: (907) 465-3750 POSITION STATEMENT: Provided department's position and answered questions regarding HB 53. KEITH GERKEN, Architect Division of General Services Department of Administration P.O. Box 110210 Juneau, Alaska 99811 Telephone: (907) 465-5683 POSITION STATEMENT: Provided department's position and answered questions regarding HB 53. ACTION NARRATIVE TAPE 97-39, SIDE A Number 0001 CHAIRMAN JOE GREEN called the House Judiciary Standing Committee meeting to order at 1:08 p.m. Members present at the call to order were Representatives Bunde, Porter, Rokeberg, Croft, Berkowitz and Green. Representative James arrived at 1:10 p.m. CHAIRMAN GREEN announced that Representative Porter had to leave at 1:30 p.m. On Monday, March 17, Chairman Green would be out of town and Vice Chairman Bunde would chair that meeting. A listen-only teleconference would take place Saturday, March 22, to hear testimony by two clergy on the death penalty issue. 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. Number 1418 ADJOURNMENT CHAIRMAN GREEN adjourned the House Judiciary Standing Committee meeting at 3:02 p.m.
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