03/12/2001 02:37 PM House JUD

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ALASKA STATE LEGISLATURE HOUSE JUDICIARY STANDING COMMITTEE March 12, 2001 2:37 p.m. MEMBERS PRESENT Representative Norman Rokeberg, Chair Representative Scott Ogan, Vice Chair Representative John Coghill Representative Kevin Meyer MEMBERS ABSENT Representative Jeannette James Representative Ethan Berkowitz Representative Albert Kookesh OTHER LEGISLATORS PRESENT Representative Richard Foster COMMITTEE CALENDAR SENATE BILL NO. 21 "An Act increasing the maximum civil fine that may be imposed by the State Medical Board as a disciplinary sanction." - MOVED SB 21 OUT OF COMMITTEE HOUSE BILL NO. 4 "An Act relating to offenses involving operating a motor vehicle, aircraft, or watercraft while under the influence of an alcoholic beverage or controlled substance; relating to implied consent to take a chemical test; relating to registration of motor vehicles; relating to presumptions arising from the amount of alcohol in a person's breath or blood; and providing for an effective date." - HEARD AND HELD PREVIOUS ACTION BILL: SB 21 SHORT TITLE:FINES BY THE STATE MEDICAL BOARD SPONSOR(S): SENATOR(S) OLSON Jrn-Date Jrn-Page Action 01/10/01 0037 (S) READ THE FIRST TIME - REFERRALS

01/10/01 0038 (S) JUD, FIN

01/22/01 (S) JUD AT 1:30 PM BELTZ 211

01/22/01 (S) Moved Out of Committee

01/22/01 (S) MINUTE(JUD)

01/23/01 0144 (S) JUD RPT 4DP

01/23/01 0144 (S) DP: TAYLOR, ELLIS, COWDERY, THERRIAULT

01/23/01 0144 532 MINUTE(FIN) 532 MINUTE(FIN) 532 REPORT AUSTERMAN, LEMAN, WARD 203 MINUTE(RLS) UNAN CONSENT REFERRALS MINUTE(HES) CISSNA, BILL: SB 21 02/16/01 0410 (S) ADOPTED FIN LETTER OF INTENT 02/16/01 0410 (S) PASSED Y15 N- E5 02/16/01 0413 (S) SB 21 TRANSMITTED TO (H) 02/19/01 0363 (H) READ THE FIRST TIME - 02/19/01 0363 (H) HES, JUD 02/27/01 (H) HES AT 3:00 PM CAPITOL 106 02/27/01 (H) Moved Out of Committee 02/28/01 0460 (H) HES RPT 5DP 02/28/01 0460 (H) DP: WILSON, JOULE, COGHILL, 02/28/01 0460 (H) DYSON 02/28/01 0461 (H) FN1: ZERO(CED) 03/12/01 (H) JUD AT 2:30 PM CAPITOL 120 ail/22?Root=HB4'>HB 4

01/08/01 0024 (H) PREFILE RELEASED 12/29/00

01/08/01 0024 (H) READ THE FIRST TIME - REFERRALS

01/08/01 0024 (H) TRA, JUD, FIN 02/22/01 (H) TRA AT 1:00 PM CAPITOL 17 02/22/01 (H) Heard & Held MINUTE(TRA) 02/27/01 (H) TRA AT 1:00 PM CAPITOL 17 02/27/01 (H) Moved CSHB 4(TRA) Out of Committee MINUTE(TRA) 02/28/01 (H) JUD AT 1:00 PM CAPITOL 120 02/28/01 (H) Heard & Held MINUTE(JUD) 02/28/01 0470 (H) TRA RPT CS(TRA) NT 1DNP 2NR 2AM 02/28/01 0471 (H) DNP: SCALZI, NR: KAPSNER, KOOKESH; 02/28/01 0471 (H) AM: MASEK, KOHRING 02/28/01 0471 (H) FN1: (ADM); FN2: (ADM) 02/28/01 0471 (H) FN3: (COR); FN4: (CRT) 02/28/01 0471 (H) FN5: (HSS); FN6: (HSS) 02/28/01 0472 (H) FN7: (HSS); FN8: (HSS) 02/28/01 0472 (H) FN9: (LAW); FN10: (DPS) 02/28/01 0472 (H) REFERRED TO JUDICIARY 03/09/01 (H) JUD AT 1:00 PM CAPITOL 120 03/09/01 (H) Heard & Held MINUTE(JUD) 03/12/01 (H) JUD AT 2:30 PM CAPITOL 120 WITNESS REGISTER DAVID GRAY, Staff to Senator Donny Olson Alaska State Legislature Capitol Building, Room 510 Juneau, Alaska 99801 POSITION STATEMENT: Testified on behalf of the sponsor of SB 21. CATHERINE REARDON, Director Division of Occupational Licensing Department of Community & Economic Development PO Box 110806 Juneau, Alaska 99811-0806 POSITION STATEMENT: During discussion of SB 21, responded to questions. RICHARD K. PAYNE, Assistant Municipal Attorney Civil Division Municipality of Anchorage Department of Law 632 West 6th Avenue, suite 730 Anchorage, Alaska 99519 POSITION STATEMENT: During discussion of HB 4, explained the Municipality of Anchorage's vehicle forfeiture program and responded to questions. CONNIE MARTIN, Legal Assistant City Attorney City of Fairbanks 800 Cushman Street Fairbanks, Alaska 99701 POSITION STATEMENT: During discussion of HB 4, explained the City of Fairbanks's vehicle forfeiture program and responded to questions. ALVIA "STEVE" DUNNAGAN, Lieutenant Division of Alaska State Troopers Department of Public Safety 5700 East Tudor Road Anchorage, Alaska 99507 POSITION STATEMENT: During discussion of HB 4, spoke on the topic of vehicle impoundment and forfeiture. BLAIR McCUNE, Deputy Director Central Office Public Defender Agency (PDA) Department of Administration 900 West 5th Avenue, Suite 200 Anchorage, Alaska 99501-2090 POSITION STATEMENT: During discussion of HB 4, spoke on the topics of vehicle impoundment and forfeiture, and the corresponding fiscal note from the PDA. DEAN J. GUANELI, Chief Assistant Attorney General Legal Services Section-Juneau Criminal Division Department of Law PO Box 110300 Juneau, Alaska 99811-0300 POSITION STATEMENT: During discussion on HB 4, spoke on the topic of vehicle forfeiture and answered questions. ACTION NARRATIVE TAPE 01-31, SIDE A Number 0001 CHAIR NORMAN ROKEBERG called the House Judiciary Standing Committee meeting to order at 2:37 p.m. Representatives Rokeberg, Ogan, Coghill, and Meyer were present at the call to order. SB 21 - FINES BY THE STATE MEDICAL BOARD Number 0140 CHAIR ROKEBERG announced that the first order of business would be SENATE BILL NO. 21, "An Act increasing the maximum civil fine that may be imposed by the State Medical Board as a disciplinary sanction." Number 0151 DAVID GRAY, Staff to Senator Donny Olson, Alaska State Legislature, testified on behalf of the sponsor of SB 21, Senator Olson. He remarked that SB 21 is a fairly straightforward bill that increases the maximum limit of a civil fine that the State Medical Board can apply to $25,000. He noted that in Senator Olson's view, the maximum fine will make more severe penalties available for the board to use in egregious cases of misconduct. Furthermore, the cost of a lot of the cases the board is asked to investigate exceeds the $10,000 fine. He pointed out that the State Medical Board is supported by [licensure] fees and fines, and therefore increasing the fines will allow the board to recoup some of its costs. MR. GRAY informed the committee that the [current] $10,000 limit has been in statute for 14 years. Mr. Gray also informed the committee that the Senate included a letter of intent, which essentially says "that just because you increased the limit, don't just be automatically increasing the fines that you cover; ... it wasn't supposed to be a penalty for those inadvertent errors that physicians make." This increase is directed at the severe cases of ethical misconduct. REPRESENTATIVE MEYER requested that Mr. Gray provide an example of a gross misconduct case that would warrant a fine of $25,000. MR. GRAY identified sexual abuse of a client and drug abuse as examples that would warrant a $25,000 fine. REPRESENTATIVE MEYER asked if a $25,000 fine is enough for a physician who sexually abuses a patient. MR. GRAY pointed out that the $25,000 fine is just one of the penalties. There are other sanctions, such as the suspension of the [physician's] license. In further response to Representative Meyer, Mr. Gray said Senator Olson felt that $25,000 is appropriate because higher fines result in another level of court action. Number 0457 REPRESENTATIVE OGAN remarked that the letter of intent is not worth the piece of paper that it's written on. He questioned why [the legislation] doesn't create two classifications of infractions with definitions of each type and thus the intent of the legislature would be codified in the statute. MR. GRAY remarked that the Senate Finance Committee chair thought that the letter of intent was "a good idea and we concurred with him." He indicated that in a lot of cases a fee structure isn't applied, and often an [out-of-court] settlement is made. There was no desire to [develop] a fee structure [in SB 21]. The increase [of the maximum fine] was done to parallel what the board is doing in cases of misconduct. REPRESENTATIVE OGAN surmised that if there is any abuse with this, the legislature could fix it. He reiterated that letters of intent are just "feel-good things" that the courts don't always pay attention to. REPRESENTATIVE COGHILL inquired as to the number of $10,000 sanctions that have been levied by the board. Number 0641 CATHERINE REARDON, Director, Division of Occupational Licensing, Department of Community & Economic Development, noted that she had only reviewed fiscal years 1999, 2000, and 2001. From 1999 to date, there has been just one $10,000 fine, which was levied on January 24, 2001. However, there were a lot of $1,000 fines (for continuing education violations), and also some (midrange) $5,000-$6,000 fines. The $10,000 fine is unusual because it is the limit and thus is [used] for the worst offenders. REPRESENTATIVE COGHILL returned the intent language, which he said seems to him to reflect what the board is already doing. He commented that he wasn't sure the intent [language] is necessary. CHAIR ROKEBERG asked if the Senate had considered whether any of the investigations underway were directly attributable to the State Medical Board, and if so, had [the Senate] considered the costs of those investigations. MR. GRAY answered in the affirmative. He related his belief that Ms. Reardon had provided some of the Senators on the Senate Finance Committee with information regarding the cost and experience of the board's activities. Ultimately, the $25,000 limit was agreed upon. However, Mr. Gray indicated agreement with Representative Ogan in regard to the possibility that all disciplinary committees for occupational licensing need to review how fines are imposed. REPRESENTATIVE COGHILL asked if this civil penalty releases [the individual] from other civil liability if [the individual] is fined. AN UNIDENTIFIED SPEAKER replied no. REPRESENTATIVE COGHILL surmised, then, that the sanction could stand separately from other civil issues even if there are other charges. CHAIR ROKEBERG asked, "What are the costs leading to the costs of investigations as they relate to the State Medical Board, in terms of your experience?" MS. REARDON informed the committee that there are two full-time investigators who handle medical investigations [only]. She indicated that their salaries, expert witness costs, and legal services amounted to $237,000 in fiscal year (FY) 1999. In FY 2000, $365,000 was spent. As of February 2, 2001, $113,000 had been spent. She noted that FY 2000 was an unusually high year. In further response to Chair Rokeberg, Ms. Reardon estimated that there were 100 medical cases open at any one time in FY 2000. Ms. Reardon turned to the amount of money brought in by the fines. In FY 1999, $9,000 in fines was collected; in FY 2000, $16,000; and in FY 2001 to February 2001, $17,950. Ms. Reardon clarified that most of the investigations don't result in disciplinary action and thus it makes sense that less is brought in from fines than is spent. Furthermore, looking fiscal year to fiscal year [is not appropriate] because one year the money may be spent on an investigation, while the disciplinary action would not occur until a year or two later. CHAIR ROKEBERG surmised, then, that an investigation could exceed $25,000 in costs. MS. REARDON agreed and specified that to be the case in FY 2000. CHAIR ROKEBERG asked if the Senate had considered those cases in which there are greater costs than [$25,000]. MR. GRAY answered that there was some consideration of that point. The difficulty is the question of how one can differentiate one investigation that costs a lot of money from another investigation that doesn't. He commented, "You get into an equal protection problem right away when you're assigning your penalties based on cost alone." Number 1020 MS. REARDON stated that if fines are to be linked to the costs, then there would need to be a procedure for the disciplined person and the state to [debate] those costs. Ms. Reardon posed an example of investigating how an individual doctor treated 20 different patients, when there was only enough evidence to charge the [doctor] with incompetence in three of the cases, and, furthermore the state only wanted a hearing on two of those cases. She clarified that the issue is whether [the individual doctor] should have to pay for all [20] investigations or just the two that [he/she] lost. Ms. Reardon informed the committee that [the board] had been cautioned that if fines are too high, the courts may perceive that the situation requires a trial. CHAIR ROKEBERG expressed concern that "we would be running substantial deficits." He said he suspected that most practitioners would be willing to spend untold amounts [of money] in order to defend their licensure and reputation. Chair Rokeberg announced that SB 21 could either be forwarded to the House Finance Committee or this committee could review the issues of due process and cost recovery. REPRESENTATIVE COGHILL related his belief that the due process issue has been sufficiently reviewed. At this point, he felt that the board's discretion is enough. Representative Coghill, said, however, that he was not interested in [moving] the Senate's intent language. CHAIR ROKEBERG commented that the letter of intent was the Senate's. Number 1213 REPRESENTATIVE COGHILL moved to report SB 21 out of committee with individual recommendations and the accompanying zero fiscal note. There being no objection, SB 21 was reported from the House Judiciary Standing Committee. HB 4 - OMNIBUS DRUNK DRIVING AMENDMENTS Number 1234 CHAIR ROKEBERG announced that the next order of business would be HOUSE BILL NO. 4, "An Act relating to offenses involving operating a motor vehicle, aircraft, or watercraft while under the influence of an alcoholic beverage or controlled substance; relating to implied consent to take a chemical test; relating to registration of motor vehicles; relating to presumptions arising from the amount of alcohol in a person's breath or blood; and providing for an effective date." [Before the committee was CSHB 4(TRA). The specific topic for today's hearing on HB 4 centers around vehicle forfeiture.] Number 1271 RICHARD K. PAYNE, Assistant Municipal Attorney, Civil Division, Municipality of Anchorage Department of Law, testified via teleconference, and said he was available to answer questions regarding how the municipality operates its DUI [vehicle impound/forfeiture] program, and how effective it is. He said that [the municipal DUI vehicle impound/forfeiture program] has been effective in reducing recidivism. He noted that although Anchorage does have a lot of repeat offenders, most are from outside the Anchorage area, or from outside the state. The number of people who pass through [the municipal DUI vehicle impound/forfeiture program] twice is much lower than one would think; the percentages vary, but possibly only 10-12 percent of those who had their vehicles impounded or forfeited once passed through [the municipal DUI vehicle impound/forfeiture program] a second time. MR. PAYNE, on the point of the financial success of [the municipal DUI vehicle forfeiture program], said that that was hard to define because [the municipality] would be enforcing the ordinance anyway and would be arresting DUI offenders whether [the municipality] was taking cars or not. He added, however, that the ordinance is set up to reimburse the municipality for its enforcement efforts. Every case has a $220 administrative fee and some other minor fees to reimburse the municipal attorney's office for its time in prosecuting civil cases. And while it is difficult to quantify if [the municipal DUI vehicle impound/forfeiture program] was making a profit, he said he believed that it is paying for itself and that it is paying for enforcement. Further, the municipality has the ability to convert forfeited vehicles to public use, such as undercover vehicles or other various purposes, rather than auction them off. Last year the municipality converted 24 vehicles, simply by paying the towing and storage bills due to the towing contractor, and thus was saved from having to buy or rent them. MR. PAYNE explained that the entire [municipal DUI vehicle impound/forfeiture program], which resolves 1,200-1,400 civil cases a year, is staffed by three people. He noted that his secretary does about 90 percent of the work, he does about 10 percent, and the third member of the team works directly with the public. He added that it is a 2.2-person-job to run the municipality's entire civil [impound]/forfeiture program. MR. PAYNE said, in response to questions posed by Representative Rokeberg, that the percentage of collection [for impounded vehicles] is 100 percent - if the fees are not paid, the individual does not get his/her car back. Thus there are not any collection efforts going on beyond his office; every cent that is asked for is achieved. With regard to forfeited vehicles that are not converted to municipal use, the breakdown of the auction is as follows: 10 percent (of what a car sells for) goes directly to an auctioneer; 30 percent is automatically paid to the municipality; of the remaining 60 percent, storage and towing fees are paid first, then any remaining money goes to the city. CHAIR ROKEBERG said he was under the impression that the Municipality of Anchorage had mandatory forfeiture for the second offense. He asked how long that had been in effect. MR. PAYNE confirmed that the municipality did have mandatory forfeiture for the second offense, and he explained that that has been in effect for the duration of the program, which was instituted approximately six years ago. He added that a first offense results in vehicle impoundment, although at the beginning of the program the impoundment procedure varied; for example, if a person did not have a driver's license, the vehicle was impounded for a longer period of time. Currently, a first offense within a ten-year period results in an impoundment of 30 days; two offenses within a ten-year period results in vehicle forfeiture; and three offenses within a five-year period results in a felony, which then gets prosecuted at the state level [instead of at the municipal level] and does not result in vehicle forfeiture (in Anchorage). He said he had heard people joke that they would prefer to get a third DWI and become a felon, rather than get a second DWI, because they would not lose their car. He went on to explain that in Anchorage, if a person has a felony, the municipality declines the case and then that person is able to retrieve his/her vehicle from the towing yard. REPRESENTATIVE OGAN asked what happens to any liens that are on the title of a forfeited vehicle. Does the municipality acquire that liability, or do the liens remain part of the owner's liability? Number 1618 MR. PAYNE explained that at this juncture in the program, all parties with a legal interest in the vehicle are sued in the civil case. He added that the 1,200 to 1,400 civil cases he had mentioned earlier included lien holders; every lien holder is sued, and while this may seem onerous, every case has been settled. [The municipality] has never outright litigated with any lien holder. Usually lien holders sign a "120-day [stipulation]," which gives them 120 days (instead of 20 days) to answer the complaint, and during that 120 days, 95 percent of all DUI cases are resolved. He added that 90 percent of the time, the lien holder does not need to get involved at all; the 120-day [stipulation] is signed by the lien holder and the municipality files it with the court system. By the time the 120 days has expired, the car issue has been resolved by the criminal defendant and/or his/her spouse (the vehicle co-owner). In about 10 percent of cases, there is one owner/driver with a lien holder and no co-owners, and in those cases the municipality settles the case with the lien holder. Usually the lien holder takes the vehicle back, sells the vehicle in a "lien-holder sale", the lien is satisfied (or if not, the lien holder still has recourse against the purchaser), and if any equity remains after the sale, it is turned over to the municipality. Thus, throughout the year, checks trickle in from different lien holders for different amounts. He also added that [the municipality] has a very good working relationship with the lien holders. CHAIR ROKEBERG referred back to the topic of the 1,200 to 1,400 civil cases. He asked if those cases just involved forfeiture or if [the municipality] also filed civil cases for impoundments. Number 1719 MR. PAYNE explained that [1,200 to 1,400 civil cases] was the total number of cases, which included both impounds and forfeitures. He further explained that 70 percent of the cases were impoundments, and 25-30 percent were forfeiture cases. He said that the process of filing a civil case for impoundments also serves as a notice to lien holders to inform them where their vehicles are. In this way, if the lien is in jeopardy because the vehicle owner is not making payments, the lien holder has the option of picking up the vehicle [from impoundment]. He added that while lien holders would prefer to just receive a letter, [the municipality] is still developing a "letter of notice," and meanwhile, filing the civil case serves that purpose. REPRESENTATIVE MEYER noted that he recalled voting for this ordinance on the assembly, and although [the ordinance] was very controversial at the time, he added that it sounded to him as if it has been working. He said that one of the concerns [then] was that [the ordinance] would not stand up to a court challenge. He asked Mr. Payne if the municipality had ever been challenged in court on this ordinance. MR. PAYNE responded that there had been numerous challenges through the criminal forum. It had been challenged on almost any possible basis. Whenever there is a vehicle that is worth a lot of money and there is no lien holder (some people do pay cash for a $32,000-$40,000 vehicle), those cases have been fought all the way to the supreme court, but the supreme court has not found any flaw in the ordinance so far. REPRESENTATIVE MEYER noted that another concern at the time was that the city [of Anchorage] would be accused of only arresting people who drive Mercedes, instead of "old clunkers." He asked if that issue has arisen. MR. PAYNE said that it had not. The vehicles that [the municipality] gets each year tend to have been manufactured in the early 1980s; thus they are not the greatest vehicles on the road, and for the most part, they are usually on the lower end. He added that it is the rare occasion when [the municipality] gets a vehicle [valued] at $32,000 that someone paid cash for [and is therefore without a lien holder]. REPRESENTATIVE MEYER said he guessed that in cases of rental cars, leased cars, and borrowed cars there would be nothing to "capture." Number 1851 MR. PAYNE agreed that there was nothing to capture, per se. The ordinance is based on the knowledge of the owner of the vehicle; if [the owner] had "reasonable belief or reasonable cause to believe" that the vehicle was going to be operated in violation of the ordinance, then [the owner's] interest in the vehicle is in jeopardy. He said he was presuming that the assembly would have assumed that if [the owner] put the person behind the wheel, or knew the person was going to be behind the wheel, then [the owner] should be held liable. Therefore, [the municipality] considers lien holders and car rental agencies to be innocent owners. He added that [the municipality] sends rental car agencies notice by fax or some other faster-than- normal fashion so that, in many cases, the rental car agencies have their vehicles back within a day. REPRESENTATIVE OGAN asked if there had been any equal protection cases filed. He said it seemed to him that by taking one vehicle worth $1,000 and taking another vehicle worth $30,000, it was not treating everyone the same. MR. PAYNE responded that that would be the state's problem, not the municipality's problem. The municipality takes, or attempts to take, every forfeiture case that comes across its desk, and there is never any indication of what type of car is involved. The state, on the other hand, according to what he had heard, can choose which vehicles to go after because the state statute says "may", whereas [the municipality] does not choose; [the municipality] goes after every single [forfeiture case]. Number 1957 REPRESENTATIVE OGAN said it seemed to him that if two people committed the same offense, and one person received what amounted to a $1,000 fine, whereas the other person received what amounted to a $35,000 fine, then there could be an equal protection case because someone could say it was arbitrary discrimination just because his/her vehicle was worth more. MR. PAYNE responded that he understood Representative Ogan to be saying, "We have the same penalty ... if you're driving a nice car or if you're driving a junky car." He noted that people have made that claim. People have also made the claim that losing a $32,000 or $35,000 vehicle was an excessive penalty for a misdemeanor. But neither of those challenges has held up [in court]. He added that on at least two occasions those types of challenges have gone as far as the Alaska Supreme Court. He also added that Ohio had either a similar ordinance or statute, and the Alaska court relied heavily on the Ohio court's decisions. He noted that in Ohio, one of the cases involved a motorcycle valued at $35,000, and in Alaska there was a case involving a $32,500 truck. In response to a request from Chair Rokeberg, he said he did not have the case citations handy but would provide them to the committee [after the hearing]. CHAIR ROKEBERG noted that there was a provision in HB 4 to change "may" to "shall" [with regard to vehicle forfeitures]. He asked if Mr. Payne had any modifications to recommend. He added that it would involve second offenses, not just felony offenses, in order to stay consistent with the Municipality of Anchorage's ordinance. MR. PAYNE responded that he did not care to make any recommendations given his status/position with the municipality, but he was confident that the legislature would make a fine decision in that regard. CHAIR ROKEBERG returned to Mr. Payne's comment that some people joke that a third offense - a felony offense - was preferable to a second offense that involved vehicle forfeiture. He asked Mr. Payne to comment further. MR. PAYNE said he had heard many people comment that they felt fortunate that it was their third DWI and not their second. This is not uncommon when [the municipality] declines a [felony] case and the offender gets his/her car back without any significant penalty. The offender has to pay towing and storage, but that can be as low as $60, whereas with forfeiture, the person loses his or her car. He added that perhaps the criminal penalties were more sever, but his focus was on the civil penalties, which are nonexistent [for a third DWI offense committed within a five-year period]. MR. PAYNE clarified for Chair Rokeberg that the $220 fee structure for impoundments is intended to cover approximately four hours (at $40/hour) of police time for the processing of each DWI, plus the cost of the civil case. He noted that originally the fee was $160 because the case was handled as an administrative procedure. Since then, the program was transferred to the state district court system, and the city began to incur a $60 fee for every case; the $60 fee was then incorporated into the impoundment fee, thus raising it to $220. He also clarified that forfeiture costs are recovered by the auction procedure, and in the cases where the vehicle is converted to public use (approximately only 24 times a year), the vehicle itself is the cost recovery. He also explained that on average, there are between 18 and 30 forfeitures per month, but he added that more vehicle forfeitures occur in the months immediately following January and July because of the holiday [influence]. CHAIR ROKEBERG asked if the municipality has had any discussions regarding increasing the fees in order to offset other costs. MR. PAYNE responded that there has been some discussion of raising the fees, and that he would be creating a presentation of the necessary changes for the mayor. Number 2285 CONNIE MARTIN, Legal Assistant, City Attorney, City of Fairbanks, testified via teleconference, and said she administers the DWI forfeitures and impounds for the city. She noted that [the Fairbanks impound/forfeiture program] is a mirror image of the Municipality of Anchorage's program, although on a much smaller scale. She said that [the Fairbanks program] takes in approximately 300 cases per year. In response to Chair Rokeberg, Ms. Martin verified that forfeiture was mandatory on a second [DWI] offense. She also responded that she had not heard any comments similar to the ones Mr. Payne said he had heard regarding the state's not being as severe on third-time offenders because of a lack of mandatory forfeiture. She added that neither had she dealt with anyone who had a problem [with the impound/forfeiture ordinance]. She went on to confirm that the fee structure of the Fairbanks program was similar to Anchorage's, although the impoundment fee was $200 instead of $220 (though she was not sure why). She added that she only worked part-time, and that she was the only one who worked [with impounded/forfeited] vehicles. MS. MARTIN, on the point of towing/storage rates in the Fairbanks area, explained that the business currently providing that service to the city charges an initial fee of $102 for "pick up" and storage, and an additional $10/day for storage after that. She noted that there were a lot of complaints about that fee, but [offenders] pay it. She added that the [Fairbanks impound/forfeiture program] only applied within the city limits. In response to Chair Rokeberg, Ms. Martin said that although [her office] did not deal with any cases at the state level, [her office] did think it would be nice if the state instituted mandatory vehicle forfeitures so that more [DWI offenders] could be taken off the streets. In response to Representative Ogan, she said that [her office] had not run into any equal protection issues because they operate on a much smaller scale. TAPE 01-31, SIDE A Number 2485 ALVIA "STEVE" DUNNAGAN, Lieutenant, Division of Alaska State Troopers, Department of Public Safety (DPS), testified via teleconference. He explained that [the DPS] had submitted a substantial fiscal note for the original version of HB 4 regarding vehicle forfeiture, and recently a revised fiscal note was distributed to the committee that shows a decrease in the vehicle forfeiture component. He said that in an effort to make the vehicle forfeiture aspect of HB 4 work as cost-effectively as possible, [the DPS] intends to dispose of the majority of vehicles (as much as possible) in the localities in which the vehicles are forfeited. Under AS 28.35.036, the DPS is allowed to dispose of forfeited vehicles at its discretion. With that in mind, what [the DPS] proposes is that in rural locations, disposal would include turning the vehicles over to charities, local governments, and nonprofit organizations. CHAIR ROKEBERG asked if there were any statutory changes that could be made with HB 4 to facilitate that process. LIEUTENANT DUNNAGAN explained that current statute is broad in that it says that as long as a vehicle is forfeited in accordance with AS 28.35.037, the disposition is at [the DPS's] discretion. He added that [the DPS] would be willing to look at any amendment or proposed language that would assist in implementation. CHAIR ROKEBERG said that suggestion did come up, and he added that it seemed to him that implementing that process with nontraditional (off-road) vehicles would be a good idea and would lower the cost. He asked what the current process of impoundment was for DWI arrests. LIEUTENANT DUNNAGAN answered that if someone is arrested for DWI, the vehicle is impounded by a rotational wrecker (provided there was a wrecker service in the area); the wrecker takes the vehicle to the company's impound lot, and the vehicle remains there until the towing and storage costs are paid by the vehicle's owner. He responded to a question posed by Chair Rokeberg by saying that there was no difference in current practice compared to provisions in HB 4 regarding vehicle impoundments. He added that in cases of vehicle forfeiture, which would be instituted with the passage of HB 4, vehicles would simply be turned over to the DPS for disposition. And, again, he said that the intent of [the DPS] is that the disposition could include turning the vehicles over to a village council (or perhaps a nonprofit corporation) so that vehicles could be put to use by Village Public Safety Officers (VPSOs). LIEUTENANT DUNNAGAN explained that currently, in rural areas, there is not much done in the way of impoundment. A lot of DWI cases in rural areas come after the fact. For instance, [the DPS] will get a report that someone was driving intoxicated, [he/she] had an accident, and hit a tree with a snow machine. If [the DWI] involves an "on scene" arrest, and the person goes to jail and there is not anywhere to impound the vehicle, the trooper, when possible, can chain up the snow machine or all- terrain vehicle (ATV) to a tree as a temporary measure. But he cautioned that most of the time in rural Alaska, impoundment facilities are not available, nor do the troopers have other means available whereby an impounded vehicle can be looked after to prevent damage or theft. He gave an example of a snow machine's being returned to the offender's parent, relative, or some sober individual in the village. Number 2273 CHAIR ROKEBERG said he appreciated the fact that a trooper will use common sense when returning a vehicle, but he pointed out that statute requires impoundment. LIEUTENANT DUNNAGAN agreed that statute requires that anytime someone is taken out of a vehicle and arrested, the vehicle should be impounded. But he argued that in rural Alaska there are no facilities for that, and therefore, troopers are just doing the best they can. [Troopers] do take notes and keep track of serial numbers and license plate numbers; thus if a vehicle is ordered to be forfeited, it can be located and given to the proper authority. CHAIR ROKEBERG asked about the use of "the club" or "boots" to prevent vehicle use. LIEUTENANT DUNNAGAN said [the troopers] did not use those types of devices. He went on to explain that in areas that are on the road system, a vehicle is impounded by a wrecking service even if the location that the vehicle is taken to is far away. He added that although that location may not have a facility where the vehicle could be kept safe and secure with the benefit of insurance, the vehicle could certainly be removed from the road. CHAIR ROKEBERG surmised that [the DPS] had concern that in taking possession of a vehicle, the security of that vehicle became an issue. LIEUTENANT DUNNAGAN said that security was an issue for any vehicle that is impounded. For instance, in Fairbanks [the DPS] had a rotational list of wreckers that were called for normal impoundments, and one of the requirements of companies on that list is that they provide both insurance for towing the vehicle and a locked, secured, and insured storage facility to tow the vehicles to. In this way the vehicle is covered for any loss that may occur while the vehicle is in impound status. In response to questions posed by Chair Rokeberg, Lieutenant Dunnagan said that Talkeetna, for example, has a wrecker service in Willow. He added that any vehicle that is impounded is taken to the closest yard belonging to whatever wrecker company is in the area. He also said he was not sure what the City of Nome has regarding wrecker services, but he surmised that someone in Nome has a tow truck that is being utilized for impoundments. He noted that the troopers in that area are dealing principally with villages. CHAIR ROKEBERG inquired if Lieutenant Dunnagan meant that whatever vendor is being used to provide towing/impoundment services in a particular area is responsible for providing secured storage. LIEUTENANT DUNNAGAN said yes. In Fairbanks, [the DPS] requires it, and he said he believed it was the same in Palmer. In some areas, however, such as Cantwell, he said wrecker services are not going to be that sophisticated; therefore, vehicles are taken and secured as well as possible. He noted that to his knowledge, [the DPS] has not experienced any loss of property or damage resulting from impoundments, but he added that if there had been [loss or damage], those [claims] would have been handled directly though the towing company, not through [the DPS]. Number 2060 CHAIR ROKEBERG commented that he recalled an incident that took place in Trapper Creek, where some snow machines, trucks, and trailers were impounded from a group and the fee from the wrecker service based in Wasilla came to $1,000. On another point, he asked if the [DPS's] fiscal note reflected second offenses. LIEUTENANT DUNNAGAN noted that he had not heard of the incident in Trapper Creek. He explained that in calculating the fiscal note, [the DPS] had used numbers from the Division of Motor Vehicles (DMV) and the DPS. For the second offense, the estimate was a 1,000 convictions a year, with a 50 percent forfeiture rate, equaling 500 vehicles. [The DPS] then tried to calculate realistically how many of those 500 vehicles [the DPS] would have to deal with, and how many could be given away to local governments, charities, and nonprofits. This resulted in a calculation that 75 percent (of 500 vehicles) would be given to other entities, and the remaining 25 percent would be dealt with by the DPS. Those same percentages were used for the supporting documentation on third-time [DWI] offenses, calculating 500 convictions per year at a 50 percent forfeiture rate; thus 250 vehicles would be subject to the 75/25 percent split. Lieutenant Dunnagan concluded by saying that the revised fiscal note pertaining to forfeitures was a result of these calculations. CHAIR ROKEBERG asked if [the DPS] currently had an administrative charge for impoundment. LIEUTENANT DUNNAGAN answered no. Any fees that are charged come from the towing company; charges can include fees for picking up the vehicle; a mileage fee; an administrative fee, which usually covers a title search through DMV; storage fees of between $10 and $20 per day; and a release fee. [The DPS] does not get involved in any portion of the fee schedule. CHAIR ROKEBERG again brought up the topic raised by Mr. Payne of people (in the Anchorage area) being relieved that their third DWI offense was a felony and therefore did not include vehicle forfeiture. LIEUTENANT DUNNAGAN said he had heard Mr. Payne's comments in that regard, but he had not heard anyone express to him that he/she preferred a felony charge to vehicle forfeiture. And although he recognized that people can place quite a bit of value in a car, he said that he personally would not be relieved to be convicted of a felony because he would lose his right to vote and to own a gun, as well as be subjected to other problems associated with being a convicted felon. CHAIR ROKEBERG said he would like to consider language that would ensure that [the DPS] had the right to give away forfeited vehicles. Number 1802 BLAIR McCUNE, Deputy Director, Central Office, Public Defender Agency (PDA), Department of Administration, testified via teleconference, and explained that for vehicle forfeitures alone [the PDA] would need three paralegals, resulting in a fiscal impact of $255,600. He added that that would be due to the geographic dispersion of cases; the PDA has offices throughout the state - from Ketchikan to Barrow - and while most of the felony DWI caseload is in Southcentral [Alaska] (with the largest amount around Anchorage and Palmer), Fairbanks also has a fairly substantial caseload. CHAIR ROKEBERG asked, "Aren't you already doing those forfeiture procedures in Anchorage and Fairbanks?" MR. McCUNE said no. He explained that the municipal ordinance is what is called an "in rem" proceeding; it is a civil proceeding and not part of the criminal case. It is related to the [criminal] case, but it is a separate civil action used by the municipality to bring suit against the [vehicle] itself. He noted that an advantage of [this arrangement] is that the [civil action] takes place right away. He said that in HB 4, according to his understanding, no forfeiture would occur except as part of the sentencing in a criminal case. He reminded the committee that the PDA represents people in criminal cases, not in civil- in-rem-forfeiture actions. He further explained that this limitation is statutory. He suggested that if the [forfeiture provisions of HB 4] were structured like the ordinance in Anchorage, such that it would be the state against the vehicle, then [the PDA] would not get appointed by the court because it would be a civil proceeding. CHAIR ROKEBERG said he appreciated hearing the distinction, although, he was concerned about the level placed on the [fiscal] note. MR. McCUNE, addressing the topic of forfeiture in general, said [the PDA] was concerned that as part of sentencing, the municipal prosecutor would not have any action against an innocent lien holder - someone who had no reason to believe that the vehicle would be used in a DWI/DUI situation. He noted that property forfeitures were difficult cases, and the property rights of family members, lien holders, and other co-owners had to be taken into account. [The PDA] had concern that mandatory forfeiture would have unintended consequences such as taking a family's only means of transportation away; he said [the PDA] expected mandatory forfeiture to really impact people out in the Matanuska-Susitna area, where public transportation is not readily available. He pointed out that current law does allow for forfeiture in appropriate cases, and [the PDA] hoped that forfeiture would remain a discretionary power of the judge. He also mentioned that [the PDA] had concerns about rural areas where there might be [cases involving] snow machines and similar vehicles. He acknowledged that [forfeiture] could have a deterrent effect, but he again stated that [the PDA's] preference was for it to remain a discretionary tool. CHAIR ROKEBERG asked for clarification from the Department of Law regarding civil versus criminal forfeiture proceedings. He noted that perhaps a decrease in the fiscal notes could be achieved by following the civil-proceedings model. Number 1486 DEAN J. GUANELI, Chief Assistant Attorney General, Legal Services Section-Juneau, Criminal Division, Department of Law (DOL), explained that HB 4 did not mandate that forfeiture be part of the criminal proceeding, and said he thought that HB 4 was probably broad enough to allow a separate civil action to be filed [by the DOL]. However, because the law recognizes that forfeitures are a type of penalty for a criminal act, and because the U.S. Supreme Court has noted that the amount of forfeiture has to be taken into consideration when determining whether the entire penalty imposed is excessive, Mr. Guaneli suggested that a criminal proceeding would be the most appropriate venue for determining whether all penalties imposed for any given DWI case, including forfeiture, were excessive. CHAIR ROKEBERG said that he appreciated Mr. Guaneli's candor, but, given the facts that there is a working system already in place in Anchorage and Fairbanks, and that the legislature will have concerns about the fiscal notes of HB 4, he still wanted to look into [the possibility of using the civil-proceedings model]. Chair Rokeberg asked Mr. Guaneli to give a quick synopsis of [the DOL's] position on the issue of forfeiture. He noted for the record that Representative Foster was present. MR. GUANELI said that [the DOL] is not in favor of mandatory vehicle forfeiture in drunk driving cases. To clarify, current law says that after someone's second drunk driving offense, the state "may" choose to forfeit the vehicle, and the court "may" forfeit the vehicle if the court finds that certain conditions have been met. By contrast, for a second offense, HB 4 requires that the state "shall take action to forfeit", in other words, move for the court to forfeit the vehicle. However, at least on the second offense, [HB 4] does not mandate that the court forfeit [the vehicle]; the court still has the factors it needs to go through to determine whether forfeiture is appropriate. On the third offense, HB 4 not only mandates that the state move against the vehicle, it also mandates that the court actually forfeit [the vehicle]; the court is not given any discretion. MR. GUANELI acknowledged that there are some good reasons why the legislature might consider taking people's cars [as a result of] drunk driving [offenses], but he observed that those reasons are already set out in current statute in the form of factors that the judge has to consider in determining whether to take somebody's car. He said those factors are: whether [forfeiting the vehicle] would deter that person, or others, from driving drunk; whether it is necessary for public protection; and whether it will express public condemnation for the conduct. Another factor he mentioned was that [forfeiting the vehicle] might generate some state revenue. Number 1129 MR. GUANELI, on the point of whether [vehicle forfeiture] is really a deterrent to drunk driving, said that multiple drunk- driving offenders are difficult to deal with, in that they don't react the same way "that you or I would"; they keep drinking, and they keep driving, even though the drinking is harming them physically and financially. It harms their family, they run the risk of long jail sentences, and in most cases they already have a suspended license and shouldn't be driving at all. And, despite all the enhanced penalties proposed, a lot of times [the penalties] just don't work for some of these [multiple drunk- driving] offenders. That is why there has been constant refrain in the committee hearings that in addition to increasing fines and increasing penalties, "we" also need to increase the amount and kind of treatment that is available for the offender. MR. GUANELI said he is not certain that anybody really thinks about losing his or her car, and if he or she does think about it, it is questionable whether that deters anybody from driving. He added that a lot of [offenders] borrow cars, or as Mr. Payne says, they rent a car and drive drunk. Losing a rental or borrowed car is not a deterrent to drunk driving, he noted. In addition, he argued that many people have cars that are essentially owned by a financial institution, and thus they have little or no equity in the vehicle. He also commented that Mr. Payne had testified that most of the [forfeited vehicles] date from the early 1980s and therefore are not worth much. Again, he said that there is some question whether there is much deterrent value in vehicle forfeiture. CHAIR ROKEBERG interjected that Mr. Payne also testified that the recidivism rate for his program was only 10-12 percent in the Anchorage area. MR. GUANELI acknowledged that Mr. Payne had said that, although Mr. Guaneli said he would be interested in looking at Mr. Payne's figures. Mr. Guaneli said that he interpreted that statement to mean that 10-12 percent of people who lose their cars through a first forfeiture come back and run the risk of losing another car through yet another forfeiture. He said that he did not know if those were very good numbers in terms of a program that is supposed to stop drunk driving. CHAIR ROKEBERG commented that [that numbers] looked pretty good to him. MR. GUANELI said that it would be interesting to look at how many people who have a second-offense conviction come back and get their third. He offered that the experience in Anchorage may not the same as experienced in the rest of the state. MR. GUANELI went on to say that public protection is a good reason for taking somebody's car; certainly he/she cannot drive a car that has been forfeited. But he cautioned that the other things that HB 4 does have to be taken into consideration as well. For example, HB 4 doubles the mandatory minimum jail sentence of four months for a third offense. And because that driver is not going to be in society at all [for that period of time], one has to wonder if taking that person's car - or, in many instances, that person's family's car - is really going to provide much public protection. Number 0860 MR. GUANELI, on another point, said that he did not think [vehicle forfeiture] would provide much additional revenue if the vehicles were not worth much money to begin with. And if the DPS intends to give away forfeited vehicles, those vehicles will not provide any additional state revenue. MR. GUANELI posited that it was not as clear a case as it might seem initially that taking people's cars has much deterrent effect, protects the public, or generates any revenue. Another point to consider is whether [vehicle forfeiture] is consistent and fair. He observed that a borrowed or rented car will be returned to the owner; a bank will not lose its [financial] interest in a car; people who forfeit a car worth $500 aren't going to lose very much; and, as Representative Ogan alluded to, it is really those few individuals who have paid cash for their vehicles [that stand to lose a lot]. He said he knew that the legislature has tried, with its presumptive sentencing system, to provide uniform and consistent criminals penalties; he suggested, however, that having a system whereby some people lose a great deal and some people lose very little (or nothing at all) does not provide for a consistent and fair penalty. CHAIR ROKEBERG likened it to a progressive tax system. MR. GUANELI responded that he was not certain that the people who can afford [vehicle forfeiture] the most are those who actually pay cash for their cars. In terms of uniformity, HB 4 does increase the fines - which apply uniformly to all offenders - from $5,000 to $10,000, and that is a steep increase. He said if [the committee] wanted to talk about a progressive system - in which the more a person can afford (or earns), the more he or she is fined - then that [idea] has some merit. He argued, however, that it becomes somewhat fortuitous whether a person is actually going to incur the penalty of [vehicle forfeiture]. It depends on how a person lives his or her life; whether [a person's life is lived] on credit, or by cash, determines how [a vehicle forfeiture penalty] actually affects that person. MR. GUANELI offered that the question becomes: What is the impact of [vehicle forfeiture]? He noted that Mr. McCune had pointed out that many forfeitures impact innocent family members. For example, the husband goes to jail under HB 4 for eight, nine, or ten months (currently, it is for four, five, or six months); he loses his job; and the family is going to need a car. Mr. Guaneli recalled from speaking with Mr. Payne that [the municipality] enters into settlements with innocent spouses, but basically that means that spouses have to give up half the value of the car from either a forced sale of the car or by payment to the municipality for the value of the offending spouse's interest in the car. MR. GUANELI mentioned that aside from all of the aforementioned problems, there are also the practical problems alluded to in one of DPS's prior fiscal notes. He added that there may very well be ways to mitigate those expenses. He said he thought that giving away [forfeited] cars might have some merit, although statutory authority probably does have to be granted in order to do that because the state has been sued in the past for taking forfeited property and not dealing with it in a way that preserves the most state revenue. Number 0562 MR. GUANELI noted that another practical problem is one of providing storage and maintenance of all the [forfeited] vehicles across the state. It is one thing to be dealing with the Anchorage municipality, which is a compact geographical area where one company handles all the towing, impounding, maintenance, and auctions, but quite another to have to provide adequate storage and maintenance in all the other areas of the state as well. He explained that the state has an obligation to store and maintain all [forfeited] vehicles (not just cars and motorcycles, but boats, planes, snow machines, and ATVs) until the person is convicted. And in cases where the person is not convicted, that person has a right to expect that his or her vehicle will be returned without any additional damage. MR. GUANELI said he was not convinced that [vehicle forfeiture] is as effective as proponents make it out to be. He added that he thinks [vehicle forfeiture] has a harmful effect on innocent family members. And it is for this reason that although [the state] has the discretion to move against these vehicles, the state has chosen not to do so. CHAIR ROKEBERG suggested that if that was Mr. Guaneli's only argument [against mandatory vehicle forfeiture], then they needed to devise a plan that doesn't hurt those family members. He acknowledged that Mr. Guaneli had other arguments, but said the last was the only one that had merit when the pros and cons were weighed. He said he thought that the DPS was taking a more positive look at [mandatory vehicle forfeiture]; [the committee] was prepared to give flexibility [to the courts]. He added that [the committee] had received correspondence from law enforcement agencies in the City of Wrangell and the City of Bethel that spoke to the impoundment/forfeiture elements [in HB 4] as being a source of additional income. He asked Mr. Guaneli if he had spoken to Mr. Payne regarding civil suit methodology vis-a-vis the criminal [suit methodology]. MR. GUANELI acknowledged that Mr. Payne had described the method [used by the Anchorage municipality], and although [the Anchorage municipality] has the option of [handling vehicle forfeitures] in that manner, Mr. Guaneli said that to his way of thinking, it made more sense to take care of the forfeiture issues during the criminal sentencing proceedings. He added that he thought the only advantage to doing [forfeiture] through a civil action would be that it would cut the public defender out of the process, and that may be a valid reason. CHAIR ROKEBERG said that [the committee] should take another look at the Anchorage recidivism rates and request further documentation. He said he understood that a study was done in Portland that showed a 4 percent recidivism rate after vehicle forfeiture was put into place. Number 0206 MR. GUANELI said that he had heard some statistics from some jurisdictions say that [vehicle forfeiture] is effective, and other [statistics] from other [jurisdictions] showing that [vehicle forfeiture] may not be [effective]. He added that he thought that in reviewing all those [statistics], everything else that a jurisdiction does in connection with drunk driving has to be taken into consideration as well. He said that he doubted that [the committee] will find many jurisdictions that have the type of progressive and mandatory sentencing scheme that Alaska does. A mandatory sentence of many months for drunk driving is unusual; a mandatory fine of $5,000 is unusual; the license revocation periods are long [as compared to other states]. Thus, if another jurisdiction does not have a lot of those types of penalties, then vehicle forfeiture may have an impact. For example, he explained that some states consider drunk driving an infraction; the offender gets a ticket and is responsible for mailing in a fine, and that takes care of the drunk driving offense. The experience in Alaska, particularly with repeat drunk drivers, is that the problem of alcohol abuse is much more endemic, and again he said that he was just not convinced that [vehicle] forfeiture is going to be effective. He posited that [the topic of vehicle forfeiture] deserves further study. CHAIR ROKEBERG stated that [the committee] would be reviewing some of the aforementioned issues, and making some revisions. [HB 4 was held over.] ADJOURNMENT Number 0024 There being no further business before the committee, the House Judiciary Standing Committee meeting was adjourned at 4:09 p.m.

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