Legislature(1997 - 1998)

03/24/1998 09:15 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
SENATE FINANCE COMMITTEE                                                       
24 March, 1998                                                                 
9:15 a.m.                                                                      
SFC 98  # 92, Side A (000-591)                                                 
      Side B (591-000)                                                         
CALL TO ORDER                                                                  
Senator Bert Sharp, Co-Chair, convened the meeting at                          
approximately 9:15 a.m.                                                        
In addition to Co-Chair Sharp, Senators Pearce, Donley,                        
Parnell and Phillips were present when the meeting was                         
convened.  Senators Torgerson and Adams arrived later.                         
Also Attending:  Senator JERRY WARD; ANNE CARPENETI,                           
Assistant Attorney General, Legal Services Section, Criminal                   
Division, Department of Law; JOHN BITTNEY, Legislative                         
Liaison, Alaska Housing Finance Corporation, Department of                     
Revenue; STEVE ASHMAN, Senior Housing Specialist, AHFC, DOR;                   
KIM METCALF-HELMAR, Special Assistant, Office of the                           
Commissioner, Department of Community and Regional Affairs;                    
YVONNE CHASE, Director, Division of Community and Rural                        
Development, DCR&A; REBECCA GOMEZ, Director, Division of                       
Employment Security, Department of Labor; LIZ DODD,                            
President, Alaska Civil Liberties Union; MIKE GREANY,                          
Director, Division of Legislative Finance and aides to                         
committee members and other members of the Legislature.                        
via Teleconference:   From Anchorage: GLEN KLINKHART,                          
Anchorage Police Department;                                                   
SUMMARY INFORMATION                                                            
Co-Chair Sharp announced there were five bills on the                          
calendar and they would be taken up in the order they appear                   
on the agenda.  He hoped the committee would get through                       
them all at this meeting.                                                      
Senator Pearce spoke to the committee about the supplemental                   
appropriation bill, HB 461, which was heard in committee the                   
day before.  The committee had ordered a new Committee                         
Substitute.  She announced the committee would be addressing                   
that CS at the evening meeting later that day.  But she said                   
it would not be taken up until after the hearing on HB 53.                     
She anticipated that to be well after 6:00 p.m.                                
CS FOR SENATE BILL NO. 323(JUD)                                                
"An Act relating to sexual offenses, to those who                              
commit sexual offenses, and to registration of sex                             
offenders; amending Rule 6(r)(2), Alaska Rules of                              
Criminal Procedure; and providing for an effective                             
Co-Chair Sharp turned the floor over to Senator Pearce,                        
sponsor of the bill to give her testimony.  Her statement                      
was as follows:                                                                
"...The use of children in the production of sexually                          
explicit material including photographs, films, videos and                     
computer images is a form of sexual abuse that can result in                   
physical or psychological harm to the children involved."                      
"Individuals who utilize children as sexual objects or are                     
sexually attracted to children, often seek out and collect                     
sexually explicit material for their own sexual                                
gratification.  Access to the Internet has become one of the                   
preferred methods of distributing and collecting child                         
pornographic material.  Several investigations across the                      
country have revealed thousands of pieces of child                             
pornography in the hands of child pornographers."                              
"Congress passed the Child Pornography Prevention Act of                       
1996 and several states are taking action to strengthen                        
their pornography laws.  The Alaska penalty for distribution                   
of child pornography is not more than five years, but law                      
enforcement officers are encountering problems in trying to                    
prove distribution.  Offenders are often charged with, or                      
plead down to Possession of Child Pornography, which is a                      
Class A misdemeanor offence with a penalty of not more than                    
one year of prison.  [This is] unless the offender is                          
convicted of more that one count and receives a consecutive                    
"SB 323 increases the offences for possession and                              
distribution of child pornography to a Class B felony                          
offenses punishable by not more than ten years in prison."                     
"The bill also creates the offense of Indecent Exposure in                     
the First Degree if the offender knowingly masturbates                         
within the observation of a person under 16 years of age.                      
This crime would be a Class B felony.  The bill makes the                      
existing offense of indecent exposure to Indecent Exposure                     
in the Second Degree.  The penalty for this offense is                         
increased to a Class C felony when committed before a person                   
under 16 years of age, and a Class A misdemeanor when                          
committed before a person 16 years or older."                                  
"The bill requires sex offender registration for the                           
offenses of indecent exposure in the first and second degree                   
and for the possession of child pornography.  Currently,                       
only offenders who are convicted for the distribution of                       
child pornography are required to register."                                   
Senator Pearce then told the committee she introduced the                      
bill at the request of an officer with the Anchorage Police                    
Department.  She said that officer was linked to the meeting                   
via teleconference from Anchorage. She requested the                           
committee to have an opportunity hear Officer Klinkhart talk                   
about the reason he came and asked for the bill to be                          
OFFICER GLEN EDWARD KLINKHART was invited to speak by Co-                      
Chair Sharp.  His testimony was as follows:                                    
"The reason that I became involved with this prior to                          
joining the police department I spent some fifteen years as                    
one of the state's more active computer people.  [I] joined                    
the force about two years ago and much to my surprise, I                       
became involved in several cases involving high tech crimes.                   
I imagined that my role would probably be in chasing down                      
teen-age hackers and people that were moving decimal points                    
in their businesses - that sort of thing.  Much to my                          
surprise, I became involved in assisting agencies including                    
the APD, the US Customs Service, the Secret Service, Palmer                    
Police Department and the Alaska State Troopers in cases                       
involving crimes against children.  This came as a bit of a                    
shock to me.  I didn't imagine even in my experience with                      
computers that this sort of thing was nearly as prolific as                    
it is."                                                                        
"Basically, a quick synopsis of some of the cases that we've                   
worked: I have a couple of cases that are currently open                       
that I can't talk about. But of the ones that I can, one                       
that primarily started this was the case of an Eagle River                     
"This particular man had been posting or putting information                   
out on the Internet that he had pictures to trade.  By                         
pictures, I mean these were not just photographs.  These                       
were actual computer images - computer photographs of nude                     
children.  In fact, his preference (most of these people                       
have a preference) was for young females between the ages of                   
five and about sixteen.  These pictures would range                            
everything from full frontal nudity to actual sexual acts."                    
"Working with US Customs on this particular case, it turned                    
out that this case and most cases that we find even here in                    
Alaska aren't just localized.  They don't just start here                      
they don't just end here."                                                     
"In this particular case, Hawaii had served a search warrant                   
on a gentleman they had found literally hundred's of                           
pictures of child pornography.  From there they discovered                     
this person was trading - actually exchanging picture for                      
picture with a gentleman from Indiana, I believe."                             
"The gentleman in Indiana was a particularly lowesome                          
individual.  This particular person was having sexual                          
encounters with his stepdaughter.  He was getting her                          
drugged and drunk and was then sexually assaulting her and                     
video taping the act.  He then would post them on the                          
Internet, these photographs."                                                  
"That caught the eye of the gentleman here in Eagle River                      
who thought that that was pretty neat and began exchanging                     
"He actually put a computer system on the Internet that                        
allowed him to trade his photographs like trading baseball                     
cards in a sense. 'I'll give you two of these for two of                       
those.'  He was pretty slick, really utilized the                              
"It used to be that these people who dealt in this kind of                     
child abuse would have to go underground.  There were                          
underground newsletters. It was actually very hard to deal                     
with, which is why US Customs dealt with it because most of                    
the child pornography was coming from third world countries                    
or parts of Europe.  Now, because of the technology, you                       
could be anywhere and be able to have access to it."                           
"To make a long story short, we were able to, using                            
computers, using technology and good old police work, serve                    
a search warrant on this particular gentleman in his house."                   
"In his house we discovered a computer which had over 8700                     
photographs of nude juvenile females.  Those ranged from                       
full frontal nudity, probably the least offensive, to actual                   
children engaged in sex.  8700; I don't know if Senator                        
Pearce brought her big pile of paper with her today, but                       
next time you are in your photocopy room, stack 17 reams of                    
paper on top of each another and you'll get a good idea as                     
to how many pictures we're talking about.  This is not just                    
one or two, this isn't just an accidental, 'Oops, Look what                    
I came across on the Internet.'  These are people who are                      
actively seeking this stuff out."                                              
"This particular gentleman I could not charge him under                        
state - or I didn't feel it right to charge him with a                         
simple A misdemeanor for this sort of thing.  He was also                      
involved in some other activities including wire fraud and                     
mail fraud.  We ended up having to go to the Feds.  We ended                   
up having to work with the US Attorney and the federal                         
system, which luckily here in Anchorage works fairly well                      
because they're good people and they were easy access.                         
However, we're finding other investigators don't have that                     
opportunity - don't have the ability to be able to have                        
access to the federal government.  In most cases we find                       
that it is faster and more efficient to deal with it on a                      
statewide level."                                                              
"This is just one example.  I have several cases that we're                    
working on.  I just did a search warrant last week on a                        
similar case."                                                                 
"We have officers now that as our officers are becoming more                   
technically savvy as we're trying to train them.  We're                        
starting to see more of this because we're able to look for                    
it.  No longer are we going to go in and find these people                     
after they've sexually assaulted children and find the                         
photographs.  We're now being a little more pro-active in                      
being able to find them with the photographs before they go                    
out and actually assault children."                                            
"That was the primary reason why I felt it was necessary to                    
talk to somebody like Senator Pearce and be able to bring                      
this sort of problem to the forefront and give law                             
enforcement - we already are learning the tools and have the                   
technological tools to do this.  We just are looking now for                   
some help from the people of the State Of Alaska to give us                    
some laws that we can work with and be able to in a sense                      
stop these people from continuing to abuse our children."                      
"Just to give you an idea of how widespread this is, I'm                       
currently on-line on the Internet even as we speak and                         
looking at people from Alaska...  I've got people from                         
Alaska right now who are in such areas as let's see, "Family                   
Sex". That's an area where people can get pictures of family                   
members engaged in sex.   There's a person right now from                      
Kenai who's logged on who's in an area called "Double                          
Penetration".  At any time day or night I can log on here                      
and find people from Alaska who are peddling this sort of                      
"Its unfortunate that one of the great things about                            
technology is it gives us more opportunity.  The bad think                     
is that it gives the bad guys more opportunities.  They're                     
trading this stuff, like I said, just like baseball cards.                     
I'm just asking for some help and some support here in being                   
able to track these people down and let them know the people                   
of Alaska just are not going to stand for this."                               
This concluded Officer Klinkhart's testimony.                                  
Senator Donley asked what it was about the federal law that                    
was different from the state law that encouraged the officer                   
to seek federal prosecution.  Officer Klinkhart explained                      
that the crime was a felony under federal law.  He continued                   
that given his druthers, he wanted to make sure that the                       
particular gentleman got the best opportunity that the law                     
would allow.                                                                   
Senator Phillips said he knew that the individual had been                     
convicted and a sentencing hearing was scheduled for some                      
time this month.  He wondered if that had taken place yet,                     
and if it had what the sentence was.  Officer Klinkhart                        
responded that he would be sentenced on Thursday.  Looking                     
at the plea agreement, Officer Klinkhart said the sentence                     
would be between 25 and 33 months in jail.  Like a lot of                      
cases involving abuse of children, he continued, they found                    
that the ability to plea the sentences down was a good tool.                   
This was because it still allowed the judiciary branch of                      
the government to work effectively, but also allowed in the                    
real world, for young victims to be spared the court                           
He shared he was especially grateful for the plea provision                    
in this case because there were sixteen families with girls                    
who were victims of this particular gentleman in Eagle                         
River.  He was pleased that they didn't have to bring the                      
sixteen girls into court and put them on the stand, some of                    
who were as young as three years old.  He appreciated having                   
the law with teeth, yet also having the ability to lessen                      
the charge and get the perpetrator to work with law                            
enforcement thus avoiding the necessity of subjecting the                      
victims to a trial.                                                            
Senator Pearce wanted to note for the record that the                          
committee had a letter from the University of Alaska-                          
Fairbanks Police Department and one from the Chief of Police                   
of the APD in support of the bill.  She added she had                          
received verbal support from a number of other police                          
departments across the state.  She pointed out that the                        
support from APD was not just from Officer Klinkhart, but                      
from the entire department.                                                    
There were no further questions of the sponsor or APD                          
Senator Pearce moved for adoption of Amendment #1.  She                        
explained the amendment, which would delete the offense of                     
Indecent Exposure in the Second Degree if committed before a                   
person sixteen years or older, from the sex offender                           
registration statute.  She said this was because most of the                   
sex offenders required to register had committed felony                        
offenses.  The Department of Correction had brought this to                    
her attention, she said, because they wanted to be                             
consistent.  In talking to the drafter, she felt it was a                      
mistake as they put the bill together.                                         
Amendment #1 was adopted without objection or discussion.                      
Senator Pearce then offered a conceptual amendment for                         
discussion of the committee.  She said the Department of Law                   
had pointed out Sections 13 and 14 (Page 5 Lines 5-11.)                        
Those sections stated that when five years had passed after                    
a teacher had been discharged for conviction of one of these                   
crimes, he or she might petition the department to reissue a                   
teaching certificate in spite of the conviction. One of the                    
Governor's bill that dealt with child abuse, she said,                         
deleted that ability for a teacher to apply to be reinstated                   
five years after being convicted of one of these felony                        
She listed the charges as Distribution of Child Pornography,                   
Possession of Child Pornography, Indecent Exposure in the                      
First Degree, Indecent Exposure in the Second Degree,                          
Unlawful Exploitation of a Minor, Indecent Viewing, Sexual                     
Abuse of a Minor in the First, Second, Third and Forth                         
Degree.  In her opinion, someone who had been convicted of                     
one of these crimes probably shouldn't be allowed back into                    
the classroom even after five years.                                           
She then moved to adopt a conceptual amendment to remove the                   
ability for a person convicted of one of the fore-mentioned                    
crimes to petition for reinstatement of a teacher's                            
certificate.  According to the Drafter, the necessary                          
changes would effect Sections 13 and 14.  The areas of those                   
sections that allowed the petitioning for teacher's                            
certificates would be deleted, she explained.  She told the                    
committee the motion needed to be conceptual because there                     
might be other statutory sites which would also be effected                    
and need to be changed.                                                        
Co-Chair Sharp ordered the conceptual amendment adopted, as                    
there was no objection.  He requested staff work with                          
Senator Pearce to incorporate it into the new Senate Finance                   
Senator Donley asked if a representative of the DOL was                        
available to answer questions.  ANNE CARPENETI came to the                     
table.  Senator Donley pointed out that this was a                             
complicated area of the criminal statutes.  He told that                       
because of the significant changes this bill would make to                     
existing law, he wanted to hear the department's opinion.                      
Ms. Carpeneti responded saying the DOL believed these were                     
serious offenses and there was good reason for raising the                     
level of seriousness for some of the offenses.  However, she                   
voiced concerns that some of the offenses were being raised                    
too high of a level.                                                           
She gave an example of the crime of Possession of Child                        
Pornography, which would be raised to a Class B Felony.                        
That would be the same level as Distribution of Child                          
Pornography and Production of Child Pornography, she pointed                   
out.  She said the departments had concerns that the                           
behavior being addressed was not the same level of                             
seriousness.  Whether possession is as serious as production                   
was an issue the department wanted addressed.                                  
Similarly, Indecent Exposure in the First Degree under the                     
bill was the same in the Governor's child protection bill,                     
according to Ms. Carpeneti.  In that bill, the offense was                     
set at a C Felony, in this bill it was a B Felony, making                      
the offence the same level of seriousness as Sexual                            
Penetration of a 13-year old.  The department disagreed as                     
to whether they carried the same level of seriousness.                         
She suggested the committee consider making Indecent                           
Exposure in the First Degree as Class C felony and                             
Possession of Child Pornography a Class C felony.                              
Otherwise, she stressed the acts were serious and didn't                       
disagree that the acts should be raised, but not to that                       
Senator Pearce told the committee the issue had been                           
discussed. One of the reasons she and the APD officer                          
decided to raise the possession of child pornography level                     
was because of the difficulty in proving distribution.  The                    
officers had found it difficult to put together a case                         
against an individual they believed to be involved in                          
distribution, but felt they could use the possession charge                    
in the level were serious enough to incur adequate                             
penalties.  She emphasized, "Why else would anyone have 8700                   
pictures if they weren't trading them or doing something                       
with them."  She said it didn't make a lot of sense to keep                    
that many pictures under the bed.                                              
She continued saying, law enforcement was interested in                        
having the higher degree of penalty and if they needed to                      
use in plea cases they could avoid making young children                       
testify.  She noted that to bring three and four-year olds                     
to trial was very difficult on the children.  For this                         
reason, they wanted the higher penalty to use as a tool.                       
Senator Donley said that sometimes when looking at                             
particularly heinous crimes such as these, he had concerns                     
over losing sight of the big picture of the criminal                           
statutes.  He stressed the importance of actual acts of                        
physical violence and said he tried to compare changes to                      
other areas to the actual violence.  He said he was relying                    
on the DOL to point out whether the legislation would by-                      
pass other areas of violence.  They should keep up with the                    
other crimes, he felt.                                                         
Ms. Carpeneti said she understood his point and that she had                   
been comparing the crime to other crimes involving the                         
sexual abuse of minors.  Sexual Assault of a Minor in the                      
Second Degree was also a Class B Misdemeanor, which included                   
sexual penetration of a 13 to 15-year old child by a person                    
over age 16.  She warned that when trying to set the levels                    
of what a crime should be, it was important to keep them in                    
some sort of prospective.  She understood the concerns about                   
the difficulties in proving distribution of child                              
pornography and the desire to have at least a felony charge                    
for prosecutors to fall back on.  That was why she suggested                   
making the possession charge a Class C felony rather than a                    
Class B felony.  She pointed out that currently, the charge                    
was a Class A misdemeanor, so the change to a Class B felony                   
would be a step in the right direction.                                        
Senator Donley asked if there where any acts of violence                       
against children, or for adults for that matter, that would                    
be less than the mere possession of these items.  Ms.                          
Carpeneti replied that Assault in the Third Degree was a                       
Class C felony.                                                                
Senator Donley wanted to know if there was a charge of                         
Assault in the Third Degree against children.  Ms. Carpeneti                   
said the charge could include physical assault against                         
children not of a sexual nature.  Senator Donley stressed to                   
the committee that his worry was that the actual physical                      
violence against children was a lesser offence than the                        
possession of these heinous materials.  He felt that the                       
crime of a violent offence against a child should be as                        
serious as possessing this kind of material.  He spoke of a                    
bill he submitted in 1990 to allow prosecution as a felony                     
of violent crimes against children.  He referred to                            
permanent disfigurement to children.  He wanted to keep the                    
levels in line with the various offenses and prevent the                       
people who commit the crimes lighter than those who just                       
think about committing the crimes.                                             
Ms. Carpeneti pointed out to the members there was a bill,                     
SB 218 sitting in the committee, which did address problems                    
with child homicide.  There were other bills in the                            
Legislature this session they could look at.                                   
Senator Pearce said she understood what Senator Donley was                     
saying, but pointed out that in order for there to be child                    
pornography, somebody had to take a picture of the child.                      
To her, that was just as invasive as an actual act of                          
violence - it was an act of violence against the child.  In                    
her mind, this was just as violent as striking a child.  She                   
added that this created the same and perhaps worse                             
psychological damage to the children in the future.                            
This concluded discussion on this legislation.                                 
Senator Pearce made a motion to move Senate Finance                            
Committee Substitute for SB 323 from committee with                            
individual recommendations and accompanying fiscal notes.                      
There was no objection and Co-Chair Sharp ordered the new CS                   
be reviewed and approved by Senator Pearce before sending it                   
to the Senate Rules Committee.                                                 
Senator Pearce publicly thanked Officer Klinkhart for                          
bringing the matter to the Legislature's attention.  She                       
acknowledged the great deal of time he put into the                            
Co-Chair Sharp said it had been brought to his attention                       
that SJR 42, while in the previous committee, did not                          
receive public testimony from all interested parties.  He                      
announced his intention to assign the bill to a subcommittee                   
for the purpose of taking public testimony via                                 
teleconference.  After the public hearing process had been                     
completed, the bill would be brought back before the whole                     
committee, he announced.  There was some discussion as to                      
who would be on the subcommittee and Co-Chair Sharp said he                    
would name the subcommittee chair and members at a later                       
CS FOR SENATE BILL NO. 223(RLS)                                                
"An Act lowering the age requirement from 60 years to                          
55 years for purposes of senior housing programs;                              
relating to the senior housing revolving fund; relating                        
to bonds to fund senior housing loans; repealing                               
provisions establishing the senior housing bond account                        
of the Alaska Housing Finance Corporation; and                                 
repealing a provision relating to the interest rate on                         
senior housing loans made by the Alaska Housing Finance                        
Co-Chair Sharp noted this was the first hearing the                            
committee held on this bill.  He invited to the table,                         
BENJAMIN BROWN, Legislative Aid to Senator Tim Kelly, who                      
was the Chairman of Senate Rules Committee and sponsor of                      
this legislation.  Mr. Brown's testimony was as follows:                       
"The version before the Senate Finance Committee is a Rules                    
Committee Substitute, which is a little unusual.  That is                      
because members of the committee and other members of the                      
Senate were concerned that some of the fiscal implications                     
of this legislation had not been addressed.  I'm happy to be                   
here on Senator Kelly's behalf to make sure we look at those                   
things as carefully as they ought to be looked at."                            
"This bill attempts to remedy several problems in Alaska's                     
senior housing statute.  In 18 56.700, which is the area of                    
Alaska's statutes which sets up the Alaska Housing Finance                     
"Back in 1990, Legislation was passed that created the                         
Senior Housing Office.  At that time it was in the                             
Department of Community and Regional Affairs.  That office's                   
purpose was to help provide loans that would make sure that                    
Senior Housing was available to Alaskans who wanted to                         
remain up here.  We had many other programs, obviously to                      
encourage seniors to be independent.  This is the housing                      
part of the picture.  The Senior Housing Office was merged                     
into AHFC when the merger went through in 1992.  At that                       
time AHFC took over managing the provisions of these loans                     
to make sure that non-profits that wanted to get together to                   
build either rental apartment units or ownership condos                        
would have financing available at a reasonable rate from the                   
"Since that time, of the nine senior housing projects that                     
have been built around Alaska, eight have been financed, not                   
under the Senior Housing Revolving Fund (the program we're                     
talking about today,) but have been financed instead under                     
the Special Needs Multi Family Loan Program, another of                        
AHFC's programs.  The reason for that is, this is an                           
antiquated statute and some of the things that were put in                     
back in 1990 into Senator Duncan's legislation that                            
originally created the OSH are just no longer necessary                        
given the superstructure of the AHFC over the Senior Housing                   
"So, Senator Kelly was just interested in streamlining the                     
statutes and making sure that the unnecessary provisions                       
that date from a prior time when DCRA was in the senior                        
housing business are no longer there.  One very targeted                       
change he also wished to make was to lower the age of                          
eligibility for persons wishing to move into these publicly                    
financed senior housing projects from 60 to 55 years of age.                   
That was a specific response to difficulty in achieving                        
maximum occupancy at a couple facilities around the state.                     
One here in Juneau, which we are all pretty familiar with,                     
is Fireweed Place.  That large fairly new building off of                      
Calhoun near the Governor's house.  That was not financed                      
under the SHRF. It was finance under the other program I                       
mentioned, the SNMFP.  But if they had not been able to                        
lower their age of eligibility from 60 to 55, they would                       
probably still be at about 50 percent occupancy.  They've                      
raised that to about 75 percent thanks to the AHFC Board's                     
ability to lower the age of eligibility for moving in there                    
to 55 years."                                                                  
"This bill attempted to take that policy change, going from                    
60 to 55, and bring it back to the main loan program, which                    
ought to be used for the SHRF for the financing of senior                      
housing in Alaska."                                                            
After offering to answer any questions up to that point, Mr.                   
Brown continued.                                                               
"As I worked with AHFC, the bill was originally very simple                    
and just lowered the age to 55 from 60 in statute.  But then                   
Mr. Bittney, AHFC's Legislative Liaison who has much                           
experience in this branch of government as well, brought a                     
few more details forward as we went through the process of                     
little things that needed to be tweaked in 18 56.700.  One                     
of those things was getting rid of an old fiscal structure                     
where there was a bond account.  The corporation sold bonds,                   
the money from the bonds was put into the bond account and                     
then was transferred into the revolving funds each time a                      
loan had to be made."                                                          
"This legislation, at the recommendation of AHFC, (the Rules                   
Committee Substitute is where this change was put in,)                         
eliminates the bond account and takes it current assets of                     
some $14 million I believe, and puts them straight into the                    
revolving fund and makes it a fully functional financing                       
mechanism for these senior housing loans."                                     
"The bill also authorizes the capitalization of the SHRF                       
with up to $30 million in new bonds.  So there's two                           
infusions of capital into this new fund that we're                             
attempting to streamline so it can again be put to use as                      
the primary agent for financing senior housing in Alaska."                     
"I believe that may be the area of greatest concern to                         
members of the Senate Finance Committee, although I don't                      
want to second guess your judgement.  The point I'd like to                    
make most strongly this morning is, this legislation and the                   
cleaning up of statutes it accomplishes can proceed with or                    
without the transfer of the $14 million and the bond                           
account.  That's a policy call that AHFC I think would be                      
certainly be glad to speak to in a moment if given the                         
opportunity.  But that's not necessarily integral to what                      
Senator Kelly is trying to accomplish the way his bill came                    
out of the rules committee."                                                   
Co-Chair Sharp said he assumed the difficulty would be in                      
moving the money over without an appropriation.  He said the                   
committee would talk with Mr. Bittney on that issue.                           
Mr. Brown had one more thing to add to his presentation.                       
"There was a separate issue that was a bit of a bone of                        
contention, not so much with the AHFC staff, but some of the                   
members of the AHFC Board and some members of the senior                       
community, that by lowering the age in statutes for the                        
SHRF, there would be no flexibility.  It would just                            
automatically be down to 55 and the AHFC Board would have no                   
latitude if that ended up creating too much demand for                         
senior housing.  The way they handled it with the other loan                   
program, the SNMF loan program, the board has the regulatory                   
authority to lower it to 55 on a case by case basis.  It                       
seems that is more friendly approach to a lot of the senior                    
community. So much so that the Commission on Aging passed a                    
resolution in support of changing this bill so that it's not                   
a statutory lowering from 60 to 55, but enabling the AHFC                      
Board by regulation to take step."                                             
"This just gives them a little tighter hold on the reins on                    
the demand there if there is a problem.  It's really not -                     
they're Actuary Analysis does not anticipate a huge spike in                   
demand by adding five more years of population.  The average                   
senior in Alaska is 77.5 or something.  That's not the area                    
of senior population that is going to be most demanding on                     
these senior housing units.  But it's probably prudent to                      
make sure we don't change it in statutes and have to go and                    
raise it again at some future point."                                          
"So I have had the Finance Committee Secretary distribute a                    
workdraft "H" version.  It is identical to the Rules                           
Committee substitute except that it does not include a                         
statutory change in the age limit from 60 to 55, but leaves                    
it for the regulatory discretion of the AHFC Board."                           
"That's all I have.  Maybe the folks from the corporation                      
can address any other concerns."                                               
Co-Chair Sharp then invited JOHN BITTNEY, Legislative                          
Liaison for AHFC, and members of his staff to come to the                      
table. STEVE ASHMAN, Senior Housing Specialist for AHFC                        
joined Mr. Bittney.  Mr. Bittney made his statement:                           
"Mr. Chairman, we're here today to speak in favor of the                       
proposed draft CS that Mr. Brown has referenced.  My                           
understanding is that the CS would change the Rules                            
Committee version in relation to how the bill addresses the                    
lowering of the age requirement for these projects.  Instead                   
of taking a blanket, across the board approach in statute of                   
lowering the age eligibility from 60 to 55, it would more or                   
less put it into something that we would be able define by                     
regulation.  We would be limited by not being able to go                       
below the age of 55."                                                          
"Right now we do have a multi-family loan program that's                       
called Special Needs Program, that we've been financing most                   
senior projects around the state since the time of the                         
merger.  We got started in this discussion last summer by                      
addressing the age eligibility for those with the regulation                   
"We had proposed lowering it again much the same way the                       
bill originally did.  That did cause some concern on the                       
part of our board for its impact and that policy call.  The                    
draftsman here was working at the time and held some                           
hearings with some senior folks around the state and did a                     
"So what the board did in its final review of that                             
regulation was basically say that senior developments around                   
the state - if they experienced some sort of an economic                       
hardship situation - they could apply to AHFC to lower the                     
age on a temporary basis down to the age of no lower than                      
55.  We would look at that regulation if the CS were to go                     
through to basically do the same thing for loans under the                     
revolving fund."                                                               
Mr. Ashman added to Mr. Bittney's comments:                                    
"Mr. Chairman I think its fair to acknowledge AHFC did                         
receive a letter from the co-chair of the Finance Committee                    
requesting that our board of directors review the assets                       
within the bond account as potentially being available.                        
That issue is being addressed at our board meeting as we                       
speak right now.  I expect to have a resolution or some sort                   
of board action with regard to that matter any minute now."                    
Senator Torgerson asked what kind of waiting list the                          
corporation anticipated if they dropped the age down to 55.                    
What would the impact be and how many folks would be                           
affected, he wondered.  Mr. Bittney responded by sharing                       
information on the demographic population.  He said he                         
looked at the '60 and above' and compared that to the '50                      
and above'.  When his office looked at the figures a couple                    
years ago, he thought the population of '60 and above' would                   
have went from about 35,000 up to 60,000 senior citizens                       
under that definition.  They didn't think it would have much                   
of a cause of increased demand on the loan program.  The                       
primary reason was because with independent senior housing,                    
the average age at the time of occupancy was about 75.  For                    
assisted living, the average age was 83 to 85 years of age.                    
He concluded that the more mobile senior wasn't likely to                      
move into the complex because they typically did not want to                   
move out of their own home.                                                    
Senator Torgerson then wanted to know what was the residency                   
requirement to receive the loan.  Mr. Ashman told him there                    
was a residency requirement under regulation or statute.  He                   
said that while an out of state developer could build senior                   
housing, it would have to be located within the State Of                       
Alaska and be utilized by Alaska citizens.  However, there                     
was no residency requirement like what may be required for                     
other loan programs administered by state agencies.                            
Co-Chair Sharp had a question on Page 2, Lines 21 and 22 of                    
the draft referring to bonds in the amount of no more than                     
$30 million.  He wanted to know if that was currently                          
accessed.  Mr. Bittney replied that it was not as there were                   
no applications pending before the corporation right now for                   
loans under this program.  He added, they were leaving in                      
place, the $30 million bonding cap in statutes.                                
Co-Chair Sharp interjected asking if that was a maximum                        
amount per project or a cumulative amount of bonds that                        
could be issued.  Senator Donley told him the amount was the                   
maximum amount of bonds that could be issued.  Mr. Bittney                     
agreed that was the way he also read the statute.                              
Mr. Bittney continued, pointing out the current statute that                   
was being deleted, which talked about approval by the                          
corporation.  That clause was leftover from before the                         
merger.  The bill would try to clear up some of the                            
ambiguity as to how authority worked between the two                           
accounts, he said.  He noted the difficulties in trying to                     
issue debt to capitalize one account and then have to                          
transfer the proceeds to be issued over to the loan fund.                      
It was not clear how the funds could be used as collateral                     
for the bond account.  He said it would be better to have                      
all the funds in one account.                                                  
Co-Chair Sharp asked where the $14.2 million dollars                           
originated that was currently in the SHRF account.  Was that                   
equity money of AHFC, he wanted to know.  Mr. Ashman                           
affirmed that.  He said the bond account had always been at                    
AHFC.  What happened, he explained, was when that was set up                   
in 1990 an appropriation bill went through the Legislature                     
that was tied to the enabling legislation.  The                                
appropriation granted $10 million of AHFC receipts into the                    
newly established bond account at that time.  It's been                        
there to this day.                                                             
Co-Chair Sharp asked if the funds were transferred in 1989.                    
Mr. Ashman replied he believed the year was 1990.  Co-Chair                    
Sharp noted that the money had been held in the account for                    
seven years and had not been utilized.  The rising account                     
balance was from the accrual of interest and not from loan                     
activity, he wondered. Mr. Ashman confirmed that.                              
Co-Chair Sharp questioned if the reason the funds had not                      
been put to use was because of the difficulty in accessing                     
the funds and making both statutes fit.  Mr. Bittney                           
answered that was correct.  In addition, he said when the                      
two funds and the functions were separated between AHFC and                    
DCRA, statute required that a surcharge be placed upon the                     
interest rate calculation for any loan going out.  The rate                    
was one-half percent for a permanent, or regular loan and                      
two points for a construction loan.  This was with the idea                    
that proceeds of the surcharge would be used to fund DCRA.                     
Now that the program is a part of AHFC it is not necessary,                    
he concluded.  Basically, he surmised that by going to the                     
other loan program where folks could apply for low-income                      
senior housing, they could avoid the surcharge.  Section                       
Eight of the pending legislation would repeal the surcharge.                   
Mr. Bittney continued by saying what AHFC would do if this                     
loan program were improved.  They would use the fund to                        
address the needs of moderate, or middle-income market rate                    
senior housing.  He explained that the special needs program                   
was something that had been geared toward lower income                         
situations that require set-asides and was where AHFC would                    
offer tax-exempt rates, which come with strings attached.                      
His office was seeing more interest in market rate or                          
moderate, middle-income senior housing.  By improving the                      
senior loan program, efforts would be placed in making loans                   
for these programs.  In Mr. Bittney's opinion, that was the                    
intention of the program.                                                      
Co-Chair Sharp pointed out the "Senior Housing Mortgage                        
Loans" and asked if that was what these monies would be used                   
for, as well as loans made for building materials for senior                   
housing.  He questioned that to qualify, did the projects                      
have to multi-unit housing, or could single-family units                       
participate.  As Mr. Bittney recalled the legislation, AHFC                    
would have the ability to finance single family homes for                      
senior citizens 60 years of age or older under existing                        
definition. He doubted they would ever use that mechanism                      
because their single-family home products had a much more                      
favorable interest rate than they would under this program.                    
Traditionally the interest rates had been higher under the                     
special needs program and the senior program than the                          
prevailing market rates.                                                       
Co-Chair Sharp directed the conversation to the lowering of                    
the permissible age.  He asked if the regulation would be                      
set by the board, or by the executive director or staff.                       
Mr. Bittney explained how under the administrative                             
procedures they would have to take a regulation to the board                   
of directors as well as hold public hearings.  Co-Chair                        
Sharp wanted to know if once the regulation was approved,                      
did Mr. Bittney foresee a delegation of authority to the                       
AHFC administration.  Mr. Bittney responded that the current                   
regulations for the special needs program - as far as                          
applying for the hardship situation - was done through the                     
Co-Chair Sharp mentioned objections he had heard with regard                   
to lowering the age to meet the federal age limit of 55.                       
The seniors who currently live in senior housing were not                      
too excited about getting a lower age group in their                           
complex, according to comments he had received.  He asked if                   
these complexes were owner-occupied, like condominiums.                        
Mr. Brown told the committee he visited many senior housing                    
developments across the state while working on this                            
legislation.  The only ownership facility was Chester Park                     
in Anchorage.  It was unique because of that. The good thing                   
about it being a real condo, many of the Alaskans there had                    
been able to convert the equity in their homes into buying                     
the units.  That was a very nice transition, he commented.                     
He noted a collegial, village-type arrangement at Chester                      
Park that was geared toward middle and upper-middle class                      
seniors.  He said he met with some of the residents and the                    
manager and never heard of concerns about a new influx into                    
the population.  In his opinion, the residents were hoping                     
to get more occupants to help share with the fixed costs.                      
Senator Adams arrived at the meeting, coming from a public                     
testimony hearing and stated for the committee that the                        
reality checks in rural Alaska and in Anchorage was - people                   
did not want to cut the budget.                                                
Co-Chair Sharp brought the discussion back to the bill at                      
hand.  He pointed out that the proposed draft did not                          
transfer or allocate funds.  Mr. Brown interjected saying                      
Section 7 of Workdraft H did transfer all assets in the                        
Senior Housing Bond Accounts, on the effective date of the                     
act, into the Senior Housing Revolving Fund.  He didn't know                   
if that would be an impediment for those funds being further                   
appropriated, but they would be a different source of                          
appropriation.  He didn't know if that legislation would                       
have to be changed to permit that eventuality later in the                     
session.  The workdraft did make the transfer just for the                     
purpose of tidying up the statute and getting rid of the                       
bond account, an unnecessary financial instrument.  The                        
revolving fund was meant to be the source of loans and the                     
destination of repayments.                                                     
Co-Chair Sharp asked for confirmation that all the assets in                   
the Senior Housing Bond Account were Alaska Housing equity                     
and had nothing to do with any bond receipts or obligated                      
funds.  Mr. Ashman affirmed that.  He added that under                         
Section 8, the bond account was being repealed, and                            
elaborated on the details.  There was further clarification                    
on that matter between Co-Chair Sharp and Mr. Ashman.                          
Co-Chair Sharp stated his desire to hold the bill until the                    
decision was received from the board on the request by the                     
co-chairs.  He offered to allow the workdraft be adopted by                    
the committee in the meantime.                                                 
Senator Adams moved and asked unanimous consent that Senate                    
Finance Committee Substitute for SB 223 Version H be adopted                   
as a workdraft.  There was no objection and Co-Chair Sharp                     
so ordered.                                                                    
Co-Chair Sharp thanked the involved parties for their                          
participation.  He warned of the possibility that Section 7                    
would be struck from the bill.  He wanted to ensure that it                    
would not cause damage to the other goals the sponsor wanted                   
to accomplish.                                                                 
That concluded discussion on the bill.                                         
CS FOR SENATE BILL NO. 274(JUD)                                                
"An Act relating to fees for probation and parole."                            
Co-Chair Sharp invited Senator Jerry Ward, sponsor of the                      
bill to join the committee and speak to his request.                           
Senator Ward's testimony was as follows:                                       
"This bill and also I have put in an amendment on it                           
(hopefully it will be presented,) - basically what this                        
does, it enable those people that are causing the cost to                      
government to share in that burden of cost."                                   
"At the beginning, before the amendment, basically let me                      
tell you what it does.  What it does is it puts into place,                    
which has been in place since 1846 and this is not to punish                   
or to inflict punishment. What this is, is to generate                         
revenues to offset those dollars, which the public is now                      
paying.  Every person in this room that is not on probation                    
or parole, and with the amendment hasn't been convicted on a                   
misdemeanor, is sharing the cost and the burden of this."                      
"We have sent letters to all the commissioners asking them                     
to please identify which portions of their budgets goes                        
towards the - and I want to speak on the amendment too as                      
well as the first part. Because that's what led me to it is                    
when I first went into Probation and Parole and realized                       
that there was $8.5 million being spent on this.  Even going                   
through the original bill, at the very highest level it only                   
generates $5.5 million.  That's with 100% participation.                       
Then when I started looking, and one of the bills you just                     
had earlier - we've got a list of all the misdemeanors -                       
under current statutes possession of child pornography under                   
this bill with the amendment except that they would lose                       
their permanent fund dividend."                                                
"There is a lot of misdemeanors.  I don't pretend to                           
understand all of them but I do know that somebody's staff                     
and somebody's legislative office spent a lot of time                          
getting these through and putting them on the books."                          
"If all convicted misdemeanors and all convicted people and                    
all people on probation and parole entered into their share                    
of the cost and if it was 100 percent successful, they would                   
generate $25 million.  This is a revenue-generating bill.                      
That's exactly what it is.  It's set up and the purpose of                     
it is, is to take the permanent fund away from those people                    
that are in this position to off-set the cost of getting                       
them in this position."                                                        
"The cost is the cost of charging, arresting, prosecuting                      
and it flows through the court system, through Public                          
Safety, to Village Public Safety, to Fish and Game, to                         
Transportation, through almost every department there is.                      
We have tried to gather these various costs together - and                     
what is the total cost - and we have been so far been told                     
that it is much too complicated to ever figure that out.                       
But anybody that takes a look at the State's operating                         
budget clearly realized that it's somewhere around $60                         
million in order to do these functions.  That's taking in                      
all the departments there are.  What this does, it enables                     
the people of the State Of Alaska to generate revenue from                     
those people that cause the problem in order to off-set some                   
of those costs."                                                               
"I don't think that we should drop anybody from probation or                   
parole or convicted misdemeanors just because it costs the                     
state more than we could possibly bring in, but however in                     
this time of measuring revenues and measuring results, this                    
is one of the ways of doing it."                                               
"I have been down here for some time and I haven't seen very                   
many revenue-generated mechanisms.  I do believe that we                       
should join in not only with some other states, in having                      
our probation and parole pay for their debt to society and                     
help to reimburse those costs.  But I also feel that this is                   
an appropriate way of doing it."                                               
"We are the only state in the union that does give out a                       
permanent fund dividend. Under the probation and parole at                     
$3.30 per day, it works out to roughly $100 per month, which                   
is equal to our permanent fund dividend.  Even with all the                    
probation and parole people paying for this amount, that                       
does not generate the $8.5 million that's needed."                             
"You'll notice in the legislation we clearly call for                          
professional collectors - third party collections that's                       
because the people that are in parole and probation have not                   
and can not have the capability to collect these, nor should                   
they.  They should do what they are hired to do, which is to                   
be in charge of probation and parole, not to be collectors.                    
There are third party independent people - companies that do                   
this for a living and can do it quite well.  That is who we                    
should have do it.  We've had several of them contact our                      
office and they are available."                                                
"Coming into this, when I started to realize the tremendous                    
cost that is put upon public safety, the departments of law,                   
the public defenders office, and all facets of government.                     
That's where the proposed amendments for misdemeanors to be                    
applied at this time because they share in the burden of the                   
cost too.  They too have a debt to society and if they were                    
not convicted they would not be causing us to have that                        
portion of government that need to be funded at a certain                      
"Right now the way this bill presently is and with the                         
amendment, if every person were to pay it would generate $25                   
million.  Because of child support payments and other things                   
that come in line before these and because of multiple                         
attachments that of course will not come to be.  But it                        
should at least hit the 50 percent level of $12 million."                      
"I believe whole-heartedly that this debt to society that                      
these people should share in that burden.  If our burden of                    
cost is too high to charge, prosecute and convict all of                       
these people, then we should re-look at our underlying                         
statutes as to their worthiness.  But as it stands right                       
now, in the reality of the day, what this is, this is a                        
repayment of a debt to society instead of having those                         
people that did not cause this pay the debt.  That's what                      
this bill is about.  It's a revenue-generating bill."                          
"With that I have Craig Johnson of my office who has been                      
working on this legislation and we'll be glad to try to                        
answer any questions that we can."                                             
That concluded Senator Ward's opening remarks.                                 
Senator Adams questioned the collection of fees.  He                           
referred to Section 3 and Section 4.  Section 3, lines 13                      
and 14 he read into the record, "While on probation among                      
the conditions of probation, the defendant may be                              
required..."  He pointed out that it was not mandatory that                    
the defendant have to pay according to the language, because                   
of the use of the word "may".  However, he jumped to Section                   
4 and read the language stating that, "the court granting                      
probation shall require a periodic portion."  Therefore, he                    
wondered if there was a conflicting statement between the                      
two, because one said, "shall" and the other "may".                            
Senator Ward told the committee his intention was for                          
"shall".  He believed the "shall" was overriding.  Senator                     
Adams said he didn't see the requirement as mandatory                          
because of the language.                                                       
Senator Adams continued his questioning and directed                           
attention to the collection of the permanent fund dividends.                   
He referred to Page 5, Section 8, the exemptions and where                     
this collection was prioritized behind such obligations as                     
child support, court-ordered restitution, defaulted                            
scholarship loans, court-ordered fines, judgements, debts to                   
state agencies, domestic violence statutes.  The way this                      
bill read, the parole/probation obligation would be number                     
eight in line, he observed.  He also pointed out that felons                   
don't receive a dividend so he didn't see how the state                        
would recover $12 million.                                                     
Senator Ward responded that was why he added the misdemeanor                   
offenses to the legislation.  Their cost to the state was                      
every bit as much.  He warned that the state would need to                     
either reduce the cost of misdemeanors or let them help pay                    
for the debt.  He stressed that they were being convicted,                     
there was a cost and the citizens were paying for it.  He                      
apologized to the chair for speaking to an amendment that                      
had not been offered.  He gave as his reason that it had                       
become clear to him that the system was not remotely                           
starting to pay even a portion of what was being demanded of                   
the citizens.  He emphasized that he was trying to get those                   
people who were burdening society with these costs to pay                      
for a portion of their debt to society.  He stressed that                      
this was not a punishment but a revenue-generating                             
legislation.  Instead of giving them a permanent fund                          
dividend, let those funds be directed toward reducing the                      
parole/probation costs, he said.                                               
Senator Donley asked Senator Ward to refresh his memory of                     
the current requirements.  He thought that for a person                        
imprisoned for a felony then released; in the year they got                    
out and for one following year would not receive a permanent                   
fund dividend.  After that they would be eligible to receive                   
the dividends again. Senator Ward confirmed that, but said                     
that under this legislation, as long as they were on                           
probation or parole there was a cost to the state and they                     
would be liable to pay the equivalent of the PFD.                              
Senator Ward continued, restating much of his testimony.                       
Senator Pearce, for discussion purposes, moved for adoption                    
of Amendment #1 and asked Senator Ward to speak to that                        
amendment.  Senator Adams objected to the motion so the                        
committee could get an explanation from the sponsor.                           
Senator Ward started speaking to a different amendment,                        
which had not yet been offered.  After he was corrected, he                    
directed CRAIG JOHNSON from his office to speak to Amendment                   
Mr. Johnson explained that the amendment was initially                         
introduced in the Senate Judiciary Committee at the request                    
of the Permanent Fund Division.  The Legislative Affairs                       
Agency's Legal Services' staff had concerns with the word                      
"except" and it was their belief that when language said                       
"except for number eight in prior state agencies", the                         
Department of Corrections was a state agency.  In their                        
interpretation, that eliminated DOC's ability to collect                       
money under this law.  Therefore this amendment was offered                    
to correct Section 8.  He explained that this was just a                       
housekeeping amendment.                                                        
Senator Adams requested that the new language be read in                       
full, incorporating the changes from the amendment.  Mr.                       
Johnson obliged, reading, "A dept owed by an eligible                          
individual to the agency of the state, unless the dept is                      
contested and appeal is pending or the time of limited                         
filing of appeal is not expired, other than for a fee under                    
8 of this subsection."                                                         
Senator Adams understood the change would read "...a dept                      
other than...owed by an individual".  He asked to have that                    
explained to him.  Mr. Johnson replied that his                                
understanding, the word dept was not in there.  Senator                        
Donley attempted to clarify that this was the section that                     
referred to the fee exemption.  He asked if it was the                         
sponsor's intent to make this a case where the exemption was                   
not available.  Senator Ward said no, and read the changes                     
as, "A debt other than for a fee under 8 of this subsection,                   
owed by an eligible individual..." which was where he felt                     
the change would be inserted.                                                  
Senator Donley still didn't understand if the intent was to                    
make the exemption applicable to this new fee.  He wanted to                   
know why it was mentioned there and also in Section 8.                         
Senator Ward said his understanding was because Corrections                    
was a department.  By stating it there, it put it into                         
chronological order.  Senator Donley realized it was the                       
order of priority.  He further clarified the amendment's                       
intent with regard to the priority.                                            
Senator Adams removed his objection.  He stressed that he                      
still did not believe the state would collect that much                        
money with the priority order as such.                                         
Co-Chair Sharp noted there was no objection to Amendment #1                    
and ordered it adopted.                                                        
Senator Pearce moved for adoption of Amendment #2.  Co-Chair                   
Sharp asked the sponsor for explanation of the amendment.                      
Senator Ward spoke to the amendment as follows.                                
"What Amendment #2 does, and there's approximately 20,000                      
misdemeanor convictions in the State Of Alaska.  I have                        
written a letter to all the commissioners and I haven't had                    
a response yet. Basically what I have asked all of them is                     
you go through this enormous list of misdemeanets all the                      
way from fishing ones to sexual things with corpses and                        
child pornography possession you just spoke on, there's a                      
big list of them.  But, and they cover all the departments                     
with maybe the - I don't know which departments they                           
wouldn't have some effect on."                                                 
"So I've written to all the commissioners and asked them,                      
because they don't have this information, exactly what is                      
the cost of these 20,000 misdemeanants to arrest them, to                      
charge them, to convict them, to fine them, to do whatever                     
it is that's going to be done through the court system, and                    
through Public Safety, through Fish and Game, through                          
Transportation, airport police.  Its a - and all my staff                      
and I've been able to do is look at the total budget and                       
guess.  We've guessed around $60 million."                                     
"As Senator Adams clearly stated and I agree with him, this                    
if enacted 100 percent, the $25 million, I don't believe                       
that it will raise $25 million, but I do believe that this                     
bill with the amendment would raise half of that.  I believe                   
it would raise about $12.5 million.  I think that would go a                   
way towards the people that are causing this debt to society                   
to help repay part of that debt."                                              
"I don't think that we as a society should stop enforcing                      
these laws or take them off the books, because they're there                   
apparently for good reasons, whatever those reasons may or                     
may not have been.  I think that what this does, this is a                     
revenue-generating mechanism."                                                 
"I support this amendment because I don't think those                          
citizens in the State Of Alaska that don't do these, that                      
they should have to pay 100 percent of them.  I think that                     
those people that are actually convicted of them should                        
share in the reimbursement of that debt.  That's what this                     
"Also it comes into the same provision of third party                          
collection because I don't believe the state government is                     
capable within their current mission statements of being a                     
collection agency of this type.  There are plenty of third                     
party companies more than willing to step forward and take                     
care of this process."                                                         
"With that I would like the committee to at least consider                     
this as what it is very clearly - a revenue-generating piece                   
of legislation for those who owe a debt to society."                           
Senator Adams objected to the amendment.  The original bill                    
affected felons, but this amendment adds misdemeanants.  He                    
felt this went beyond the bill.  He asked the committee how                    
many of us had gone to a state park and perhaps stayed over                    
our time limit and perhaps got a citation.  He pointed out                     
that would perhaps be a misdemeanor.  He gave another                          
example of getting off a plane and illegally parking at the                    
Juneau Airport, which would also be a misdemeanor.  He                         
stressed the need to look at adding the misdemeanor.  He                       
noted other misdemeanors such as subsistence violations,                       
drinking alcohol on an election day or disorderly conduct.                     
He suggested that if the misdemeanor clause was inserted to                    
the bill it either need to be returned to the Judiciary                        
Committee or else this committee would need to site each                       
misdemeanor that would be affected.                                            
Senator Pearce shared a list of all the misdemeanor crimes                     
that the sponsor had handed out for committee members.                         
Senator Ward concurred with Senator Adams that possession of                   
child pornography and subsistence fin fishing with                             
unidentifiable gear would be categorized the same under this                   
legislation and both defendants would lose their PFDs.                         
However, he felt the simple fact was that 20,000                               
misdemeanants cost this state approximately $60 million.  He                   
added that if some of the crimes should be taken off the                       
list of misdemeanors, he hoped that some of the people                         
convicted of those crimes would lobby the Legislature to                       
have them removed.  Meanwhile, he felt that somebody still                     
had to pay the associated costs and he didn't want to pay                      
for them.  The citizens he represented no longer wanted to                     
pay for them either, he stated.  He continued speaking to                      
the potential need to have some of the misdemeanor offenses                    
taken off the books, referring to the costs involved.                          
Senator Donley tried to understand the pattern.  Citing                        
Sections D1 and D2, which talked about convictions of a                        
misdemeanor and incarceration as a result of the                               
convictions, he asked if both would have to occur before the                   
offenders would lose their dividend or would the mere                          
conviction be sufficient to cause the loss of the PFD.                         
Senator Ward stated the conviction was the method by which                     
the dividend would be fore-fitted.  Senator Donley asked for                   
further clarifications on the meaning of the two sections.                     
He continued, asking about AS 11.81.900 that was referenced                    
in Line 18.  Mr. Johnson explained that under the current                      
law, if a person were convicted of three misdemeanors he                       
would lose his permanent fund.  The proposed amendment would                   
in part repeal that portion of the language, because the PFD                   
would be denied after the first conviction.  Senator Donley                    
then pointed out that the PFD would be taken away in the                       
same manner as for a felony conviction, for the first year.                    
This was not permanent, according to Senator Ward, unless                      
they commit another crime and are convicted.                                   
Senator Donley asked how Amendment #2 related to the on-                       
going fee provision.  Would this replace the version in the                    
bill or would it be an addition, he wanted to know.  Mr.                       
Johnson said it would be a separate section and would be in                    
addition to the existing fee structure.  The bill was a                        
vehicle to get PFDs from misdemeanants.  It did not relate                     
to probation and parole, he said.                                              
Senator Donley expressed that he agreed with the system                        
placed forth in the amendment because it was clean, it                         
didn't have administrative cost problems and the state                         
wouldn't have to defend these people.  It would just say                       
they were not eligible without needing to provide public                       
defenders.  He liked Amendment #2 and suggested expanding on                   
it to clean up some of the other provisions in the bill.                       
Senator Ward responded to those comments.  He felt the                         
people on probation and parole needed to understand their                      
responsibility in paying for what they had done.  He thought                   
those people should pay for their costs of probation and                       
parole.  He believed that helped them.  He told the                            
committee that was his beginning thrust of adding                              
responsibilities.  He referred to boot camps and getting up                    
in the morning.  He stated that responsibility was a good                      
thing, which was how this legislation started out.                             
Senator Donley said he agreed with the philosophy, but he                      
thought the process had not gone far enough with regard to                     
felony convictions.  When a person was convicted of a                          
felony, they only lose their dividend for one year under                       
existing law.  He said he would be interested in extending                     
beyond that.  He wanted to deny PFD for a misdemeanor                          
conviction and to extend the time for a felony conviction.                     
Senator Ward noted that a large percentage of people who had                   
been convicted of a felony have gone on probation, those                       
were the people he was targeted.  He talked about efforts of                   
putting people behind bars and that it didn't work to                          
rehabilitate offenders.  He spoke about reentering the                         
community and repaying and accepting responsibility.                           
Senator Donley asked if the state could pre-garnish the PFD                    
for felons who were on probation.  He noted a provision in                     
the legislation allowing for an individual who claimed they                    
were unable to make the payments.  He wanted to know how                       
that would relate to the garnishment of the dividends.  He                     
felt that obviously the money was available by the issuance                    
of the PFDs, but would some individuals get the dividend,                      
blow the money on something else and when it came time to                      
pay this debt, claim they couldn't make the payment.  He                       
wondered if there was a way for the state to collect the                       
money first and avoid the whole problem.                                       
Senator Ward defended the fore-mentioned provision, stating                    
it was inserted to avoid becoming a debtor jail.  He                           
stressed that if someone was truly unable to pay this, he                      
did not want to see that person put back into jail.  Senator                   
Donley responded that he understood the provision, but                         
wondered if there was a way to avoid getting into the                          
position of granting the dividend, the defendant spending                      
the funds on something else, then saying they couldn't pay                     
the probation fee.  Senator Ward assured him that this                         
legislation would prevent the PFD from being issued to the                     
probation/parolee.  He said that with electronic transfer,                     
the money would never get into their hands.  Senator Donley                    
clarified that there was an anticipatory garnishment that                      
would occur.  Senator Ward explained that once the                             
individual was in the system, there would be a procedure                       
that would direct the funds to the state.  He further spoke                    
to the costs charged the probation/parolee.  He wanted those                   
people to clearly know they were repaying their debt to                        
Senator Donley said he would like to work with the sponsor                     
and his staff with changing this legislation.                                  
There was discussion as to where the committee was with                        
regard to the amendment.  It was determined Amendment #2 had                   
been moved and they were in discussion on that amendment.                      
Senator Ward brought back to the attention of the members                      
his request to the commissioner to identify the actual costs                   
incurred by felons and misdemeanants.  He admitted that his                    
figure of $60 million was a guess.  He felt that if the                        
departments were to report back actual figures, there would                    
be a better understanding of what the citizens were paying                     
Co-Chair Sharp said he had questions he was holding until                      
they came to discussion on the bill.                                           
Senator Adams asked Senator Ward if this amendment had been                    
offered in the Senate Judiciary Committee.  Senator Ward                       
replied that no, he didn't come up with the amendment until                    
after the bill had moved from that committee.  He expounded                    
further on his reasons for adding misdemeanors to the                          
legislation.  He said the matter was brought up with phone                     
calls to his office.  Another reason was the crime of                          
possession of child pornography.                                               
Co-Chair Sharp interrupted announcing that he would like to                    
hear from the Department of Corrections, otherwise he would                    
put the bill aside for a future meeting.  First he intended                    
to complete action on the amendment before the body.                           
Senator Adams continued to speak against Amendment #2.  He                     
read some other misdemeanor offenses that he felt were                         
unworthy of forfeiture of a PFD.  Senator Ward countered;                      
arguing that constituents guilty of those offenses could                       
lobby to have them removed from the list of misdemeanors.                      
Senator Pearce observed that Senator Donley had an interest,                   
not only in Amendment #2 but also with some further changes.                   
In the interest of time, she offered to remove her motion to                   
adopt Amendment #2 so he could get with the sponsor and the                    
department to incorporate those changes.                                       
Senator Donley stated that he liked Amendment #2 and did not                   
object to it.  Senator Pearce stressed it was clear the                        
committee would not get through the legislation in the time                    
allotted for this meeting.  She deferred to the co-chairs                      
call of how he wished to proceed on the motion.                                
Co-Chair Sharp called for a vote on Amendment #2.  It failed                   
by a three to three vote with Senators Donley, Phillips and                    
Sharp voting in favor. Senator Parnell was absent during the                   
roll call.                                                                     
Co-Chair Sharp voiced a concern with the high figures                          
included in the fiscal notes.  He regretted the committee                      
did not have a chance to hear from the DOC on this                             
legislation.  He ordered the bill held in committee.                           
CS FOR SENATE JOINT RESOLUTION NO. 42(JUD)                                     
Proposing an amendment to the Constitution of the State                        
of Alaska relating to marriage.                                                
Co-Chair Sharp announced his desire to at least get this                       
bill on the table during this meeting to start the hearing                     
process.  He stated his intent to set the bill aside and                       
assign it to a subcommittee for the purpose of holding an                      
adequate public hearing.  He said he would be announcing the                   
subcommittee chair and members shortly.  The subcommittee                      
chair would then announce the time of public testimony                         
Senator Adams suggested the committee let the court make a                     
decision on this matter, rather than the Legislature.  He                      
said after a court decision was announced lawmakers could                      
address the issue if necessary.                                                
Co-Chair Sharp ordered the bill held in committee.                             
SENATE BILL NO. 334                                                            
"An Act relating to guidelines and standards for state                         
training programs; and relating to the Alaska Human                            
Resource Investment Council."                                                  
Senator Torgerson suggested the committee adopt the CS,                        
which could then be distributed to the Legislative                             
Information Offices and other interested parties.  Co-Chair                    
Sharp agreed, observing this would give the bill its first                     
hearing, and therefore start the process.                                      
Senator Pearce moved the committee adopt the workdraft CS,                     
Version "H" for SB 334.  Senator Adams objected.  He said he                   
supported the legislation, but wanted the senator from                         
Kasilof to have a chance to explain the CS.                                    
Senator Torgerson spoke to the workdraft, saying:                              
"Section One of the original bill had the members of the                       
AHRIC committee reduce from 26 down to nine.  What this                        
amendment does is reduce it to 21.  Basically, Mr. Chairman                    
we took the commissioners of Commerce and Economic                             
Development, Community and Regional Affairs, Education and                     
Labor and made them non-voting members of the council."                        
"Section Two just designates that the council members may                      
appoint as designee, anybody on the council.  Currently, the                   
only designees that can be appointed are the ones from the                     
state.  This says that anybody that's on the council may                       
appoint a designee that can attend the meetings."                              
"Section Three outlines the appointment of the Governor                        
saying that one person can hold more than one seat, trying                     
to keep that number down as small as we can. The one person                    
who is selected to hold two seats still only gets one vote                     
and his designee still only gets one vote."                                    
"Section Four - staggered terms, this is a conforming                          
"Section Five - basically what section five does, Mr.                          
Chairman, is allow the private members to receive per diem                     
while they're meeting as the AHRIC committee.  Currently,                      
they are not entitled to per diem and it has been a barrier                    
we've had."                                                                    
"Section Six, Mr. Chairman says the chairman and the vice-                     
chairman of the committee must be appointed, elected by the                    
committee and they must somebody from business and industry                    
that holds that seat.  Currently, it says private sector,                      
but we wanted to be more direct and put business and                           
"It talks about quorums in Section Seven.  Section seven                       
also creates the executive committee and establishes four                      
permanent committees and it also establishes that the chairs                   
of those permanent committees that make up the executive                       
committee are from the private sector.  So that gives us an                    
entire executive committee that is business and industry or                    
private sector.  It outlines the committee."                                   
"Section Eight goes through some of the performance measures                   
of each one of the committees and their work."                                 
"Section Nine outlines some more performance standards for                     
the council.  It gives the council the authority to adopt                      
regulations, to identify what administrative costs are, and                    
then caps administrative fees at 15 percent or whatever is                     
mandated by the federal government.  It requires them to                       
submit an annual report to the Legislature by a certain                        
"Section Ten again outlines more performance standards.                        
We'd have to get into more detail on that."                                    
"Section Eleven just outlines the programs that come under                     
AHRIC.  We split them between the ones that are currently                      
under AHRIC and the ones we are adding to the AHRIC                            
committee, which are all the training programs in the state.                   
Section Eleven is a transition period."                                        
"Section Twelve is immediate effective date."                                  
This concluded Senator Torgerson's presentation on the CS.                     
Senator Adams removed his objection on adoption of the CS.                     
There being no objection, the workdraft CS was adopted.  Co-                   
Chair Sharp asked Mike Andrews to look at the CS and be                        
prepared to offer his comments when the committee brought                      
the bill back to the table.                                                    
This concluded the Committee's bill actions.  Senator Pearce                   
had some announcements.  She said the committee would again                    
meet at 5:30 that evening.  The committee would first take                     
up HB 53 Lease Purchasing, hearing public testimony via                        
teleconference and in-person.  She advised committee members                   
come to the table with any questions for representatives,                      
who would be on-line to answer them.  She added that the                       
entire meeting would be broadcast live via Armed Services                      
Radio to the Delta Junction Area.                                              
She continued saying that the committee would take up the                      
supplemental budget bill with the intention of moving it                       
from committee and getting it to the floor the next morning.                   
She hoped to get some of the supplemental monies out to the                    
departments quickly.                                                           
She asked for the concurrence of Senator Sharp in bringing                     
SB 334 back before the committee on Friday morning.  She                       
noted the meeting had been scheduled to begin at 9:00 am but                   
said she would be willing to start at 8:00 to add this bill                    
to the agenda.  Co-Chair Sharp agreed.  He added there could                   
be other bills left from today's meeting that would also be                    
ready for another hearing at the Friday meeting.                               
Senator Pearce listed the schedule for the next day's                          
meeting, which would start at 9:00 am and would be a Results                   
Based Budget Worksession on the University of Alaska and                       
teacher training.                                                              
Co-Chair Sharp recessed the meeting at approximately                           
11:10 a.m.                                                                     
SFC-98 (30) 3/24/98 am                                                         

Document Name Date/Time Subjects