Legislature(1997 - 1998)

04/17/1998 09:25 AM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
SENATE FINANCE COMMITTEE                                                       
17 April, 1998                                                                 
9:25 a.m.                                                                      
SFC 98  # 125, Side A (000-593)                                                
   Side B (593-197)                                                            
CALL TO ORDER                                                                  
Senator Bert Sharp, Co-Chair, convened the meeting at                          
approximately 9:25 a.m.                                                        
In addition to Co-Chair Sharp, Senators Torgerson, Adams,                      
Parnell and Phillips were present when the meeting was                         
convened.  Senator Donley arrived shortly thereafter.                          
Also Attending:  Senator LYDA GREEN; Senator GEORGIANNA                        
LINCOLN; Senator JERRY MACKIE; Representative NORM ROKEBERG;                   
Representative GENE KUBINA; ANNE CARPENETI, Assistant                          
Attorney General, Legal Services Section, Criminal Division;                   
DUGAN PETTY, Director, Division of General Services,                           
Department of Administration; KIM METCALF-HELMAR, Special                      
Assistant, Office of the Commissioner, Department of                           
Community and Regional Affairs; LYNDA ZAUGG, Director,                         
Division of Community Corrections, Department of                               
Corrections; BETSEY ROBSON, Assistant Director, Division of                    
Institutions, DOC; LARRY STREUBER, Facilities/Planning                         
Chief, Division of Administrative Services, Department of                      
Health and Social Services; DON DAPCEVICH, Executive                           
Director, Governor's Advisory Board on Alcoholism and Drug                     
Abuse, DHSS; CATHERINE READON, Director, Division of                           
Occupational Licensing, Department of Revenue; BOB                             
BARTHOLOMEW, Deputy Director, Division of Income and Excise                    
Audit, DOR; SUSAN BURKE, Attorney, Law Firm of Gross and                       
Burke; CARIN ROBINSON; MIKE GREANY, Director, Division of                      
Legislative Finance and aides to committee members and other                   
members of the Legislature.                                                    
via Teleconference:  From Anchorage, JANE ANGVIK, Director,                    
Division of Lands, Department of Natural Resources.                            
SUMMARY INFORMATION                                                            
HOUSE BILL NO. 472                                                             
"An Act relating to apportionment of business income."                         
Co-Chair Sharp noted that the committee held a hearing on                      
this bill the day before.  It had been set aside because of                    
questions members wished to have addressed.  Representative                    
Rokeberg was invited to join the committee and comment:                        
"Mr. Chairman, I'll be very brief.  This committee has                         
already reviewed the substance of this legislation in SB
345.  Yesterday, I hope you have available on your desk, a                     
list of supporters for HB 472.  I've listed them in a list                     
rather than provide the actual backup.  You have additional                    
backup in your folder.  I'd ask that any additional                            
information on [SB] 345 be adopted by reference into the                       
bill package for this bill."                                                   
"Also you have, Mr. Chairman - I've distributed something I                    
wanted to make part of the permanent record - under a cover                    
letter from COMICO Alaska from the producer's council, a                       
list of the foreign flag vessels shipping mined ore out of                     
the State Of Alaska during the years 1996 and 97, including                    
the Skagway terminal, which is a $25 million investment                        
financed by AIDEA bonds.  It's also my understanding, Mr.                      
Chairman that there is no US flag high-seas ore carriers in                    
the United States.  I wanted to introduce that as part of                      
the record."                                                                   
"Additionally, Mr. Chairman, you should have distributed to                    
the committee, a letter addressed to myself from the law                       
firm of Gross and Burke of April 7, 1998, which speaks to                      
the issues relating to the retroactivity provision, the                        
constitution issue and severability.  I'd like that as part                    
of the record Mr. Chairman."                                                   
"Also I notice that you do have a letter to Senator Donley                     
from the Department of Revenue regarding some questions the                    
committee raised in the last hearing on this bill."                            
"With that, Mr. Chairman, I would point out that Ms. Burke                     
is in the audience and available for any questions you may -                   
the committee may have as to any legal aspects relating to                     
the bill.  And with that I'd be available for any                              
Senator Parnell offered Amendment #1 and moved for its                         
adoption.  He explained that it addressed the retroactivity                    
question that came up at the earlier meeting. He believed                      
the bill as it currently stood, sufficiently established the                   
public purpose for the retroactivity.  However, this                           
amendment would make it clear that if the court made a final                   
determination that retroactive application, under Section 2,                   
was invalid, that the act would apply to tax years ending                      
on, or after the effective date of the act.  He felt the                       
amendment would give a clear direction as to what was                          
Without objection, Amendment #1 was adopted.                                   
Senator Adams expressed approval of the change made with                       
Amendment #1.  But, he still disagreed with the law summary                    
of Gross and Burke.  He stated his feelings that the bill                      
without the amendment was unconstitutional.  He spoke of how                   
the bill was supposed to help cruise lines and shared that                     
cruise lines generated pre-tax revenues of $671 million last                   
year.  In the US, they only paid $6 million, which was less                    
than one percent.  He expressed his desire that the tax                        
break not be given to these industries.  He felt this bill                     
would entice a lawsuit from the public.  He hoped the                          
amendment would clarify whether the bill was constitutional.                   
He voiced his objection to the passage of the bill.                            
Senator Parnell made a motion to move CS HB 472 (FIN) from                     
committee.  Co-Chair Sharp directed committee staff to                         
review the fiscal note and determine if changes needed to be                   
made as the result of the amendments.  He noted there was                      
objection to the motion and called for a vote.  The motion                     
passed by a vote of 6-1 and the bill was moved from                            
committee.  Senator Adams cast the nay vote.                                   
CS FOR SENATE BILL NO. 274(JUD)                                                
"An Act relating to fees for probation and parole."                            
Co-Chair Sharp noted this bill had received a hearing at an                    
earlier meeting and that a committee member wanted to work                     
with the sponsor to make changes.  At the prior hearing,                       
Amendment #1 was adopted and Amendment #2 was not adopted.                     
There was further discussion about where the committee was                     
in relation to action on the bill.                                             
Senator Donley shared with the other members that he had                       
been working with the sponsor to change the period of loss                     
of the Permanent Fund Dividend for those individuals who                       
committed a felony or multiple misdemeanors from one to two                    
He continued by saying they also worked to add to the                          
current list of appropriations of these revenues.  Under the                   
current bill, the PFD's that would no longer go to the                         
criminal would be available to distribute to the Victim's                      
Compensation Fund, the Council of Domestic Violence and                        
Sexual Assault and the Department of Corrections                               
incarceration and probation program.  He was proposing to                      
add to the list, the Office of Crime Victim's Rights, which                    
would be created upon the passage of SB 219.  He noted the                     
committee had that bill in its possession and one reason                       
that bill had not been moved from committee, was because of                    
the accompanying $500,000 fiscal note.  He suggested the                       
withheld PFD funds could go to support the Office of Crime                     
Victim's Rights.                                                               
Amendment #4 would be the first step in accomplishing this.                    
It would change the loss period for PFD from one to two                        
years for individuals who had committed a felony or been                       
convicted of two or more misdemeanor crimes against a                          
Senator Adams objected for the purpose of asking a question.                   
He asked what would happen in relation to this amendment if                    
SB 219 failed to pass.  Would other programs that were                         
listed as receiving funds through this bill suffer as a                        
result of the failure of SB 219, he wondered.  Senator                         
Donley replied that the other programs would actually                          
benefit if the Office of Crime Victim's Rights were not                        
established.  They would receive a larger share of the                         
funds.  He admitted the department did not know how much                       
revenue would be generated by this program, but last year                      
3,029 criminals were denied a PFD due to incarceration.  He                    
used that figure to calculate an amount of $4 million that                     
would be available for these programs.                                         
Senator Donley moved to adopt Amendment #4.  Senator Adams                     
objected, asking for further explanation of Section 8.                         
Senator Donley described how currently released felons and                     
multiple misdemeanants waited one calendar year to begin                       
receiving PFD's.  This amendment would say they had to wait                    
two years before receiving their dividend again, he                            
explained.  Senator Adams voiced his opposition of the                         
amendment.  His reason was that he felt this would place a                     
burden on the families of convicts who depended on the                         
dividends to help cover living expenses.                                       
Co-Chair Sharp requested a roll call.  Amendment #4 was                        
adopted by a vote of 6 - 1, with Senator Adams casting the                     
opposing vote.                                                                 
Senator Donley offered a motion to adopt Amendment #3 and                      
spoke to the amendment.  He said, with the funding source                      
established by the previous amendment, this would add the                      
Office of Crime Victim's Rights to the list of recipients of                   
the revenues.  He noted it had a contingent effective date                     
based on the passage of SB 219.                                                
Senator Parnell asked for clarification that the intent was                    
not to appropriate all the earned revenue into the one                         
program, but to divide it among the four listed above.                         
Senator Donley affirmed, pointing out that the existing                        
statutes did not specify a percentage breakdown of                             
Senator Adams asked if each program would receive 25 percent                   
of the funds, or would they be funded according to a                           
priority structure.  Senator Donley answered that neither                      
would apply.  Funding would be determined strictly by a                        
budgetary process, starting with the Governor's proposal and                   
going through the Legislature system just as other budget                      
items did.  He noted that more funds currently were spent on                   
the Council of Domestic Violence and Sexual Assault program                    
than were spent on the Victim's Compensation Fund.                             
Senator Adams had another question relating to Section 11.                     
He hoped that the companion bill, SB 219 would accompany                       
this bill as it traveled through the remaining committees.                     
He felt this would make both bills more understandable in                      
their relation to each other.  Senator Donley advised that                     
SB 219 was in the Senate Finance Committee and Senator Adams                   
suggested scheduling a hearing so it could be moved from                       
committee soon.                                                                
There was no objection to Amendment #3 and Co-Chair Sharp                      
ordered it adopted.                                                            
There were no further amendments and the committee began                       
hearing public testimony.                                                      
Co-Chair Sharp first called upon LINDA ZAUGG,  Director of                     
Community Corrections, DOC, who came to the table and spoke                    
as follows:                                                                    
"What I wanted to do today was speak about SB 274, which is                    
essentially proposes placing a $3.30 per day fee on                            
offenders that are on probation and parole."                                   
"I would like to provide just a little bit of history on the                   
subject.  In 1986 the Legislature proposed and passed a                        
probation fee.  The DOC at that time supported this                            
legislation and placed in regulations, a requirement for $45                   
per month fee.  It became clear soon after that that fee was                   
much more difficult to collect than originally anticipated.                    
And it really did require a considerable amount of probation                   
officer time doing accounting work and trying to enforce the                   
collection of that fee.  The DOC at that time was able to                      
collect less than ten percent of the anticipated fee and                       
ended up putting some probation officers on community work                     
service to pay the fee in liew of payment.  This in fact                       
turned out to be a paperwork nightmare and was                                 
"In rural Alaska, probationers who live the subsistence                        
lifestyle, were unable to pay and there was little in the                      
way of community work service to replace the fee.  In urban                    
communities, most probationers did not - who did not have                      
work could not afford to pay the fee or outright refused to                    
pay the fee.  While AS 12.55.051 allowed the defendants to                     
be incarcerated one day for each $50 owed in fee or fine,                      
very few offenders were incarcerated.  This issue quickly                      
became a fee with no consequences.  While some did pay, over                   
90 percent did not.  The DOC was still obligated to still                      
try to collect that money and spent a considerable amount of                   
time and resources in that effort to collect."                                 
"During the 16th Legislature, Senator Adams proposed a bill                    
to repeal the fee because many of the probationers in rural                    
Alaska lived a subsistence lifestyle and it was extremely                      
difficult to collect.  And collection in other parts of the                    
state just simply did not go well.  Senator Adam's bill,                       
which was SB 133 passed the Senate by a vote of 17 to zero                     
and passed the House by a vote of 37 to zero.  Five members                    
of this committee voted to repeal that fee."                                   
"House bill - the current HB or SB 274 differs from the                        
previous fee in that it is over twice the amount of the                        
previous fee, which was $45 a month.  And requires the DOC                     
to contract out the collection and administration of the                       
fee.  The current national average of 23 states where the                      
collection fee exists, is $22.60 a month.  The highest fee                     
is $40 a month with the lowest fee being $10 a month."                         
"In addition, Section 7 of this legislation requires that                      
the Board of Parole revoke probation for parolees that                         
refuse to pay the fee.  This will be the first statute that                    
mandates revocation of parole anywhere in the Alaska law.                      
The bill will have no choice but - the board will have no                      
choice but to revoke parole and put the parolees back in                       
severely overcrowded system.  It will cost more per day than                   
the monthly fee."                                                              
"SB 274 goes onto require the probationers and probationees                    
to assign their permanent fund check to the state and                          
requires the DOC to attach the PFD if they become inerrors.                    
However, the state would not get any of this money until                       
prior requirements are satisfied such as child support,                        
restitution, court-ordered fees, etc.  The fees are number                     
eight in line for the attachment of the PFD check.  DOC does                   
not believe that many, if any of these PFD's will be left by                   
the time we get to number eight under AS 43.23.065 fee.  One                   
example given for this bill is that of the State of Texas,                     
which collects $90 million a year from their                                   
probation/parolee fees.  And that in fact is correct.  The                     
State of Texas has made the collection of fees a priority.                     
But this is a priority over things such as child support and                   
restitution.  The DOC does not believe that children and/or                    
victims should be paid after probation/parole fees are                         
"With regard to the collection of fees, we realize that the                    
sponsor has required that this be contracted out.  The DOC                     
understands and supports this concept.  We contacted the                       
Associated Credit Agency, which is a collection agency here                    
in Juneau and were told that they did not do this kind of                      
work.  They're in the business of collecting bad debts only                    
and normally take a percentage of the money recovered.  It                     
is unclear if an accounting firm or a person will take on                      
this task keeping in mind that it is probably the most                         
difficult group of people to collect money from.  If they                      
do, it will still require considerable time on the part of                     
the probation officers who will have to work closely with                      
the contractors to provide information on the                                  
"Finally, the DOC believes that the concept of this bill is                    
a good idea but the previous track record does not support                     
the reinstatement of this fee.  It is easy to say that if                      
everyone pays their fee, the bill will bring in                                
approximately $5 million.  Past performance indicates that                     
this will not be the case and the DOC believes that there                      
are no indications that this will change."                                     
"One of the things brought up at one of the last hearings                      
was the business of roughly 20,000 misdemeanants out there                     
that could pay part of this fee as well.  I just - for the                     
committee's information - they're actually - during calendar                   
year '97 there were 9,175 misdemeanant arrests - people                        
arrested for misdemeanants for a total of 17,574.  So the                      
fee, if any would actually be collected on those 9,000                         
"Thank you for the opportunity to speak on this issue.  If                     
you have any questions I'd be glad to try to answer them."                     
Senator Adams asked if the misdemeanants were under the                        
supervision of the probation/parole segment.  Ms. Zaugg told                   
him the probation/parole offices would not be a part of the                    
collection efforts.                                                            
Co-Chair Sharp next called upon JENNIFER BELL of Natives for                   
Sobriety to testify.  Her testimony was as follows:                            
"[I have] kind of mixed feelings about SB 274.  That some of                   
the concerns are as what was stated before.  You know                          
there's a high rate of unemployment already in rural                           
communities.  And then you - we also have individuals on                       
probation/parole who are classified as sex offenders and are                   
already paying for treatment sometimes at the rate of $400,                    
$500 a month.  And I could see some real difficulty for them                   
to pay this and then there would be - you know I could just                    
see a lot of violations you know for not being able to pay                     
this fee."                                                                     
"I'm also concerned that you know you have individuals who                     
are on public assistance you know like $100 a month is going                   
to go towards paying probation/parole fees because that's                      
the only money that they do have.  And it seems like this                      
amount equals to the amount of the permanent fund per year.                    
And with - and I just in 1996 alone there was like 3,600                       
plus revocations where you know there - they were revoked                      
for whatever reason you know.  Be very difficult for them to                   
be eligible for permanent fund when they're revoked and back                   
in jail.  And I just see there's be great difficulty in                        
collecting this."                                                              
"I know there has been some discussion about at some point                     
having individuals return back to their home and in rural                      
areas that you know where there don't have probation                           
officers.  You know they only have BPSO's and who's going to                   
collect this, who's going to monitor this.  You know this                      
would be a real deterrent to having them go back home like                     
its just something else that could be violated for very                        
easily.  So those are the concerns."                                           
"You know regarding getting a job.  I think I stated before                    
I was in Lemon Creek for fourteen months.  It took me an                       
equal amount of time to get a job right here in Juneau and                     
very difficult.  And I'm sure a lot of other probation -                       
those on probation and parole have the same difficulty                         
depending on whatever the crime is.  It's just difficult                       
time.  And it is a burden on the family.  I know it's                          
something that we need to be responsible for, but it's also                    
something else that you know my mind it's like I have to                       
have a job or I will be in violation you know for not being                    
able to pay."                                                                  
"Now on the other side it looks like this bill may pass, I                     
don't know.  It and there have been many, many reports again                   
I keep bringing this up you know that if a good portion of                     
this money could go towards addressing those concerns that                     
have already been stated you know.  There's a list of you                      
know places where this money is going to go, whether its to                    
- for the victims or for domestic violence - whatever if                       
some of that money could go back in corrections to help                        
correct some of the concerns that are there in terms of                        
culturally relevant programs.  I think this would be a great                   
thing.  If it could be collected you know."                                    
"But I just see it's going to be real difficulty in                            
collecting this money.  And you know - I know there are high                   
percentage of Natives out there you know from rural areas.                     
And I just see this as something that's going to be very                       
hard for them."                                                                
This concluded public testimony on the bill.                                   
Senator Donley pointed out that the committee had the                          
amended bill before it.  Senator Adams interrupted saying                      
that he was drafting another amendment that he wished to                       
offer.  Senator Phillips requested a short recess while the                    
amendment was being distributed.                                               
The committee took a five-minute AT EASE starting at                           
approximately 10:00 a.m.                                                       
Senator Adams apologized for the delay then moved for                          
adoption of Amendment #5.  Senator Donley objected and                         
Senator Adams spoke to the motion.                                             
He said this would be the first time in statute that a                         
parolee would be held responsible for the payment of a                         
parole fee with the penalty for not paying resulting in                        
reimprisonment.  He believed the discretion should be left                     
up the Parole Board.  His amendment would change the word,                     
"shall" to "may".  The reason he did that, he explained was                    
because economic conditions changed within different areas                     
of Alaska.  He felt the Parole Board should take that into                     
consideration when determining punishment.  He also noted                      
the overcrowding in the prison system and suggested the                        
reimprisonment option could be delayed until the                               
overcrowding had been eased.                                                   
Senator Phillips wondered how often the parole board might                     
use this as an escape hatch for not returning offenders to                     
prison.  He asked if there was a representative of the                         
parole board present at the meeting.  Ms. Zaugg returned to                    
the table.  Senator Phillips addressed his question to her                     
asking if the board would manipulate this law and see it as                    
an excuse for not remanding parolees.  Ms. Zaugg responded                     
that the way the bill was currently drafted, the parole                        
board had no discretion.                                                       
Senator Phillips asked if the parole board followed a                          
standard or whether they passed judgement on a case by case                    
basis.  Ms. Zaugg replied that it was pretty much case by                      
case.  Senator Phillips felt that was a problem.                               
Ms. Zaugg offered ANN CARPENETI from the Department of Law                     
who was present and could answer any legal questions.                          
Senator Phillips voiced his concern that the parole board                      
would not follow the intent of the Legislature in returning                    
to prison; those parolees who failed to pay their fee.  He                     
felt criteria should be set, rather than the parole board                      
operating on a case by case manner.                                            
Ms. Carpeneti did not feel she was in a position to speak to                   
the standards followed by the parole board.  In her opinion,                   
using the word, "shall" restricted the board from making a                     
decision when the failure to pay was a mistake, or the                         
person didn't get paid that month or other situations.  She                    
spoke to the possible inappropriateness of returning                           
parolees to prison in some circumstances.  She also                            
mentioned the overcrowded conditions in the prisons.                           
As Co-Chair Sharp read the language, there was some latitude                   
in the parole board's discretion.  He read that portion,                       
"The board shall revoke the parole of the parolee who                          
defaults with payment of the parole fee imposed                                
under...unless the parolee shows by a preponderance of                         
evidence that the parolee was unable to pay despite having                     
made continuing good faith efforts to pay the fee.  If the                     
board finds that the parolee was unable to pay despite                         
having made good faith efforts the parole may not be revoked                   
solely because of the inability to pay."  That gave the                        
board discretion, he felt.                                                     
Senator Phillips then wondered why the amendment was                           
necessary.  Ms. Carpeneti advised that it made more sense                      
form a drafting standpoint to use the word "may" when giving                   
the discretion under the circumstances.                                        
Senator Donley requested the bill sponsor's opinion on the                     
issue.  CRAIG JOHNSON, staff to Senator Jerry Ward commented                   
as follows:                                                                    
"Specifically to the amendment, I think that that would in                     
essence take the teeth out of the bill.  When you - it may                     
do it, it may not.  I think part of the reason that the last                   
time this was tried and there was only an eight percent                        
collection rate was a result of two things.  One, there was                    
no repercussions per say, and two, there was really no                         
incentive for the department to collect this money.  Now                       
there is incentive and there are repercussions.  The                           
incentive is it's a private collection agency so the                           
department really doesn't have to deal with it.  And two on                    
the shell I think it's going to drive the inmate knowing                       
that there is very little - their only recourse to not                         
paying is to prove that they fall under the inability to                       
Co-Chair Sharp re-read the sentence in the bill which said,                    
"If the board finds that the parolee was unable to pay                         
despite having made continuing good faith efforts, the                         
parole may not be revoked solely because of the inability to                   
pay."  To him, that was allowing the parole board some                         
discretion.  Mr. Johnson agreed and added that if the board                    
determined the parolee was able to pay, then they had no                       
option but to revoke the parole.                                               
There was no further discussion on the amendment and Co-                       
Chair Sharp requested a roll call.  Amendment #5 failed by a                   
vote of 1-5-1.  Senator Adams cast the nay vote and Senator                    
Torgerson was absent.                                                          
Senator Pearce offered a motion to move from committee, CS                     
SB 274 (FIN) with a new fiscal note to be provided by the                      
department.  Senator Adams objected.                                           
Senator Adams spoke to his objection stating his belief that                   
the legislation was a waste of time. Even if the bill                          
passed, he didn't believe it would work in the rural areas                     
he represented.  He warned that many of his constituents did                   
not have the money to pay the fee.  He reemphasized the                        
rural economy and unemployment rate.  He felt the change in                    
withholding PFD's for two years would place a burden on the                    
families of these individuals.                                                 
Co-Chair Sharp requested a roll call.  The bill was moved                      
from committee by a vote of 5-1-1.  Senator Adams cast the                     
nay vote and Senator Torgerson was absent.                                     
SENATE BILL NO. 246                                                            
"An Act amending the definition of correctional                                
facility to include a therapeutic treatment center;                            
providing for the conveyance of the Harborview                                 
Developmental Center and appurtenant land to the City                          
of Valdez for the purpose of conversion and lease of a                         
part of the center for a therapeutic treatment center                          
for the Department of Corrections; providing that such                         
a land conveyance counts toward the general grant land                         
entitlement of the City of Valdez; and providing for an                        
effective date."                                                               
Co-Chair Sharp announced that although this was the first                      
official hearing on this bill, the committee heard a                           
presentation from Dr. Gary Field of the Oregon Department of                   
Corrections earlier relating to the establishment of the                       
rehabilitation center.                                                         
He invited BETSY ROBSON, Assistant Director in the                             
Department of Corrections in charge of programs, to speak to                   
the bill.  Her testimony was as follows:                                       
"With the chair's permission, I'd like to hand out some                        
documents that relate to the cost of care per day, and also                    
the effectiveness of treatment."                                               
Co-Chair Sharp noted that information was probably already                     
in each member's file, but instructed her to pass out her                      
information just in case there were any differences.  He                       
urged her to continue with her presentation.                                   
"This bill would allow the DOC to establish the Valdez                         
Therapeutic Community.  For a long time, the DOC has                           
recognized the need for intensive alcohol treatment and                        
programs to address those offenders who are seriously                          
"It is estimated that a large number, approximately 80                         
percent of the individuals involved in crime in our custody                    
have problems with substance abuse.  Currently the DOC                         
provides a substance abuse education program, a pretreatment                   
program and an outpatient model.  We do not have available                     
the intensive treatment to deal with these serious                             
"If we were to open the Valdez facility, we would be looking                   
at housing 60 medium/minimum inmates from across the state.                    
These individuals would require - have been screened and                       
known to require intensive treatment and would not otherwise                   
be eligible for any form of early release unless they                          
receive this type of treatment.  The program will feature a                    
nine to twelve month program of intensive treatment.  It                       
will have a strong after-care component and planning for                       
after-care will begin when the inmate enters the program."                     
"We feel that this program can have a significant impact on                    
this population in terms of reduction of recidivism.                           
Previously national expert, Gary Field from the Staying Out                    
program in Oregon did testify before this committee as to                      
the anticipated impact of this program.  And in fact in the                    
handout that we distributed, there is a pamphlet that shows                    
research summary on recidivism rate."                                          
"The second section of this bill provides for the transfer                     
of the Harborview Developmental Center and the adjoining                       
property to the City of Valdez.  The DOC, Department of                        
Health and Social Services and the City of Valdez have been                    
working closely with the Department of Admin. on developing                    
an interim agreement to allow us to make renovations to the                    
building and to continue forward with those renovations."                      
Side B Tape 125,  10:20 a.m.                                                   
"...In addition, the DOA has assisted with a surplussing                       
process.  They have canvassed other state departments and                      
agencies and determined that there is no other agency with                     
an interest in the building.  Dugan Petty is here today on                     
behalf of the DOA and would be available to answer any                         
questions that individuals may have."                                          
"Also, I would like the permission of the chair to ask Larry                   
Streuber from DHSS to come up and address the issue of what                    
will happen if the building is not transferred to the City                     
of Valdez."                                                                    
Co-Chair Sharp invited LARRY STREUBER, the                                     
Facilities/Planning Chief for the DHSS to speak to the                         
committee.  After introducing himself, Mr. Streuber's                          
comments were as follows:                                                      
"Harborview Development Center for many years was the                          
institutional facility for the developmentally disabled                        
population.  Three years ago, the decision was made to close                   
Harborview and the remaining 44 residents were transferred                     
to community services.  The last residents were out November                   
15th and the last program staff were out of Harborview                         
December 30th."                                                                
"Harborview is a valuable asset.  It's valued - its                            
replacement value is valued at over $40 million.  To protect                   
that asset - the State's asset, the building - the DHSS                        
implemented an asset protection plan, a fancy name for                         
mothballing.  Basically what we did is divide the mechanical                   
electrical operations of the building into logical units and                   
reduced the energy necessary to keep the building functional                   
but operating at a minimum capacity.  And we retained one                      
maintenance mechanic on staff.  So out of the hundred or so                    
people that were at Harborview as staff a few years ago, we                    
still have one maintenance mechanic.  However the Valdez                       
Community Hospital is fully operational and does occupy 17                     
percent of the facility."                                                      
"The point that we want to make today is that if the                           
facility isn't transferred to Valdez it remains a state                        
responsibility.  The state will have the responsibility to                     
protect the building to keep an asset protection."                             
"In FY99, if the State has to continue asset protection for                    
that building, we estimate that that cost will be about                        
$265,000 and we don't have any money in our FY99 budget to                     
do that."                                                                      
Co-Chair Sharp asked what would be the cost to demolish the                    
building.  Mr. Streuber did not know, but had heard the cost                   
to demolish API would be $15 million.  He estimated the cost                   
to demolish Harborview would be less because it was a                          
smaller building.                                                              
Senator Phillips wanted to know if the City of Valdez had                      
any other plans for the facility besides using it for the                      
alcohol treatment program.  Ms. Robson was unaware of any                      
other plans.  However, she did point out that DOC intended                     
to occupy only a portion of the building, which they would                     
lease from the city.  Other portions of the building would                     
be used by other agencies.                                                     
Senator Adams asked for clarification on the daily operating                   
rate.  He noted a letter from Senator Ward stating the cost                    
per bed was $124.39.  DOC quoted the cost as $95.87.  He                       
wanted to know why the discrepancy existed.  Ms. Robson was                    
unsure and requested the committee allow Division of                           
Administration Deputy Director Joe Reeves from DOC speak to                    
the cost per day matter.                                                       
Senator Pearce directed the committee's attention to the                       
back page of one of the handouts the treatment costs were                      
broken out and compared to incarceration costs.  Senator                       
Adams was satisfied with that information to answer his                        
Senator Phillips wanted to know if there was an option to                      
sell the building to the private sector.  He compared that                     
to the cost to the state to maintain the building or have it                   
demolished.  Ms. Robson asked DUGAN PETTY, General Services                    
Director for the DOA be allowed to comment.  Mr. Petty spoke                   
to that issue as follows:                                                      
"We've not taken this to the point where we have put it out                    
for public dissemination.  The City of Valdez has expressed                    
an interest in the facility and if the decision were made                      
not to move forward with the City of Valdez.  Although, I                      
would wonder if it wouldn't become something like the                          
Whittier building - never had a market.  We have not done                      
that.  We could do it should we not do it with the city.                       
We've been..."                                                                 
Senator Phillips interrupted asking for other examples where                   
the State surplussed buildings.  Mr. Petty replied they had                    
excessed a number of smaller buildings for off-site removal.                   
The State had done a limited amount of larger buildings.  He                   
qualified that this was a new state and this was one of the                    
first large buildings that had been looked at for                              
decommission.  They did not have much of a track record, he                    
admitted, but they did believe that to the extent the                          
transfer could benefit the community, the transaction made                     
sense.  By transferring to the city, it would not preclude                     
the city from entering into an agreement with the private                      
sector for use of the building, he added.  However, the city                   
needed part of the building for the community hospital.  He                    
believed the hospital was vital to the community.                              
Senator Pearce wanted to know what the DOC was going to do                     
with regard to the Cleary Order to relieve prison                              
overcrowding if inmates could not be transferred to this                       
facility.  Ms. Robson responded part of the department's                       
plan to reduce prison population was to send inmates to the                    
alcohol treatment facility.  If the program were not                           
approved by the Legislature, they would have to look at                        
other alternatives including violating the court ordered                       
population cap or shipping more inmates to Arizona.  The                       
cost to house these inmates out-of-state would be                              
approximately $106 per day, she estimated.                                     
Senator Pearce spoke of the plan the department submitted to                   
the court to comply with the Cleary Order.  She asked if it                    
included placing inmates in the Harborview facility as part                    
of the solution.  Ms. Robson affirmed.  Senator Pearce                         
wanted to know if the inmates were not housed in state, what                   
would be the average cost to house them out-of-state.  Ms.                     
Robson repeated that the average amount would be $106 per                      
day.  Senator Pearce noted that while the outside beds were                    
cheaper, the inmates wouldn't receive any treatment while                      
being housed out of state.  Ms. Robson said they would                         
receive very limited treatment.  It would be whatever                          
treatment was available at the facility, but would not be                      
enough to meet their needs.                                                    
Senator Pearce observed that in order to comply with the                       
court order, these inmates needed to be placed somewhere.                      
In other words, these would not be new beds, and at some                       
point the treatment program would have to be provided under                    
the Cleary Order.  Ms. Robson agreed that was a fair                           
assessment of the situation.                                                   
Co-Chair Sharp didn't recall Harborview being part of the                      
prison relief package the committee put together.  Senator                     
Pearce said while it was not part of the short-term/long-                      
term plan to house inmates in tents and ship others out of                     
state, the Harborview facility was approved by the                             
Legislative Budget and Audit Committee last year and was                       
included in the supplemental budget package.  She shared                       
that one stipulation for the program's approval was that the                   
cost per day of incarceration, less cost for treatment, had                    
to be below the average cost per day system-wide.  She                         
explained that part of the budget plan for the department                      
was an under $8 million increase, which did not include                        
these 60 beds because funding for them was covered under a                     
fiscal note.  Whether the Legislature passed this bill or                      
not, they would need to somehow fund the 60 beds to meet the                   
court order, she warned.  It was up to the Legislature                         
whether they wanted to fund the 60 beds through the                            
Harborview program or by some other means.                                     
Co-Chair Sharp noted the arrival of the bill sponsor,                          
Representative GENE KUBINA, and invited him to join the                        
committee.  He also invited Senator GEORGIANNA LINCOLN to                      
join the committee.  Senator Kubina testified as follows:                      
"Harborview Developmental Center - DHSS has wanted for years                   
to get out of the institution of Harborview.  So, in doing                     
so, they have kept the number down, not allowed more people                    
to go in that facility, making the cost per person extremely                   
high, which in essence, forced the closure of that                             
"The City of - over the last two years, the Legislature                        
first funded $250,000 to do a - to find out how to use -                       
what way we could use Harborview.  Basically, Harborview is                    
a facility that's made to house people.  Last year, the                        
Legislature funded $400,000 and they put stipulations in                       
that I think you are all aware of so I won't read them.  But                   
it says that we will do this program if they can do it where                   
the cost per inmate day does not exceed statewide average                      
during that day excluding treatment.  And then they also -                     
we also put in the budget that we would have these programs                    
to monitor it so that we could actually show or prove                          
whether we're saving money by doing it or not."                                
"The City of Valdez has gone to a great length to try to                       
bring the cost down, providing the facility, work with the                     
department.  They are in essence, in the lease back to the                     
department, including heating, electricity and maintenance.                    
There is no - they have taken all the risk on that building                    
not being a good building and having to cost too much.  All                    
of that is in the cost.  So this is what people in DHSS been                   
saying for years where the building is expensive.  We don't                    
buy that we've never bought that.  We just think they wanted                   
to get out of having a quote an institution."                                  
"Mr. Chairman, we had a gentleman from Oregon here talk                        
about the program.  I won't go into that.  I know you sat                      
through it and everybody that has dealt with these programs                    
tell you this program is great.  Oregon not only had one                       
that they started almost 20 years ago.  They've added three                    
more because this program works so well in keeping people                      
out of prison."                                                                
"Mr. Chairman, the City of Valdez has worked in good faith.                    
They have a million dollars ready to put into the building                     
to bring it - make the changes that corrections needs to use                   
the facility for this proposal.  Obviously, they don't want                    
- they're not going to spend that money until we know that                     
the proposal is there.  We have followed the letter of the                     
law.  Even though the Governor vetoed this, the department                     
has agreed to follow it, the City of Valdez has done                           
everything they can to come in with those stipulations and                     
we would like to go forward with the program."                                 
"I think - I'm convinced that several years down the line,                     
we're all going to be happy that it happened because the                       
program is going to be successful.  We're going to be doing                    
something to keep people out rather than putting them back."                   
He concluded by offering to answer any questions.                              
Co-Chair Sharp invited Senator Lincoln to speak.  She                          
testified as follows:                                                          
"I would just add to that that in looking at the 60 bed                        
minimum and medium custody inmates that would be there, that                   
frees up 60 more beds that we so desperately need within the                   
state.  And I think when you look at the cost effectiveness                    
as was mentioned earlier, the average cost of being $106                       
compared to the $95.87 - I think that's through the                            
department and the community that they have worked very                        
closely together to come under that figure.  And have a very                   
cost effective program here, one that's needed and also that                   
I think that the planning process that both the City of                        
Valdez, and the department and the administration in all                       
working together for this planning process."                                   
"It wasn't anything that was just put together real rapidly                    
and without any thought given to the benefits to the State                     
Of Alaska.  So I think it really is - if you look at it -                      
overall it's cost effective and we certainly do have the                       
need there."                                                                   
Co-Chair Sharp next called upon DON DAPCEVICH, the Executive                   
Director for the Governor's Advisory Board on Alcoholism and                   
Drug Abuse.  After introducing himself, Mr. Dapcevich gave                     
the following presentation:                                                    
"My board has instructed me to come and speak before you in                    
support of this legislation."                                                  
"All Alaskan's had the opportunity about ten days ago to                       
watch a very impressive series.  And I hope some of you saw                    
that series titled 'Moyers on Addiction'.  It was run                          
nationally on public television all across the State Of                        
Alaska.  The last hour of that program was devoted to the                      
prison system's response to treatment and it focused on the                    
State of Arizona.  And they have recently come to                              
realization that the most effective, the most fiscally                         
responsible way to deal with the overcrowding in their                         
prisons is to treat the addictions of their prisoners.  And                    
I think this is the opportunity that you have to respond to                    
that in Alaska."                                                               
"I had the good fortune several years ago to act as a                          
consultant to the State of Texas when they began their foray                   
into treatment communities for their prison populations.                       
And they have proven as you can see in the material provided                   
by the DOC to you, been quite successful in their ability to                   
treat prisoners.  It's a relatively small investment with a                    
control infrastructure cost to the state that can be                           
measured.  It's quantifiable. It's qualafiable."                               
"You have an opportunity to use the performance measures                       
that you've established the outcome based funding criteria                     
that you're establishing to measure the effectiveness of                       
this treatment program.  And if it doesn't work over a very                    
short period of time, beginning in the second year, you'll                     
know if it hasn't worked and you can either continue to fund                   
it based on it's effectiveness in efficacy in treating this                    
population, or you can defund it."                                             
"But here's an opportunity where the community is willing to                   
accept this facility.  And that's pretty strange in this day                   
and age for a community to be willing to not only accept                       
this facility in their community, but to participate with                      
you in the cost of operating the facility.  So it appears to                   
be from our perspective, a win, win; win situation for the                     
state.  A very small investment, a promised return on that                     
investment over a very short period of time that will                          
actually save you dollars in the long run.  So we would                        
encourage you to fund this facility and get it on the road."                   
Representative Kubina announced that he needed to leave the                    
meeting to satisfy a call placed on all House of                               
Representative members.  He wanted the members to that know                    
his leaving did not imply apathy for the work the committee                    
was doing, but that he had no other choice but to go to the                    
House chambers.  Co-Chair Sharp noted the need and thanked                     
the representative for the explanation.                                        
Co-Chair Sharp commented on conflicting testimony where the                    
department said Arizona prisoners received limited treatment                   
and Mr. Dapcevich said they had an exemplary program.                          
Senator Adams asked if the Co-Chair was ready for a motion                     
to move the bill from committee.  Co-Chair Sharp said he was                   
waiting for more comments.  There were no others signed up                     
to testify.  He ordered the bill held in committee.                            
SENATE CS FOR CS FOR HOUSE BILL NO. 17(RES)                                    
"An Act establishing the Department of Natural                                 
Resources as the platting authority in certain areas of                        
the state; relating to subdivisions and dedications;                           
and providing for an effective date."                                          
Co-Chair Sharp noted that Representative Jeannette James was                   
the sponsor of the bill but since the House members were                       
under the call order, she was unable to attend this portion                    
of the meeting.  He asked if any members of her staff were                     
present and could speak on her behalf.  There was no one                       
from her office present.                                                       
Senator Adams pointed out there had been a similar bill in                     
the Legislature during a different session.  He shared that                    
the only reason it died was because of the adjournment                         
frenzy that particular year.  He didn't think the Department                   
of Natural Resources had any problem with the legislation.                     
He felt the fiscal note adequately reflected the funding                       
associated with the platting authority.  He didn't know of                     
any opposition to this bill, which would establish DNR as                      
the platting authority and amend the definition of                             
subdivision.  He expressed a desire to see the bill moved                      
out of committee.                                                              
Co-Chair Sharp noted that he and Senator Torgerson had heard                   
the bill in the Resources Committee and were both                              
comfortable with it also.  Just for the record, he wanted to                   
hear comments from JANE ANGVIK, the Director of the Division                   
of Lands.  Via teleconference from Anchorage, she briefly                      
stated that the division supported HB 17.                                      
Senator Torgerson had one question.  He wanted to know if a                    
title search would be required before any of the properties                    
could be plotted.  Ms. Angvik responded it was not required.                   
She continued saying that a title search was necessary in                      
order to buy or sell land, but particularly in an                              
unorganized borough, it was currently possible to record any                   
document.  What this legislation would do, she explained,                      
was allow a review of the survey to determine its accuracy.                    
Senator Torgerson indicated his consideration of drafting an                   
amendment to require a title search and that the title                         
search must be kept by the department for future reference                     
for incorporation and taxation in rural Alaska if that ever                    
came to fruition.  He felt that would fit into the intent of                   
this legislation.                                                              
Senator Adams requested a new fiscal note from the                             
department if the title searches were to be required. He                       
felt the amount would be substantial and although he didn't                    
mind the increase, thought it needed to be appropriated.                       
Ms. Angvik asked for clarification that Senator Torgerson                      
intended the title searches be done on private land.                           
Senator Torgerson affirmed.  Ms. Angvik commented that would                   
be unusual.  In answering the senator's question why, she                      
said it was because the department only did title searches                     
for state land.                                                                
Senator Torgerson commented that before a property tax                         
notice could be issued on private land, a title search must                    
be done.  He assumed a title company would be hired to do                      
the search.  His intention was that a plat could not be                        
recorded without having first performed a title search.                        
Co-Chair Sharp asked if Senator Torgerson meant for the                        
title search costs to be paid by the property owner or                         
individual requesting the plat as opposed to DNR.  Senator                     
Torgerson affirmed.                                                            
Ms. Angvik assured the committee that the department had no                    
objection to the requirement of a title report as well as a                    
Co-Chair Sharp ordered the bill held in committee until the                    
next day's scheduled meeting to allow Senator Torgerson to                     
draft the amendment.                                                           
SENATE CS FOR CS FOR HOUSE BILL NO. 334(STA)                                   
"An Act relating to waiver of tuition and fees for                             
certain family members of a peace officer or a fire                            
fighter killed in the line of duty; and providing for                          
an effective date."                                                            
Co-Chair Sharp noted the time was short, but he wanted to                      
have a hearing on this bill.  The committee took a short                       
recess to summon the sponsor's staff member to speak to the                    
BRUCE CAMPBELL, staff to Representative Pete Kelly, was                        
invited to come to the table.  He testified to the bill as                     
"I am pleased to bring HB 334 before you.  This is a bill                      
that you may recall that we had a tragedy this last winter                     
in which a police officer gave his life in Fairbanks.  And                     
when we began to research the issue, we discovered that                        
police officers were not included in the existing tuition                      
waver program that we offer for military.  So this bill                        
offers that benefit to peace officers and to fire                              
"There is a technical amendment requested by the drafters.                     
And they have discovered a technical defect that, as we                        
adjusted the process, we did in fact need to put 'a member                     
of the armed services' in the title of the bill.  So I have                    
a short amendment for you that achieves that."                                 
Senator Phillips interrupted asking if that would require a                    
resolution.  Mr. Campbell replied that it did not, that the                    
drafters said it was a technical defect, which could be                        
corrected under Uniform Rule 41-B.                                             
Co-Chair Sharp clarified that existing law already allowed                     
for widows and children of members of the armed services who                   
died in the line of duty to receive the waiver.  Mr.                           
Campbell affirmed.                                                             
Co-Chair Sharp asked if there were any other amendment the                     
sponsor wished to offer.  Mr. Campbell said no, just the one                   
already mentioned.                                                             
Co-Chair Sharp noted that several committee members were                       
absent and there was not enough votes to take action on the                    
bill, so he set the bill aside until a later meeting.                          
Co-Chair Sharp adjourned the meeting at approximately                          
10:55 a.m.                                                                     
SFC-98 (21) 4/17/98 am                                                         

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