Legislature(2003 - 2004)

04/02/2003 01:32 PM Senate JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE JUDICIARY STANDING COMMITTEE                                                                             
                         April 2, 2003                                                                                          
                           1:32 p.m.                                                                                            
TAPE(S) 03-15                                                                                                                   
MEMBERS PRESENT                                                                                                               
Senator Ralph Seekins, Chair                                                                                                    
Senator Scott Ogan, Vice Chair                                                                                                  
Senator Gene Therriault                                                                                                         
Senator Johnny Ellis                                                                                                            
Senator Hollis French                                                                                                           
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                            
SENATE BILL NO. 58                                                                                                              
"An  Act  relating  to permanent  fund  dividend  program  notice                                                               
requirements  and   to  the  ineligibility  for   permanent  fund                                                               
dividends  of  certain  persons sentenced  for  crimes  involving                                                               
mandatory motor vehicle liability insurance."                                                                                   
     MOVED CSSB 58(JUD) OUT OF COMMITTEE                                                                                        
SENATE BILL NO. 59                                                                                                              
"An  Act  relating  to permanent  fund  dividend  program  notice                                                               
requirements  and   to  the  ineligibility  for   permanent  fund                                                               
dividends of  certain persons sentenced  for driving  while under                                                               
the influence  of an alcoholic beverage,  inhalant, or controlled                                                               
substance, or for refusal to submit to a chemical test."                                                                        
     HEARD AND HELD                                                                                                             
SENATE BILL NO. 53                                                                                                              
"An Act  relating to disposition  of a traffic  offense involving                                                               
the death  of a person;  providing for the revocation  of driving                                                               
privileges by  a court for a  driver convicted of a  violation of                                                               
traffic  laws  in  connection  with  a  fatal  motor  vehicle  or                                                               
commercial motor  vehicle accident;  amending Rules 43  and 43.1,                                                               
Alaska Rules  of Administration;  and providing for  an effective                                                               
     SCHEDULED BUT NOT HEARD                                                                                                    
SENATE BILL NO. 2                                                                                                               
"An Act relating to recovery of civil damages from the parents                                                                  
or legal guardian of a minor; and providing for an effective                                                                    
     SCHEDULED BUT NOT HEARD                                                                                                    
PREVIOUS ACTION                                                                                                               
SB 58 - See Judiciary minutes dated 2/19/03                                                                                     
SB 59 - See Judiciary minutes dated 2/19/03                                                                                     
WITNESS REGISTER                                                                                                              
Senator John Cowdery                                                                                                            
Alaska State Capitol, Room 101                                                                                                  
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Sponsor SB 58 and SB 59                                                                                   
Crystal Moore                                                                                                                   
Staff to Senator John Cowdery                                                                                                   
Alaska State Capitol, Room 101                                                                                                  
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Introduced SB 58 and SB 59                                                                                
Tamara Cook                                                                                                                     
Legislative Affairs Agency                                                                                                      
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Answered questions on SB 59                                                                               
Larry Persily                                                                                                                   
Deputy Director                                                                                                                 
Department of Revenue                                                                                                           
PO Box 110400                                                                                                                   
Juneau, AK  99811-0400                                                                                                          
POSITION STATEMENT: Testified on SB 59                                                                                        
Linda Wilson                                                                                                                    
Public Defender Agency                                                                                                          
Department of Administration                                                                                                    
PO Box 110200                                                                                                                   
Juneau, AK  99811-0200                                                                                                          
POSITION STATEMENT: Testified on SB 59                                                                                        
ACTION NARRATIVE                                                                                                              
TAPE 03-15, SIDE A                                                                                                            
CHAIR  RALPH   SEEKINS  called  the  Senate   Judiciary  Standing                                                             
Committee meeting  to order  at 1:32  p.m. Present  were Senators                                                               
Therriault,  French and  Chair Seekins.  Senators Ellis  and Ogan                                                               
arrived shortly thereafter.                                                                                                     
He  announced the  committee  would  hear SB  155  and  SB 89  on                                                               
Friday, April 4, 2003.                                                                                                          
        SB  58-PFD INELIGIBILITY/MOTOR VEHICLE INSURANCE                                                                    
CHAIR RALPH  SEEKINS asked  for a motion  to adopt  the committee                                                               
substitute (CS) as the working document.                                                                                        
SENATOR  GENE THERRIAULT  made a  motion  to adopt  CS \H  Cook.2                                                               
4/2/03 as the working document.  There being no objection, it was                                                               
so ordered.                                                                                                                     
SENATOR COWDERY  asked his staff  to explain the changes  and the                                                               
reasons for those changes.                                                                                                      
CRYSTAL MOORE, staff to Senator  John Cowdery, explained CS SB 58                                                               
[Version H]  amends AS 43.23.005 (g)  to add "and (i)"  to (d)(1)                                                               
of the  section and "(i)(2)"  to (d)(2)(B). The latter  takes out                                                               
all programs  and departments  to which  the PFD  is appropriated                                                               
when a  person loses his  or her PFD and  the money stays  in the                                                               
general fund                                                                                                                    
SENATOR SCOTT  OGAN clarified  the money stays  in the  corpus of                                                               
the permanent fund, not the general fund.                                                                                       
MS. MOORE agreed.                                                                                                               
CHAIR  SEEKINS  added it  would  actually  stay in  the  realized                                                               
earnings of the reserve account.                                                                                                
SENATOR COWDERY said yes.                                                                                                       
SENATOR  GENE  THERRIAULT  explained  the  Legislature  makes  an                                                               
annual  appropriation  for  dividends;  the money  goes  into  an                                                               
account and dividends  are paid from that  account. An individual                                                               
that is convicted of a DUI  wouldn't get a dividend so that money                                                               
would stay in  the dividend fund to be  distributed equally among                                                               
other eligible recipients.                                                                                                      
Frequently, when  the PFD  is garnished  for a  court settlement,                                                               
the  court  considers  that  to   be  the  fine  or  penalty.  He                                                               
understands that the  prime sponsor doesn't want  the dividend to                                                               
be available to  pay the fine. He intends that  the violator lose                                                               
the dividend and also pay the court fine.                                                                                       
SENATOR COWDERY said that was  his intent. A DUI conviction would                                                               
make  an individual  ineligible to  receive a  PFD and  the funds                                                               
would not be disbursed to an  agency to satisfy that or any other                                                               
SENATOR OGAN asked if it is  correct that the money would stay in                                                               
the earnings reserve.                                                                                                           
SENATOR   THERRIAULT  said   it  would   not  and   restated  his                                                               
CHAIR SEEKINS said the earnings  reserve brings the money over to                                                               
the Legislature who then makes  the appropriation to the dividend                                                               
account. He asked Senator Ellis if that was correct.                                                                            
SENATOR  JOHNNY   ELLIS  said   that  was  correct   and  Senator                                                               
Therriault clearly understood the process.                                                                                      
1:22 pm                                                                                                                       
SENATOR  HOLLIS  FRENCH asked  if  he  understood correctly  that                                                               
driving without  insurance and DUI  convictions would  be treated                                                               
differently than any other PFD forfeitures.                                                                                     
SENATOR COWDERY  replied that is  correct. The language in  SB 58                                                               
and  SB  59  is  similar,  but language  in  SB  59  also  covers                                                               
CHAIR SEEKINS verified that the  bill applies just to convictions                                                               
in Alaska and isn't retroactive.                                                                                                
MS. MOORE confirmed; the bill  applies to convictions for driving                                                               
without auto insurance in Alaska only and it is not retroactive.                                                                
SENATOR OGAN  made a motion  to move CSSB 58(JUD)  from committee                                                               
with individual recommendations and  attached fiscal notes. There                                                               
being no objection, it was so ordered.                                                                                          
           SB 59-PERMANENT FUND INELIGIBILITY FOR DUI                                                                       
SENATOR SCOTT  OGAN made a  motion to adopt  committee substitute                                                               
(CS) version \H SB 59 for discussion.                                                                                           
SENATOR JOHNNY ELLIS  objected for the purpose  of an explanation                                                               
of the changes prior to adoption.                                                                                               
CRYSTAL  MOORE said,  "The changes  are the  same changes  as the                                                               
last one  as far as  removing the  subsection (B) and  putting it                                                               
into (i) as well as including municipal..."                                                                                     
CHAIR SEEKINS asked  for confirmation that a  person convicted of                                                               
a DUI in a municipality would become ineligible for the PFD.                                                                    
MS. MOORE said that is correct.                                                                                                 
SENATOR ELLIS removed his objection.                                                                                            
SENATOR GENE  THERRIAULT referred  to page 3,  line 21  and asked                                                               
whether  the law  would apply  retroactively  from the  effective                                                               
SENATOR JOHN  COWDERY, bill  sponsor, replied  it was  his intent                                                               
that prior convictions  would not apply. He asked  Tamara Cook to                                                               
TAMARA COOK,  Legislative Legal  and Research  Services Director,                                                               
explained that  eventually a five-year  period would  apply. This                                                               
would include the qualifying year,  and four years prior to that.                                                               
If there is a conviction during  any of those five years then the                                                               
person will be disqualified from receiving a PFD.                                                                               
Under  Section  4,  a special  applicability  section  says  that                                                               
convictions   committed  before   January  1,   2004  cannot   be                                                               
considered  for purposes  of  determining  prior convictions  for                                                               
purposes of this  section. That language is the  last sentence on                                                               
page 3,  lines 28-30. There  is no  retroactivity as of  the date                                                               
the bill is adopted.                                                                                                            
SENATOR THERRIAULT asked  if a person convicted for  one DUI will                                                               
lose just one check.                                                                                                            
MS. COOK replied,                                                                                                               
     You'll  lose the  check for  that  year if  you have  a                                                                    
     conviction during any of the  period that is expressed.                                                                    
     As a  matter of fact, if  you have a violation  in year                                                                    
     four then  there would be  a number of years  before it                                                                    
     moves down  past the  four-year prior.  So in  fact you                                                                    
     would lose up to five years of PFDs.                                                                                       
SENATOR THERRIAULT asked if that is for one conviction.                                                                         
MS. COOK said it is.                                                                                                            
1:49 pm                                                                                                                       
MS. COOK explained,                                                                                                             
     Those sections, which  are in paragraph 3,  deal with a                                                                    
     single conviction,  but in the case  of individuals who                                                                    
     have had  a prior -  if they were sentenced  during the                                                                    
     qualifying year  or the  four years  immediately before                                                                    
     the qualifying  year as  a result  of a  conviction in-                                                                    
     state of the  DUI. And then if you look  on line 15 you                                                                    
     will see, 'and if the  individual has been convicted of                                                                    
     a prior' so they have to  have had one prior as well to                                                                    
     fall under paragraph 3.                                                                                                    
SENATOR COWDERY  asked if  a DUI  from last  year would  have any                                                               
affect on a person who was  also convicted of a DUI the following                                                               
MS. COOK said that  would count as a prior. The  law looks at the                                                               
year in which  a conviction occurs and then it  looks back to see                                                               
if there are any priors within a five year period.                                                                              
SENATOR  COWDERY asked  if the  dividend would  be lost  for that                                                               
year and another four years, which was his intent.                                                                              
MS. COOK said  yes; including the qualifying year  would take the                                                               
total to five years.                                                                                                            
SENATOR  THERRIAULT  asked  for  verification that  for  a  first                                                               
conviction  a  person   will  lose  one  check   while  a  second                                                               
conviction within  a four-year  period will  result in  five lost                                                               
MS.  COOK agreed  because a  first offender  falls under  page 1,                                                               
paragraph (d)  and the  new subsection  (B). [Subsection  (d) and                                                               
subparagraph (B)] It  says you don't qualify for a  PFD if during                                                               
the qualifying  year you're convicted  of this crime. If  you are                                                               
convicted of either  DUI or refusal to submit to  a chemical test                                                               
[under AS 28.35.030] you cannot qualify for a PFD.                                                                              
The new  paragraph (3) means a  person doesn't qualify for  a PFD                                                               
if  during the  qualifying year  and the  four years  immediately                                                               
prior to  the qualifying year they  are sentenced as a  result of                                                               
conviction of DUI and they have a prior DUI conviction.                                                                         
SENATOR  FRENCH  asked for  further  explanation  with regard  to                                                               
whether the money would be diverted  back to the dividend fund or                                                               
used to pay crime victims. He  wasn't clear where version \H gave                                                               
direction to shift the money to one account or the other.                                                                       
MS. COOK  acknowledged the question  is confusing because  it's a                                                               
technical fix  and it's not readily  apparent on the face  of the                                                               
Under existing law,  people that have been  convicted of felonies                                                               
and misdemeanors with  priors are not eligible for  PFDs. Part of                                                               
the  public notice  statute, AS  43.23.028, considers  the amount                                                               
that  would have  been paid  to individuals  who were  ineligible                                                               
under (d)  to receive a PFD.  To the extent that  the Legislature                                                               
appropriates that amount,  it doesn't need to be  included in the                                                               
notice requirement.                                                                                                             
SENATOR FRENCH asked which statute was the notice requirement.                                                                  
MS. COOK explained it's AS 43.23.028.                                                                                           
     It  says that  everything that  is subtracted  from the  PFD                                                               
     must be listed, with the  exception of money that would have                                                               
     belonged to other people. The  reasoning is that money would                                                               
     never have gone  into the PFD check anyway. To  get out from                                                               
     under   that  notice   requirement,  the   person  must   be                                                               
     ineligible under AS 43.20.005  (d). The original versions of                                                               
     the bills  amended that  section of  statute to  include the                                                               
     additional crimes  and to the ineligibility  provision. When                                                               
     it was decided  that we did not want to  treat money in that                                                               
     fashion, ... I  took the provisions that were in  (d) out of                                                               
     (d) and I put  them in bill Section 2. ... Page  1 \H SB 59.                                                               
     I created a  new subsection (i) so that these  are no longer                                                               
     (d)  ineligibilities; they  are  (i)  ineligibilities. As  a                                                               
     result, the cross reference that  applies to the other types                                                               
     of people just doesn't apply to these folks anymore.                                                                       
SENATOR  FRENCH asked  if removing  AS 43.23.005  (i) would  make                                                               
this  money available  to crime  victims as  it has  been in  the                                                               
MS. COOK replied the solution for  that would be to return to the                                                               
original version of the bill.                                                                                                   
SENATOR FRENCH verified that would be \A version.                                                                               
MS. COOK agreed; it's the same  as taking the material in (i) and                                                               
placing it back in (d).                                                                                                         
She  pointed out  there are  additional changes  to the  original                                                               
bill  that you  might  not  want to  lose.  For  example, the  CS                                                               
addresses the ordinance and the original bill doesn't.                                                                          
SENATOR FRENCH noted that would  make an individual ineligible if                                                               
they had a municipal DUI.                                                                                                       
MS. COOK agreed.                                                                                                                
SENATOR THERRIAULT  asked the sponsor  if it was his  intent that                                                               
the funds  would not  go into the  victim's compensation  fund so                                                               
that the  court couldn't count  that money toward  the violator's                                                               
SENATOR COWDERY said,                                                                                                           
     The reason I  wanted to make them  ineligible, not keep                                                                    
     them eligible and the money  to go - there's probably a                                                                    
     long  list of  people that  want  the money  - and  the                                                                    
     people  that  are  getting  the   money  now  won't  be                                                                    
     affected  unless the  person  they're  getting it  from                                                                    
     gets another DUI.                                                                                                          
MS. COOK wasn't  sure she understood the thrust  of the Senator's                                                               
statement, but  currently, money  available under  subsection (d)                                                               
is  available to  the Legislature  to appropriate  among four  or                                                               
five different  purposes that  have been set  out in  statute. It                                                               
has nothing  to do with  an individual's  own PFD and  whether or                                                               
not it is subject to attachment.                                                                                                
2:00 pm                                                                                                                       
CHAIR SEEKINS recapped. If a person  is not eligible, it stays in                                                               
the  corpus of  the money  brought  to the  Legislature from  the                                                               
permanent  fund  and  how  it   is  appropriated  is  up  to  the                                                               
MS. COOK said it essentially stays  as part of the dividend fund,                                                               
not  the permanent  fund,  and is  distributed  according to  the                                                               
formula for all eligible people  unless the Legislature elects to                                                               
appropriate it for some other purpose.                                                                                          
CHAIR SEEKINS interjected, "We could  add it to the hold harmless                                                               
MS. COOK  said the Legislature  could do  that with any  money in                                                               
the  dividend fund,  but the  appropriation would  appear in  the                                                               
SENATOR OGAN  asked if it  was correct  that anyone else  with an                                                               
attachment would be out of luck.                                                                                                
MS. COOK  said yes; a person  that doesn't have a  permanent fund                                                               
dividend doesn't have one to attach.                                                                                            
SENATOR FRENCH asked  if this bill would make  all DUI offenders'                                                               
PFD checks that were forfeited  under a previous provision of law                                                               
unavailable for distribution to crime victim funds.                                                                             
MS. COOK said,                                                                                                                  
     They will  not be  available to  be distributed  in any                                                                    
     fashion   except   as   the  Legislature   chooses   to                                                                    
     appropriate  them.   If  the  Legislature   chooses  to                                                                    
     appropriate the  money, that fact  will appear  as part                                                                    
     of the notice  on the recipient's PFD  check stub. That                                                                    
     money  is just  like any  other money  in the  dividend                                                                    
     fund and the Legislature  can appropriate the money for                                                                    
     any  public  purpose.  If  it  does  so,  there  is  an                                                                    
     automatic  notice  that,  by law,  the  permanent  fund                                                                    
     division provides to the dividend recipients.                                                                              
SENATOR FRENCH asked  if PFD funds that felons  are ineligible to                                                               
receive are appropriated separately  to the domestic violence and                                                               
sexual assault programs.                                                                                                        
CHAIR  SEEKINS  said,  "It's just  automatically  deposited  over                                                               
SENATOR THERRIAULT clarified the money  shows up as a fund source                                                               
for those programs.                                                                                                             
SENATOR FRENCH asked if this bill would change that.                                                                            
MS.  COOK replied  SB  59  would change  the  fact  that, if  the                                                               
Legislature elects to take money  out of the dividend fund, there                                                               
will be  a notice  that appears on  individual's checks.  In that                                                               
sense, it will be a harder decision for the Legislature to make.                                                                
SENATOR FRENCH asked  if the dividend checks  didn't already show                                                               
all the deductions.                                                                                                             
MS. COOK said it does show that.                                                                                                
     To  the extent  that the  monies go  to the  authorized                                                                    
     uses that are  contained in this bill that  can be made                                                                    
     of the  PFDs of certain  criminals, there is  no notice                                                                    
     on  your   check  stub  of   those.  As  long   as  the                                                                    
     Legislature  appropriates only  the  amount that  would                                                                    
     have been paid  to certain criminals under  (d) who are                                                                    
     now ineligible, but no more  than that, and uses it for                                                                    
     only the designated uses that  have been set out in the                                                                    
     statute,  of  which  there   are  five  potential,  the                                                                    
     Legislature  is  free to  distribute  the  money as  it                                                                    
     chooses.  As long  as the  appropriation in  the budget                                                                    
     does  not exceed  this amount,  and is  only for  these                                                                    
     uses,  that  fact  will not  appear  on  your  dividend                                                                    
LARRY  PERSILY,  Deputy  Commissioner   with  the  Department  of                                                               
Revenue, testified  via teleconference  and noted for  the record                                                               
that he  tried to  testify on  SB 58  as well,  but the  line was                                                               
He voiced the  same concerns he did the last  time the bills were                                                               
heard. By  denying dividend elegibility  to more people,  the net                                                               
impact to  the Child  Support Enforcement  Division will  be that                                                               
more  custodial  parents will  not  receive  money due  to  them.                                                               
Oftentimes the dividend is the  only money the department is able                                                               
to collect on child support cases for the year.                                                                                 
SENATOR  THERRIAULT  asked for  verification  that  each year  he                                                               
might  get several  cents more  in his  dividend check  that came                                                               
from what would have been a convicted felon's check.                                                                            
MR. PERSILY replied that is correct.                                                                                            
LINDA  WILSON   from  the  Public  Defender   Agency  echoed  Mr.                                                               
Persily's comments about  the effect the law would  have. Many of                                                               
the individuals  the agency represents  are indigent and  the PFD                                                               
is their  primary source  of income. That  income pays  for child                                                               
support among other things and  a conviction for DUI would result                                                               
in  that money  being unavailable  for child  support. Oftentimes                                                               
the dividend is attached to  pay for other financial obligations,                                                               
which would go unpaid as well if the PFD could not be attached.                                                                 
Conviction for  a second  offense will  affect payments  for five                                                               
years. Both SB 58 and SB  59 will certainly reduce the ability to                                                               
attach PFDs to pay for  obligations that are currently covered by                                                               
the PFD.  Both bills will eliminate  the ability for money  to go                                                               
to the victims; instead that money  will go back into the PFD for                                                               
the eligible applicants to receive.  People that are convicted of                                                               
felonies and lose their PFDs  have their checks pass to earmarked                                                               
funds. Under this legislation, this  wouldn't be the case for the                                                               
person convicted of a DUI.                                                                                                      
SENATOR COWDERY said everyone that  gets a DUI conviction doesn't                                                               
pay  child  support. He  thought  many  do  keep up  their  child                                                               
support payments.                                                                                                               
MS. WILSON pointed  out that last year  the Legislature increased                                                               
the  penalties  for  DUI  significantly  and  this  would  be  in                                                               
addition  to  those  increased penalties.  Although  she  had  no                                                               
objection  to the  increased penalties,  she opined  it might  be                                                               
better to wait and see what  the effects of that legislation were                                                               
on deterrents. Those people might  have to forfeit their vehicle,                                                               
have  a  longer  term  for   license  suspension  and  have  more                                                               
difficulty  getting  their  license reinstated.  With  all  those                                                               
increases,  the loss  of the  PFD to  cover any  of the  expenses                                                               
would be an additional penalty.                                                                                                 
SENATOR COWDERY replied, "That's the intent."                                                                                   
MR. PERSILY reported that garnished  dividends comprised about 15                                                               
percent  of  the  Child  Support  Enforcement  Division's  entire                                                               
collection last  year and,  in total, more  than $60  million was                                                               
taken  from  dividend checks  for  child  support, state  student                                                               
loans, state  welfare fraud, unemployment fraud,  and for private                                                               
CHAIR SEEKINS  said Senator Cowdery probably  doesn't believe all                                                               
those people are going to get a DUI this year.                                                                                  
SENATOR COWDERY added, "Stiff penalties  is true, but when we put                                                               
more  jail  time,  that  costs  society  more  by  housing  these                                                               
SENATOR  THERRIAULT asked  how much  of the  $60 million  was for                                                               
personal garnishments.                                                                                                          
MR. PERSILY replied about $10 million  of the $60 million went to                                                               
private individuals or  creditors as opposed to  state or federal                                                               
There were no further questions or discussion.                                                                                  
SENATOR  THERRIAULT  made a  motion  to  move CSSB  59(JUD)  from                                                               
committee  with   individual  recommendations   and  accompanying                                                               
fiscal notes.                                                                                                                   
SENATOR ELLIS  objected. The  impact on  child support  and crime                                                               
victims  gave him  pause  and he  didn't want  to  move the  bill                                                               
forward at that time.                                                                                                           
SENATOR THERRIAULT withdrew his motion.                                                                                         
CHAIR SEEKINS held SB 59 in committee.                                                                                          
2:15 pm                                                                                                                       
CHAIR SEEKINS called for an at-ease.                                                                                            
2:19 pm                                                                                                                       
CHAIR SEEKINS  reconvened the hearing and  announced Senator Ogan                                                               
was unavailable to introduce SB 53  so the bill wouldn't be heard                                                               
that day.                                                                                                                       
There being  no further  business to  come before  the committee,                                                               
Chair Seekins adjourned the meeting at 2:20 p.m.                                                                                

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