Legislature(2003 - 2004)

03/11/2003 03:35 PM Senate STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
             SENATE STATE AFFAIRS STANDING COMMITTEE                                                                          
                         March 11, 2003                                                                                         
                            3:35 p.m.                                                                                           
MEMBERS PRESENT                                                                                                               
Senator Gary Stevens, Chair                                                                                                     
Senator John Cowdery, Vice Chair                                                                                                
Senator Fred Dyson                                                                                                              
Senator Gretchen Guess                                                                                                          
Senator Lyman Hoffman                                                                                                           
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                            
SENATE JOINT RESOLUTION NO. 7                                                                                                   
Expressing support  for Vancouver,  British Columbia's,  bid for                                                                
the 2010 Olympic Winter Games and the Paralympic Winter Games.                                                                  
     MOVED SJR 7 OUT OF COMMITTEE                                                                                               
SENATE JOINT RESOLUTION NO. 9                                                                                                   
Expressing  confidence in  and support  for all  members  of the                                                                
military,  their  families,  and  employers of  members  of  the                                                                
National Guard.                                                                                                                 
     MOVED CSSJR 9 (STA) OUT OF COMMITTEE                                                                                       
SENATE BILL NO. 65                                                                                                              
"An Act authorizing the  Department of Corrections to enter into                                                                
agreements  with  municipalities  for  new  or  expanded  public                                                                
correctional facilities in the Fairbanks North Star Borough, the                                                                
Matanuska-Susitna  Borough,  Bethel,  and  the  Municipality  of                                                                
     HEARD AND HELD                                                                                                             
SENATE BILL NO. 99                                                                                                              
"An  Act   expressing  legislative  intent  regarding  privately                                                                
operated correctional  facility space and  services; relating to                                                                
the development and financing of privately operated correctional                                                                
facility  space  and  services;  authorizing the  Department  of                                                                
Corrections to enter  into an agreement for  the confinement and                                                                
care of  prisoners in  privately operated  correctional facility                                                                
space; and providing for an effective date."                                                                                    
     HEARD AND HELD                                                                                                             
PREVIOUS ACTION                                                                                                               
SJR 7 - See Labor and Commerce minutes dated 3/4/03                                                                             
SJR 9 - No previous action to record.                                                                                           
SB 65 - See State Affairs minutes dated 2/20/03                                                                                 
SB 99 - No previous action to record                                                                                            
WITNESS REGISTER                                                                                                              
Mark Riehle                                                                                                                     
Staff to Senator Cowdery                                                                                                        
Alaska State Capitol, Room 101                                                                                                  
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Introduced SJR 7                                                                                          
Senator Con Bunde                                                                                                               
Alaska State Capitol, Room 506                                                                                                  
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Sponsor SJR 9                                                                                             
Senator Lyda Green                                                                                                              
Alaska State Capitol, Room 516                                                                                                  
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Sponsor SB 65                                                                                             
Mary Bowery                                                                                                                     
No address provided                                                                                                             
POSITION STATEMENT: Testified on SB 65                                                                                        
Frank Smith                                                                                                                     
No address provided                                                                                                             
POSITION STATEMENT: Testified on SB 65                                                                                        
David Katzeek                                                                                                                   
Alaska Native Brotherhood #2                                                                                                    
650 Glacier Highway                                                                                                             
Juneau, AK 99801                                                                                                                
POSITION STATEMENT: Testified on SB 65                                                                                        
Ron Swanson                                                                                                                     
Mat-Su Borough representative                                                                                                   
350 E. Dahlia                                                                                                                   
Palmer, AK 99645                                                                                                                
POSITION STATEMENT: Testified on SB 65                                                                                        
Ronald Wilson                                                                                                                   
3330 Sparrow Ct                                                                                                                 
Palmer, AK 99645                                                                                                                
POSITION STATEMENT: Testified on SB 65                                                                                        
Daniel Colang                                                                                                                   
4423 Woodriver Dr.                                                                                                              
Fairbanks, AK 99701                                                                                                             
POSITION STATEMENT: Supports SB 65                                                                                            
Dean Rand                                                                                                                       
No address provided                                                                                                             
POSITION STATEMENT: Testified on SB 65                                                                                        
Senator Con Bunde                                                                                                               
Alaska State Capitol, Room 506                                                                                                  
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Sponsor SB 99                                                                                             
Frank Prewitt                                                                                                                   
Cornell Company representative                                                                                                  
No address provided                                                                                                             
POSITION STATEMENT: Testified on SB 99                                                                                        
Marvin Wiebe                                                                                                                    
Senior Vice President Cornell Company                                                                                           
No address provided                                                                                                             
POSITION STATEMENT: Testified on SB 99                                                                                        
ACTION NARRATIVE                                                                                                              
TAPE 03-7, SIDE A                                                                                                             
CHAIR  GARY STEVENS  called  the Senate  State  Affairs Standing                                                              
Committee meeting  to order at  3:35 p.m.  Present were Senators                                                                
Hoffman,  Dyson and  Chair  Gary Stevens.  Senators Cowdery  and                                                                
Guess arrived momentarily.                                                                                                      
The first order of business was SJR 7.                                                                                          
          SJR  7-VANCOUVER'S BID FOR 2010 WINTER GAMES                                                                      
MARK  RIEHLE,  staff to  Senator  Cowdery  and  the World  Trade                                                                
Committee,  described SJR  7  as an  expression  of support  for                                                                
Vancouver British Columbia's bid for  the 2010 Olympic Games and                                                                
the Paralympic Games.  Vancouver is competing to  host the games                                                                
with   Pyeongchang,   Korea,    and   Salzburg,   Austria.   The                                                                
International Olympic Committee (IOC) will award the bid to one                                                                 
of the three cities in July 2003.                                                                                               
     If Vancouver is  successful, Alaska is  certain to see                                                                     
     economic  benefits. In  particular,  Alaska stands  to                                                                     
     benefit in  the tourism and  winter recreation sectors                                                                     
     due  to  overall  worldwide  exposure of  the  Pacific                                                                     
     Northwest region.  As an  example, the  entire Western                                                                     
     region of  the mainland U.S. received  an estimated $1                                                                     
     billion economic boost  from the 2000  winter games in                                                                     
     Salt Lake City.                                                                                                            
     Alaska  and  British  Columbia share  close  economic,                                                                     
     government, sporting, cultural and family ties along a                                                                     
     lengthy  common  border.  The  primary  goal  of  this                                                                     
     resolution is  to strengthen  these ties  through this                                                                     
     formal resolution of support.                                                                                              
     Passage of this resolution  will mean more than simple                                                                     
     neighborly    expression     of    support    because,                                                                     
     traditionally,   the   IOC   gives  weight   to   such                                                                     
     resolutions when making its bid determination.                                                                             
     It is  likely Alaskan  small business  owners-from bed                                                                     
     and breakfast establishments to microbreweries to fish                                                                     
     processors-will realize  the primary  economic benefit                                                                     
     of a  successful  2010 bid  by Vancouver  and Whistler                                                                     
SENATOR COWDERY asked him to elaborate on how Alaskan businesses                                                                
would benefit.                                                                                                                  
MR. RIEHLE replied small businesses would have the opportunity                                                                  
to distribute brochures.                                                                                                        
There were no further questions.                                                                                                
SENATOR DYSON made a motion to move SJR 7 from committee with                                                                   
individual recommendations and zero fiscal note.                                                                                
There being no objection, it was so ordered.                                                                                    
              SJR  9-SUPPORTING MEMBERS OF MILITARY                                                                         
CHAIR GARY  STEVENS asked  for a  motion to adopt  the committee                                                                
substitute (CS) for SJR 9 as the working document.                                                                              
SENATOR FRED DYSON made a motion to adopt CSSJR 9 (STA) \I Kurtz                                                                
3/7/03 version as the working document.                                                                                         
There being no objection, it was so ordered.                                                                                    
SENATOR CON  BUNDE, resolution  sponsor, urged the  committee to                                                                
join him in  an expression of confidence in  and support for all                                                                
members of  the military and their families  as they participate                                                                
in the defense of our country.                                                                                                  
The  committee substitute  reflects  title  changes for  General                                                                
Chandler and General Campbell.                                                                                                  
SENATOR JOHN COWDERY noted some Alaskans who are also members of                                                                
the military have had difficulty qualifying for a permanent fund                                                                
dividend after they return from active duty then leave the state                                                                
for  extended  vacations.  He  labeled  this  a  disservice  and                                                                
expressed hope the situation would be changed.                                                                                  
He made a motion to move CSSJR (STA) 9 \I version from committee                                                                
with individual recommendations and zero fiscal note.                                                                           
There being no objection, it was so ordered.                                                                                    
             SB  65-CORRECTIONAL FACILITY EXPANSION                                                                         
CHAIR GARY  STEVENS announced he  did not  intend to move  SB 65                                                                
from  committee  that day.  Senator  Green  introduced the  bill                                                                
during a  previous hearing  and he asked  if she  had additional                                                                
SENATOR  LYDA  GREEN,  bill   sponsor,  restated  the  need  for                                                                
additional prison  facilities in  the  state. The  proposed plan                                                                
offers  the opportunity  to  add to  existing  facilities, which                                                                
would consolidate services without adding new administration.                                                                   
She  noted  the amounts  referred  to  in  the  letter from  the                                                                
Department of Revenue and the figures shown on the Department of                                                                
Correction  fiscal  note  have   caused  confusion.  She  added,                                                                
"Revenue feels that the state might aught to be the person doing                                                                
the actual  bonding; whereas the communities feel  like they are                                                                
perfectly capable of doing that."                                                                                               
There were no questions for Senator Green.                                                                                      
CHAIR GARY STEVENS  noted there were a  number of people waiting                                                                
to testify.                                                                                                                     
MARY  BOWERY  testified via  teleconference.  She has  extensive                                                                
first  hand  knowledge  of  private  prisons  in  the  state  of                                                                
Tennessee. Following are points regarding a comparative study of                                                                
private and state prisons in Tennessee:                                                                                         
  ·  As per contract, only healthy  inmates were assigned to the                                                                
     private prison                                                                                                             
  · $4,000 medical cap per inmate per year in private prison                                                                    
  ·  Only medium  custody or  lower inmates assigned  to private                                                                
  · State prison required to have an emergency response team                                                                    
  ·  Private prison  was able  to fill  empty beds  with inmates                                                                
     from other states                                                                                                          
  ·  If Tennessee  inmates were  injured  by inmates  from other                                                                
       states, Tennessee was liable for the medical and legal                                                                   
  ·  The state was required to handle an escape from the private                                                                
    prison because the private prison had no legal jurisdiction                                                                 
     to handle the escape. State taxpayers were not reimbursed                                                                  
     for the expense                                                                                                            
  ·  The private  prison had a  turnover rate of 100  percent in                                                                
     two years with 62.9 percent in the first six months                                                                        
  ·  The private prison had more idle inmates because there were                                                                
          fewer jobs for inmates and fewer educational or                                                                       
     rehabilitation opportunities and programs                                                                                  
  ·  The  private  prison  had  increased  incident  reports  of                                                                
     violent acts                                                                                                               
CHAIR  GARY  STEVENS  asked  what  position she  held  with  the                                                                
Tennessee prison system.                                                                                                        
MS. BOWERY replied  she was a correctional counselor  III with a                                                                
wide range of jobs including parole work in a 400 inmate housing                                                                
There were no further questions for Ms. Bowery.                                                                                 
MR. FRANK  SMITH testified via  teleconference in support  of SB
65.  He has  worked  in  substance abuse  programs, has  visited                                                                
prisons  the world  over  and is  familiar  with the  facilities                                                                
Senator Green envisions. He advised he  sent the Chair a copy of                                                                
his recently  published chapter  on Native Americans  in private                                                                
The prison proposed in SB  65 is superior to the Whittier option                                                                
because  Sutton  has   far  better  access,   it  addresses  the                                                                
desperately  needed  expansions  to  the  Bethel  and  Fairbanks                                                                
prison,  and it  would present  a  great savings  to  the state.                                                                
Having been involved  in prison research for the  last 30 years,                                                                
he  felt  qualified  to  advise  members of  the  importance  of                                                                
bringing prisoners  closer to  home.  In fact,  "That connection                                                                
with family and  support systems in the  community is absolutely                                                                
the most  important thing in keeping Native  Alaskans from going                                                                
back to jail."                                                                                                                  
The Tennessee  study referred to in  earlier testimony indicated                                                                
that the state saved just  38 cents per prisoner per day. Guards                                                                
in the private  prisons were making very poor  wages compared to                                                                
state correctional officers  while the CEO's  in private prisons                                                                
were making about two thirds of a million dollars.                                                                              
CHAIR  GARY  STEVENS  announced  individual testimony  would  be                                                                
limited to five minutes.                                                                                                        
SENATOR  COWDERY asked  if  the cost  of  housing  prisoners was                                                                
MR. SMITH replied it is important.                                                                                              
SENATOR   COWDERY   asked   whether  the   State   could   build                                                                
competitively and  why exporting prisoners  rather than building                                                                
in Alaska wasn't an acceptable alternative.                                                                                     
MR. SMITH reiterated the importance of proximity to families for                                                                
inmates.  Also,  training  and   staff  stability  help  in  the                                                                
rehabilitative process and private prisons  have greater than 50                                                                
percent annual staff  turnover compared to less  than 15 percent                                                                
staff turnover in  public prisons. Admittedly it  may be cheaper                                                                
to  house inmates  in private  prisons outside  Alaska,  but the                                                                
conditions  in  some private  prisons  are  deplorable and  some                                                                
private contracts  have been  rescinded due to  poor conditions.                                                                
It's been suggested that moving  prisons to Mexico would be even                                                                
cheaper, but you get what you pay for.                                                                                          
SENATOR COWDERY  asked about  safety and  how many  escapees the                                                                
Arizona prison has had.                                                                                                         
MR. SMITH  cited the example in  which the court  found that six                                                                
Alaskan  inmates were  justified  in escaping  from the  Arizona                                                                
facility to get  away from bad conditions. The  court also found                                                                
the private prison had no legal authority to confine Alaskans in                                                                
SENATOR COWDERY  said  his informal  inmate poll  indicated most                                                                
inmates preferred to remain in Arizona.                                                                                         
MR. SMITH spoke  to an article in the  Anchorage Daily News that                                                                
tracked visiting  rates in  Arizona. It found  just four  of 825                                                                
Alaskan inmates  were getting regular  visits. Also, he  has 150                                                                
pages of affidavits from  Alaskan prisoners who were confined to                                                                
the  Central Arizona Detention  Facility in  Florence describing                                                                
two unimaginable guard riots.                                                                                                   
SENATOR COWDERY  said, "Well I  guess it's  our role to  get the                                                                
best  bang for  the buck  and it's  not our  role to  coddle our                                                                
prisoners  necessarily, but  they got  to be  treated  humane. I                                                                
don't want to waste any more time on this, thank you."                                                                          
There were no further questions of Mr. Smith.                                                                                   
MR. DAVID KATZEEK gave testimony in both Tlingit and English.                                                                   
     This particular bill, whether  it's private or whether                                                                     
     it's public-I would strongly encourage the legislators                                                                     
     to take a look at what  you have in your hands and ask                                                                     
     yourselves a  question. What  will  history say  of me                                                                     
     when I served  in the Legislature and  the majority of                                                                     
     the  people that  have been  placed in  prison  are my                                                                     
     people?  Building  prisons  doesn't really  solve  the                                                                     
     major  problem. Prisons  with  rehabilitative programs                                                                     
     and  projects are  the type  of things  that  can turn                                                                     
     things around.  You're talking about  money. If you're                                                                     
     talking about money then I would encourage you to take                                                                     
     a look  at the recidivism  rate and find  out how much                                                                     
     you're  getting   double  dipped  by   one  particular                                                                     
     prisoner  over and  over  and  over  again. The  other                                                                     
     question I would ask is, Are we living in an addictive                                                                     
     society where  we continue to  do the same  thing over                                                                     
     and over and over and over and over.... and over again                                                                     
     expecting different results  and yet  getting the same                                                                     
     kind of  results over  again? And then  somebody comes                                                                     
     and says, "Let's build another prison."                                                                                    
     Have you  heard a  little baby  crying whose  daddy is                                                                     
     incarcerated and who maybe started off in getting into                                                                     
     trouble by drinking?  Put yourself in  the position of                                                                     
     that  individual. Have  you  heard the  kid  crying in                                                                     
     prison whose grandmother passed away whose grandfather                                                                     
     passed away that  they can't go  and see? I  am not in                                                                     
     favor of  the state  building facilities  where you're                                                                     
     going  to  have  a  state  run  program  where  you're                                                                     
     listening to a  special interest group  and believe me                                                                     
     when I'm saying this, that special interest group will                                                                     
     be following me  and looking at me  because I'm saying                                                                     
     something that's contrary to what the general rule is.                                                                     
     I'm here to plead with you noble people. You are noble                                                                     
     people just like I  am and just like those individuals                                                                     
     that are placed in prison. I ran a brief demonstration                                                                     
     that  I would  call  a beta-tested  program  using our                                                                     
     Tlingit  culture  and  how   we  interacted  with  one                                                                     
     another. I called the prisoners  that I met with-and I                                                                     
     was doing this voluntarily  with respect to the Alaska                                                                     
     Native Brotherhood Camp II-and I  called them Aan Yuxu                                                                   
     Saani. I  called them noble  people. Those individuals                                                                     
     that were  incarcerated went back  to their counselors                                                                     
     and other  people and  said, "You  know what  this guy                                                                     
     called us?  Noble." They  were  white guys.  They were                                                                     
     saying,  "Nobody had  ever  called  us noble  before."                                                                     
     Tears running down their face.  Some of these guys are                                                                     
     now out  providing for  their families and  doing good                                                                     
     work. The point I'm  making to you is building prisons                                                                     
     is not necessarily the solution. Building prisons with                                                                     
     respect to institutions that  will allow us to develop                                                                     
     the  kind of  programs-Why  do I  say  us?  I'm saying                                                                     
     Native people.  When we become  responsible, as Native                                                                     
     people, for  our own people,  we are  beginning to get                                                                     
     healed. So  what  will history  say of  you?  That you                                                                     
     built a  big prison over  in Fairbanks that  didn't do                                                                     
MR.  KATZEEK said this  is  the third  year he  has come  to ask                                                                
legislators to  look beyond  the  bars and  cement to  the human                                                                
beings. Although it  is difficult to talk about  prisons for his                                                                
people, he came  to testify because he loves  his people. He can                                                                
see and feel and understand the  rage of his or any people whose                                                                
traditional lifestyle is so changed, but building bigger prisons                                                                
isn't the  answer. "Look for prisons  that will be  able to meet                                                                
the need  that history will  record that you  had compassion and                                                                
mercy on your fellow man."                                                                                                      
CHAIR GARY  STEVENS thanked  Mr. Katzeek  for his  testimony and                                                                
asked if there were any questions.                                                                                              
SENATOR COWDERY  commented that  about one  third of  the Alaska                                                                
Native inmates  he met in  Arizona had  committed crimes against                                                                
Caucasians and  about  two thirds  had committed  crimes against                                                                
other Alaska Natives. He  said, "A crime is a  crime and you can                                                                
have  compassion but  I,  you  got to  have  compassion for  the                                                                
victims and the victims families too."                                                                                          
MR. KATZEEK  replied he  was pleased  Senator Cowdery  said that                                                                
because  it  "documents  the  frustration  with  respect  to  an                                                                
individual in their community who can't provide with dignity for                                                                
their families."                                                                                                                
SENATOR COWDERY responded, "Whose fault is that now?"                                                                           
MR.  KATZEEK replied  there  are  a variety  of  issues such  as                                                                
subsistence  and  limited  entry  that  make  it  difficult  for                                                                
individuals to provide. To  solve that he would say,  "You are a                                                                
human being and the most  important thing in being a human being                                                                
is to  be able  to listen  attentively to  your spirit,  to your                                                                
heart, to  your sole, to your  mind. And work from  being who we                                                                
are  as  people.  That  doesn't  forgive the  person  for  doing                                                                
something that's wrong. That's acknowledging a human being, like                                                                
you acknowledged  me today. I  really appreciate it  because you                                                                
recognized  me, you  acknowledged  me and  you  accepted me.  It                                                                
doesn't mean that you agree  with what I'm saying, but the honor                                                                
of letting  me sit here  regardless of where  I come from  or my                                                                
background  is  a  principle   in  any  human  relationship  and                                                                
There were no further questions for Mr. Katzeek.                                                                                
CHAIR GARY STEVENS called Ron Swanson to testify.                                                                               
MR. RON  SWANSON, community development director  for the Mat-Su                                                                
Borough,  testified the  borough  assembly  passed a  resolution                                                                
supporting municipal  owner state  operated prisons  on February                                                                
18,  2003. The  development  of newer  and  expanded prisons  in                                                                
Alaska  municipalities  would   benefit  Alaskans  by  providing                                                                
construction  and  permanent  year  around  prison  jobs.  Also,                                                                
housing  prisoners in  the  state would  allow  prisoners to  be                                                                
closer  to   their  families  and  culture   and  would  enhance                                                                
The  Mat-Su Borough  has  three correctional  facilities with  a                                                                
total of 585 beds. The Palmer Correction Facility at Sutton, the                                                                
Mat-Su  Pretrial Facility  in  Palmer, and  the  Point MacKenzie                                                                
Facility have provided stable and well paying jobs for Alaskans.                                                                
The  Sutton Facility would  be  expanded to  1,200 beds  and was                                                                
originally  planned and  constructed with  enough  land for  the                                                                
expansion. The combination of the prison expansion, an increased                                                                
recreation and tourism base at  Hatcher Pass, and a new regional                                                                
hospital and mental health  facility would diversify the borough                                                                
The Department of Corrections would operate the facilities under                                                                
long-term lease agreements with  local boroughs and cities. Tax-                                                                
exempt revenue bonds would be used to finance the facilities and                                                                
would be secured by  assignment of lease payments payable to the                                                                
boroughs  and cities.  Bond proceeds  would be  used  to finance                                                                
construction and  expense to  issue the  bonds. The  state would                                                                
have  responsibility   for  design   and  construction   of  the                                                                
facilities through construction management agreements. As owners                                                                
of the  facilities, cities  and boroughs would  accept liability                                                                
not covered by insurance.                                                                                                       
There were no questions asked of Mr. Swanson.                                                                                   
MR.  RONALD WILSON  stated  he  has been  a  state employee  and                                                                
corrections officer for  over 19 years, but  he was representing                                                                
himself.  He  said private  prisons  have  not  proven they  can                                                                
provide  correctional services  more cheaply  than  their public                                                                
counterpart and  any private  prison cost savings  comes through                                                                
reduced staff expenses. Public employees have background checks,                                                                
psychological  evaluations,  attend and  pass  the  correctional                                                                
officer   academy,  and   meet  Alaska   Pay   Standard  Council                                                                
requirements. He  asked, "If your  going to place twice  as many                                                                
inmates  in one  facility  as  you have  ever  done before,  why                                                                
wouldn't  you  want the  staff  in  that  facility to  meet  the                                                                
requirements that [correction] officers now have to meet?"                                                                      
SIDE B                                                                                                                          
4:25 pm                                                                                                                         
He quoted  findings from several studies  that indicated private                                                                
prisons  did  not  measure   favorably  compared  to  state  run                                                                
facilities and outlined specific examples of private failures in                                                                
There were no questions asked of Mr. Wilson.                                                                                    
MR. DANIEL  COLANG expressed support for  SB 65. He  said he has                                                                
been employed by Department of Corrections for eleven years, but                                                                
the views expressed were his own.                                                                                               
His father,  a World  War II  veteran, always encouraged  him to                                                                
vote because thousands  of Americans died on  the battlefield to                                                                
safeguard  that  right.  Because  Alaskans  have  voted  against                                                                
private prisons two times, he  asked the committee to honor that                                                                
There were no questions asked of Mr. Colang.                                                                                    
MR.  DEAN  RAND,  long  term  Whittier resident,  testified  via                                                                
teleconference that  he was not  in favor of  locating a private                                                                
prison in Whittier.                                                                                                             
CHAIR GARY STEVENS advised the committee was hearing SB 65.                                                                     
MR. RAND  said he  realized that and  he just wanted  members to                                                                
have a  more accurate picture regarding the  amount of community                                                                
support  for  a  private  prison  in Whittier  because,  Cornell                                                                
Company  has   "steamrolled  into  and  over   the  citizens  of                                                                
Whittier." Community support for a private prison in Whittier is                                                                
"questionable at best."                                                                                                         
There was no further testimony on SB 65.                                                                                        
CHAIR GARY  STEVENS announced he  would hold SB 65  in committee                                                                
until Thursday. If members agreed, it  was his intention to move                                                                
the bill from committee at that time.                                                                                           
SENATOR GUESS asked whether public testimony was closed or would                                                                
it be taken on Thursday.                                                                                                        
CHAIR GARY  STEVENS advised public  testimony could be  given on                                                                
                 SB  99-CORRECTIONAL FACILITIES                                                                             
SENATOR CON BUNDE, bill sponsor, advised some Whittier residents                                                                
asked him to offer the bill as one possible alternative of doing "if                                                            
not more, at least the same for less." He paraphrased from the                                                                  
sponsor statement:                                                                                                              
          Senate  Bill  99  authorizes  the  Department  of                                                                     
          Corrections to enter  into an  agreement with the                                                                     
          City  of  Whittier  for   a  1,200  bed  [medium]                                                                     
          security correctional facility and services for a                                                                     
          period of 25 years.                                                                                                   
          Alaska  needs  a  new  prison  and  the  ultimate                                                                     
          question is  whether the prison  is in  Alaska or                                                                     
          another state. Currently the  state prison system                                                                     
          is operating over capacity  and the population is                                                                     
          projected to rise.                                                                                                    
          Given the current fiscal  challenge in the state,                                                                     
          a private prison offers the best value for scarce                                                                     
          dollars.   In   addition  to   being   the   only                                                                     
          economically  viable  choice, building  a  prison                                                                     
          will   bring   benefit   to   the   state,   both                                                                     
          economically  and  socially.  Previous  testimony                                                                     
          demonstrates  the  benefit  of  having  prisoners                                                                     
          closer to their families and other support.                                                                           
          SB 99 will provide investment for future economic                                                                     
          growth  by  creating  more than  500  direct  and                                                                     
          indirect union  scale construction jobs  and more                                                                     
          than 450 permanent, direct and indirect, jobs for                                                                     
          Alaskans  associated with  prison  operations for                                                                     
          the 25 year lease authorized by the legislation.                                                                      
          By  locating   the   prison  in   Whittier,  that                                                                     
          community  will   have  an  anchor   industry  to                                                                     
          generate   vital   economic   benefits   for   an                                                                     
          economically disadvantaged rural community.                                                                           
          A majority  of Whittier residents, maybe  not the                                                                     
          most vocal  but the  majority, have  indicated at                                                                     
          least to me their support for a private prison in                                                                     
          their community.                                                                                                      
          I think  SB 99  makes sense for  Alaska's economy                                                                     
          and her citizens and would encourage your careful                                                                     
          scrutiny and support.                                                                                                 
SENATOR LYMAN HOFFMAN referred to the construction cap placed on                                                                
SB 65 and asked why there was no such cap in SB 99.                                                                             
SENATOR BUNDE wasn't  sure why a cap would  be placed on private                                                                
SENATOR  JOHN COWDERY  asked  if the  prison  would be  financed                                                                
through bonds.                                                                                                                  
SENATOR BUNDE replied that's his understanding.                                                                                 
SENATOR COWDERY  noted bonds  are carefully scrutinized  to make                                                                
sure they would be paid back.                                                                                                   
SENATOR BUNDE  said  the question  is moot  if the  bonds aren't                                                                
There were no further questions asked of Senator Bunde.                                                                         
MR. FRANK  PREWITT advised he  was a former  commissioner of the                                                                
Department of Correction with about  20 years in public service.                                                                
SB 99  proposes a  city owned,  but privately managed  1,200 bed                                                                
prison  that  is  founded   upon  the  same  sound  correctional                                                                
practices as  the  state run  facility proposed by  SB  65. Both                                                                
capture efficiency through design and  economy of scale and both                                                                
are located  where construction costs are  relatively low, where                                                                
wages and  benefits are the lowest  in the state,  and within 50                                                                
miles  of  the  most  sophisticated and  plentiful  fire,  life,                                                                
safety, program, housing and human resources in the state.                                                                      
Management and cost are  the substantive differences between the                                                                
proposals. Private  contractor, Cornell Companies,  would manage                                                                
the Whittier prison while Sutton would be operated by the state.                                                                
Daily capital and operating costs  at Sutton are estimated to be                                                                
$110 per  prisoner while  Whittier costs would  be just  $94 per                                                                
prisoner  per  day.  The  $94  includes inmate  programs,  major                                                                
medical,  staff  recruiting  and  training, equipment,  facility                                                                
maintenance and  all other  capital and operating  expenses. The                                                                
only cost above the  $94 would be transportation of prisoners to                                                                
the prison and the  cost to monitor the contract. The Department                                                                
of Corrections  transports prisoners between facilities  and the                                                                
State Troopers take prisoners to court.                                                                                         
The  perception that  SB 65  and SB  99 are  competing  bills is                                                                
incorrect and neither bill standing  alone will solve the prison                                                                
bed  shortage issue.  The Department  of Corrections  projects a                                                                
need for over  1,600 prison beds by 2006. For  the last 20 years                                                                
there has been need for  an additional 200 prison beds each year                                                                
and there  is nothing to  suggest that  will change in  the near                                                                
If the Whittier prison is  authorized this year, the doors could                                                                
open in two years while the Sutton prison wouldn't open for four                                                                
or five  years. "It's a  simple matter of  timing and inflation.                                                                
The two bills don't  compare; nor do they compete." The Whittier                                                                
proposal is the only  immediate in-state solution, but a project                                                                
such as the  Sutton proposal and a  modest expansion of regional                                                                
jails needs to be in place to fix the long-term shortage.                                                                       
Governor Murkowski said his primary  mission is good paying jobs                                                                
and reducing government spending and growth. The Whittier prison                                                                
accomplishes all those objectives. Wages  and benefits are lower                                                                
than with  the state, but  they are "good,  solid private sector                                                                
wages and benefits." The facility costs less because the private                                                                
sector  has a  different overhead  structure and  can  build for                                                                
He referred to the cost comparison table  in tab 3 of the "State                                                                
of Alaska Projected Prison Bed  Demand & Cost Analysis" booklet.                                                                
After comparing the costs, he  asked members to review the March                                                                
6,  2003 "Whittier  Prison  Project Economic  Impact" report  by                                                                
economist, David Reaume. Mr. Reaume argues the economic stimulus                                                                
and  benefit  to the  state  exceeds  the  extra expenditure  of                                                                
housing Alaska prisoners in state.                                                                                              
Alaska  Natives represent  close  to 40  percent  of the  prison                                                                
population in  Alaska yet  SB 99  is the only  bill that  has an                                                                
express provision in  the body of the  law to provide culturally                                                                
relevant  programs for  Natives.  Cornell Companies  has made  a                                                                
commitment to  team with  the Native  community to  provide this                                                                
type of programs for Native offenders                                                                                           
SENATOR HOFFMAN said Native inmates in the Arizona prison report                                                                
the  culturally  relevant programs  were  not  working. To  have                                                                
potlatches, they are  required to raise private  funds, but they                                                                
receive no  cooperation when they  ask for an  accounting of the                                                                
funds raised. He  asked if such practices would take  place if a                                                                
private facility were built in Alaska.                                                                                          
MR. PREWITT replied  Corrections Corporation of America operates                                                                
the facility  in Arizona  and Cornell  Companies is  a different                                                                
company. Cornell Companies recognizes that nothing has been done                                                                
to  curb  the   incarceration  and  recidivism  rate  of  Native                                                                
Alaskans. It is their  intention to involve the Native community                                                                
by teaming with Native corporations to explore new ways of doing                                                                
business because the old ways have not worked.                                                                                  
SENATOR COWDERY  asked if Cornell Companies  would be interested                                                                
in bidding  for the  design, construction  and operation  of the                                                                
prison proposed in SB 65.                                                                                                       
MR. PREWITT  replied, "If you're suggesting  that the Department                                                                
of Corrections  could put  out a  competitive bid to  design and                                                                
operate a  facility at Sutton  rather than having that  be state                                                                
operated,   that's   something   that  Cornell   Companies   and                                                                
Corrections Corporation  of America and  several other companies                                                                
most assuredly would respond to it."                                                                                            
4:50 pm                                                                                                                         
CHAIR GARY  STEVENS noted members had other  commitments at 5:00                                                                
pm and announced the hearing would be continued on Thursday.                                                                    
SENATOR GUESS asked whether pharmaceuticals were included in the                                                                
major medical program.                                                                                                          
MR.  PREWITT  replied pharmaceuticals  were  included; there  is                                                                
confusion over  the cost and  "the fiscal note  attached to this                                                                
House  [Senate]  bill is  the  result  of  their [Department  of                                                                
Corrections] analysis of the  contract between Cornell Companies                                                                
and the City  of Whittier as well as the  intent language in the                                                                
bill itself where the intent language says, 'similar services to                                                                
Arizona'  when Arizona  major  medical  pharmaceuticals are  not                                                                
included in  that. It is our  intent that they  are included. We                                                                
tried  to address  that  in the  'not  to exceed  $94' per  diem                                                                
language.  As for  the  contract with  Whittier,  that's in  the                                                                
process. That  particular contract  was  based upon  last year's                                                                
legislation, which was different."                                                                                              
SENATOR GUESS  referred to  language in Section  2, subparagraph                                                                
(A) regarding  adjusting per diem  cost that states,  "costs not                                                                
incurred  until  full  occupancy;"  and  asked  whether  he  was                                                                
familiar with that clause.                                                                                                      
MR. PREWITT  said that is  a "ramp  up" provision and  Mr. Wiebe                                                                
from Cornell Companies could provide an explanation.                                                                            
CHAIR GARY STEVENS asked Mr. Prewitt, Mr. Wiebe, Mr. Butler, Mr.                                                                
Wilson, Mr. Burnett and Mr. Wright whether they would be able to                                                                
attend the  Thursday hearing. After  receiving affirmative nods,                                                                
he announced there was time for a few more questions.                                                                           
SENATOR GUESS  said her previous  question could wait.  She then                                                                
asked,  "Who decides  which  type  of prisoners  would  be in  a                                                                
private  facility   and  which  type   would  be  in   a  public                                                                
[facility]?" She was  more concerned with how  and where inmates                                                                
with significant and critical medical conditions such as HIV and                                                                
cancer would be assigned.                                                                                                       
MR. PREWITT wanted Mr. Wiebe to respond.                                                                                        
SENATOR GUESS said she could wait for an answer until Thursday.                                                                 
MR. PREWITT  replied it is  up to the  Department of Corrections                                                                
when prisoners  are assigned to  and removed from  the facility,                                                                
but certainly a contractor wouldn't want a population with a 100                                                                
percent disability.                                                                                                             
SENATOR HOFFMAN asked whether he had reviewed the 3/10/03 fiscal                                                                
note provided with SB 99.                                                                                                       
MR. PREWITT replied  they had reviewed the fiscal  note from the                                                                
Department of Corrections that had  a number "somewhere over $50                                                                
SENATOR HOFFMAN asked if they agree with the findings.                                                                          
MR. PREWITT  replied they do not  agree. "The $94  per diem rate                                                                
includes  all  costs  to  the  Department of  Corrections  as  I                                                                
testified except for the cost to  bring the prisoner to the door                                                                
and monitor the contract. $94 a day times 1,200 times 365 is $41                                                                
million." The  Department of  Corrections  and the  bill sponsor                                                                
need to dialog.                                                                                                                 
SENATOR  HOFFMAN advised  he could  save his  questions  for the                                                                
Finance Committee if that was the wish of the Chair.                                                                            
CHAIR  GARY  STEVENS replied  he  would  prefer  that he  direct                                                                
finance questions to that committee.                                                                                            
There were no further questions of Mr. Prewitt.                                                                                 
MR.  MARVIN  WIEBE,  Senior  Vice  President Cornell  Companies,                                                                
introduced his  company as a  partner with state  departments of                                                                
correction. They  compete for  contracts with  their competitors                                                                
and, as in this  instance, with state correction departments. As                                                                
a company they try to meet the particular needs of each state.                                                                  
Cornell Companies  has been  in business a  number of  years, is                                                                
traded  on  the   NYSE,  and  has  about   16,000  people  under                                                                
supervision in 14 different states and the District of Columbia.                                                                
They  have operated  in Alaska  since  1998 and  have  160 staff                                                                
members  that  supervise  nearly  600  offenders  in  prison  or                                                                
community residential  centers. They  have been  working closely                                                                
with the  Alaska Native  Brotherhood to  focus on  Native Alaska                                                                
programs. Alcoholism  is much more  difficult to solve  than any                                                                
other addiction problems and is particularly difficult in Native                                                                
cultures. It is  a major issue and they need  the help of Alaska                                                                
Natives to provide  meaningful, helpful, and culturally relevant                                                                
There was no further testimony on SB 65.                                                                                        
CHAIR GARY STEVENS held SB 65 in committee.                                                                                     
There being  no further business  to come  before the committee,                                                                
Chair Gary Stevens adjourned the meeting at 5:00 pm.                                                                            

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