SENATE BILL NO. 97 "An Act relating to fees for probation and parole." This was the second hearing for this bill in the Senate Finance Committee. Senator Ward, the bill's sponsor, explained that this legislation was initially heard by the Committee during the first session of the Twenty-Second Legislature; however, he stated, the bill was held in Committee in order to determine how many states charge fees to individuals on probation or parole; to determine fee collection methods; and to determine the cost of administering the program. Senator Ward informed the Committee that Alaska is the lone state not charging probation and parole fees, and he commented that the proposed committee substitute contains a provision that would allow the State to contract with a private business to manage the fee collection process. WILLIAM GILBODI, President, Gragil Associates, Inc. testified from an offnet site and informed the Committee that the company, which is an accounts-receivable management firm located in Rockland, Massachusetts, has been managing the billing and collecting of fees for the state of Vermont, Department of Corrections, since 1997. He explained that the company's contract with Vermont provides for such things as: supervision fees; victim assistance and compensation; victim restitution; transportation; and general fund fines. He stated that the contract includes a 13.3 percent contingency fee that is charged to the individuals on probation rather than to the state. He explained that the contingency fee is added to the monthly fees of the probationer, and if the monthly fee is paid within 30 days of receipt, the contingency fee is waived. He stated that the actual fee cost to probationers averages approximately nine percent. Senator Ward asked the testifier to explain the process whereby the company is authorized to attach probationers' tax refunds for non- payment of fees. Mr. Gilbodi informed the Committee that this is the first year that authorization was granted to attach probationer's tax refunds, and he attested the process has been successful. Senator Ward avowed that, were this legislation enacted, the State's delinquent balances could be collected through attaching probationers' Permanent Fund Dividends. Senator Ward asked the testifier whether the collection process is working well in the state of Vermont. Mr. Gilbodi informed the Committee that Vermont's 2001 recovery rate was 70 percent, and he reported that the recovery rate should increase as a result of the authorization to attach Income Tax Refunds for delinquent balances. He furthered that the company has recently implemented a credit bureau reporting system that should provide additional recovery rate increases. Senator Ward informed the Committee that the Alaska Department of Corrections has a current successful collection rate of ten percent. Co-Chair Donley reminded the Committee that representatives of the Executive Branch recently testified to the Committee that the State's collection rate is approximately 30 percent. He declared that he considers this number to be "extremely low" as the Department is authorized to attach individuals' Permanent Fund Dividends. He asserted that the successful collection rate demonstrated by the testifier's company affirms that the collection rate should be higher, and he suggested that perhaps a private institution rather than the Department of Corrections could provide better collection management. Senator Ward stated that the testifier's company, and others, would submit proposals were this legislation enacted. Co-Chair Kelly reminded the Committee that the Version "C" committee substitute has not yet been adopted as a working draft. SFC 02 # 45, Side B 05:02 PM AT EASE 5:02 PM /5:06 PM LINDA WILSON, Deputy Director, Public Defender Agency, Department of Administration, testified from an offnet site to express that the bill mandates the establishment of separate parole and probation fees, and she stressed that this would require an individual, on parole and probation at the same time, to incur duplicate fees. She asked the Committee to address whether the intent of the legislation is to collect dual fees, and she detailed situations wherein a person could be simultaneously on parole and probation, yet report to a single probation officer. She stressed that the proposed language would result in duplication of efforts that would negatively affect the Courts, the individual, and the Parole Board. She urged the Committee to revise the language to specify that a single fee would apply to individuals in this situation. Senator Ward stated that the bill currently contains mechanisms to safeguard against the testifier's valid concern; however, the Court could decide that dual fees were necessary. He added that some states charge up to 26 different fees to individuals on probation or parole, primarily, he continued, as a means to offset the cost of providing parole and probationary programs. AT EASE 5:10 PM / 5:17 PM Co-Chair Kelly announced that this bill would be SET ASIDE and re- addressed later in the meeting. SENATE BILL NO. 97 "An Act relating to fees for probation and parole." [This bill was heard earlier in the meeting.] Senator Ward moved to adopt committee substitute Version "C" as a working draft. There being no objection, CS SB 97(FIN), Version 22-LS0338\C was adopted as a working draft. ROBERT BUTTCANE, Legislative & Administrative Liaison and Juvenile Probation Officer, Division of Juvenile Justice, Department of Health and Social Services, voiced that the Department is opposed to probation fees that would affect individuals served by the Department. Ms. Wilson commented that the Version "C" committee substitute is not available at the off-net site; however, she noted that Section 7 of Version "A" "indicates that the Parole Board shall revoke the parole of a parolee who defaults on a payment." She asked the Committee to consider an amendment to change the word "shall" to "may" in order for the Parole Board to have an option in the situation. Senator Ward asserted his intent that the Parole Board should not have the option of eliminating fees. Ms. Wilson explained that if the Court has the ability to impose a probation fee as specified in Section 6 of Version "A," then provisions should be included to allow the Court the discretion to revoke probation. She stated that Section 7 of Version "A" limits this ability to the discretion of the Parole Board. She reiterated that she does not have access to a copy of Version "C" and apologizes if she is reading outdated language. Co-Chair Kelly stated that Section 4(a) of Version "C" contains language that states, "A Court granting probation, as defined in AS 33.05.080, shall require a periodic probation fee to be paid to the Department of Corrections as a condition of probation based on ability to pay." He surmised that this language allows the Court to regulate whether it would be appropriate to "double up" on the fines of the parolee. Ms. Wilson agreed, but clarified that the bill contains two different provisions: one that concerns probation and another that concerns parole. She stressed that "the Court does not get involved in parole, and Section 7 refers to the Parole Board." Senator Ward moved to report the "Committee Substitute for Senate Bill Number 97, Version 'C' out of Committee with individual recommendations and accompanying note." Senator Hoffman objected, and asked whether the adoption of Version "C" would have any affect on the accompanying fiscal notes. Senator Ward responded that while he does not agree with the accompanying fiscal notes, they are applicable to Version "C." A roll call was taken on the motion. IN FAVOR: Senator Leman, Senator Ward, Senator Wilken, Senator Austerman, Senator Green, Co-Chair Donley, Co-Chair Kelly OPPOSED: Senator Hoffman, Senator Olson The motion to report the bill from Committee PASSED (7-2) CS SB 97(FIN) was REPORTED from Committee with a Department of Health and Social Services fiscal note in the amount of $214,400 dated February 22, 2002, a Department of Corrections fiscal note, dated March 1, 2002 in the amount of $16,600, and a Department of Administration zero fiscal note dated April 1, 2002.