HOUSE BILL NO. 366 am "An Act relating to an exemption from public disclosure of certain appropriations from the dividend fund; relating to execution upon permanent fund dividends by civilian process servers using electronic procedures; amending Rule 89, Alaska Rules of Civil Procedure; and providing for an effective date." REPRESENTATIVE HARRY CRAWFORD, Sponsor, explained that a number of years ago the law was changed so that incarcerated felons and multiple misdemeanants could not collect a Permanent Fund Dividend. Unfortunately, it prevented their children who were owed child support from receiving it. This bill ensures that those children will not lose out on their child support. Most children of incarcerated parents have a child support order that is $50 per month. The majority of the time the parents' only assets are the PFD's. The bill also provides for electronic delivery of writs by the Department of Revenue. 10:35:58 AM Co-Chair Stedman asked if the bill would direct the PFD of a parent that is incarcerated to the child. Representative Crawford explained that it would require the Department of Revenue to estimate the amount of the child's PFD and allow the child to receive child support payments. The bill is subject to appropriation by the legislature. Senator Thomas wondered about the order of dispersal of the PFD for incarceration costs to the Department of Correction and the Department of Public Safety. He wondered how much would be left over for child support payments. Representative Crawford replied that the bill simply puts the children back on the list to be able to receive payments. It does not make an appropriation. Representative Crawford reported that this year it was estimated that there would be about $16 million for incarceration costs. He said there were about 5,000 children, of which about 2,000 would be eligible. He thought that there would be money left over. 10:39:07 AM JERRY BURNETT, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF REVENUE, reported on currently calculated PFD felon funds. There were about 10,188 people who did not qualify for their dividend as a result of incarceration, which represented about $16,800 in the FY 09 budget. AT-EASE: 10:39:57 AM RECONVENED: 10:40:47 AM Mr. Burnett continued to explain that currently the money is all appropriated to the Department of Corrections and to the Department of Public Safety's Council on Domestic Violence and Sexual Assault. With the passage of the bill, PFD felon funds would potentially be available for grants to children of incarcerated parents. Mr. Burnett reported that next year when the FY 2010 budget is compiled, the Department of Revenue would estimate how many children are not in foster care or are wards of the state and whose parents would have received a PFD absent their incarceration, and bring a budget request for that amount. He guessed that next year's felon funds would be about $21 million to $22 million. He said that half of the felons who are incarcerated have child support orders. It is estimated that next year less than 2,000 children would be eligible for the support, which would require about $4 million to replace garnished dividends. Co-Chair Stedman said the fiscal notes show zero. Mr. Burnett said they were zero because the effect of the bill only allows the appropriations from the PFD felon fund to be made. The fiscal notes do not show appropriations. 10:43:52 AM Senator Thomas asked if the legislature would appropriate money for purposes of child support. He wondered how much would be available after the other appropriations are made. Mr. Burnett explained that the monies can be spent for anything on the list without disclosure on the PFD as a reduction to peoples' dividends. The bill allows for a specific appropriation request for a child support grant program. He related that the appropriation request could be made in several ways. He gave an example of how it could be done. 10:45:47 AM Mr. Crawford explained that the bill allows child support payments to be back on the list. No one expected to pay for items in the felon's fund to come off of the backs of children. It was an unintended consequence. Senator Olson asked if the incarcerated person has access to the money. Representative Crawford said they did not. Senator Thomas said he was supportive of the bill. Representative Crawford explained that child support orders are number one in line for garnished wages in all other instances. Co-Chair Stedman noted that the fiscal notes need to be cleared up. HB 366 was heard and HELD in Committee for further consideration. 10:49:06 AM HOUSE BILL NO. 366 am "An Act relating to an exemption from public disclosure of certain appropriations from the dividend fund; relating to execution upon permanent fund dividends by civilian process servers using electronic procedures; amending Rule 89, Alaska Rules of Civil Procedure; and providing for an effective date." Co-Chair Stedman referred to the revised Department of Corrections fiscal note which has been changed from a zero note to an indeterminate note. He referred to the second paragraph on the fiscal note which states, "In FY 2009 approximately $9.1 million of the $31 million Inmate Health Care budget is PFD Criminal Funds. If in the future the legislature chooses to reduce the current level of PFD Criminal Funds appropriated to the Department of Corrections, a General Fund appropriation equal to the reduction would be requested to maintain inmate health care services." It would be up to the legislature to decide what would be appropriated annually. 3:45:31 PM Representative Crawford estimated the amount of felon funds for the coming year to be $21 to $22 million. The amount for inmate care will increase, but there should be more than enough funds to handle the child support request. That amount can't be known until the number of children are accounted for. He maintained that it could be about $4 million and there should be enough available. 3:46:38 PM Senator Elton MOVED to REPORT HB 366 am from Committee with individual recommendations and accompanying fiscal notes. There being NO OBJECTION, it was so ordered. HB 366 am was REPORTED from Committee with "no recommendation" and with a new indeterminate fiscal note from the Department of Corrections and a previously published zero fiscal note from the Department of Revenue. 3:47:35 PM