HOUSE FINANCE COMMITTEE January 18, 2001 1:39 PM TAPE HFC 01 - 14, Side A TAPE HFC 01 - 14, Side B TAPE HFC 01 - 15, Side A TAPE HFC 01 - 15, Side B CALL TO ORDER Co-Chair Mulder called the House Finance Committee meeting to order at 1:39 PM. MEMBERS PRESENT Representative Eldon Mulder, Co-Chair Representative Bill Williams, Co-Chair Representative Con Bunde, Vice-Chair Representative Eric Croft Representative John Davies Representative Carl Moses Representative Richard Foster Representative John Harris Representative Bill Hudson Representative Ken Lancaster Representative Jim Whitaker MEMBERS ABSENT None ALSO PRESENT Representative Gretchen Guess; Representative Kevin Meyer; Representative Joe Green; Bruce Botelho, Attorney General, Department of Law; Dean Guaneli, Chief Attorney General, Criminal Division, Department of Law; Kathryn Daughetee, Director, Administrative Services Division, Department of Law; Dianne Barrans, Executive Director, Postsecondary Education Commission, Department of Education & Early Development; Sheila King, Finance Officer, Postsecondary Education, Department of Education & Early Development; Stephanie Cole, Administrative Director, Alaska Court System; Chris Christensen, Staff Counsel, Office of Administrative Services, Alaska Court System; Bill Cotton, Executive Director, Alaska Judicial Council, Anchorage. PRESENT VIA TELECONFERENCE Marla Greenstein, Anchorage. GENERAL SUBJECT(S):  Review of Departments Accomplishments: Department of Law Alaska Commission on Postsecondary Education Alaska Court System The following overview was taken in log note format. Tapes and handouts will be on file with the House Finance Committee through the 22nd Legislative Session, contact 465- 2156. After the 22nd Legislative Session they will be available through the Legislative Library at 465-3808.   LOG SPEAKER DISCUSSION    TAPE HFC 00 - 14  SIDE A  000 Co-Chair Mulder Convened the meeting of the House Finance Committee.  DEPARTMENT OF LAW  069 BRUCE BOTELHO, Spoke to the mission of the Department ATTORNEY GENERAL, noting that the mission was to provide DEPARTMENT OF LAW legal services to State government and to prosecute crime. He pointed out the handout distributed to Committee members. [Copy on File].  105 Attorney General Explained that two divisions, the civil Botelho division and the criminal division accomplish the mission of the Department.  173 Attorney General The Human Services section is located in Botelho the civil division. He highlighted the components located in the civil division.  222 Attorney General * Transportation Botelho * Human Services * Commercial * Special Litigation * Legislation/Regulations * Fair Business Practices * Environmental Law * Oil, Gas & Mining * Collections & Support * Governmental Affairs * Natural Resources * Statehood Defense  382 Attorney General Further enumerated responsibilities of Botelho each category.  468 Attorney General Spoke in further detail regarding the Botelho fair business practices, which handles public utility & oil and gas pipeline regulations; occupational licensing; and postsecondary education.  517 Attorney General Discussed Statehood Defense and the  Botelho sovereignty issues including the ANILCA challenges and the salmon treaty.  565 Attorney General Referenced the Criminal Division and the Botelho offices associated with that Division.  592 Attorney General * Criminal Justice Litigation & Legal Botelho Services which encompasses corrections legal services; public safety legal services; criminal justice legislation; DMV appeals; violence against women. * Special Prosecutions & Appeals division handles appeals; white-collar crime; environmental crimes; special fish & game violations; Medicaid provider fraud; welfare fraud & child support prosecutions.  638 Attorney General The Criminal Division is comprised of the Botelho 1st Judicial District, 2nd Judicial District, 3rd Judicial District & the 4th Judicial District, each one applicable to a different area of the State.  694 Attorney General Spoke to "who" the beneficiaries of the Botelho Department are. The objective is to serve the public. When prosecuting a case, the Department serves the public. When in litigation, it is usually to the benefit of all of Alaska. The Department has very specific clients with priority for the Executive, Legislative and Judicial Branches. For the most part, legal services are provided by lawyers within the Department, however, sometimes the services are contracted out.  846 Attorney General Reviewed the performance outcomes of SB Botelho 281 and the Office of the Attorney General. He noted the success of the Office in achieving its missions should be measured by considering the cost of legal services to each State agency and whether the divisions and the offices in the Department meet the performance measures described hereafter.  939 Co-Chair Mulder Requested a comparative analysis for those monies spent. The "look-back" is important. He inquired why Department of Corrections had not been included in the handout.  980 Attorney General He explained that the charges relating to Botelho that Department would be listed in the criminal division analysis. He listed the costs rounded to the nearest hundred dollars to each state agency for legal services rendered by the Civil Division on behalf of those agencies during  FY2000. The amounts include the cost of contract legal counsel and other costs external to the Department as well as Law's internal costs.  1010 Attorney General Addressed the Division of Administrative Botelho Services. Admin Services measures the cost of the division compared to personnel costs for the departments and the number of late penalties incurred for payroll or vendor payments, and the number of audit exceptions. He outlined the benchmarks of that Division.  1075 Attorney General Discussed the Civil Division and the Botelho measure of the monetary value of disputed oil and gas taxes and royalties received by the State through court judgment or settlement.  1126 Representative Croft Asked the how much of the money owed was paid to the State.  1176 Attorney General Commented that one of the difficulties Botelho when evaluating legal performance, the win/loss concept is not an appropriate measure to look at. The amount recovered is difficult. Many of the cases have been in litigation for up to five years. These numbers are not a reflection of what happens in one fiscal year. He acknowledged that it is a problem around the country.  1263 Co-Chair Mulder Requested that the Subcommittee help in creating a system to help determine a way to figure that number out.  1280 Representative Croft Discussed the danger in declaring a win or loss. He recommended that the State should pick cases that do not have the wrong incentive.  1320 Attorney General Noted the transitions into collections Botelho and support. He indicated that the measure determines the monetary value of the criminal and civil judgments collected, including indigent defense costs, costs of incarceration for offenders convicted of driving while intoxicated, and other fines and costs owed to the State. Collections are consistent.  1422 Representative Asked if the two receipts listed reflect Hudson long standing disputed tax issues.  1450 Attorney General Advised that the old cases are finished. Botelho The receipts reflect only a small backlog of cases. At this time, dealing with the tax audits is what is current. He suggested that the amount of contention  is narrower.  1494 Representative Inquired if the expected funds could be Hudson predicted by Department of Revenue.  1512 Attorney General Agreed, adding that the average over time Botelho produces the receipts from litigation.  1537 Co-Chair Mulder Asked the outstanding tax settlement amount.  1550 Attorney General Offered to research and provide that Botelho information.  1561 Attorney General Discussed the timekeeping and support Botelho measure. The civil division marks the number of new case files opened, categorized by type of case for each year for the past five years.  1732 Attorney General Responded to questions regarding the Botelho decrease in amounts collected from State judgments.  1793 Attorney General Discussed the Human Services measure and Botelho the number of new cases opened relating to protecting children in the State against abuse and neglect and the caseload per attorney.  1857 Attorney General In FY2000, 695 child protection cases Botelho representing more than 1,100 children were opened statewide. Noted that section indicates the placement of abused children and that 7% are still pending.  1885 Attorney General Discussed the criminal division measure. Botelho The intention for that measure establishes a baseline for the number of violent felony prosecutions; felony drug case prosecutions and misdemeanor domestic violence assault prosecutions.  1969 Co-Chair Mulder Commented on the danger that only 50% of the cases that are being tried.  2000 Representative Green inquired if there was so much fluctuation due to the severity of the crime.  2024 DEAN GUANELI, CHIEF Stated that as prosecutors, they do not ASSISTNAT ATTORNEY take into account bed space. When the GENERAL, LEGAL jails are full, attorneys meet with the SERVICES SECTION, prosecutors, consistent with public CRIMINAL DIVISION, safety. There is a possibility that the DEPARTMENT OF LAW courts would take those considerations into account. He commented on the strategy and the circumstances in which the decision could be affected. He noted that the types of crimes tend to be more alcohol related. The kinds of cases in rural Alaska tend not to go to trial as often. It is due to the nature of the crime and the offenders. There tends to be more of a feeling of cooperation.  2170 Vice-Chair Bunde Asked about the bail standard and the advantage for corrections.  2190 Mr. Guaneli Addressed the bail concern noting that it is always established accordingly.  2220 Representative Questioned the standard of prosecution in Whitaker rural versus urban Alaska.  2236 Mr. Guaneli The way that cases move through the system is different in rural Alaska. There tends to be a less of an antagonistic relationship. Appropriated resolution is more easily reached.  2274 Attorney General Discussed the Office of Special Botelho Prosecution and Appeals, a measure in the Criminal Division for the number of new criminal cases reviewed for prosecution; the number of criminal cases resolved; the number of new appeals and petitions opened; the number of appeals and petitions resolved; and the average cost per criminal case reviewed and the average cost per appeal or petition opened.  2325 Attorney General Commented on the intended changes to the Botelho Department. He noted the need for more training within the Department in order to look at the large institution that Alaska is and to minimize the number of conflicts bringing them to early resolution. Relive some of the work of the staff.  TAPE HFC 01 - 14, DEPARTMENT OF LAW   (continued)  Side B  050 Attorney General Noted an area of concern and exploration Botelho regarding how the advocacy to the highest courts of land should be done. He referenced the Court of Appeals and the US Supreme Court.  154 Co-Chair Mulder Asked why the need.  167 Attorney General There exists a need to serve as a Botelho "screen" for legal purposes and to provide a level of quality control. At present time, there exist varying levels of ability for writing briefs. He emphasized that the person arguing the case determines the success and that advocacy at the appellate level is a different league. State government must be represented effectively.  302 Co-Chair Mulder Asked if the State needed that type of sophistication.  324 Attorney General Explained that the State often appears Botelho before the Supreme Court. If these  services were contracted out, that would be a much greater expense to the State.  398 Co-Chair Mulder Asked if the State needs more specialized focus to enhance winnings.  421 Attorney General Replied that there could be an Botelho incremental benefit to the State. He emphasized that the issue is important to the State and would improve the State's status.  470 Co-Chair Mulder Recommended identifying the need through past performance. He thought it could be possible.  502 Attorney General Looked forward to working with the Botelho Committee on this concern.  521 Representative Asked how other states handled this Hudson problem.  542 Attorney General Most of the larger states have an Botelho appellate unit. The Alaska system is a relatively good size for such a consideration. He pointed out that Alaska is much more active in natural resource component than the other states.  631 Representative Green Asked if the Department currently has lawyers to handle this.  663 Attorney General Advised that there are employees who have Botelho great skill levels. Currently, they are at their caseload maximum.  ALASKA POSTSECONDARY EDUCATION  760 DIANE BARRANS, Addressed the mission of the Alaska EXECUTIVE DIRECTOR, Postsecondary Commission Budget Request POSTSECONDARY Unit to provide postsecondary education EDUCATION financial assistance to Alaskans and to COMMISSION, authorize the operation of postsecondary DEPARTMENT OF institutions in the State.  EDUCATION & EARLY DEVELOPMENT 917 Ms. Barrans Discussed the completion and placement rate of students attending Alaska institutions that offer job specific training programs; the percentage of loans issued by the Commission that are in default and the defaulted loan recovery rate..  976 Ms. Barrans Discussed the key performance measures including the number of Alaska communities with access to medical services associated with WWAMI/UW and the percentage of WWAMI participants who return to the State to practice medicine. She added the number of patient visits provided to Alaskans through programs and physicians associated with the University  of Washington School of Medicine WWAMI program; the number of health related programs developed in the State at are associated with WWAMI/UW and the number of research projects in or about the state associated with the UW School of Medicine WWAMI program.  1016 Ms. Barrans Reviewed charts on pages 4, 5 and 6.  1052 Representative Referred to the number of communities Davies with access to medical services associated by WWAMI.  1113 Co-Chair Mulder Reviewed measures relating to participants who return to the State on page 3. He noted that there is a 29% increase in the number of health related programs developed in the State that are associated with WWAMI but questioned the total number.  1232 Co-Chair Mulder Reviewed the third measure on page 3 - number of research projects in or about the State associated with WAMI and asked for clarification.  1312 Ms. Barrans Noted that the default rate is dropping while the repayment rate is increasing. Discussed forgiveness. Fewer than 1 in 4 teachers that go into the program complete their degree and return to the State.  1497 Ms. Barrans Discussed criteria for the Alaska Teacher Loan program. Participants must be an Alaskan high school graduate and return to teach in a rural school. Participants are not necessarily from rural areas.  1547 Representative Noted that the return rate is twice as Davies high for rural teachers in areas where the program is active.  1590 Co-Chair Mulder Questioned if there was approximately $1.7 million dollars available for the program.  1601 Ms. Barrans Stated that the amount was not set. There are a number of nominations from school districts. The nominations are generally around 90.  1661 Co-Chair Mulder Noted that the nominations are for 4 - 5 year programs.  1672 Ms. Barrans Observed that not every participant remains in the program for the entire time. Stated that a nominee has never been denied.  1717 Vice-Chair Bunde Recommended that the drop out number be ascertained. He observed that only about 20 percent of the general college  population graduates. He concluded that the loan participants are subsidizing the forgiveness of student loans.  1766 Ms. Barrans Clarified that there are also earnings on investments. She observed that those that do not complete the program and go on to teach repay their loans with interest.  1806 Representative Recommended that data be collected on the Hudson number of areas that are requesting teachers.  1866 Ms. Barrans Spoke to the Alaska Student Loan Corporation Income/Loss Trend.  1897 Vice-Chair Bunde Suggested that the returned dividend fund should stay in the Commission. He asked the default rate 20 years ago.  1935 Ms. Barrans Replied 27%  1946 Representative Like the idea of keeping the money in the Whitaker company.  1991 Co-Chair Mulder Spoke to the dividend to be returned to the state.  2006 Ms. Barrans Stated that it would amount to $4 million dollars.  2017 Representative Green Asked what caused the contribution to flatten out.  2038 Ms. Barrans Replied that this is a balancing act. The intent is to fund their own activities while lower rates.  2057 SHIELA KING, FINANCE The leveling off resulted from bonding OFFICIER, out. The interest on the assets that POSTSECONDARY they would have owned is given out. The EDUCATION bonds that are maturing do not exceed the COMMISSION, amount of cashed being used. There DEVELOPMENT OF remains a significant expense.  EDUCATION AND EARLY DEVELOPMENT 2112 Representative Asked about fluctuating bonds affecting Whitaker the student loans.  2129 Ms. Barrans In 1999, there was a decrease in the lending rate. It became a very competitive environment. The rate that the person pays going into, is not always the same rate that they pay coming out of the loan. She spoke to the varying rates resulting from a healthy economy and entering the workplace with little training.  2196 Vice-Chair Bunde Stated that it is typical that a student graduating with a $40,000 dollar debt would keep most young people from moving forward.  2222 Representative Asked the number of students that are Hudson completing on an annual basis and the  number of issued new loans.  2239 Ms. Barrans They do not track that data. 30% of the annual applicant pool is a new time borrower.  2296 Ms. Barrans Addressed the chart illustrating the accumulated deficit of fund equity.  TAPE HFC 01 - 15, ALASKA POSTSECONDARY EDUCATION   (continued)  Side A  056 Co-Chair Mulder Stated that the graph indicates positive fund equity.  133 Ms. King Commented on the profit rolling into the retained earnings. Projected that in 2002 there will be a positive retained earning.  208 Representative Asked about the chart.  Davies 226 Ms. King Explained that the General Fund money given to the corporation in the 90's was considered revenue and helped the Commission to show positive revenue. That makes up the general fund dollars. The trend line is positive.  ALASKA COURT SYSTEM  329 STEPHANIE COLE, Explained that the mission of the Alaska ADMINISTRATIVE Court System is to provide an accessible DIRECTOR, ALASKA and impartial forum for the just COURT SYSTEM resolution of all cases that come before it and to decide such cases in accordance with the law, expeditiously and with integrity. She listed the purposes of the courts.  467 Ms. Cole Explained the patterns resulting this year. Within the case load there were many new felonies filed on criminal and violent crimes. Violent crimes are a large part of what the Court System does.  591 Ms. Cole There has been a 9% increase in felony filings in Anchorage. Felonies cases are the ones that most likely go to trial. Children cases continue to rise. In Bethel, children's cases are up 17%. Within the domestic side, there continues to be an increase.  700 Ms. Cole The focus is to guarantee that cases are treated fairly and quickly. The Alaska Court is very concerned with delay. There is a constitutional requirement to speedy trial. Being brought to trial within 180 days. If a defendant is not brought to trial within that time, then the case is dismissed through Rule 45. She noted that the goal was for 100%  compliance.  813 Co-Chair Mulder Why is the Alaska Court System was not listed in SB 281.  847 CHRIS CHRISTENSEN, The judicial branch is separate from the STAFF COUNSEL, departmental concerns. He added that ALASKA COURT SYSTEM there are a number of constitutional and statuary measures that predate what the legislature and executive branch has been doing.  917 Co-Chair Mulder Requested that Mr. Christensen work with the Subcommittee Chair to accomplish the concern at hand.  1033 Ms. Cole Referenced Page 5 of the handout. She noted the amount of money collected from the general fund. Page 6. Page 7 - collected against the Permanent Fund Dividend.  1130 Ms. Cole Prior to 1988, Alaska was consistent with other states and thousands of bench warrants were issued and never collected. Currently, there is a judgment placed against the person if they do not pay the bench warrants. She stated that there has been a remarkable difference.  1206 Ms. Cole Have eliminated procedures that were not working.  1221 Representative Also eliminated an irritant for many Davies constituents by focusing on the bench warrants.  1270 Ms. Cole Reiterated that the handling well and expeditiously is the Court's priority. The Courts handle their own procurement and computer systems.  1311 Ms. Cole However, the most effort goes into handling the caseload.  1323 Ms. Cole Outlined the projects being pursued with federal funds: * Drug Courts-reduce recidivism rates received a three year grant * Mental Health program - funding from the Mental Health Trust Authority * Alcohol Project - uses the drug Meltrixin and is being assisted by the Anchorage Downtown partnership.  1549 Ms. Cole Emphasized that people are very excited by these projects.  1568 Ms. Cole She noted that there are more and more people coming to court without an attorney. It is also difficult for the court as the proceedings takes longer. The problem rests with the attorney costs. The Judicial system can get  reimbursement to CSED. That action does appear in the budget this year as a transfer from Child Support Enforcement Division (CSED).  1644 Vice-Chair Bunde Asked how often the court would order the permanent fund dividend given to CSED.  1681 Representative Croft Stated that the court can "input" income.  1715 Ms. Cole Stated that this was not an uncommon practice.  1727 Ms. Cole Spoke to the stressed court in Bethel, which is where the caseload is. A district court judge could be appointed. Unfortunately, there has not been a qualified judge to help.  1765 Vice-Chair Bunde Asked why the Court could not find a qualified district court judge.  1780 Ms. Cole Stated that was correct.  1785 Ms. Cole Voiced appreciation of construction of the new court building in Fairbanks. Establishing the last effort.  ALASKA COMMISSION ON JUDICIAL CONDUCT -  ALASKA COURT SYSTEM  1872 WILLIAM COTTON, Explained the mission of the Commission, EXECUTIVE DIRECTOR, which was created by an amendment to the ALASKA JUDICIAL State Constitution in 1968. The COUNCIL, ALASKA Commission is composed of three State COURT SYSTEM court judges, three attorneys who have practiced law in the State for at least ten years, and three members of the public. The group of nine individuals are from differing backgrounds and geographical areas address problems of judicial conduct and disability. Any person may file a complaint alleging judicial misconduct.  1971 Mr. Cotton Addressed the unique role of the Commission and their effectiveness. He noted that information of the Commission is made available on the internet.  2033 Vice-Chair Bunde Asked how many people use the web site.  2047 Mr. Cotton Replied that one day there were 50,000 hits on the web site. It provides an incentive for the judges to really do their job. It involves accountability. A good many people use the information.  2090 Representative Asked if there was a guideline to Whitaker determine the qualifications of the judges.  2107 Mr. Cotton  *Integrity; · ability to be fair; · legal ability; · the willingness to treat people with  respect; · to get cases done on time; · willingness to work hard. He offered to provide the memo discussing that concern.  2152 Representative Asked if there was constitutional statute Whitaker requirement.  2168 Mr. Cotton Replied that it is in statute.  2179 Mr. Cotton Noted that magistrates are not screened.  2186 Mr. Cotton Judges have to have been in law practice for several years.  2199 Mr. Cotton Council makes recommendations regarding retention of judges. The Council also interviews judges.  2242 Mr. Cotton Reviewed research projects. The Council worked with the Criminal Justice Assessment Commission. Civil case data is being collected. Evaluations will be provided to the Legislature on Drug Court, Therapeutic Justice programs.  2321 Mr. Cotton Comprehensive study of the criminal justice system will be completed by the summer of 2002. There is a small increment for this study and it is the only one in their budget.  2355 Representative Questioned if the voters have enough Lancaster information on judges.  2367 Mr. Cotton Felt that the information was good but would like to see more.  TAPE HFC 01 - 15, ALASKA JUDICIAL COUNCIL - AK. COURT SYS.   (continued)  Side B  022 Co-Chair Mulder Felt that the information was sufficient. He emphasized that the subjective evaluation (does this judge think like I do?) is more difficult to provide.  091 Mr. Cotton Stressed that the Council is very diverse and that liberal and conservative members are represented.  122 Co-Chair Mulder ADJOURNMENT  The meeting was adjourned at 4:00 p.m.