Legislature(2003 - 2004)

02/14/2003 01:04 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB 23 - RESTITUTION FOR CRIME VICTIMS                                                                                         
Number 0022                                                                                                                     
CHAIR McGUIRE announced that the  only order of business would be                                                               
HOUSE BILL NO. 23, "An  Act relating to court-ordered restitution                                                               
and compensation following a criminal conviction."                                                                              
Number 0057                                                                                                                     
REPRESENTATIVE   BRUCE  WEYHRAUCH,   Alaska  State   Legislature,                                                               
sponsor,  said that  HB 23  was  introduced to  address the  2002                                                               
Alaska Court  of Appeals  case, Demers  v. State  of Alaska.   He                                                             
explained that  the difference  between the  original bill  and a                                                               
proposed committee  substitute (CS)  is that  the words,  "to the                                                               
victim" have been  added after "compensation" on page  1, line 9,                                                               
and page 2, line 11.  As  background for HB 23, he explained that                                                               
[a  former]  Alaska  Folk Festival,  Inc.,  treasurer,  James  G.                                                               
Demers, had  been convicted of  embezzling funds from  the Alaska                                                               
Folk Festival, a  nonprofit corporation.  Mr.  Demers was ordered                                                               
by the  Alaska Superior  Court to pay  restitution to  the Alaska                                                               
Folk  Festival for  the  work of  volunteers  who incurred  time,                                                               
money, and effort to uncover that  crime.  He said that according                                                               
to  his  understanding,  the  police said,  "We  don't  have  the                                                               
ability, ...  time, and resources to  do all the work  that needs                                                               
to be done,  so you figure out what happened  here and present us                                                               
with the  evidence of the crime  so we can then  prosecute it and                                                               
give it to the district attorney."                                                                                              
REPRESENTATIVE WEYHRAUCH  said that in collecting  this evidence,                                                               
the volunteers  spent a  substantial amount  of time,  money, and                                                               
effort.   He  remarked that  oftentimes, white-collar  crimes are                                                               
more   difficult  to   uncover  because   the  perpetrators   are                                                               
professional people who  are more versed in ways  of hiding their                                                               
crimes.   He said that the  Alaska Court of Appeals  reversed the                                                               
sentencing court's  decision regarding paying restitution  to the                                                               
Alaska Folk  Festival, and that  the reason for the  reversal was                                                               
based  on  a  narrow  interpretation   of  the  language  in  the                                                               
legislative  intent   section  of   the  statute   pertaining  to                                                               
compensation and  recovery.  He  opined that in the  Alaska Court                                                               
of  Appeals  decision, the  dissenting  opinion  of [Chief  Judge                                                               
Robert  G.  Coats]  was  the  correct  opinion.    Representative                                                               
Weyhrauch  said that  the  purpose of  HB 23  is  to reverse  the                                                               
Alaska  Court  of  Appeals  decision  and  adopt  the  dissenting                                                               
opinion, which read in part:                                                                                                    
      Alaska Statute 12.55.045 directs a sentencing court                                                                       
        that orders restitution to take into account the                                                                        
     "[(1)]  public policy  that favors  requiring criminals                                                                    
     to  compensate   for  damages   and  injury   to  their                                                                    
     victims." ... One of the  purposes of [AS] 12.55.045(a)                                                                    
     is "to  make full restitution available  to all persons                                                                    
     who  have been  injured  as a  result  of the  criminal                                                                    
     behavior,  to  greatest   extent  possible."  ...  This                                                                    
     legislative  intent   seems  to   me  to   support  the                                                                    
     conclusion  that  the  legislature  favors  restitution                                                                    
     awards as part of criminal sentences.                                                                                      
Number 0293                                                                                                                     
REPRESENTATIVE WEYHRAUCH offered that  the public policy decision                                                               
before the  committee is,  "Do we, as  a legislature,  intend for                                                               
the  court of  appeals to  tell the  legislature what  its intent                                                               
is?"  He  reiterated that he agrees with  the dissenting opinion,                                                               
that  the legislature  intended  to favor  restitution awards  as                                                               
part of criminal sentences.   He also reiterated that in adopting                                                               
HB 23,  the minority decision  would be adopted and  the majority                                                               
decision  would  be  overturned.     He  again  referred  to  the                                                               
dissenting opinion, which also read in part:                                                                                    
     On the other  hand, if victims of a  crime, rather than                                                                    
     hiring someone  else, spend there  own time  and effort                                                                    
     to fix damages cause by  a criminal act and can clearly                                                                    
     establish the value of the  efforts, I see no reason to                                                                    
     preclude  a court  from awarding  restitution.   Such a                                                                    
     rule seems to me to  be consistent with the legislative                                                                    
     policy of  these statutes and the  past interpretations                                                                    
     by this court.                                                                                                             
REPRESENTATIVE  WEYHRAUCH  said  he  believes that  as  a  public                                                               
policy,  the legislature  should ensure  that a  sentencing court                                                               
has the  broad tools to  award restitution to victims  of crimes;                                                               
hence the addition  of the words "to the victim"  in the proposed                                                               
CS.   He remarked that  both he and  the Department of  Law (DOL)                                                               
want to clarify  that the victims referred to in  the proposed CS                                                               
are  the nonprofit  victims, not  the individual  members of  the                                                               
nonprofits.  He continued:                                                                                                      
     I think [that it] is  the legislature that defines what                                                                    
     its policy  is and its  intent is,  and then a  court -                                                                    
     legitimately,   under   our  constitutional   form   of                                                                    
     government - interprets  that.  When the  court makes a                                                                    
     mistake,  it's up  to the  legislature to  clarify what                                                                    
     its  intent  is.   And  our  intent,  I believe,  as  a                                                                    
     legislative body,  should be [to ensure]  that a white-                                                                    
     collar criminal  that creates a crime  that causes harm                                                                    
     is fully  liable for  all the  damages they  cause, and                                                                    
     that  a sentencing  judge -  both  ... [as]  part of  a                                                                    
     sentence  and   part  of  probation  -   requires  that                                                                    
     defendant to  pay back the  full measure of  the impact                                                                    
     they caused to entities.                                                                                                   
Number 0447                                                                                                                     
REPRESENTATIVE   WEYHRAUCH   listed   some   of   the   nonprofit                                                               
organizations that he has been a  part of, and remarked that many                                                               
nonprofits are not well funded.   Because of funding limitations,                                                               
he  pointed out,  it  is  often not  possible  for nonprofits  to                                                               
simply hire professionals  on retainer to gather  the evidence of                                                               
wrongdoing;  nonprofits have  to  rely on  volunteer efforts  for                                                               
this  task  just  as  they  do  for most  of  their  tasks.    He                                                               
reiterated that he  wants to ensure that when an  individual in a                                                               
nonprofit  organization incurs  costs  or expenses  because of  a                                                               
crime, and  is able to  provide reasonable documentation  of such                                                               
costs  or  expenses, that  the  court  can order  the  defendant,                                                               
either as  part of  a sentence  or as part  of probation,  to pay                                                               
restitution to a  nonprofit victim.  He opined  that the majority                                                               
opinion in Demers  v. State takes away the  court's discretion to                                                             
do so.                                                                                                                          
Number 0621                                                                                                                     
REPRESENTATIVE ANDERSON  moved to [adopt  the proposed CS  for HB
23, Version 23-LS0134\D, Ford, 1/29/03, as a work draft].                                                                       
Number 0625                                                                                                                     
REPRESENTATIVE GRUENBERG objected for  the purpose of discussion.                                                               
He surmised that the language  change being proposed by Version D                                                               
would  provide that  only  the victim  could  be compensated  for                                                               
volunteer  labor, and  would preclude  compensation to  any other                                                               
person providing volunteer  services.  He asked  whether such was                                                               
the sponsor's intent.                                                                                                           
REPRESENTATIVE WEYHRAUCH  remarked that the wording  in Version D                                                               
was  suggested by  the  DOL.   He  said he  wanted  to allay  any                                                               
concern that there would be "a  whole bunch of people in front of                                                               
court  asking for  restitution."   The  compensation, he  pointed                                                               
out, has  to be related  to the nonprofit,  to the crime,  and to                                                               
the injury to the nonprofit.  He elaborated:                                                                                    
     The  nonprofit ...  finds  evidence  of something  that                                                                    
     happened.   They  use the  individual to  document that                                                                    
     the crime  happened.  The individual  incurs expense on                                                                    
     behalf  of  the  nonprofit.     The  victim  stays  the                                                                    
     nonprofit.    If you  make  the  victim those  who  are                                                                    
     broader than the nonprofit in  this specific case - and                                                                    
     in  this bill  ... I  intentionally wanted  to keep  it                                                                    
     very narrow  to this specific  instance - ...  then you                                                                    
     do maybe open up a can  of worms for a sentencing judge                                                                    
     ... [to] sort ... out.                                                                                                     
     And   I  believe   that  it   was  important   for  the                                                                    
     legislature  to give  the tools  to the  ... sentencing                                                                    
     court to  make sure  that the  victim nonprofit  has to                                                                    
     present the  evidence of the  damage that  was incurred                                                                    
     to discover the crime and  maybe bring the crime to the                                                                    
     authorities' attention  and to document the  crime, and                                                                    
     then once the  restitution was paid, the  money goes to                                                                    
     the victim, so that the court  is not left as a referee                                                                    
     to all the other people  that may be deciding they want                                                                    
     money, too, from this defendant.                                                                                           
REPRESENTATIVE WEYHRAUCH observed that  if individuals want funds                                                               
from  a  defendant,  they  may  pursue  the  issue  via  a  civil                                                               
procedure.  Version  D simply provides that  the restitution will                                                               
be paid to the nonprofit.                                                                                                       
Number 0891                                                                                                                     
REPRESENTATIVE GRUENBERG withdrew  his objection.  [Subsequently,                                                               
Version D was treated as adopted].                                                                                              
Number 0995                                                                                                                     
DOUG  WOOLIVER,  Administrative Attorney,  Administrative  Staff,                                                               
Office  of  the  Administrative  Director,  Alaska  Court  System                                                               
(ACS),  said  simply that  the  sponsor,  in his  testimony,  has                                                               
adequately addressed some of the ACS's concerns.                                                                                
REPRESENTATIVE  ANDERSON, referring  to  Section  2, proposed  AS                                                               
12.55.100(a)(2), asked  whether the term "volunteer  labor" could                                                               
be interpreted so  expansively as to include  the volunteer labor                                                               
of his  family and  friends should his  house be  burglarized and                                                               
vandalized.    He expressed  the  concern  that  HB 23  could  be                                                               
abused,  and  pondered  whether   the  definition  of  "nonprofit                                                               
entity"  should  be added  in  order  to  restrict how  the  term                                                               
"victim" is interpreted.                                                                                                        
REPRESENTATIVE  WEYHRAUCH opined  that  the legislature's  policy                                                               
should  be to  ensure that  any  victim of  criminal behavior  is                                                               
compensated  to the  greatest extent  possible,  that the  courts                                                               
have  the ability,  when  presented  with reasonable,  documented                                                               
evidence that  expenses associated with the  crime were incurred,                                                               
to make the victim whole.   He stressed that the costs associated                                                               
with  the  volunteer  labor  must  be  properly  documented,  and                                                               
surmised that this won't include  compensating someone simply for                                                               
taking  time off  [from his/her  regular job].   He  posited that                                                               
sentencing  judges will  still have  the  discretion to  disallow                                                               
speculative  damages.   He remarked  that  he did  not feel  that                                                               
nonprofit  entities  should  be  the only  ones  compensated  for                                                               
documented costs incurred by volunteers.                                                                                        
REPRESENTATIVE  GARA surmised  that HB  23  is a  good bill  that                                                               
addresses a  situation which should  be addressed.   He expressed                                                               
concern, however,  that without  some additional language,  HB 23                                                               
will not accomplish what the sponsor intends.  He elaborated:                                                                   
     The reason  we got  into this mess  in the  first place                                                                    
     is,  when we  write  a criminal  law,  the courts  have                                                                    
     always,  in  every  state,  interpreted  the  law  very                                                                    
     narrowly.   And  that's  because in  criminal laws,  we                                                                    
     take away peoples'  liberty, and ... we  intend to take                                                                    
     away peoples'  liberty as punishment,  and one  of your                                                                    
     [punishments] is  that you lose  the amount  of liberty                                                                    
     that the state or the  federal government have said you                                                                    
     should lose.   The  courts, when  they decide  how much                                                                    
     liberty to take  away from somebody, always  want to be                                                                    
     careful  that   they're  not   taking  more   than  the                                                                    
     legislature  intended  for them  to  take  away.   They                                                                    
     don't want to start  inventing new punishments, so they                                                                    
     interpret criminal statutes narrowly.   They say to the                                                                    
     legislature,  "You have  to  say what  you  mean so  we                                                                    
     don't start making things up,  essentially, so we don't                                                                    
     start  expanding things  beyond what  you intended;  so                                                                    
     we're going to interpret your words very narrowly."                                                                        
     That's probably  why the [Alaska] Court  of Appeals did                                                                    
     what  they  did.    The   appropriate  remedy  was  for                                                                    
     [Representative] Weyhrauch to come  in here and come up                                                                    
     with a  bill that now addresses  the situation clearly.                                                                    
     And  here's   where  I'm   concerned  that   we're  not                                                                    
     addressing the  situation clearly.  We  want nonprofits                                                                    
     to  be able  to  recover the  fair  value of  volunteer                                                                    
     labor  that  goes  into remedying  the  crime;  in  the                                                                    
     situation  you  discussed,  that's what  we  wanted  to                                                                    
     happen.  But, really, the  victim in our situation here                                                                    
     is a nonprofit.   It was the  nonprofit's agents, their                                                                    
     employees, that came in and did  the work.  We want the                                                                    
     nonprofit to be  able to recover for the  work of their                                                                    
Number 1429                                                                                                                     
REPRESENTATIVE GARA continued:                                                                                                  
     In Representative Anderson's example,  let's say it was                                                                    
     the  KKK [Ku  Klux  Klan] that  comes  in and  destroys                                                                    
     somebody's house and paints it  with swastikas all over                                                                    
     the  place, and  the community  comes in  and spends  a                                                                    
     week repairing the  house.  If we  wanted the community                                                                    
     members  to have  the value  of their  time compensated                                                                    
     for  - and  probably  in  most circumstances  community                                                                    
     members would  say, "I  don't really  want compensation                                                                    
     for this," and  they would leave it at  that, but maybe                                                                    
     they put  in a lot of  time and maybe the  victim wants                                                                    
     to honor the  people who helped with  the house project                                                                    
     by getting them compensation for  their time - we would                                                                    
     have  to say  that this  [proposed] statute  allows the                                                                    
     victim to recover compensation for  their time or their                                                                    
     agent's time.                                                                                                              
     So, in both  Representative Anderson's situation, which                                                                    
     I embellished  a little bit  by making  the perpetrator                                                                    
     the KKK,  and in Representative  Weyhrauch's situation,                                                                    
     we're really compensating for the  time of the victim's                                                                    
     agents.  And I think we  might have to put in, in order                                                                    
     to effectuate  the intent here,  ... on page 2  on line                                                                    
     11 of the  CS, that we're compensating  "the victim for                                                                    
     the value  of the  victim's or their  agent's volunteer                                                                    
     labor".  And so I'm  offering for a discussion the idea                                                                    
     of a friendly  amendment.  And certainly  if that's not                                                                    
     the  sponsor's intention,  I  won't push  it.   If  the                                                                    
     sponsor believes that  we don't want to  expand the law                                                                    
     that  far, then  that's fine.    But I  worry that  the                                                                    
     sponsor's  intentions   won't  be  honored   when  this                                                                    
     statute then  goes to  another court  and the  court is                                                                    
     charged  to  interpret  the   statute  as  narrowly  as                                                                    
     possible.   I  wonder,  when they  apply  that rule  of                                                                    
     construction  that  the  law   has  to  be  interpreted                                                                    
     narrowly, if, again,  we'll go up there  and they won't                                                                    
     be constrained the same way.                                                                                               
REPRESENTATIVE  WEYHRAUCH  replied   that  Representative  Gara's                                                               
[suggested] amendment  has purchase with him  because he believes                                                               
that  the legislature's  intent is  that the  court be  given the                                                               
discretion to  make full restitution  available, to  the greatest                                                               
extent  possible, to  all  persons  who have  been  injured as  a                                                               
result  of  criminal  behavior.    He  mentioned,  however,  that                                                               
although he  does not have  any specific problem  with broadening                                                               
the bill in that fashion, doing  so may make it difficult to pass                                                               
HB 23 on the House floor.   He indicated that he would be willing                                                               
to  work with  Representative Gara  on that  point after  hearing                                                               
further testimony.                                                                                                              
Number 1588                                                                                                                     
LINDA  WILSON, Deputy  Director,  Public  Defender Agency  (PDA),                                                               
Department  of Administration,  relayed  that some  of the  PDA's                                                               
concerns have  been addressed by  Version D.   She said  that the                                                               
PDA has submitted  an indeterminate fiscal note,  and offered the                                                               
following explanation.                                                                                                          
     The [PDA]  represents indigent defendants  in contested                                                                    
     restitution  hearings,   which  are   a  part   of  the                                                                    
     sentencing  process.    This  bill  would  authorize  a                                                                    
     sentencing   judge  to   order  a   defendant  to   pay                                                                    
     restitution   -  originally,   before  you   added  the                                                                    
     language  "to  the  victim" -  to  relatives,  friends,                                                                    
     coworkers, neighbors  of a crime victim  who spent time                                                                    
     consoling  the victim  or helping  clean  up after  the                                                                    
     crime  or assisting  the victim  with  tasks that  they                                                                    
     might  be  too upset  to  attend  to.   And  with  that                                                                    
     language,  "the value  of ...  volunteer labor,"  there                                                                    
     could  be more  contested  restitution hearings,  which                                                                    
     would result  from the  enactment of  this legislation,                                                                    
     that  might center  around what  was the  value of  the                                                                    
     volunteer labor.                                                                                                           
     And  I think  that  Representative  Weyhrauch spoke  to                                                                    
     that  in terms  of, you  would certainly  want to  have                                                                    
     something that  wasn't speculative  but that  you could                                                                    
     have  receipts  and  documentation for.    Whether  the                                                                    
     volunteer   labor   was   directly   related   to   the                                                                    
     defendant's  crime  might be  an  issue  that would  be                                                                    
     contested.   Whether or not it  alleviated or mitigated                                                                    
     the effect  of the  crime.  Obviously  there is  no way                                                                    
     for  us to  accurately  predict, number  one, how  many                                                                    
     people  would  come  forward  that  would  want  to  be                                                                    
     compensated  for  volunteer  labor,  and  so  it's  not                                                                    
     possible to predict.  Now,  the amendment of adding the                                                                    
     language  "to   the  victim"  certainly   narrows  this                                                                    
     legislation and  certainly is an  attempt, I  think, to                                                                    
     address  the  concerns  from  that  [Alaska]  Court  of                                                                    
     Appeals decision.                                                                                                          
MS. WILSON continued:                                                                                                           
     I guess my  only concern about that  change in language                                                                    
     is that then  you have the money, and I  think this was                                                                    
     actually brought  out in ...  the Demers case,  is that                                                                  
     the money  then would go  to the victim, in  this case,                                                                    
     to  compensate  them for  the  value  of the  volunteer                                                                    
     labor that  they received.   So then you have  to trust                                                                    
     the crime  victim to  then pay  the volunteers  for ...                                                                    
     the value of their labor  in turn.  When you're talking                                                                    
     about  an individual  as opposed  to a  nonprofit, this                                                                    
     troubled  the [Alaska]  Court  of  Appeals, I  believe,                                                                    
     because  they  felt  that  ... --  the  home  had  been                                                                    
     repaired.   So  let's  say it's  a burglary,  neighbors                                                                    
     come  in and  they repair  the house  and they  fix the                                                                    
     windows, you compensate the victim  and then the victim                                                                    
     is then  trusted to then  pay the volunteers.   I think                                                                    
     ...  that's  probably a  good  thing,  that the  victim                                                                    
     probably can  be trusted to  do that, but I  don't know                                                                    
     if  that  was  intended,  to  limit it  so  much.    We                                                                    
     certainly do  support restorative justice -  making the                                                                    
     victim  whole; [we]  don't have  any problem  with this                                                                    
     legislation,  but just  that it  may  have some  fiscal                                                                    
     impact on the [PDA].  Thank you.                                                                                           
Number 1764                                                                                                                     
ROBERT BUTTCANE,  Legislative & Administrative  Liaison, Division                                                               
of  Juvenile  Justice  (DJJ),  Department   of  Health  &  Social                                                               
Services (DHSS),  said that  the DJJ supports  the concept  of HB
23, and asked  members to consider extending the  same rights and                                                               
benefits  [to] delinquency  proceedings.   The  way  the bill  is                                                               
currently  structured,  he  noted,  it addresses  issues  in  the                                                               
criminal court.  But there  are occasions when juvenile offenders                                                               
victimize nonprofit  organizations.  And  although it may  take a                                                               
title change,  he said he  would like victims of  juvenile crimes                                                               
to  receive the  same benefits  as  victims of  offenders in  the                                                               
adult system.   In response to questions, he  indicated that he's                                                               
had some  preliminary discussions with  the DOL regarding  such a                                                               
change, but  does not  yet have any  specific language  ready for                                                               
the committee.                                                                                                                  
Number 1871                                                                                                                     
RILEY  WOODFORD, Alaska  Folk Festival,  Inc., explained  that he                                                               
was  "president of  the Board  of the  Alaska Folk  festival" for                                                               
about  five   years,  and  that   it  was  he  and   another  who                                                               
investigated  Mr.  Demers's  embezzlement.     He  recounted  his                                                               
experience after discovering that a crime had taken place:                                                                      
     We went  to the police  and were told by  the detective                                                                    
     that:   "We do not have  [the] time or resources  to be                                                                    
     handed a stack of  legers and reconstruct what happened                                                                    
     here.   It's your responsibility.   If you are  able to                                                                    
     ...  document each  individual  criminal  act and  each                                                                    
     individual act of  theft and of where  those crimes are                                                                    
     covered  up, we'll  look  at all  that  and then  we'll                                                                    
     arrest  him -  that's what  we do  - and  then ...  the                                                                    
     prosecution will take it from there."                                                                                      
MR. WOODFORD surmised that such a  burden is generally put on the                                                               
nonprofit,  as  was  done  in  his  case.    He  noted  that  his                                                               
organization  was  encouraged to  be  fairly  discrete about  its                                                               
investigation in order  to lessen the likelihood  that Mr. Demers                                                               
would attempt  to sabotage the  efforts to bring him  to justice.                                                               
To that  end, the  Alaska Folk Festival  was reluctant  to simply                                                               
use the  services of an  accounting firm because it  might pursue                                                               
the investigation by making phone  calls to different people and,                                                               
thus, alert  Mr. Demers to the  fact that his actions  were being                                                               
MR.  WOODFORD   noted  that  in  addition,   an  accounting  firm                                                               
unfamiliar with the nonprofit might  not be able to differentiate                                                               
between approved  items and those  of a questionable  nature; for                                                               
example, an  accounting firm  might not  realize that  Mr. Demers                                                               
did  not have  approval to  bill all  if his  phone calls  to the                                                               
Alaska Folk  Festival.   He posited that  even had  an accounting                                                               
firm done  most of the  work, the investigation would  still have                                                               
required a lot of additional  work from members of the nonprofit,                                                               
such  as  the president  and  treasurer,  to help  reconstruct  a                                                               
particular crime.  In asking  for the compensation, he explained,                                                               
it   was  not   to  compensate   them  as   individuals;  rather,                                                               
compensation was  sought because of the  impact the investigation                                                               
had in taking so  much time - an estimated 200  hours - away from                                                               
their regular task of putting on the festival.                                                                                  
Number 2025                                                                                                                     
REPRESENTATIVE  GARA  posited  that  it might  be  helpful  if  a                                                               
nonprofit organization could tell its  volunteers that there is a                                                               
possibility that  they may compensated for  costs associated with                                                               
helping alleviate or mitigate the impact of a crime.                                                                            
MR. WOODFORD  relayed that  had they known  that they  could have                                                               
hired an accounting firm, submitted  a bill for those services to                                                               
the court, and then not  had any difficulties getting compensated                                                               
for that  expense, they  probably would have  gone that  route to                                                               
begin  with.   Unfortunately, he  added, they  did not  know that                                                               
that was  an option  open to them.   As it  was, the  Alaska Folk                                                               
Festival  only  hired  an  accounting  firm at  the  end  of  the                                                               
investigation, for  the purpose  of reviewing and  critiquing the                                                               
volunteer members' work.                                                                                                        
REPRESENTATIVE  WEYHRAUCH,  turning  back  to the  issue  of  Mr.                                                               
Buttcane's suggested change, indicated that  he does not have any                                                               
objections as long  as such a change does not  raise other issues                                                               
that prevent the bill from moving on.                                                                                           
REPRESENTATIVE  GARA  asked  why  juvenile  offenders  would  not                                                               
already be subject  to the provisions of HB 23,  even without any                                                               
MR.  BUTTCANE explained  that the  delinquency  chapter is  found                                                               
under Title 47,  and that delinquency proceedings  are handled in                                                               
the superior court through that separate  chapter - AS 47.12.  In                                                               
those instances,  a judge may  impose a  delinquency disposition,                                                               
which,  he said,  is similar  to a  sentence as  stipulated under                                                               
Title 12.   Therefore, he surmised, the delinquency  statute - AS                                                               
47  -  would  have to  be  amended  as  well,  in order  for  the                                                               
provisions of  HB 23 to  apply to victims of  juvenile offenders.                                                               
He  suggested  that   there  are  a  couple  of   places  in  the                                                               
delinquency chapter  where such a  change could be  included, but                                                               
pointed out  that he would  still have to  do some work  with the                                                               
DOL  and the  sponsor  to ensure  that any  change  does what  is                                                               
intended.   In response to  a question, he said  that restitution                                                               
is currently permitted in delinquency proceedings.                                                                              
REPRESENTATIVE  COGHILL   asked  whether   there  is   already  a                                                               
precedent for setting the value of volunteer labor.                                                                             
Number 2259                                                                                                                     
REPRESENTATIVE  WEYHRAUCH  said he  was  not  sure if  there  was                                                               
precedent in criminal  law, and indicated that  he would research                                                               
that issue.                                                                                                                     
CHAIR  McGUIRE  remarked  that  the  question  of  how  [criminal                                                               
courts] will determine  valuations for volunteer labor  is a good                                                               
one and is a question that  she would be interested in having the                                                               
answer to.                                                                                                                      
REPRESENTATIVE  SAMUELS, after  noting  that he  agrees with  the                                                               
concept  of  HB 23,  asked  who  would  get the  compensation  in                                                               
instances where the  nonprofit organization is only set  up for a                                                               
limited time and purpose.                                                                                                       
REPRESENTATIVE WEYHRAUCH offered that  in such instances, perhaps                                                               
the  organization might  not exist  long  enough to  even make  a                                                               
claim for compensation.  He  suggested that perhaps a court might                                                               
choose to award any compensation  owed to a nonexistent entity to                                                               
a similar nonprofit or to  the Office of Victims' Rights instead.                                                               
That,  however,  is   a  question  that  would   fall  under  the                                                               
discretion of  the sentencing judge  on a case-by-case  basis, he                                                               
pointed  out.   He  then  opined that  the  courts should  simply                                                               
interpret HB 23 broadly enough  so that defendants are ordered to                                                               
pay compensation to their victims.                                                                                              
TAPE 03-7, SIDE B                                                                                                             
Number 2383                                                                                                                     
REPRESENTATIVE GRUENBERG  remarked that  the current title  of HB
23 has  focused his  attention on a  variety of  different issues                                                               
with  regard to  the restitution  statute.   He  opined that  the                                                               
committee could  go down one  of two roads:   "We can do  a very,                                                               
very narrow thing that really  won't, necessarily, fully help the                                                               
situation.  Or  we can take a  look at a few things  that I think                                                               
could really help in this particular  area."  He posited that his                                                               
view of  the bill is  perhaps different  from others' views.   He                                                               
     Looking  at  Judge  [David] Mannheimer's  ...  separate                                                                    
     opinion here,  he raises some  issues ....  And  in his                                                                    
     concurrence, he  looks at whether  a person who  is the                                                                    
     defendant would be unjustly harmed  by being ordered to                                                                    
     pay  restitution, and  I'm looking  at  ... [the]  last                                                                    
     sentence of  paragraph four:   "Ordering  the defendant                                                                    
     to  pay 'restitution'  [to the  Folk  Festival for  the                                                                    
     hours  of  work  performed  by  the  insurance  company                                                                    
     employees]  would result  in the  unjust enrichment  of                                                                    
     the Folk Festival."                                                                                                        
     I  think  that to  really  understand  what's going  on                                                                    
     here, you have to look  at the situation as a triangle.                                                                    
     And at one corner of  the triangle is the defendant; at                                                                    
     the second  corner is the  victim; the third  corner is                                                                    
     the third-party provider of the  services - or payor of                                                                    
     the bill.   And the  question is,  will the there  be a                                                                    
     windfall?  And,  if so, who, most  equitably, should be                                                                    
     entitled to the windfall?   I would first eliminate the                                                                    
     defendant, the  tort-feasor, the person who  caused the                                                                    
     injury;  he, in  my opinion  ..., is  the least  ... we                                                                    
     should  be justly  concerned with  because they're  the                                                                    
     person who caused the problem.                                                                                             
     And the  second question is  with respect to  the other                                                                    
     two parties  if there is  to be  a windfall.   First of                                                                    
     all,  is there  a windfall  and, secondly,  if so,  who                                                                    
     should get it?  And, as  I thought about this, ... this                                                                    
     is  where  the  field  of criminal  law  and  tort  law                                                                    
     intersect.  Until maybe 20  years ago there was no such                                                                    
     thing as "restitution" in ...  criminal law, and if you                                                                    
     wanted to get  reimbursed, if ... money  was stolen and                                                                    
     your house  was burglarized  or vandalized  or torched,                                                                    
     you  had  to  bring  a  lawsuit.   And  so  this  issue                                                                    
     initially  didn't arise  in the  field of  criminal law                                                                    
     but  arose in  the  field  of tort  law,  and there  is                                                                    
     something called  the "collateral source" rule  in tort                                                                    
     law. ...                                                                                                                   
Number 2213                                                                                                                     
REPRESENTATIVE GRUENBERG went on to say:                                                                                        
     I  hope Justin  [Roberts] gave  out a  case ...  called                                                                    
     Beaulieu v. Elliott,  and if you look at  page 673, ...                                                                  
     under "headnote  [12]" ... it  says, "...  Elliot urges                                                                    
     the  adoption  of  the collateral  source  rule,  which                                                                    
     provides  that   damages  may  not  be   diminished  or                                                                    
     mitigated  on  account  of  payments  received  by  ...                                                                    
     [plaintiff] from  a source  other than  the defendant."                                                                    
     And this would  go to the value of services,  too.  And                                                                    
     I  looked on  this bill  ... as  really the  first time                                                                    
     that  I'm aware  that this  legislature has  considered                                                                    
     the  possibility of  engrafting  the collateral  source                                                                    
     rule into  the area  of criminal-law restitution.   And                                                                    
     to me  it makes  a lot  of sense to  do it  because the                                                                    
     purpose of  a "restitutionary" hearing in  ... criminal                                                                    
     law  is to  make it  easy,  simple, and  cheap for  the                                                                    
     victim to  get some  limited kinds of  special damages.                                                                    
     Special damages  are reimbursement for  actual expenses                                                                    
     - or the value of services, in this particular case.                                                                       
     And if  we're going  to do that,  the question  is, who                                                                    
     should  get  the  reimbursement?     Or  the  question,                                                                    
     really, in  this particular case,  in the  Demers case,                                                                  
     was, should a collateral  source payment be allowed, or                                                                    
     should the defendant get the  windfall by not having to                                                                    
     pay for the  value of services, which the  court made a                                                                    
     finding of fact did have a  certain value.  And in this                                                                    
     Demers case, it wasn't an issue  as to the value of the                                                                  
     services  those gentlemen  provided, because  the court                                                                    
     found what they  were, and there was  no challenge that                                                                    
     that  finding was  clearly erroneous,  so we  know what                                                                    
     the value  of the  services were.   And ...  really the                                                                    
     most important  question that  this bill  addresses ...                                                                    
     is whether we are going  to allow the collateral source                                                                    
     rule, as  in Elliott v.  Beaulieu ..., to  be engrafted                                                                  
     in some  manner into the restitutionary  statute, and I                                                                    
     think it makes a lot of sense for us to do it.                                                                             
Number 2157                                                                                                                     
REPRESENTATIVE GRUENBERG continued:                                                                                             
     Now,  that was  the  common law  rule  and it  normally                                                                    
     applies in contractual situations,  like where you have                                                                    
     an  insurance  policy.   The  victim  has an  insurance                                                                    
     policy,  the  insurance  policy pays  for  mending  the                                                                    
     broken  leg   or  pays  for   restoring  Representative                                                                    
     Anderson's  house   or  whatever,   and  ...   in  that                                                                    
     particular  case,  the  insurance policy  usually  says                                                                    
     that if  you get  money from  the tort-feasor,  "we get                                                                    
     paid  back."    And  so   the  question  is,  does  the                                                                    
     insurance  company,  the third-party  provider,  absorb                                                                    
     the loss,  or does  the tort-feasor, the  defendant, in                                                                    
     this case, skate  free.  And I think in  that case it's                                                                    
     not a  windfall because  otherwise the provider  is out                                                                    
     the money  and there's a contractual  obligation there.                                                                    
     So,  in that  case it  seems to  me that  the defendant                                                                    
     should clearly have to pay back the insurance company.                                                                     
     And  you  can do  that  under  this because  there's  a                                                                    
     contractual obligation,  then, to be sure  that whoever                                                                    
     the  witness  was, that  the  person  does pay  because                                                                    
     they're   under  a   contractual   obligation  to   the                                                                    
     insurance company  to do it.   The legislature,  in the                                                                    
     tort  reform legislation,  ...  has  changed that,  the                                                                    
     collateral  source rule,  in some  manners.   It's [AS]                                                                    
     09.17.070, the  collateral benefits.  And  the question                                                                    
     is, if we're going to get  into this, do we want to ...                                                                    
     reference AS 09.17.070?   And that is  ... the question                                                                    
     that ... this bill presents to me.                                                                                         
CHAIR McGUIRE  said that Representative  Gruenberg is  correct in                                                               
his  analysis.   She  remarked  that  she  wants to  ensure  that                                                               
everyone understands the  gravity of the precedent  that is being                                                               
set via HB 23.                                                                                                                  
REPRESENTATIVE GRUENBERG also mentioned  that he has some concern                                                               
with  the title  of HB  23  as well.    He pointed  out that  the                                                               
language in AS 12.55.045(b) could  cause a great injustice to the                                                               
defendant in  that "An  order of  restitution under  this section                                                               
does not limit any civil  liability of the defendant arising from                                                               
the  defendant's  conduct".    He   suggested  that  perhaps  the                                                               
language could  be changed to  include something along  the lines                                                               
of  "however, any  restitution may  serve as  a partial  offset",                                                               
because  they shouldn't  be able  to recover  twice for  the same                                                               
injury  for  the  same  damage  from the  defendant.    "That  is                                                               
something  that, if  we're going  to do  some [justice]  here, we                                                               
ought to consider," he added.                                                                                                   
Number 1975                                                                                                                     
REPRESENTATIVE  WEYHRAUCH remarked  that there  is a  significant                                                               
distinction between a  civil proceeding to collect  damages and a                                                               
criminal  one.   He recounted  some  of the  processes and  costs                                                               
associated  with  a civil  proceeding  and  remarked that  it  is                                                               
unlikely that anyone going through  such a proceeding can be made                                                               
entirely whole.   In  a criminal  proceeding to  collect damages,                                                               
however,  there is  the threat  of  jail time  and revocation  of                                                               
probation if  the defendant does  not pay what he/she  is ordered                                                               
to.  He  opined that in the latter proceeding,  the defendant has                                                               
a   much  greater   incentive  to   follow   through  on   paying                                                               
restitution;  hence  [HB 23]  will  give  a sentencing  court  an                                                               
important tool in helping to make  the victim whole.  In closing,                                                               
he asked members to  not lose sight of the impetus  for HB 23 and                                                               
the aforementioned  policy questions that he  feels the committee                                                               
should address.                                                                                                                 
REPRESENTATIVE GARA suggested taking  a 10-minute at-ease for the                                                               
purpose  of working  with the  sponsor to  develop some  possible                                                               
amendments,  which could  then be  addressed  before the  meeting                                                               
adjourned  for the  day.   He  acknowledged  that the  suggestion                                                               
proposed by  Mr. Buttcane, however,  raises a complex  issue, and                                                               
he remarked  that his inclination  is to refrain  from addressing                                                               
that issue.  He elaborated:                                                                                                     
     Juvenile cases are about trying  to make a young person                                                                    
     understand what  they did and  trying to ensure  that a                                                                    
     young person  can, at some  point, become an  adult who                                                                    
     becomes  a productive  member of  society, and  I don't                                                                    
     know that we  really need to make  the juvenile process                                                                    
     more difficult  at this point, especially  through this                                                                    
     bill, especially on such a minor issue.                                                                                    
REPRESENTATIVE  SAMUELS  said  he disagrees  with  Representative                                                               
Gara regarding juveniles.   He elaborated:  "Part  of the process                                                               
of  making a  juvenile  a  better person  is  also  to make  them                                                               
realize what they  did and make them pay it  back, and making the                                                               
victim whole needs to be priority one."                                                                                         
REPRESENTATIVE WEYHRAUCH indicated that he  was willing to take a                                                               
brief at-ease  to work on  possible amendments,  adding, however,                                                               
that  he was  not sure  that 10  minutes would  be sufficient  to                                                               
address all of Representative Gruenberg's concerns.                                                                             
The committee took an at-ease from 2:10 p.m. to 2:19 p.m.                                                                       
CHAIR McGUIRE,  upon coming back  to order, relayed  that members                                                               
needed more time  to work with the sponsor on  the issues raised,                                                               
and announced that HB 23 would be held over for that purpose.                                                                   

Document Name Date/Time Subjects