Legislature(2015 - 2016)CAPITOL 120

04/14/2015 01:00 PM JUDICIARY

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved SB 5 Out of Committee
-- Public Testimony --
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
          SB   5-RESTITUTION: PROPERTY AND INCOME LOSS                                                                      
1:07:07 PM                                                                                                                    
SENATOR  PETER  MICCICHE, Alaska  State  Legislature,  said SB  5                                                               
strengthens Alaska  restitution laws, assists in  restoring crime                                                               
victims  to a  pre-offense condition,  and protects  the property                                                               
interests of all  Alaskans.  According to the  2013 Department of                                                               
Public Safety  Annual Report, Alaskans suffered  over $23 million                                                               
in loss due to property crimes,  which is up more than 12 percent                                                               
since  2011.   A fundamental  component of  Alaska court  ordered                                                               
restorative justice is making crime  victims whole.  He explained                                                               
that  SB  5  addresses  a   language  inconsistency  in  statutes                                                               
speaking to  restitution as  a provision  of sentencing,  and the                                                               
statutes have a  provision of probation resulting  in persons and                                                               
businesses affected  by crime  receiving compensation  [only] for                                                               
loss  and  victim  restitution  orders.    He  noted  that  SB  5                                                               
reconciles  this inconsistency  under a  provision of  sentencing                                                               
adding  a public  policy consideration  calling for  offenders to                                                               
compensate  victims for  damages  and injury,  including loss  of                                                               
income.   The  bill defines  loss of  income as  a total  loss of                                                               
income a  business or person  may lose  due to not  having stolen                                                               
property available  for the  period of time  it takes  to replace                                                               
that  property, he  stated.   The  new  language directs  courts,                                                               
while  making determinations  of loss  for restitution,  to value                                                               
property as  the market  value of  the property  at the  time and                                                               
place of  the crime, or a  reasonable time after the  crime.  The                                                               
bill amends, as  a condition of probation,  establishing the same                                                               
standard as  in AS 12.55.045,  and restitution as a  condition of                                                               
1:09:12 PM                                                                                                                    
SENATOR  MICCICHE  pointed  out  that  current  inconsistency  in                                                               
Alaska's  restitution   laws  contributed  to  a   recent  Alaska                                                               
Appellate  Court  decision that  is  problematic  to Alaskan  and                                                               
their  property interests.    The 9th  Circuit  Court of  Appeals                                                               
found in  Lori S. Welsh v.  State of Alaska, No.  A-11197 (2013),                                                             
that  restitution  orders,  as   a  condition  of  sentencing  or                                                               
probation,  would  be  restricted   to  actual  damages  or  loss                                                               
suffered  by   the  victim.     In  that  regard,  there   is  no                                                               
consideration  of the  market value  of the  property or  loss of                                                               
income to the crime victim.   He offered that within his district                                                               
there have  been a rash  of drug  related crimes where  folks are                                                               
looking for money for additional  drugs.  Within his district, he                                                               
described, there is a small  water well drilling company and some                                                               
folks broke in  one night and literally trashed  that vehicle for                                                               
all  of the  copper  on board,  the welding  leads,  and all  the                                                               
wiring  harnesses.   He commented  that  the company  was out  of                                                               
business for  weeks and it was  within the portion of  the season                                                               
with the highest amount of activity.   The way the law stands, he                                                               
explained,  the court  is [not]  instructed to  consider loss  of                                                               
income in  restitution.  The  bill reconciles  that inconsistency                                                               
in the restitution orders so  that the law clearly considers loss                                                               
of  income as  a real  loss to  persons and  businesses, and  the                                                               
court   should   make   that   consideration   when   determining                                                               
restitution orders.  He observes  the rights of perpetrators but,                                                               
he expressed,  prefers to  protect the  rights of  victims higher                                                               
with  just and  fair  restitution  orders from  the  courts.   He                                                               
described SB 5 as a substantial step in that direction.                                                                         
1:11:17 PM                                                                                                                    
CHUCK  KOPP,   Staff,  Senator   Peter  Micciche,   Alaska  State                                                               
Legislature, advised  that Section 1  of the bill  clearly states                                                               
public policy preference  that the court consider  loss of income                                                               
in issuing  restitution orders.   He reiterated  Senator Micciche                                                               
in  that  Sec.  2  adds  a new  definition  for  loss  of  income                                                               
specifying  the inclusion  of the  total  loss of  income that  a                                                               
business  or  person suffers  as  a  result  of not  having  this                                                               
property available  for the  period of time  it takes  to replace                                                               
the property.  He pointed to  Sec. 3 and remarked that it directs                                                               
the court when  making determinations of loss  for restitution to                                                               
[include the] value  of property as the market value  at the time                                                               
and place of  the crime, or if that cannot  be easily ascertained                                                               
the cost of replacement.  He  extends this is taken directly from                                                               
AS 11, criminal  statutes where the courts  determine value under                                                               
the  criminal  law  for  property  so it  is  the  same  language                                                               
commonality in  statute there.   He explained that Sec.  4 speaks                                                               
to conditions of  restitution as a provision of  probation and it                                                               
makes amended language  so that it is  consistent with conditions                                                               
of restitution for sentencing stating,  "the court will determine                                                               
the  amount of  actual damages  or  loss under  the paragraph  by                                                               
valuing property as the market value  of the property at the time                                                               
and  place  of   the  crime,  or  if  it   cannot  reasonably  be                                                               
ascertained  the cost  of replacement  of the  property within  a                                                               
reasonable time  after the crime."   The language brings  in line                                                               
the   provisions  of   restitution  under   sentencing  and   the                                                               
provisions of  restitution under  probation so that  the standard                                                               
is the same  and the court, in both  circumstances, he explained,                                                               
can  consider the  loss of  income to  businesses and  persons in                                                               
determining  restitution  orders.   He  related  that it  is  not                                                               
mandatory as the law declares  that the court will consider this.                                                               
He  reiterated Senator  Micciche's  comments in  that the  retail                                                               
value in  many cases  is properly  recognized as  the replacement                                                               
cost, and additionally,  it is not just the items  stolen but the                                                               
cost of project delays and  project cancelation.  Off road system                                                               
[theft  or damage]  can cost  the season  and liquidated  damages                                                               
begin depending upon what is stolen  or damaged from the job site                                                               
and,  he related,  how long  it takes  to replace  that property.                                                               
There  is  broad based  support  for  SB  5 from  businesses  and                                                               
persons across Alaska, he opined.                                                                                               
1:14:08 PM                                                                                                                    
REPRESENTATIVE GRUENBERG  asked whether the bill  deals with loss                                                               
of income and valuation of property.                                                                                            
MR. KOPP answered in the affirmative.                                                                                           
REPRESENTATIVE GRUENBERG offered  his concern regarding valuation                                                               
of property  in that  the bill  requires the  court to  value the                                                               
property  "at  that  amount,  using   that  standard,"  which  is                                                               
different from just requiring the  court to take into account the                                                               
loss of income.   He questioned whether the intent  is to require                                                               
the court  to use that  measure of  value, and pointed  out there                                                               
different  methods of  valuing  property, such  as,  the cost  of                                                               
replacement  or, in  the  area of  income  producing property  to                                                               
value it  as stolen  income producing  property that  was stolen,                                                               
which would be  similar to dealing with loss of  income.  Another                                                               
method  in reviewing  the value  of similar  properties could  be                                                               
that someone shoots an unreplaceable  prized animal, but would be                                                               
[evaluated] as  similar animals.   He suggested that  the sponsor                                                               
may   consider   giving   the    court   discretion   in   making                                                               
determinations.   Representative Gruenberg referred to  [page 2],                                                               
lines  16, 28-19,  and suggested  the following  language: "value                                                               
property  at the  market value,"  thereby  substituting "as"  for                                                               
"at."  Connected with that, the  term normally used at the law is                                                               
the "fair market  value" and he recommended using the  term as it                                                               
is in the  law.  One of  the really harsh rules is  when a person                                                               
is insured  and their  car is  totaled, it is  valued on  a basis                                                               
that is not the replacement cost but much less, he remarked.                                                                    
CHAIR  LEDOUX  asked  that  Representative  Gruenberg  stay  with                                                               
issues related to SB 5.                                                                                                         
1:18:39 PM                                                                                                                    
SENATOR MICCICHE responded that  this bill language is permissive                                                               
and does  not dictate the method  of valuation as each  case will                                                               
differ depending  upon the  circumstances.   He advised  that the                                                               
intent of  the bill is  that not every  Alaskan can go  to Costco                                                               
and purchase  a new  generator [that  day] as it  may have  to be                                                               
shipped  on a  $2,000  flight across  the Inlet.    He offered  a                                                               
scenario  of someone  in a  boat, stealing  a generator,  is then                                                               
caught,  and the  thief  does not  owe the  victim  for a  $1,000                                                               
generator -  they owe  the victim  for a  $3,000 generator.   The                                                               
intent of the bill is that  the court consider the actual cost of                                                               
that object at  the site at the time [of  theft] and, pointed out                                                               
that the bill is permissive enough  to not steer the court on how                                                               
it will  value each  item, rather  that the  actual value  of the                                                               
item is considered.                                                                                                             
REPRESENTATIVE  GRUENBERG suggested  that  rather than  requiring                                                               
[the  court]  to  value  it,  add the  language  crafted  at  the                                                               
beginning of the bill.                                                                                                          
1:19:59 PM                                                                                                                    
MR. KOPP  replied that this issue  came up in the  other body and                                                               
the language on page 1, lines  14-15, is clearly permissive as it                                                               
reads,  "In  determining the  amount  and  method of  payment  of                                                               
restitution or  compensation, the  court shall take  into account                                                               
..."  He offered the language does not tell the court ...                                                                       
REPRESENTATIVE  GRUENBERG  argued  that  it deals  with  loss  of                                                               
income, the  suggestion he previously  made deals with  damage or                                                               
loss of restitution.                                                                                                            
MR.   KOPP  explained   that  the   entire  section   deals  with                                                               
restitution  orders  and sentencing,  a  predecessor  to Sec.  2,                                                               
which  is permissive.    It  reads that  a  public policy  favors                                                               
requiring  criminals  to  compensate   for  damages  and  injury,                                                               
including loss  of income.   He  offered that  loss of  income is                                                               
internally consistent  in that section  as it is stated  later in                                                               
the  same  section  with  respect  to  someone  who  might  steal                                                               
commercial fishing  gear, set net  gear, drift gill net  gear, or                                                               
trolling  gear that  the court  will consider  loss of  income in                                                               
that  consideration,  "again,  consider  loss  of  income."    He                                                               
pointed  out that  the reference  to "considering"  is consistent                                                               
"taking into  account" is consistent  throughout the  statute and                                                               
is something that  is not a new concept, and  highlighted it as a                                                               
public policy priority.                                                                                                         
1:21:49 PM                                                                                                                    
CHAIR LEDOUX related that the  time for amendments has passed and                                                               
she will not slow down the bill  at the end of the session for an                                                               
amendment which could  have been made and been  introduced to the                                                               
House  Judiciary Standing  Committee in  compliance with  the 24-                                                               
hour rule.                                                                                                                      
REPRESENTATIVE  GRUENBERG pointed  out that  he does  not believe                                                               
that subsection (o) is limited to loss of income.                                                                               
MR. KOPP  submitted that market  value is a well-defined  term in                                                               
criminal law under AS 11.46.980,  which is the same standard used                                                               
by the  courts to  determine property  valuation with  respect to                                                               
thefts and burglary in property crimes.                                                                                         
1:23:06 PM                                                                                                                    
REPRESENTATIVE  CLAMAN opined  that as  a statistical  matter the                                                               
public  defender  would  say  that   80-85  percent  of  criminal                                                               
defendants are public  defender eligible and usually  do not have                                                               
a lot of  money.  He questioned whether this  changes the court's                                                               
fundamental obligation to make a  determination about the ability                                                               
to  pay or  set restitution  schedules consistent  with how  much                                                               
money the  defendant can actually  earn.  He advised  he supports                                                               
restitution and also does not  like the idea of creating debtor's                                                               
prisons or sending people back  to prison because they can't pay.                                                               
He asked  how the bill impacts  the obligation of the  ability to                                                               
SENATOR  MICCICHE  explained that  current  Alaska  law does  not                                                               
allow  a person  in prison  solely due  to the  inability to  pay                                                               
under AS 12.55.051(a)  and (c).  He offered  that perpetrators of                                                               
a crime usually have no idea  of the ultimate value of the damage                                                               
and his goal  is to get the perpetrator out  of prison as quickly                                                               
as possible, turn their lives around,  and be put on a reasonable                                                               
restitution   payment  plan.     He   further  offered   that  AS                                                               
12.55.051[(c)] reads:                                                                                                           
     ...  If,  at  a  hearing  under  this  subsection,  the                                                                    
     defendant  proves by  a preponderance  of the  evidence                                                                    
     that the  defendant will be  unable through  good faith                                                                    
     efforts to  satisfy the order requiring  payment of the                                                                    
     fine or  restitution, the court shall  modify the order                                                                    
     so that the  defendant can pay the  fine or restitution                                                                    
     through good faith efforts ...                                                                                             
SENATOR  MICCICHE  pointed  out  there  is  no  potential  for  a                                                               
debtor's prison  in Alaska law, and  no value to the  victim even                                                               
when retrieving cents  on the dollar.  He opined  that it largely                                                               
represents the  expectation of the  perpetrator to do  their best                                                               
to provide restitution to the victim.                                                                                           
1:26:01 PM                                                                                                                    
REPRESENTATIVE  CLAMAN  submitted  that   a  generator  could  be                                                               
running for  10-years before being  stolen and the  old generator                                                               
is worth less than $500, but  the practical reality of locating a                                                               
10-year old  replacement is  hard to imagine.   He  surmised this                                                               
bill  allows the  court make  the determination  of [replacement]                                                               
SENATOR MICCICHE  responded he has  faith that common  sense will                                                               
CHAIR LEDOUX opened public testimony.                                                                                           
1:28:00 PM                                                                                                                    
CHRIS  NETTLES,  President,  GeoTek  Alaska,  Inc.,  said  he  is                                                               
testifying on  behalf of the  National Federation  of Independent                                                               
Business, and as primary owner of  GeoTek Alaska.  He pointed out                                                               
how  important it  is  to a  business  to strengthen  restitution                                                               
laws, and  offered that  within his business  a snow  machine was                                                               
stolen  from an  off-road  site, and  fortunately  it was  stolen                                                               
after the project had been completed.   However, he said, had the                                                               
machine been  stolen before the  project, his business  would not                                                               
only have undergone  the cost of replacing the  snow machine, but                                                               
the cost  of getting  another one to  the site.   On top  of that                                                               
issue, a  company may be  under contracts and standby  costs, and                                                               
suffer liability  or loss due  to not meeting the  contract time.                                                               
When  reviewing the  cost of  an item  or damage  performed by  a                                                               
perpetrator, it is  not just the cost for that  item as there are                                                               
many  other  costs  possibly  included   for  one  item  that  is                                                               
essential to  a project.   It is  important that  victims receive                                                               
restitution from perpetrators, if possible, he expressed.                                                                       
CHAIR LEDOUX  closed public testimony  after ascertaining  no one                                                               
further wished to testify.                                                                                                      
1:31:44 PM                                                                                                                    
NANCY MEADE, General Counsel,  Administrative Staff, Alaska Court                                                               
System, [Advised she is available to answer questions.]                                                                         
REPRESENTATIVE GRUENBERG  offered his concern regarding  Sec. 3-4                                                               
of the  bill and opined that  subsection (o) which will  be added                                                               
in Sec.  3, would not  be limited to  a determination of  loss of                                                               
income  language at  page 1,  "requiring the  court to  take that                                                               
into account."   He further  opined the new subsection  (o) would                                                               
not  be permissive  but  would  require the  court  to value  the                                                               
property at the fair market value.                                                                                              
MS. MEADE responded that the  legal interpretation of the bill is                                                               
something the court system does  not normally provide as it would                                                               
be  a   better  question  for  Legislative   Legal  and  Research                                                               
Services.   She  offered that  from the  court system's  point of                                                               
view, this does clarify how  to apply some currently inconsistent                                                               
statutes,  which the  court  can easily  apply.   At  restitution                                                               
hearings  there are  currently arguments  and discussion  brought                                                               
forth regarding valuation of property,  she explained.  This bill                                                               
offers  more  guidance  for  the   court  which,  she  noted,  is                                                               
something the judges appreciate  and reiterated it clarifies some                                                               
inconsistencies.  She did not  see a problem with courts applying                                                               
it as written, she remarked.                                                                                                    
1:34:16 PM                                                                                                                    
STACI  SHROEDER,  Assistant   Attorney  General,  Legal  Services                                                               
Section,  Department of  Law, asked  Representative Gruenberg  to                                                               
briefly restate the question.                                                                                                   
REPRESENTATIVE  GRUENBERG turned  to  Sec. 3,  and asked  whether                                                               
that subsection would only apply  to property involved in loss of                                                               
income.  He  opined it is a standalone  section under restitution                                                               
and compensation, AS 12.55.045, not  all of which involves income                                                               
producing property  or property involved  in the loss  of income.                                                               
He  surmised  that subsection  (o)  applies  to income  producing                                                               
situations and non-income producing situations.                                                                                 
1:35:42 PM                                                                                                                    
MS. SCHRODER answered  that she reads subsection  (o) as applying                                                               
to the  entire statute  and not being  limited in  clarifying how                                                               
the court should value property.                                                                                                
REPRESENTATIVE GRUENBERG agreed  that it is just not  a factor to                                                               
be taken into  consideration, but "in a  non-income situation the                                                               
court would have  to value it at  that method."  He  opined it is                                                               
not all bad, but there may be  other ways the court would want to                                                               
have some leeway.                                                                                                               
REPRESENTATIVE KELLER pointed out that  is not necessarily bad as                                                               
it applies to all restitution compensation.                                                                                     
1:36:38 PM                                                                                                                    
The committee took an at-ease from 1:36 to 1:38 p.m.                                                                            
1:38:50 PM                                                                                                                    
CHAIR LEDOUX referred  to the discussion of whether  or not there                                                               
is a grammatical error on [page 2], lines 16, 28-29, which read:                                                                
        ... shall value property as the market value of                                                                         
     the property ...                                                                                                           
CHAIR LEDOUX submitted that the sponsor  does not believe it is a                                                               
grammatical error.                                                                                                              
SENATOR  MICCICHE  pointed  out   that  when  reading  the  whole                                                               
sentence "the  court shall  value property  ..." which  is taking                                                               
the value and  valuing it "as" the market value  of the property.                                                               
He  said that  "at" the  market value  of the  property would  be                                                               
looking at  one singular item.   The bill says, "it  is valued as                                                               
the market value  of the property," and  he does not see  it as a                                                               
grammatical error as  it fits, it went through  the Department of                                                               
Law, and Legislative Legal and  Research Services, who all agreed                                                               
that is  the correct language,  and for all intents  and purposes                                                               
it is fully functioning as written.                                                                                             
1:40:02 PM                                                                                                                    
REPRESENTATIVE KELLER moved to report  SB 5, labeled 29-LS0109\H,                                                               
out  of   committee  with  individual  recommendations   and  the                                                               
accompanying fiscal notes.  There  being no objection, SB 5 moved                                                               
from the House Judiciary Standing Committee.                                                                                    
1:40:28 PM                                                                                                                    
The committee took an at-ease from 1:40 to 1:44 p.m.                                                                            

Document Name Date/Time Subjects
SB 5 ALCAN Engineering Support.pdf HJUD 4/14/2015 1:00:00 PM
SB 5
SB 5 2011 - 2013 Alaska Property Loss Summary.pdf HJUD 4/14/2015 1:00:00 PM
SB 5
SB 5 AGC Support.pdf HJUD 4/14/2015 1:00:00 PM
SB 5
SB 5 AS 11.46.980 Determination of Value.pdf HJUD 4/14/2015 1:00:00 PM
SB 5
SB 5 Crime Index Offense Summary 2009-2013.pdf HJUD 4/14/2015 1:00:00 PM
SB 5
SB 5 Fiscal Notes.pdf HJUD 4/14/2015 1:00:00 PM
SB 5
SB 5 NFIB Support.pdf HJUD 4/14/2015 1:00:00 PM
SB 5
SB 5 Orion Marine Group Support.pdf HJUD 4/14/2015 1:00:00 PM
SB 5
SB 5 State Chamber Support.pdf HJUD 4/14/2015 1:00:00 PM
SB 5
SB 5 Welsh Appellate Opinion.pdf HJUD 4/14/2015 1:00:00 PM
SB 5
SB 5 Welsh Case Brief and Commentary.pdf HJUD 4/14/2015 1:00:00 PM
SB 5
SB 5.pdf HJUD 4/14/2015 1:00:00 PM
SB 5
SB5 Section Analysis.pdf HJUD 4/14/2015 1:00:00 PM
SB 5
SB5 Sponsor Statement.pdf HJUD 4/14/2015 1:00:00 PM
SB 5
HB0126A.pdf HJUD 4/14/2015 1:00:00 PM
HB 126
HB0126E.pdf HJUD 4/14/2015 1:00:00 PM
HB 126
HB126 SECTIONAL ANALYSIS - ver E.docx.pdf HJUD 4/14/2015 1:00:00 PM
HB 126
HB126 Sponsor Statement.pdf HJUD 4/14/2015 1:00:00 PM
HB 126
Memo 15-101.dla.pdf HJUD 4/14/2015 1:00:00 PM
HB 126
HB 126 - ACMJ Presentation V4.pdf HJUD 4/14/2015 1:00:00 PM
HB 126