Legislature(2003 - 2004)
04/07/2003 01:31 PM JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 23-RESTITUTION FOR CRIME VICTIMS CHAIR SEEKINS announced HB 23 to be up for consideration. REPRESENTATIVE BRUCE WEYHRAUCH, sponsor of HB 23, said he introduced the legislation to overturn a Court of Appeals decision. He explained that the treasurer of the Alaska Folk Festival embezzled money from the non-profit corporation. When the new treasurer went to the police, they told him they did not have the resources to investigate. The Folk Festival spent hundreds of hours and dollars to follow the paper trail for the police, who then submitted it to the district attorney. The treasurer was convicted of theft and during sentencing the judge said he would have to pay back the time and effort expended by the volunteers. On appeal, the Court of Appeals indicated that the Legislature did not intend the restitution statutes to be read broadly enough to compensate volunteers of non-profits for their time, money and effort in uncovering a crime. They appealed to the Alaska Supreme Court and the divided court wanted to hear the appeal. Part of the ruling by the dissenting judges indicated that many other citizens and organizations will be affected by this ruling. The District Attorney indicated that they wanted legislation to address this appeal's court decision. HB 23 would allow a non-profit to come to a court as the victim and specify the value of the time and effort incurred so the court could direct the defendant to reimburse the victim. The bold-faced language in the amended version of the bill makes it clear that the non-profit is the victim, not the individual volunteers that did the service. This language was developed by the Department of Law, the Public Defender's Office and the court system. If the volunteer presents a reasonable bill to the non-profit for reimbursement, that can go in turn to the sentencing judge, so that the sentencing judge has a rational basis for providing the compensation to the non-profit to make its compensation decisions later on. SENATOR FRENCH asked if volunteer labor and services are generally a subject of restitution in law. REPRESENTATIVE WEYHRAUCH replied that wasn't intended in this bill. "This bill was meant to be narrow to address the specific facts of the Demers case where you have a non-profit that is the victim..." SENATOR THERRIAULT asked if he is limited to damages or loss (page 2, line11) as an individual if he expends hours of time to provide information to the court. REPRESENTATIVE WEYHRAUCH replied that would be the case, if he were a victim of a crime. "There is no intent to change that at all." SENATOR FRENCH said that judges are often reluctant to grant restitution for the hours anyone spends taking their car to the body shop and picking it up or lost wages, for instance. "They usually want to see a receipt." 1:55 p.m. MR. RILEY WOODFORD, former president of the Alaska Folk Festival, reiterated the story. The police made it clear that their focus was violent crime and public protection. White- collar crime tends to be a fairly low priority. So, in situations like this, it falls upon the board of the non-profit to do most of the investigative work, which takes away from the mission and the reason the people volunteered. In the end, they tallied up the amount of time they spent and picked what they thought was fair compensation to the festival, not to the individuals to help make right some of the impact of the crime. He thought this was a fair bill that would help compensate non- profits that are victimized by this same kind of white-collar crime. SENATOR THERRIAULT asked if the group hired an accountant to quantify the amount of the embezzlement and was that a compensatable expense or would that come under loss. CHAIR SEEKINS responded that, if his company's accounting department quantified an amount of embezzlement, more than likely he wouldn't be able to recover that internal time, but if he hired an accounting firm to do it, that would be a direct expense related to the crime and he would be able to claim that. He asked Senator French's opinion. SENATOR FRENCH said this was a fuzzy area. In a $100,000 bank embezzlement that he was familiar with, he doubted that the person would be charged with all the investigative costs. He asked if the festival was receiving any money from the Mr. Demers. MR. WOODFORD replied they were receiving money and it would probably be paid back over a five-year period. He added that Judge Collins said she would have included the costs if the statute were more clear-cut. Non-profits are in a little different situation than a business in that they are completely volunteer and there is a tremendous amount of trust and cooperation involved in the board members who sometimes handle quite a bit of money. Most of the time the checks and balances are very easy to subvert. SENATOR FRENCH said they could change a few words on page 2 and treat everyone the same. You could say, "including compensation to a victim for the value of labor and goods if the labor and goods were necessary to alleviate or mitigate the effects of the crime." REPRESENTATIVE WEYHRAUCH said he originally wanted this bill to be broad, but the court has the ability under (2) to address the financial burden placed on the victim and those who provide services to the victim and other persons... The reason this language was put in specific to a non-profit was to address this particular issue and, two, without it, it loses a broader base of support from the administration and creates all kinds of legal issues. It is intended to allow the individuals that Senator Therriault is talking about to already be compensated under this provision of the statute. This just reverses the Court of Appeals to make sure that a non- profit that has volunteer effort and expenses expended can recover, which right now is prohibited under our case law. SENATOR FRENCH asked if anyone suggested that it would be illegal or unconstitutional to have volunteer labor repaid through a restitution award. REPRESENTATIVE WEYHRAUCH replied no, because the intent is to make sure that a court can order it if it can be substantiated by a preponderance of evidence. MS. PAM LABOLLE, President, Alaska State Chamber of Commerce, said they recently suffered embezzlement and didn't have the ability to determine the extent of their loss through volunteer efforts. They hired an accountant, which will cost an additional $10,000. The chamber sees the value of this legislation for non- profits, because they know what the expense is. CHAIR SEEKINS said that a lot of non-profits are too small to have many checks and balances and he can see why they want to have volunteer time counted. It has intrinsic value and the court should be able to make a value determination in terms of restitution. The question now is do they want to bring a not- for-profit organization under the same bill. MS. ANNE CARPENETI, Department of Law, said she wasn't as familiar with the bill as she would like to be, but restitution is hard for judges, prosecutors and defense lawyers. Limiting it to non-profits was a beginning point. SENATOR THERRIAULT wanted to know if this bill gives non-profits something that private individuals and businesses don't currently enjoy. MS. CARPENETI replied she thought they were and asked the sponsor. REPRESENTATIVE WEYHRAUCH responded that wasn't what he said. CHAIR SEEKINS said that would need to be clarified. SENATOR THERRIAULT said that perhaps the policy call is whether the benefit society gets out of non-profits matches that special treatment. TAPE 03-19, SIDE B CHAIR SEEKINS closed testimony and said he would hold the bill for further work.